REPORT TO COUNCIL
SUBJECT
Title
Action on Resolutions to Establish Community Facilities District (CFD) 2019-1 (Lawrence Station) to finance certain Public Services, Conduct a Special Election for the CFD Formation, and Introduce an Ordinance Ordering a Levy of Special Taxes for the CFD
Report
BACKGROUND
On November 29, 2016, the City Council adopted the Lawrence Station Area Plan (a Specific Plan) and Environmental Impact Report, along with the associated General Plan and Zoning Ordinance Amendments. The Plan features a transit-oriented development and provides needed public improvements and facilities for residents. To maintain the unique, high quality and non-standard facilities and avoid the potential impact on the City’s General Fund, the Plan indicated an option for funding the long term maintenance of such improvements through a Community Facilities District (CFD), a land-secured financing mechanism.
On March 5, 2019, Council adopted a Resolution of Intention No. 19-8674 to form Community Facilities District 2019-1 (Lawrence Station) and Future Annexation Area to finance certain public services (Attachment 1). These services primarily include maintenance of roadways, parks, parking spaces and enforcement, landscaped parkways and medians, trails, a highway overpass, and a community clubhouse and garden to be located within the development, all as further described below.
DISCUSSION
Under the California Mello-Roos Community Facilities Act (Act) of 1982, once the proceedings are completed, the City will be authorized to annually levy a special tax on the property within the CFD, beginning in Fiscal Year 2019/20. The special taxes will be used to fund the authorized public services, and will maintain additional funds necessary in an operating and maintenance reserve of 20% for replacement and repair as facilities near end of service life (straight line depreciation of 15 years). A summary of the authorized public services to be funded is provided below.
• Roadways: Maintenance, public space improvements including but not limited to signage, street trees, decorative lighting fixtures, etc. Other maintenance items include servicing, repair, replacement, and removal/replacement of roadways and sidewalks, cleaning and removal of graffiti, and associated electric, water, and other utility costs.
• Parks (Central Plaza, Linear Park, Kifer Park, Mini Park, Open Space easement, Community Garden, Community Park building, etc.): Maintenance, including servicing, repair, removal and replacement of neighborhood parks (includes park amenities such as park community centers, playground equipment, play courts, play structures, picnic tables, lighting, drinking fountains, barbeques, etc.). Maintenance also includes technological enhancements, cleaning and removal of graffiti, and associated electric, water, and other utility costs.
• Parking Spaces and Parking Enforcement: Maintenance, including servicing, repair, removal and replacement of parking spaces (includes poles, fixtures, bulbs, conduits, equipment, including guys, anchors, posts, pedestals and metering devices, etc.). Maintenance also includes technological enhancements, cleaning and removal of graffiti, and associated electric, water, and other utility costs. Additional services to be provided include the employment of a Community Services Officer (0.5 FTE), including salary and benefits, and including the maintenance costs of related equipment and vehicle.
• Landscaped Parkways and Medians: Maintenance, including servicing, repair, removal and replacement of parkways, landscape setbacks, and landscaped roadway medians (including all signage, turf, ground cover, shrubs, trees, plants, irrigation and drainage systems, ornamental lighting structures, electricity, repair/replacement & inspection, and associated appurtenant facilities located within the streetscape). Maintenance includes cleaning and removal of graffiti, and associated electric, water, and other utility costs.
• Trails/Pathways: Maintenance, including servicing, repair, removal and replacement of all facilities associated with the trails (includes amenities such as trees, plant material, sod, irrigation systems, sidewalks, drainage facilities, weed control and other abatements, signs, associated appurtenant facilities, etc.).
• Highway Overpass: Maintenance, including servicing, repair, replacement, and removal of all facilities associated with the Highway Overpass between Westlake and SummerHill (includes vertical curbs, median, recovery areas, shoulders, concrete, bridge supports, etc.). Maintenance also includes cleaning and removal of graffiti, and associated electric, water, and other utility costs.
• Community Clubhouse and Garden: Maintenance, including servicing, repair, replacement, and removal of all facilities associated with the Community Clubhouse and Garden (includes amenities such as lighting, drinking fountains, restrooms, exercise facilities, shrubs, trees, plants, irrigation and drainage systems, ornamental lighting structures, electricity, repair/replacement & inspection, and associated appurtenant facilities, etc.). Maintenance also includes cleaning and removal of graffiti, and associated electric, water, and other utility costs.
Prior to the March 5, 2019 Council meeting, 100% of the owners of the land proposed to be included in the CFD submitted petitions and waivers requesting that the Council proceed with the CFD. The petitions and waivers authorized the Council to initiate the proceedings to form the CFD, and waived certain time frames associated with the formation process. The Council adopted the requisite Resolution of Intention (Attachment 1) to formally start the CFD formation process at the March 5, 2019 meeting. The Resolution No. 19-8674 also set a public hearing for April 9, 2019, so that public testimony can be taken on the question of establishing the CFD.
At tonight’s meeting, the Council will conduct a public hearing to consider the formation of the proposed CFD, and receive public testimony. At the conclusion of the public hearing, if the Council intends to proceed with the formation of the CFD, the Council will need to adopt a Resolution of Formation of the CFD (Attachment 2), which establishes the scope of the facilities to be built and the special tax formula, and a Resolution Calling a Special Election (Attachment 3), which calls for the required vote of affected property owners.
Although some CFD formations require a waiting period prior to the actual election, in this case the property owners have waived any waiting period preceding the Election. So, after adopting the resolutions, the Council will immediately conduct the Special Election at the public meeting. Each land owner will have one vote for each acre or portion of acre owned; the ballot form for the election is found in Attachment 4.
After completing the election, the Council will then adopt a Resolution confirming the results of election (Attachment 5), and if the vote was successful, directing recording of notice of special tax lien (Attachment 6). Finally, if the vote is positive and approved by a 2/3ds majority, the Council is authorized to introduce an ordinance levying the special taxes (Attachment 7).
Implementation Schedule
Following tonight’s proceedings, if the election is successful, the City Clerk must complete, execute and cause to be recorded in the office of the County Recorder a notice of special tax lien within 15 days (Attachment 6).
CFD Administration
In conformance with Resolution of Intention No. 19-8674 to form Community Facilities District 2019-1 (Lawrence Station) and Future Annexation Area to finance certain public services, the CFD Report (Attachment 8) has been prepared and is on file with the City. On or about July 1 of each Fiscal Year, the Administrator (Director of Finance or City Manager designee) for the CFD will identify the current Assessor’s Parcel Numbers (APN) for all Parcels of Taxable Property within the CFD. The Administrator shall also determine: (i) within which Tax Zone each Parcel is located; (ii) whether each Parcel of Taxable Property is Developed Property, Taxable Owners Association Property, or Taxable Public Property; (iii) for Developed Property, the number of Residential Units and the amount of Ground Floor Retail Square Footage and Other Non-Residential Square Footage on each Parcel; (iv) for Ground Floor Retail Square Footage, the amount of Exempt Retail Square Footage and Taxable Retail Square Footage; and (v) the Special Tax Requirement for the Fiscal Year. New parcels and developed properties subject to the CFD will be incorporated and the Special Tax will be calculated and assessed the appropriate rates according to the Rate and Method of Apportionment of the Special Tax (See Exhibit B of CFD 2019-1).
|
Table 1 Base Special Tax |
|
Land Use Category |
Base Special Tax Tax Zone 1 FY2018/19 |
Base Special Tax Tax Zone 2 FY2018/19 |
|
Residential Units |
$302.80 per Residential Unit |
$132.29 per Residential Unit |
|
Taxable Retail Square Footage |
$1.79 per Taxable Retail Square Foot |
$2.42 per Taxable Retail Square Foot |
|
Other Non-Residential Square Footage |
$1.79 per Other Non-Residential Square Foot |
$2.42 per Other Non-Residential Square Foot |
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve commitment to a specific project which may result in potential significant impact on the environment. For the underlying project, the Lawrence Station Area Plan, the City Council approved and certified an Environmental Impact Report (EIR) on November 29, 2016, and the EIR contemplated the formation of this CFD.
FISCAL IMPACT
By passage of the proposed Ordinance, the Council will authorize and levy special taxes within the CFD (including any parcel or parcels in the Future Annexation Area that annex into the CFD) pursuant to the Act, at the rates and in accordance with the formula (the "Rate and Method") set forth in the Resolution of Formation. The special taxes are intended to mitigate the impact of the new development and will offset maintenance costs that otherwise would have been borne by the General Fund. The CFD’s annual special tax revenues will range from a low of $344,374 in 2019/20 to $811,540 in the 30th year of the tax levy, assuming an average annual increase in the CPI of 3% per year. An initial appropriation amount of approximately $344,374 (or 100%) is expected to be allocated as follows: $2,988 (or 0.8677%) for roadways, $83,551 (or 24.2636%) for parks, $3,207 (or 0.9313%) for parking space maintenance, $26,875 (or 7.8046%) for landscaped parkways/medians, $72,900 (or 21.1705%) for facilities, $84,193 (or 24.4500%) for parking enforcement, and $70,660 (or 20.5199%) for reserves and administration. If approved, the revenues and expenditures for this CFD will be included in the Fiscal Year 2019/20 and 2020/21 Biennial Operating Budget, and thereafter in subsequent City budgets as updated. While the levy in the Future Annexation Area will be proportional and in accord with the formula, the actual amounts are unknown at this time.
COORDINATION
This report has been coordinated among the City Attorney’s Office, City Clerk’s Office, Parks & Recreation Department, Public Works Department, Police Department, and Finance Department.
PUBLIC CONTACT
A notice of public hearing was published in the Santa Clara Weekly on March 27, 2019. Public contact was also made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
ALTERNATIVES
1. Adopt a Resolution of Formation to Establish the Community Facilities District 2019-1 (Lawrence Station) to finance certain Public Services, and adopt a Resolution calling a Special Election.
2. Conduct a Special Election Regarding the Community Facilities District 2019-1 (Lawrence Station).
3. Adopt a Resolution Confirming the Results of Election and Directing Recording of Notice of Special Tax Lien.
4. Introduce an Ordinance Levying the Special Taxes for Community Facilities District 2019-1 (Lawrence Station).
5. Do not adopt a Resolution of Formation to Establish the Community Facilities District 2019-1 (Lawrence Station) and Do Not Conduct the Special Election.
RECOMMENDATION
Recommendation
Alternatives 1, 2, 3, and 4:
1. Adopt a Resolution of Formation to Establish the Community Facilities District2019-1 (Lawrence Station) to finance certain Public Services, and adopt a Resolution calling a Special Election.
2. Conduct a Special Election Regarding the Community Facilities District 2019-1 (Lawrence Station).
3. Adopt a Resolution Confirming the Results of Election and Directing Recording of Notice of Special Tax Lien.
4. Introduce an Ordinance Levying the Special Taxes for Community Facilities District 2019-1 (Lawrence Station).
Staff
Prepared by: James Teixeira, Director of Parks & Recreation
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Resolution No. 19-8674, A Resolution of Intention to Establish Community Facilities District 2019-1 (Lawrence Station)
2. Resolution of Formation to Establish Community Facilities District 2019-1 (Lawrence Station)
3. Resolution Calling a Special Election to Establish Community Facilities District 2019-1 (Lawrence Station)
4. Special Election Ballot Form for Community Facilities District 2019-1 (Lawrence Station)
5. Resolution Confirming the Results of Election and Directing Recording of Notice of Special Tax Lien for Community Facilities District 2019-1 Lawrence Station (Lawrence Station)
6. Notice of Special Tax Lien for Community Facilities District 2019-1 (Lawrence Station)
7. Ordinance Levying the Special Taxes for Community Facilities District 2019-1 (Lawrence Station)
8. Community Facilities District 2019-1 (Lawrence Station) Report