HomeMy WebLinkAbout1994-12-13; City Council; 12955; REQUEST AUTHORIZATION TO PROCEED WITH THE ESTABLISHMENT OF A MELLO-ROOS DISTRICT TO FINANCE CERTAIN PUBLIC IMPROVEMENTS WITHIN THE CARLSBAD RANCH PROJECTt
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DEPT. CM
TITLE: REQUEST AUTHORIZATION TO PROCEED WITH THE
FINANCE CERTAIN PUBLIC IMPROVEMENTS WITHIN
THE CARLSBAD RANCH PROJECT
MTG. 12/13/94 ESTABLISHMENT OF A MELLO-ROOS DISTRICT TO
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QIY OF CARLSBAD - AGVDA BILL
RECOMMENDED ACTION:
q L1 e 3@ Adopt Resolution No. directing staff to prepare documents for the establishmei
a Mello-Roos Communities Facilities District (CFD No. 3) to finance certain pi
improvements within the Carlsbad Ranch Project, authorizing the retention of Brown, D
and Hentschke to assist the City with the district formation process and to act as I:
counsel, avld Kadie, Jensen, Johnson and Rsdnar ta pravide npeeial ta~ and finat
consulting services.
ITEM EXPLANATION:
The City has received a request from the property owner of the Carlsbad Ranch Projel
form a Mello-Roos Communities Facilities District (CFD) to fund certain public improvem
within the Carlsbad Ranch Specific Plan. This agenda bill will provide the Council with
following background which should be considered prior to making a decision on
request:
1) A description of Council Policy 38 which guides the City Council in determi
when and how to use CFD funding;
A description of the public improvement the property owner has asked the Ci
consider for inclusion in a CFD;
The staff’s recommendations for financing the listed public improvements.
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COUNCIL POLICY 38
The Council adopted the original version of Policy 38 in 1989 as part of the City’s effc
put some structure to the challenges of financing the new Growth Management Plan.
policy was intended to define for both the City and property owners those instances w
the use of public debt might be appropriate.
Under Council Policy 38 the City may allow a CFD to be used to finance p
improvements where those improvements provide a significant public benefit. The que
of defining public benefit was left up to the Council to consider on a case-by-case b
A good general rule for the Council to follow in defining public benefit is to use
financing for those facilities that benefit more than a single business interest, whert
enhancements, and where the financing does not substitute for a developer’s obligatic
provide infrastructure.
The policy also includes clear guidelines on the City’s role in the CFD formation pro(
and the developer/land owner’s responsibilities, and the safeguards that ensure tha
resulting district will not be a burden to future residents. These provisions includt
following:
general public will receive some benefit from improved circulation, safety, or aest
e 0 .* Page Two of Agenda Bill No. id, 95f
a The City Council controls when and if a district is to be formed, and what facil
shall be included.
e The City selects the special tax consultant (the person responsible for computing
tax that will be placed on the property within the district), bond counsel, finar
consultant, and engineer (if one is required). This ensures that the CFD finan1
team has the interest of the City Council and future residents at heart when cres
the rules that will govern the district during its life.
0 The property owner shall support all costs of district formation. These costs cai
refunded to the owner from the proceeds of a future bond issue if the forms
process is successful.
a The City requires that the property supporting any subsequent debt have a vak
at least three times the amount of any debt placed on it by the district. Th
known as having a 3:l value to lien ratio. A 4:l ratio is preferred.
e No CFD tax can be allowed to pass through to a home buyer. (In this case, tt-
not an issue because all property within the proposed boundary is zoned for I
residential uses,)
The existence of the CFD and how the tax formula affects property within the di: 0
boundaries must be fully disclosed to any property buyer through a pros
approved by the City.
a Prior to considering any request for formation of a CFD the City Council has a:
that the proposed district be analyzed by a staff committee who shall provide.
recommendation to the Council.
Another feature of the CFD is that the repayment of the debt is the sole responsibility o
property within the district. The City, its sources of revenue, residents outside the dis
and any other non-participant in the CFD cannot be held responsible for the repaymei
debt issued by the district. This was recognized by the Council when Policy 38 was
drafted.
The Carlsbad Ranch CFD
Carltas, the property owner of the Carlsbad Ranch Project, has asked that the City Coi
consider forming a CFD to finance a variety of improvements. These improvements I
been reviewed by the Policy 38 Committee which is comprised of the City Manager,
Attorney, Community Development Director, Financial Management Director, Fin:
Director, Planning Director, City Engineer, and a staff assessment engineer.
The following list of improvements are recommended for inclusion in a CFD finan
program for the Carlsbad Ranch Project. The number preceding the project descripl
refer to the attached map showing the possible CFD boundaries and project location
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(I Page Three of Agenda Bill No. /Ai 956
IMPROVEMENTS RECOMMENDED FOR FUNDING
Locat ion Description
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Traffic Signal at Cannon Road and Armada Drive
Armada Drive from Cannon Road to Palomar Airport Road, including wet
dry utilities, surface improvements, roadway grading.
Hidden Valley Road from Palomar Airport Road to Carlsbad Ranch pror
line, including surface improvements, wet and dry utilities, and road
grading for full width improvements.
Construction at Paseo del Norte/Palomar Airport Road intersection, inclul
widening for right turnpocket, utility relocation, and traffic signal modificati
Construction at Palomar Airport Road/Armada Drive intersection, inch
median modification widening for right turn pocket, utility relocations,
traffic signal modification.
Palomar Airport Road/Hidden Valley Road intersection, including me
reconfiguration and new traffic signal.
Conversion of overhead electric lines to underground along Palomar Ail
Road from Paseo del Norte to Armada Drive.
Conversion of overhead electric to underground along Palomar Airport Rl
from Armada Drive to College Boulevard.
Sidewalk along existing Paseo del Norte, east side, from Car County Dri\
Palomar Airport Road.
Cannon Road widening from Paseo del Node to Car Country Drive.
Cannon Road full improvements and grading from Car Country Driv
Armada Drive.
Cannon Road from Armada Drive to the east boundary of Property 1
shown on the attached map.
Reconfiguration of LEGO Drive/Armada Drive intersection, including all rerr
and relocation costs for surface improvements and utilities, new SUI
improvements, wet and dry utilities, and roadway grading. This intersec
will be constructed as a roundabout.
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In addition to the above projects, Carttas had asked that the City to include the follo
projects. These have not been recommended by the Policy 38 Committee for two reas
First, the improvements along LEGO Drive would be on private property. The finding
clear public benefit from these improvements would be difficult to support. These inc
project number 3 (street improvements) and 8 (dry utilities) in LEGO Drive. Second, ir
case of the drainage facilities not shown on the project map, these facilities will be fur
through drainage fees rather than the proposed CFD.
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%. Page Four of Agenda Bill No. /ai 55-5
IMPROVEMENTS NOT RECOMMENDED FOR FUNDING
Location Description
3 LEGO Drive, public portion along lot 10, including all wet and dry utili
surface improvements, and roadway grading.
8 LEGO Drive, dry utilities in private portion of LEGO Drive along lot 13.
9 Interior road though the central office/industrial area of the project.
Not Shown Cannon Lake: 2-60 culvert crossing at railroad (Carlsbad Ranch portio
cost is $300,000).
Not Shown Erosion Control and NPDES facilities associated with public storm c
systems.
Those projects recommended by the Committee will provide a public benefit.
improvements to Cannon Road, Palomar Airport Road and Paseo Del Norte will pro
both enhanced circulation and aesthetic improvements to the area. The improvemen
Armada Drive and Hidden Valley Road will provide access to the area similar to
provided by Paseo Del Norte. All improvements recommended by the Committee
specifically allowed under State law.
The projected cost of the improvements is about $1 1.4 million. A more accurate estir
of project costs and sources of funding will be provided to the Council when the
returns with the completed special tax report and CFD formation documents.
RECOMMENDATION:
Staff is recommending that the Council adopt the attached resolution which will allov
hiring of consultants and preparation of CFD formation documents to fund tl
improvements shown on the "Recommended" list above. The City Council will hav
opportunity to review the list of projects, special tax formula, boundaries of the dis
implementation and administrative rules, amount of debt to be issued, and other asp
of the district when the CFD documents are brought back to a future meeting.
The staff also recommends (with the approval of the City Attorney) that the City retain
Johnson and Bodner, as special tax consultant and financial advisor. Both of tl
individuals worked closely with the staff on the creation of the City's only CFD, and bot1
very familiar with the City Council's policies and position on issues related to fairnes3
equity, and disclosure requirements.
Brown, of Brown Diven and Hentschke, as bond counsel, and Carl Kadie, of Kadie Jei
FISCAL IMPACT:
The creation of the CFD will not have a direct fiscal impact on the City. The City will ir
staff time in the formation of the district, and the City Council may elect to inc
improvements in the district which are scheduled for City construction at a later date.
City Engineer has indicated that there may be some economy of scale savings by
@ 0 .. Page Five of Agenda Bill No. 12; Cicf
constructing certain City projects concurrent with CFD projects. A Council decision c
funding any of these City projects will be made as part of the Capital Improvement Pros
review process, or based on the recommendation of the City Engineer at the approp
time.
The City will receive an annual management fee for administering the CFD. The amou
this fee will be determined as part of the special tax formula to be presented to Council
the final documents.
The attached resolution requires that Carltas deposit $50,000 with the City to cover incidental costs related to district formation. These expenditures may be reimburse
Carltas if the district is successful in issuing debt at some time in the future.
EXHIBITS:
1 I Resolution No. qq -326 directing staff to prepare documents for the establishr of a Mello-Roos Communities Facilities District (CFD No. 3) to finance certain pi
improvements within the Carlsbad Ranch Project, authorizing the retention of Brc
Diven and Hentschke to assist the City with the district formation process and tc
as bond counsel, and Kadie, Jensen, Johnson and Bodnar to provide specia
and financial consulting services.
1 .a Attachment "A to Resolution No. 9'7-326 of list of Recommer
and Not Recommended Improvements.
2.
3. Map of proposed improvements.
Staff Report to the Policy 33/38 Committee dated 10/25/94.
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EXHlBl e e
RESOLUTION NO. 94-326
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, DIRECTING STAFF TO PREPARE DOCUMENTS FOR THE
DISTRICT (CFD NO. 3) TO FINANCE CERTAIN PUBLIC IMPROVEMENTS
WITHIN THE CARLSBAD RANCH PROJECT, AUTHORIZING THE
RETENTION OF BROWN, DIVEN AND HENTSCHKE TO ASSIST THE CITY
WITH THE DISTRICT FORMATION PROCESS AND TO ACT AS BOND
COUNSEL, AND KADIE, JENSEN, JOHNSON AND BODNAR TO PROVIDE
SPECIAL TAX AND FINANCIAL CONSULTING SERVICES.
ESTABLISHMENT OF A MELLO-ROOS COMMUNITIES FACILITIES
WHEREAS, Carttas, the property owner of the Carlsbad Ranch Project, has
the City Council to consider the formation of a Mello-Roos Community Facilities [
(CFD) to provide funding for certain public improvements within the Carlsbad
Specific Plan; and
WHEREAS, the City Council has reviewed the request as provided in Council
38 and finds those improvements recommended for funding below provide a sigr
public benefit; and
WHEREAS, the City Council finds that there is sufficient public benefit provic
the construction of the projects listed below to warrant providing public debt financ 1 the project through a CFD formed consistent with Council Policy 38; and
1 WHEREAS, Carttas shall provide funding for all costs, both direct and incider
may be necessary to bring the CFD to final formation.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Car
California as follows:
1. That the above recitations are true and correct.
2. That the City Council authorizes staff to begin work on the formation of l
to finance the projects listed below, however staff may recommend modifications tot
at a later date if sufficient justification exists.
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counsel.
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That the City shall retain the services of Brown, Diven and Hentschke a!
That the City shall retain the services of Kadie, Jensen, Johnson and E
as special tax consukant and financial advisor.
5. That the preliminary costs related to the formation of this district shall be
by Carttas, however, those costs that are directly related to the formation of the 1
and/or construction of included facilities may be considered by the Coun
reimbursement from CFD bond proceeds in the future. Carltas shall immediately c
the sum of $50,000 with the City as an advance to cover these formation costs.
6 That, if the sum of $50,000 proves to be insufficient to cover preliminary
the City Financial Management Director shall estimate the amount of additional
required and Carttas shall deposit these additional funds with the CRY.
7. That the staff will return with the documents necessary to form thc
described above, and to retain the bond counsel and special tax consultant.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City COL
the City of Carlsbad, California on the 13th day of DECEMBER
by the following vote, to wit:
AYES: Council Members Lewis, Nygaard, Kulchin, Finnila, Hall 1 NOES: None
ABSENT: None
ATTEST:
mQitlCp1
ALETHA L. MUTE
(SEAL)
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0 ATTACHMENT "I 0
IMPROVEMENTS RECOMMENDED FOR FUNDING
Location Description
1
1,2,4-7
Traffic Signal at Cannon Road and Armada Drive
Armada Drive from Cannon Road to Palomar Airport Road, including wei
dry utilities, surface improvements, roadway grading.
Hidden Valley Road from Palomar Airport Road to Carlsbad Ranch pro
line, including surface improvements, wet and dry utilities, and roac
grading for full width improvements.
Construction at Paseo del Norte/Palomar Airport Road intersection, inch
widening for right turnpocket, utility relocation, and traffic signal modifical
Construction at Palomar Airport Road/Armada Drive intersection, inclc
traffic signal modification.
Palomar Airport Road/Hidden Valley Road intersection, including mc
reconfiguration and new traffic signal.
Conversion of overhead electric lines to underground along Palomar Ai
Road from Paseo del Node to Armada Drive.
Conversion of overhead electric to underground along Palomar Airport F
from Armada Drive to College Boulevard.
Sidewalk along existing Paseo del Norte, east side, from Car County Dri
Palomar Airport Road.
Cannon Road widening from Paseo del Norte to Car Country Drive.
Cannon Road full improvements and grading from Car Country Driq
Armada Drive.
Cannon Road from Armada Drive to the east boundary of Property 1
shown on the attached map.
Reconfiguration of LEGO DrivelArmada Drive intersection, including all ren
and relocation costs for surface improvements and utilities, new su
improvements, wet and dry utilities, and roadway grading. This interse
will be constructed as a roundabout.
10-1 1
12A
128
median modification widening for right turn pocket, utility relocations,
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12E
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IMPROVEMENTS NOT RECOMMENDED FOR FUNDING
Location Description
3 LEGO Drive, public portion along lot 10, including all wet and dry uti
surface improvements, and roadway grading,
8 LEGO Drive, dry utilities in private portion of LEGO Drive along lot 13.
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9 Interior road though the central office/industrial area of the project.
Not Shown Cannon Lake: 2-60" culvert crossing at railroad (Carlsbad Ranch portic
cost is $300,000).
Not Shown Erosion Control and NPDES facilities associated with public storm (
systems.
EXHIBIT 0 0
October 25, 1994
TO: POLICY 33/38 COMMllTEE MEMBERS
FROM: Financial Management Director
POLICY 33/38 COMMITTEE - CARLSBAD RANCH - REQUEST FOR MELLO-RO
D I STRl CT
The Carlsbad Ranch property owner has approached the City with a request to forr
Mello-Roos district to fund a number of projects related to the development of the
property. A meeting of the Policy 33/38 Committee has been scheduled for 8:30 a. on Thursday, October 27, 1994 in the Community Development conference room tc
review this request.
SUMMARY
The property owner has proposed that the City consider forming a Mello-Roos distr
(CFD) to fund a wide range of projects related to the development of the Carlsbad
Ranch Specific Plan. These projects would be constructed in two phases with thos
improvements related to the non-LEG0 portion of the property being constructed fir
followed by the LEGO related improvements. The projected costs for these
improvements are: Phase I - $7.8 million, and Phase II - $3.6 million, for a total of
about $1 1.4 million.
The cost estimates and financial feasibility of the project have not been reviewed in
detail by City staff. This review would take place after the Policy 33/38 Committee
and the City Council have approved the concept of forming a district to fund the
proposed projects. The preliminary review conducted by both the Engineering and Finance staffs suggest that the cost estimates provided by the property owner are
reasonable, and that the project could be financially feasible if property values withii
the Carlsbad Ranch Specific Plan area are sufficient to support the resulting taxes.
PROJECT DESCRIPTION
The proposed district would fund two phases of construction. Phase I would includ
all of those improvements that are not related to the LEGO project. These
improvements would be required by the existing Carlsbad Ranch Specific Plan even
the current revision being processed by the City is not approved. The Phase 1
improvements include the following (note - the location numbers preceding the
project description refer to the improvement maps attached to this memo):
0 a ..
Policy 33/38 Committee Members
October 25, 1994
Page 2
Location Description
1,2,4-7 Armada Drive from Cannon Road to Palomar Airport Road, including
and dry utilities, surface improvements, roadway grading.
Cannon Road widening from Paseo del Norte to Car Country Drive.
Cannon Road full improvements and grading from Car Country Drive
Armada Drive.
Traffic Signal at Cannon Road and Armada Drive.
Construction at Paseo del Norte/Palomar Airport Road intersection,
including widening for right turnpocket, utility relocation, and traffic
signal modifications.
Conversion of overhead electric lines to underground along Palomar
Airport Road from Paseo del Norte to Armada Drive.
Construction at Palomar Airport Road/Armada Drive intersection,
including median modification widening for right turn pocket, utility
relocations, and traffic signal modification.
Features associated with pedestrian walkway along the westerly and
southerly edges of lot 14 (hotel site), including wide sidewalk and
retaining wall.
Temporary Major CMWD water line construction adjacent to future
southerly LEG0 drive/Armada Drive intersection.
Sidewalk along existing Pas- del Norte, east side, from Car Country
Drive to Palomar Airport Road.
Not shown Cannon Lake: 2-60" culvert crossing at railroad (Carlsbad Ranch portic
of cost is $300,000).
Not shown Erosion Control and NPDES facilities associated with public storm drai
systems.
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Policy 33/38 Committee Members
October 25, 1994
Page 3
Phase II Will Construct the remaining improvements necessary to sme the EGO p
property, These include the following:
Locat ion Descri Pt ion
3 LEGO Drive, public portion along lot 10, including all wet and dry
utilities, surface improvements, and roadway grading.
Reconfiguration of LEGO Drive/Armada Drive intersection, including dl
removal and relocation costs for surface improvements and utilities, nc
surface improvements, wet and dry utilities, and roadway grading. Th
intersection will be constructed as a roundabout.
Cannon Road from Armada Drive to SDG&E property line, approximat
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730’ including full improvements and grading,
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LEGO Drive, dry utilities in private portion of LEGO Drive along lot 13.
Hidden Valley Road from Palomar Airport Road to Carlsbad Ranch
property line, including surface improvements, wet and dry utilities, an
roadway grading.
Palomar Airport Road/Hidden Valley Road intersection, including medii
reconfiguration and new traffic signal.
Conversion of overhead electric to underground along Palomar Airport
Road, from Armada Drive to Hidden Valley Road.
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Cost estimates for these projects are attached to this memo.
POLICY ANALYSIS
In general, the projects listed above meet the state law requirements for inclusion in
CFD. Whether or not they meet the City’s Policy 38 guidelines for inclusion is a topic
for committee discussion.
$50,000 with the City as a deposit toward the cost of these services.
POLICY 33 COMMIITEE DECISIONS
CFD.
portion of the projects listed above through a CFD.
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Policy 33/38 Committee Members
October 25, 1994
Page 5
2) The committee should review the proposed projects list to determine which
portions of the project qualify for funding under Council Policy 38.
The staffs recommendation is that, with the exception of the improvements c
private property, the Committee should allow the inclusion of all clearly publi
improvements. The tax burden should be spread based on a fair share
analysis of the projects financed. No shifUing of tax burden between parcels
should be allowed. Further, the property owner should be allowed to pass t'
CFD tax through to any subsequent purchaser of the property, subject to the
terms of a disclosure program to be developed by the City and bond counsl
The Committee should discuss requiring the property owner to deposit $5O,C
with the City to cover the cost of any preliminary services not funded as part
any subsequent bond issue. This deposit would be made following Council
authorization to proceed with the CFD formation. The property owner should
be further required to replenish this fund as may be necessary during the
district formation process.
" The staff recommendation is that the deposit (and replenishment) be requirec
fter the City Council has approved moving forward with the district.
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Attachments (3)
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FILE No. December 7,1994 ,
Mr. David Hauser
Assistant cify Enpm
2075 Las Palmas I)&
msbd,CA 92469-1576
Re: PmposedCannonRoadWestFeclPtogram
Dear David:
We are in dpt of your letter dated November 17,2994 in which yau intmducd the
Proposed CannanRoad West Pee Program We bve Serious concerns With the equitablt dstrhuticm of the assessments necessary to pay fb~ the extension of Cannon Road,
Don Rose, Sdor Planner at SDG&E, has discussed our concerns with the City Engheer.
The Pfarmirrg Director told us that there was a coi~cefn on the Civ’s part tfiart the pmw
description could be misconstrued as not requiring bendthg parties to pay their fair share of the costs. He said these groups are being assess& though their fets are behg pdd by
PsrtieJotherthanthCmSeIW
We wish to reiterate OUT concern and request a meeting in which you may qW the
program. Please contact me at 696-2483 or Don Rose at 696-2408 to mwqp a titrmo to
meet that is convenient for you.
ELYfWL R%d Wassem
Land Services
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, ‘1 F& THE INFORMATION 0
THE CIM COUNCIL . t5--\3-Q$ CITY MANA(
A
DATE