HomeMy WebLinkAboutAgenda Report - August 5, 2015 G-01 PHAGENDA ITEM G
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AGENDA TITLE: Public Hearing to Consider Reduction of Special Taxes and Annual Index
for Community Facilities District No. 2007-1
MEETING DATE: August 5, 2015
PREPARED BY: City Manager
RECOMMENDED ACTION: Public Hearing to consider the reduction of special taxes
and annual index for Community Facilities District No.
2007-1.
BACKGROUND INFORMATION: Council gave staff direction to negotiate a reduction of the
special taxes and annual index rate for Community
Facilities District No. 2007-1 at its regular meeting on April
15, 2015.
Council further directed staff to negotiate a waiver of the below described vested rights from the
benefitted property owners to develop property under the current Impact Fee Program. On
June 17, 2015, Council began the process of levying a reduced Special Tax by adopting a
Resolution of Consideration.
As discussed on April 15, 2015, the City of Lodi created a Community Facilities District ("CFD")
for service in 2007 as a condition of its most recent annexations of Reynolds Ranch, and the
Westside and Southwest Gateway Annexations. CFDs for service are relatively new in
municipal finance. However, unlike CFDs for infrastructure, CFDs for service fund things such
as landscaping and lighting, police and fire services, parks service and other items traditionally
funded by the General Fund. At the time, the special tax was set at $600 per year for single
family homes and $175 for multi -family units. The special tax is subject to annual indexing of
the greater of the Consumer Price Index or 5 percent. The index is applied July 1 of each year.
As such, the special tax is currently set at $804 per year and will be $844 per year by the time
the first house is occupied.
Although total inflation from 2007 to date totals 13 percent (Bureau of Labor Statistics), the
minimum inflation factor set by the approved formula has been 40 percent. Although a 5
percent minimum may have been reasonable upon the adoption of the CFD, it is generally
understood that the economy did not perform as expected in 2008. It is also worth noting that
the portion of homeowner's property taxes received by the City are approximately $400 per
year, less than half of what these new homes will pay in CFD special taxes alone. It should be
noted that Rose Gate homes are expected to be priced around $400,000 resulting in about
$650 in municipally -directed property taxes. In light of the significant difference between
inflation and the minimum escalator, staff believes it is appropriate for the City to consider the
developer's request to reduce the special tax and the index rate.
Any recognition of the economic disadvantages faced by these projects would be incomplete
without addressing the City's current Impact Fee program discounts. As Council is aware, the
developers of these projects filed vesting tentative maps that, if extended, could allow many of
the currently vested units to develop at $5,940 per unit instead of the program calculated
$23,195. Van Ruiten Ranch has 200 vested single-family units plus 88 unvested high-density
units; Reynolds Ranch has 227 vested single-family units plus 330 unvested high-density units
and Rose Gate has 232 vested single-family units.
As Council recalls, the discount program was initiated to spur development for a three-year
period. However, the vesting map process could substantially increase that time frame. As
such, staff considers it fair to allow units to develop at the discount for limited period to
recognize the original intent of the program. Staff negotiated a reduction in CFD special taxes
to $500 per single-family unit and $145.83 per multi -family unit and an index reduction to 2
percent per year. Such a change would track the property owners' concurrent Proposition 13 -
based property tax increase and also manage to exchange CFD special taxes for the
developers' waiver of any rights to the 60 -percent discount for units that do not pull a building
permit (and complete construction within six months) within a brief negotiated time frame.
The negotiated agreement for Council approval would give Rose Gate three years and Van
Ruiten and Reynolds Ranch four years to pull permits under the discounted rate. Thereafter
they would develop at then -current rates. The projects are staggered to reflect their relative
term to commencement of construction.
On June 5, 2015 the Council approved the Resolution of Consideration. This resolution initiated
the process for the reduction of the above referenced special taxes and scheduled a public
hearing for August 5, 2015 and contemplated scheduling a landowner election scheduled for the
same day.
Although the Mello -Roos Act provides for accelerated election timelines if the landowner
electors file a waiver of time limits and other related election requirements, such waivers have
not been provided by the landowner electors. As a result, the election timeline will not be
accelerated and the City anticipates holding the election in November/December. At the next
regularly scheduled council meeting, the City Council will be asked to consider the adoption of a
resolution calling an election.
The following item is recommended as part of this staff report:
The City Council hold a public hearing regarding the reduction of special tax and
annual index within CFD 2007-1
The Development Agreements waiving the discounted impact fees are also before the Council
today as a separate but related agenda item.
FISCAL IMPACT: Lost revenue of up to $304 per single family unit and $30.83 per
multifamily unit offset by corresponding increases in impact fee
revenues of undetermined amount depending on when units
develop under the Development Agreements.
FUNDING AVAILABLE: Not applicable.
c ►�vabduer
City Manager
Please immediately confirm receipt
of this fax by calling 333-6702
CITY OF LODI
P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
ADVERTISING INSTRUCTIONS
SUBJECT: PUBLIC HEARING ON RESOLUTION OF CONSIDERATION TO LEVY A
REDUCED SPECIAL TAX WITHIN A PORTION OF THE CITY OF LODI
COMMUNITY FACILITIES DISTRICT NO. 2007-1 (PUBLIC SERVICES)
PUBLISH DATE: SATURDAY, JULY 11, 2015
TEAR SHEETS WANTED: One (1) please
SEND AFFIDAVIT AND BILL TO:
LNS ACCT. #0510052
DATED: MONDAY, JULY 6, 2015
JENNIFER M. FERRAIOLO, CITY CLERK
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
ORDERED BY: JENNIFER M. FERRAIOLO
CITY CLERK
PAMELA M. FARRIS
DEPUTY CITY CLERK
ELENA STODDARD
ADMINISTRATIVE CLERK
Verify Appearance of this Legal in the Newspaper — Copy to File
Emailed to the Sentinel at dianer@lodinews.com at "' ' time) on (date) (pages)
LNS Phoned to confirm receipt of all pages at (time) PM
(initials)
forms\advins.doc
09��FOR�
DECLARATION OF POSTING
PUBLIC HEARING ON RESOLUTION OF CONSIDERATION TO LEVY A REDUCED
SPECIAL TAX WITHIN A PORTION OF THE CITY OF LODI COMMUNITY FACILITIES
DISTRICT NO. 2007-1 (PUBLIC SERVICES)
On Monday, July 6, 2015, in the City of Lodi, San Joaquin County, California, a Notice of
Public Hearing on Resolution of Consideration to Levy a Reduced Special Tax. within a
Portion of the City of Lodi Community Facilities District No. 2007-1 (Public Services)
(attached and marked as Exhibit A) was posted at the following locations:
Lodi City Clerk's Office
Lodi City Hall Lobby
Lodi Carnegie Forum
WorkNet Office
declare under penalty of perjury that the foregoing is true and correct.
Executed on July 6, 2015, at Lodi, California.
JENNIFER M. FERRAIOLO
CITY CLERK
PAMELA M. FARRIS ELENA STODDARD
DEPUTY CITY CLERK ADMINISTRATIVE CLERK
NAAdministration\CLERK\Public HearingAAFFADAVITS\DECPOST CFD TAX.doc
1EXHI-BIT.Al
NOTICE OF PUBLIC HEARING
ON RESOLUTION OF CONSIDERATION TO LEVY A REDUCED SPECIAL TAX WITHIN A
PORTION OF THE CITY OF LODI COMMUNITY FACILITIES DISTRICT NO. 2007-1
(PUBLIC SERVICES)
NOTICE IS HEREBY GIVEN that the City Council of the City of Lodi on June 17, 2015,
adopted its Resolution No. 2015-89 in which it proposed to levy a reduced special tax within a
portion of Community Facilities District No. 2007-1 (Public Services) all pursuant to the provisions
of the Mello -Roos Community Facilities Act of 1982. The Resolution describes the reduced special
tax and the area subject to the reduced special tax (designated as Zone 1). For further details, the
Resolution is available at the offices of the City at 221 W. Pine Street, Lodi, California.
NOTICE IS HEREBY FURTHER GIVEN that the City Council has fixed Wednesday,
August 5, 2015, at 7:00 p.m., in the regular meeting place of the City Council,
Carnegie Forum, 305 W. Pine Street, Lodi, California, as the time and place when and where the
City Council will hold a public hearing to consider the Resolution. At the hearing, the testimony of
all interested persons or taxpayers for or against the proposed reduced special tax will be heard
and considered. Protests may be made orally or in writing, except that any protests pertaining to
the regularity or sufficiency of the proceedings shall be in writing and shall clearly set forth the
irregularities and defects to which objection is made. All written protests must be filed with the
City Clerk before the time fixed for the hearing. Any written protest may be withdrawn, in writing, at
any time before the conclusion of the hearing.
NOTICE IS HEREBY FURTHER GIVEN that, at the conclusion of the public hearing, the
City Council may abandon the proceedings or may, after passing upon all protests, submit to the
qualified electors the questions of levying the reduced special tax. If 50% or more of the registered
voters, or 6 registered voters (whichever is more), residing within CFD 2007-1, or the owners of 1/2
or more of the area of land included in CFD 2007-1 and not exempt from the reduced special tax file
written protests against the reduced special tax and sufficient protests are not withdrawn, the
reduced special tax shall not be considered for a period of one year from the date of the decision of
the City Council on the hearing.
NOTICE IS HEREBY FURTHER GIVEN that, if the City Council determines at the
conclusion of the public hearing to proceed, the election will be conducted by mailed ballot to the
landowners in Zone 1.
DATED: July 11, 2015
Jenfer M. F raiolo, City Clerk
Cit of Lodi
1271333.1 11233-038