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HomeMy WebLinkAbout1987-10-13; City Council; 9187; Policy for use of the Mello-RoosOF CARLSBAD — AGENP BILL AB# ?/^7 MTG 10-13-87 DEPT. ENG TITLE: POLICY FOR USE OF THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 DEPT. HD^^^ CITY ATT^^B) CITY MGRj^Lt- RECOMMENDED ACTION: Adopt Council Policy No. O a for the use of the Mello-Roos Community Facilities Act of 1982 ITEM EXPLANATION The Mello-Roos Community Facilities Act of 1982 legislated the mechanisms to establish tax districts for the provision of services and facilities not otherwise authorized by law. The legislation provides that with the approval of two-thirds of the voters, a tax for the construction and operation of a large variety of public facilities may be established. Where the district boundaries include fewer than 12 registered voters, the vote is taken by landowners voting by area. The provision of landowner voting makes the Community Facilities Act Districts a particularly attractive mechanism to fund such facilities as parks, fire stations, libraries, arterial highways and other facilities required to accommodate future growth. It is anticipated that property owners within the City will be proposing utilization of this mechanism in the near future as a tool to assist in the implementation of Growth Management. The proposed policy establishes guidelines and procedures for the development and processing of these districts. FISCAL IMPACT OUJ IQ_0. The policy specifies that for developer initiated districts, all staff and consultant costs shall be borne by the project proponents. Some staff commitment should be expected in the initial implementation of the Policy. No funding is requested at this time. EXHIBIT • Council Policy No. 3f for the use of the Mello-Roos Community Facilities Act of 1982 o oz3 Oo CITY OF CARLSBAD COUNCIL POLICY STATEMENT EFFECTIVE DATE: 10-13-87 GENERAL SUBJECT:ASSESSMENT DISTRICT FINANCING OF PUBLIC IMPROVEMENTS SUPERSEDES DATE: SPECIFIC SUBJECT:POLICY FOR USE OF POLICY NO: 38 PAGEl OF 5 DATE ISSUED: 10-13-87 CANCELLATION DATE: THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 COPIES TO: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File BACKGROUND: The City Council has adopted a Growth Management Program which con- templates the construction of a large number of various public facil- ities in the coming years. The City Council recognizes that the Mello-Roos Community Facilities Act of 1982 provides a flexible tool which may be useful in providing financing for the construction of public facilities in conjunction with development. The City Council anticipates that from time to time they will receive requests from property owners of major planned developments to use the Mello-Roos legislation for the construction of public facilities. PURPOSE: To establish a policy which will permit the use of the Mello-Roos Community Facilities Act to assist in providing needed public facilities. To provide a procedure for processing applications for Community Facility District financing and to provide a staff committee to review such applications and to consider initiating Districts for Council consideration where appropriate. This policy is primarily intended to apply to Community Facility Districts proposed for property which is predominantly undeveloped and where the City elects to use public financing for appropriate public improvements. POLICY: 1. The City may allow the financing of public improvements or ser- vices under the provisions of this policy where the public faci- lities or services represent, in the City's opinion, a significant public benefit. CITY OF CARLSBAD COUNCIL POLICY STATEMENT EFFECTIVE DATE: 10-13-87 GENERAL SUBJECT:ASSESSMENT DISTRICT FINANCING OF PUBLIC IMPROVEMENTS SUPERSEDES DATE: SPECIFIC SUBJECT: POLICY FOR USE OF POLICY NO: 38 PAGE 2 OF 5 DATE ISSUED: 10-13-87 CANCELLATION DATE: THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 COPIES TO: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File 2. Facilities which may be considered shall be public facilities of general benefit such as administrative facilities, libraries, fire stations, parks, schools, a major drainage facilities, arterial highways major bridges and freeway interchanges. 3. For all Districts the City shall select the special tax consultant, bond counsel, and, if required, the financial consultant. The design engineer and the underwriter will also be selected by the City but in consultation with proponents of the District. 4. Where Districts are initiated by property owners,a sum sufficient to pay all fees and costs for the proposed Community Facilities District shall be deposited with the City by the proponents of the district prior to award of any contract. The proponents shall also be required to deposit with City a sum sufficient to cover all City costs incurred in connection with review of a proposed district including staff review, legal review, adminis- tration, plan checking, investigation, City Council review and inspection. These sums will be retained by City to the degree used if the district is not successfully completed or if such costs are not recovered by City from the district. Where the district is successfully completed deposits may be credited against taxes or reimbursed by the district under the terms of a prior agreement. 5. If the City Council determines it is necessary, a financial feasi- bility/market absorption study may be required prior to initiation of a District. Where such a study is required the City will select and retain the consultant with funds deposited by project proponents. It is expected that the project property value to- debt ratio should 4:1 after the installation of the improvements to be financed. A project may be approved with a ratio between 4:1 and a minimum of 3:1 if the ratio is recommended by both bond counsel and the underwriter and if the City Council finds the reduced ratio to be within parameters acceptable to them. The value of the property proposed to be taxed shall be determined CITY OF CARLSBAD COUNCIL POLICY STATEMENT GENERAL SUBJECT: ASSESSMENT DISTRICT FINANCING OF PUBLIC IMPROVEMENTS SPECIFIC SUBJECT: POLICY FOR USE OF POLICY NO: PAGE 3 OF 38 DATE ISSUED:10-13-87 EFFECTIVE DATE:10-13-87 CANCELLATION DATE: SUPERSEDES DATE: THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 COPIES TO: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File by an M.A.I, appraisal, performed by an appraiser selected by the City. Property owners for all Districts will be required to provide for full and complete disclosure of any Community Facilities District or Assessment District financing applicable to the property to prospective purchasers. The disclosure should include at a minimum the following: a. The maximum tax on the property; b. The duration of the tax; c.A list of the specific facilities the tax is for; and d. The tax formula used in easily understood terms. If the tax formula is such that a list of known payments for each year can be computed, a complete list of payments for the term of the bond shall be made for each parcel. The City or a consultant selected by the City will determine the taxing formula. The prime emphasis in this determination will be fairness to the future property owner who will be paying the taxes over years. Although this policy does not fix the method of determining the formula, strong consideration should be given to (a) a fixed annual amount or (b) a fixed amount increased annually by a small percentage. PROCEDURE: 1. Proponents desiring to form a Mello-Roos district shall submit an application requesting a study for the establishment of a Community Facilities District which shall do all of the following: CITY OF CARLSBAD COUNCIL POLICY STATEMENT GENERAL SUBJECT:ASSESSMENT DISTRICT FINANCING OF PUBLIC IMPROVEMENTS SPECIFIC SUBJECT: POLICY FOR USE OF POLICY NO: 38 PAGE 4 OF 5 DATE ISSUED: 10-13-87 EFFECTIVE DATE: 10-13-87 CANCELLATION DATE: SUPERSEDES DATE: THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 COPIES TO: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File 2. a. b. c. d. e. Request the City Council to consider proceedings to establish a Mello-Roos Community Facilities District. Describe the boundaries of the territory proposed for inclusion in the District. State the types of facilities to be financed by the District. Provide a detailed financial alternative analysis exploring alternative funding options and demonstrating the advantages which make a Mello-Roos Community Facilities District the most desirable financing mechanism for the proposed improvements. Be signed by not less than ten (10%) percent of the registered voters residing within the proposed District or by owners of not less than ten (10%) percent of the land area within the proposed District. It is the intention of the City Council that proponents of a District have an early opportunity to have the proposal reviewed by City staff for compliance with this policy. In that regard, the City Council hereby directs the creation of the Project Review Committee. The Committee shall consist of the City Manager, City Attorney, Community Development Director, Finance Director, Planning Director, City Engineer, and City Assessment Engineer. The Committee shall meet on request with proponents of a district to review a project to determine whether or not the requirements of this policy have been satisfied. Committee review shall take place prior to the presentation of a Community Facilities District project to the City Council. Whenever any such project is presented to the Council it shall be accompanied by a report containing the findings and recommendations of the Committee made in regard to such project. The Committee may require the proponents to furnish any additional information necessary to the evaluation of the proposed District. CITY OF CARLSBAD COUNCIL POLICY STATEMENT EFFECTIVE DATE: 10-13-87 GENERAL SUBJECT:ASSESSMENT DISTRICT FINANCING OF PUBLIC IMPROVEMENTS SUPERSEDES DATE: SPECIFIC SUBJECT: POLICY FOR USE OF POLICY NO: 38 PAGE 5 OF 5 DATE ISSUED: 10-13-87 CANCELLATION DATE: THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 COPIES TO: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File Upon review of the proposed Community Facilities District and after considering the report of the Committee, the City Council shall determine whether or not to approve proceeding with the formation of the District. It is the policy of the City Council of the City of Carlsbad to limit projects to the criteria set forth in this policy. The City Council reserves to itself the authority to approve or disapprove any proposed Community Facil- ities District based upon the evidence received at the hearings held by the City Council. Any exceptions to the criteria of this policy will be approved only upon an express finding by the City Council that the project is so affected with a public interest that the City should assist in providing tax-free financing for the improvement in order to satisfy a public need. If the City Council approves proceeding with the formation of the District, City staff and the proponents shall proceed in accordance with State law and the requirements of this policy. Where there are multiple proponents of a proposed District they shall designate a spokesman authorized to act for the proponents in their dealings with the City. The spokesman shall be respon- sible for collecting any fees for deposit with the City, providing any necessary information to the City, and for communicating as necessary back to the proponents.