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HomeMy WebLinkAboutRES CC 2004 2225 2004 0721RESOLUTION NO. 2004 -2225 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, RESCINDING RESOLUTION NO. 97 -1279 AND ADOPTING LOCAL LAND SECURED FINANCING POLICY CONCERNING THE USE OF THE MELLO -ROOS COMMUNITY FACILITIES ACT OF 1982 WHEREAS, the City Council (the "City Council ") of the City of Moorpark (the "City ") has duly considered the advisability and necessity of establishing community facilities districts in the City from time to time under and pursuant to the terms and provisions of the "Mello -Roos Community Facilities Act of 1982," being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act "); and WHEREAS, Section 53312.7 and 53345.8 of the California Government Code requires that the City of Moorpark (the "City ") consider and adopt a local Land Secured Financing Policy concerning the use of the Mello -Roos Community Facilities Act of 1982 (the "Act ") , prior to the initiation of proceedings to establish a new community facilities district ( "CFD ") under the Act; and WHEREAS, the City Council has previously adopted local goals and policies pursuant to the Act and has determined that it is in the best interests of the City that such goals and policies be amended by adoption of new local Land Secured Financing Policy; and WHEREAS, the City Council has determined to establish amended Land Secured Financing Policy concerning the use of the Act; and WHEREAS, the City Council is fully advised in this matter. NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVES AS FOLLOWS: SECTION 1. The above recitals are true and correct, and the City Council so finds and determines. SECTION 2. It is the intention of the City Council to from time to time approve the establishment of community facilities districts in the City under the provisions of the Act. Resolution No. 2004 -2225 Page 2 SECTION 3. Section 53312.7 and 53345.8 of the California Government Code requires that the City of Moorpark (the "City ") consider and adopt local Land Secured Financing Policy concerning the use of the Mello -Roos Community Facilities Act of 1982 (the "Act "), prior to the initiation of proceedings to establish a new community facilities district ( "CFD ") under the Act. SECTION 4. The City hereby rescinds Resolution 97 -1279 dated February 19, 1997, adopting Goals and Policies for Community Facilities Districts and hereby adopts the "Land Secured Financing Policy" Concerning the Use of Mello -Roos Community Facilities Act of 1982" attached as Exhibit A hereto as the goals and policies of the Cites referred to in Section 53312.7 of the Act. PASSED AND ADOPTED this 21st ATTEST: Deborah S. Traffenstedt, City Clerk y of Julf, 209%. rick HTntter, Mayor Attachment: Exhibit A- "Land Secured Financing Policy" Resolution No. 2004 -2225 Page 3 CITY OF MOORPARK LAND SECURED FINANCING POLICY For Special Assessment and Mello -Roos Community Facilities District Financing INTRODUCTION The City of Moorpark encourages development of commercial, residential and industrial property which result in reciprocal value to the City (i.e. increased jobs, property or sales tax revenues, major public improvements), and will consider developer or property initiated applications requesting the formation of community facilities districts ( "CFDs ") or special benefits assessment districts ( "ADs "), as well as other financing methods to assist these types of development and /or to provide funding for on -going City services an annual basis. Facilities and services will be financed in accordance with the provisions of the Mello -Roos Community Facilities Act of 1982 as amended and /or the appropriate laws governing the levying of assessments and the issuance of bonds concerning ADs. Generally, only improvements directly benefiting the CFD or the AD can be financed with CFDs or ADs. Developer exactions, such as off -site housing subsidies, school, transit impact fees, and other types of impact fees, may also be financeable. At the City's discretion, and depending upon existing circumstances, community services may also be financed on an on -going basis in addition to the issuance of bonds. The City shall make the determination as to whether a proposed district shall proceed under the provisions of the Mello -Roos Community Facilities Act or under the appropriate assessment district laws, and whether the district will be a construction, acquisition, or City services district. The City may confer with the developer and its consultants to learn of any unique district requirements, such as regional serving facilities or long -term development phasing, prior to making any final determination. All City and consultant costs incurred during evaluation of new development district applications, and the establishment of districts, will be paid by the developer(s) using advance deposits in those instances where a proposed district has been initiated by a party or parties other than the City. The City may incur expenses for analyzing proposed districts where the City is the principal proponent of the formation for financing of the district. Expenses not legally reimbursable by the district shall be borne by the developer. Both City and district consultant costs can be funded from Bond proceeds regardless of how funding is initially arranged. Resolution No. 2004 -2225 Page 4 DISTRICT COSTS, REIMBURSEMENT AND SURPLUS POLICIES Costs incurred by the City prior to formation: All costs incurred by the City prior to formation of the district, including but not limited to consultant costs (e.g., legal counsel, engineer firms, appraisers, special tax consultants, financial advisors), City staff and administrative costs and related expenses, cost of providing notices, printing and publication costs, and all expenses directly or indirectly relating to these items, shall be reimbursed to the City by the developer prior to formation. Reimbursement shall be facilitated by advance deposit increments in accordance with the agreements required by this policy document. Costs incurred by the City subsequent to formation: All City administrative and consultant costs related to administration of the district and incurred after formation shall be included within the assessment or special tax formula in accordance with applicable provisions of law. ■ Reimbursement to applicant/developer: 1. Where district is formed and bonds are issued or city services paid for on an ongoing basis. If the district is formed either to finance ongoing city services or to issue bonds, the developer shall be entitled to reimbursement from bond proceeds for all reasonable costs and expenses incident to the proceedings and construction of the public facilities, subject to approval of bond counsel, and subject to any applicable restrictions contained in the Improvement Acts or the Mello -Roos Community Facilities Act of 1982. With regard to developer paid consultant costs, reimbursement shall be limited to those district - related consultants hired by the City or those hired by the developer and expressly approved by the City. Eligibility for reimbursement for any otherwise- eligible expense is conditioned upon the developer providing paid invoices therefore to the City, and City approval. The developer shall not be entitled to reimbursement from bond proceeds for any of the following: • Administrative or overhead expenses, financial consultant or legal fees incurred by an applicant for the formation of a Special District (this limitation does not apply to amounts advanced by the developer to the City). • Land -use planning and subdivision costs and environmental review costs related to such land use planning and subdivision. Environmental impact studies unless off -site and directly related to the project. Construction loan interest. Resolution No. 2004 -2225 Page 5 • Costs, including but not limited to, land acquisition costs incurred prior to entering into a reimbursement or acquisition agreement or the adoption of a resolution of intention to form the special district. • Attorney's fees related to the land use entitlement or subdivision process unless off -site and directly related to the project. ■ On -site right -of -way and easements. ■ Other overhead expenses incurred by the applicant. 2. Where district is not formed, or where district is formed and bonds are not issued. In the event that the district is not formed due to City disapproval or abandonment, or due to developer abandonment, or the district is formed and bonds are not issued for any reason or the expenditure of the special tax for ongoing city services is not authorized, the City will refund to developer any remaining unexpended and unobligated portion of advance deposits posted with the City, subject to the City's prior and full reimbursement of all its direct and indirect costs. If the applicant/developer's advance deposit to the City is not sufficient to reimburse the City for all of its direct and indirect costs, the City will require an additional deposit by the developer for the difference. The City shall be entitled to pay any refund to the developer listed on the application form without interest, irrespective of any changes in the ownership or composition of the applicant/developer. In the event that a District is formed for City services only, the Developer shall be obligated to pay all expenses for the formation of the District. If a "service" district is not formed for any reason, the Developer shall be entitled to any unused portion of his advance deposit. 3. In the event that a District is formed for City services only, the Developer shall be obligated to pay all expenses for the formation of the District. If a "service" district is not formed for any reason, the Developer shall be entitled to any unused portion of his advance deposit. ■ Surplus Funds: In the event that there are surplus funds generated through the creation of the Special District and the sale of bonds, these surplus funds shall be used as follows: 1. The Council may direct staff to use a portion of this surplus to offset the annual levy of assessments or special taxes to property owners in following years in a manner consistent with the statutes. Under this policy, an amount of up to 5% of the total bond issue size not to exceed $1 million may be used to offset the annual levy without further Council action. 2. Any amount in excess of that used to offset the annual levy described in (2) above will be used to call bonds at an appropriate bond call date, as determined by staff and the City's financial advisor. Resolution No. 2004 -2225 Page 6 3. Any additional expenditure that conforms with the intent of the district and provides public benefit. USE OF CONSULTANTS The City shall employ any consultants necessary for the formation of a special district, review of the financing, and the issuance and administration of bonds, including but not limited to the underwriter(s); bond counsel; financial advisor; special tax consultant; engineers; appraiser; market absorption study consultant; or any other consultant deemed necessary by the City in its judgment to complete the district proceedings and for issuance of bonds. The cost reimbursement provisions of this policy shall apply to all costs and expenses incurred by City in employing such consultants. Any developer may retain its own consultants for its own benefit, but will work through those consultants hired by the City. If the developer retains its own consultants, all costs associated therewith shall be borne by the developer, without reimbursement from bond proceeds unless otherwise agreed to in writing by the City of Moorpark. ELIGIBLE INFRASTRUCTURE AND PUBLIC FACILITIES Infrastructure and public facilities eligible for district financing are those public improvements which benefit properties within a proposed development and /or will mitigate impacts of that development upon areas of the City outside the proposed development and which will be owned, operated and maintained by the City or another public agency such as a public school district as approved by the City. Normal "in- tract" improvements such as local and collector streets, curbs, gutters, sidewalks, parkways and medians, are not eligible improvements to be funded by the CFD. In -tract improvements which are, or will be, owned, operated or maintained by a private company or utility are not eligible, except for improvements to be owned by shareholders -owned utility companies regulated by the California Public Utilities Commission and which comprise less than five percent of the project. LAND USE APPROVALS All proposed projects within the proposed district, together with the infrastructure and public facilities, must be consistent with the City's adopted General Plan and zoning classifications. All property within the proposed district must possess land use determinations or zoning classifications of sufficient certainty, and facility requirements of sufficient specialty that each parcel can be adequately assessed. Resolution No. 2004 -2225 Page 7 AGREEMENTS REQUIRED The developer will be required to enter into all necessary agreements incident to district proceedings in a form provided by the City and consistent with these policies. These agreements may include, but not be limited to: • Development and Disposition Agreement • Acquisition and Disclosure Agreement • Funding and Reimbursement Agreement • Advance Deposit Agreement • Land Dedication Agreement (where required) • Other Agreements (as required) As a condition to the issuance and sale of the bonds, all of the agreements required by the City shall be duly approved and executed by the parties thereto. Prior to execution of any agreements, such agreements shall be reviewed by bond counsel and City Attorney and such other consultants as the City believes are appropriate. THE APPRAISAL PROCESS 1) Introduction The process of arriving at an appraised value may be summarized as follows: • Statement of appraisal purpose. • Required data and sources of data. • Gathering, recording and verification of data. • Determination of "highest and best use." • Estimation of land value. • Estimation of improvement value by relevant approach: • sales comparison, • cost (or replacement value), or • income capitalization. • Reconciliation of results to concluded value. • Report of value with statement of limitations, conditions, and assumptions. 2) The Appraiser - General Requirements Appraisals undertaken to establish value -to -lien ratios for land- secured financings can be complex, requiring the appraiser to interpret the significance of various financial and demographic data. Because an appraisal essentially is an appraiser's opinion of value, the City requires that the appraiser be qualified to render this opinion. Resolution No. 2004 -2225 Page 8 a) Credentials The appraiser will be credentialed by the State of California Office of Real Estate Appraisers and be a member of the Appraisal Institute (MAI) or have similar training, experience and qualifications. b) Independence The appraiser will be an independent contractor retained by the public agency, rather than a land owner /developer. 3) Date of the Value Estimate The date of the value estimate should clearly be identified in the appraisal report. The period between the date of the appraisal and the financing should be no more than three (3) months, to accurately represent land values to prospective investors. SECURITY: CREDIT ENHANCEMENT ■ Financial Plan — for new development, prior to City Council approval of the district, the developer must submit a financial plan which demonstrates to the City's satisfaction the developer's ability to pay all assessments and /or special taxes through build out of the project. Credit Enhancement — in general, where credit enhancement is required for the bond issue as a whole, in the opinion of the City's Financial Advisor, the developer shall provide such enhancement in such form as is approved by the City and the underwriters. Such enhancement may, for example, be required in cases where the value -to -lien ratio for property within the district is insufficient, and may take the form of letters of credit, policies of insurance, or other similar security to the satisfaction of the City Attorney and the City Manager. VALUE -TO -LIEN RATIOS If the value -to -lien ratio is 3:1 or greater for the entire district and if there is a value -to -lien ratio of 3:1 on at least 90% of vacant land in the district, the City may elect not to require letters of credit or other security to secure payment of the special taxes to be levied annually on properties within the district. If the value -to -lien ratio is less than 3:1 for the district as a whole or on at least 90% of vacant land in the district, the City may require either letters of credit or other security (assigned deposits, deposits to escrow) to secure payment of the special taxes /special assessments on properties within the district or may elect to abandon the district. Resolution No. 2004 -2225 Page 9 MARKET ABSORPTION STUDY The City, at its discretion, may require and may employ a consultant for the purpose of conducting a market absorption study. The cost for such study shall be considered an eligible expenditure of bond proceeds. SPECIAL TAXES AND ASSESSMENTS The projected special assessment and /or special tax, when added to the ad valorem property tax and other direct and overlapping debt for the proposed district (including other benefit assessments, special taxes levied for authorized but unissued debt, and any other anticipated special assessments, taxes or charges which may be included on a property owner's annual property tax bill), shall not exceed two percent (2 %) of the projected assessed value of each improved parcel within the district. A backup special tax shall be required to protect against changes in land use that may result in insufficient annual special tax revenues. 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 district issued bond proceeds. Bonds issued under this policy may be sold through either a competitive or negotiated sale or both. FISCAL FEASIBILITY REPORT Prior to the formation of a financing district, a fiscal feasibility report may be required if fifty percent (50 %) or more of the land within a district is substantially undeveloped. The report shall be prepared by or at the direction of the City. All costs for preparing this report shall be borne by the developer. An estimate of the report cost will be made prior to initiating the study and the developer shall deposit one hundred percent (100 %) of the cost prior to starting the report. SPECIAL TAX FORMULA The maximum special tax submitted to the qualified voters of the district shall not exceed one percent (1 %) of the projected assessed value of the developed properties at the time of full build -out of district formation. Furthermore, the total of the following shall not exceed two percent (2 %) of the projected assessed value of the subject properties: 1) Ad valorem property taxes levied by the State of California and assessed by the County of Ventura. 2) Voter approved ad valorem taxes levied by the City in excess of one percent (1 %) of the assessed value. Resolution No. 2004 -2225 Page 10 3) Special taxes levied by any existing CFD for the payment of bonded indebtedness and /or on -going services. 4) Assessments levied for any assessment district or maintenance district for the payment of bonded indebtedness or services. 5) The maximum special tax for the proposed CFD. The maximum special tax formula shall adhere to the following requirements: 1) The maximum special tax shall be established when a developed parcel is first subject to the tax and shall include the annual administrative costs of the City to administer the district. 2) Concerning that portion of the tax restricted to generating funds for maintenance of facilities or services, the special tax formula may include escalator rates allowing annual tax increases above two percent (2 %) per year for developed parcels. 3) The City shall have discretion to allow a special tax in excess of the two percent (2 %) maximum tax burden limits for any commercial or industrial lands within the district. 4) Concerning that portion of the tax restricted to generate funds for the payment of debt service, the special tax formula may include escalator rates, however, said increases shall never raise the annual tax above two percent (2 %). ACQUISITION PROVISIONS Unless as otherwise agreed to between the City and the developer, the following provisions will apply concerning the acquisition of public facilities with Mello -Roos or assessment district funds: ■ The delivery to the City by the developer of all deeds, easements, or other documents necessary to complete the transfer of title to the improvements and the land or interests in land on which the improvements have been constructed. ■ Issuance of a title insurance policy in favor of the City that ensures clear title to the land or interests in land to be conveyed to the City. ■ The delivery to the City of a certified copy of the developer's "Notice of Completion" filed with the County of Ventura Recorder's Office thirty -five (35) days prior to acceptance of the improvements. ■ The delivery to the City by the developer of lien waivers or releases from all Resolution No. 2004 -2225 Page 11 contractors, subcontractors, and suppliers associated with construction of the improvements; or, in cases where this is not practical, other equivalent security such as a lien -free endorsement from a title company. ■ Any other documentation required pursuant to the acquisition agreement between applicant/developer and the City. ■ Construction of such facilities in conformity with the requirements of Government Code Section 53313.5. CONTINUING DISCLOSURE The developer will comply with the federal requirements concerning secondary market disclosure as those requirements are interpreted by the City and its counsel. RESPONSIBLE DEPARTMENT The City's Administrative Services Department, which is located at 799 Moorpark Ave. Moorpark, CA 93021, and whose telephone number is (805) 517 -6242 , is designated as the department of the City responsible for: (i) preparing the annual roll of special tax obligations with respect to any District; (ii) providing information to interested persons regarding the current and estimated future tax liability of owners or purchasers of real property subject to the special tax lien; and (iii) furnishing notices of special tax as required by Section 53340.2 of the Act. Subject to the policies of the City, and as permitted by applicable law, the Administrative Services Department may obtain the assistance of a qualified consultant to perform any of the duties set forth above. TRANSPARENCY AND NOTIFICATION The City will take the following steps to ensure that prospective property purchasers are fully informed about their taxpaying obligations imposed under the Act: 1. It will conduct all proceedings required by the Act in the manner required by the Ralph M. Brown Act (Section 54950 and following of the California Government Code); 2. It will cause a map of the boundaries of any proposed District to be recorded, pursuant to Section 3111 of the California Streets and Highways Code, in the Office of the Recorder of Imperial County with 15 days following the adoption, of a resolution of intention to form that District, pursuant to Section 53321 of the Act; 3. It will give notice, pursuant to Section 53322 of the Act, prior to holding any public hearing on the establishment of a District; Resolution No. 2004 -2225 Page 12 4. It will record a notice of special tax lien, in the form specified by Section 3114.5 of the California Streets and Highways Code, within 15 days of the City Council's determination that the requisite number of voters are in favor of the levy of a special tax in connection with a District. Such notice will include, among other information: i. A description of the rate, method of apportionment, and manner of collection of the authorized special tax; ii. Information about the conditions under which the obligation to pay the special tax may be prepaid and permanently satisfied and the lien of the special tax canceled; iii. The name(s) of the owner(s) and the assessor's tax parcel number(s) of the real property included within this community facilities district and not exempt from the special tax; and iv. The name, address and telephone number of the Administrative Services Department, so that the Administrative Services Department may be contacted to obtain further information concerning the current and estimated future tax liability of owners or purchasers of real property subject to the special tax lien. 5. It will, through the Administrative Services Department, furnish a notice of special tax, in the form set forth in Section 53340.2(c) of the Act to any individual requesting the notice or any owner of property subject to a special tax levied by the local agency with five working days of a request for such notice. The City Council may establish a reasonable fee for this service, but such fee will not exceed $10.00. INTERPRETATION The City Council is empowered to interpret this document. A finding by the City Council that a District conforms with the provisions of this Land Secured Financing Policy shall be conclusive evidence of such conformity. AMENDMENT This Land Secured Financing Policy may be amended from time to time by resolution of the City Council. Resolution No. 2004 -2225 Page 13 GLOSSARY Acquisition district - a special assessment district or CFD formed to finance the acquisition of infrastructure or public facilities where the developer will be reimbursed for eligible construction and related costs. Bonds - bonds authorized and issued under the Improvement Act of 1911, the Municipal Improvement Act of 1913, the Improvement Bond Act of 1915, the Mello -Roos Act of 1982, or such other mechanism as is utilized by the City in its discretion to finance the infrastructure and /or public facilities. Bond counsel - special counsel retained by the City to assure compliance with applicable federal and state tax and other laws and regulations relating to public financing. Bond underwriter - the investment banker(s) retained by the City to design, develop and execute the sale of bonds in the market place. City - the City of Moorpark. Community Facilities District (CFD) - a special district formed pursuant to the Mello -Roos Community Facilities Act of 1982, to finance specific public improvements or public services, and where properties within the district are levied a special tax in accordance with the rate and method of apportionment adopted as part of the district proceedings. Fair market - the amount of cash or its equivalent which property would bring if exposed for sale on the open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other and both have knowledge of all of the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions upon uses and purposes. Fee district - a special district formed to finance specific infrastructure and /or public facilities, and where landowners within the district are assessed a fee, payable at the time of development or permit approval, which fee is proportionate to the benefit received from the infrastructure and /or public facilities. There is no bond financing associated with a fee district. Fiscal feasibility report - a study performed under the direction of the City to determine the financial viability of a proposed district. Resolution No. 2004 -2225 Page 14 Improvement acts - the Improvement Act of 1911, the Municipal Improvement Act of 1913, the Improvement Bond Act of 1915, or such other act or ordinance under which the proceedings are conducted, leading to formation of the district. Infrastructure and public facilities - those public improvements including but not limited to major streets and arterials; highway improvements and freeways; freeway interchanges; right of way acquisitions; bridges; street lights; water, flood, sewer and drainage improvements; landscape and irrigation facilities; reclaimed water facilities; environmental mitigation; bicycle and pedestrian facilities; fire and police stations; parks; wetlands; telephone ducts; electrical conduits; libraries; transit improvements (including public parking facilities); and the provision of certain services (if applicable), that may be eligible for financing under this document, and which are authorized improvements under the improvement act or CFD selected by the City. In -tract facilities - public facilities which serve an individual tract development, such as local subdivision streets, local utilities and local drainage systems. Special assessment district - an assessment district formed pursuant to an improvement act to finance eligible specified infrastructure and /or public facilities, and where properties within the district are assessed an amount proportionate to the benefit received from the improvements financed. Special tax consultant - consultant retained by the City to develop the rate and method of apportionment and other special tax formulas and criteria for a Mello -Roos CFD. Value -to -lien ratio - the value of a parcel of land as determined by an MAI appraisal relative to the amount for which land secured bonds may be sold for the parcel. Resolution No. 2004 -2225 Page 15 STATE OF CALIFORNIA ) COUNTY OF VENTURA ) CITY OF MOORPARK ) ss. I, Deborah S. Traffenstedt, City Clerk of the City of Moorpark, California, do hereby certify under penalty of perjury that the foregoing Resolution No. 2004 -2225 adopted by the City Council of the City of Moorpark at a regular meeting held on the 21st day of July, 2004, and that the same was adopted by the following vote: AYES: Councilmembers Harper, Hunter NOES: None ABSENT: Councilmember Millhouse ABSTAIN: None Mikos, Parvin and Mayor WITNESS my hand and the official seal of said City this 21st day of September, 2004. --J� S. I P"=,+ Deborah S. Traffenste t, City Clerk (seal)