HomeMy WebLinkAboutAGENDA REPORT 2018 1011 CC SPEC ITEM 06BCITY OF MOORPARK,
CALIFORNIA
City Council Meeting
of October 11, 2018
ACTION Consensus to
schedule this discussion for a
regular Council meeting
BY M. Benson
B. Workshop Discussion Regarding Advantages and Disadvantages of Community
Facilities District (CFD) Versus Landscape and Lighting Maintenance District
(LLMD. Staff Recommendation: 1) City staff recommends the use of CFDs for
city government services instead of LLMDs when ent ering into new development
agreements; and 2) Provide direction to City staff regarding which financing
method the Council prefers: Community Facilities District (CFD) or Landscape
and Lighting Maintenance District (LLMD).
Item: 6.B.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Ron Ahlers, Finance Director
DATE: 10/11/2018 Special Meeting
SUBJECT: Workshop Discussion Regarding Advantages and
Disadvantages of Community Facilities District (CFD) Versus
Landscape and Lighting Maintenance District (LLMD)
OVERVIEW
The City has a long history of forming LMDs to cover landscaping costs for new
developments. However, city staff considers the use of a CFD to provide funds for on-
going city government services to be superior to LMDs.
Chris Fisher, Vice President & Group Manager along with Mike Medve, Project
Manager, from Willdan Financial Services, will present the differences between CFDs
and LMDs as a financing tool for on-going government services. The City has
contracted with Willdan Financial Services for over a decade to provide formation
services for CFDs as well as on-going support for the administration of CFDs (aka
“Mello-Roos District”). Additionally, David Fama from Jones Hall is expected to attend
the meeting. The City has contracted with Jones Hall for many years to provide bond
counsel services for the city’s debt issuances. Mr. Fama has been involved in each
issuance and is well qualified to speak on CFDs.
DISCUSSION
Community Facilities District (CFD)
A Community Facilities District (CFD) is a special tax district provided for in State Law
that funds public improvements and on-going services within an identified area. The
Mello-Roos Community Facilities District Act of 1982 authorized local governments to
create CFD’s for the purpose of selling tax exempt bonds to fund public improvements
and collect revenues to pay for public improvements. Also authorized is the collection of
revenue to fund services and maintenance associated with the new development (a
CFD by utilizing Government Code 53311-53368.3 for maintenance of facilities and
services). Requirements of creating a CFD include several procedural actions by the
City Council and affected property owners, such as an application, petition, Resolution
Item: 6.B.
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of Intention including Rate and Method of Apportionment and Boundary Map,
Resolution of Formation, property owner election, Public Hearing, and recordation of
Notice of Special Tax. Prior to the formation of a CFD, it must be approved by a two-
thirds majority of the qualified voters within the proposed district boundaries. As a
general practice that applies to all of the funding mechanisms discussed in this
document, when forming a new funding mechanism associated with residential
development that relies on a property assessment, the election regarding the imposition
of an assessment is held before the property is subdivided and lots are sold to individual
homeowners. The additional applicable assessment rate is therefore disclosed to
prospective homeowners by the home developer/builder.
Mello-Roos Community Facilities Act of 1982 (Government Code 53311 et. seq.) can
fund 100% of the cost of the following capital improvements:
♦ Street improvements
♦ Water, Sewer, Storm Drain improvements
♦ Parks, Libraries, Schools and other Public buildings
♦ Development Impact Fees for any of the above
CFD Special Tax can fund 100% of the cost of the following services:
• Police protection services
• Fire protection and suppression services
• Ambulance and paramedic services
• Recreation programs
• Libraries
• Schools
• Parks, parkways and open space maintenance
• Flood and storm protection services
• Street maintenance
Landscape and Lighting Maintenance Districts (LLMD’s)
Landscape and Lighting Maintenance Districts LLMD’s are permitted under the
Landscaping and Lighting act of 1972 (1972 Act) and State of California Proposition
218, the "Right to Vote on Taxes Act". The 1972 Act permits the formation of LLMD’s,
and annexation into said district to finance the installation, maintenance and servicing of
landscaping, trails, fencing, irrigation, streetlights, traffic signals, bridge lights, graffiti
abatement, bio-swales, and fossil filters through annual assessments on real property
within the district. The annual assessment for each zone in the LLMD is based on the
estimated specific benefit to each parcel, Equivalent Dwelling Unit (EDU) or acre and
not on property valuation. In 1996, State of California Proposition 218 required that all
parcel assessments be presented to the property owners for their authorization in order
to levy a parcel assessment. A "Special Election" is conducted to ascertain if 51% of the
affected property owners are in favor of an annual assessment for a LLMD being added
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to their property taxes. Elections are conducted in the same year the application for
annexation is submitted. Although LLMD’s do provide for a number of services to be
included, they are not as broad as CFD’s in the eligibility of services that can be
financed on an on-going basis.
Annually, the City goes through a process for the LLMD: prepare engineer’s report,
general benefit vs. special benefit determination, can only fund special benefit cost,
submit preliminary report to City Council, set a public hearing date, hold a public hearing
on the final report, City Council approve final report and submit the assessment to the
County for inclusion on the property tax bill.
FISCAL IMPACT
None.
STAFF RECOMMENDATION
1) City staff recommends the use of CFDs for city government services instead of
LLMDs when entering into new development agreements.
2) Provide direction to City staff regarding which financing method the Council prefers:
Community Facilities District (CFD) or Landscape and Lighting Maintenance District
(LLMD).
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