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HomeMy WebLinkAboutCC Reso No 1995-67RESOLUTION NO. 95-67 A RESOLUTION ADOPTING LOCAL GOALS AND PC??.,ICIES ~'~R COMMUNTTY FACILTTIES DISTRx~'I'S - ~~MMER!r7.R,I PRC7PFJi'!?'Y RESOLVED by the City Council ~f th~ Cit;~ af La:.'~e Slsinore (the "City") that: WHEREAS, SecHon 533Il2.7(a) yi the California Government Code requires that the City Council of the City of Lake Elsinore (the "City") consider and adopt local goals and policies for community facilities c?istricts ("CFDs") prior to the initiation of proceedings to establish a CFD under the t~r~vi,ic,~r> of Chapter 2.5 of Part 1 of Divisiom 2 of Title 5 of the California Government Coc?e i}hti "Ac.'); and WHEi'2EyS, this Ciiy Council. inte~ds to consider the establishment of a CFD rela±ed to a commercial development known a; !~itq Center, and desires at this time to adopt local goals and policies for CFDs involving commercial property so that it may commence proceedings for establishing a ~r'D; and WHEREA3, City staff has caused to be prepared a draft of goals and policies for CFDs of the City invoTving commercial property (the "Goals and Policies"), the form of which is on file with the City Clerk, and this City Council has duly considered said GoaLs and Policies. NOW, THEREFORE, TT IS HEREBY ORDERED that the Goals and Policies, in the form on file with the City Clerk, are hereby adopted as the local goals and policies of the City for CFDs involving commercial property, and are intended to satisfy the requirements of Section 53312.7(a) of the Act. ~F%~FF~F~F%~F+F%~F~F PASSED AND ADOPTED this lOth day of October,1995, by the following vote: AYES: COUNCILMEMBERS: BENDER, BRINLEY, PAPE, WASHBURN NOES: COUNCILMEMBERS: ALONGI ABSENT: COUNCILMEMAERS: NONE ~l ~U~> ~~ Gary Washbum, Mayor City of Lake Elsinore (SEA Attest: ~ By: ~ Approved as to Legal Form: ~~ Sohn R. H~. er, it Attor.ney City of Lake Elsinore ~. 22054-I1 JI-IH4V:Pjf:cra 10/04/95 J1954 QTY OF LAKE ELSINORE LOCAL GOALS AND POLIQES FOR COMMUNITY FAQLITTES DISTRICTS - COMMIIiQAL PROPIItTY (Adopted October 10,1995) I. INTRODUCTION. Section 53312.7(a) of the California Government Code requires that the City consider and adopt local goals and policies wncerning the use of the Mello-Roos Community Facilities Act of 1982 (the "Act"), prior to the initiation of proceedings on or after January 1, 1994 to establish a new community facilities district ("CFD") under the Act. The following goals and policies aze intended to apply solely to community facilities districts which involve only commercial properries, and are intended to meet the minnnum requirements of the Act. These local goals and policies may be amended or supplemented by resolution of the City Council at any tune. It is expected that the City will adopt separate local goals and policies for community facilities districts involving property for residential and mixed residential and commercial developments. II. GOALS. The financing of public facilities and services under the Act serving commercial developments should be undertalcen only in connection with economic development, and where no special tax is expected to be levied on property used for private residential purposes. CFDs established under these goals and policies may only include property intended to be used for commercial or industrial purposes, or office buildings. Any request for a CFD involving any private residential property will require adoption of separate and distinct goals and policies. The City shall make the determination as to whether a proposed district shall proceed under the provisions of the California assessment laws or the Act. The City may confer with consultants and the applicant to learn of any unique CFD requirements such as faciliHes serving the regional area prior to making any final determination. All City and consultant costs incurred in the evaluation of new CFD applications and the establishment of CFDs will be paid by the applicant(s) by advance deposit increments. The City shall not incur any non-reimbursable expense for processing CFDs. Expenses not chargeable to the CFD shall be borne by the applicant. III. ELIGIBLE PUBLIC FACILITIES AND SERVICES. The improvements eligible to be financed by a CFD must be owned by a public agency or public utffity, and must have a useful life of at least fiue (5) years, except that up to five percent of the proceeds of an issue may be used for facilities owned and opetated by a privately-owned public utility. The development or redevelopment proposed within a CFD must be consistent with the City's general plan and must have received any required legislative approvals such as zoning or specific plan approvaLs. A CFD shall not vest any rights to future land use on any properHes, including those which are responsible for paying special taxes. T'he list of eligible public facilities indude, but aze not limited to, the following: • Streets • Street lighting • Traffic signals and safety lighting • Landscaping on public property or in public easements • Sanitary sewer facilities • Storm drain facilities • Public pazldng strucivres • Flood control facilities • Potable and reclaimed water facilities • Parks and recreational facilities • Elementary and secondary school sites and facilities • Libraries • Child care facilities • Public utilities • Cultural facilities • Police and fire protecHon facilities • Governmental facilities The funding of public facilities to be owned and operated by public agencies other than the City shall be considered on a case-by-case basis. If the proposed financing is consistent with a public facilities financing plan approved by the City, or the proposed facilities are otherwise consistent with approved land use plans for the property, the City shall consider entering into a joint financing agreement or joint powers authority in order to finance these facilities. A joint agreement with the public agency that will otvn and operate any such facility must be entered into prior to the resolution of formarion of any CFD. The City will consider on a casrby-case basis CFDs established for the provisions of services eligible to be funded under the Act. Eligible services are as specified in the Act. IV. PAIORITIES FOR CFD FINANCING. Priority for CFD financing shall be given to public facilities which: (a) are necessary for economic development, or (b) are otherwise incident to an economic development project. If appropriate, the City shall prepare a public facilities financing plan as a part of the specific plan or other ]and use document that identifies the public facilities required to serve a project, and 4he type of financing to be utilized for each facility. V. CREDIT QUALITY REQUIREMENTS FOR CFD BOND ISSUES. All CFD bond issues should have at least a three to one property value to public lien ratio after calculating the value of the financed public improvements to be installed. Property value may be based on either an appraisal or on assessed values as indicated on the county assessor's tax roll. The appraiser shall be selected by the City, and the appraisal shall be based on standards promulgated by the State of California and otherwise determined applicable by City staff and consultants. The appraisal must be dated within nine months of the date the bonds are issued. The public lien amount shall include the bond issue currently being sold plus any public indebtedness secured by a lien on real property currently existing against the properties to be taxed. Less than a three to one property value to public lien raHo, excessive tax delinquencies, or projects of poor economic viability may cause the City to disallow the sale of bonds or require credit enhancement prior to bond sale. The City may consider exceptions to the above policies for bond issues that do not represent an unusual credit risk, either due to credit enhancement or other reasons specified by the City, and which otherwise provide extraordinary public benefits. If the City requires letters of credit or other security, the credit enhancement shall be issued by an insHtution, in a form and upon terms and condiHons satisfactory to the City. Any security required to be provided by the applicant may be dischazged by the City upon the opinion of a qualified appraiser, retained by the City, that a value-to-lien ratio of three to one has been attained. As an alternative to providing other security, the applicant may request that a portion of the bond proceeds be placed in escrow with a corporate agent in an amount sufficient to assure a valurto-lien ratio of at least three to one on the outstanding proceeds. The proceeds shall be released at such times and such amounts as may be necessary to assure a value-to-lien ratio of at least three to one on the aggregate outstanding bond proceeds and other indebtedness secured by real property liens as required. VI. DISCLOSURE REQUIREMENTS FOR PROSPECTIVE PROPERTY PURCHASERS. A. Disclosure Rec~uirements for Develo}~ers. Developers who are selling lots or pazcels that are within a CFD shall provide disclosure notice to prospective purchasers that complies with all of the requirements of Section 53341.5 of the Government Code. The disclosure norice must be provided to prospecHve purchasers of property at or prior to the time the contract or deposit receipt for the purchase of property is executed. Developers shall keep an executed copy of each disclosure document as evidence that disclosure has been provided to all purchasers of property within a CFD. B. Disclosure Requirements for the Resale of Lots. The City Department of Administrative Services shall provide a notice of special taxes to sellers of property (other than developers) which will enable them to comply with their notice requirements under Section 1102.6 of the Civil Code. This notice shall be provided by the City within five working days of receiving a written request for the notice. A reasonable fee may be chazged for providing the notice, not to exceed any maximum fee specified in the Act. VII. EQUITY OF SPECIAL TAX FORMULAS AND MAXIMUM SPECIAL TAXES. Special tax formulas for CFDs shall provide for minunum special tax levels which satisfy the following expenses of a CFD: (a) 110 percent debt service coverage for all CFD bonded indebtedness, (b) the reasonable and necessary administrative expenses of the CFD, and (c) amounts equal to the differences between expected earnings on any escrow fund and the interest payments due on bonds of the CFD. Additionally, the special tax formula may provide for the following: (a) any amounts required to establish or replenish any reserve fund established in associarion with the indebtedness of the CFD, (b) the accumulaHon of funds reasonably required for fuhue debt service, (c) amounts equal to projected delinquencies of special tax payments, (d) the costs of remarketing, credit enhancement and liquidity facility fees, (e) the cost of acquisirion, construcHon, furnishing or equipping of facilities, (fl lease payments for existing or future facilities, (g) costs associated with the release of funds from an escrow account, and (h) any other costs or payments permitted by law. The special tax formula shall be reasonable and equitable in allocating public facilities' costs to parcels within the CFD. Exemptions from the special tax may be given to parcels which are publicly owned, aze held by a property owners' associarion, aze used for a public purpose such as open space or wetlands, aze affected by public utility easements making impractical their utilization for other than the purposes set forth in the easements, or have insufficient value to support bonded indebtedness. The total projected property tax levels for any CFD shall not exceed any maximum specified in the Act. The annual increase, if any, in the maximum special tax for any parcel shall not exceed any maximum specified in the Act. The increase in the special tax levied on any pamel as a consequence of delinquency or default by the owner of any other parcel shall not exceed any maximum specified in the Act. Special taxes will only be levied on an entire County Assessor's parcel, and any allocation of speciai tax liability of a County Assessor's pazcel to leasehold or possessory interest in the fee ownership of such County Assessor's pazcel shall be the responsibility of the fee owner of such parcel and the City shall have no responsibility therefore and has no interest therein. Failure of the owner of any County Assessor's parcel to pay or cause to be paid any special taxes in full when due, shall subject the entire pazcel to foreclosure in accordance with the Act. The City shall retain a special tax consultant to prepare a report which: (a) recommends a special tax for the proposed CFD, and (b) evaluates the special tax proposed to determine its ability to adequately fund identified public facilities, City administrative costs, services (if applicable) and other related expenditures. Such analysis shall also address the resulting aggregate tax burden of all proposed special taxes plus existing special taxes, ad valorem taxes and assessments on the properties within the CFD. VIII. APPRAISALS. The definitions, standards and assumptions to be used for appraisals shall be determined by City staff on a case-by-case basis, with input from City consultants and CFD applicants, and by reference to relevant materials and information promulgated by the State of California. In any event, the value-to-lien ratio shall be determined based upon an appraisal by an independent MAI appraiser of the proposed CFD. The appraisal shall be coordinated by and under the direction of the City. All costs associated with the preparation of the appraisal report shall be paid by the entity requesting the establishment of the CFD through the advance deposit mechanism. IX. TERMS AND CONDITIONS OF BONDS. All terms and conditions of the bonds shall be established by the City. The City will control, manage and invest all CFD issued bond proceeds. Each bond issue shall be structured~to adequately protect bond owners and to not negatively impact the bonding capacity or credit raHng of the City through the special taxes, credit enhancements, foreclosure covenant, and special reserve. All statements and material related to the sale of bonds shall emphasize and state that neither the faith, credit nor the taxing power of the City is pledged to security or repayment of the Bonds. The sole source of pledged revenues to repay CFD bonds are special taxes, bond proceeds and reserve funds held under the bond document, and the proceeds of foreclosure proceedings and additional security instruments provided at the time of bond issuance. X. CFD COST DEPOSITS AND REIMBURSEMENTS. All City and consultant costs incurred in the evaluation of CFD applications and the establishment of CFDs will be paid by the entity requesting the establishment of the CFD by advance deposit increments. The City shall not incur any non-reimbursable expenses for processing and administering CFDs. Expenses not chazgeable to the CFD shall be directly borne by the applicant. Each peririon for formation of a CFD shall be accompanied by an initial deposit in the amount determined by the City to fund 'uutial staff and consultant costs associated with CFD review and implementation. If additional funds are needed to off-set costs and expenses incurred by the City, the City shall make written demand upon the applicant for such funds. If the applicant fails to make any deposit of additional funds for the proceedings, the City may suspend all proceedings until receipt of such additional deposit. The City shall not accrue or pay any interest on any portion of the deposit refunded to the applicant or the costs and expenses reimbursed to the applicant. Neither the City nor the CFD shall be required to reimburse the applicant or property owner from any funds other than the proceeds of bonds issued by the CFD. 4 \ XI. USE OF CONSULTANTS. The City shall select all consultants necessary for the formation of the CFD and the issuance of bonds, including the underwriter(s), bond counsel, financial advisors, appraiser and the special tax consultant. Prior consent of the applicant shall not be required in the determination by the City of the consulting and finaneing team. JQI. EXCEPTIONS TO THESE POLICIES. The City may find in limited and exceptional instances that a waiver to any of the above stated policies is reasonable given identified special City benefits to be derived from such waiver. Such waivers only will be granted by action of the City Council. 5 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) SS: CITY OF LAKE ELSINORE ) I, VICKI KASAD, CITY CLERK OF THE CITY OF LAKE ELSINORE, DO HEREBY CERTIFY that the foregoing Resolution duly adopted by the City Council of the City of Lake Elsinore at a regular meeting of said Council on the 10th day of October, 1995, and that it was so adopted by the following vote: AYES: COUNCILMEMBERS: BENDER, BRINLEY, PAPE, WASHBURN NOES: COUNCILMEMBERS: ALONGI ABSENT: COUNCILMEMBERS: NONE . COUNCILMEMBERS: NONE ~ ~ VICKI KASAD, CITY CLERK CITY U~' LAKE ELSINORE _ (SEAL) STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) SS: CITY OF LAKE ELSINORE ) I, VICKI KASAD, CITY CLERK OF THE CITY OF LAKE ELSINORE, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. 95-67 of said Council, and that the same has not been amended or repealed. DATED: October 13, 1995 , ~~ VICKI KA , CIlY CLERK CITY OF L7:KE ELSINORE (SEAL)