HomeMy WebLinkAboutCity Council Item No. 8CITY OF
LSINORE
DREAM EXTREME.
REPORT TO CITY COUNCIL
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: ROBERT A. BRADY
CITY MANAGER
DATE: JULY 14, 2009
SUBJECT: COMMUNITY FACILITIES DISTRICT NO. 2003 -2 (CANYON HILLS)
IMPROVEMENT AREA D, ALTERING THE RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAXES
Backaround
The City Council established a Community Facilities District No. 2003 -2 (Canyon Hills)
(the "CFD ") in 2004 pursuant to the Mello -Roos Community Facilities Act of 1982. The
CFD was created to finance the construction of public infrastructure related to the
Canyon Hills development. The CFD was partitioned into 4 separate improvement areas
(A through D), based on the construction phasing for the development.
Improvement Area D consists of a proposed 895 residential units and a school site.
Construction on the buildings has not begun within this improvement area.
Discussion
The configuration of the school site in Improvement Area D has changed since the CFD
was formed, reducing the area of taxable property within the CFD. Because of this
change, the current undeveloped tax rate in the Rate and Method of Apportionment of
special taxes (RMA) no longer provides adequate tax coverage. Therefore, the property
owner (Pardee Homes) has requested the RMA be altered to account for the reduction in
taxable area by increasing the undeveloped tax rate. There will be no change to the
developed tax rates.
Pardee Homes has also requested that the termination of the special tax for Improvement
Area D be extended from Fiscal Year 2046 -47 to Fiscal Year 2052 -53, or 6 years. This
coincides with the number of years that have passed since the creation of the CFD and
there has been no development activity in that time period.
CC July 14, 2009 Item No. 8
Page 1 of 22
Resolution of Consideration for CFD 2003 -2
July 14, 2009
Page 2
Pardee Homes has agreed to add to the RMA a certificate allowing for the reduction of
the developed property special taxes prior to bond sale. Should the total tax rate for the
parcels in Improvement Area D exceed the City s goal of 2% prior to bond issuance, the
certificate can be used to permanently reduce the CFD special taxes to keep the total tax
within the 2% goal. In 2005, City staff began requiring a similar certificate in all new
CFDs.
The proposed changes require two- thirds (2/3) majority approval by the land owners
within Improvement Area D.
Attached is a Resolution of Consideration to alter the RMA and setting a Public Hearing
for August 25, 2009. The proposed amended and restated RMA is also attached.
Fiscal Impact
Cost of the change proceedings is bom by the developer. All other costs are paid
through the CFD.
Recommendations
Adopt a Resolution of Consideration to alter the rate and method of apportionment
of special taxes within Improvement Area D of CFD No. 2003 -2 (Canyon Hills) and
set a Public Hearing for August 25, 2009, 7:00 PM.
Prepared by: James R. RI
Acting Director Administrative Services
Approved by: Robert A. Brady
City Manager
CC July 14, 2009 Item No. 8
Page 2 of 22