TO:
FROM:
FOR:
SUBJECT:
Agenda Item No. 10
CITY OF YUCAIPA
AGENDA REPORT
Honorable Mayor and City Council
Phil White, Director of Finance
City Council Meeting of July 22, 2024
Levy of Special Taxes Within Community Facilities District No. 98-1 of the City of Yucaipa (Chapman Heights) for Fiscal Year 2024-2025 RECOMMENDATION:
That the City Council adopt Resolution No. 2024-51 authorizing the levy of special taxes within Community Facilities District No. 98-1 of the City of Yucaipa (Chapman Heights) for Fiscal Year 2024- 2025.
BACKGROUND/DISCUSSION:
On August 10, 1998, the City Council of the City of Yucaipa adopted Resolution No. 98-33 establishing the formation of Community Facilities District No. 98-1 (Chapman Heights), hereinafter referred to as the District. The District was established for the purpose of financing the construction, acquisition, expansion, and improvement of public infrastructure within the boundaries of the District. In addition, on August 10, 1998, in a Special Election, the qualified voters of the District authorized the District to incur bonded indebtedness in an amount not to exceed $30 million. The District has issued three series of Special Tax Bonds totaling $30 million. The annual debt service on the bonds is payable from special taxes levied and collected annually on all relevant properties within the District.
On September 14, 1998, the City Council adopted Ordinance No. 187, authorizing the levy of the Special Tax within the District. The Special Tax is to be levied in an amount sufficient to pay principal, interest and administrative expenses with respect to all bonds issued by the District, including the Series 1998 Special Tax Bonds, the Series 2002 Special Tax Bonds and the Series 2003 Special Tax Bonds, to pay certain costs of the facilities authorized to be financed by the levy of special taxes of the District, pursuant to the Resolution of Formation, and to pay all incidental expenses.
On November 14, 2011, the City Council, acting as the legislative body of the District, adopted Resolution No. 2011-68, authorizing the issuance of its 2011 Special Tax Refunding Bonds in a principal amount of $26,125,000. The purpose of the refunding bonds was to take advantage of the favorable interest rates in order to generate significant debt service savings, resulting in net present value savings equal to approximately $1,599,069. The City Council determined that the almost $1.6 million in savings would be passed on to the current property owners by applying that savings over the next three years as a credit against the annual assessment. The annual savings was valued at approximately 27% per property owner.
On September 25, 2023, the City Council, acting as the legislative body of the District, adopted Resolution No. 2023-48, authorizing the issuance of its 2023A Special Tax Refunding Bonds in a principal amount of $9,935,000. The purpose of the refunding bonds was to take advantage of the favorable interest rates in order to generate significant debt service savings that will reduce the annual assessment for the property owners in the District.
It is now necessary and appropriate for the City Council to levy and collect the special taxes for Fiscal Year 2024/2025 (FY25) for the purposes specified above. FY25 represents the 26th year in which assessments will be levied on behalf of the District to pay the costs associated with satisfying annual debt service and the 12th year following the issuance of the 2011 Special Tax Refunding Bonds. The Bonds will be paid in full with the Special Tax levied in 2030.
Attached is a spreadsheet determining the rates for the proposed levy, as prepared by Willdan Financial Services, the City's Special Tax Administrators. As the Special Tax Administrators, Willdan has calculated the special taxes in a manner consistent with the Rate and Method of Apportionment approved by the City Council in 1998. It is important to note that the Rate and Method considers property in its condition as of January 1 of the apportionment year. Therefore, if a building permit had not yet been issued for a parcel by January 1, 2024, that parcel will be taxed as undeveloped during F25.
Approximately 1.53 acres remain taxable, but undeveloped, as of January 1, 2024. Willdan determines ownership of property based upon the most current information available as provided by the County of San Bernardino.
Historically, properties have been assessed annually at a rate equal to approximately 91% of the maximum tax rate allowable. 91% represents the target percentage rate outlined in the original Rate and Method of Apportionment. However, for FY13, FY14 and FY 15, the annual assessment rate was reduced to reflect the savings resulting from the bond refunding in 2011. For those three years, the special tax rates were assessed at a rate equal to approximately 68% to 69% of the maximum tax allowable, in order to satisfy the annual debt service requirements. In FY 16, the amount of special tax rate assessed reverted back to approximately 91% of the maximum tax allowed; however, since then the special tax rate assessed has been approximately 83.8% to 88.3%.
The proposed assessments for FY25 have been calculated at a rate equal to approximately 68.62% of the maximum tax allowable. This reflects a decrease of 14.03% the previous year due to savings from the issuance of the 2023A Bonds. The administrative costs include estimates for agency administration, the cost allocation plan expense, auditor fees, County Assessor and Registrar fees, legal costs, and consulting fees. The total amount budgeted for administrative costs for FY25 is equal to $108,496.
FISCAL IMPACT:
The District funds the debt service and administrative costs up to the maximum allowed. The City acts in a fiduciary capacity in the financial administration of the District and receives payment for the administrative costs up to the maximum. In FY25, the total amount of debt service and administrative costs to be paid by the District is $1,785,030. Administrative costs in excess of the maximum will be funded by a General Fund contribution of $26,466.
The collection of the taxes will be accomplished in the same manner as that used to collect ad- valorem property taxes. All funds necessary to satisfy debt service payments and administrative expenses are the responsibility of the District.
Attachments:
1. Resolution No. 2024-51
2. CFD No. 98-1 (Chapman Heights) Calculation of FY 2024/2025 Tax Rates —Prepared by Willdan Financial Services
3. FY 2024/2025 Budget Worksheet
Approved by
ATTACHMENT 1
RESOLUTION NO. 2024-51
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA
ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 98-1 OF THE CITY OF YUCAIPA (CHAPMAN
HEIGHTS) AUTHORIZING THE LEVY OF SPECIAL TAXES WITHIN
COMMUNITY FACILITIES DISTRICT NO. 98-1 FOR FISCAL YEAR
2024-2025
WHEREAS, the City of Yucaipa (the "City") previously established Community Facilities District 98-1 of the City of Yucaipa (Chapman Heights) ("CFD No. 98-1") pursuant to the terms and provisions of the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Government Code Section 53111 (the "Act"); and WHEREAS, CFD No. 98-1 issued its Series 1998 Special Tax Bonds in the amount of $17,500,000 pursuant to Resolution No. 98-36, adopted by the City Council of the City acting as the legislative body of CFD No. 98-1 on August 10, 1998, as amended by Resolution No. 98-44, adopted on October 12, 1998 (the "Series 1998 Special Tax Bonds"); and WHEREAS, CFD No. 98-1 issued its Series 2002 Special Tax Bonds in the amount of $5,800,000 pursuant to Resolution No. 2002-15, adopted by the City Council of the City acting as the legislative body of CFD No. 98-1 on May 13, 2002; and WHEREAS, CFD No. 98-1 issued its Series 2003 Special Tax Bonds in the amount of $6,700,000 pursuant to Resolution No. 2003-08, adopted by the City Council of the City acting as the legislative body of CFD No. 98-1 on June 23, 2003; and WHEREAS, CFD No. 98-1 issued its Series 2011 Special Tax Refunding Bonds in the amount of $26,125,000, pursuant to Resolution No. 2011-68 of the District entitled "Resolution of the City of Yucaipa, Acting as the Legislative Body of Community Facilities District No. 98-1 (Chapman Heights) of the City of Yucaipa, authorizing the issuance of its 2011 Special Tax Refunding Bonds in a Principal Amount Not to Exceed Twenty Eight Million Dollars ($28,000,000) and Approving Certain Documents and Taking Certain Other Actions in Connection Therewith," adopted by the City Council on November 14, 2011; and WHEREAS, CFD No. 98-1 issued its Series 2023A Special Tax Refunding Bonds in the amount of $9,935,000, pursuant to Resolution No. 23-48 of the District entitled "Resolution of the City of Yucaipa, Acting as the Legislative Body of Community Facilities District No. 98-1 (Chapman Heights) of the City of Yucaipa; and
WHEREAS, the City Council, acting in its capacity as the legislative body of the District, found that the issuance of the Refunding Bonds would provide significant public benefits by reducing the total amount of special taxes to be levied within the District; and WHEREAS, the City Council, acting in its capacity as the legislative body of the District, determined that any savings achieved through the issuance of the Refunding Bonds shall
be used to reduce special taxes of the District over the remaining maturity following the issuance, and such reductions shall be made in accordance with the Act; and WHEREAS, the City Council of the City acting as the legislative body of CDF No. 98-1 is authorized pursuant to Resolutions Nos. 98-33 and 98-34 (collectively, the "Resolutions of Formation") and Ordinance No. 187 adopted by the City Council of the City on September 14, 1998 (the "Ordinance") to levy a special tax on property in CDF No. 98-1 sufficient to pay principal, interest and administrative expenses with respect to all bonds of CFD No. 98-1, including Series 1998 Special Tax Bonds, Series 2002 Special Tax Bonds, Series 2003 Special Tax Bonds, Series 2011 Special Tax Refunding Bonds, and Series 2023A Special Tax Refunding Bonds to pay certain costs of the facilities authorized to be financed by the levy of special taxes of CFD No. 98-1 pursuant to the Resolutions of Formation and to pay all expenses incidental thereto; and
WHEREAS, it is now necessary and appropriate that this City Council levy and collect the special taxes for Fiscal Year 2024/2025 for the purpose specified in the Ordinance, by the adoption of a resolution as specified by the Act and the Ordinance; and WHEREAS, the special taxes being levied hereunder are at the same rate or at a lower rate than that provided by the Ordinance.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA HEREBY RESOLVES AS FOLLOWS:
Section 1. The above recitals are true and correct.
Section 2. The special tax ("Special Tax") is imposed without regard to property valuation and is levied in compliance with the Act and the Ordinance.
Section 3.
In accordance with the Act and the Ordinance, there is hereby levied upon the parcels within the District, which are not otherwise exempt from taxation under the Act or the Ordinance, the special taxes for FY25 at the tax rates set forth in the report prepared by Willdan Financial for CFD No. 98-1 entitled "City of Yucaipa Community Facilities District No. 98-1, Chapman Heights, Calculation of FY 2024/2025 Tax Rates" (the "Report") submitted herewith, which rates do not exceed the maximum rates set forth in the Ordinance. After adoption of this Resolution, the City Manager of the City, or his designee, may make any necessary modifications to these special taxes to correct any errors, omissions or inconsistencies in the listing or categorization of parcels to be taxed or in the amount to be charged to any category of parcels; provided, however, that any such modifications shall not result in an increase in the tax applicable to any category of parcels and can only be made prior to the submission of the tax rolls to the San Bernardino County Auditor-Controller/Treasurer/Tax Collector.
Section 4. All of the collections of the special tax shall be used only as provided for in the Act and the Resolutions of Formation. The special tax shall be levied only so
Section 5.
Section 6.
Section 7.
long as needed to accomplish the purposes described in the Resolutions of Formation.
The special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency as provided for ad valorem taxes as such procedure may be modified by law or this City Council from time to time.
As a cumulative remedy, if any amount levied as a special tax for payment of bond interest or principal, together with any penalties and other charges accruing under this Resolution, are not paid when due, the City Council may, not later than four years after the due date of the last installment of principal on the Bonds, order that the same be collected by an action brought in the superior court to foreclose the lien of such special tax.
The actions of City staff heretofore taken in order to obtain consent from the San Bernardino County Auditor-Controller/Treasurer/Tax Collector to a later filing date are hereby ratified and the City Clerk is hereby authorized and directed to transmit a certified copy of this Resolution and the Report to the San Bernardino County Auditor-Controller/Treasurer/Tax Collector, together with other supporting documentation as may be required to place said special taxes on the secured property tax roll for FY25 on or before August 10, 2024, and to perform all other acts which are required by the Act, the Ordinance, or by law in order to accomplish the purpose of this Resolution.
PASSED, APPROVED and ADOPTED this 22nd day of July 2024.
Justin Beaver, Mayor
ATTEST:
Ana V. Sauseda, MMC
Director of General Services/City Clerk
ATTACHMENT 2
City of Yucaipa
Community Facilities District No. 98-1
Chapman Heights 2011 Special Tax Refunding Bonds
Calculation of Fiscal Year 2024/2025 Tax Rates
Proposed Total Levy Amount Fiscal Year 2024/2025 $1,785,016.88 (1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
Land Use
Category
Property Type
Square Footage
Maximum
Tax Rate
Tax
Basis
Tax Rate
FY 2024/2025
Taxable
Units/SgFUAcres
Maximum
Tax
FY 2024/2025
Revenues
Proposed
FY 2024/2025
Tax Rate
FY 2023/2024
Tax Rate
FY 2023/2024
Revenues
Rate
Percent Change
from FY 2023/2024
(3)x(6)
(5)x(6)
1 Res, SF. Detached
Over 3,400 Sq Ft
$1,880.00
Per Unit
$1,290.10
214 units
$402,320.00
$276,081.40
$1.290.10
51,500.72
S321.154.08
-14.03%
2 Res, SF, Detached
2,750 to 3,399 Sq Ft
51.710.00
Per Unit
51,173.44
328 units
560.880.00
384.888.32
S1,173.44
$1.365.02
447,726.56
-14.03%
3 Res. SF. Detached
1.900 to 2,749 Sq Ft
$1,140.00
Per Unit
$782.30
1.020 units
1,162,800.00
797,946.00
5782.30
S910.00
928.200.00
-14.03%
4 Res, SF, Detached
Less than 1.900 Sq Ft
$781.00
Per Unit
5535.94
240 units
187.440.00
128.625.60
$535.94
$623.44
149,625.60
-14.04%
5 Res, SF Attached or MF
$459.00
Per Unit
$314.98
249 units
114,291.00
78,430.02
$314.98
$366.40
91.233.68
-14.03%
6 Commercial
$0.6500
Per Sqft
50.4460
263,526 sq.ft.
171.291.90
117.545.64
50.4460
50.5189
136,735,26_
-14.03%
7 Other
$6,320.00
Per Acre
50.00 0 acres
0.00 0.00
50.00 $0.00
0.00 n/a
8 Golf Course
S813.00
Per Acre
50.00 148.40 acres
120.649.20
0.00 $0.00
$0.00
0.00 n/a
9 Undeveloped
$6,230.00
Per Acre
S980.33
1.53 acres
9,531.90
1,499.90
$980.33
51.140.35
1.744.74
-14.03%
10 Exempt
$0.00
50.00 66 parcels
0.00 0.00
50.00 50.00
0.00 n/a
Totals
$2,729,204.00
$1,785,016.88
$2,076.419.92
NOTES' Col (3). Official Statement, Appendix B "Rate and Method of Apportionment of Special Tax," Table 1, page B-4.
Col (5). Official Statement, Appendix B "Rate and Method of Apportionment of Special Tax," pages B-4, B-5.
Col (6): Based on property data from the San Bernardino Preliminary Secured Roll and building permits from City of Yucaipa Building & Safety.
Wlldan Financial Services
ATTACHMENT 3
2024/25 Budget Worksheet
Community Facilities District No. 98-1 (Chapman Heights) Fund Number CQ54STO1
x u'
PRINCIPAL AND INTEREST
Principal
Interest
TOTAL
$1,555,000.00
$660,093.76
$2,215,093.76
$1,270,000.00
$433,000.00
$1,703,000.00
ADMINISTRATION COSTS
Agency Administration/Cost Allocation Plan
Agency Auditor Fees
Attorney Fees
Other Expenses, Paid by Agency
Total Agency Staff and Expenses
County Auditor and Assessor Fees
Registrar/Transfer/Paying Agent Fees
Consulting Services
Consulting Expenses
Delinquency Management Fee
TOTAL
Total Principal, Interest and Admin Costs
$64,372.00 $64,372.00
2,100.00 2,100.00
2,500.00 2,500.00
5,000.00 5,000.00
$73,972.00 $73,972.00
599.70 599.70
9,506.72 10,353.15
21,457.72 22,003.38
783.42 684.01
891.54 883.76
$107,211.11 $108,496.00
$2,322,304.87 $1,811,496.00
ADJUSTMENTS APPLIED TO LEVY
Reserve Fund Credit
Special Tax Fund Credit
Replenishment/(Credit)
Capitalized Interest Credit
General Fund Credit
TOTAL
$0.00 $0.00
(219,074.71) 0.00
0.00 0.00
0.00 0.00
(26,789.36) (26.465.82)
($245,864.07) ($26,465.82)
TOTAL CHARGE
Total Charge
Applied Charge
Difference (due to rounding)
$2,076,440.80 $1,785,030.18
$2,076,419.92 $1,785,016.88
($20.88) ($13.30)
ADDITIONAL INFORMATION
Number of Active Parcels
Number of Parcels Levied
Actual DM Fees
Admin Costs as a percent of Annual Levy
2,069 2.069
1,999 1,999
891.54 883.76
5.16% 6.08%
Approved
Date: —711,5Z
11