HomeMy WebLinkAbout1995-06-27; City Council; 13214; ESTABLISH 1995-96 ANNUAL TAX FOR COMMUNITY FACILITIES DISTRICT NO. 1,* ,
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Cia OF CARLSBAD - AGE* BILL qa 4
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MTG. ESTABLISH 1995-96 ANNUAL TAX FOR
COMMUNITY FACILITIES DISTRICT NO. 1 FIN DEPT. cir
RECOMMENDED ACTION:
Adopt Resolution No. 95-182
Facilities District No. 1.
ITEM EXPLANATION:
In 1982, the State Legislature responded to the need for a high quality methl
financing public improvements by approving the Mello-Roos Community Facilities 1
1982. This act allows voters to approve a special tax to be levied upon their prope
fund the construction or acquisition of facilities or services.
The City of Carlsbad philosophy is that a Community Facilities District (CFD) shou
used to finance facilities that are city-wide in obligation and benefit. A CFD i!
intended to relieve any property owner of the responsibility to provide fundin
infrastructure improvements related to development. No homeowners in Carlsbal
affected by a City CFD because under the City's guidelines, any and all tax obliga
on residential units must be paid in full when the building permit is issued. Wt
building permit is issued for non-residential development, property owners must ch
whether to pay the CFD tax in full or pay pass-through taxes for twenty-five years.
The City of Carlsbad and property owners of specific vacant land in Carlsbad wc
together to form a CFD to provide funding for a variety of infra- structure projects ne
to meet growth management requirements. Vacant land and a small percentat
developed non-residential land located in twelve Local Facilities Management Zone
currently in the CFD, with other zones annexing as development plans progress.
Following Mello-Roos legislation, Council held a public hearing and an electior
formed Community Facilities District (CFD) No. 1 on May 7, 1991. Through debt fina
or available cash balances, CFD No. 1 will fund the following capital projects:
Civic Facilities 1-5 Interchanges Road Segments
Library Palomar Airport Road La Costa Avenue
Warehouse Facility La Costa Avenue Olivenhain Road
City Hall Poinsettia Lane Cannon Road
Veteran's Memorial Park Faraday Avenue
establishing the 1995-96 annual tax for the Comrr
Leucadia Boulevard
In June 1991, Council adopted an ordinance putting in place the tax formula fc
district establishing the maximum tax rates that may be levied on CFD No. 1.
maximum tax rate for property within the CFD is adjusted each year by one-half c
annual change in the Los Angeles inflationaryfactor in the Engineering News-Record (I
Cost Indexes in 22 Cities. The maximum tax rate for property not yet included 1
CFD No. 1 is adjusted by the full ENR percentage change until the fiscal ye
annexation. Although the ordinance established a ceiling for future tax rates, it di
create the individual tax levy that will be placed on each parcel. Each year the
establishes the levy as the funding needs for the next fiscal year are known.
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PAGE TWO OF AGENDA BILL NO, ITj 2 1 y
Staff recommendations for the 1995-96 tax levy are presented in Exhibit 1 which shows thc rate schedule for property included within CFD No. 1 at formation and for property annex(
1993-94 and 1994-95. adjustment since the index remained relatively flat. Vacant property planned for future reside development will continue to be taxed at 74% of the maximum tax on each developable acre the tax on vacant property zoned for future commercial or industrial development will rema 38.37% of the maximum tax. Based on current estimates, the tax rate for future commerci industrial development will need to be raised to approximately 50% of the maximum tax in 1
97 and 75% of the maximum tax in 1997-98. Although this may seem like a large increase, t
rates were set low initially at the request of the property owners and were originally projectc increase to 57% of the maximum tax by 1993-94.
Certain non-residential property owners elected not to pay off their CFD obligation at the
building permits were issued. Instead, they chose to assume an annual special tax for develc
property for twenty-five years. According to the CFD documents, the annual special ta
developed property shall not exceed 13.81 % of the authorized one time payoff tax for commc
and industrial property. This percentage rate was determined based on the average cost of I
financing (1 1%) plus administrative costs.
The proposed 1995-96 tax rate for developed property is 9.48% of each property’s one
payoff tax. This rate, based on the average rate of interest earned on the City’s invest
portfolio plus administrative costs, is the same rate as last year.
FISCAL IMPACT:
The levying of taxes on parcels within CFD No. 1 will create the necessary cash flow to fir the construction of the new library, 1-5 interchanges, and other major civic and road pro, Setting the CFD tax at the recommended rates will result in a tax levy of about $2.4 milk
the 1995-96 fiscal year. The City will be paying $67,530 in CFD taxes on property rec
acquired for the Carlsbad Municipal Golf Course project. There are currently significant CF
delinquencies for previous years totaling $1.7 million (or 19%), so the amount collected in
year 1995-96 may be substantially less than the $2.4 million levied. This should not havc
significant fiscal impact though because delinquencies are factored into future re\ projections. The CFD will eventually receive these delinquent taxes; it is just a matter of the collection occurs.
EXH I 81 TS :
1.
There is no increase proposed in the CFD tax rate, and no
Resolution No. ’35 4 /82 District No. 1.
establishing the 1995-96 annual tax for Community Fac
RESOLUTION NO. 95-182 *
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RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, ESTABLISHING ANNUAL
TAX FOR A COMMUNITY FACILITIES DISTRICT
WHEREAS, the CITY COUNCIL of the CITY OF CARLSBAD, CALIFOF
(hereinafter referred to as the "legislative body"), has initiated proceedings, hc
public hearing, conducted an election and received a favorable vote from the qua
electors relating to the levy of a special tax in a community facilities district, z
authorized pursuant to the terms and provisions of the "Mello-Roos Comm
Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Govern1
Code of the State of California. This Community Facilities District shall hereinaftc
referred to as COMMUNIN FACILITIES DISTRICT NO. 1 (hereinafter referred to a
"District"); and,
WHEREAS, this legislative body, by Ordinance as authorized by 8e
53340 of the Government Code of the State of California, has authorized the le
a special tax to pay for costs and expenses related to said Community Fac
District, and this legislative body is desirous to establish the specific rate of the SF
tax to be collected for the next fiscal year.
NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS:
as previously authorized by Ordinance of this legislative body, and is not in excess of
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3 that as previously approved by the qualified electors of the District.
4 SECTION 4. That the proceeds of the special tax shall be used to pay, in
5 whole or in part, the costs of the following, in the following order of priority: I
6 A. Payment of principal of and interest on any outstanding
7 authorized bonded indebtedness;
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SECTION 3. That the rate as set forth above does not exceed the amount
9. Necessary replenishment of bond reserve funds or other reserve
funds:
C. Payment of costs and expenses of authorized public facilities
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and public services;
D. Repayment of advances and loans, if appropriate. The proceeds
of the special taxes shall be used as set forth above, and shall not be used for any
other purpose.
SECTION 5. The special tax shall be collected in the same manner as
ordinary ad valorem property taxes are collected, and shall be subject to the same
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penalties and same procedure and sale in cases of any delinquency for ad valorem
taxes, and the Tax Collector is hereby authorized to deduct reasonable administrative
20 costs incurred in collecting any said special tax.
21 SECTION 6. All monies above collected shall be paid into the Community )
22 Facilities District funds, including any bond fund and reserve fund.
23 /I SECTION 7. The Finance Director is hereby directed to calculate the
24 /I installment of the special tax for each parcel within the District and provide a list of
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those special taxes to the Auditor of the County. The Auditor of the County is hereby
directed to enter in the next County assessment roll on which taxes will become due,
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opposite each lot or parcel of land affected in a space marked "public improvemer
special tax" or by any other suitable designation, the installment of the special tal
SECTION 8. The County Auditor shall then, at the close of the tax collecl
period, promptly render to this Agency a detailed report showing the amount anc
amounts of such special tax installments, interest, penalties and percentages
collected and from what property collected, and also provide a statement of
percentages retained for the expense of making any such collection.
PASSED, APPROVED AND ADOPTED by the City Council of the Cit
Carlsbad at its regular meeting held on the 27th day of JUNE , 1995
the following vote, to wit:
b AYES: Council Members Lewis, Nygaard, Kulchin, Finnila,
NOES: None
ABSENT: None
ATTEST:
/
iL*iE (SEAL)
TAX ON DEVELOPED PROPERTY
MAXIMUM
1994-95 TAX
1 995-96 TAX
% OF ONE-TIM
13.81 %
9.48%
9.48%
'TAX ON DEVELOPED PROPERTY % OF ONE-TIME
MAXIMUM 13.81 %
1994-95 TAX 9.48%
1995-96 TAX 9.48%
RL
RLM
RM
RMH
RH
COMMERCIAL
INDUSTRIAL
NON- RESIDENTIAL
$304 $304 834 834
1,336 1,336
2,050 2,050
3,006 3,006
$1,756 $1,756
1,054 1,054
(38.37% c
TAX ON DEVELOPED PROPERTY
MAXIMUM
1994-95 TAX
1 995-96 TAX
% OF ONE-TIME
13.81 %
9.48%
9.48%