REPORT TO COUNCIL
SUBJECT
Title
Action on a Reimbursement Agreement for Formation of a Community Facilities District in the Tasman East Specific Plan Area and Related Budget Amendment [Council Pillar: Promote and Enhance Economic, Housing and Transportation Development]
Report
BACKGROUND
The Tasman East Specific Plan supports the development of a new mixed-use residential neighborhood in the Tasman East area on the north of Tasman Drive between Lafayette Street and the Guadalupe River. The Specific Plan supports the development of up to 4,500 dwelling units at urban densities. One feature of the Specific Plan is the proposed extension of an existing street, Calle del Sol, northward to act as a “main street” through the middle of the new urban neighborhood. The City is in the process of evaluating a modification of the Specific Plan to treat the extension of Calle del Sol as a pedestrian and bicycle paseo, rather than as a neighborhood street as currently envisioned. Developing this portion of Calle del Sol as a paseo, rather than a street, would allow the City to retain an existing sewer pump station at its current location, integrating it into the design of the proposed paseo.
The Developers within the Tasman East Specific Plan Area have requested that the City initiate proceedings to establish a community facilities district (“CFD”) under the Mello-Roos Community Facilities Act to provide funding for certain public services for the proposed Calle del Sol pedestrian and bicycle paseo in the Tasman East Specific Plan Area. In order to prepare necessary documents for the formation process, and to calculate the amount of a special tax to fund the district services, the City is proposing to hire two outside consultants: Jones, Hall as legal counsel and Goodwin Consulting Group as special tax counsel. Jones, Hall and Goodwin Consulting were the City’s consultants when the City established Community Facilities District No. 2010-1 for Levi’s Stadium and Community Facilities District No. 2019-1 for the Lawrence Station Area.
As authorized by the Mello-Roos Act, the City can ask developers to advance the costs necessary to form a CFD, including the cost of hiring outside consultants. The attached agreement would provide that the Tasman East Developers deposit $49,500 with the City, to fully cover the cost of hiring the two consultants, inclusive of costs for City administration of the consultant agreements. In the event the City does not expend the entire amount, the excess will be refunded to the Developers. If the CFD is ultimately approved the Developers would be reimbursed from the CFD proceeds.
DISCUSSION
The formation of a Community Facilities District for the Tasman East Specific Plan Area would potentially provide funding for a variety of public services for the proposed Calle del Sol pedestrian paseo. These services include managing, maintaining and repairing improvements within the Paseo, including the pedestrian and bicycle pathways, storm drainage systems, landscaping, decorative paving, open spaces, and an enclosure for the City pump station.
The action before the Council does not in any way obligate the City Council to approve the formation of the CFD; that will be brought to the Council at a future date after appropriate noticing has been conducted, and would ultimately have to be voted upon by affected property owners. The only issue before the Council is whether to approve an agreement pursuant to which the Developers front the costs of forming the CFD. This would allow work to begin on formation of the CFD while the City continues to evaluate the proposed change of the Calle del Sol extension from a street to a bicycle pedestrian paseo. Approval of the Specific Plan modification, as well as the CFD, are potential future actions for City Council consideration.
On November 13, 2018, the City Council approved Resolution 18-8619, delegating the authority to execute most reimbursement agreements to the City Manager, up to a value of $250,000. Although the proposed reimbursement agreement is below that amount, the statute authorizing cities to collect advances of Mello-Roos setup costs, Government Code Section 53314.9, requires that the City Council approve the reimbursement agreement, and so Resolution 18-8619 would not apply here.
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)(5), in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
Approval of the reimbursement agreement will allow the City to recover outside consultant costs to prepare the documents necessary to form the CFD. Following the execution of the reimbursement agreement, the developers will deposit $49,500 in the City’s Expendable Trust Fund from which payments will also be made. The budget amendment below is recommended to recognize developer contributions to support outside consultant costs.
BUDGET AMENDMENT
FY 2020/21
|
|
Current |
Increase/ (Decrease) |
Revised |
|
Fund 079 - Expendable Trust Fund |
|
|
|
|
Revenues |
|
|
|
|
Developer Contributions |
$0 |
$49,500 |
$49,500 |
|
Expenditures |
|
|
|
|
Community Facilities District Formation - Tasman East |
$0 |
$49,500 |
$49,500 |
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s office.
PUBLIC CONTACT
Public contact was 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>.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to execute the Reimbursement Agreement with the Developers within the Tasman East Specific Plan Area; and
2. Approve the FY 2020/21 budget amendment in the Expendable Trust Fund to recognize developer contributions in the amount of $49,500 and establish a Community Facilities District Formation - Tasman East appropriation to account for outside consultant costs in the amount of $49,500.
Staff
Reviewed by: Andrew Crabtree, Director of Community Development
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Reimbursement Agreement