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HomeMy WebLinkAbout1993-07-27; City Council; 12337; Rancho Santa Fe Rd. financing program update7/27/93 RANCHO SANTA FE ROAD FINANCING PROGRAM UPDATE MTG. 07 ,I CM f DEPT. ( _- CITY CITY c 4-1 v1 4-1 a 4J g &4 4-1 a, 4J a a a 3 a, 5 a a, 3 .rl a, ; $4 ri .rl L) 5 V 0 z 0 F 0 a e z 3 0 0 Cw OF CARLSBAD - AGEYA BILL I AB # 12, 337 TITLE: DEP' RECOMMENDED ACTION: Accept the staff report and provide staff with direction on how to proceed with 1 implementation of the financing program. lTEM EXPLANATION: On June 22, 1993, the City Council heard an appeal from California Pacific Hor development of their site which is located in the southeast portion of Carlsbad. This has been precluded from development due to a condition stating that no developm may occur until a financing program is developed to pay for the necessary improveme on Rancho Santa Fe Road. On July 6, 1993, Council adopted Resolution No. 93-: directing staff to proceed with the preparation of documents for the formation c CommUnity Facilities District and fee program to fund the construction of the road. r Council further directed staff to provide the Council with an update of the status of i project at their July 27, 1993 meeting. This agenda bill provides a status report on Rancho Santa Fe Road financing project and asks Council to give staff additio direction. Staff has provided the Council with a report on four key points in the financing prop These are: aslang that thsy bc allswcd LQ preceed with recvrdation of their final map and fi e e e Coordination with the San Dieguito Union High School Dist e Calendar of future events Status of the CFD formation process Status of the fee setting process construction schedule COMMUNITY FACILITIES DISTRICT FORMATION PROCESS On June 22, 1993, the staff proposed the formation of a Community Facilities Disl (CFD) to finance the construction of Rancho Santa Fe Road. Council directed staf develop a plan for implementation of this district and return with the neces: documents to begin formation. Attached to this agenda bill is a report entitled, Community Facilities District NC FeasibiZity Repoll. This report, prepared by our special tax consultant, provides Council with the proposed special tax formula, the one-time tax per dwelling unit (( No. 2) necessary to finance the complete road project, the rules of operation for district and a map that generally describes the boundaries of CFD No. 2. The special tax formula has been developed to comply with Council Policy 38 wl requires that all tax obligations for any residential property must be paid off at the 1 of building permit issuance. Under this policy, no homeowner in the City of Carls will have to pay a tax imposed by a City controlled CFD. The tax paid with the bdc permit is referred to as a "One-Time" tax. The table below shows how the one-time would be applied all property: e !2,337 0 c Page Two of Agenda Bill No. -r fl The formula assumes that the payment of the one-time taxes will be sufficient to COT the cost of the road improvements as well as any debt service associated with 1 issuance of bonds. If the one-time taxes are not sufficient, a vacant 'land tax authorized as part of the district structure. The rules of operation for CFD No. 2 are relatively simple. All property owners wisE to proceed with any type of development act%@ would be required to participate in I district. If they are not part of the original propertgr owner group forming the distr they would be required to annex before any permit, approval or action could be tak on their property. Formation of the district does not require all property owners witl Zones 11 and 12 to participate at the outset. However, a minimum of 80% of 1 undeveloped property is necessary to provide adequate support for the full road projc The staff will review the CFD proposal with the Council at the meeting of July 27,19' and will move on to the development of legal documents if Council concurs with 1 recommendation to proceed. FEE SETTING PROCESS Fee System - The staff is also working on the creation of a fee program which could gut hito place in advance of the CFD financing plan. Although there are some basic concerns about this approach to financing facdih Council should consider the following proposals before providing direction to staff. T fee program would allow the Council to find that anyone paying the fee has met tf obligation under the requirement to provide a financing plan for Rancho Santa Fe Ro This fee would be paid prior to the recordation of a final map for all units included the find map. In order to make the fee program work on the extremely short calendar available, any( wishing to meet the5 obligation for Rancho Santa Fe Road through the payment oft fee will be required to sign a waiver which sets aside the developeis rights under 1600 (Government Code Section 66000 et seq) which dictates how development f must be created and imposed. This portion of the government code establishes rule! nemas, public hearings, and timing of imposition with which the City must complq establish a valid fee. The City will meet the nexus and public hearing requirements, would be unable to meet the timing of imposition sections of the code if the fee is to in place soon enough to help the San Dieguito Union High School District construct schedule. 0 12,337 @ Page Three of Agenda Bill No. Y r The amount of the fee is significantly higher than the one-time tax suggested undei CFD proposal because the fee must provide adequate cash flow to carry the early pf of the project without demanding the issuance of debt. The construction of the phase of Rancho Santa Fe Road north of La Costa will requke the issuance of through the CFD proposal, or the establishment of a fee high enough to cover the of these early phases of the road project. The proposed fee is $16,860 per EDU. The table below shows how this fee woul assessed against the various types of development: Non-residential 4 - 16 EDU per acre Once the CFD is formed, property owners would be required to annex to the CFD ra than being allowed to pay the fee. Also, upon formation of the CFD, the City w refund to any developer who had paid the fee the difference between the amouni EDU assessed under the fee program and the CFD financing plan. Prepayment of CFD One-Time Taxes - The establishment of this fee requires a fo public hearing process. Also, Council should note that the proposed fee is established to fund the first two phases of Rancho Santa Fe Road. Council would to revisit this issue in the future to establish a second fee district to finance the third fourth phases of the project. This division of the project into two fee districts api to be necessary to meet the nexus requirements of AB 1600. Staff is having some difficulty providing the City Council with specific findings support the concept that a fee program meets the demands of a financing progra required by the Growth Management Program. In addition, the question of nexus potentially delayed public hearings could push the implementation of a fee pro$ beyond the October 1,1993 deadline for providing the school with the ability to pro with their construction project. Because of these problems, staff is recommending that the Council considc modification to tRe above program that would allow a property owner to prepa estimated one-time tax prior to recordation of final map which would be held by the begins on the first phase of Rancho Santa Fe Road and Olivenhein Road. This payment would be allowed under an agreement between the City and the devel which finds that the developer has met the requirement of providing a financing pro1 for the road through tReir participation in the future CFD. The rules for deted who would be allowed to enter into such an agreement have not been drafted. in the CFD No, 2 fund until such time that the CFD is formed, or construction I e 0 Page Four of Agenda Bill No. ,' 2, 33 7 3- L. r The City would proceed with the formation of CFD No. 2 by holding the neces: hearings and calling for the election in the manner prescribed by law. In the event 1 CFD No. 2 fads to be formed by the required vote of the property owners, the City wc be allowed to retain the prepaid one-time taxes. Any developer having paid these ( time taxes would be allowed to proceed with development. And, in one year property owners would be allowed to ask the Council to call for another vote on formation of CFD No. 2. This one year waiting period included in state law prech the Council from calling for another vote on the same district for a minimum of applications due to the lack of a financing plan for Rancho Santa Fe Road. By implementing the prepayment program, Council can avoid the problems associi with establishing a fee program that may not meet the Growth Management facil guarantee and any problems associated with AB 1600 and development fee issues. addition, the prepayment of CFD one-time taxes can be accomplished through agreement between the City and the developer, thereby shortening the time require implement the financing plan. Such an agreement could be presented to Council p to the October 1, 1993 deadline for the School District. SAN DIEGUITO UNION HIGH SCHOOL DISTRICT CON!STRUCI'ION SCHEDULE The City Engineer has worked with the School District representatives to determine t construction needs. Based on his research, we have determined that the District nt to have resolution of the California Pacific Homes question by October 1, 1993. schedule before the Council tonight can meet this deadline. CALENDAR The following calendar has been developed to meet the needs of the City, School Dis and land owners: year. During this period the City would not process maps or other developn Date Description July 27 Bnef Council on the status of the Fee and CFD propor Receive Council direction. Hold property owners meeting at Public Safety Centc review details of proposed Fee and CFD. Revise CFD proposal as necessary to meet Council nc July 28 July 29 to August 13 and address property owner concerns. August 24 to Sept 17 Present Council with Resolution of Intention to F CFD, and revisions to Local Facilities Managen Finance Plans, Draft Agreement to Prepay CFD One-l Taxes Hold public hearing, call for and set date for electioi CFD No. 2 September 28 to Oct 26 .. * e Page Five of Agenda Bill No. jq! 337 -. c. r This calendar assumes all parties can rea& agreement rapidly on the amount of the tax, and the process of implementation of the program. It will take the full cooper of all parties to make this calendar become a reality. COUNCIL, DIRECIlON Following Council's review of the attached CFD Feasibility Report and the Fee SJ proposal, staff is asking Council to provide direction in three areas: 1. Council may wish to provide staff with suggestions for modification o proposed process, fee, prepayment proposal, tax formulas, and calendar. Council may wish to direct staff to meet with the property owners to discus CFD prepayment and Fee proposals. Council may wish to direct staff to return at a future meeting with documents to establish the CFD financing programs. 2. 3. FISCAL IMPACT: The City is proposing to establish a financing program that will fund the constru of $40 million of major infrastructure improvements over a 17-year period. The pro will require the administrative efforts of the City staff and the participation and SUI of the property owners. During this period, debt may be issued to finance ce portions of the construction. It will be the City's responsibility to establish taxes o annual basis that are adequate to support the annual debt service payments. The creation of the financing program will require the dedication of both staff time City resources. On July 6, 1993, the City Council authorized the appropriatio $30,000 to pay for the services of the special tax consultant services and ( professional services. Although these costs will be reimbursed from the district an1 programs, the exact time of reimbursement has not been established. The City's Community Facilities District No, 1 will provide some support for the Ra Santa Fe Road project. CFD No. 1 H scheduled to fund up to $6 &on of &e Ra Santa Fe/Olivenhah Road improvements in future years. The availability of these f will depend on the fiscal health of CFD No. 1 and the timing of projects funded by No. 2. No City funds have been committed to the project beyond those outlined above. EXHIBITS: 1. 2. CFD No. 2 Financial Feasibility Report. Report on the Fee System for Financing Rancho Santa Fe Road Improvemt .I ~nlt3/! i -h- e - L F- CITY OF CARLSBAD FINANCING FEASIBILITY COMMUNITY FACILITIES DISTRICT NO. 2 (RANCHO SANTA FE ROAD) JULY 1993 Kadie-Jensen, Johnson & Bodnar 7801 Mission Center Road, Suite 460 San Diego, CA 92108 (619) 2g~-n450 *_ 0 @ - d-- EXECUTIVE SUMMARY The project proposed to be financed through the formation of Community Faci District No, 2 (the CFD, or CFD No, Z), includes three basic phases of Rancho Santa Fe 1 and a segment of Olivenhain Road. The estimated cost of this project, exclusive of any I relating the formation and administration of the CFD is estimated at $40,000,000. The til of construction will be dictated by the growth management traffic generation. Basa information provided by the City, the following staging is anticipated in this report: Facilitv Construction Stages Stage Trips cost 1 2,500 $3,000,000 2 12,500 18,000,000 3 40,000 14, oao,ooo 4 Buildout 5,000,000 The boundaries of CFD 2, as proposed, are shown on the accompanying Vicinity The Mello-Roos or Special Tax Financing Plan developed in this report has been design guarantee the availability of funding to meet construction costs as facilities become nece as a result of development. The program includes a mix of pay-as-you-go and debt fina together with a contribution from CFD No 1. CFD 2 debt has been minimized to reduc cost of interest. It is estimated that only about one-third of the project will be financed thi the sale of bonds. In accordance with City policy, Mello-Roos tax liability will be discharged no latte the time that a building permit is issued. Accordingly no CFD No. 2 special taxes w passed through to the home owner. The levying of a Mello-Roos tax requires developing a formula that sets a maximu for each year. The recommended formula takes into consideration trip generation as w benefit (the relative increase in value to the property), as discussed later in this report. COMMUNITY FACILITIES DISTRICT NO. PROJECT LIMITS RANCHO SANTA FE ROAD N * 0 0 I_ -. - Equivalent Dwelling Units (EDU) were defined as follows for the purpose of develc c the tax formula: Equivalent Dwelling Units Single Family Detached 1.0 EDU/DU Single Family Attached (*) 0.8 EDUlDU Multi-Family 0.6 EDU/DU Commercial//Office 4 to 16.0 EDU/Acre (*) Includes condominiums, duplexes etc. On this basis, it was determined that there were approximately 4,300 potential E (Equivalent Dwelling Units) in the proposed District. As full development potential is st realized and an allowance for "coverage" (potential for taxing in excess of bond requiren is required for a Mello Roos financing. It was assumed that 3,200 of the EDUs would ac develop (75 %) . A number of buildout schedules were analyzed to determine the sensitivity c financing plan to faster and slower growth, as well as the effects of inflation. The se: schedule shown in Table 1, assumes buildout over 17 years on a distribution curve. Inf of 3% as been assumed. A higher rate of inflation will not adversely effect the financing The Mello-Roos financing plan has been designed to provide construction financi needed through a combination of cash, bond proceeds and funds from CFD No, 1, ass1 buildout and inflation as discussed above. Cash from One-Time Special Tax $ 53,901,644 Bond Funds 12,450,000 CFD No. 1 Contribution 6,000,000 Interest earnings 4,922,238 Note: CFD No. 2 funding reflects 3% inflation assumption. e 0 I. . If growth takes place as projected, or within reasonable parameters of the projection, will be paid off through the collection of a "One-Time Special Tax at Building Permit. order to make it possible to sell bonds, provision must be made to pay debt service in a I case situation. This is done by providing for the levy of an annual tax on undeveloped The worst case would take place if, after the sale of bonds projected in year six, no fu development takes place. The two tax rates necessary to support the financing plan a follows: One-Time Special Tax at Building Permit $13,210 per EDU Standby Tax on Undeveloped Land $2,371 per Net Acre The maximum Special Tax which must be authorized on undeveloped land varies the buildout assumption and the amount of property included in the CFD. The rates i assume all of the land shown in the Vicinity Map is included and a 75% buildout is achic Rates for alternative buildouts are discussed under, "Lien Ratio and Tax Rates for Altern Buildout. I' The steps leading to the development of these rates, the results of alternative assum1 and the details of the proposed tax structure are detailed in the body of this report. e 0 --. - THE PROJECT The Project includes the construction of portions of Rancho Santa Fe Road Olivenhain Road, together with appurtenant storm drain facilities, sewer lines, water liner utilities and other improvements, all as set forth on file in the office of the City Engineer en "Description and Cost Estimate - CFD No. 2 Facilities." The location of the major project facilities is shown on Exhibit 1, on file with the Engineer.. These facilities are necessary to the development of properties in Local Fac Management Zones 11, 12 and two ownerships in Zone 6, and are accordingly conditia development of such properties. The estimated cost of the facilities is $40,000,000 in 1993 dollars, exclusive of issuance and district administrative expense. For the purpose of this report, it 3 % inflatio been assumed. A higher rate of inflation would not adversely effect the feasibility of the prl A lower rate of inflation would have an adverse effect, but could be offset by the vacant tax. e 0 --. - RECOMMENDED BOND AUTHORIZATION The tax rate formula which will be discussed later in this report, provides for the inc in taxes to meet inflation in construction costs. The amount of bonds that will need to be i depends on a combination of buildout and inflation. We recommend that $50,000,000 oft be authorized. This should be more than sufficient to match inflation. There is no sen trying to lower the bond authorization, as the amount actually sold is absolutely controllc repayment capacity. -. 0 0 .. - BOUNDARIES OF THE COMMUNITY FACILITIES DISTRICT The proposed boundaries of the Community Facilities District No. 2 are genera shown on the Vicinity Map and more particularly shown on the map entitled, "Boundan Community Facilities District No 2, City of Carlsbad," on file with the City Engineer. In order for the financing plan to work, a significant percentage of the property v the proposed boundary must be included in CFD No. 2. The Undeveloped Land Tax incr as the amount of property in the CFD is decreased. As shown in the section of this I entitled "Lien Ratio and Alternative Buildout", no less than 75-80% of the land area shou included at district formation, with the balance to be included by annexation. Any areas le of the CFD at formation should be included in an area of proposed annexation, thl simplifying the annexation process, If all of the owners of all of the property proposed for inclusion in CFD No. 2 d agree to that inclusion, the election can not be held until at least 90 days after the conclusi the hearing process. 0 0 -. .-_ 8 TAX RATE AND METHOD OF APPORTIONMENT Based on the EDU definitions shown in the Executive Summary, it was determiner a maximum of 4,300 EDU could be constructed in CFD 2. For the purpose of determink tax rate, a 75 % buildout or 3,200 EDU was assumed and construction costs were inflated i per year. A computer model was constructed around these assumptions as shown on shov Table 1, which is explained in detail in the following paragraphs. Column 2, Estimates of equivalent dwelling units (EDU) built per year based on 75 units indicated in general plan, with EDU calculated as follows: Single Fi - Detached = 1 EDU: Single Family - Attached = .8 EDU: Multi Family EDU, and: Commercial/Office = 4 to 16.0 EDU per net acre. Shows the annual income that would be generated by a one time tax of $12 per edu. This rate has been increased annually to reflect the inflation assump Shows that $12,450,000 of bond proceeds were used to complete the fins of the second phase of construction. The bonds to be issued includes constru cost plus approximately 17% for a reserve fund and bond issuance costs. Construction costs as shown above increased by inflation. Administrative costs ($100,000) and debt repayment costs are shown ii column based on the assumptions set forth in the heading. Debts service is t on total bond issuance as discussed earlier. This column shows the fund balance prior to current years interest earning: is the total of columns 3,4,5,6,7 and 9. Interest on balance of column 9 for prior year. The interest rate in the moc set at inflation plus 1 % - in this case 4%. Shows the balance in the fund, including interest earnings. This is the total of columns 2 through 9 and is a balancing entry agains column 9 balance in year 17. Column 3. Column 4. Column 5. Column 6. Column 7. Column 8. Column 9. Column 10. 0 e i I The 1993 One-Time Special Tax per EDU as established in the forgoing anal! $13.210. In order to successfully market bonds, a source of income must be provi development stops or slows to the degree that debt service can not be met from the One Special Tax. The source of this income is the Undeveloped Land Tax. Assuming 1,6. acres in the proposed district and a 75% buildout, there would be a remainder of 1,235 ne1 subject to taxation. Reducing this area prorata, based on the projected buildout (Ta Column 2) there would be a total of 907 taxable net acres immediately after the sale of in year 6. The annual cost of debt service and administrative costs, as shown in Tablt $2,151,706. Dividing this number by the 907 net acres of taxable area, result is a max vacant land tax of $2,301. The Special Tax Formula is summarized in the following sa I 1. .I' ! I 0 u--i ' e j I r c 0 0 I I I I< ~ 00 ;[: >- - I? 0-n I I :!. I -------- z u~vI~wN-o~w-~~~~~oN- I D I >rn I I I n I 75 c l-r 0 ;: z ---NNWWWNN--4 IW I 12 1 -4w-emNmA--mNwaAw-4 i I I jp I py~~yp~mmm~pyw~ym I rnm oc IO I mm~m-ulaoooaul-m-4mm 100) 2-l N~O I aoulw-aaowwaw-wwoa I ,=? - - z i n I a' -w I -- -- N -N -w p p -ul -ul -ul p -w PJ -N - - - I w I mmawul-wau-~P-4 -m;Jq f 6, o ; N-~WONOW~N~PW~~UO - 4 I p -- -N -w p -cn -w -- F -0 -w -m -- p -w -a pJ I 2 o A 0 m mm-4wo-4uulwwwaw-4Naa I '~~00 a I ~am~m~-4am-4mrnawam~ I h ~-wulPaam~mm~ma0-4-4 I Gg~rn WP j UII N - Ln a 1~ 7 cm - -F 01 01 I [ 0 0 0 v)0 0 I a- zo I 02 P I . a0 I f j 1 I I j 00 100 ; +v) m I m-4 m cog ; m-r p I D a, P- m~ w wo j r: j wul W ulo ' A A I I wz -- 2- N $ I 3-2 P - - w I -4- W ulVI -4 m 00 o o o o 000 ooogo mu -1 - a I I___ NNNNNNNNNNN------ _-----_- I N 0) I ;;;;;;;;;;;oo;;;; I m I -~a----a-a-oooooo I ?E;+ -4 f --4;;;;;;-w;;;oo-oooo e$= -4 100000000000000000 1 -:Bo> U - I I I I< > j >-h l 32- i irn 0 - ~~ w-rz c"2 i -- 1 N I ----------- m5 I szs~~s~~sp~ss~~~s ; -*oz< f I i I I 1 I "-A- jn j i o~ao-ow-w~~~ow~~-+ I l -0 P c" .F 'D c" ? _c" .N IC I I ebb-ommo-4wawmaaw I I -~---IDNN~-~W-WVW-~- I z I z 0 I mmNNmm-4o-4weNoy~o- j zF I -A a p -m y -UI --4 y p p -a y -VI m -w a o N -4 ww-owwmow-~w~w a-4 - I i rn Nawwea--4w-N-oNNw i FTz - m m P .w m w - VI o m w m P a m mrnom~>~~kk-$-&-.J~& 1 i or+ o' o ~~~~NNW-W-JO-JWW~Y i aP@z - z --I .I wwwmcnw~- N- e ~i~~~ N -N NN--- p p p -N -w p p-' VI N : I jz 7 c ~1Lam-4-w~w-4mbkmmm I+ z we-~~maawww~~wwo-o- fm 0 P -- P -- P ".' 0 ? 9 P 0 P P P P --4 ".' w-amwuouNw-a-omaa I :I= omw-~~a-momw-4~mo- (I)** W VIWVIVI m-wa-4m-a-4--4 j +IT I I I I0 WI g-4 ;I I >--I o: 1 I I I 1 I ro j v)r UII ; x> e e -_ ._ c SUMMARY OF THE SPECIAL TAX FORMULA 1) ONE-TIME SPECIAL TAX: A one time tax will be levied at the time of building p issuance, at the following rates and subject to the adjustments as set forth below: 1993/94 ONE-TIME SPECIAL TAX RATES Single Family Detached $13,210 per DU Single Family Attached 10,568 per DU Multi-Famil y 7,926 per DU Commercial 132,100 per Net Acre The 1993/94 tax rate shown above will be adjusted annually prior to June 30, of year, to reflect any increase in the Construction Cost Index which has taken place durin proceeding twelve month period, or which was not added to the tax rate in prior years be of the tax increase limit. The Construction Cost Index is defined as follows: The Engint News Record Construction Cost Indexes in 22 Cities - City of Los Angles. The increased will be applied to any building permit issued on or after July 1, of each year. The max increase in any one year is 10% and the maximum number of adjustments to this rate is Revenues from this 'tax will be placed in the Project Account and used for debt se direct project costs and district administration. 2) UNDEVELOPED LAND TAX: A special tax will be levied on the net undeveloped ac in CFD 2 if, in any year, there is insufficient funds in the Project Account to meet the c debt service, district administration, scheduled construction or any projected short fall financing system resulting from Construction Cost index increases of less than 3% per as determined by the City Finance Director. a 0 I -. The tax will be levied in amount sufficient for these purposes, but not greater th; maximum tax rate, The Maximum Tax Rate - Undeveloped Land is $2,371 per net acre, SI to annual increase as described in 1) above. The net acreage of each parcel has been deter1 by NBWLowry and is set forth in the report on file with the City Engineer entitled, "CFD - Net Acreage." This report may be modified from time to time as directed by the Engineer. x e 0 c .-. LIEN RATIO AND ALTERNATE BUILDOUT In the case of the present project, the lien on the undeveloped land is a function ( maximum tax on such land. This function is referred to as the capitalized value, and is to a factor of 10.675, multiplied by the maximum undeveloped land tax. This factor ass a capitalization rate of 8% and a term of twenty-five years. The maximum Undeveloped Land Tax set forth above, assumes 75% buildout. If i acres are included in the CFD, or a lower rate of buildout is assumed, the maxi Undeveloped Land Tax would need to be increased. This would be done at the tin formation and could not be done thereafter. Table 2 shows alternative maximum taxes t on various buildout assumptions. To determine lien ratios, CFD 1 taxes have been included at the predominate rate i District. As shown in Table 2, the inclusion of all the recommended land in the CFD : 75% build out, will result in lien ratio of slightly less than 4 to 1, based on a value of $12: per acre. If only 80% of the land is included, and developed at 75% (a build out of 60%: lien ratio will be slightly higher than 3 to 1, the City minimum. - c - mmw*C\r (Dcv c? 7 m'k Ir, Roq OW0 F30 w I I I I) -a -a ciim m ci c3 cu 23% ZnG i3 ~ $&2 kul- !$zg OS4 Eg 2 2 L 2 3; zb =n Z8 k 22 26 +W zn. 3 lJJ n $ 0 z Z W- I- xi A CY+L a, YZN m mr-- fi2! F3zi 3 I -0 mao-m mwRq Namb COOTOLnbpJ cvmmmmm a-o-rO_ -Lom,co,~- wmmcvcocom ma -mmco7 CO-mmcumcv% cvcuRmmmm* I cvcvcvcvcvcvcvcu mmmmmmmm mmmmmmmm cum- mwma bsmmmm ~CG~N~~rn~ 8 M m m_b m N-LO 00000000 (DCO-m*-7- w_~,~_/--~-~~o-~! - cv mi* m (D co m 7--7---- bmobmobm C\1-0003m*m a-*-'cu-m-b-m-m-- mm~mcucucucud $?qq+?q$?gg Lf50mO~OmO O&&O 00080000 goo0 COco~bwmv)m 0 Wfi(/lU{ d - c 0 0 .= ll FEE SYSTEM FOR FINANCING A PORTION OF RANCHO SANTA FE ROAD CITY OF CAIPLSBAD JULY 1993 Kadie-Jensen, Johnson & Bodnar 7801 Mission Center Road, Suite 460 San Diego, CA 92108 (619) 296-1450 -f 0 a .I . 1 I EXECUTIVE SUMMARY An alternate to the Mello-Roos financing as described in a separate report en "Financing Feasibility - CFD NO. 2 (Rancho Santa Fe Road), is the establishment of i District and the collection of a fee, either at the time of final map approval. Under system, there is no practical way to allow for debt to be incurred. Accordingly, the I Rancho Santa Fe Road Improvements could not be feasibly financed. The proposed improvements considered in this report are limited to the first two of the total project aggregating $21,000,000, and include a segment of Rancho Santa Fee R North and the improvement of Olivenhain Road together with related improvements. The boundaries of the Fee District would be some portion of the area of the pro, boundaries of CFD 2, from which no more than 12,500 trip would be generated. The ba of the project could later be financed through a second Fee District on the balance c benefited area. Selection of property for inclusion in a fee district should be based on the lando readiness to build. The basis for allocating the costs of the project is the Equivalent Dwelling Unit (E which are defined as follows: Single Family - Attached 1.0 EDU Single Family - Detached 0.8 EDU Multi Family 0.6 EDU I 0 0 -1 e- # .- ! A computer model was developed for the purpose of determining the fee necessa fund the improvements over time. The resulting fee is $16,860 per EDU, or: Single Family Detached $1 6,860 Single Family .Detached 13,168 Multi Family 9,836 RANCHO SANTA FE ROAD FEE PROGRAM PROJECT LIMITS i 0 e -. '5 r- II I- . 1 THE PROJECT The Project includes the construction of a the northern portion of Rancho Santa Fe 1 and a segment of Olivenhain Road together with appurtenant storm drain facilities, sewer 1 water lines, dry utilities and other improvements, all as set forth in a file in the office o City Engineer entitled "Description and Cost Estimate - Rancho Santa Fe Road Fee Disti This description of work represents the first, and most essential half of the o\ proposed Rancho Santa Fe Road Project for Zones 11, 12 and two ownerships in Zone 6 The estimated cost of the facilities, is $21,000,000, in 1993 dollars, exclusive ol administrative expense. For the purpose of this report, a zero rate of inflation has been ass1 as this represents the "worst case" in terms of the feasibility of the project. A higher ra inflation would not adversely effect the feasibility of the project. 0 0 ., - .- A- c .. . f c THE BENEFIT AREA The benefit area for the Fee District will be comprised of property with the pro] boundaries of CFD No. 2 (see Vicinity Map in CFD Report). However, the maximum ar of property that can be included is limited to those parcels which would generate no mort 12,500 trips. If a lesser amount of property is included, the fees would have to be incre It is recommended that property owners be contacted to determine their desire to particip the Fee District, and boundaries determined accordingly, Unless the Fee District is superseded by a Mello-Roos program, it is unlikel! properties left out of the Fee District could produce a feasible financing plan until Fee D property is completely built out. 1 h -z 0 0 V * *. - 7 I DETERMINATION OF THE FEE To quantify the development with in the Fee District, a system of Equivalent Dwc Units (EDU) was established as set forth in the Executive Summary. It is assumed fo purpose of this Report, that only residential property is included in the Fee Distincl accordingly EDU also describes trip generation. For the purpose of determining the fee, various rates of development were consic in a computer model. Buildout as shown in Column 2 of Table 1 was judged to be adequ conservative for the purpose of determining the fee. The computer model which was constructed around these assumptions is shown on SI on Table 1, and result in a fee of $16,860 per EDU. Table 1 is explained in detail i following paragraphs. Column 2. EDU calculated as follows: SF - detached = 1 edu: SF - attached = .8 Multi family = .6 edu. Shows the annual income that would be generated by a fee of $16,850 per This fee has been increased annually to reflect the inflation assumption. Shows expenditures for construction, inflated by 0%. Shows the estimated cost of administration of the fee program. This column shows the fund balance prior to current years interest earning is the total of columns 3,4,5, and 9 (prior year). Column 3. Column 4. Column 5. Column 6. ,, 4 0 a p- -. - w q Column 7. Interest on balance of column 9 for prior year. The interest rate in the moc set a inflation plus 1 % - in this case, with 0% inflation, 1 %. Shows the balance in the fund, including interest earnings. This is the total of the totals of columns 2 through 8 and is a balancing against the column 8 balance in year 7. Column 8. Column 9.