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2015-04-21; City Council; 21941; Adding Chapter 3.40 Establishment of Reimbursement Fee, Construction Eligible Improvements
CITY OF CARLSBAD-AGENDA BILL 11 AB# 21.941 INTRODUCE AN ORDINANCE OF THE CITY DEPT. DIRECTOR MTG. 04/21/15 COUNCIL OF THE CITY OF CARLSBAD, CITY ATTY. ~ DEPT. ASD CALIFORNIA, ADDING CHAPTER 3.40 TO THE CITYMGR. "'oo CARLSBAD MUNICIPAL CODE SETTING FORTH PROCEDURES FOR THE ESTABLISHMENT OF A REIMBURSEMENT FEE FOR FUNDING THE REIMBURSEMENT OF CERTAIN COSTS OF THE CONSTRUCTION ELIGIBLE IMPROVEMENTS RECOMMENDED ACTION: Introduce Ordinance No. CS-273 of the City Council of the City of Carlsbad, California, adding Chapter 3.40 to the Carlsbad Municipal Code setting forth procedures for the establishment of a reimbursement fee for funding the reimbursement of certain costs of the construction of eligible improvements. ITEM EXPLANATION: On September 10, 2013, via Agenda Bill 21,360, Council approved a reimbursement agreement between the City of Carlsbad and Bent-West, LLC for assessment district formation deposits and allowed Bent-West, LLC to temporarily bypass the initial Policy No. 33 (the "Policy") approval steps. On April 15, 2014, via Agenda Bill 21,567, Council made a finding under the Policy to waive the provision of the pass-through requirement for community facilities districts ("CFD") based on the benefit of proceeding with the College Boulevard improvements in a district with diverse ownership. Lastly, on February 17, 2015 via Agenda Bill 21,864 Council directed staff to pursue alternative financing in the form of a development condition or reimbursement agreement based on the challenges of CFD financing over unentitled properties. As such, staff has developed a reimbursement fee ordinance under the powers available to charter cities. This reimbursement fee ordinance would allow the city to condition properties within a Local Facilities Management Plan ("LFMP") Zone. The development condition would require affected properties pay a proportional share of public improvement costs incurred by an applicant(s) constructing public improvements on behalf of other property owners also conditioned to construct the same public improvements. The affected properties' proportional share and related reimbursement fee is determined by a reimbursement fee study. The city acts as a pass-through for the reimbursement fees. Reimbursement fees collected are remitted to the applicant(s) originally incurring the public improvements construction costs. The reimbursement fee ordinance increases the number of financing tools available to help finance public improvements. This reimbursement fee ordinance can be used in LFMP Zone 15 and other situations in DEPARTMENT CONTACT: Aaron Beanan 760-602-2414 Aaron.Beanan@carlsbadca.gov FOR CLERK USE. COUNCIL ACTION: APPROVED D CONTINUED TO DATE SPECIFIC D DENIED D CONTINUED TO DATE UNKNOWN ~ CONTINUED D RETURNED TO STAFF WITHDRAWN D OTHER-SEE MINUTES D AMENDED D REPORT RECEIVED D I Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided PAGE 2 which an applicant(s) constructs public improvements on behalf of multiple property owners also conditioned to constructthe same public improvements. Staff is not recommending a specific financing approach for LFMP Zone 15 at this time. After Council takes action on the reimbursement fee ordinance, either adopting or denying the ordinance, staff will return with a recommended financing approach for LFMP Zone 15. The recommended financing approach will be developed by the Council Policy No. 33 committee after examining the applicant's proposal and available financing tools. The Policy No. 33 committee's recommendation will be brought back to Council for consideration. Reimbursement Fee Ordinance The reimbursement fee ordinance contains the following main ideas: • The applicant(s) requesting the creation of a reimbursement fee must: o Detail the types and estimated costs of the public improvements proposed for reimbursement o Detail the properties the applicant(s) is seeking reimbursement from, o Mail the aforementioned information to the affected properties and provide proof of mailing to the city, and o Provide a deposit(s) to cover the costs of the city in considering the request. • Only public improvements will be reimbursable. • The reimbursement fee will be based on estimated or actual costs depending on the timing for each development project subject to the fee with a mechanism to adjust estimated costs to actual costs. • The reimbursement fee will be based on actual unit counts; not estimated unit counts. • The reimbursement fee would be due and payable prior to building permit issuance. • The reimbursement fee could escalate by a standard inflationary index (e.g. CPI, CCI, etc.) until the obligation was paid or terminated. • The city's obligation to collect reimbursement fees from properties would terminate 15 years after the first day of the year following the date Council established the fee. FISCAL IMPACT: There is no fiscal impact to the city by providing an additional financing tool to fund public improvements. ENVIRONMENTAL IMPACT: Pursuant to Public Resources Code Section 21065, this action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided PAGE 3 EXHIBITS: 1. Ordinance No. CS-273 of the City Council of the City of Carlsbad, California, adding Chapter 3.40 to the Carlsbad Municipal Code setting forth procedures for the establishment of a reimbursement fee for funding the reimbursement of certain costs of the construction of eligible improvements. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDINANCE NO. CS-273 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ADDING CHAPTER 3.40 TO THE CARLSBAD MUNICIPAL CODE SETTING FORTH PROCEDURES FOR THE ESTABLISHMENT OF A REIMBURSEMENT FEE FOR FUNDING THE REIMBURSEMENT OF CERTAIN COSTS OF THE CONSTRUCTION OF ELIGIBLE IMPROVEMENTS EXHIBIT 1 WHEREAS, the Carlsbad City Council concurs that it is necessary to add Chapter 3.40 to the Carlsbad Municipal Code setting forth procedures for the establishment of a reimbursement fee for funding the reimbursement of certain costs of the construction of eligible improvements. NOW, THEREFORE, the City Council of the City of Carlsbad ordains as follows: SECTION 1: That Chapter 3.40 is added to the Carlsbad Municipal Code to read as follows: Chapter 3.40 CARLSBAD REIMBURSEMENT FEE 3.40.010 Short Title 3.40.020 Purpose 3.40.030 Definitions 3.40.040 Request for Establishment of a Reimbursement Fee 3.40.050 Deposits 3.40.060 Improvements Eligible for Reimbursement 3.40.070 Eligible Costs 3.40.080 Construction of Eligible Improvements 3.40.090 Reimbursement Fee Study 3.40.100 Notice of Public Hearing 3.40.110 Public Hearing and Establishment of Reimbursement Fee 3.40.120 Adjustment of the Reimbursement Fee to Reflect Actual Costs 3.40.130 Adjustment of Reimbursement Fee for Specific Projects 3.40.140 Imposition of a Reimbursement Fee 3.40.150 Payment of the Reimbursement Fee 3.40.160 Establishment of Funds and Use of Reimbursement Fees Ill Ill Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 3.40.010 Short Title. This Chapter shall be known as the "Carlsbad Reimbursement Fee." 3.40.020 Purpose. Chapter 21.90 of the Carlsbad Municipal Code requires the preparation of a Local Facilities Management Plan for each Local Facilities Management Zone within the City to include, among other provisions, a financing plan establishing various methods of funding the public facilities and improvements identified in such Local Facilities Master Plan needed to accommodate development within the related Local Facilities Management Zone to fairly allocate the cost of construction of such public facilities and improvements to the various properties within such Local Facilities Management Zone. A Local Facilities Management Plan may provide that an owner or developer of property within the related Local Facilities Management Zone fund and construct certain required LFMP Improvements prior to or concurrent with development of such owner's or developer's property to comply with the phasing schedule and performance standards for such LFMP Improvements provided for in the LFMP. The purpose of this Chapter is to establish, in accordance with the freedom afforded to charter cities generally and by the Charter of the City of Carlsbad, a mechanism by which the costs of the construction of LFMP Improvements (defined in Section 3.40.030 herein) and certain appurtenant improvements, defined in Section 3.40.030 herein collectively as "Eligible Improvements," incurred by an owner or developer of property within a Local Facilities Management Zone may, as required pursuant to Chapter 21.90, be fairly allocated among the properties within such Local Facilities Management Zone and the owner or developer that originally incurred such costs may be reimbursed by the owners of the other properties within the Local Facilities Management Zone that would otherwise have been responsible for financing and/or constructing all or some portion of such Eligible Improvements as a condition of approval of the development of such properties. 3.40.030 Definitions. As used in this Chapter, the following terms shall have the following meanings: "Administrative Services Director" shall mean the Administrative Services Director of the City or his or her designee. "Building Permit" means a permit required by and issued pursuant to Chapter 18.04 of the Carlsbad Municipal Code. "Chapter 21.90" means Chapter 21.90 of the Carlsbad Municipal Code as it may be amended from time to time. "City" shall mean the City of Carlsbad. "City Council" shall mean the City Council of the City. "City Engineer" shall mean the City Engineer of the City or his or her designee. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 "Eligible Improvements" shall mean those improvements for which the cost of construction thereof may be eligible for reimbursement pursuant to this Chapter. "Eligible Incidental Costs" shall mean those incidental costs that may be eligible for reimbursement pursuant to this Chapter. "Local Facilities Management Plan" or "LFMP" shall have the meaning given such term in Chapter 21.90. "LFMP Improvements" means those public facilities and improvements identified in an LFMP that are needed to accommodate development with the LMFZ for which such LFMP was prepared pursuant to Chapter 21.90. "LFMZ Property" or "LFMZ Properties" means a property or the properties, as applicable, within a Local Facilities Management Zone. "Local Facilities Management Zone" or "LFMZ" means a local facilities management zone established pursuant to Chapter 21.90. "Occupancy Permit" means a permit required by and issued pursuant to Chapter 21.60 of the Carlsbad Municipal Code. "Project" means any project undertaken for the purpose of development. "Project" includes a project involving the issuance of a permit for construction or reconstruction, but not a permit to operate. "Public Agency" shall mean any city or county, whether general law or chartered, special district, school district or any other municipal corporation, district, or political subdivision of the State of California. "Reimbursement Fee" means a fee adopted pursuant to the Charter of the City of Carlsbad, this Chapter and any City Council resolution adopted pursuant to this Chapter. "Reimbursement Fee Study" means a study prepared or caused to be prepared by the City Engineer pursuant to Section 3.40.090 hereto pertaining to a request for establishment of a Reimbursement Fee. "Requesting Party" means the owner or developer of LMFZ Property within an LFMZ that has filed a request pursuant to Section 3.40.050 hereto that the City establish a Reimbursement Fee pursuant to the provisions of this Chapter. "Requesting Party" also means, collectively, the owners and/or developers of LFMZ Properties within an LFMZ that have jointly filed such a request. 3.40.040 Request for Establishment of a Reimbursement Fee. Whenever a Requesting Party is required by the City to construct Eligible Improvements the cost of which such Requesting Party believes will exceed the cost fairly allocable to the Requesting Party's LFMZ Property, the Requesting Party may file a written request with the City Engineer for the establishment by the City of a Reimbursement Fee to be imposed on other LFMZ Properties Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 located within such LFMZ to which a portion of the cost of such Eligible Improvements should be fairly allocated as a condition of approval of the development of such LFMZ Properties. Such request must be received by the City Engineer prior to the construction of the Eligible Improvements for which reimbursement is being requested. Such a request shall include a description of each Eligible Improvement in sufficient detail to enable to the City Engineer to identify each such improvement and a detailed plat of the applicable LFMZ showing the precise location of each such Eligible Improvement and each of the LFMZ Properties from which the Requesting Party is seeking reimbursement. Such request must also include an engineer's estimate of the cost of construction of such Eligible Improvements, together with an estimate of the Eligible Incidental Costs for which reimbursement is requested. For any request for which the Requesting Party consists of multiple owners and/or developers that are jointly filing such request, such request must be executed by all such owners and developers and must include the designation of one party to whom the City is authorized and directed to make all reimbursement payments, together with an acknowledgment that the City shall have no responsibility whatsoever for determining the allocation of reimbursements among such owners and/or developers or making such allocation to such owners and developers. The Requesting Party shall, at such Requesting Party's expense, also mail a copy of such request to the owner of each LFMZ Property from which the Requesting Party is seeking reimbursement and the Requesting Party shall file proof of such mailing satisfactory to the City Engineer. The request of such Requesting Party shall not be deemed to be complete until: A. The City Engineer has received satisfactory proof of the mailing of the Requesting Party's request for establishment of a Reimbursement Fee; and B. The Administrative Services Director has received the initial deposit from the Requesting Party as required pursuant to Section 3.40.050 below. 3.40.050 Deposits. All City and consultant costs incurred in the implementation of a request for the establishment of a Reimbursement Fee pursuant to the provisions of this Chapter, the preparation of the Reimbursement Fee Study for such Reimbursement Fee request, the proceedings to establish a Reimbursement Fee, the amendment of the Reimbursement Fee Study pursuant to Section 3.40.120 and the proceedings to consider the adjustment of a Reimbursement Fee pursuant to Section 3.40.120 will be paid by the Requesting Party by advance deposit with the City of monies sufficient to pay all such costs. Each request for the establishment of a Reimbursement Fee shall be accompanied by an initial deposit in an amount to be determined by the Administrative Services Director to be adequate to fund the initial review of the request, preparation of the Reimbursement Fee Study and the proceedings to implement the Reimbursement Fee request. If additional funds are required to pay implementation costs, the Administrative Services Director may make written demand upon the Requesting Party for such additional funds and the Requesting Party shall deposit such additional funds with the City within five {5) working days of the date of receipt of such demand. Upon the Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 depletion of the funds deposited by the Requesting Party for such costs, all proceedings shall be suspended until receipt by the City of such additional funds as the Administrative Services Director may demand. The deposits shall be used by the City to pay for costs and expenses incurred by the City incident to the initial review of the Reimbursement Fee request, preparation of the Reimbursement Fee Study, proceedings for the consideration of the Reimbursement Fee request, and the review of the actual costs of construction of the Eligible Improvements and the Eligible Incidental Costs and proceedings for the consideration of the adjustment of the Reimbursement Fee pursuant to Section 3.40.120, including, but not limited to, legal, Reimbursement Fee consulting, engineering, administration and staff costs and expenses, required notifications, printing, and publication costs. The City shall refund any unexpended portion of the deposits if the Requesting Party files a written request with the City Engineer that the Requesting Party is terminating its reimbursement request. 3.40.060 Improvements Eligible for Reimbursement. Eligible Improvements must be LFMP Improvements or other additional public improvements identified in this Section 3.40.060 below that will be owned, operated, or maintained by the City or another Public Agency and that are constructed pursuant to and in compliance with all applicable requirements of the City, including without limitation this Chapter, or such other Public Agency that will own, operate or maintain such Eligible Improvements. The City Council shall have the final determination as to the eligibility of any improvements for reimbursement. Such Eligible Improvements may include, but are not limited to: A. Streets and Highways: Arterial streets, highways, major bridges, and freeway interchanges constituting LFMP Improvements for an LMFZ. If the primary purpose of completing a circulation link is met, and overriding public interest is shown, then public facilities increasing traffic capacity for a circulation element may be considered. Right-of-way must be dedicated or acquired prior to submission of a request for reimbursement. The value of right-of-way required to be dedicated by the owner thereof is generally not eligible for reimbursement except under special circumstances as recommended by the City Engineer. B. Additional Public Improvements: If appurtenant to the types of street and highway improvements described in A. above, the following additional improvements may be considered for reimbursement: 1. Sewer lines or other sewer facilities: Sewer lines must be located within the rights-of-way of the arterial streets when the City Engineer has determined it is necessary that they be so located. 2. Water lines and other water facilities: Water lines must be located within the public rights-of-way of the arterial streets when the City Engineer has determined it is necessary that they be so located. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 3. Drainage facilities. 4. Landscape and irrigation facilities. 5. Recycled water facilities. 6. Grading for eligible public streets. 7. The construction of environmental mitigation required for Eligible Improvements. 8. Bicycle and pedestrian facilities, if located on land or easements owned or dedicated to the City and accepted as part of the City wide trail system. 9. Such other improvements as may be authorized by law and which the City Council determines are consistent with Chapter 21.90 and the applicable LFMP. Each Eligible Improvement must be located in public rights-of-way dedicated or otherwise granted to the City or the other Public Agency that shall own, operate or maintain any such Eligible Improvement. Notwithstanding the foregoing, no facility or improvement the financing of which is included in any fee program established for the purpose of financing such facility or improvement by the City or the other Public Agency that will own such facility or improvement shall be considered to be an Eligible Improvement. Additionally, dry utilities or other utility improvements that will be owned by a public utility or other private entity shall not be considered to be Eligible Improvements. 3.40.070 Eligible Costs. Costs of an Eligible Improvement that shall be eligible for reimbursement pursuant to the provisions ofthis Chapter shall include the following: A. The actual costs of construction as determined by the City Engineer to be reasonable and customary costs of the work performed. Costs incurred to expedite the completion of the construction of any Eligible Improvement within a time period not required by the City or the Public Agency that will own such Eligible Improvement will not be eligible for reimbursement. B. Eligible Incidental Costs, as determined by the City Engineer to be reasonable and customary for such incidental costs, that are directly related to Eligible Improvements the costs of construction of which shall be reimbursed from the related Reimbursement Fees and that are identified in the "Administrative Procedures for Reimbursable Public Works Projects" as issued by the City Engineer from time to time as Eligible Incidental Costs for public works projects. The following incidental costs are considered ineligible to be reimbursed from Reimbursement Fees established pursuant to this Chapter: 1. Development impact fees. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 2. Administrative or overhead expenses, financial consultant, or legal fees incurred by a Requesting Party for the establishment of a Reimbursement Fee. This limitation does not apply to amounts advanced by the Requesting Party to the City pursuant to the provisions of this Chapter to pay for costs incurred by the City to undertake the proceedings to establish Reimbursement Fees pursuant to this Chapter. 3. Land-use planning and subdivision costs and environmental review costs related to such land use planning and subdivision. 4. Environmental impact studies, unless directly related to the project and done separately for the project. 5. Maintenance, monitoring and endowment costs for mitigation land. 6. Construction loan interest. 7. Subdivision financial analysis. 8. Attorney's fees incurred by the property owners or their agents, except as recommended by the City Attorney related to condemnation proceedings. 3.40.080 Construction of Eligible Improvements. A Requesting Party shall solicit at least three (3) bids from licensed contractors for the construction of such Eligible Improvements and shall award the contract for the construction of such Improvements to the lowest responsible bidder. Nothing in the preceding sentence shall prohibit a Requesting Party from including more than one such Eligible Improvement in a single solicitation for bids. In the case where the Requesting Party does include more than one such Eligible Improvement in a single solicitation for bids, the Requesting Party shall award the contract for the construction of such Eligible Improvements to the bidder submitting the lowest aggregate bid for the construction of all such Eligible Improvements included in such solicitation. Following the award of a contract for the construction of an Eligible Improvement or Eligible Improvements, the Requesting Party shall provide to the City Engineer copies of the bid solicitation documents, the names of the contractors from whom such bids were solicited, the results of the bid solicitation including the response provided by each contractor submitting a bid or declining to submit a bid if provided and copies of the executed construction contracts. Following completion of the construction of the Eligible Improvements, the Requesting Party shall submit to the City Engineer (a) copies of all change orders to the construction contracts, all invoices for the construction of the Eligible Improvements for which the Requesting Party is seeking reimbursement and documents satisfactory to the City Engineer evidencing payment for the construction of the Eligible Improvements and (b) copies of all. contracts related to Eligible Incidental Costs for which the Requesting Party is seeking reimbursement, all change orders related to such contracts, all invoices for such Eligible Incidental Costs and documents satisfactory to the City Engineer evidencing payment Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 1 2 3 4 5 6 7 8 9 10 11 EXHIBIT 1 of such Eligible Incidental Costs. All such invoices must be submitted to the City Engineer no later than sixty (60) calendar days following acceptance by the City of the last of the Eligible Improvements for which the Requesting Party is seeking reimbursement. Costs represented by invoices received beyond this period of time shall not be eligible for reimbursement. Following the receipt of such invoices, the City Engineer shall review the invoices and shall determine whether or not the costs represented thereby are reasonable and customary costs of the work performed or the costs incurred. If, in the opinion of the City Engineer, the costs represented by the invoices are higher than that which are customary and reasonable for such work performed or costs incurred, the City Engineer may deny reimbursement for that portion of such costs deemed to be excessive. 3.40.090 Reimbursement Fee Study. The City Engineer will, following receipt of the documents required to be provided to the City Engineer pursuant to Section 3.40.040 hereto, prepare or cause to be prepared a Reimbursement Fee Study for the requested Reimbursement Fee that will include the following: A. A legal description or list of the Assessor's Parcel Numbers of each parcel 12 within the applicable LFMZ, the name of the owner thereof, street address thereof each such parcel, if any, and the acreage thereof; 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. A detailed plat showing the precise locations of all of the Eligible Improvements for which the Requesting Party has requested reimbursement shown in relation to the parcels within the applicable LFMZ; C. A list of each of the Eligible Improvements and the estimated cost of the construction of the Eligible Improvements and each of the estimated Eligible Incidental Costs, as approved by the City Engineer; D. A report identifying the burden which the development of each parcel proposed to be subject to the Reimbursement Fee in accordance with its zoning and general plan designation and other existing land use entitlements, if any, will impose upon the Eligible Improvements and the extent to which the development of each such parcel will contribute to the need for or burden upon such Eligible Improvements; E. An explanation of how there is a reasonable relationship between the Reimbursement Fee's use and the types of Projects on which the Reimbursement Fee is proposed to be imposed; F. A detailed description of the method of Reimbursement Fee allocation; and G. A reimbursement schedule to include a list of all parcels within the applicable LFMZ proposed to be subject to the Reimbursement Fee with current Assessor's parcel number, owner's name, property's street address, and the acreage of such parcels and a proposed Reimbursement Fee applicable to each such parcel. Upon completion of a Reimbursement Fee Study the City Engineer shall mail a copy of such study to the Requesting Party and the owner of each property proposed to ! ' . I Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 EXHIBIT 1 be subject to the Reimbursement Fee as set forth in such Reimbursement Fee Study, together with the notice of the date, time and place of a property owner informational meeting at which the City Engineer or his or her designee shall be available to answer questions regarding the Reimbursement Fee Study. Such notice shall be given at no less than ten days before the date of such meeting. Such meeting shall be scheduled to occur not less than 20 days prior to the public hearing required to be held pursuant to Section 3.40.110 hereto. 3.40.100 Notice of Public Hearing. Upon completion of the Reimbursement Fee study pursuant to Section 3.40.080 hereto, the time and place for a public hearing of the City Council shall be set, as part of a regularly scheduled meeting of the City Council, at which oral or written presentations can be made regarding the proposed Reimbursement Fee. Notice of such public hearing shall be published pursuant to Government Code Section 6062a and such notice shall be mailed to the Requesting Party and the owner of each parcel that may be subject to the imposition of the proposed Reimbursement Fee at least fifteen (15) calendar days prior to the date set for such public hearing. 3.40.110 Public Hearing and Establishment of Reimbursement Fee. The City Council shall hold a public hearing to determine the types of Projects that shall be subject to the Reimbursement Fee, the Reimbursement Fee that shall be imposed on each Project and the term that such Reimbursement Fee shall be in effect; provided, however, no Reimbursement Fee shall have a term longer than 15 years from the first day of the calendar year following the date of adoption of the resolution of the City Council establishing'such Reimbursement Fee. This Reimbursement Fee shall only be established if the City Council can make the following findings: A. The purpose and use of the Reimbursement Fee. 18 B. Determine how there is a reasonable relationship between the use of the 19 20 21 22 23 24 25 26 27 28 Reimbursement Fee and the type of Project on which the Reimbursement Fee is imposed. C. · Determine how there is a reasonable relationship between the need for the Eligible Improvement and the type of Project on which the Reimbursement Fee is imposed. At the conclusion of the public hearing, the City Council shall adopt a resolution approving, conditionally approving or denying the establishment of the Reimbursement Fee. If the Reimbursement Fee is to be subject to escalation, the resolution shall state the rate of escal,ation applicable to the Reimbursement Fee. The resolution shall attach as an exhibit thereto a copy of the reimbursement plan as adopted by the Council and shall set forth the method of Reimbursement Fee allocation as approved by the Council. 3.40.120 Adjustment of the Reimbursement Fee to Reflect Actual Costs. Upon completion of the construction of the Eligible Improvements for which a Reimbursement Fee has been established and acceptance of such Eligible Improvements by the City or the other Public Agency that will own, operate and maintain such Eligible Improvements and receipt by the City Engineer of the information and documents required to be submitted I •'"\ . <;;;,l,_ Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 by the Requesting Party, the City Engineer shall prepare or cause an amendment to the Reimbursement Fee study upon which the Reimbursement Fee to be prepared to incorporate such actual costs of the Eligible Improvements and the related Eligible Incidental Costs. Upon completion of the amendment to the Reimbursement Fee Study, the City Engineer shall mail a copy of such amendment to the Requesting Party and the owner of each property subject to the Reimbursement Fee, together with the notice of the date, time and place of a property owner informational meeting at which the City Engineer or his or her designee shall be available to answer questions regarding the amendment to the Reimbursement Fee Study. Such notice shall be given at no less than ten days before the date of such meeting. Such meeting shall be scheduled to occur not less than 20 days prior to the public hearing required to be held pursuant to this Section 3.40.120 hereto. The existing Reimbursement Fee shall be subject to increase or decrease, as applicable, to reflect differences between the estimated costs of the Eligible Improvements and the Eligible Incidental Costs utilized to establish the Reimbursement Fee and the actual costs of such Eligible Improvements and Eligible Improvement Costs. Such adjustments may be considered for approval by the City Council following a public hearing thereon for which notice is given pursuant to Section 3.40.100 hereto. At such public hearing oral or written presentations may be made regarding the proposed adjustment in the Reimbursement Fee. At the conclusion of such public hearing, adjustments to the Reimbursement Fee may be made by resolution of the City Council. 3.40.130 Adjustment of Reimbursement Fee for Specific Projects. Upon application filed with the City for approval of the land use entitlements to permit development and construction of a Project to be developed on property subject to a Reimbursement Fee established pursuant to this Chapter, the City Engineer shall prepare or cause to be prepared an analysis of the Project and whether there is a reasonable relationship between the amount of the Reimbursement Fee to which the Project would be subject and the cost of the Eligible Improvements attributable to the Project. The City Engineer shall mail a 'copy of such analysis to the applicant for the entitlement and the owner of such property, if other than the applicant, and the Requesting Party entitled to reimbursement from the proceeds of the Reimbursement Fee not less than 20 days prior to the public hearing described in the following paragraph. The City Council shall, prior to imposing the payment of such Reimbursement Fee as a condition of approval of such Project, hold a public hearing for the purpose of determining whether there is a reasonable relationship between the amount of the Reimbursement Fee to which the Project would be subject and the cost of the Eligible Improvements attributable to the Project. Such public hearing may be consolidated with any public hearing to consider the approval of the land use entitlements for the Project. In addition to any other notice of such public hearing required by law, notice of such public hearing shall be mailed to the owner of the property on which the Project is proposed to be developed and the Requesting Party entitled to reimbursement from the proceeds of the Reimbursement Fee not less than 15 days prior to the date of such public hearing. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 At such public hearing oral or written presentations may be made regarding whether there is a reasonable relationship between the amount of such Reimbursement Fee and the cost of the Eligible Improvements attributable to the Project. Upon the conclusion of such public hearing, the City Council shall determine whether there is a reasonable relationship between the amount of the Reimbursement Fee to which the Project would be subject and the cost of the Eligible Improvements attributable to the Project. If the City Council determines that there is such a reasonable relationship, the approval of the Project may be conditioned with the requirement for the payment of the Reimbursement Fee. If the City Council determines that there is not a reasonable relationship between the amount of the Reimbursement Fee to which the Project would be subject and the cost of the Eligible Improvements attributable to the Project, the City Council shall adopt a resolution modifying the Reimbursement Fee so that there is a reasonable relationship between the Reimbursement Fee, as modified, to which the Project will be subject and the cost of the Eligible Improvements attributable to the Project. 3.40.140 Imposition of a Reimbursement Fee. Notwithstanding any provisions of the Carlsbad Municipal Code, no permit shall be issued for any Project subject to a Reimbursement Fee established pursuant to this Chapter except upon the condition that the Reimbursement Fee applicable to such Project shall be paid in accordance with the provisions of this Chapter. 3.40.150 Payment of the Reimbursement Fee. The owner or developer of a Project subject to the payment of a Reimbursement Fee established by the City Council pursuant to this Chapter shall pay such Reimbursement Fee prior to issuance of any Building Permit or Occupancy Permit for such Project; provided, however, that if the Carlsbad Municipal Code provides of development impact fees assessed by the City pursuant to the Charter of the City of Carlsbad or the Mitigation Fee Act (Chapter 5 of Division 1 of Title 7 of the California Government Code) to be collected at a later time, then a Reimbursement Fee collected pursuant to this Chapter shall be collected at the same time as that mandated by the Carlsbad Municipal Code for the payment of such other fees. In no event shall a final inspection or an Occupancy Permit be issued for any Project subject to a Reimbursement Fee prior to the payment of such Reimbursement Fee in full. A Reimbursement Fee required to be paid pursuant to this Chapter shall be the Reimbursement Fee in effect at the time of payment. Notwithstanding anything in the Carlsbad Municipal Code or any other written documentation to the contrary, the Reimbursement Fee applicable to a Project shall be paid whether or not such Project is subject to conditions of approval by the City. For Projects for which the City does not require a permit, final inspection or issuance of an Occupancy Permit, the Reimbursement Fee applicable to a Project shall be paid prior to use or occupancy of such Project. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 3.40.160 Establishment of Funds and Use of Reimbursement Fees. Reimbursement Fees collected under this Chapter shall be segregated into a Reimbursement Fee Fund with separate accounts established for each separate Reimbursement Fee established pursuant to this Chapter. Reimbursement Fees deposited in such an account may be disbursed solely to reimburse the applicable Requesting Party for Eligible Improvements and Eligible Incidental Costs as approved by the City Council in the establishment of such Reimbursement Fee. No reimbursement payment shall be made to any Requesting Party until the construction of all Eligible Improvements has been completed and such Eligible Improvements have been accepted by the City or the other Public Agency that will own such Eligible Improvements and the adjustment, if any, to the applicable Reimbursement Fee pursuant to Section 3.40.120 has been approved. If a Reimbursement Fee shall have paid at the rate initially established pursuant to Section 3.40.110 and such Reimbursement Fee is reduced pursuant to this Section 3.40.120, the City shall refund to the payee of such Reimbursement Fee the amount by which such Reimbursement Fee shall have been reduced prior to disbursing any funds on deposit in the applicable account of the Reimbursement Fee Fund to the Requesting Party. EFFECTIVE DATE: This ordinance shall be effective thirty days after its adoption; and the city clerk shall certify the adoption of this ordinance and cause the full text of the ordinance or a summary of the ordinance prepared by the City Attorney to be published at least once in a newspaper of general circulation in the City of Carlsbad within fifteen days after its adoption. INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City Council on the __ day of ______ , 2015, and thereafter, Ill Ill Ill Ill Ill tS Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT 1 PASSED AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad on the __ day of _____ , 2015, by the following vote, to wit: AYES: NOES: ABSENT: APPROVED AS TO FORM AND LEGALITY: CELIA A. BREWER, City Attorney MATT HALL, Mayor ATTEST: BARBARA ENGLESON, City Clerk lb Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Jackson I DeMarco I Tid us Peckenpaugh All Receive -Agenda Item :f1i u . For the Information of the: CITY COUNCIL ACM. ,_£___ CA ./ CC ,/' · A LAW CORPORATION 9ate~ Gity Mana§er V:: April9, 2015 Direc·i DiaL Email: Reply w: File No: VIA EMAIL (clerk@carlsbadca.gov) AND FIRST CLASS MAIL City Council City of Carlsbad 1635 Faraday Avenue Carlsbad, California 92008 Re: Objections to Proposed Ordinance to Establish Reimbursement Fee Funding and Proposed Zone 15 Reimbursement Fee, and Request to Continue Matter Off Calendar (April10, 2015 City Team/Zone 15 Property Owners Meeting); April21, 2015 City Council Meeting Dear Mayor Hall and Honorable Councilmembers: We represent Mandana Cal Co., the owner of approximately 190 acres ofland·induded in the reimbursement area ofthe'Zone 15 fmaticing proposal, shewn as property nos. 1, 2 and 18 on the Zone 15 "Benefiting Properties Map" attached to Aaron Beanan's March 2, 2015 letter regarding Local Facilities Management Plan Zone 15 Financing Program for Public Improvements Related to College Boulevard Reach "A" Construction. Mandana has owned the property for over 30 years. The property is unentitled and has long been farmed. The Mandana and Kato properties comprise 41% ofthe entire Zone 15 "Benefiting Properties" area, and more than 50% of the unentitled land proposed to be included in. the reimbursement area. We urge the City to correct the serious procedural and substantive illegalities of both the proposed Ordinance to Establish Reimbursement Fee Funding ("Ordinance") and proposed Zone 15 Reimbursement Fees. 1. The City's Actions in Connection with the Ordinance Violate Mandana's Due Process Rights. The City is violating the due process rights ofMandana (and the other unentitled property owners) as guaranteed by the Fourteenth Amendment bfthe United States Constitution and Article I,§ 7 of the California Constitution by, among other things: Irvine Office 2030 Main Street/ Suite 1200 Irvine, California 92614 t 949.752.8585 f 949.752.0597 Westlake Village Office 2815 Townsgate Road, Suite 200 Westlake Village, California 91361 t 805.230.0023 f 805.230.0087 wWw .jdtplaw .com -Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 9, 2015 Page 8 · Conducting_a .. sham l)!i(rkshop. The March 26, 2015 notice of the April10 property owner meeting says thah~~pose of the meeting is for property owners to provide feedback on the --··-propp~~ifff.~\8i<J?wever, the City has employed a "hide and ram" strategy that prevents affected p'~o~r¥ v~$ from having any meaningful opportunity to provide input: ~~~~,~~t)l~4o~~~erenced in the notice were not made available to the property owners ·'" ... .. \ ·: ._1 untll-Jat~ !yeitertl.ay; ... 1"3h._ ~,,;y't'!'v: • hundreds.df'p"!~~ of technical data were provided to property owners for the first time with less than two days to review them before the April 10 Workshop, and without any staff report or summary of what the data are intended to show or how the City is using the data. The City's "data dump" was timed to coincide with the public review and comment periods of the City's separate College Boulevard Mitigation General Plan Amendment and Mitigated Negative Declaration; and the City's recirculation ofthe portions of the General Plan EIR, making it impossible for the property owners to meaningfully comment on these significant proposals; • key documents were not provided to the property owners. For example, the City did not provide the "City constraints analysis", referenced in the Zone 15 Estimated Improvement Cost Allocations Table, that was used to assign potential future unit projections for the unentitled properties; • the City already set the City Council's hearing on the proposed Ordinance for April 21, 2015, meaning that the City's 10-day hearing notice (Municipal Code section 21.54.060) must be mailed and posted or published the same day as the Workshop. The City's actions evidence that it intends to proceed to the City Council hearing regardless of property owner input. Materially changing the tentative map conditions of the entitled projects within Zone 15 long after the close of the public comment periods on those projects. Conditions of approval requiring construction of College Boulevard improvements were imposed by the City and accepted by the developers of each of the entitled projects within Zone 15. At the time of those project approvals, the City's current Policy No. 33 applied, requiring the concurrence of not less than 65%, by area, ofland proposed to be assessed, taxed, or subject to the payment of fees to fund such improvements. The current proposed reimbursement fee would fail under Policy No. 33 because the Mandana and Kato properties comprise more than 35% of the acreage and are not in a position to use or benefit from the College Boulevard improvements. Had the developers of the entitled projects proposed that the City require Mandana to subsidize implementation of their own conditions of approval at the time those tentative maps were being considered by the City, Mandana would have objected. The cun-ent proposed Ordinance • changes the conditions of approval of the entitled projects without complying with the procedures to substantively amend tentative map conditions, in violation of Subdivision Map Act section 66473 and Municipal Code section 20.20.010; and · Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 9, 2015 Page 9 • deprives the public of an opportunity to petition the City in connection with those project amendments. Intentionally withholding information from and excluding Mandana from the financing proceedings. Mandana's letter dated February 16, 2015 and testimony at the February 17 Workshop detail actions taken by the City and Bent-West to circumvent full disclosure to Mandana and allow bureaucratic momentum to build for the current financing proposal against Mandana's interests and without Mandana's participation. Bent-West and Rusty Gross intentionally and successfully petitioned the City Council to deviate from the established process under Council Policy 33 of forming an assessment district. As a direct result, Mandana was unaware of the initiation of these proceedings for well over a year. Bent-West conducted extensive private discussions with the City Council and staff during that period, and Bent West's appearance at three City Council meetings in September 2013, April 2014 and June 2014, to petition and receive permission from the City Council to bypass the initial 65% landowner consent step required by Policy 33 (see City Council Resolution No. 2013-226), waive Policy 33's prohibition against public fmancing of an applicant's administrative, fmancial consultant and legal fees in an attempt to add Bent-West's expenditures into the Zone 15 financing district (see April15, 2014 City Council Minutes, Agenda Bill No. 21,567), and approve a reimbursement agreement with Bent-West to form a CFD to fund the College Boulevard improvements (see City Council Resolution Nos. 2013,-226, 2014-159). Bent-West successfully built bureaucratic momentum within the City by keeping the two largest unentitled landowners, Mandana and Kato, in the dark. · On July 31, 2014, Mandana first became aware that Bent-West and Rusty Gross had petitioned the City to include the Mandana and Kato properties in the then-proposed assessment district without their knowledge and agreement. Mandana and Kato immediately informed Bent-West, the City Attorney, and the Director of Finance oftheir objections to having their properties included in the district. Subsequently, at the December 15, 2014 meeting, Mandana first learned that Bent-West had ·'·-· · petitioned the City to instead include the Mandana and Kato properties in a reimbursement area, in an apparent attempt to circumvent Policy 33's 65% property owner concurrence requirement. Mandana was disappointed to learn that the City was pursuing Bent-West's request over the objections ofMandana and Kato and in a manner that places even more severe fmancial burdens on their properties than an assessment district would have, and rescinds their right to opt out of financial participation. Unfortunately, despite the vocal opposition of both Mandana and Kato, the largest property owners in the proposed reimbursement area, in its January 2015 workshop, the City Council approved Bent-West's proposal to pursue such an unfair and deviant process to structure a reimbursement area that financially benefits the entitled properties at the expense of the unentitled properties. In the January 2015 City Council workshop, Bent-West's Rusty Gross claimed publicly that the reason Mandana and Kato do not want to participate in a reimbursement district is that they want "a free ride", and that the College Boulevard improvements will greatly enhance the values of their properties. It is apparent that Mandana's interests have been prejudiced in these Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 9, 2015 Page 10 proceedings by the false and misleading information about Mandana that Bent-West had the opportunity to repeat in Mandana's absence over a long period of time to the City Council and staff. However, it was Bent-West that accepted the obligation to construct the College Boulevard improvements as a condition of approval of its tentative map, and is now belatedly attempting to subsidize that same obligation by forcing the fmancial participation of Mandana and the other unentitled properties through a prejudicial process and on unfair terms. By levying a $2 million reimbursement obligation on Mandana's unentitled property, Bent- West's present proposal threatens to make development of the Mandana property financially infeasible for the foreseeable future. At the same time, the proposal would fmancially benefit Bent-West by subsidizing its existing obligation to construct College Boulevard, and pass the costs to future home buyers through the CFD structure. Prohibiting Mandana from exercising its right to opt out of the financing proposal. The Ordinance is intentionally structured to disallow Mandana and the other unentitled landowners from exercising their right under existing Council Policy 33 to opt out of the financing strategy. (See February 17, 2015 Agenda Bill, p. 4.) 2. The Ordinance Amounts to an Unconstitutional Taking of Private Property. Private property may not be taken for public use without just compensation. (U.S. Const., 5th Amend.; Cal. Const., art. I, §19.) The purpose of the Takings Clause "is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." (Palazzolo v. Rhode Island (2001) 533 U.S. 606, 617-618.) Constitutional requirements also state that there must be an "essential nexus" between an imposed condition and the impacts of a specific project (No !Zan v. California Coastal Commission, 483 U.S. 825, 837 (1987) ("Nollan")) and that conditions imposed must be "roughly proportional" to the project impact (Dolan v. City ofTigard, 512 U.S. 374, 391 (1994) ("Dolan")). The proposed fmancing method would allocate a greater financial burden to Mandana than its fair share. Mandana's land is currently farmed and is un~ntitled. It does not contribute to or need the proposed improvements. However, as currently drafted, the Ordinance would impose the Reimbursement Fee obligation on unentitled property based on the property's future development potential. It would levy the Reimbursement Fee obligation up front, as a dollar amount assigned to each unentitled parcel before there is a development project, by calculating the property's potential future unit projections "in accordance with its zoning and general plan designation and other existing land use entitlements, if any". (Ordinance Section 9.D.) In Mandana's case, the Reimbursement Fee levy is estimated to total over $2 million. The Ordinance attempts to reconcile the Reimbursement Fee after a particular project is proposed on the property and before imposing a condition of approval to actually pay the fee allocated to the property. Before payment of the fee is required, the City would hold a hearing to review the fee and determine whether there is a "reasonable relationship" between the amount of the fee and the cost of the improvements attributable to the project. (Ordinance Section 13.) However, the Ordinance does not assure that the fee will be adjusted in the same ratio that the Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April9, 2015 Page 11 actual number of approved units bears to the estimated number of units on which the fee was first imposed, or provide any other standard for how the "reasonable relationship" will be determined. As soon as the City levies the Reimbursement Fee on Mandana's unentitled property for the Carlsbad Boulevard improvements, it will cloud Mandana's title and impose an onerous and unfair burden on the property negatively affecting its value and rendering its future development infeasible. The February 17, 2015 Agenda Bill (p. 2) acknowledges that the unentitled property cannot carry the proposed debt. Also, unlike the CFD properties, which the City Council has allowed to pass through the financing debt to the ultimate homeowners (see April15, 2014 City Council action on Agenda Bill No. 21,567), any future developers of the currently-unentitled properties would be obligated to pay a lump sum reimbursement upon the first development permit (Ordinance, Section 14.) The City's proposed Ordinance also appears to violate the Mitigation Fee Act (Gov. Code,§§ 66000, et seq.) which establishes both a procedural process that must be followed before fees can be levied, and also a statutory standard against which monetary exactions by local governments are measured. (Ehrlich v. City of Culver City, (1996) 12 Cal.4th 854, 864-865.) The City must meet the nexus and rough proportionality requirements of Nollan and Dolan. The fee must be more than "theoretically" or "plausibly" related to the ends that is served by the exaction or fee; Nollan and Dolan require a "factually sustainable proportionality" between the effects of a proposed project and a given fee. (Ehrlich, supra, 12 Cal.4th at p. 880.) The Nollan standard requires that the City prove that there is an essential nexus between a legitimate state interest and the development fees. By levying a parcel-based Reimbursement Fee in advance of a development project, the Ordinance precludes a project specific analysis in accordance with Nollan and Dolan and renders the City's actions here fatally flawed. The Ordinance does not, and cannot, supplant the City's obligations to comply with the Mitigation Fee Act and United States and California Constitutions when imposing reimbursement fees. 3. Conclusion and Request to Continue the Matter Off-Calendar. Mandana urges the City to continue the Ordinance off the City Council's April 21 agenda and correct the serious procedural and substantive illegalities of both the proposed Ordinance to Establish Reimbursement Fee Funding and proposed Zone 15 Reimbursement Fees before proceeding any further. Sincerely, Michele A. Staples Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 9, 2015 Page 12 cc: Steve Sarkozy, City Manager (manager@carlsbadca.gov)* Gary Barberio, Assistant Manager (gary.barberio@carlsbadca.gov)* Celia A. Brewer, City Attorney (Celia.Brewer@carlsbadca.gov)* Chuck McBride, Director of Finance (Chuck.McBride@carlsbadca.gov)* Aaron Beanan, Senior Accountant (Aaron.Beanan@carlsbadca.gov)* Pat Thomas, Public Works Director (Pat.Thomas@carlsbadca.gov)* Don Neu (don.neu@carlsbadca.gov) David De Cordova (david.decordova@carlsbadca.gov) Glen Van Peski (Glen.VanPeski@carlsbadca.gov)* Jeremy Riddle (Jeremy.Riddle@carlsbadca.gov)* Shannon Wemeke (Shannon.Wemeke@carlsbadca.gov)* *via email Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Jackson I DeMarco I Tid us Peckenpaugh A LAW CORPORATION i)!lCl' DiJ!: 949.851.7409 April 21, 2015 I .. nail mstaplt:s@jdtplaw.wm IZtpl) tt>. Irvine Of1ice I tlt '..,, 7616 I 122588 VIA EMAIL (clerk@carlsbadca.gov) AND MESSENGER City Council City of Carlsbad 1635 Faraday Avenue Carlsbad, California 92008 Re: Proposed Ordinance No. CS-273 to Establish Reimbursement Fee for Funding Reimbursement of Certain Costs of Construction of Eligible Improvements (April 21, 2015 Agenda Item No. 11, AB #21,941 -Item to be Continued) Dear Mayor Hall and Honorable Councilmembers: 1. Introduction and Summary. We represent Mandana Cal Co. ("Mandana"), the owner of approximately 195 acres of land in Zone 15 proposed to be included in the reimbursement fee area. Man dana's properties are shown as parcel nos. 1, 2 and 18 on the Zone 15 "Benefiting Properties Map" attached to the letter dated March 2, 2015, from Aaron Beanan regarding the Zone 15 Local Facilities Management Plan ("LFMP") Financing Program for Public Improvements Related to College Boulevard Reach "A" Construction (attached as Exhibit "1 "). Mandana has owned the property for over thirty (30) years. The property is unentitled and has long been farmed. The Mandana and Kato properties together comprise 41% of the entire Zone 15 "Benefiting Properties" area. and more than 50% of the unentitled land proposed to be included in the Zone 15 reimbursement area. Mandana urges the City Council to reject the proposed Ordinance. Contrary to the mantra that the City Council members and staff have heard repeatedly from Bent-West and Rusty Grosse, Mandana is not interested in a ''free ride". The City's existing Growth Management Plan's Citywide Facilities and Improvements Plan, Zone 15 LFMP management fees , Municipal Code, and the Council Policy Statement No. 33 for Financing of Public Improvements ("Policy 33", attached as Exhibit "2") already ensure that undeveloped land within Zone 15, including Mandana, will contribute their fair share toward public facilities when those properties are developed in the future. The proposed Ordinance would, among other things, erode the substantive and procedural protections afforded under existing state and local Irvine Office 2030 Main Street, Suite 1200 Irvine, California 92614 t 949.752.8585 f 949.752.0597 Westlake Village Office 2815 Townsgate Road, Suite 200 Westlake Village, California 91361 t 805.230.0023 f 805.230.0087 www.jdtplaw.com Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 21,2015 Page 2 laws and policies, force owners of unentitled properties to bear the costs of developing the entitled projects, and result in the allocation of an unfounded and open-ended reimbursement obligation on the unentitled properties. The City currently estimates Mandana's reimbur~ement obligation at over $2 million, rendering development of Man dana's land infeasible for the foreseeable future. In addition to the reasons discussed in Mandana's February 16 and April9, 2015, comment letters (attached as Exhibits "3" and "4"), the proposed Ordinance should be rejected because it would: • establish a development fee structure that does not meet the minimum requirements of Proposition 218 (Cal. Constitution, Article XIII C, XIII D) and the Mitigation Fee Act (Gov. Code,§§ 66000, et seq.): • result in unequal treatment among owners of undeveloped properties within an LFMP that contribute to the costs of public improvements, in violation of Constitutional equal protection requirements: and, • create a new tinancing mechanism that undermines Council Policy 33 by punishing landowners who do not vote in favor of special districts to fund public improvements. Additionally, the Council has not proceeded in the manner required by law to approve the Ordinance. A noticed hearing is required to adopt the Ordinance because it would: • amend the LFMP financing mechanisms: and, • "exceptionally affect" owners of unentitled undeveloped properties in Zone 15. This letter also supplements our letter dated April 9, 2015 (Exhibit "4"). Up until the April 10, 2015 meeting that the City convened to discuss the proposed reimbursement fee ordinance with the Zone 15 Property Owners, we understood that the City was processing the reimbursement fee to fund College Boulevard improvements within Zone 15 and that the City Council would need to conduct a hearing to consider a proposed new reimbursement fee ordinance. At that April 10 meeting (which is the only workshop that the City has conducted with regard to the proposed Ordinance), the City abruptly changed course and completely divorced the reimbursement fee proposal from the Zone 15 reimbursement fee proceedings. Now·, the City's position is that the proposed reimbursement fee Ordinance is a legislative ordinance that authorizes the establishment of a reimbursement fee program applicable City- wide, and that no hearing is required. Additionally, we were told for the tirst time on Friday, April 17, that the City's administrative record on the proposed reimbursement fee ordinance presently before the City Council does not include any of the Zone 15 proceedings or prior letters that Mandana submitted to the City on the proposed reimbursement fee to date. Mandana is now forced to resubmit and incorporate by reference the enclosed documents about the City's Zone 15 reimbursement fee proceedings in an efl'ort to ensure that the administrative record on the proposed Ordinance Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April21, 2015 Page 3 includes, at a minimum, Mandana's prior comment letters and key documents that the City has considered in developing the Ordinance that is now before the Council. The City is now attempting to conceal the fact that the Proposed Ordinance is really about the College Boulevard improvements in Zone 15, and, more specifically, how the unentitled properties therein are to contribute to those costs. This should leave the Council asking "why are we being asked to do this now?" The City started this process by approving a series of special waivers for Bent-West to proceed with a Community Facilities District ("CFD") to fund the Zone 15 College Boulevard improvements. (See, City Council Resolution Nos. 2013-226,2014-159 and April 15,2014 City Council Minutes, attached as Exhibit "5"). On September 10, 2013, the City Council allowed Bent-West to bypass the first step in the process established under Policy 3 3 that requires the applicant to prove they have the consent of not less than 65% of the owners, by area, of the property proposed to be subject to the levy of assessments. Bent-West already knew that it could not meet that initial step because it did not have the consent of Mandana and Kato, who own in excess of 35% of the area proposed to be subject to the assessment. The City Council justified giving Bent-West a special waiver to skip the initial showing of consent on two grounds. First, several large owners are out of state and hard to communicate with. However, both the City and Bent-West knew that the owners of the Mandana and Kato properties live in-state and are readily available for any communications. Second, having preliminary numbers to share with the other ownership interests would solidify the requisite 65% ownership approval. The City Council still required Bent-West to obtain approval from not less than 65%, by area, of the property owners proposed to be subject to the levy of assessments in order to form the CFD. When the owners ofMandana and Kato properties were finally made aware of the CFD proposal, they notified Bent-West and the City oftheir disapproval. (See, August 3 L 2014, correspondence from Warren Kato, and September 2, 2014, correspondence from Mandana's Ali Shashani, attached as Exhibit "6".) Having failed to secure the required 65% approval, Bent- West then proposed to shrink the CFD area to include the five properties that are currently entitled, and to impose a new kind of reimbursement fee on the unentitled properties. (See, October 29, 2014, Zone 15 Infrastructure Financing and Reimbursement Program, attached as Exhibit" 7".) The proposed Ordinance is needed to accommodate Bent-West's funding scheme. The Cailfornia Subdivision Map Act (see, for example, Government Code sections 66484.7, 66485, et seq.) and the Carlsbad Municipal Code already have adequate reimbursement procedures. Therefore, Mandana urges the City Council to reject the Ordinance and stop bending and changing existing laws to benefit experienced developers who acquired their interests in their entitled projects subject to conditions of approval under those existing laws. 2. The Reimbursement Fee to be Established by the Ordinance Does Not Meet the Minimum Requirements of Proposition 218 (Cal. Constitution, Articles XIII C, XIII D) and the Mitigation Fee Act (Gov. Code,§§ 66000, et seq.). The Ordinance violates Proposition 218 and the Mitigation Fee Act. Under the Ordinance, only a developer who already received entitlements and accepted a condition of Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April21, 2015 Page 4 approval to construct public improvements can petition the City to impose a reimbursement fee on other properties that the developer selects, to pay for the portion of public facilities that the developer believes will exceed the cost fairly allocable to its property. (Ordinance § 3.40.040.) It is in the Requesting Party developer's self-interest to design facilities that minimize impacts to its own properties and to maximize the allocation of the facilities costs to the reimbursement fee area. However, the Ordinance does not require the Requesting Party developer to justify the facilities design or account for facilities costs attributable to its own development project and the development of other undeveloped properties that it has not selected to be subject to the Reimbursement Fee. (See Ordinance §§ 3.40.060, 3.40.070.) There is no procedure for the City and targeted property owners to evaluate the propriety of the facilities identified by the developer for reimbursement, or determine the "portion of the cost of a public facility paid by the property owner or developer which exceeds the need for the public facility attributable and reasonably related to the development". (Gov. Code, § 66003 .) The Ordinance does not exclude from the improvements and costs subject to the Reimbursement Fee the public facilities "attribut.able and reasonably related to the development''. Likewise, the Ordinance does not require the Reimbursement Fee Study to include information on the portion ofthe public facility attributable and reasonably related to the Requesting Party's own development project and other entitled development projects and parcels that are not proposed by the requesting developer to be subject to the Reimbursement Fee. (See Ordinance § 3.40.090). These omissions prevent the City and the targeted landowners from determining whether the Reimbursing Party developer has designed the facilities in a cost-etiective manner and fairly allocated the portion of the facilities costs to be imposed on the reimbursing parcels. Without this basic information, the City is unable to determine whether the Reimbursement Fee bears a reasonable relationship to the increased demand for the facilities generated by those parcels, in violation of Proposition 218, the Mitigation Fee Act, and the Constitutional standards of nexus and rough proportionality (Ehrlich v. City of Culver City ( 1996) 12 Cal.4 111 854 ). Mandana appreciates the City's amendments to the initial draft Ordinance to no\\> provide that the Reimbursement Fee Study be distributed for comment by the landowners targeted by the Requesting Pm1y developer. However, the Ordinance does not require the Reimbursement Fee Study to include minimum information to satisfy Proposition 218, the Mitigation Fee Act, and the Constitutional standards of nexus and rough proportionality. Failing to require this information deprives targeted landowners and the City Council a meaningful opportunity to evaluate and determine whether the initial fee allocation under Section 3.40.11 0, and the adjusted final allocation under Section 3.40.130, comply with those standards. Additionally, the Ordinance does not account for any existing Local Facilities Management Fees already established to fund the LFMP facilities under Municipal Code Section 21.90.050. This omission violates the Growth Management Plan and exposes the properties targeted for the Reimbursement Fee to a greater financial burden than its fair share in two ways: first, by requiring the payment of duplicative fees for those same public facilities; and second, by failing to reduce the Eligible Costs by the amount of the Local Facilities Management Fees already collected to date for benefitted parcels that have developed. In Zone 15, for example, approximately 3/4 of the units already have been constructed (see Northeast Quad Map attached as Exhibit "8"), many of which would have paid the Locall·acilities Management Fees as a Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 21, 2015 Page 5 condition of their development. Ifthe Local Facilities Management Fees collected by the City are not credited to the costs of the improvements, the remaining 114 of undeveloped units would bear the entire cost of the College Boulevard facilities. 3. The Reimbursement Fee Results in Unequal Treatment Among Affected Owners of Undeveloped Properties Within an LFMP. The Ordinance does not require all undeveloped property benefitted by a certain improvement to be subject to the reimbursement fee. This omission allows the Requesting Party developer to pick and choose which landowners will be subject to the Reimbursement Fee, and which will have access to more favorable fi nancing mechanisms. The City is already processing a request by Bent-West to impose a reimbursement fee obligation on some properties in Zone 15 to fund the College Boulevard improvements, and to process a CFD on other properties to fund the same improvements. In fact, the City is scheduled to conduct a Policy 33 Committee meeting on the CFD portion of Bent-West's request on April 27, a week after its first reading of the reimbursement fee Ordinance. The proposed Ordinance is being considered in order to accommodate Bent-West's request to impose a mandatory Reimbursement Fee on the other undeveloped property owners. As discussed in Mandana's February 16,2015 letter (Exhibit "3"), the funding mechanisms proposed by Bent-West would have very different financial impacts, with the heavier financial burden imposed on the owners of unentitled undeveloped properties who \\-ould be mandated to pay the Reimbursement Fee, and the lighter financial burden falling on Bent- West and the other owners of entitled properties who would be allowed to form a CFD. The City's ongoing processing of both a CFD and a reimbursement fee for different Zone 15 property owners demonstrates that the Ordinance does not require all benefitted properties to be subject to the Reimbursement Fee and does not otherwise require uniform application within the Local Facilities Management Zone. Rather, it is the Requesting Party developer who chooses the parcels that are to be subject to the Reimbursement Fee. As discussed in Mandana's February 16, 2015 letter (Exhibit "3"), the City's ongoing proceedings on Bent-West's request shows that the Ordinance denies the equal protection of the law to owners of unentitled, undeveloped parcels that have been targeted by Bent-West for imposition ofthe Reimbursement Fee. For example, by electing to proceed with a CFD, the non-targeted owners of the entitled undeveloped properties can pass down the reimbursement obligation to subsequent homeowners and escape the Ordinance's requirement to pay the reimbursement fee before the issuance of building permits. (Ordinance§ 3.40.150.) The non-targeted property owners also escape Ordinance's imposition of liability for any increase in construction costs that may result after issuance of the CFD. (Ordinance § 3.40.130.) Additionally, contrary to the summary of the Ordinance's ''main ideas" in today's Agenda Bill 21,941, the Reimbursement Fee is not allocated based on actual unit counts. The Ordinance simply does not establish a per-unit fee in the same manner as the existing local facilities management fees and development impact fees. Rather, it imposes an initial Reimbursement Fee allocation on each parcel based on its "zoning and general plan designation and other existing land use entitlements, if any". (Ordinance § 3.40.090(D).) The Ordinance provides for an adjustment to the parcel allocation at the entitlement stage based on whether Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 21, 2015 Page 6 there is a reasonable relationship between the amount of the Reimbursement Fee and the cost of the Eligible Improvements attributable to the Project (Ordinance § 3.40.11 0), but it does not provide any methodology or even call for the allocation to be adjusted in proportion to the actual number of entitled parcels compared with any unit count assumed at the time of the initial allocation. Additionally, the Ordinance allows for the Reimbursement Fee to be subject to an undefined rate of escalation that, depending on the rate, could foreseeably double the amount of the fee. (Ordinance § 3.40.11 0.) This is particularly unfair where the improvements are being constructed by the owner of entitled land and the Reimbursement Fee is imposed on unentitled properties that do not have any current need for the improvements. The result ofthe Ordinance's lack of specificity is an unclear, subjective methodology for encumbering properties that are subject to the Reimbursement Fee, with no defined limit on each parcel's ultimate fi nancial obligation. 4. The Ordinance's Reimbursement Fee Process Creates an Inherent Conflict of Interest and Undermines the Landowner Protections of Policv 33. The Ordinance would create an inherent conflict of interest by authorizing the Requesting Party developer to choose which parcels and which facilities are to be subject to the ill-defined Reimbursement Fee, without demonstrating how much of the facilities costs are attributable to its own preferences in designing facilities that minimize impacts to its own project, and without accounting for how much of the costs are attributable and reasonably related to development of the Requesting Party's project and other parcels that the Requesting Party has not proposed to be subject to the Reimbursement Fee. As discussed in Mandana's February 16 and April 9, 2015 letters (Exhibits "3" and "4"), the City's proceedings to date on Bent-West's proposal have prejudiced Mandana's interests by depriving Mandana of its right to vote on Bent-West's proposal to form a CFD to fund the College Boulevard improvements under the initial landowner approval requirements of Council Policy No. 33 (attached as Exhibit "2"). Policy 33's ''Property Owner Requirements" (Sections 5 and 6) require that the applicant shall have the concurrence of the affected area's property owners representing not less than 65%, by area, of the land proposed to be assessed, taxed, or subject to the payment of fees under assessment districts, CFDs and Bridge and Thoroughfare Districts. By allowing a Requesting Party developer such as Bent-West to carve out objecting landowners from a special district and impose the mandatory Reimbursement Fee, the Ordinance undermines Policy 33 and strips landowners of its intended protections. The Zone 15 proceedings to date demonstrate that the Ordinance wrongly allows a Requesting Party developer to punish landowners who do not vote in favor of a special district to fund public improvements. 5. By Failing to Conduct a Noticed Public Hearing. the Council Has Not Proceeded in the Manner Required by Law to Approve the Ordinance. According to the Agenda Bill, the purpose and reasoning behind the current proposal flow from the Council's prior direction for LFMP Zone 15. As the Council may recalL the Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 21, 2015 Page 7 February 17, 2015, Agenda Bill (attached as Exhibit "9") was titled "Council Guidance on Financing of Public Improvements in Local Facilities Management Plan Zone 15." On that day, Staff sought, and received, "Council guidance on pursuing an alternative financing for Zone 15." It is apparent from the record ofthe City's proceedings to date on Zone 15 financing, that the proposed Ordinance is really an effort to amend the Zone 15 LFMP. However, the City's Municipal Code (§21.90.125) requires the City to conduct different proceedings and hearings to amend the Zone 15 LFMP. Furthermore, because the proposed action is really about Zone 15, the City Council should not take any action at this meeting as it has failed to provide all of the impacted property ovv11ers with individualized notice and an opportunity to be heard by the Council. California case law provides that where a proposed legislative action will ''exceptionally affect" a property owner or business user, the City must provide that person with individualized notice and the opportunity to be heard. (Horn v. County of' Ventura, (1979) 24 Cal. 3d 605, 6 15; Harris v. County o,lRiverside (9th Cir. 1990) 904 F. 2d 497.) Even considering the City's statements that the Ordinance is intended to establish a new financing tool applicable City-wide, the City's failure to conduct a noticed public hearing to approve the Ordinance violates the procedure required by the Growth Management Plan sections of the Municipal Code. 6. Conclusion. Mandana respectfully requests that the Council reject the Ordinance for the reasons discussed above. Instead, the Council should enforce existing conditions of approval requiring developers to construct public improvements, and provide for any reimbursement within the framework of its existing laws and policies (for example, Municipal Code sections 13 .08.050, 15.08.080, and 20.16.041 et. seq.). The Subdivision Map Act, City's Municipal Code, Growth Management Plan, LFMP Finance Plan, and LFMPs already include means and methods to finance LFMP facilities and to appropriately reimburse developers who construct them. The Zone 15 landowners who have interests in entitled projects, including Bent-West and Rusty Grosse, are experienced developers who acquired their interests in the entitled projects subject to conditions of approval under those existing laws. Sincerely, Michele A. Staples Enclosures MAS:laj Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April21, 2015 Page 8 Exhibits: 1) March 2, 2015 and March 26, 2015 letters from Aaron Beanan regarding the Zone 15 Local facilities Management Plan (''LFMP") Financing Program for Public Improvements Related to College Boulevard Reach "A'' Construction 2) Council Policy No. 33 Regarding financing of Public Improvements 3) February 16,2015 letter on behalf ofMandana regarding Objections to Proposed Approach to Finance Public Improvements in Local Facilities Management Plan Zone 15 and Request to Continue Matter OffCalendar (February 17,2015 Agenda Item No.7, AB 21,864) 4) April 9, 2015 letter on behalf of Mandana regarding Objections to Proposed Ordinance to Establish Reimbursement fee Funding and Proposed Zone 15 Reimbursement fee, and Request to Continue Matter Off Calendar 5) City Council Resolution Nos. 2013-226, 2014-159 and April 15, 2014 City Council Mi nutes 6) August 31,2014 correspondence from Warren Kato, and September 2, 2014 correspondence from Mandana's Ali Shashani 7) October 29, 2014, Zone 15 Infrastructure Financing and Reimbursement Program 8) Northeast Quad Map 9) February 17, 2015 Agenda Bill No. 21,864 cc: Steve Sarkozy, City Manager (manager(cilcarlsbadca.gov)* 1250910.2 Gary Barberio, Assistant Manager (gary.barberio@carlsbadca.gov)* Celia A. Brewer, City Attorney (Celia.Brewer@carlsbadca.gov)* Chuck McBride, Director of Finance (Chuck.McBride({z}carlsbadca. 10v)* Aaron Beanan, Senior Accountant (Aaron.Beanani'W.carlsbadca.gov)* Pat Thomas, Public Works Director (Pat.Thomas·'alcarlsbadca.gov)* Don Neu, City Planner (don.neu~carlsbadca.gov)* David De Cordova, Principal Planner (david.decordova(aicarlsbadca.gov)* Glen Van Peski, Community and Economic Development Director (Glen.VanPeski@carlsbadca.gov)* Jeremy Riddle, Associate Engineer (Jeremv.Riddle@carlsbadca.Q.ov)* Shannon Werneke, Associate Planner (Shannon. Werneke\(Qcarlsbadca.go v) * *via email, with Exhibits Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 1 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided March 2, 2015 APN: 209-070-07-00 Mandana Cal Co. Attn: Ali Shashani PO Box 10249 Newport Beach, CA 92658 (City of Carlsbad RE: LOCAL FACILITIES MANAGEMENT PLAN ZONE 15 FINANCING PROGRAM FOR PUBLIC IMPROVEMENTS RELATED TO COLLEGE BOULEVARD REACH "A" CONSTRUCTION Dear Mr. Shashani: This letter is to inform you the City of Carlsbad has received a request to pursue a financing program in Local Facilities Management Plan Zone 15 ("Zone 15") from Bent-West, LLC. The financing program proposal intends to finance certain public improvements related to the construction of College Boulevard Reach A. These improvements include street improvements to College Boulevard Reach "A" and Cannon Road Reach "4A", water improvements, wastewater improvements, drainage improvements, environmental mitigation improvements, among others. The property associated with Assessor Parcel Number ("APN") 209-070-07-00 is located within the proposed financing program's boundaries because the city and their special tax consultant determined the property receives benefit from the proposed public improvements. Please see attached map. A preliminary cost spread analysis has been prepared by the city's special tax consultant. However, this does not yet include all property proposed for inclusion within the financing program. An updated cost spread analysis is currently being completed. At this time no financing program has been approved by the City Council nor has a financing district been established. Staff is still working with the City Council, Bent-West, LLC and various consultants on a financing program. In the near future, city staff will host one or more meetings at the city to disseminate information on progress and next steps and receive feedback from the affected owners. Please email me your contact information and the property(ies) you are associated with so I can make sure you are notified of meetings regarding a Zone 15 financing program. My email address is aaron.beanan@carlsbadca.gov. And if you would like additional information or have questions, you can contact me via my email address or at (760) 602-2414. Sincerely, lb'??- Senior Accountant Enclosure Finance Department 1635 Faraday Avenue Carlsbad, CA 92008-73141760-602-2430 1760-602-8553 f I www.carlsbadca.gov Business License 760-602-2495, Utility Billing 760-602-2420, Purchasing 760-602-2467-Fax 760-602-8556 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided ' I Local Facilities Management Zone 15 Benefiting Properties 21 12 13 8 .,., i ~ 10 14 7 !11 3 4 ~lr~ / I 1 2 19 18 , 11 l . ~ 1~~p)..A OR~, 1U I '~ ~ -rl~ l ~ D LFMZ 15 Boundary Benefiting Property (Map 10 -APN): 1 -2090700300 12 -20906071 00 2 -2090700700 13-2090607200 3-2090606100 14 -2090701300 4 -2090400200 15 -1680503500 5-2090901100 16 -2090401500 6 -2090404400 17 -2090602300 7 -2090606500 18 -2090402700 8 -2090606800 19 -2090402800 9 -2090701600 20 -2090607000 10 -1680505700 21 -1680506000 11 -2090404500 22 -1680503600 9 ,;--------11------ L FARADAY p.'<l Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided March 26, 2015 APN: 209-040-27-00 Mandana Cal Co. Attn: Ali Shashani PO Box 10249 Newport Beach, CA 92658 {City of Carlsbad RE: NOTIFICATION OF PROPERTY OWNER MEETING REGARDING LOCAL FACILITIES MANAGEMENT PLAN ZONE 15 FINANCING PROGRAM FOR PUBLIC IMPROVEMENTS RELATED TO COLLEGE BOULEVARD REACH "A" CONSTRUCTION Dear Mr. Shashani: This letter is to inform you the City of Carlsbad is hosting a Zone 15 property owner meeting on April 10th, 2015 from 11:30-1:30 in Room 1738 at the Faraday building. The address is 1635 Faraday Avenue, Carlsbad CA 92008. Lunch will be provided. The following items will be discussed at this meeting: • Proposed ordinance, • Most recent cost allocation, and • Steps forward For more information about the ordinance concept, please refer to the city's website {http://www.carlsbadca.gov/citvhall!clerk/meetings/default.asp) and Agenda Bill21,864. In addition to providing this information, there will be opportunities for property owners to provide feedback. Documents associated with the proposed ordinance and cost allocation will be electronically disseminated closer to the date of the meeting. These documents are still being finalized. As such, if you have not provided me your email address, please do so to ensure you receive these documents prior to the meeting. At this time, no financing program has been approved by the City Council nor has a financing district been established. Staff is still working with the City Council, Bent-West, LLC and various consultants on a financing program. If you would like additional information or have questions, you can cont act me via my email at aaron.beanan@carlsbadca.gov or at {760) 602-2414. Z·n /~\~- Aaron Beanan Senior Accountant Finance Department 1635 Faraday Avenue Carlsbad, CA 92008-73141 760-602-2430 1760-602-8553 f I www.carlsbadca.gov Business License 760-602-2495, Utility Billing 760-602-2420, Purchasing 760-602-2467-Fax 760-602-8556 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided {City of Carlsbad NOTICE OF AVAILABILITY OF RECIRCULATED PORTIONS OF THE DRAFT EIR FOR THE DRAFT GENERAL PLAN AND CLIMATE ACTION PLAN NOTICE IS HEREBY GIVEN THAT the City of Carlsbad, as lead agency, has prepared and is recirculating portions of the Draft Environmental Impact Report (EIR) for the draft General Plan and Climate Action Plan in accordance with the California Environmental Quality Act Sections 15087 and 15088.5. The portions ofthe draft EIR that are recirculated for public review include the following: • Chapter 0: Executive Summary • Chapter 3.2: Air Quality • Chapter 4: Analysis of Alternatives • Chapter 5: CEQA Required Conclusions • Chapter 6: Bibliography • AppendiX B: Air Quality Modeling Information The draft EIR for the proposed General Plan and Climate Action Plan (EIR No. 13-02, State Clearing House # 211011004) was previously circulated for a 45-day public review period from April 4, 2014 to May 19, 2014; and on May 14, 2014, the public review and comment period was extended to June 20, 2014. In response to comments received on the previously circulated draft EIR, the draft EIR has been revised; the revisions include a revised air quality analysis, which concludes Impacts 3.2-1, 3.2-2, 3.2-3, and 3.2-4 will be significant and unavoidable, and a new reduced denisty alternative that reduces impacts to air quality and transportation. The California Environmental Quality Act st ates that "A lead agency is required to recirculate an EIR when significant new information is added to the EIR after public notice is given of the availability of the draft EIR for public review." CEQA Guidelines Section 15088.5 describes the procedures for recirculation of portions of an EIR; subsection (f)(2) provides that, when an EIR is revised only in part and the lead agency is recirculating only the revised chapters or portions of an EIR, the lead agency may request that reviewers limit their comments to the revised chapters or portions of the recirculated EIR. THE CITY OF CARLSBAD REQUESTS THAT REVIEWERS LIMIT THEIR COMMENTS TO THE PORTIONS OF THE DRAFT EIR THAT ARE REVISED AND RECIRCULATED IN THIS DOCUMENT. COMMENTS RECEIVED ON THE PREVIOUSLY CIRCULATED DRAFT EIR WILL BE RESPONDED TO IN THE FINAL EIR AND NEED NOT BE RE-SUBMITIED. The recirculated portions of the draft EIR can be viewed on the City of Carlsbad website at www.carlsbadca.gov. If you have difficulty accessing the document online or would prefer to review a hardcopy, the document is also on file with the City of Carlsbad Planning Division, located at 1635 Faraday Avenue, Carlsbad CA 92008, and a copy is available at (1) City Clerk's Office, 1200 Carlsbad Village Drive; (2) Carlsbad Main Library, 1775 Dove Lane; and (3) Georgina Cole Library, 1250 Carlsbad Village Drive. The recirculated portions of the draft EIR will be available for a 45-day period for review and comment by the public and public agencies from March 20, 2015 to May 4, 2015. Pursuant to Section 15204 of the CEQA Guidelines, in reviewing the recirculated portions of the draft EIR, persons and public agencies should focus on the sufficiency of the document in identifying and analyzing the possible impacts on the environment and ways in which the significant effects might be avoided or mitigated. Comments are most helpful when they suggest additional specific alternatives or mitigation measures that would provide better ways to avoid or mitigate the significant environmental effects. Community & Economic Development Planning Division 1635 Faraday Avenue I Carlsbad, CA 92008 I 760-602-4600 I 760-602-8560 fax Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Please submit all comments in writing to the following City of Carlsbad contact: Jennifer Jesser, Senior Planner Carlsbad Planning Division 1635 Faraday Avenue, Carlsbad, CA 92008 jennifer. jesser@ca rlsbadca .gov Project Description: A comprehensive update to the Carlsbad General Plan including an update to the Housing Element for the 2013-2021 planning period and the preparation of a Climate Action Plan. Potentially Significant Environmental Effects: The potentially significant environmental issues addressed in the recirculated portions of the draft EIR include impacts to air quality. Summary of Recirculated Portions ofthe Draft EIR: A document providing an introduction and summary for the recirculated portions of the draft ElK is available for review at the City of Carlsbad website at: http://www.carlsbadca.gov/services/depts/planning/update/documents.asp CASE NO .: EIR 13-02/GPA 07-02/ZCA 07-01/LCPA 07-02 CASE NAME: General Plan Update PUBLISH DATE: March 20, 2015 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 2 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page l of 15 Policy No. --=33"---- Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File BACKGROUND The City Council often receives requests from property owners to use special districts to fund public improvements. These "Special Districts" include Assessment Districts formed pursuant to the Municipal Improvement Act of 1913 (Streets and Highways Code Section 10000 and following) (the "1913 Act"), with Improvement Bonds issued pursuant to the Improvement Bond Act of 1915 (Streets and Highways Code Section 8500 and following) (the "1915 Act"), Community Facilities Districts formed pursuant to the Mello-Roos Commumty Facilities Act of 1982 (Government Code Section 53311 and following) (the "Mello-Roos Act"), and Bndge and Thoroughfare Districts (Government Code Section 66484 and Carlsbad Municipal Code Section 20.08.140). The City Council has found it necessary to determine circumstances under which the City Council will approve Special District formation and financing as a guide to those who would seek to request it. The ability of a property owner or developer to obtain financing of public improvements from the proceeds of tax-exempt bonds 'provides substantial economic benefits to such owner or developer. These benefits include the financing of such improvements at interest rates substantially lower than conventional financing interest rates, if such conventional financing is available, and/or the ability to obtain financing without providing equity compensation to the lender. For this consideration, the City Council has determined that tax-exempt financing should only be used if the public interest would be served thereby in addition to the benefit conferred on the properties within the proposed Special District. The Mello-Roos Act requires that a public agency initiating proceedings to fonn a Community l'acilities District after January I, 1994 must first consider and adopt local goals and policies concerning the use of the Mello-Roos Act. This policy shall act as such a statement of local goals and policies pursuant to this statutory requirement and as a consolidation and .replacement of the existing Policy 33 and Policy 38 and shall also provide guidance in the approval of Bridge and Thoroughfare Districts. Thus, the existing Policies No. 33 and 38 have been repealed. PURPOSE The primary purpose for the City Council's approval of Special District financing is to complete the links in the City's traffic circulation system. The City Council in that regard will not favor a proposed Special District that contemplates the constructiOn of a portiOn of an arterial street unless it is extended in a logical way to connect with and improve the City's existing traffic circulation system. The City may require that proponents of a Special District expand the area to be included within a proposed Special District as may be necessary to complete linkages in the City's traffic circulation system. Other improvements may be considered by the City Council on a case-by-case basis. This policy does not address the funding of public services. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 2 of 15 Policy No. __ 3=3==---- Date Issued 12/17/02 Effective Date 12117/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File The underlying principals behind this policy are: • To protect the public interest; • To ensure fairness in the application of the assessments, special taxes, or fees to current and future property owners; • To ensure full disclosure to current and future property owners of the Special District; • To ensure the creditworthiness of any Special District debt; To protect the City's credit rating and financial position; • To ensure that the applicants for Special District proceedings, other than City-initiated proceedings, pay all costs associated with the formation of any Special District; To establish one policy regarding the requirements that must be met before the City Council will consider approving the financing of public improvements using Special Districts; • To provide City staff, the residents of the City, and owners and developers of property located within the City with guidance in the application for and consideration of the establishment of Special Districts; and • To incorporate the requirements of new legislation pertaining to the use of Special Districts. It is not the intent of this policy to relieve any developer of responsibilities for the construction of public improvements or satisfaction of other conditions of development related to the subdividing of property, the processing of tentative or final maps, or master plan developments. This policy does not supersede any law, but the intent is to further restrict or clarify its use. POLICY Statement: I. FINDING OF PUBLIC INTEREST The City may allow the financing of public improvements under the provisions of this policy if, in the City's opinion, the public interest would be served thereby in addition to the benefit conferred on the properties within the proposed Special District. Each applicant for the establishment of a Special District must comply with the applicable requirements contained herein unless the City Council expressly grants an exception to such policy or policies as they apply to a specific application. 1 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 3 of 15 Policy No. ---"'-'3 3"------ Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File Facilities Allowed: 2. AUTHORIZED PUBLIC IMPROVEMENTS Improvements proposed to be financed through a Special District must be public improvements that will be owned, operated, or maintained by the City or other public agency or public utility. The City Council shall have the final determination as to the eligibility of any improvements for financing, as well as the prioritization of financing of such improvements. Such improvements generally include, but are not limited to: A. Streets and Highways: Arterial streets, highways, major bridges, and freeway interchanges identified on the traffic circulation element of the Carlsbad General Plan. If the primary purpose of completing a circulation link is met, and overriding public interest is shown, then public facilities increasing traffic capacity for a circulation element may be considered. Right- of-way must be dedicated, offered for dedication, or acquired prior to formation of the Special District. Right-of-way withirt the boundaries of the Special District is generally not authorized to be financed through a Special District except under special circumstances as recommended by the City Engineer. B. Other Public Improvements: If appurtenant to the types of street and highway improvements described in (A) above, the following additional improvements may be considered: 1) Sewer lines or other sewer facilities: Sewer lines must be located within the rights-of-way of the arterial streets when the City Engineer determines it is necessary that they be so located. 2) Water lines and other water facilities: Water lines must be located within the rights-of-way of the arterial streets when the City Engineer determines it is necessary that they be so located. 3) Drainage facilities. 4) Landscape and irrigation facilities. 5) Reclaimed water facilities in rights-of-way. 6) Grading for eligible public streets. 7) Environmental mitigation required for the improvements being financed through the Special District. 8) Bicycle and pedestrian facilities, if located on land or easements owned or dedicated to the City and accepted as part of the Citywide trail system. 9) Such other improvements as may be authorized by law and which the City Council determines are consistent with the policies herein . Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 4 of 15 Policy No. _ _,3::..:::3'---- Date Issued 12/17/02 Effective Dat~ 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File Such improvements may be limited by the type of Special·District utilized or at the discretion of City Council. Any improvements already included in an existing fee program are not eligible to be financed by a Special District. Generally, other facilities may be considered if initiated by City Council or the owners of existing developed property. All improvements must be located in public rights-of-way dedicated or otherwise granted to the City or other public agency. 3. INCIDENTAL COSTS Eligible Incidental Costs that may be financed from the proceeds of bonds issued for a Special District or the assessments, special taxes, or fees levied within a Special District shall be limited to those incidental costs directly related to the improvements financed from the proceeds of such bonds or revenues. These incidental costs are eligible to the extent that such costs have been included in the calculation of the assessment, special tax, or fees. "Administrative Procedures for Reimbursable Public Works Projects," as issued from time to time by the City Engineer, are provided and detail eligible incidental costs for public works construction projects. Ineligible Incidental Costs. Costs considered ineligible to be financed from the proceeds of Special District bonds or the assessments, special taxes, or fees levied within a Special District include, but are not limited to, the following: A. Development impact fees. B. 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 applicant to the City pursuant to the provisions of this policy to pay for pre- formation costs incurred by the City. (See "Pre-Formation Costs, Deposits, and Reimbursements.") C. Land-use planning and subdivision costs and environmental review costs related to such land- use planning and subdivision. D. Environmental impact studies, unless directly related to the project and done separately for the project. E. Endowments for mitigation land. F. Construction loan interest. G. Costs incurred prior to the City Council's acceptance of a request to begin work on the formation of a Special District, a reimbursement, or acquisition agreement, or the adoption of a resolution of intention to form the Special District, whichever comes first. H. Subdivision financial analysis. I. Attorney's fees incurred by the property owners or their agents, except as recommended by the City Attorney related to condemnation proceedings. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 5 of 15 Policy No. __ 3::..:3"------ Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File J. On-site right-of-way and easements. K. Other overhead expenses incurred by the applicant. 4. STAGE OF THE IMPROVEMENTS . Any public improvements proposed to be financed through a Special District must meet all design and construction requirements and standards as may be established by the City and in accordance with current State laws. A public improvement proposed to be acquired from the proceeds of bonds, assessments, fees, or special taxes shall not be paid for out of Special District funds until all components, including appurtenant improvements, of such improvement are completed, bonds are sold if applicable, and such improvement has been opened to the public or could be opened to the public but for the fact that such opening has been withheld or delayed solely by the City. An "improvement" shall be generally defined as a particular street with independent usage, including all appurtenant improvements such as sewer, drainage, and utility improvements appurtenant to the street. The City Engineer shall have the authority and discretion to establish one or more separate improvements consistent with the definition thereof for any Special District. Each improvement established by the City Engineer for any Special District and all components, including any appurtenant improvements, included within each such improvement must be described in the acquisition and financing agreement for such Special District. Any deviation of the description of an improvement shall be approved.by the City Engineer. The City Engineer may authorize the partial release of funds of up to ninety percent (90%) of the cost of any such improvement to pay for the acquisition of such improvement when such improvement, including all components thereof, can, in the opinion of the City Engineer, be opened by the City for use by the public. Ten percent (1 0%) of the cost of any improvement shall not be paid for until final acceptance of such improvement by the City and the City Engineer or his or her designee has certified the final cost of such improvement. Prior to formation, any required environmental review and an environmental certification for development within the proposed Special District and the improvements proposed to be financed by the Special District must be completed, land use entitlement approvals for such development must be obtained, and right-of-way for all improvements proposed to be financed by the Special District must be dedicated or an irrevocable offer to dedicate must be received by the City. Prior to the sale of bonds, if applicable, design of substantially all improvements to be financed from the proceeds of such bonds must be completed (1 00%) and bids for construction received. The City may enter into acquisition agreements prior to the formation of the Spectal District. Any acquisition under such agreement shall be conditional upon formation of the Special District and, if Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public hnprovements Page 6 of 15 Policy No. ---=3=3 __ _ Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File applicable, issuance of bonds for such Special District. Except as provided below, the purchase price of any improvement shall not exceed the estimated costs for such improvement per the acquisition agreement, the engineer's report, or Community Facilities District report, as applicable, for the Special District when such Special District was formed. Any costs above this amount will be eligible for inclusion in the purchase price for an improvement only if there are eligible funds remaining upon completion of all of the improvements to be financed by a Special District. For Bridge and Thoroughfare Districts, or Community Facilities Districts that do not or cannot issue debt, construction to be completed by the developers will be reimbursed through fees or special taxes, if and when collected. Property Own.er Requirements: 5. CONCURRENCE OF PROPERTY OWNERS Where a Special Distri ct is initiated by the property owners, the application for the consideration of the establishment of a Special District shall have the concurrence of the affected area's property owners representing not less than 65%, by area, of the land proposed to be assessed, taxed, or subject to the payment of fees. The application for consideration shall include an acceptance of this policy and, when applicable, a waiver of the property owners' rights under the Majority Protest Act. The City Council is in no way required to proceed with the formation of a Special District if the City Council finds that the creation of the Special District, the financing of the improvements by a Special District, or the construction of the improvements will not be in the best interest of the City. 6. FINANCIAL CAPABILITY AND STABILITY OF THE PROPONENTS Any application for the establishment of a Special District shall contain such information and be submitted in such form as the Finance Director may require. In addition to such information as the Finance Director may require, each application must contain: A. Proof of authorization to submit the application on behalf of the owner of the property for which the application is submitted if the applicant is not the owner of such property. B. Evidence satisfactory to the Finance Director that the applicant represents or has the consent of the owners of not less than 65%, by area, of the property proposed to be subJect to the levy of the fees, assessments, or special taxes. C. A business plan for the development of the property within the proposed Special Distnct and such additional financial information as the Finance Director may deem necessary to adequately review the financial feasibility of the Special District. The applicant must demonstrate to the satisfaction of the Finance Director the ability of the owner(s) of the property proposed to be developed to pay the fees, assessments or special taxes for the Special Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD Page 7 of 15 Policy No. _ _,3"""3'------ COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File District and any other assessment, special taxes and ad valorem taxes on such property until full build-out of the property. 7. PRE-FORMATION COSTS, DEPOSITS, AND REIMBURSEMENTS Except for those applications for Special Districts where the City is the applicant, all City and consultant costs incurred in the evaluation of applications and the proceedings to form a Special District and issue bonds, if applicable, will be paid by the applicant by advance deposit with the City of monies sufficient to pay all such costs. Each application for the formation of a Special District shall be accompanied by an initial deposit in an amount to be determined by the Finance Director to be adequate to fund the evaluation of the application and begin the proceedings to form the Special District and issue bonds, 1f applicable. If additional funds are required to pay pre-formation costs, the Finance Director may make written demand upon the applicant for such additional funds and the applicant shall deposit such additional funds with the City within five (5) working days of the date of receipt of such demand. Upon the depletion of the funds deposited by applicant for pre-formation costs, all proceedings shall be suspended until receipt by the City of such additional funds as the Finance Director may demand. The deposits shall be used by the City to pay for costs and expenses incurred by the City incident to the evaluation of the application and proceedings for the formation of the Special District and the issuance of bonds (if applicable) including, but not limited to, legal, special tax or assessment consulting, engjneering, appraisal, market absorption, financial advisor, administrative and staff costs and expenses, required notifications, printing, and publication costs. The City shall refund any unexpended portion of the deposits upon the occurrence of one of the following events: A. The formation of the Special District and the issuance of the bonds, if applicable; B. The formation of the Specml District or the issuance of the bonds is not approved by the City Council; or C. The proceedings for the formation of the Special District and the issuance of bonds are abandoned at the written request of the applicant. Except as otherwise provided herein, the applicant shall be entitled, at the option of the City, to reimbursement of or credit against special taxes or assessment installments for all amounts deposited, if such amounts are recovered in the Special District. Any such reimbursement shall be payable solely from the proceeds of the bonds, special taxes, or fees as applicable. ' ' ,:.. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 8 of 15 Policy No. _ _;3::..:3::.,__ __ Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File 8. STAGE OF THE DEVELOPMENT PROJECT Development projects shall be at the stage of land use entitlements and design where all criteria of the policy can be adequately assessed. All property to be included in a Special District shall have already received environmental review and approval of all land use entitlements such as zoning, master plans, specifi c plans, or Local Facilities Management Plans and regulatory permits. The City Council may approve a Special District that includes some land without such approvals if the improvements to be financed are consistent with the General Plan and if the City Council finds the improvements are required in the public interest. 9. DEVELOPMENT RIGHTS Approval of a Special District and construction of the public improvements does not, in and of itself, vest any rights to the then existing land use approvals for the property to be assessed or taxed for such improvements or to any particular level, type, or intensity of development or use. Applicants for a Special District must include an express acknowledgement of this policy and shall expressly waive on their behalf and on behalf of their successors and assigns any cause of action at law or in equity including, but not limited to, taking or damaging of property, for reassessment of property or denial of any right protected by USC Section 1983 which might be applicable to the properties to be assessed. Formation Process: 10. CREATION OF THE SPECIAL DISTRICT REVIEW COMMITTEE It is the intention of the City Council that proponents of a Special 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 Special District Review Committee. The Committee shall consist of the City Manager, City Attorney, Community Development Director, Planning Director, City Engineer, Administrative Services Director (Chairperson), Finance Director, and Public Works Director. The Committee shall meet to review a proposal for a Special District for the purpose of determining whether or not the requirements of this policy have been satisfied. Committee review shall take place prior to the presentation of a Special District proposal to City Council. Whenever any such proposal is presented to the City Council, it shall be accompanied by a report containing the findings and recommendations of the Committee made in regard to such proposal. The Committee may require the proponents to furnish any additional information necessary to the evaluation of the proposed Special District. The Committee may require all or any part of the deposits provided for in this policy to be made prior to commencing their review of the proposed Special District. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT ' General Subject: Financing of Public Improvements Page 9 of 15 Policy No. _ __,3~3 __ _ Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File 11. SELECTION OF CONSULT ANTS The City shall select all consultants, such as, but not limited to, the assessment engineer or special tax consultant, bond counsel, financial consultant, and if required, underwriter and appraiser. 12. FEASIDILITY STUDY If the City Council determines it necessary, a financial feasibility study may be required by a consultant selected by the City to be accomplished at the expense of the proponents of the Special District to ascertain whether or not the proposed Special District is financially feasible and whether or not the proposed bonds will find market acceptance. Assessment /Special Tax Considerations: 13. APPORTIONMENT METHODOLOGY I REQUIREMENTS The City or the special tax consultant or assessment engineer, as applicable, selected by the City shall determine the special tax formula or method of assessment spread. The prime emphasis in the establishment of the special tax formula will be fairness to the future property owner who will be paying the taxes over the years. The methodology for spreading assessments shall be based upon the benefit to the properties assessed. The methodology utilized shall adhere to the followi ng requirements: A. The annual assessment or special tax shall be sufficient to include an amount necessary to pay for the expenses incurred by such Special District in the levy and collection of the assessment, special tax, or fee and the administration of the bonds and the Special District. B. For special taxes: 1) The maximum projected annual special tax revenues must equal 110% of the projected annual gross debt service of any bonds of the Community Facilities District. 2) The special tax formula shall include provisions to protect against changes in density resulting in the generation of insufficient special tax revenue to pay annual debt service and administrative expenses. As a condition of approval of the downsizing of the development by the applicant or the applicant's successor-in-interest, the City Council may require the prepayment of a portion of the special tax obligation as may be necessary in the determmation of the City to ensure that adequate debt service coverage exists with respect to any outstanding bonds. Alternatively, the City Council may require security in a form and amolffit deemed necessary by the City to provide for the payment of debt service on the bonds. 3) A partial and/or total prepayment option shall be included in any rate and method of apportionment of special taxes to pay for public improvements. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 10 ofl5 Policy No. ---=33=---- Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File 4) The applicable special tax to pay for public improvements levied against any parcel used for private residential purposes must be discharged prior to the sale of the individual lot. 5) The rate and method of apportionment of a special tax to pay for public improvements shall specify a fiscal year or number of years beyond which the special tax may not be levied on any parcel. C. All developed and undeveloped property within any Special District that is not otherwise statutorily exempt from the levy of the assessment, fee, or special taxes shall bear its appropriate share of the Special District's aggregate obligation from the date of formation of the Special District consistent with the other goals and policies set forth herein. D. The City Council will not approve a Special District unless all assessments, fees, or special taxes apportioned to publicly owned parcels within the District have been paid or discharged to the City's satisfaction. 14. DISCHARGE OF ASSESSMENT OR SPECIAL TAX OBLIGATION It is the City's desire that any assessment or special tax obligation be discharged prior to the sale of individual lots. Under this policy, property owners of residential land within a Community Facilities District must discharge the special tax obligation applicable to the property prior to the sale of individual Jots. For commercial/industrial property within a CFD and any property within an assessment district, the City Council may approve a pass-through of the obligation to a prospective purchaser at the City's sole discretion. 15. MAXIMUM AGGREGATE TAXES AND ASSESSMENTS If the City Council approves a pass-through of the assessment or special tax obligation, it is the policy of the City that the total of the following taxes, assessments, and special taxes appearing on the property tax bill shall not exceed 1.8% of such initial sales price of any residential dwelling unit to such residential homeowner: A. Ad valorem property taxes. B. Voter-approved ad valorem property taxes in excess of 1% of the assessed value of the subject property. C. The maximum annual special taxes levied by all Community Facilities Districts under consideration and any other Community Facilities Districts or other public agency charges on the tax roll. D. The annual assessment installments, including administrative surcharge, for any existing or proposed assessment district, whether such assessment installments are utilized to pay debt service on bonds issued for such assessment district or to pay for maintenance or services. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 11 of 15 Policy No. ----=33"---- Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City· Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File While there is no specific limit on the rate of assessment or taxation of commercial or industrial property, the City Council reserves the right to limit the rate of such taxation or assessment to ensure the economic feasibility of such property. The applicant for the establishment of any Special District shall be required to enter into an agreement with the City or the Special District requiring the prepayment by the applicant of that portion of the obligation applicable to any parcel used for residential purposes in order to reduce the annual maximum obligation to the standards described above. 16. DISCLOSURE TO PROPERTY PURCHASERS Property owners for all Special Districts will be required to provide for full and complete disclosure of such Special District applicable to the property to prospective purchasers. The disclosure must include all of the following in addition to such other provisions as may be required by State law, the Municipal Code of the City, or as the applicant may deem necessary: A. Provide full disclosure of the proposed Special District and all other assessment and special tax financing applicable to the property (whether imposed by the City or any other public agency), including the maximum annual payment, monthly payments, principal, average interest rate, duration of payments, list of facilities to be funded, and the tax formula or method of spread in easily understood terms. B. List the amount of the assessment or special tax payments in all sales brochures, all advertising and all purchase documents adjacent to the sales price of the property and in the same size type. C. Where an assessment or special tax is authorized to be passed through, give prospective purchasers an option to have the obligation lien discharged prior to the close of escrow or to assume the obligation by a pass-through as a part of the sales price of the property. D. Specify in all disclosure documents the name, title, telephone number, and address of a representative of the City as provided to the applicant who may be contacted by any prospective purchaser of property within a Special District for further information regarding the Special District and the lien. The disclosure program will be subject to City Council approval. The City Council's goal is to provide complete and concise disclosure to any subsequent property purchaser. Requirements of Debt Issuance: 17. TERMS AND CONDITIONS OF BONDS The following Section is only applicable to assessment districts and Community Facilities Districts. Bridge and Thoroughfare Districts are unable to issue debt. Bonds shall be issued m accordance Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 12 of 15 Policy No. ---'3~3"------ Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridg~ and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File with the Improvement Bond Act of 1915 for assessment districts and Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code, commencing with Section 53311 for Community Facilities Districts unless the City Council determines otherwise. Bonds issued under this policy may be sold through competitive or negotiated sale as determined by City Council. The City Council will consider recommendations from staff and/or the City's financial consultant in selecting a method of sale. The terms and conditions of any bonds issued by the City for any Special District including without limitation the sizing, timing, term, interest rates, discount, redemption features, flow of funds, investment provisions, and foreclosure covenants shall be established by the City. Each bond issue shall be structured to adequately protect bond owners and to avoid negatively impacting the bonding capacity or creditworthiness of the City. Unless otherwise approved by the City Council, the following shall serve as minimum bond requirements: A. A reserve fu nd or other security recommended by City staff, the City's financial advisor, and/or underwriter shall be established for each bond issue in an amount recommended by the City's financial advisor and/or underwriter. B. Interest shall be capitalized for a bond issue only so long as necessary to place the charges on the assessment roll. Interest may be capitalized for a longer term (not to exceed an aggregate of 18 months) on an exception basis at the sole discretion of the Finance Director, taking into consideration the value-to-lien ratio, the expected timing of initial residential occupancies, expected absorption and build-out of the project, the expected construction and completion schedule for the public improvements to be funded from the proceeds of the bond issue in question, the size of the bond issue, the development pro forma and the equity position of the applicant, and such other factors as the Finance Director may deem relevant. C. In instances where multiple series of bonds are to be issued, the City shall determine what improvements shall be financed from the proceeds of each series of bonds. D. Neither the faith, credit, nor taxing power of the City shall be pledged to the payment of the bonds. The sole source of revenue for the payment of the bonds shall be the assessments or special taxes, capitalized interest, if any, and monies on deposit in the reserve fund established for such bonds. 18. REQUIRED VALUE-TO-LIEN RATIO I APPRAISAL Project property value-to-lien ratio, i.e., the full cash value of the properties subject to the levy of the assessments or special taxes, including the value of the improvements to be financed, compared to the aggregate amount of the lien to be created, plus any prior or anticipated fixed assessment liens and/or special tax liens, must be 4: I. A project may be approved with a ratio between 4:1 and a Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 13 of 15 Policy No. _ ___::;..,33"-------- Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File minimum of 3:1 if the ratio is recommended by the underwriter and/or financial advisor to the City and if the City Council finds the reduced ratio to be within acceptable parameters. The required value-to-lien ratio shall be determined with respect to all taxable property within the Special District in the aggregate and with respect to each discrete development area as defined by the Finance Director. In addition, the City Council may, it its sole discretion, accept a form or forms of credit enhancement such as a letter of credit, bond insurance, or the escrow of bond proceeds to offset a deficiency in the required value-to-lien ratio as it applies to the taxable property within the Special District in the aggregate or with respect to any development area. The appraisal shall be undertaken by, done under the direction of, and addressed to the City. The value of the property proposed to be assessed shall be performed by a certified real estate appraiser (MAl) selected and retained by the City or the City's financial advisor. 19. MARKET ABSORPTION STUDY The City may require a market absorption study for any Special District proposed to include new development. In any case, the City shall retain, at the applicant's sole expense but subject to reimbursement as provided for herein, a consultant to prepare a report to verify or establish the projected market absorption for and the projected sales prices of the properties proposed to be included within the Special District. If a market absorption study is conducted, the appraiser shall utilize the conclusions of the market absorption study in conducting the appraisal of the properties within the proposed Special District or shall justify, to the satisfaction of the City Manager, why such conclusions were not utilized in conducting such appraisal. 20. PRIORITIZATION OF PUBLIC IMPROVEMENTS The City reserves the ri ght to establish priorities for payment or reimbursement. 21. RESPONSIDILITY FOR THE COST OF FORECLOSURE The City Council may require the proponents of the Special District to enter into an agreement with the City to be responsible for the cost of any judicial foreclosures that the City determines are necessary in regard to the Special District bonds. The City may, at its option, retain an attorney to prosecute the foreclosures in a timely manner in the name of the City, and the proponent shall agree to be responsible for all costs of such foreclosures. If the City Council approves a pass-through of the obligation to the purchaser of an individual lot, the proponents shall be relieved of th~ir obligation under such agreement for such lot. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page 14 of 15 Policy No. _ _,3::..:=3~-- Date Issued 1 2117/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File 22. SURPLUS FUNDS It is the City Council's policy that, in the event that there are surplus funds generated through the creation ofthe Special District and the sale ofbonds, if applicable, these surplus funds shall be used as follows: A. To complete any work related to the project that the City Council determines is equitable and reasonable as allowed by statutes. B. The City 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 applicable 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. C. Unless otherwise directed by the City Council, any amount in excess of that used to offset the annual levy described in (B) above will be used to call bonds at an appropriate bond call date. PROCEDURE: 1. CONTACT FOR PROPONENT(S) Whether there is one or multiple proponents of a proposed Special District, an authorized spokesperson shall be designated to act for the proponent(s) in their dealing with the City. The spokesperson shall be responsible for collecting any fees for deposit with the City, providing any necessary information to the City, and for communicating, as necessary, back to the other proponent(s). 2. REQUEST TO BEGIN WORK Any request for the City to begin work on the feasibility or formation of a Special District shall contain such information and be submitted in such form as the City Finance Director may require. In addition to the information required by Section 6 above, each application must contain data on the proposed Special District to include, but not be limited to: a description of the improvements and estimated cost of such improvements proposed to be funded by the Special District, written justification of how these facilities comply with this policy, a construction and phasing schedule of the improvements and the development project, and map(s) that identify the proposed boundary of the Special District. 3. INITIAL PRESENTATION TO THE SPECIAL DISTRICT REVIEW COMMmEE In the initial meeting of the Special District Review Committee, the City Engineer will provide an overview of the proposed project and the requested public facilities to be financed. This overview will state whether or not the proposed public facilities generally adhere to this policy and descri be the timing requirement of the public facilities in conjunction with the estimated build-out of the development project. The Finance Director shall present a brief summary of the financial stability I"' I . . Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Financing of Public Improvements Page IS of 15 Policy No. --=33"'---- Date Issued 12/17/02 Effective Date 12/17/02 Cancellation Date None Supersedes No. 6/23/98 Specific Subject: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts Copies to: City Council, City Manager, City Attorney, Department and Division Heads, Employee Bulletin Boards, Press, File of the proponents as provided by the proponents, confirmation of the consent of 65% of the property owners by area, and an estimate of the pre-formation costs. Recommendation of the Special District Review Conunittee shall be communicated to the proponents of the Special District. 4. AUTHORIZATION TO PROCEED Upon review of the proposed Special District and after considering the report of the Committee, the City Council shall determine whether or not to authorize staff to proceed. It is the policy of the City Council 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 Special District. Any exceptions to the criteria of this policy will be approved only upon an express finding by the City Council that the proposed Special District is so effected 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 authorizes the assessment of feasibility and proceeding with the formation of the Special District, City staff and the proponents shall proceed to do that in accordance with State law and the requirements of this policy. 5. ASSESSMENT OF FEASIBILITY AND FORMATION The City Engineer and/or Finance Director shall obtain contracts with consultant(s) as required to review the feasibility of the project and collect a pre-formation deposit as determined by the Finance Director. The feasibility of the project as prepared by staff or consultant shall be presented to the Special District Review Committee. Should the Special District Review Conunittee recommend against the proposed Special District, such recommendation along with the feasibility study will be conununicated to the proponents of the Special District. Should the Special District Review Committee recommend that formation of the Special District should be recommended to City Council, a preliminary schedule shall be determined along with requirements of the proponents to submit any additional information or deposit of funds. The recommendations of the Special District Review Committee, preliminary schedule, and requirements of the proponents, as discussed, shall be transmitted to the proponents. If needed, additional meetings of the Special District Review Committee shall be held to determine if formation of the Special District should be recommended to City Council. 6. REQUEST FOR FORMATION The report of feasibility and recommendation of formation of the proposed Special District by the Special District Review Committee shall be taken to City Council for consideration. If the City Council approves proceeding with the formation of the Special District, City staff and the proponents shall proceed to do that in accordance with State law and the requirements of this policy. -END OF POLICY -Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBI 3 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Jackson I DeMarco I Tid us Peckenpaugh A LAW CORPORATIO N Direct Dial. 949.851.740\1 February 16, 2015 Fmail: R~!ply to: FikNo: mstaples@jdtpluw.com Irvine Office 2294/00178 VIA EMAIL (clerk@carlsbadca.gov) AND FIRST CLASS MAIL City Council City of Carlsbad 1635 Faraday Avenue Carlsbad, California 92008 Re: Objection to Proposed Approach to Finance Public Improvements in Local .Facilities Management Plan Zone 15 and Request to Continue Matter Off Calendar (February 17,2015 Agenda Item No.7, AH #21,864) Dear Mayor Hall and Honorable Counci1members: 1. Introduction and Summary. W c represent Mandana Cal Co., the O\\ner of approximately 190 acres of land included in the reimbursement area of the Zone 15 financing proposal (shown as property no. 11 on the Zone 15 map at the last page of the attached "Zone 15 Infrastructure Financing and Reimbursement Program"). Mandana has owned the property for over 30 years. The property is unentitled and has long been farmed. Mandana's property comprises 27% of the entire rcirnbur~ement area plus CFD area, and more than 50% of the proposed reimbursement area. Although Mandana is a major landowner in Zone 15, the City and Bent-West did not infom1 Mandana of their efforts to form a financing district including Mandana's property until last July, after the City Council had already made several key decisions adverse to Mandana's interests in September 2013. April2014, and June 2014. We urge the City Couucil to deny staff's request to pursue the hybrid CFD/reimbursementfinanciug mechanism as currently proposed, and to continue the matter off calendar until its terms are vetted and consented to by 65% oftlte landowners included in the entire reimbursement area plus CFD area . The City's actions to date on the Zone 15 financing strategy violate Mandana's Constitutionally- protected substantive and procedural due process rights by: l) failing to provide Mandana prior notice and an opportunity to pa11icipate in key City Council meetings over the past two years authorizing Bent-West to bypass the initial65% Irvine Office 2030 Main Street, Suite 1200 Irvine, California 92614 t 949.752 8585 f 949 752 0597 Westlake Village Office 2815 Townsgate Road, SUite 200 Westlake Village, California 91361 t 805.230 0023 f 805.230.0087 www.jdtplaw.com Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad February 16, 2015 landowner consent step required by Council Policy No. 33 (see City Council Resolut10n No. 2013-226), waiving Policy 33's prohibition against public financing of an applicant's administrative, fi nancial consultant and legal fees in order to add Bent-West's expenditures into the Zone 15 financing district (see April 15, 2014 City Council Minutes, Agenda Bill No. 21 ,567), and approving reimbursement agreements with Bent- West to fmm a CFD (see City Council Resolution Nos. 2013-226, 2014-159); 2) withholding infonnation from the City Council about major landowner objections and Bent-West's inability to achieve the required 65% landowner consent contradicting the Council's stated reasons for approving those actions; 3) failing to infonn Mandana that the City Council had taken those actions to commence fonnation of a CFD until last July; and 4) structuring the current proposed tinancing mechanism described in the February 17, 2015 Agenda Bill in a manner intended to (i) encumber Mandana's unentitled property to the same or greater extent of the previously proposed CFD, (ii) avoid accounting for the property's inability to support the proposed debt, and (iii) avoid providing Manclana an opportunity to vote on the current financing mechanism. If implemented, the proposed financing strategy will also expose the City to risk of liability for the unconstitutional taking of Mandana' s property by imposing an obligation to finance public improvements disproportionate to the property's need tor or contribution to the improvements, at rates and terms that could render future development infeasible, with full knowledge that the property is unentitled and cannot suppmt the debt. 2. The Proposed Financing Strategy Unfairly Burdens Mandana and Other Unentitled Properties for the Benefit of the Few Developers With Expiring Tentative Tract Maps. Under Bent-West's current Zone 15 financing proposal (see attached Zone 15 Infrastructure financing and Reimbursement Program), a few developers with approved tentative tract maps representing less than half of the CFD area plus reimbursement area would for m a CFD. Their participation would be capped at the payment of the special tax established by the CFD. The February 17, 2015 Agenda Bill (at p. 2) explains that, if only the landowners with approved tentative tract maps were to participate in a CPD, their land would not generate sufficient funds from the sale of bonds to construct College Boulevard. So the financing mechanism proposes that the majority of the ultimate College Boulevard construction costs would be paid primarily by the remaining unentitled properties by way of a reimbursement agreement obligating the City to foreclose, if necessary, to pay the comtruction costs upon completion of certain milestones. Knowing that the value of the unentitled property would not meet the required loan-to-value ratto to supp01t a CFD (see February 17,2015 Agenda Bill p. 2), the proposal is to include only the few properties with approved TTMs in the CFD. The remaining unentitled properties would be subjected to a reimbursement amount that increases over time at the inflationary index rates which in Mandana's case, when compounded over 15 years, could approach 100%. The Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad February 16,2015 proposal is also structured to not allow the unentitled landowners to vote on the financing strategy. (See February 17, 2015 Agenda Bill, p. 4.) The proposal creates three different categories of landowners within Zone 15 (see map at last page of the Attachment): (1) a few entitled property owners with tentative tract maps are to be included in a CFD and their contribution would be capped based on a projected construction fund and tax-exempt municipal bond rates; (2) several undeveloped properties within Zone 15 are to be omitted from participation in the financing proposal without explanation; and (3) the remaining, unentitled landov.ners comprising the majority of the area are to provide security t(Jr the construction of the College Boulevard improvements by way of a reimbursement obligation. Unlike the CFD properties, the reimbursement properties' obligation is not capped. Therefore, any variance in the construction funding projections would appear to be borne by the unentitled reimbursing properties. The proposed hybrid CFD!reimburscmcnt strategy simply docs not work under the cunent <:ircumstances where the majority of the financing area is unentitled. The imposition or such a large reimbursement obligation on Mandana's unentitled propetty may make it infeasible to build, particularly in light of other regulatory and physical constraints. Additionally, landowners who have been omitted from the process until recently are now asking serious questions about the validity of the projected <:onstruetion costs and Bent-West's inability to finance or construct public improvements under the terms of its Operating Agreement. The College Boulevard improvements, if constructed under the proposedfimmcing mechanism, would not increase the value or development potential ofll1amlmza's property . Instead, the fimmcittl burden may render the property's development infeasible. 3. The Proposed Financing Strategy Does Not Comply with Citv Council Policv 33 and City Council Approvals. The City Council's Policy No. 33 provides policy guidance for the City's use of assessment districts, CFDs and Bridge and Thoroughfare Districts. Policy 33 is intended to, among other things, ensure fairness in the application of assessments, special taxes, or fees to current and future property owners; ensure full disclosure to <:nnent and future property owners of the Special District; and establish one policy regarding the requirements that must be met before the City Council will consider approving the financing of public improvements using Special Districts. Policy 33's "Property Owner Requirements'' (Sections 5 and 6) provides that the applicant shall have the concurrence of the affected area's property owners representing not less than 65%, by area, of the land proposed to be assessed, taxed, or subject to the payment offees The September 10,2013 City Council Resolution No. 2013-226 that initiated the original proposed CFD proceedings requires Bent-West to meet the 65% landowner approval threshold before proceeding with the rest of the formation process. Likewise, Section 11 of the Reimbursement Agreement for Special Financing District Formation Deposits approved by the City Council on June 24,2014 requires Bent-West to comply with Council Policy No. 33 in forming the CFD and issuing bonds. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad February 16, 2015 The current hybrid CFD/reimbursement finam;ing proposal does not meet 65% landowner concurrence provision of Policy 33's Property Owner Requirements. The hybrid CFD/C'ity- imposed reimbursement area is not among the financing mechanisms for College Boulevard discussed in the September 10, 2013 Agenda Bill (p. 1 ). 11te City Council should not approve tlte request to pursue the financing approach, as currently proposed, until the matter has been vetted and supported by 65% of the affected landowners in accordance with Policy 33 and the Council's prior approvals. 4. The Proposed Financing Strategy Violates Mandana's Procedural Hue Process Protections. The City has approved a series of waivers allowing Dent-West to deviate from the Policy 33 procedures without notice to the affected property owners. The process to date is creating bureaucratic momentum while depriving Mandana and the other affected landovvners an opportunity to meaningfully participate in the City's decisionmaking. Policy 33's Property Owner Requirements provide for the applicant to prove it has the concurrence of at least 6YYo of the owners, by area, of property proposed to be subject to the levy of assessments before proceeding through the formation process for a spccial tinancing district. Ever since 2005 when a special financing district was first discussed by Bent-West, both Mandana and the Kato Family Limited Partnership (who collectively hold 41% of the acreage in the so-called benefitted area) have objected to the premature inclusion of their properties in the iinancing structure on grotmds that, as unentitled properties, their properties do not currently need or contribute to the College Boulevard improvements, and their property values could not support the debt levels that have been proposed. Until last July, Mandana was unaware that Bent-West and the City were, nevertheless, pursuing the formation of a CFD. Although Mandana is a major landowner \\>ithin the CFD area that was originally proposed by Bent-West, the City provided no notice either before or after the City Council's action on September 10,2013, authorizing Bent-West to temporarily bypass the initial 65% landowner concunence step under Policy No. 33's Property Owner Requirements (Resolution No. 20 13-226). The September 10, 2013 Agenda Bill justifying the City Council's action enoneously says that "several large landowners arc out of state and hard to communicate with" and that "Bent West, LLC believes having preliminary numbers to share with the other ownership interests would solidify the requisitt: 65 percent ownership approval". In fact, both Mandana and Kato are in-state and easily accessible to both the City and Bent-West. As soon as A 1i Shashani of Man dana learned of Bent-West's efforts, he sent an email to Stephen Powell of Bent-West, with a copy to Chuck McBride and Aaron Beanan, reiterating Mandana's objection to being prematurely included in the proposed CFD. Warren Kato of the Kato Family Limited Partnership also noti11ed Aaron Beanan of Kato's objection. A few months later, in December, the cunent hybrid CPD/rcimbursemcnt tinance mechanism was distributed to most of the Lone 15 landowners. (There is no information on whether WalMmi has received notice of the proposed financing mechanism, tmd if so, what its position is.) Under the City's waiver (City Council Resolution No. 20!3-226) Bent-West was still required to comply with Policy 33's Property Owner Requirements providing for 65% landowner Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Co unci I City of Carlsbad February 16,2015 concunence before proceeding further with the financing district. Instead. the !..:urrent proposal attempts to circumvent that requirement by imposing a reimbursement obligation on the unentitled prope11ies by way of a reimbursement obligation, without providing them an opportunity to vote. (February 17, 2015 Agenda Bill. p. 4.) However, as currently proposed, the CFD is interdependent on the imposition of the reimbursement obligation. The proposed financing strategy violates Mandana's procedural and substantive due process rights by pledging Mandana's property as collateral for the College Boulevard construction costs over Mandam1 's objection, while depriving Mandana the opportunity to vote on the proposed financing mechanism. We offer the observation that College Boulevard is a City arterial serving not only the properties adjacent to it in Zone 15 but also significant other areas in the City. Accordingly, the City's referenced legal authority to establish a reimbursement area over the objection of a majority of the unentitled landowners, Government Code. Sections 66486 and 66487 (a ponion of the Subdivision Map Act), appears to be misplaced. 5. The Proposed Financing Strategy Amounts to an Unconstitutional Taking of Mandana's Private Property. Private property may not be taken for public usc without just compensation. (U.S. Const., 5th Amend.; Cal. Const., art. L §19.) The purpose ofthe Takings Clause "is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." (Palazzolo v. Rhode Island (2001) 533 U.S. 606, 617 -618.) Constitutional requirements also state that there must be an ·'essential nexus., between an imposed condition and the impacts of a specific project (Noll an v. Cal~furnia Cvasia! Commission, 483 U.S. 825, 837 (1987)) and that the conditions imposed must be "roughly proportional" to the project impact (Dolan v. City ofTigard, 512 U.S. 374,391 (1994)). The proposed financing method would allocate a greater financial burden to Mandana than its fair share. Mandana's land is currently farmed and is unentitled. It does not contribute to or need the proposed improvements. Neve11heless, the hybrid CFD/reimbursement financing mechanism allocates Mandana's reimbursement obligation based on unit projections under the CutTent General Plan designation. It is simply premature to include Mandana's propet1y as part of the proposed tinancing mechanism when there is not yet a clear picture of its potential development yield due to regulatory and physical constraints. The proposed financing mechanism also does not factor into the fair share calculation the fact that certain Zone 15 properties are excluded from the CFD and reimbursement area, and that the Carlsbad Boulevard extension will carry many times more traffic than the Zone 15 properties will generate. The February 17, 2015 Agenda Bill (p. 2) acknowledges that the unentitled property cannot carry the proposed debt. Also, unlike the CFD properties, which the City Council has allowed to pass through the financing debt to the ultimate homeowners (see April 15, 2014 City Council a<.:tion on Agenda Bill No. 21,567), Mandana would be obligated to pay a lump sum reimbursement upon some development trigger, such as subdivision map approval or i'>suance of grading permit (see February 17,2015 Agenda Bill, p. 3). As soon as the City pledges Mandana's property a~ security for the CFD and establishes a reimbursement obligation ~ubject to the inflatiOnary mdex rates for the Carlsbad Boulevard improvements, it will cloud Mandana's title and 1mpose an Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad February 16, 2015 onerous and unfair burden on the property negatively affecting its value and rendering its future development infeasible. We assume the last thing the City wants to do is foreclose on the Mandana property and the other unentitled reimbursement properties. But based on the information in the Agenda Bill, the proposed Zone 15 financing strategy seems inevitably headed to that end. The City should assume that, in order to recover its costs of construction, Bent-West may demand that the City foreclose on the allocations assigned to each of the reimbursement properties, if necessary, when they achieve a development milestone requiring payment. It is not di±1lcult to imagine circumstances where the reimbursing property owners, for reasons beyond their controL may be unable to pay their contribution to fund the construction of College Boulevard. For example, regulatory and physical development constraints, inability to obtain funding for the development project, market conditions impeding sales, a ::;igniticant and unforeseen increase in College Boulevard's construction costs (which, in contrast to the CFD properties, only the reimbursing properties could be liable to pay). Imposing suclt a large financial obligation on Mandana 's property may render its development infeasible. 6. Conclusion and Request to Continue the Matter Off-Calendar. Mandana and the other unentitled landowners arc not umeasonable. They have legitimate concerns with the proposed financing strategy that efTectively requires them to assume the development risk, assume the market risk, and incur debt at a rate far greater than the few entitled landowners included in the CFD. Tlte financing proposal is premature ami ~lumld he continued off-calendar until these and other basic concems are vetted and the consent of 65% of the affected landowners in the combined CFD/reimbursement area is obtained. Sincerely, Michele A. Staples Attachment cc: Steve Sarkozy, City Manager Cr!E!.lll:lg9J:~!.L£~l.d.?bad~JJ.g()v) Celia A. Brewer, City Attorney ((;c;_!jt~,_!,3_x9..5Y.<,;I(51J£ .. m:l.?.P.<!'i£~,gQ~)* Chuck McBride, Director of Finance (ClwckJyh:J?.ridc.@G.<1Tishf!dt;<1,gQ_\) Aaron Beanan, Senior Accountant (Aaron.Bcanan((Aarlsbadca.gpv) Glen Van Peski (Glcn.V<}.nPeski1Zil_carlsbadcq.gov) Jeremy Riddle (JeienJv.Riddler(jlcarbbaduuzov) Shannon Wernek (Shannon. Wc;rm::ket{ikat lsbadca"gs2~:) Mr. Ali Shashani* *via email, Vvith Attachment Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 4 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Jackson I DeMarco I Tid us Peckenpaugh Apri19, 2015 A LAW CORPORATION I ji!Cl'i lliH' Email: Reply l!• l 1kNo· 949.851.7409 mstaples@jdtplaw.curn Irvine Office 7616/122588 VIA EMAIL (clerk,lal,carlsbadca.gov) AND FIRST CLASS MAIL City Council City of Carlsbad 1635 Faraday Avenue Carlsbad, California 92008 Re: Objections to Proposed Ordinance to Establish Reimbursement Fee Funding and Proposed Zone 15 Reimbursement Fee, and Request to Continue Matter Off Calendar (April10, 2015 City Team/Zone 15 Property Owners Meeting); April 21, 2015 City Council Meeting Dear Mayor Hall and Honorable Councilmembers: We represent Mandana Cal Co., the owner of approximately 190 acres of land included in the reimbursement area of the Zone 15 financing proposal, shown as property nos. 1 , 2 and 18 on the Zone 15 "Benefiting Properties Map" attached to Aaron Beanan's March 2, 2015 letter regarding Local Facilities Management Plan Zone 15 Financing Program for Public Improvements Related to College Boulevard Reach "A" Construction. Mandana has owned the property for over 30 years. The property is unentitled and has long been farmed. The Mandana and Kato properties comprise 41% of the entire Zone 15 "Benefiting Properties" area, and more than 50% of the unentitled land proposed to be included in the reimbursement area. We urge the City to correct the serious procedural and substantive illegalities of both the proposed Ordinance to Establish Reimbursement Fee Funding ("Ordinance") and proposed Zone 15 Reimbursement Fees. 1. The City's Actions in Connection with the Ordinance Violate Mandana's Due Process Rights. The City is violating the due process rights ofMandana (and the other unentitled prupert) owners) as guaranteed by the Fourteenth Amendment of the United States Constitution and Article I, § 7 of the California Constitution by, among other things: Irvine Office 2030 Main Street, Suite 1200 Irvine, California 92614 t 949.752.8585 f 949.752.0597 Westlake Village Office 2815 Townsgate Road, Suite 200 Westlake Village, California 91361 t 805.230.0023 f 805.230.0087 www .jdtplaw. com Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 9, 2015 Page 8 Conducting a sham workshop. The March 26,2015 notice of the AprillO property owner meeting says that the purpose of the meeting is for property owners to provide feedback on the proposed Ordinance. However, the City has employed a "hide and ram" strategy that prevents affected property owners from having any meaningful opportunity to provide input: • the documents referenced in the notice were not made available to the property owners until late yesterday; • hundreds of pages of technical data were provided to property owners for the first time with less than two days to review them before the Aprill 0 Workshop, and without any staff report or summary of what the data are intended to show or how the City is using the data. The City's "data dump" was timed to coincide with the public review and comment periods of the City's separate College Boulevard Mitigation General Plan Amendment and Mitigated Negative Declaration; and the City's recirculation of the portions ofthe General Plan EIR, making it impossible for the property owners to meaningfully comment on these significant proposals; • key documents were not provided to the property owners. For example, the City did not provide the "City constraints analysis", referenced in the Zone 15 Estimated Improvement Cost Allocations Table, that was used to assign potential future unit projections for the unentitled properties; • the City already set the City Council's hearing on the proposed Ordinance for April 21, 2015, meaning that the City's 10-day hearing notice (Munidpal Code set:tion 21.54.060) must be mailed and posted or published the same day as the Workshop. The City's actions evidence that it intends to proceed to the City Council hearing regardless of property owner input. Materially changing the tentative map conditions of the entitled project!i within Zone 15 long after the close of the public comment periods on those projects. Conditions of approval requiring construction of College Boulevard improvements were imposed by the City and accepted by the developers of each of the entitled projects within Zone 15. At the time of those project approvals, the City's current Policy No. 33 applied, requiring the concurrence of not less than 65%, by area, of land proposed to be assessed, taxed, or subject to the payment of fees to fund such improvements. The current proposed reimbursement fee would fail under Policy No. 33 because the Mandana and Kato properties comprise more than 35% ofthe acreage and are not in a position to use or benefit from the College Boulevard improvements. Had the developers of the entitled projects proposed that the City require Mandana to subsidize implementation oftheir own conditions of approval at the time those tentative maps were being considered by the City, Mandana would have objected. The current proposed Ordinance • changes the conditions of approval of the entitled projects without complying with the procedures to substantively amend tentative map conditions, in violation of Subdivision Map Act section 66473 and Municipal Code section 20.20.010 ~ and Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 9, 2015 Page 9 • deprives the public of an opportunity to petition the City in connection with those project amendments. Intentionally withholding information from ami excluding Mandanafrvm the financing proceedings. Mandana's letter dated February 16, 2015 and testimony at the hbruary I 7 Workshop detail actions taken by the City and Bent-West to circumvent full disclosure to Mandana and allow bureaucratic momentum to build for the cunent financing proposal against Mandana's interests and without Mandana's participation. Bent-West and Rusty Gross intentionally and successfully petitioned the City Council to deviate from the established process under Council Policy 33 of forming an assessment district. As a direct result, Mandana was unaware of the initiation of these proceedings for well over a year. Bent-West conducted extensive private discussions with the City Council and staff during that period, and Bent West's appearance at three City Council meetings in September 2013, April 2014 and June 2014, to petition and receive permission from the City Cow1cil to bypass the initial 65% landowner consent step required by Policy 33 (see City Council Resolution No. 20 13-226), waive Policy 33's prohibition against public financing of an applicant's administrative, financial consultant and legal fees in an attempt to add Bent-West's expenditures into the Zone 15 financing district (see Aprill5, 2014 City Council Minutes, Agenda Bill No. 21 ,567), and approve a reimbursement agreement with Bent-West to form a CFD to fund the College Boulevard improvements (see City Council Resolution Nos. 2013,-226, 2014-159). Bent-West successfully built bureaucratic momentum within the City by keeping the two largest unentitled landownt!rs, Mandana and Kato, in the dark On July 31, 2014, Man dana first became aware that Bent-West and Rusty Gross had petitioned the City to include the Mandana and Kato properties in the then-proposed assessment district without their knowkdge and agreement. Mandana and Kato immediately informed Bent-West, the City Attorney, and the Director of Finance of their objections to having their properties included in the district. Subsequently, at the Dt!cember 15.2014 meeting, Mandana first learned that Bent-West had petitioned the City to instead include the Mandana and Kato properties in a reimbursement area, in an apparent attempt to circunwent Policy 33's 65% property owner concurrence requirement. Mandana was disappointed to learn that the City was pursuing Bent-West's request over the objections of Mandana and Kato and in a manner that places even more severe financial burdens on their properties than an assessment district would have, and rescinds their right to opt out of financial participation. Unfortunately, despitt! the vocal opposition of both Mandana and Kato, the largest property owners in the proposed reimbursement area, in its January 2015 workshop. the City Council approved Bent-West's proposal to pursue such an unfair and deviant process to structure a reimbursement area that financially benefits the entitled properties at the expense of the unentitled properties. In the January 2015 City Council workshop, Bent-West's Rusty Gross claimed publicly that the reason Mandana and Kato do not want to participate in a reimbursement district is that the) want "a free ride", and that the College Boulevard improvements will greatly enhance the value!:> or their properties. It is apparent that Mandana's interests have been prejudiced in these Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April9, 2015 Page 10 proceedings by the false and misleading information about Mandana that Bent-West had the opportunity to repeat in Mandana's absence over a long period of time to the City Council ami staff. However, it was Bent-West that accepted the obligation to construct the College Boulevard improvements as a condition of approval of its tentative map, and is now belatedly attempting to subsidize that same obligation by forcing the financial pm1icipation of l'v1andana and the other w1entitled properties through a prejudicial process and on unfair terms. By levying a $2 million reimbursement obligation on Mandmm's unentitled property, Bent- West's present proposal threatens to make development of the Mandana property financially infeasible tor the foreseeable future. At the same time, the proposal would financially benefit Bent-West by subsidizing its existing obligation to construct College Boulevard, and pass the costs to future home buyers through the CFD structure. Prohibiting Man dana from exercising its right to opt out of the financing proposal. The Ordinance is intentionally structured to disallow Mandana and the other unentitled landowners from exercising their right under existing Council Policy 3 3 to opt out of the financing strategy. (See February 17,2015 Agenda Bill, p. 4.) 2. The Ordinance Amounts to an Unconstitutional Taking of Private Property. Private property may not be taken for public use without just compensation. (U.S. Const., 5th Amend.; Cal. Canst., art. 1, § 19.) The purpose of the Takings Clause ''is to prevent the govcnunent from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." (Palazzolo v. Rhode Island (2001) 533 U.S. 606, 617-618.) Constitutional requirements also state that there must be an "essential nexus" between an imposed condition and the impacts of a specific project (Hollan v. California Coastal Commission, 483 U.S. 825, 837 (1987) (''Hollan")) and that conditions imposed must be "roughly proportional" to the project impact (Dolan v. City ofTigard, 512 U.S. 374, 391 (1994) ("Dolan")). The proposed financing method would allocate a greater financial burden to Mandana than i1s fair share. Mamlana's land is currently farmed and is unentitled. It docs not contribute to or need the proposed improvements. However, as currently drafted, the Ordinance v.ould impose the Reimbursement Fee obligation on unentitled property based on the property's future development potential. lt would levy the Reimbursement Fee obligation up tront, as a dollar amount assigned to each unentitled parcel before there is a development project, by calculating the property's potential future unit projections "in accordance with its zoning and general plan designation and other existing land use entitlements, if any". (Ordinance Section 9.D.) In Mandana's case, the Reimbursement Fee levy is estimated to total over $2 million. The Ordinance attempts to reconcile the Reimbursement Fee after a particular project is proposed on the property and before imposing a condition of approval to actually pay the fee allocated to the property. Before payment of the fee is required, the City would hold a hearing to review the fee and determine whether there is a ''reasonable relationship" between the amount of the fee and the cost of the improvements attributable to the project. (Ordinance Section 13 .) l Iowever, the Ordinance does not assure that the fee will be adjusted in the same ratio that the Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April9, 2015 Page 11 actual number of approved units bears to the estimated number of w1its on which the fee was first imposed, or provide any other standard for how the "reasonable relationship" will be determined. As soon as the City levies the Reimbursement Fee on Mandana's w1entitled property for the Carlsbad Boulevard improvements, it will cloud Mandana's title and impose an onerous and unfair burden on the property negatively affecting its value and rendering its future development infeasible. The February 17, 2015 Agenda Bill (p. 2) acknowledges that the um:ntitled property cannot carry the proposed debt. Also, unlike the CFD properties, which the City Council has allowed to pass through the financing debt to the ultimate homeowners (see April 15, 2014 Cit; Council action on Agenda Bill No. 21,567), any future developers ofthe currently-unentitled prope11ies would be obligated to pay a lump sum reimbursem ent upon the first development permit (Ordinance, Section 14.) The City's proposed Ordinance also appears to violate the Mitigation Fee Act (Gov. Code,§§ 66000, et seq.) which establishes both a procedural process that must be followed before fees can be levied, and also a statutory standard against which monetary exactions by local governments are measured. (Ehrlich v. City of Culver City, (1996) 12 Cal. 4th 854, 864-865 .) The City must meet the nexus and rough proportionality requirements of Noll em and Dolan. The fee must be more than "theoretically" or "plausibly" related to the ends that is served by the exaction or fee; Nollan and Dolan require a "factually sustainable proportionality" between the effects of a proposed project and a given fee. (Ehrlich, supra, 12 Cal. 4th at p. 8~0 .) The Noll an standard requires that the City prove that there is an essential nexus between a legitimate slate interest and the development fees. By levying a parcel-based Reimbursement Fcc in advance of a development project, the Ordinance precludes a project specific analysis in accordance with Nollan and Dolan and render~ the City's actions here fatally flawed. The Ordinance does not, and cmmot, supplant the City's obligations to comply with the Mitigation Fee Act and United States and California Constitution'> when imposing reimbursement fees. 3. Conclusion and Request to Continue the Matter Off-Calendar. Mandana urges the City to continue the Ordinance otfthe City Council's April21 agenda and correct the serious procedural and substantive illegalities of both the proposed Ordinance to Establish Reimbursement Fee Funding and proposed Zone 15 Reimbursement Fee~ before proceeding any further. Sincerely, Michele A. Staples Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad April 9, 2015 Page 12 cc: Steve Sarkozy, City Manager (manager@carlsbadca.gov)* Gary Barberio, Assistant Manager (~aary.barberio@carlsbadca.gov l* Celia A. Brewer, City Attorney (Celia.Brewerlalcarlsbadca.gov)* Chuck McBride, Director of Finance (Chuck.McBride(iilcarlsbadca.gov)* Aaron Beanan, Senior Accountant (Aaron.Beanan(a>carlsbadca.gov)* Pat Thomas, Public Works Director (Pat.Thomas(a),carlsbadca.gov)* Don Neu (don.neu@ca.rlsbadca.RQ.Y) David De Cordova (david.decordova(a)carlsbadca.gov) Glen Van Peski (Glen.VanPcski@carlsbadca.gov)* Jeremy Riddle (Jeremy.Riddle@carlsbadca.rz.ov)* Shannon Werneke (Shannon. Werneke(a;,carlsbadca.gov)* *via email Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 5 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Jbrr 'nt CITY OF CARLSBAD-AGENDA BILL 6 APPROVE REIMBURSEME_N_T_A_G_R_E-EM-E-NT _ _._'_D-EPT_. DI_RE_CT_O_R--~-\r-,~-FOR SPECIAL FINANCING DISTRICT CITY ATTY. -/' FORMATION DEPOSITS CITY MGR. AB# ----··--21 ,360 _,_j MTG. _'Vl0/13 DEPT. FIN RECOMMENDED ACTION: Adopt Resolution No. 2013-226 approving a reimbursement agreement for special financing district formation deposits. ITEM EXPlANATION: The City of Carlsbad is divided into 25 Local Facilities Management Zones . One goal of the Local Facilities Management Zones is to ensure the provision of public facilities and improvements corresponds to the pace of development in the applicable zone. The Local Facilities Management Plan ("LFMP") for Zone 15 outlines the specific improvements, such as sewer, water, drainage, and circulation improvements, necessary to support the allowable growth in the zone. In order to proceed with development, any currently undeveloped property within Zone 15 is required to complete College Boulevard between Cannon Road and El Camino Real. Per the LFMP, the financing requirement of College Boulevard for one development area of Zone 15 is as follows: Prior to the approval of the first final map within the Development Area 2 of Zone 15, the participating property owners' must develop and agree to the formation of a comprehensive financing program that guarantees the construction of full width improvements of College Boulevard between Cannon Road and El Camino Real. Said financing mechanism can include such programs as a Bridge and Thoroughfare District, Assessment District, or private reimbursement agreements. The ultimate financing program must receive City Council approval prior to the recordation of the first final map. In order to pursue some of the referenced financing mechanisms, like the Assessment District, the property owners' are required to follow Council Policy No. 33. City Council created Council Policy No. 33 (the "Policy") as a mechanism to determine whether or not forming a special financing district would serve the public interest. Per the Policy, property owners are required to follow specific steps to petition the formation of a special financing district with City Council. The initial steps of the special financing d1strict formation process are listed on the following page and generally described as follows: FOR CLERK USE. COUNCIL ACTION: DEPARTMENT CONTACT: Aaron Beanan 760-602-2414 AMon.Beanan@carlsbadca.gov APPROVED 0 DENIED 0 CONTINUED 0 WITHDRAWN 0 AMENDED 0 CONTINUED TO DATE SPECIFIC CONTINUED TO DATE UNI<NOWN RETURNED TO STAFF OTHER-SEE MINUTES REPORT RECEIVED o ____ _ 0 0 0 0 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided PAGE: 2 1. The applicant must prove they have the consent of the owners of not less than 65 percent, by area, ofthe property proposed to be subject to the levy ofthe assessments. 2. The applicant must submit a business plan for the development of the property within the proposed special financing district. 3. The applicant must provide a deposit to cover the pre-formation costs associated with attempting to form tile district. 4. City staff must form a special district review committee to determine whether or not the applicant's submittal conforms to Council Policy No. 33. 5. The city selected Assessment Engineer completes a preliminary Engineer's Report to indicate the proposed improvements, method of assessment allocation, and preliminary assessments. Most applicants represent one developer controlling all property within the proposed special financing district. This allows the applicant to easily satisfy the first requirement: have 65 percent of the property owners consent to the formation. If this requirement is not satisfied, applicants cannot move on in the approval process. The applicant in Zone 15, Bent West, LLC, is having challenges obtaining concurrence from 65 percent of the property owners. These challenges are due to several unique characteristics in Zone 15. This zone is characterized by fractured ownership and offsite ownership. The fact there are numerous ownership interests, versus the common situation of having only one owner, and the fact several large owners are out of state and hard to communicate with, make it a challenge for Bent West, L~C to obtain the requisite 65 percent, by area, approval from the Zone 15 property owners. Bent West, LLC believes having preliminary numbers to share with the other ownership interests would solidify the requisite 65 percent ownership approval. As such, staff is requesting that Bent West, LLC be allowed to temporarily bypass the Policy's initial approval steps and post a deposit with the city. The deposit would pay for a city selected Assessment Engineer and bond counsel to develop a preliminary Engineer's Report. The preliminary Engineer's Report would provide a preliminary list of proposed improvements, a provisional method of assessment allocation, and estimated assessments . Bent West, LLC would share this information with the other property owners in an effort to obtain concurrence from 65 percent of the property owners. The preliminary Engineer's Report created for Bent West, LLC is a working document and is based on the information Bent West, LLC has provided. It does not include information or input from any other potential interests in a Zone 15 assessment district. Bent West, LLC, is still required to obtain approval from not less than 65 percent, by area, of the property proposed to be subject to the levy of assessments. Completing a preliminary Engineer's Report does not remove this condition. If this approval threshold is not satisfied, the formation of a special financing district will not proceed. If this approval threshold is satisfied, the formation of a special financing district will proceed as outlined in the Policy. As indicated above, the preliminary Engineer's Report is based on data Bent West, LLC provided. If the other participating owners have additional information or input, the improvements and or method of assessment allocation and or preliminary assessments may change based on input from the other property owners ') Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided PAGE 3 FISCAL IMPACT: Per the Policy, the cost to form a special financing district lies solely with the applicant. The applicant is required to deposit sufficient funds with the city to cover all formation costs. If a special financing district is formed and bonds are issued, the Policy allows the formation costs to be reimbursed to the applicant from bond proceeds. If, for any reason, a special financing district is not formed and bonds are not issued, the city will refund any unexpended deposits to the applicant per the Policy. There is no fiscal impact to the city if Bent West, LLC is allowed to temporarily bypass the initial Policy approval steps. The attached reimbursement agreement memorializes the Policy formation cost rules and creates the mechanism for Bent West, LLC to deposit sufficient funds for the information they are requesting. Staff estimates $30,000 will initially cover the time of staff, an assessment engineer, and bond counsel to create a preliminary Engineer's Report. Staff requests City Council allow Bent West, LLC to temporarily bypass the initial Policy approval steps and approve the attached reimbursement agreement for special financing district formation deposits. Council approval only allows the completion of a draft preliminary Engineer's Report. It does not approve the formation of a special financing district, the Improvements included in the spectal fmancing district, the method of assessment allocation, the preliminary assessments, or the issuance of bonds. Staff will return to Council at a later date if Bent West, LLC receives the requisite owner approval after this initial step ENVIRONMENTAL IMPACT: An Environmental Impact Report (EIR 98-02 -SCH No. 99111082) was prepared for the Calavera Hills Master Plan Phase II, Bridge and Thoroughfare District No.4, & Detention Basins. The EIR analyzed the construction of the missing section of College Boulevard between Cannon Road and El Camino Real. Furthermore, approving a reimbursement agreement for speCial financing district formation deposits is exempt from the requirements of CEQA pursuant to Public Resources Code Section 21065. Thts action does not constitute a "project" within the meaning of CEOA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. EXHIBITS: 1 Resolution No. 2013-226 , approving a reimbursement agreement for special financing district formation deposits. 2. Area Map-Local Facilities Management Plane: Zone 15 3. Reimbursement Agreement for Special Financing District Formation Deposits. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 II 12 13 14 15 I6 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 2013-226 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A REIMBURSEMENT AGREEMENT FOR SPECIAL FINANCING DISTRICT FORMATION DEPOSITS Exh1bit 1 WHEREAS, the CITY COUNCIL of the CITY OF CARLSBAD, CALIFORNIA, (hereinafter referred to as the "legislative body"), has outlined the steps necessary for the financing of public improvements in Council Policy No. 33 (the "Policy"); and, WHEREAS, the Policy requires the applicant prove they have consent of the owners of not less than 65 percent, by area, of the property proposed to be subject to the levy of assessments before proceeding through the formation process of a special financing district; and, WHEREAS, Zone 15 is uniquely characterized by fractured ownership and offsite ownership which has made it challenging for Bent West, LLC to obtain the necessary ownership consent; and, WHEREAS, Bent West, LLC believes having a preliminary Engi neer's Report would help them obtain the necessary 65 percent ownership consent; and, WHEREAS, the Policy stipulates that all formation costs are the respon~ibility of the applicant; and, WHEREAS, the attached Reimbursement Agreement for Special Financing District Formation Deposits ("Agreement") creates the mechanism for Bent West, LLC to assume the responsibility for formation costs; and, WHEREAS, the city will incur no costs in the potential formation of a special financmg district in Zone 15; and, Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 I I 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Exhibit 1 WHEREAS, staff requests that Council allow Bent West, LLC to temporarily bypass the initial formation steps given the unique characteristics of Zone 15, the fact that Bent West, LLC is required to pay for all formation costs per the attached Agreement, and the fact that Council is not approving the formation of a special financing district, the improvements included in the special financing district, the method of assessment allocation, the preliminary assessments, or the issuance of bonds. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and co rrect. 2. That Bent West, LLC is allowed to tem porarily bypass the initial formation steps outlined in the Policy, specifically the requirement of the applicant to prove they have the consent of the owners of not less than 65 percent, by area, of the property proposed to be subject to the levy of the assessments, with the understanding that Bent West, LLC, or any future applicant, is still required to meet the requisite 65 percent approval threshold before proceeding with the rest of the formation process. 3. That the Agreement, Exhibit 3 attached hereto, is hereby approved. 4. That the City Manager, or his designee, is hereby authorized to sign the Agreement. 5. That the City Clerk is hereby authorized and directed to record the fully executed Agreement with the San Diego County Recorder's Office. II II c ) Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Exhibit 1 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the __ day of _______________ ___, 2013, by the following vote to wit: AYES: NOES: ABSENT: MATT HALL, Mayor ATTEST: BARBARA ENGLESON, City Clerk (SEAL) Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided ~ t ·,j Local Facilities Management Plan Zone 15 0 2500 5000 Feet Local Facilities Management Plan Zone 15 @ ' . ' . Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 3 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided REIMBURSEMENT AGREEMENT FOR SPECIAL FINANCING DISTRICT FORMATION DEPOSITS BENT WEST, LLC This Reimbursement Agreement dated as of , 2013 ("Agreemenf') is by and between the City of Carlsbad, a municipal corporation ("City"), for itself and on behalf of the proposed City of Carlsbad, California, Assessment District for Local Facilities Management Plan Zone 15 ("AD") and Bent-West, LLC, a California Limited Liability Company ("Developer"), collectively ("the Parties"), with reference to the following recitals: RECITALS WHEREAS, the Developer has requested that the City consider the formation of the AD and the issuance of bonds for the AD ("Bonds") under the Municipal Improvement Act of 1913 and the Improvement Bond Act of 1915 (collectively, the "Act"); and WHEREAS, the Developer is willing to deposit funds with the City to ensure payment of the costs of the City in forming the AD and otherwise in connection with the issuance of Bonds for the AD and the proposed expenditure of the proceeds thereof, provided that such funds so advanced are reimbursed to the Developer from the proceeds of any Bonds issued by the City for the AD to the extent provided herein; and NOW, THEREFORE, the City and Developer agree as follows: Recitals. The Recitals are true and correct and incorporated herein by this reference. 2. Deposits. The Developer hereby agree to advance amounts necessary (''Deposit" and collectively "Deposits") to be used by the City to pay the costs in conducting proceedings for the formation of the AD and the issuance of Bonds for the AD (as more fully described in Section 3 below, the "Initial Costs"). The Deposit(s) shall be kept in a separate fund and the City shall maintain records as to the expenditure of the Deposit(s). (a) The Developer hereby agrees to advance amounts within ten (10) business days upon written demand by the Finance Director of the City. The City Manager, in his/her sole discretion, may direct City staff and consultants to cease all work related to the format1on of the AD and the issuance of Bonds until all monies, so demanded, have been received by the City. If the City Manager, in his/her sole discretion, directs City staff and consultants to cease all worl< related to the formation of the AD and the issuance of Bonds, the Finance Director of the City shall, within ten (1 0) business days after receipt of such direction, return the then unexpended Deposits to the Developer, without interest, Jess an amount equal to any costs incurred by the City or that the City is otherwise committed to pay, which costs would be subject to payment under Section 3(a) below but have not yet been so paid, and terminate the proceedings. 3. Use of Funds. The Deposits shall be administered as follows: (a) The Finance Director of the City may draw upon the Deposits from time to time to pay the Initial Costs, including but not limited to: (i) the fees and expenses of any consultants to the City employed in connection with the formation of the AD, the issuance of the Bonds, and the proposed expenditure of the Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided proceeds thereof (such as assessment engineering, legal counsel, including the City Attorney, Bond Counsel, and financial advisory fees); (ii) the costs of market absorption, appraisal and feasibility studies and other reports necessary or deemed advisable by City staff or consultants in connection with the AD or Bonds; (iii) the costs of publication of notices, preparation and mailing of ballots and other costs related to any election with respect to the AD, the assessments to be levied therein, and any bonded Indebtedness thereof; (iv) a reasonable charge for City staff time, as determined by the Finance Director in their sole discretion, in analyzing the AD, the Bonds, and the expenditure of the proceeds thereof, including a reasonable allocation of City overhead expense related thereto; and (v) any and all other actual costs and expenses incurred by the City with respect to the AD or the Bonds after the date of execution of this Agreement. (b) If the Bonds are issued under the Act by the City secured by assessments levied upon the land within the AD, the City shall provide for reimbursement to the Developer, without interest, of all amounts charged against the Deposits, said reimbursement to be made solely from the proceeds of the Bonds and only to the extent otherwise permitted under the Act On or within ten (10) business days after the date of issuance and delivery of the Bonds, the Finance Director of the City shall return the then unexpended Deposits to the Developer, without interest, less an amount equal to any costs incurred by the City of that the City is otherwise committed to pay, which costs would be subject to payment under Section 3(a) above, but have not yet been so paid (c) If the Bonds are not issued, or the City decides to terminate proceedings under the Act with respect to the formation of the AD and the issuance of the Bonds, the Finance Director of the City shall, within ten (1 0) business days after receipt of a request by the Developer, return the then unexpended Deposits to the Developer, without interest, less an amount equal to any costs incurred by the City or that the City is otherwise committed to pay, which costs would be subject to payment under Section 3(a) above but have not yet been so paid. 4. Agreement Not Debt or Liability of City. It is hereby acknowledged and agreed that this Agreement is not a debt or liability of the City. The City shall not in any event be liable hereunder other than to return the unexpended and uncommitted portions of the Deposits as provided in Section 3 above and provide an accounting under Section 6 below. The City shall not be obligated to advance any of its own funds with respect to the AD or for any of the other purposes listed in Section 3(a) hereof. No member of the City Council, or officer, employee or agent of the City shall to any extent be personally liable hereunder. 5. No Obligation to Issue Bonds. Tne provision of this Agreement shall in no way obligate the City to form the AD, to issue Bonds, or to expend any of its own funds in connection with the AD 6. Accounting. The City Finance Director shall provide the Developer with a written accounting of moneys expended under this Agreement, within ten (1 0) business days of receipt by the Finance Director of the City of a written request therefore submitted by an authorized officer of the Developer No more than one accounting will be provided in any calendar month and the cost of providing the accounting shall be charged to the Deposits. 7. Notices. Unless otherwise specifically provided herein, all notices, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly delivered upon personal delivery, or served by certified mail postage prepaid. Delivery of notice to Developer shall be presumed to have been made on the date of mailing regardless of receipt by Developer. Notices shall be address as follows· Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Notices to the City shall be delivered to: City of Carlsbad Attn: Finance Director 1635 Faraday Avenue Carlsbad, CA 92008-7314 Notices to Developer shall be delivered to Bent-West, LLC Attn: Steve Powell, Project Manager 5796 Armada Drive, Suite 300 Carlsbad, CA 92008 Phone: 520-331-1720 Email: Powell@theriver.com 8. Successor and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. The Parties agree and acknowledge that the Developer may, in its sole discretion, assign its rights and obligations under this Agreement to a third-party (a "Successor Developer"). In the event of such assignment, all previously advanced Deposits shall be deemed to have been made by such Successor Developer and any unexpended Deposits shall, to the extent provided for in the Agreement, be returned to such Successor Developer. In the event of such assignment and within 14 calendar days of such assignment, Developer shall notify City, in writin~:;, of such assignment and provide City with Successor Developer's complete contact information. 9. Counterparts. This Agreement may be execute in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute one and the same instrument. 10. Governing Law and Venue. This Agreement shall be interpreted and enforced under the laws of the State of California and venue shall be in San Diego County, California. 11. Council Policy No. 33. The process to form the AD and issue Bonds shall comply with Council Policy No. 33: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts. 12 Complete Agreement This Agreement contains the entire agreement between the part1es with respect to the subject matter contained herein, and supersedes all negotiations, discussions, and prior drafts with respect to this subject matter. 13. Amendment. This Agreement may be amended only by a written instrument executed by the City and Developer 14. Severability. The invalidity or unenforceability of any provision of this Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity or enforceability of any other provision hereof REMAINDER OF PAGE INTENTJONALL Y LEFT BLANK Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. DEVELOPER By: By: (sign here) Dennis O'Brien, Member/Manager (print name/title) dobrien@westpartners.com (Email address) (sign here) (print name/title) CITY OF CARLSBAD, a municipal corporation of the State of California By: City Manager or Mayor or Director ATTEST: BARBARA ENGLESON City Clerk If required by City, proper notarial acknowledgment of execution by Developer must be attached. If a corporation, Agreement must be signed by one corporate officer from each of the following two groups: Group A. Chairman, President, or Vice-President Group B. Secretary, Assistant Secretary, CFO or Assistant Treasurer Otherwise, the corporation !!!!!!! attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. APPROVED AS TO FORM: CELIA A. BREWER, City Attorney Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided ACKNOWLEDGMENT State of California r...... • County of ::On ~0 On ~L>t Co-th , 2DI? before me, ~B \~o~ht, ~ fli:fiG (insert name anG . .t' le of the off1cer) I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS rny hand and official seal. Signature ~ ~C1J--Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD-AGENDA BILL 15 APPROVE REIMBURSEMENr AGREEMENT AB# 21 658 DEPT. OIREcrOR MTG. 06/24/14 FOR SPECIAL FINANCING DISTRICT CITYATIY. ~ DEPT. FIN FORMATION DEPOSITS-COMMUNITY CITY MGR. FACILITIES DISTRICT RECOMMENDED ACTION: Adopt Resolution No. 2014-159 approving a Reimbursement Agreement for Special Financing District Formation Deposits-Community Facilities District. ITEM EXPLANATION: On September 10, 2013, via Agenda Bill 21,360, Council approved a reimbursement agreement between the City of Carlsbad and Bent-West, LLC for assessment district formation deposits and allowed Bent-West, LLC to temporarily bypass the initial Policy No. 33 {the "Policy") approval steps. On April 15, 2014, via Agenda Bill 21,567, Council made a finding under the Policy to waive the provision of the pass-through requirement for community facilities districts based on t he benefit of proceeding with the College Boulevard improvements in a district with diverse ownership. Staff is now pursuing the formation of a community facilities district as the financing mechanism for College Boulevard, Reach A in local Facilities Management Plan Zone 15. As such, a new reimbursement agreement between the City of Carlsbad and Bent-West, LLC accepting formation deposits for community facilities district is required. Approving the reimbursement agreement will not affect Council's previous decision which allowed Bent-West, LLC to temporarily bypass the initial Policy approval steps. FISCAL IMPACT: Per the Policy, the cost to form a special financing district lies solely with the applicant. The applicant is required to deposit sufficient funds with the city to cover all formation costs. If a special financing district is formed and bonds are issued, the Policy allows the formation costs to be reimbursed to the applicant from bond proceeds. If, for any reason, a special financing district is not formed and bonds are not issued, the city will refund any unexpended deposits to the applicant per the Policy. There is no fiscal impact to the city by approving the attached reimbursement agreement with Bent- West, LLC. The attached reimbursement agreement memorializes the Policy formation cost rules and creates the mechanism for Bent-West, LLC to deposit sufficient funds for the community facilities district information they are requesting. DEPARTMENT CONTACT: Aaron Beanan 760-602-2414 ~aron.Beanan@carlsbadca .gov FOR CLERK USE. COUNCIL ACTION: APPROVED 0 CONTINUED TO DATE SPECIFIC D DENIED D CONTINUED TO DATE UNKNOWN D CONTINUED 0 RETURNED TO STAFF D WITHDRAWN 0 OTHER-SEE MINUTES 0 AMENDED 0 REPORT RECEIVED D Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided PAGE 2 ENVIRONMENTAL IMPACT: An Environmental Impact Report (ElR 98-02 -SCH No. 99111082) was prepared for the Calavera Hills Master Plan Phase II, Bridge and Thoroughfare District No.4, & Detention Basins. The ElR analyzed the construction of the missing section of College Boulevard between Cannon Road and El Camino Real. Furthermore, approving a reimbursement agreement for special financing district formation deposits is exempt from the requirements of CEQA pursuant to Public Resources Code Section 21065. This action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. EXHIBITS: 1. Resolution No. 2014-159 approving a Reimbursement Agreement for Special Financing District Formation Deposits-Community Facilities District. 2. Area Map-Local Facilities Management Plane: Zone 15 3. Reimbursement Agreement for Special Financing District Formation Deposits-Community Facilities District. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 2014-159 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A REIMBURSEMENT AGREEMENT FOR SPECIAL FINANCING DISTRICT FORMATION DEPOSITS COMMUNITY FACILITIES DISTRICT Exhibit 1 WHEREAS, the CITY COUNCIL of the CITY OF CARLSBAD, CALIFORNIA, (hereinafter referred to as the "legislative body"), has outlined the steps necessary for the financing of public improvements in Council Policy No. 33 (the "Policy"); and, WHEREAS, the Policy stipulates that all formation costs are the responsibility of the applicant; and, WHEREAS, the attached Reimbursement Agreement for Special Financing District Formation Deposits-Community Facilities District ("Agreement") creates the mechanism for Bent-West, LLC to assume the responsibility for formation costs; and, WHEREAS, the city will incur no costs in the potential formation of a special financing district in Zone 15; and, NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the Agreement, Exhibit 3 attached hereto, is hereby approved. 3. That the City Manager, or his designee, is hereby authorized to sign the Agreement. 4. That the City Clerk is hereby authorized and directed to record the fully executed Agreement with the San Diego County Recorder's Office. II Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Exhibit 1 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the __ day of _______________ -' 2014, by the following vote to wit: AYES: NOES: ABSENT: MATT HALL, Mayor ATTEST: BARBARA ENGLESON, City Clerk (SEAL) L-\ Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided ' I ,, '• t ,; ,• ~-··, I. -~-. ;. -' '•. I . : '. I. ·~-. Exhibit 2 Local Facilities Management Plan Zone 15 ··-··-··--·-. ·~ - 1·.: -.· ·' (-' ·'7 -OY ., !r ~it.ff , 1.2 1'1, '!I ·o: tl . -\ i i i i ., ! ! i Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 3 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided REIMBURSEMENT AGREEMENT FOR SPECIAL FINANCING DISTRICT FORMATION DEPOSITS-COMMUNITY FACILITIES DISTRICT BENT WEST, LLC This Reimbursement Agreement dated as of , 2014 ("Agreement") is effective as of April 15, 2014, supplants the Reimbursement Agreement for Special Financing District Fonnation Deposits Dated September 13, 2013, and Is by and between the City of Carlsbad, a municipal corporation ("City"), for itself and on behalf of the proposed City of Carlsbad, California, Community Facilities District for Local Facilities Management Plan Zone 15 ("CFD•) and Bent-West, LLC, a California Limited Liability Company ("Developer''), collectively ("the Parties"), with reference to the following recitals: RECITALS WHEREAS, the Developer previously requested the City consider the formation of an Assessment District and the issuance of bonds for the Assessment District; and WHEREAS; the Developer deposited funds with the City to ensure payment of the costs of the City in forming the Assessment District; and WHEREAS, the City and Developer entered into a Reimbursement Agreement for Special Financing District Formation Deposits approved by Council on September 10, 2013 through Agenda Bill 21,360 and Resolution No. 2013-226 for the payment of the costs of the City in forming the Assessment District; and WHEREAS, the Developer has now requested that the City consider the formation of the CFD and the issuance of bonds for the CFD ("Bonds") under the Mello-Roos Community Facilities Act of 1982 (the "Act"); and WHEREAS, the Developer is willing to deposit funds with the City to ensure payment of the costs of the City in forming the CFD and otherwise in connection with the issuance of Bonds for the CFD and the proposed expenditure of the proceeds thereof, provided that such funds so advanced are reimbursed to the Developer from the proceeds of any Bonds issued by the City for the CFD to the extent provided herein; and NOW, THEREFORE, the City and Developer agree as follows: 1. Recitals. The Recitals are true and correct and incorporated herein by this reference. 2. Deposits. The Developer hereby agree to advance amounts necessary ( "Deposit" and collectively "Deposits") to be used by the City to pay the costs in conducting proceedings for the formation of the CFD and the issuance of Bonds for the CFD (as more fully described in Section 3 below, the "Initial Costs»). The Deposit(s) shall be kept in a separate fund and the City shall maintain records as to the expenditure of the Deposit(s). (a) The Developer hereby agrees to advance amounts within ten (10) business days upon written demand by the Finance Director of the City. The City Manager, in his/her sole discretion, may direct City staff and consultants to cease all work related to the formation of the CFD and the issuance of Bonds until all monies, so demanded, have been received by the City. If the City Manager, in his/her sole discretion, directs City staff and consultants to cease all work related to the formation of the CFD and the issuance of Bonds, the Finance Director of the City shall, within ten ( 1 0) business days after receipt Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided of such direction, return the then unexpended Deposits to the Developer, without interest, less an amount equal to any costs incurred by the City or that the City is otherwise committed to pay, which costs would be subject to payment under Section 3(a) below but have not yet been so paid, and terminate the proceedings. 3. Use of Funds. The Deposits shali be administered as follows: (a) The Finance Director of the City may draw upon the Deposits from time to time to pay the Initial Costs, including but not limited to: (i) the fees and expenses of any consultants to the City employed in connection with the formation of the CFD. the issuance of the Bonds, and the proposed expenditure of the proceeds thereof (such as assessment engineering, legal counsel, including the City Attorney, Bond Counsel, and financial advisory fees); (ii) the costs of market absorption, appraisal and feasibility studies and other reports necessary or deemed advisable by City staff or consultants in connection with the CFD or Bonds; (iii) the costs of publication of notices, preparation and mailing of ballots and other costs related to any election with respect to the CFD, the special taxes to be levied therein, and any bonded indebtedness thereof; (iv) a reasonable charge for City staff time, as determined by the Finance Director in their sole discretion, In analyzing the CFD, the Bonds, and the expenditure of the proceeds thereof, including a reasonable allocation of City overhead expense related thereto; and (v) any and all other actual costs and expenses incurred by the City with respect to the CFD or the Bonds after the date of execution of this Agreement. (b) If the Bonds are issued under the Act by the City secured by special taxes levied upon the land within the CFD, the City shall provide for reimbursement to the Developer, without interest, of all amounts charged against the Deposits, said reimbursement to be made solely from the proceeds of the Bonds and only to the extent otherwise permitted under the Act. On or within ten ( 1 0) business days after the date of issuance and delivery of the Bonds, the Finance Director of the City shall return the then unexpended Deposits to the Developer, without interest, less an amount equal to any costs incurred by the City of that the City is otherwise committed to pay, which costs would be subject to payment under Section 3(a) above, but have not yet been so paid. (c) If the Bonds are not issued, or the City decides to terminate proceedings under the Act with respect to the formation of the CFD and the issuance of the Bonds, the Finance Director of the City shall, within ten (10) business days after receipt of a request by the Developer, return the then unexpended Deposits to the Developer, without interest, less an amount equal to any costs incurred by the City or that the City is otherwise committed to pay, which costs would be subject to payment under Section 3(a) above but have not yet been so paid. 4. Agreement Not Debt or Liability of Citv. It is hereby acknowledged and agreed that this Agreement is not a debt or liability of the City. The City shall not in any event be liable hereunder other than to return the unexpended and uncommitted portions of the Deposits as provided in Section 3 above and provide an accounting under Section 6 below. The City shall not be obligated to advance any of its own funds with respect to the CFD or for any of the other purposes listed in Section 3(a) hereof. No member of the City Council, or officer, employee or agent of the City shall to any extent be personally liable hereunder. 5. No Obligation to Issue Bonds. The provision of this Agreement shall in no way obligate the City to form the CFD, to issue Bonds, or to expend any of its own funds in connection with the CFD. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 6. Accounting. The City Finance Director shall provide the Developer with a written accounting of moneys expended under this Agreement, within ten (10) business days of receipt by the Finance Director of the City of a written request therefore submitted by an authorized officer of the Developer. No more than one accounting will be provided in any calendar month and the cost of providing the accounting shall be charged to the Deposits. 7. Notices. Unless otherwise specifically provided herein, all notices, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly delivered upon personal delivery, or served by certified mail postage prepaid. Delivery of notice to Developer shall be presumed to have been made on the date of mailing regardless of receipt by Developer. Notices shall be address as follows: Notices to the City shall be delivered to: City of Carlsbad Attn: Finance Director 1635 Faraday Avenue Carlsbad, CA 92008-7314 Notices to Developer shall be delivered to: Bent-West, LLC Attn: Steve Powell, Project Manager 5796 Armada Drive, Suite 300 Carlsbad, CA 92008 Phone: 520-331-1720 Email: Powell@theriver.com 8. Successor and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. The Parties agree and acknowledge that the Developer may, In its sole discretion, assign its rights and obligations under this Agreement to a third-party (a "Successor Developer"). In the event of such assignment, all previously advanced Deposits shall be deemed to have been made by such Successor Developer and any unexpended Deposits shall, to the extent provided for in the Agreement, be returned to such Successor Developer. In the event of such assignment and within 14 calendar days of such assignment, Developer shall notify City, in writing, of such assignment and provide City with Successor Developer's complete contact information. 9. Counterparts. This Agreement may be execute in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute one and the same instrument. 10. Governing Law and Venue. This Agreement shall be interpreted and enforced under the laws of the State of California and venue shall be in San Diego County, California. 11. Council Policy No. 33. The process to form the CFD and issue Bonds shall comply with Council Policy No. 33: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts. 12. Complete Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter contained herein, and supersedes all negotiations, discussions, and prior drafts with respect to this subject matter. 13. Amendment. This Agreement may be amended only by a written instrument executed by the City and Developer. q Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 14. Severability. The invalidity or unenforceability of any provision of this Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity or enforceability of any other provision hereof. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK I f) Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. DEVELOPER By: By: (print name/title) dobrien@westpartners.com (Email address) (sign here) (print name/title) CITY OF CARLSBAD, a municipal corporation of the State of California By: City Manager or Mayor or Director ATTEST: BARBARA ENGLESON City Clerk If required by City, proper notarial acknowledgment of execution by Developer must be attached. If a corporation, Agreement must be signed by one corporate officer from each of the following two groups: Group A. Chairman, President, or Vice-President Group B. Secretary, Assistant Secretary, CFO or Assistant Treasurer Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. APPROVED AS TO FORM: I I Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL COD& § 1189 '· ::~~ On lsJ/(J{~oqate beforeme, g f\..P-£N L-fRt-E"Tf1.':-' personally appeared Place Notary Seal Above \) Here Insert Name and nue of the Oftlcer 0] y Z.NN \'I D 1 13fL\ Z..N -----· Naroo(s) of Signer(s) ·------- who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/aFa subscribed to the within Instrument and acknowledged to me that he/s.Aelthe;' executed the same in his!AefAfleir authorized capacity(ies), and that by his/~ir signature(s) on the instrument the person(s), or the entity upon behalf of which tt1e person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: cK WiU\ cA fli !ldh-s~gnalure of Not~ --------------------OPTIONAL-------------------------- Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: R.tLMBUR-.<7_~ M Z.NJ: \ibR.EEWtz.NT -fi2B--7_Ef1!.l9l D D t -f\l'\~10(!.lN.C.. "})!"ST. :tt,~HTIDI\J f5~ft:>Sn-:N7 b f P /I ocument a e: _ um er o ages: _ -,_ ___ _ Signer(s) Other Than Named Above:------------------- Capacity(ies) Claimed by Slgner(s) Signer's Name: 0 Corporate Officer -Title(s): -~----~ 0 Individual 0 Partner -0 Limited n General U Attorney in Fact 0 Trustee rl Guardian or Conservator 0 Other:_ Signer Is Representing:_ Signer's Name: __ _ 0 Corporate Officer -Title(s): n Individual 0 Partner -[J Limited l'l General 0 Attorney in Fact 0 Trustee D Guardian or Conservator 0 Other:--------------- Signer Is Representing: -~--------- -~ .;.;.~~~~~~~~~~~~~~~""'~~ © 2012 National Notary A~;sociation • Nationa/Notary.org • 1 BOO-US NOTARY (1 -800-876-6827) Item 115907 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided MINUTES MEETING OF: CITY OF CARLSBAD CITY COUNCIL (Regular Meeting) DATE OF MEETING: AprillS, 2014 TIME OF MEETING: 9:00 a.m. PLACE OF MEETING: Room 173A, 1635 Faraday Avenue, carlsbad, CA 92008 CALL TO ORDER: 9:00a.m. ROLL CALL: Hall, Packard, Wood, Schumacher, Blackburn DEPARTMENTAL AND CITY MANAGER REPORTS: 1. AB #21,566 -Discussion on the additional scope options for capital improvement projects scheduled for the Georgina Cole library (Cole library) and the Carlsbad City library on Dove Lane (Dove Library). Heather Pizzuto Library and Cultural Arts Director, and Steve Didier, Management Analyst presented the report and PowerPoint Presentation (available in the office of the City Clerk}. The overview provided scope of work, and conceptual ideas. Council Member Blackburn asked for clarification on why the stucco needs replacing and if it is cost effective to do so, or would an option of repainting provide the aesthetic appeal that new stucco may provide at a fraction of the cost. The option to replace the stucco or resurface are not options due to the fact that the latter adds weight to the building which is an engineering issue. Council Member Schumacher inquired as to the potential for additional revenue generated if the Schulman Auditorium was upgraded as shown in the presentation. The changes would consist of an additional 12" added to the height of the stage and a green room for staging performers. Mayor Pro Tern Packard asked how long it would take to put a new roof on the Dove Library, as it would shut down the library to patrons. Interim Public Works Director Jim Howell responded to the question regarding the roof and stated it would depend on the extent of the remodel option chosen. If it is the option that includes the roof, removal of stairs and relocating the Friends of the Library store inside the Dove Library it could take a minimum of 8 weeks. Ms. Pizzuto mentioned that in the event of library closures, the Library Learning Center would be available to provide most services. April IS, 2014 Page I Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Speaker in Support: Michael Williams, Treasurer of Carlsbad Arts Foundation Council would like staff to repair the Cole library. If the library is due for replacement in 10 years, Council recommends fire suppression system, duct work, parking lot, sealants, and minimal repairs to maintain the functionality of the facility, but not to invest in a remodel. Regarding the Dove library Council asked staff to provide a revised scope of work at a future meeting regarding the cost analysis, service revenue generation, rate of return on a coffee shop investment and auditorium. They recommended painting the library and delaying the replacement of stucco for now. ACTION: Motion by Mayor Hall, seconded by Mayor Pro Tern Packard, direction to staff to move forward with specific repairs to the Cole library and return to Council at a future meeting with a revised scope of work and assessments regarding the Dove library, motion carried unanimously. RECESS: Mayor Hall recessed the meeting at 10:13 a.m., meeting reconvened at 10:18 a.m. with all Council Members present. 2. AB #21,567-Seeking Council guidance on Policy 33, Financing of Public Improvements. Chuck McBride, Administrative Services Director, and Brian Forbath, Bond Counsel with Stradling, Yocca, Carlson and Rauth presented the report via PowerPoint (available in the office of the City Clerk). Mr. McBride gave an overview of Policy 38 which merged with Policy 33 in 2002, which provides process and procedure guidelines regarding bonds and the formation of Community Facilities Districts (CFD)'s and Assessment Districts, used to finance public improvements, Council may waive the policy if Council finds it to be of public benefit. Staff presented a request for a waiver of the Policy 33 provisions related to the pass through of a CFD lien for a residential project. Speakers in Support: Steve Powell, Project Manager with Bent West, John Yeager, Bent West, Michael Williams ACTION: Motion by Mayor ProTem Packard (as paraphrased by City Attorney Brewer) to make a finding under Policy 33 to waive the provision of the pass-through requirement for CFDs based on the benefit of proceeding with the College Boulevard improvements in a district with diverse ownership, seconded by Council Member Blackburn, motion carried 3-2 with Mayor Hall and Council Member Schumacher voting No. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided 3. AB #21,568-Receive and file an update from staff regarding the status of City of Carlsbad's Employee learning and Development Plan update. ACTION: Motion by Mayor Pro Tern Packard, seconded by Council Member Blackburn, to continue the item to a future meeting date. Motion carried unanimously. COUNCIL REPORTS AND COMMENTS: Mayor Hall and Council Members reported on activities and meetings of some committees and sub-committees of which they are members. CITY MANAGER COMMENTS: None. CITY ATTORNEY COMMENTS: None. ADJOURNMENT: By proper motion, the Regular Meeting of AprillS, 2014 was adjourned at 11:45 a.m. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 6 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided From: Sent: To: Cc: Subject: C1ty of Carlsbad Senior Accountant Administrative Services Finance City of Carlsbad 1635 Faraday Ave. Carlsbad, CA 92008 Dear Mr. Beanan, Warren Kato [wkkato@gmail.com] Sunday, August 31, 2014 2:45PM Aaron Beanan Steve Powell Zone 15 Improvements I represent the Kato Family Trust and the Kato Family Limited Partnership who has an interest in the Sunny Creek area of the City of Carlsbad. It has come to my attention that the City of Carlsbad, the West Group, and Foursquare Properties (Rusty Grosse) have been engaged in planning a Community Financing District (CFD) in the Sunny Creek area We have not had the benefit of any of the submissions to the City, the engineering studies, and meetings w1th the C1ty We have not been approached as to our input or consulted as to our intentions Allegedly the apportionment of the cost distributions are going to be allocated by the number of lots on each property However, because our property has not been mapped, it will be unfair to allocate costs based on a speculative number ot lots. We object to the planned CFD on the above grounds and reserve the right to make further ObJeCtions once we are provided w1th the submissions, studies, and summaries of meetings. Warren Kato (714) 504-6081 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided From: Ali Shashani [mailto:ali.shashani@qmail.com] Sent: Tuesday, September 02, 2014 10:58 AM To: 'powell@theriver.com' Cc: 'chuck.mcbride@carlsbadca .gov'; 'Aaron Beanan'; 'attorney@carlsbadca.gov'; 'dobrien@westpartners. com' Subject: Proposed Bent-West College Blvd. CFD Mr. Stephen Powell Project Manager Bent-West 5796 Armada Drive Suite 300 Carlsbad, CA 92008 Mr. Stephen Powell, In the last week of July 2014 in a telephone conversation with Mr. Rusty Gross I became aware that Bent-West has been working on a CFD for College Boulevard. Upon my enquiries about this matter Mr. Gross arranged a meeting with you in your office on July 30, 2014 for explanation of Bent-West's proposed CFD plans. In that meeting you presented a map prepared by Bent-West's engineers Hunsaker & Associates on Bent-West's behalf titled "Zone 15 Participating Properties" in Bent-West's proposed CFD. I expressed my great astonishment of how Bent-West had been working on this CFD for almost two years and had kept us completely in the dark about a process that is supposed to be a public process, especially when you knowingly and falsely without our knowledge and agreement had misrepresented Mandana and Kato properties as "Zone 15 Participating Properties" in Proposed Bent-West College Blvd. CFD. As you well know our properties have no approved tentative maps and therefore it is impossible to speculate on the number of eventual dwelling units on these properties. Mandana's property which is approximately 27% of Bent-West's proposed CFD will not participate in Bent-West's proposed CFD and as you know Kato's property, which is approximately 14% of Bent-West's proposed CFD has also objected to Bent-West's proposed CFD. Without Mandana's and Kato's participation in Bent-West's proposed CFD Bent-West does not have the legally required 2/3 of land owner's by area participation necessary to form this CFD. Ali Shashani Mandana Co. PO Box 10249 Newport Beach, CA 92658 Phone: 949.400.4404 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 7 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Zo1111e 15 llllffirasttndure Fina:ncimlg and Reimbursement Program u. The Cadslboo City CoUJ.ll.'l.CiH approved fue locaR FaciRittie:s Mamgement Pioam Ameooment Zone l.5)((EH~he "Zone li5 lLFMIF'~) otru Jrulluary W, 20tz puo:wmuo City Cou:rn.ci[ Rewhniie:m No 2«H i-1~5. 2. The Zone R 5 LFMP spe:cilfies varioll.lis !Orulljor mfrnstrucrure improvemems n:-quired ro serve aU n1.e<» devdopmermtt W.lfifuiru Zone l :5. 1rmcluding the oonsuuction of College Boulevard from Camrmolll\ Road ~o the exi.sting northeriy !:ermmus near E! Camioo Real and related iofras.tructme nmpmvements. at.<> further descrilbed in Exhibit ··A" attached hereto ithe ""CoUege Boulevard ImpmvemenL<;."). J. The City approved Carlsbad Tract No. 00-R& for the Bent-West property purs:uan.t to Plrum.ing Commission Resolution No. 5153 and imposed various: Conditions of Approval unchJiJdlmg Conditions: Nos. 50 through 56 requiring the financing and conslr"Uction of the College Bmdevam lmproveme[lt:s; (the "Conditions of Appmval"). 4. Bent-West is proposing m advance WO% of the costs of the College Bouievani fmpmvemenlts ( currendy est!maled to be $14,39 5 ,5&0), subject m reimbursement from other benefitted properties within Zone i 5 oftheir fair share of the costs of the College Boukvard tmpmvements. 5. The Zone 15 LFMP states that "no single financing mechanism could satisfY the complex ~nfrastructure requirement<> of this Zone." (Zone !5 LFMP. pp. 148-149) Consequently. Bem-West is proposing two financing mechanisms for the reimbursement of the costs of the College Boulevard Improvements from benefitted properties within Zone 15 --a Community Facilities District established pursuant to the Mello-Roos Community Facilities Act of 1982, a<; amended (Government Code Section 533ll, et. seq.) (the "'Zone 15 CFD") and a reimbursement agreement between Bent-West and the City pursuant to which the City would collect a reimbursement from all benefitted properties within Zone I 5 (the ·'Reimbursement Agreement"). 6. The cost of the College Boulevard !mprovements would be spread among the benefitted prope1ties pursuant to a fair share cost methodology approved by the City and collected from such properties pursuant to the Zone 15 CFD and the Reimbursement Agreement. An initial draft of the cost allocation prepared by the City's consultant, NBS, is attached hereto as Exhibit "B'·. (f\ portion of the costofsome of the drainage and waterline improvements are not included in the cost allocation but, in accordance with the Conditions of Approval, may be subject to separate reimbursement agreements providing for reimbursement from existing fee programs.) 7. The Zone t 5 CFD would be established pursuant to City Council Resolution. No. 2002-369 ("'Policy 33") and the MeHo-Roos AcL [t would include rhe following elements: • The Zone l5 CFD boundaries would indude five properties that are cuiTentiy entitled -i.e., Dos Colinas, MDRJEncinas Creek Apartments, Holly Springs. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Cantariru Ranch and Rancho Miiagm. Each soch !PifOJ!CITY would he design.ared a<:. i[s owrn '"Tax Zo~rne.,. wiithln ili.e Zone 15 CFD • The :speda~ traXe:S authorized ~or each Tax Zone would be based on (I) me Tax Zone ':s fair share of the el.1imated coslt:s of those CoUege Boulevard [mprovemeois (excluding habiltar mirigation for College Boulevard) that are deemed eligible for fmanciing tl:nrough a CFD wiah tax -exempt bonds and (2) the existing entitlements or d!eveiopment assumptions for the Tax Zone included in the Zone 15 LFMP -i.e., unit counts or gross leasab!e area ("GLA"). • Pmsrnmtm the City Cmnncil's action of Aprii 15,1014, the special ta.xes wowd not be required i.o be prepaid prior lto the sale of individual residential lot<; to homeowners. • Special taxes will not be levied upon propen:y \.vithin aT ax Zone prior to the: earlier of ( l) approval oftl:te first final subdivision map wi.thln the Tax Zone, (2) issuance of the first grading permit within the Tax Zone (excluding grading done for agricultural purposes). or (3) the commencement of construction within the Tax Zone (excluding the construction of stmctures designed to support agricultural operations). • The amount of bonds issued to fund the Zone 15 CFD Tax Zones' fair share of the College Boulevard Improvements shaH be based upon the actual costs of the College Boulevard Improvements. 8. The Reimbursement. Agreement would be erttered into by the City pursuant to its police powers under Article XI, Sec.tion 7 of the California Constitution., Government. Code Section 66486, Sections 20.16.041 and 20.16.042 of the Carlsbad Municipal Code, the Zone i 5 LFMP and the Conditions of ApprovaL The Reimbursement Agreement is intended to be of the type described in Section VI.E of the Zone 15 LFMP (see p. l50) and could be similar to the form of reimbursement agreement approved by the City in Zone 14 pursuant to City Council Resolution No. 2004-293. The Reimbursement Agreement will include the following elements: • The benefit areas of the Reimbursement Agreement (each, a '·Benefit Area·') shall correspond to each of the Tax Zones as wetl as the propetiies in Zone 15 bur outside the Zone 15 CFD as depicted in Exhibit ''C" attached hereto (all, .. Benefit Areas''). • The Benefit Areas corresponding to each Tax Zone within the Zone I 5 CFD shall only be subject to reimbursement payments for their fair share of the habitat mitigation costs of the College Boulevard Improvements. • The Benefit Areas corresponding to each of the properties outside of the Zone 15 CFD shall be subject to reimbursement payments for their fair share of all ofilie costs of the CoUege Boulevard Improvements. 2 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided • llnitiaHy, the est.<ililished reimbursement paym.ents shaH be based upon p) the esrirnwed roslt:S oJ' the College Boulevard improvements and (2) the actual entitlements or ilie devdopment assumptions for each Benefit Area in the Zone 15 LFMP. The actual' reoolbursement payments shaH 1lhen be adjusted to reflect (l) the acrual costs of !the College Boulevard Improvements and (2) the actual development entitlements (i.e., ooirs or GLA) for the Benefit Areas: at the time the: reimbursement payment is required. 11re reimbursement paymem for a Benefit Area shaH be made upon the eadi.er of 0) approval of the first final subdivisimn map within ilie Benefit Are;L (1:) issuance of the fi11>i grading penrnlt wilthin the Ber~efit Area (excluding grading done for agti.cultural purposes), or (3) the commencement of construction within the Benefit Area (excluding the construction of stmctures designed to support agricultural operations). • The reimbursement payment for each Benefit Area shall be subject to an annual inflationary adjustment based upon a cmnstruciion cost index until it is paid with respec~ !:o the Benefit Area • The City's obligation £o coHecr the reimbursement payment shall terminate on the date tlmt is 15 years foHowing the City's acceptance of all College Boulevard Improvements. 9. The following is a suggested process for the approval of both the Zone 15 CFD and Reimbursement Agreement • City consuHant completes the fair share allocation of rhe estimated costs of tbe College Boulevard Improvements. • Bent-West submits to the City the concurrence of the owners of at least 65% of the land in the proposed Zone 15 CFD, as required by Policy 33. • The tair share aiRocation is presented to all Zone t5 landO\:vners withtn the Benefit Areas for review and comment in a meeting with City staff and consultants. Gty consui.tlli:lts and staff prepare and circulate to the Zone 15 CFD landov.mers the Zone 15 CFD docmnents (i.e. the CFD resolutions and rate and method of apportionment of special taxes) and City st.:'lff prepares and submits to Bent-West for review a draft Reimbursement Agreement. • The Zone 15 CFD is presented to the City•s Policy 33 committee. • City Council adopts Zone 15 CFO Resolution ofintention and seliS a public hearing for [he formation of the Zone 15 CFD. • Chy Council conducls a public hearing on the Zone 15 CFD pursuant to lhe Mdlo-Roos Ad and a public hearing on the approval of the Reimbursen""Lem Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Agreemeni: and the establishment of the Benefit Areas pursuant i:o Carlsbad Municipal Code Sectnon 20.16.042. • City conducts the Zone 15 CFD election and confirms the election results. • [f the election is successful., City records the Zone ! 5 Notice of Special 1 ax Lien. • Subsequent to formation of the Zone 15 CFD, the City could el.ect to permir the o-cvner of a Benefit Area outskie the Zone ~ 5 CfD to annex into the Zone 15 CFD prior to the issuance ofbonds in order to finance the Benefit Area's reimbursement payment obligation. 4 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBlT"A" CoUege Boulevard Improvements Pisrri.f.I;:_Wide l~J![.OVements (a!! Tax Z.one and Benefit Area Properties) S·treet [mprovcments Cannon Road-Reach 4A College Boulevard and Cannm:J Road Intersection lmprovements College Blvd Core lmpmvements-Sunny Creek Rd. to Cannon Rd W atter lmpmvements CM\VD Reclaimed Water Line -nT (384 Zone) Ctr>.fWO Water Line 1\2." (Service Area A -375 Zone -College) CMWD Water Line 11"' (Service Area A-315 Zone-Omtarini Loop) CM\VD Water Line 16"" & 36"' (Service Area B -490 Zone -College) CM\VD Water Line 16" & 36""' (Service Area B-490 Zone-' A' Street} Drainage !.mpmvements College Bridge over Agua Hedionda Creek -Drainage Facility BL-L Detention Basin BJ-l College Bridge-7&''' Stonn Drain Extension -Portion of Dminage Facility BL-L College Blvd-Drainage Facility BR (66" culvert under CoHege) Common Basins/Storm Drains Westside (College portwn only) EC North Hydromodification Basin (College portion only) Frontage Improvements Habitat Mitigation Site EC Hydromod Basin (Cniiege portion only) RCOA Pared) Basin BJ Parkway Landscaping RCOA Parcel 3 Basin BJ Soft Costs ADL Construction Suppon and Close-out for Frontages Leighton Geotech for College Grading TY UN Bridge Design and Inspection Des:tgn!Processling soft cosi.S reimbursement to Bent-West (incurred subsequent to 9-I 0-13} Ci[y Processang Costs (prre-fonnation and formation) A-t Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided ~pecufoc [mprovement<> ( relrtain Tax Zone and Benefi[ Area Properties) CoUege Bm.devrud frontage lmpmvemeni!:S RCOA Parcel4 (Apartment portion only) MDR-Encinas Creelk Camarini Ranch Llilbliner EC East WaliMart (Lot ll) EC South EC North Do:s. C-0linas Signal Cost a1t College/Street C Cantarini Ranch MDR-Encinas Creek DosCohnas Signal Cost at College/Street A Canll:arini Ranch Dos Colinas Sewer Line Nonh Cantarini Ranch MDR-Encinas Creek Sewer Line South Cantuini Ranch Dos Co!inas Holly Springs (' onm:mn Basins/Storm Drains Westside Orntarin[ Ranch Dos Colinas EC North Hydmrnodification Basin Canttarini Ranch A-2 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Habimt Mitigation (aU Tax Zone and Benefit An:a Properties) College Boulevard Wetlands & Uplands Mitigation Improvements Costs for design., processing and construction of improvements only (no hmd costs or endowment, morrito[&ng and maintenance costs) A-J Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHlBlT"'B" NBS h1titial Dm ft Cost Al!ocation (attached) B-1 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City of c-arlsbiJd Zonll 15 Estimated Pl!ltrict-Wide. Spec:lftc, and Habitat Mitigation Improvement Coat AJio<:tlllons l'l~~ed upm1 infofn\atlon con\Rineo in the October 19, 2(!"1·1 City ol Carlsbad Growth M~rmgem<mt Program Local Fa~IIIIII!K M~nftiJ"i1lt:mt fll~n Amendnwnt Zone 1S (E) Total Tot<~ I Comm11rolill Gonorol Plan Appro1111ct & Square EOU Oi~trlet Wlct~ Sp11etfle Oovelopment l..1111d Use Future Unit Footii1Jil Rate p11r tmpravllmllnt tmproVllmont , __ ,.,MN Ownt>.t SUI!.\!~> T~l!ll l'lt>olgn<~.jlon f'roJoctlon~ ProJection Unl! §D~_CJ!!IliJ1l COlll.s!2l 209..0110·11·00 WAIA'IART STORES INC PtutlelpptJng MF'~ICOM L·1 19() 00,000 (3) 910 !:1,391.137 Sll,M-0 2011·070·16·00 KA 10 I'AMIL Y L TO PARTNERSHIP Unenllllttd SFR RL·1(R) 54 a 4 00 2G6 612 Gr1 0 20~..()70.03·00 MA.NDANA CAL CO Unenlltled Sf'R RL·2(b) 1!!5 0 4.00 MO , .73~ 231 0 20i·070·0i·Otl MANDANA CAL CO Unenlltlea SFR RL·2(b) 0 0 209.060·23·00 MRl.OW TIMOTHY Partlclputlng SFR RLM·iD 1:! 0 4.00 48 126 126 0 2Dil·OeO·Il1·00 t, YAI.L eNit'1RP-RISES INC Pilttlclpallng SFR RLM-11 19 0 4.00 78 19!l.69P 0 1G8·0~0·1!7·00 HOLI. Y SPRINGS DEVELOPMENT Ll.C Pijr\lclpallng SFR RLM·2 I RLM·2A ~~~ 0 4 00 166 441,~41 1\0,120 209..070·13·00 BENT ·WEST llC Partlclpsllng SFR Rl.M<lA I I'\LM-4A 104 0 4.00 416 1,093.091 1 ,!\36,040 16S-D60·3Ei·OO RANCHO CARLS MD OWNERS ASSN l"llrtlcl~&tlng HOA RL.M·36 0 0 0.00 0 0 0 1!'18·050·36·00 RANCHO CARLSBAD OWNERS ASSN Psrtlc:lpiltlng Ml'f'! RlM-3C 80 0 2.25 1110 472.972 71, .. 16 20G..QS0·71·00 W P GOLF & EQUESTRIAN L L C PurtlelpatlnQ Sf'R RLM·7 14 0 4.00 GG 147 147 tl8,272 20$·060·72·00 W !'GOLF & EQUESTRIAN l L C Pl\fllclpoth1g SFR RLM·8 e 0 4.00 36 9>t,SG4 59,080 :!Oil·OGO·IlB·OO W :> l DOS COliNAS Ric l. l C P6r11clpstlng SI"R RlM·M 4 0 4.00 1(! 42.0-1~ 0 209..Q60·1l6·00 BE:PTON INVESTMENTS L L C Pl!rtlclpatlng SFR RLM·9A a 0 4.00 32 84.084 130,844 20i..Q60·70·00 W S L ClOS COl.INAS R/E l. L C Pertlclpa!lng Sr. l.lviniJ RM-3 305 0 (4) 571 1,501 .~24 1,:!79,133 l.JlBl~Q·~0-00 EN~Ji!l8~ !:t3E§K flPART~ftlTS !..k!'t PBrtlciQ!tlng ~EB . BM!i1 127 g 2./l~ ~g~ m.~~ gz~.a6o Tol.!lf11: 1,143 90,000 3,711 $B,7S1,602 $3,573,086 (A) Clen~tlll Pl~n b\jj~IQn~Uon ov•rlaJl4 with fX1teul& 20\l-070·1•HO ond 20~·070.16·00 l"lll'(!lrl20~··07o-t,._OO di!v~loped with an~ un~ 1\~m~~lnlng unilfi ~ncllniN~m~llon ohown on paret~l:10l).Q70.t6-00 (h) 0CIMI~I f'lbi1 O~•lgnGtl011 ovariAPO w\th Pllreol~ 209-0Til-03·00 Hnd 20C,070-07.00. lnle>11'NIIIen lhOWfl on P~""'l ~01>-07[).03•00 (1) iM c:JI~trlci<WIQo co~l• IQ!AI $10,622 •67 w~l~h Inc! YO;>$ th• habif•l mlilsall•m ~"~'~ at ~1.070,911<!. N't ct~tnei-IY!do coat~ ~I"«> $9,751 ,b!l3. Toi&II'Niy not ~qYOI eY<l ta rounl.ilng (2) Tot@! nl!<Y tiQi C~UIII dWo It> IOUndlnQ. (l) TMIWU rlltP l'>C>r MFR utili I> 1.~0 ond lhll EtlU ram pot 1,000 ol comnl<lrclal aqyoro loo1BQ~ ia 6.60. (4) Th~ ~1 n~>liilttclllvlns unl1~ ijlfl ~M~ned 1 ao EOU• p~t unit und th;; n~ lndependMtlivlno units a."' autoned 1.90 EDU~ P"' unh. Toll! I Habitat lmprovamont Mltlgetl;ntal Col!~!&l__ $262,613 $2,662,5110 73,676 746,Mfl ;eo.4ee 1 924,Gtl7 13,862 1:J9,971J 21,032 221,1l31 48,482 §30,04~ 120,052 2,749,183 0 D 61,li4G 61JB,333 16,161 231,5eo 10,380 1!l4,01'l3 4,e17 4fl,65!l a.2~s 2.:1<!,1()3 lll<!,89S 3,04e,41!1! fl2~~~ Lm,§~~ $1,070,963 $14,3116,680 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided B21SI!~I!l City of Carlsbad Zone 15 EPU As6.ignm~ot D[!I!:!D.Q! b!tllQ .L!!i~ D!!i! £QY.!Ul ~~r.i;R.Y!l~l We.S!I gQUJ(~ £2!..llit4l SFR 1.00 1.00 1.00 1 00 MFR 0.70 1.00 0.40 0 15 Senior Com~ (In• 0.30 1 00 0.40 0.20 S®nior Care (A~ 0.20 1.00 0.40 0.20 Commercial 10.00 0.60 0.20 0.30 MF'R wEI Cam1 0.35 1.00 0.40 0.15 Comm®rclal w f 5.00 0 60 0.20 0 30 ( 1) Bued upon SANDAG trip generation data (2) Based upon the City's sewer EDU a!)signmenl !~tAl ~p l.l1 4.00 2 25 1.90 1.60 11.10 1.90 6.10 (3) Based upon the water connection fee methodology from the Carlsbl!ld MWD 201:1. Water Ma1:1ter Plan (4) Estimated utlll:l:ing generul plan land use lmpervlouanes:; percentage$ (5) Aaaumca approxlml!tt~ly 50% of tl1l'l trflfflc will utlil~e Ei Camino Real for accesll fti Unit Unit Unit Unit 1,000 BSF Unit 1,000 BSF Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBlT'"C' Zone !:5 CfO TA:x Zone & Benefit Area P'rropenies (see attached) C-1 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 'C' ZONE 15 Cf-D fAX ZONC & BEf\lHIT ARf.A PROPERTIES HUNSAKER & ASSOCIATES SAN OitCO, INC PLANNINC 97fJ7 Weplcl Stret1t ENONWilNG San Diego, Ct. 9%121 SVR\IfYING I'H(BSS)S.StHSOO· fX(651!~S8-1414 , . DOS COUNAS Z. MDR "ENCINAS CREEK APTS'' J. HOLLY SPRINGS 4. CANTARINI RANCH 5. RANCHO MILAGRO 6. WALMART (LOT 11) 7. EC SOUTH 6. EC NORTH 9. RCOA P-4 10. KATO 11. MANDANA 12. BARLOW 13. LUBUNER 14. EC EAST [ = = I TAX ZONE/BENEFIT AREAS CITY OF VJSTA IZ2L21 BENEFIT AREAS (NOT A PART OF CFD ) 0: 21 Tn~ :Z<>n< and 8@nont Nva Prop<~rtloa.dw~ In R:\OB4~\t!<t:n~\OJ<hltlll! <ln '0.:_/3__:_0/--20_H _______________________ ~----' Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBI 8 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided --=:1--''" ft 1200 ,., Northeast Quad Current and Capacity DUs August 21, 2013 CJ Existing DUs (black numbers) -Capacity DUs >0 (white numbers) Total Existing DUs: 5,933 Total Capacity DUs: 2,305 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 9 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CITY OF CARLSBAD-AGENDA Bill 7 AB# 21,864 COUNCIL GUIDANCE ON FINANCING OF DEPT. DIRECTOR MTG. 02/17/15 PUBLIC IMPROVEMENTS IN LOCAL FACILITIES CITY ATTY. DEPT. ASD MANAGEMENT PLAN ZONE 15 CITY MGR. ~ RECOMMENDED ACTION: Accept a presentation from the Administrative Services Department/City Attorney on an approach to financing public improvements in Local Facilities Management Plan Zone 15 ("Zone 15") and receive Council guidance on pursuing the financing approach. ITEM EXPLANATION: On September 10, 2013, via Agenda Bill 21,360, Council approved a reimbursement agreement between the City of Carlsbad and Bent-West, LLC for assessment district formation deposits and allowed Bent-West, LLC to temporarily bypass the initial Policy No. 33 (the "Policy") approval steps. On April 15, 2014, via Agenda Bill 21,567, Council made a finding under the Policy to waive the provision of the pass-through requirement for community facilities districts ("CFD"} based on the benefit of proceeding with the College Boulevard improvements in a district with diverse ownership. As such, staff has been pursuing the formation of a CFD as the financing mechanism for College Boulevard, Reach A in Zone 15. However, several things have occurred during this process that could change the ability and/or effectiveness of a CFD to be a comprehensive financing tool for Zone 15. City of San Diego v. Melvin Shapiro, et al. The statutory authority governing CFD formations allows for an election of registered voters or landowners depending on the number of voters who are registered to vote within the proposed boundaries of the CFD. If less than 12 registered voters reside within the proposed boundaries of the CFD, the election must be a landowner election where each landowner gets one vote for each acre (or portion thereof) of land they own within the CFD. If 12 or more registered voters reside within the proposed boundaries ofthe CFD, the election must be a registered voter election where each registered voter within the CFD is entitled to cast a vote. On August 1, 2015, the California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of San Diego v. Melvin Shapiro, et al. (the "Shapiro Decision"). The case involved a Convention Center Facilities District (the "CCFD") established by the City of San Diego (the "City"}. The CCFD is a financing district much like a community facilities district established under the provisions of the Mello Roos Act. The CCFD was comprised of all of the real property in the entire City. However, the special tax to be levied within the CCFD was to be levied only on hot el properties located within the CCFD. DEPARTMENT CONTACT: Aaron Beanan 760-602-2414 Aaron.Beanan@carlsbadca.gov FOR CLERK USE. ~l COUNCIL ACTION: APPROVED 0 CONTINUED TO DATE SPECIFIC 0 DENIED 0 CONTINUED TO DATE UNKNOWN 0 CONTINUED 0 RETURNED TO STAFF 0 WITHDRAWN 0 OTHER-SEE MINUTES ~ AMENDED 0 REPORT RECEIVED Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided PAGE 2 The election authorizing the special tax was limited to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel is located. Thus, the election was not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was modeled after Section 53326(c) of the Mello Roos Act, which generally prov1des t hat, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners ofthe proposed district whose property would be subject to the special tax. The Court held that the CCFD special tax election was invalid under the California Constitution because Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters within the district. In the Shapiro Decision, the Court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. The Shapiro Decision, however, casts doubt on the validity of the provisions of the Mello Roos Act that would re quire a landowner election in the event there was at least one registered voter but less than 12. Zone 15 currently has several registered voters. Accordingly, bond counsel (consistent with the current position of all major bond counsel firms in California) is not comfortable advising the City to proceed w1th a landowner election under these facts. Additionally, as there are fewer than 12 registered voters, there is not authorization under the Mello Roos Act to hold a registered voter election either. Based on the forgoing ambiguity, the city's bond counsel has recommended that any parcels including registered voters be excluded from participating in a CFD unless further clarification from the Courts or the Legislature is provided. Development Status The varying stages of development within the proposed CFD also present several challenges. Section 8 of the Policy requires that all property in a proposed special financing district have received environmental review and all land use entitlements. Further, Section 13.B.2 of the Policy requires the CFD special tax formula include provisions to protect against changes in the density of development of the property within the CFD that would result in insufficient special tax revenue. This mirrors the statutory authority governing CFDs. A significant amount of parcels in the proposed CFD are unentitled and have no environmental review. Additionally, if this requirement was waived, the unentitled properties still face challenges. The city has to use the densities as shown on the most current approved map or document. As such, the city would use the densities shown in the current Zone 15 Local Facilities Management Plan in establishing the special taxes for the unentitled properties. This could create a situation where a property's density is reduced due to development or environmental constraints when they receive entitlement, but the corresponding special tax obligation is not because it could result in insufficient special tax revenue. Insufficient special tax revenue could increase the risk of failing to meet debt service payments. Even if these challenges were overcome, and the unentitled properties were included in the CFD, a bond issuance could still create undesirable outcomes. For example, if the city chose to pursue a single debt issuance (versus a debt issuance with multiple series) while the unentitled properties remained unentitled, those property owners might be taxed prematurely and at a level that could not be supported by the value of the unentitled property. If the city chose to issue multiple series of bonds, the subsequent series of bonds would be small and most likely unmarketable or fiscally inefficient as the financing costs would represent 2 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided PAGE 3 a disproportional share of the construction costs. Lastly, if the city chose to wait to issue bonds until all unentit led properties within the CFD became entitled, it would, according to Bent-West, LLC, create reimbursement uncertainty for Bent-West, LLC. According to Bent-West, LLC this uncertainty would make it difficult to move forward with advancing funds for the construction ofthe public improvements on behalf of the entitled and unentitled properties. Application for Financing Zone 15 Public Improvements Bent-West, LLC submitted an application for the initiation of a special financing district on January 8, 2015 in compliance with the Policy. Bent-West, LLC's application included CFD formation request letters from five (5) parcels within Zone 15: Property Name Owner /Representative Cantarini Ranch Dennis O'Brien Holly Springs Susan Kelly Encinas Creek Apartments Susan Kelly Dos Colinas John Rimbach Rancho Milagro Warren Lyall These properties only represent a portion ofthe properties originally proposed for inclusion in a community facilities district. There are approximately 23 parcels that benefit from the improvements. Further, these properties are the only benefiting properties currently entitled within Zone 15 (i.e. have obtained city approval of a Tentative Map or Site Development Plan). All other benefiting properties within Zone 15 are unentitled (i.e. have not had city approval or the city approval has expired) and several have registered voters residing on the property. Under a separate request made on January 9, 2015, Bent-West, LLC asked the city to consider entering into a reimbursement agreement with Bent-West, LLC which would contain provisions on how the remaining properties within Zone 15 would contribute their fair share towards the public improvements. The proposal contains the following main ideas: • The reimbursement agreement(s) would cover only unentitled properties. " The reimbursement of each property's fair share obligation will be based on actual costs; not estimated costs. • The reimbursement of each property's fair share obligation will be based on actual unit counts; not estimated unit counts. • The reimbursement payments would take place at some development trigger (e.g. approval of final subdivision map, issuance of grading permit, etc.). • The fair share obligation would escalate by a standard inflationary index (e.g. CPI, CCI, etc.) until the obligation was paid or terminated. • The city's obligation to collect reimbursement payments from benefiting properties would terminate 15 years after the city accepted the College Boulevard improvements. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided PAGE 4 Bent-West, LLC's recommendation of an alternative financing approach that includes a CFD on the entitled properties and a reimbursement agreement(s) for the unentitled properties is their proposed solution to the legal case and entitlement issues described above. Reimbursement Agreement Requiring the unentitled properties within Zone 15 to pay their fair share of the public improvements may be accomplished several ways. The city may enter into a reimbursement agreement with Bent-West, LLC that contains provisions on how the city will collect the fair share payments from the unentitled properties and pass them through to Bent-West, LLC. This is typically done by imposing a condition on those unentitled properties as they come forward to develop. The development condition requires the property owners pay theirfair share of the public improvements. Alternatively, the city may adopt an ordinance under its charter city provisions giving the city the right to impose reimbursement agreements on properties benefiting from public improvements. This method would similarly require those properties pay their fair share of the public improvements. A reimbursement agreement approach, regardless of the details, would require that Council impose this obligation on the properties benefiting from the public improvements. Affected property owners would have the right to voice their opinions at a public hearing, but not vote. Staff will return at a future date to recommend a specific reimbursement agreement approach at Council's direction. Council Guidance Staff is request ing Council guidance on pursuing an alternative financing for Zone 15; more specifically, imposing a condition/reimbursement agreement to ensure all properties benefiting from the public improvements pay their fair share of the public improvements. FISCAL IMPACT: Per the Policy, the cost to form a special financing district lies solely with the applicant. The applicant is required to deposit sufficient funds with the city to cover all formation costs. If a special financing district is formed and bonds are issued, the Policy allows the formation costs to be reimbursed to the applicant from bond proceeds. If, for any reason, a special financing district is not formed and bonds are not issued, the city will refund any unexpended deposits to the applicant per the Policy. There is no fiscal impact to the city by providing Council guidance on imposing a condition/reimbursement agreement to ensure all properties benefiting from the public improvements pay their fair share of the public improvements. ENVIRONMENTAL IMPACT: This action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. EXHIBITS: None. L( Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Sherry Freisinger From: Sent: To: Cc: Subject: Attachments: Stan Weiler <stanweiler@hwplanning.com> Friday, February 13, 2015 3:15 PM City Clerk /'\II Receive -Agenda Hem # I For the Information of the:- 91~COUNCIL ACM~ V';cA V CC V 0 at8 k$ Q!tv Maoaye~ 'Steve Powell'; 'John P. Yeager'; Aaron Beanan; Charles McBride City Council Meeting -9:00AM -February 17, 2015 -Agenda Item 7 Agenda Item 7 -First -Zone 15 Area Map -February 10, 201S.pdf; Agenda Item 7 - Second -Highlights of Reimbursement Agreement.docx; Agenda Item 7 -Third -Zone 15 LFMP Improvements.pdf; Agenda Item 7-Fourth-Z-15 NBS Estimated Cost Allocation ll-3-14.pdf; Agenda Item 7 -Fifth -Zone 15Improvement Cost Breakdown.pdf; Agenda Item 7 -Sixth -Habitat Mitigation Plan -January 22, 2015.pdf Attached are six exhibits that we would like to use during our presentation to the City Council on February 17, 2015 under Agenda Item 7 for the Financing of Public Improvements in LFMP Zone 15. Mr. Steve Powell and Mr. John Yeager will be making presentations to the City Council. Please confirm receipt and contact me if you have any questions. Best Regards, Stan Weiler, AICP Principal 2888 Loker Avenue East, Suite 217 Carlsbad, CA 92010 Phone: 760.929.2288 Ext. 402 Mobile: 760.801.4678 www.hwplanning com 1 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided ZONE 15 AREA MAP OF BENEFITED PROPERTIES I I ENTITLED PROPERTIES VZZ/1 UNENTITLED PROPERTIES HUNSAKER & ASSOCIATES SAN OJECO, INC PlANNING IJlfJl Waples Street ENQNEERJNG San Diego. Ca 92121 SURVEYING PH(858)558.4so0 • FX(858)5511o 1414 EX 28o AREA MAP BENEFTTTED AREA IAAP TIERED.dwg In R'\0848\&Eng\Exhlblts on 2/10/2015 hl 0 tJ) :z: h1 u 0 b.., 0 r t:: u 1. DOS COUNAS 2. MDR "ENCINAS CREEK APTS" 3. HOLl. Y SPRINGS 4. CANTARINI RANCH 5. RANCHO MILAGRO 6. WALMART (LOT 11 ) 7. EC SOUTH 8. EC NORTH 9. RCOA P-4 10. KATO 11. MANDANA 12. BARLOW 13. LUBUNER 14. EC EAST 15. MANDANA 16. HAGAMAN 17. REUSCH/DOLKAS 18. GROSSE, R&M 19. COMAN 20. GROSSE 2005 TRUST ~ ~ > b.., a >-c u Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City of Carlsbad Zone 15 Improvement Costs District Wide Improvement Costs: ow 1 DW-2 DW-3 DW-4a DW-4b DW-5a DW-Sb DW-6a DW-6b DW-7 DW-8a DW-8b DW-9 DW-10 DW-1"1 DW-28 DW-19a DW-19b DW-20a DW-20b DW-21a DW-21b DW-22 DW-24 DW-25 DW-26 DW-27 Street Improvements: Cannon Rd. -Reach 4A Colleqe Blvd and Cannon Rd. Intersection Improvements Colleqe Blvd. Core Improvements-Sunny Creek Rd. to Cannon Rd . Subtotal • Street Improvements Water Improvements: CMWD Reclarmed Water Line-12" (384 Zone) (Colleqe) CMWD Reclaimed Water Line -12" (384 Zone) (Cantarini) CMWD Water Line-12" (Service Area A -375 Zone) (Colleqe) CMWD Water Line-12" (Service Area A -375 Zone) (Loop throuqh Cantarinil CMWD Water Line-16" and 36" (Service Area B-490 Zone) (Colleqe) CMWD Water Line· 16" and 36" (Service Area B -490 Zone) (A Street) Subtotal Water Improvements: Drainage Improvements: Colle~e Bridqe over Aqua Hedionda Creek -Orarnaoe Facility BL-L Detent1on Basin BJ-1 Detention Basin BJ-1 Easement Condemnation Colleqe BridQe-78" Storm Drain Extens1on -Portion of Dramaqe Facility BL·L Colleqe Blvd.-Dra~naqe Facility BR (66" Culvert under Colleqe Blvd.) Common Basins I Storm Drain Weststde EC North Hvdromodific.ation Basin Subtotal Drainage Improvements: Other Improvements Habitat Mitigation St!e Frontage Improvements Parkway Landscape • Habitat Mitigation Area Frontage Improvements for RCOA Parcel 3 Parkway Landscape -RCOA Parcel 3 Frontage lmprovemenets BJ Basin Parkway Landscape -BJ Basin Subtotal Frontage Improvements: Additional Soft Costs ADL Construction Support & Close Out-Frontages Leighton -Geotech for Gradmg Tf Ltn Bridge Design and Inspection Sotft cost reimbursement subsequent to 9/1012013 City Assessment Distnct Processtng Subtotal Additional Soft Costs: Page 1 of 2 $506,593 203,024 3.,..l.D.L.9ZB $3,817,595 $475.752 320.556 341.572 227.649 0 D $1,365,529 $2,393,348 469.847 500.000 105.146 0 30.443 3.3...fu12 $3,532,626 $36,684 0 258,41 '1 46 434 146,459 L3J..5 $495,303 $4 250 53,000 38,200 245,000 2..0.0..000 $540,450 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City of Carlsbad Zone 15 Improvement Costs Specific Improvement Costs: Sl-1 Sl-2 Sl-7 Sl-10 Sl-11 Sl-12 Sl-15 Sl-16 Sl-3cr Sl-3dc Sl-8mdr Sl-8cr Sl-8dc Sl-18 Sl-4cr Sl-4mdr Sl-5cr Sl-5hs Sl-5dc Sl-17 Sl-6cr Sl-6dc Street Improvements: College Blvd. Frontage Improvements-Cantarini Ranch College Blvd Frontage Improvements-Eq Ctr. East College Blvd. Frontage Improvements-MDR College Blvd. Frontage Improvements-Lubliner College Blvd. Frontage Improvements -RCOA P-4 College Blvd Frontage Improvements-Dos Co!inas College Blvd. Frontage Improvements-Wai-Mart College Blvd Frontage Improvements-Eq. Ctr South College Traffic Signals at Streets A-Centanni Ranch College Traffic S1gnals at Streets A-Dos Colinas College Traffic Signals at Streets C -MDR College Traffic Signals at Streets C -Cantanni Ranch College Traffic Signals at Streets C -Dos Colinas College Blvd. Frontage Improvements-Eq. Ctr North Subtotal Street Improvements: Water and Sewer Improvements: Sewer Line North-Cantarini Ranch Sewer Line North -MDR Sewer Line South -Cantarin1 Ranch Sewer Line South -Holly Springs Sewer Line South -Dos Colinas Subtotal Water and Sewer Improvements: Drainage Improvements ECN Hydromod Basin on EC North-Cantarini Ranch Common Drainage Improvements -Cantarini Ranch Common Drainage Improvements -Dos Colinas Subtotal Drainage Improvements: Habitat Mitigation Improvements Habitat Mitigation Improvements: Habitat Mitigation on EC Property Page 2 of 2 $547,076 101,565 74,842 130,844 71,416 624,258 8 840 59,080 158,040 158,040 79,020 79,020 158,040 6.8.212 $2,318,353 $'12,867 125 488 86,882 40 120 ii.5.3.9 $273,896 $102.618 447 972 430 256 $980,846 $1,070,984 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Highlights of Bent-\Vest's Proposed Criteria for the proposed Zone 15 Reimburse1nent Agreement 1. City consultants and City staff (and ultimately, the City Council) will determine fair-share cost allocations for all Zone 15 benefitting properties. 2. All final "fair-share" cost allocations will be based on the actual costs of constructing the College Improvements. 3. Each property's final fair-share cost allocation will be based on the actual number of units that are ultimately approved for the property . 4. Reimbursement payments for cost shares will be payable only when a property moves forward with development (i.e. final map or grading permit). 5. If an unentitled property is never developed, it will never have to make its reimbursement payments. 6. City 's obligation to collect reimbursement payments will expire 15 years after completion of the College Improvements. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City of Carlsbad Zone 15 Estimated Distnct-Wide. Spec1flc and Habitat Mitigation Improvement Cost Allocations Based ut:on rnfon·rat.on COI'tamecl in the October 19 2011 C•ty of Carlst>ad Growt'l M'lnagement Program Local Fac.iht1es Managernent Pt;m Amendment Zom' '5 IE) Total Total Commerdal General Plan Approved & Square EDU Dostrlct Wide Specific Development Land Use Future Unit Footage Rate per Improvement Improvement APN Owner Status T:,:Ee Designation Projections Project1on Unit ED Us Costsp) Costs!21 209-090-1 i -00 WAL-MART STORES INC Unentitled MFR/COM L-1 1SO 90 000 (3) 910 S2.391 137 $8.840 W9-070-16 00 KATO FAMILY L TO PARTNERSHIP Unentitled SFR RL-1(a} 64 0 4.00 256 672.671 0 209-070-03-00 MANDANA CAL CO Unentitled SFR RL-2(b) 165 0 4 00 660 1 734 231 0 209-070-07-00 MANDANA CAL CO Unentitled S~='R ~L-2(b) 0 0 209-060-23-00 BARLOW TIMOTHY Unentitled SFR RLM-10 12 0 4 00 48 126,126 0 209-060-61-00 l YALL ENTERPRISES INC Entitled SFR RLM-11 19 0 4 00 76 199,699 0 168-050-57-00 HOLLY SPRINGS DEVELOPMENT LLC Entitled SFR RLM-2 I RLM-2A 42 0 4.00 168 441,441 40,120 209-070-13-00 BENT-WEST LLC Entitled SFR RLM-3A I RLM-4A 104 0 4 00 416 j 093.091 1,536.040 168-050-35-00 RANCHO CARLSBAD OWNERS ASSN Unentitled HOA RLM-38 0 0 0 00 0 0 0 158-050-36-00 RANCHO CARLSBAD OWNERS ASSN Unentitled MFR RLM-3C 80 0 2.25 180 472,972 71 416 209-060-71-00 W P GOLF & EQUESTRIAN L L C Unentlt.led SFR RLM-7 14 0 4.00 56 147,147 68.272 209-060-72-00 W P GOLF & EQUESTRIAN L l C Unentitled SFR RLM-8 9 0 4 00 36 94.594 59,080 2.09-060-68-00 W S L DOS COLINAS RIE L L C Unentitled SFR RLM-8A 4 0 4 00 16 42,042 0 209-060-65-00 BEPTON INVESTMENTS L L C Unentitled SFR RLM-9A 8 0 400 32 84.084 130.844 ?09-060-70-00 W S L DOS COLINAS RIE L L C Entitled Sr Living RM-3 305 0 (4) 571 1.501 424 1.379,133 168-050-60-00 ENCINAS CREEK APARTMENTS LLC Entitled MFR RMH-1 127 0 2 25 286 750.843 279 350 Totals: 1,143 90,000 3, 711 S9.751.502 $3,573,095 a) General Plan Oesigl'a!lon overlaps wt!h parcels 209·070-l-1-00 and 209-070 :6-00 Parcel 209-070-14-00 developed wth one unot Remammg un;ts and Information sh<w<n on parcel 209-070-16-00 bj General Plan Oestgnanon overlaps woth parcels 209·07()-03-00 and 209-0 70-07-00 1'1tormat<on shown on parci~l 209-070-03-00 1) The dislnr.!-'<Mde costs tota• S1 0.822.487 whoch tnc!ude.l> the hab•ta! mrt•gallon costs of $1 070 984 Net dtstnct-wtCie costs are $9,751,503 Total may toot e'wat cue to roLOOrng 2) Total may r-ot equal due to rouoorng 3) The EDU rate per MFR una. IS 1 90 and the EDU rate per 1 .COO of comrnercr;;l square IOOt3ge -s 6 10. 4) Tt·e 81 assisted living units are assigned 1 80 EO Us per unrt and the 224 independenlliving umts me assrgned 1 90 EOUs per unor Habitat Mitlgation(2J S262 613 73,878 190.46C 13.852 21,932 48.482 120,05::: 0 51,945 16,161 10,389 4,617 9,235 164,898 82 463 $1,070,983 Total Improvement CostsQL_ $2 662.590 746,549 1.924,697 139,978 221,631 530,043 2.749.183 0 596.333 231,580 164.063 46,659 224,163 3,045,455 1.112.556 $14,395,580 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Roadwa~ Land Use Description SFR EDUs{1) MFR Semor Care (Independent) Sentor Care (Assisted) Com mereta/ MFR w El Camino Access(5) Commerctal w El Camino Access{S) ( 1) Based upon SAN OAG tnp generation data (2) Based upon the City's sewer EDU assignment 1.00 0 70 0 30 0.20 10 00 0 35 5 00 City of Carlsbad Zone 15 EDU Assignment Drainage Sewer EDUs{2} Water EDUs{3} EDUs(4) 1 00 1 00 1 00 1.00 0 40 0 15 1 00 0 40 0.20 100 0 40 0.20 0 60 0 20 0 30 1 00 0 40 0 15 0.60 0.20 0 30 (3) Based upon the water connection fee methodology from the Carlsbad MWO 2012 Water Master Plan {4) Estimated utilizing general plan land use imperviousness percentages (5) Assumes approximately 50% of the traffic will utilize El Camtno Real for access Total EDUs Per 4 00 Unit 2.25 Umt 1.90 Untt 1.80 Unit 11.10 1,000 BSF 1.90 Untt 6.10 1,000 BSF Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided r---. ----- ~ Rt: "l.ACEM ;T 'ill£ r.-, 9CNT-WEST Li...C CANTAPINI RANCH .. 0J~~}.ifztJ---J~. ... ~ _ <:"::J::3..":'- ~~~i --~--=-- ZONE 15 RNANCE DISTRICT EXHIBIT FOR ZO~E 15 LFMP IMPROVEMENTS .-, / . _/ .,_ ,/ -, _ _ / ·, __ / '·. WEST SE~ ll\<1~0 )OS CottNA.S '-. ,/ ·,_ _/ ·,_ / ·v· ·, 'y- _/ 1'tP \Jf.)LF o\ FOOE:ST~. UC '" sw., '-. /' ·,_ _/_, CANNON AQ,_~~~.t:!3A CORE IMP_"!Q_l]_~ •\. • =-~i.=::~~-!!-o:-'--=.:.-:L"" '\ ,/# ··v· ACPTON INVE~NTS INC lU8UNEA ____ / '\. _/ __ _,_,..· -, '> _,/ Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided LEGEND • -• PROPOSED BUFFER ' ' ' \ --UM<TS OF WEnAIIO CREAOON (3,1 AC) llllliB PROPOSED CHANNEL BOTTOM c::::J UP\ANO MITIGATION AAEA (5,5 AC) --CHANNEL FLOW UNE SYCAMORE WOOOtAND SOUTH~RN WILLOW SCRUB ---EXISTING FLOOOWAY UNE - -EXlSTING 100 YEAR FLOOO PLAIN --··.'-.. ,--... ,...,.., .._ ' ', GPA 14-02/ZC 14-01/SUP 14-01/HDP 14-04/HMP 14-02/MS 14-10 ...._. ---_""_"_ ---- ,..,... ___ _ MINOR SUBDIVISION MS-14-10 & HABITAT MITIGATION PLAN COLLEGE BLVD. CITY OF CARLSBAD, CALIFORNIA SHEET 3 OF Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided "' 0 ~~ "' UJ ::< FROST ..qv, <>'f>RDI CT "'~"c>~t:.1 Local Facilities Management Zone 15 Benefiting Properties C] LFMZ 15 Boundary Entitled Property Unentitled Property J ,... ______ _. __ --- \NHIPTAIL LOOP ;;-~ "<< ~cr CA"-~CT Document Path J 'Requests201 0Pius\Fma'1ce\5400231_1_5'LFMZ15Properties mxd Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Jackson I DeMarco I Tid us Peckenpaugh A LAW CORPORATION Direct Dial: February 16, 2015 Email: Reply to: FileNo: 949.851.7409 mstaples@jdtplaw.com Irvine Office 2294/00178 VIA EMAIL (clerk(ii),carlsbadca.gov) AND FIRST CLASS MAIL City Council City of Carlsbad 1635 Faraday Avenue Carlsbad, California 92008 Re: Objection to Proposed Approach to Finance Public Improvements in Local Facilities Management Plan Zone 15 and Request to Continue Matter Off Calendar (February 17,2015 Agenda Item No.7, AB #21,864) Dear Mayor Hall and Honorable Councilmembers: 1. Introduction and Summary. We represent Mandana Cal Co., the owner of approximately 190 acres of land included in the reimbursement area of the Zone 15 fmancing proposal (shown as property no. 11 on the Zone 15 map at the last page of the attached "Zone 15 Infrastructure Financing and Reimbursement Program"). Mandana has owned the property for over 30 years. The property is unentitled and has long been farmed. Mandana's property comprises 27% of the entire reimbursement area plus CFD area, and more than 50% of the proposed reimbursement area. Although Mandana is a major landowner in Zone 15, the City and Bent-West did not inform Mandana of their etiorts to form a financing district including Mandana's property until last July, after the City Council had already made several key decisions adverse to Mandana's interests in September 2013, April2014, and June 2014. We urge the City Council to deny staff's request to pursue the hybrid CFD/reimbursement financing mechanism as currently proposed, and to continue the matter off calendar until its terms are vetted and consented to by 65% of the landowners included in the entire reimbursement area plus CFD area. The City's actions to date on the Zone 15 financing strategy violate Mandana's Constitutionally- protected substantive and procedural due process rights by: 1) failing to provide Mandana prior notice and an opportunity to participate in key City Council meetings over the past two years authorizing Bent-West to bypass the initial65% Irvine Office 2030 Main Street, Suite 1200 Irvine, California 92614 t 949.752.8585 f949.752.0597 Westlake Village Office 2815 Townsgate Road, Suite 200 Westlake Village, California 91361 t 805.230.0023 f 805.230.0087 www.jdtplaw.com Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad February 16, 2015 landowner consent step required by Council Policy No. 33 (see City Council Resolution No. 2013-226), waiving Policy 33's prohibition against public financing of an applicant's administrative, financial consultant and legal fees in order to add Bent-West's expenditures into the Zone 15 financing district (see April15, 2014 City Council Minutes, Agenda Bill No. 21,567), and approving reimbursement agreements with Bent- West to form a CFD (see City Council Resolution Nos. 2013-226, 2014-159); 2) withholding information from the City Council about major landowner objections and Bent-West's inability to achieve the required 65% landowner consent contradicting the Council's stated reasons for approving those actions; 3) failing to inform Mandana that the City Council had taken those actions to commence formation of a CFD until last July; and 4) structuring the current proposed financing mechanism described in the February 17, 2 0 15 Agenda Bill in a manner intended to (i) encumber Mandana's unentitled property to the same or greater extent of the previously proposed CFD, (ii) avoid accounting for the property's inability to support the proposed debt, and (iii) avoid providing Mandana an opportunity to vote on the current financing mechanism. If implemented, the proposed financing strategy will also expose the City to risk of liability for the unconstitutional taking ofMandana's property by imposing an obligation to finance public improvements disproportionate to the property's need for or contribution to the improvements, at rates and terms that could render future development infeasible, with full knowledge that the property is unentitled and carmot support the debt. 2. The Proposed Financing Strategy Unfairly Burdens Mandana and Other Unentitled Properties for the Benefit of the Few Developers With Expiring Tentative Tract Maps. Under Bent-West's current Zone 15 financing proposal (see attached Zone 15 Infrastructure Financing and Reimbursement Program), a few developers with approved tentative tract maps representing less than half of the CFD area plus reimbursement area would form a CFD. Their participation would be capped at the payment of the special tax established by the CFD. The February 17, 2015 Agenda Bill (at p. 2) explains that, if only the landowners with approved tentative tract maps were to participate in a CFD, their land would not generate sufficient funds from the sale of bonds to construct College Boulevard. So the financing mechanism proposes that the majority of the ultimate College Boulevard construction costs would be paid primarily by the remaining unentitled properties by way of a reimbursement agreement obligating the City to foreclose, if necessary, to pay the construction costs upon completion of certain milestones. Knowing that the value of the unentitled property would not meet the required loan-to-value ratio to support a CFD (see February 17,2015 Agenda Bill p. 2), the proposal is to include only the few properties with approved TTMs in the CFD. The remaining unentitled properties would be subjected to a reimbursement amount that increases over time at the inflationary index rates which in Mandana's case, when compounded over 15 years, could approach 100%. The Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Cotmcil City of Carlsbad February 16, 2015 proposal is also structured to not allow the unentitled landowners to vote on the financing strategy. (See February 17,2015 Agenda Bill, p. 4.) The proposal creates three different categories of landowners within Zone 15 (see map at last page of the Attachment): (1) a few entitled property owners with tentative tract maps are to be included in a CFD and their contribution would be capped based on a projected construction fund and tax-exempt municipal bond rates; (2) several undeveloped properties within Zone 15 are to be omitted from participation in the financing proposal without explanation; and (3) the remaining, unentitled landowners comprising the majority of the area are to provide security for the construction of the College Boulevard improvements by way of a reimbursement obligation. Unlike the CFD properties, the reimbursement properties' obligation is not capped. Therefore, any variance in the construction funding projections would appear to be borne by the une ntitled reimbursing properties. The proposed hybrid CFD/reimbursement strategy simply does not work under the current circumstances where the majority ofthe financing area is unentitled. The imposition of such a large reimbursement obligation on Mandana's unentitled property may make it infeasible to build, particularly in light of other regulatory and physical constraints. Additionally, landowners who have been omitted from the process until recently are now asking serious questions about the validity of the projected construction costs and Bent-West's inability to finance or construct public improvements tmder the terms of its Operating Agreement. The College Boulevard improvements, if constructed under the proposed financing mechanism, would not increase the value or development potential of Mandana's property. Instead, the financial burden may render the property's development infeasible. 3. The Proposed Financing Strategy Does Not Comply with City Council Policy 33 and City Council Approvals. The City Council's Policy No. 33 provides policy guidance for the City's use of assessment districts, CFDs and Bridge and Thoroughfare Districts. Policy 33 is intended to, among other things, ensure fairness in the application of assessments, special taxes, or fees to current and future property owners; ensure full disclosure to current and future property owners of the Special District; and establish one policy regarding the requirements that must be met before the City Council will consider approving the financing of public improvements using Spedal Districts. Policy 33's "Property Owner Requirements" (Sections S and 6) provides that the applicant shall have the concurrence of the affected area's property owners representing not less than 65%, by area, ofthe land proposed to be assessed, taxed, or subject to the payment of fees. The September 10,2013 City Council Resolution No. 2013-226 that initiated the original proposed CFD proceedings requires Bent-West to meet the 65% landowner approval threshold before proceeding with the rest of the formation process. Likewise, Section 11 of the Reimbursement Agreement for Special Financing District Formation Deposits approved by the City Council on June 24,2014 requires Bent-West to comply with Council Policy No. 33 in forming the CFD and issuing bonds. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad February 16,2015 The current hybrid CFD/reimbursement financing proposal does not meet 65% landowner concurrence provision of Policy 33's Property Owner Requirements. The hybrid CFD/City- imposed reimbursement area is not among the financing mechanisms for College Boulevard discussed in the September 10, 2013 Agenda Bill (p. 1). The City Council should not approve the request to pursue the financing approach, as currently proposed, until the matter has been vetted and supported by 65% of the affected landowners in accordance with Policy 33 and the Council's prior approvals. 4. The Proposed Financing Strategy Violates Mandana's Procedural Due Process Protections. The City has approved a series of waivers allowing Bent-West to deviate from the Policy 33 procedures without notice to the affected property owners. The process to date is creating bureaucratic momentum while depriving Mandana and the other attected landowners an opportunity to meaningfully participate in the City's decisionmaking. Policy 33's Property Owner Requirements provide for the applicant to prove it has the concurrence of at least 65% of the owners, by area, of property proposed to be subject to the levy of assessments before proceeding through the formation process for a special financing district. Ever since 2005 when a special financing district was first discussed by Bent-West, both Mandana and the Kato Family Limited Partnership (who collectively hold 41% of the acreage in the so-called benefitted area) have objected to the premature inclusion of their properties in the tinancing structure on grounds that, as unentitled properties, their properties do not currently need or contribute to the College Boulevard improvements, and their property values could not support the debt levels that have been proposed. Until last July, Mandana was unaware that Bent-West and the City were, nevertheless, pursuing the formation of a CFD. Although Mandana is a major landowner within the CFD area that was originally proposed by Bent-West, the City provided no notice either before or after the City Council's action on September 10,2013, authorizing Bent-West to temporarily bypass the initial 65% landowner concurrence step under Policy No. 33's Property Owner Requirements (Resolution No. 2013-226). The September 10, 2013 Agenda Bill justifying the City Council's action erroneously says that "several large landowners are out of state and hard to communicate with" and that "Bent West, LLC believes having preliminary numbers to share with the other ownership interests would solidify the requisite 65 percent ownership approval". In fact, both Mandana and Kato are in-state and easily accessible to both the City and Bent-West. As soon as Ali Shashani ofMandana learned of Bent-West's etforts, he sent an email to Stephen Powell of Bent-West, with a copy to Chuck McBride and Aaron Beanan, reiterating Mandana's objection to being prematurely included in the proposed CFD. Warren Kato of the Kato Family Limited Partnership also notified Aaron Beanan ofKato's objection. A few months later, in December, the current hybrid CFD/reimbursement finance mechanism was distributed to most of the Zone 15 landowners. (There is no information on whether WalMart has received notice of the proposed financing mechanism, and if so, what its position is.) Under the City's waiver (City Council Resolution No. 2013-226) Bent-West was still required to comply with Policy 33's Property Owner Requirements providing for 65% landowner Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad February 16, 2015 ... ( t'. concurrence before proceeding further with the financing district. Instead, the current proposal attempts to circumvent that requirement by imposing a reimbursement obligation on the unentitled properties by way of a reimbursement obligation, without providing them an opportunity to vote. (February 17, 2015 Agenda Bill, p. 4.) However, as currently proposed, the CFD is interdependent on the imposition of the reimbursement obligation. Tlze proposed financing strategy violates Mandan a's procedural and substantive due process rights by pledging Mandana's property as collateral for the College Boulevard construction costs over Mandana 's objection, while depriving Mandan a the opportunity to vote on the proposed financing mechanism. We offer the observation that College Boulevard is a City arterial serving not only the properties adjacent to it in Zone 15 but also significant other areas in the City. Accordingly, the City's referenced legal authority to establish a reimbursement area over the objection of a majority of the unentitled landowners, Government Code Sections 66486 and 66487 (a portion of the Subdivision Map Act), appears to b~ misplaced. 5. The Proposed Financing Strategy Amounts to an Unconstitutional Taking of Mandana's Private Property. Private property may not ·be taken for public use without just compensation. (U.S. Canst., 5th Amend.; Cal. Canst., art. I, §19.) The purpose ofthe Takings Clause "is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." (Palazzolo v. Rhode Island (2001) 533 U.S. 606, 617-618.) Constitutional requirements also state that there must be an "essential nexus" between an imposed condition and the impacts of a specific project (Nollan v. California Coastal Commission, 483 U.S. 825, 837 (1987)) and that the conditions imposed must be "roughly proportional" to the project impact (Dolan v. City ofTigard, 512 U.S. 374,391 (1994)). The proposed financing method would allocate a greater financial burden to Mandana than its fair share. Mandana's land is currently farmed and is unentitled. It does not contribute to or n~::ed the proposed improvements. Nevertheless, the hybrid CFD/reimbursement financing mechanism allocates Mandana's reimbursement obligation based on unit projections under the current General Plan designation. It is simply premature to include Mandana's property as part of the proposed financing mechanism when there is not yet a clear picture of its potential development yield due to regulatory and physical constraints. The proposed financing mechanism also does not factor into the fair share calculation the fact that certain Zone 15 properties are excluded from the CFD and reimbursement area, and that the Carlsbad Boulevard extension will catTy many times more traffic than the Zone 15 properties will generate. The February 17, 2015 Agenda Bill (p. 2) acknowledges that the unentitled property cannot carry the proposed debt. Also, unlike the CFD properties, which the City Council has allowed to pass through the financing debt to the ultimate homeowners (see April 15, 2014 City Council action on Agenda Bill No. 21,567), Mandana would be obligated to pay a lump sum reimbursement upon some development trigger, such as subdivision map approval or issuance of grading permit (see February 17,2015 Agenda Bill, p. 3). As soon as the City pledges Mandana's property as security for the CFD and establishes a reimbursement obligation subject to the inflationary index rates for the Carlsbad Boulevard improvements, it will cloud Mandana's title and impose an Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided City Council City of Carlsbad February 16, 2015 onerous and unfair burden on the property negatively affecting its value and rendering its future development infeasible. We assume the last thing the City wants to do is foreclose on the Mandana property and the other unentitled reimbursement properties. But based on the information in the Agenda Bill, the proposed Zone 15 financing strategy seems inevitably headed to that end. The City should assume that, in order to recover its costs of construction, Bent-West may demand that the City foreclose on the allocations assigned to each of the reimbursement properties, if necessary, when they achieve a development milestone requiring payment. It is not difficult to imagine circumstances where the reimbursing property owners, for reasons beyond their control, may be unable to pay their contribution to fund the construction of College Boulevard. For example, regulatory and physical development constraints, inability to obtain funding for the development project, market conditions impeding sales, a significant and unforeseen increase in College Boulevard's construction costs (which, in contrast to the CFD properties, only the reimbursing properties could be liable to pay). Imposing such a large financial obligation on Mandan a':,· property may render its development infeasible. 6. Conclusion and Request to Continue the Matter Off-Calendar. Mandana and the other unentitled landowners are not unreasonable. They have legitimate concerns with the proposed financing strategy that effectively requires them to assume the development risk, assume the market risk, and incur debt at a rate far greater than the few entitled landowners included in the CFD. The financing proposal is premature and should be continued off-calendar until these and other basic concerns are vetted and the consent of 65% oftlte affected landowner:,' in the combined CFD/reimbursement area is obtained. Sincerely, Michele A. Staples ·· -- Attachment cc: Steve Sarkozy, City Manager (manager@carlsbadca.gov) Celia A Brewer, City Attorney (Celia.Brewer@carlsbadca.gov)* Chuck McBride, Director of Finance (Chuck.McBride(a),carlsbadca.gov) Aaron Beanan, Senior Accountant (Aaron.Beanan@carlsbadca:gov) Glen Van Peski (Glen. VanPeski(a),carlsbadca.go'd Jeremy Riddle (Jeremy.Riddle@carlsbadca.gov) Shannon Wemek (Shannon,Werneke@carlsbadca.gov) Mr. Ali Shashani* *via email, with Attachment Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Zone 15 l.nfulstrndllln: Fia;uu:iaJ:; :md Reimbursement Progr.un I. The Carlsbad City Council approved !the Locai Facifiities Management Plan Amendment Zone l5(E)(ilie""Zone K5 LFMP-)oru Januruy 10,2012pursuanttoCityCouncilResoiution No. 2011-285. 2. The Zone U 5 LFMP specifies various major infrastructure improvements required to serve aU new development within Zone 15. including the construction of CoUege Boulevard from Cannon Road to the existing northerly tenninus near El Camino Real and related infrastructure improvements, as further described in Exhibit .. A .. attached hereto (the ··college Boulevard bnprovements'"'). 3. The City approved Carlsbad Tract No. 00-l8 for the Bent-West property pursuant to Planning Commission Resolution No. 5753 and imposed various Conditions of Approval, Eocluding Conditions Nos. 50 through 56 requiring the financing and construction of the College Boulevard Improvements (the "Conditions of Approval"). 4. Bent-West is proposing to advance WO% of the costs of the College Boulevard fmprovements (currently e."timated to be $14,39 5,5 80). subject to reimbursement from other benetltted properties within Zone l5 of their fair share of the costs of the College Boulevard Improvements. 5. The Zone 15 LFMP states that "no single financing mechanism could satisfy the complex infrastructure requirements of this Zone." (Zone 15 LFMP, pp. 148-149) Consequently, Bent-West is proposing two financing mechanisms for the reimbursement of the costs of the College Boulevard Improvements from benefitted properties withlnZone 15 --a Community Facilities District established pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Government Code Section 53311. et seq.) (the "Zone 15 CFD") and a reimbursement agreement between Bent-West and the City pursuant to which the City would collect a reimbursement from all benefitted properties within Zone 15 (the "Reimbursement Agreement"). 6. The cost of the College Boulevard Improvements would be spread among the benefitted properties pursuant to a fair share cost methodology approved by the City and collected from such properties pursuant to the Zone 15 CFD and the Reimbursement Agreement. An initial draft of the cost allocation prepared by the City's consultant, NBS, is attached hereto as Exhibit "B". (A portion of the cost of some of the drainage and water line improvements are not included in the cost allocation but, in accordance with the Conditions of Approval, may be subject to separate reimbursement agreement-; providing for reimbursement from existing fee programs.) 7. The Zone 15 CFD would be established pursuant to City Council Resolution No. 2002-369 ('"Policy 33") and the Me!lo-Roos Act. [t would include the following elements: • The Zone l5 CFD boundaries would include five properties that are ctUTentl y entitled-i.e., Dos Colinas, MDRJEncinas Creek Apartments, Holly Springs, Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Cautarini Ranch a111d Rancho Milagm. Each such property would be designated as itts own "Tax Zone .. within the Zone 15 CFD. • The :special faXes authorized for each Tax Zone would be based on (1) the Tax Zone's fair share of the estimated COS1ts of those College Boulevard Improvements (excluding habitat mitigation for CoUege Boulevard) that are deemed eligible for financing through a CFD with tax-exempt bonds and (2) the existing entitlements or development assumptions for the Tax Zone included in the Zone 15 LFMP-i.e., unit oounts or gross leasable area ("GLA"). Pursuant to the City Council's action of April 15.1014, the special taxes would not be required to be prepaid prior to the sale of individual residential lots to homeowners. Special taxes will not be levied upon property within a Tax Zone prior to the earlier of(l) approval ofdte firstfmal subdivision map within the Tax Zone, (1) issuance of the first grading permit within the Tax Zone (excluding grading done for agricultural purposes), or (3) the commencement of construe lion within the Tax Zone (excluding the construction of stmctures designed to support agricultural operations). • The ammmt of bonds issued to fund the Zone 15 CFO Tax Zones' fair share of the College Boulevard Improvements shall be based upon the actual costs of the College Boulevard Improvements. 8. The Reimbursement Agreement would be entered into by the City pursuant to its police powers under Article XI, Section 7 of the California Constitution, Government Code Section 66486, Sections 20.16.041 and 20.16.042 of the Carlsbad Municipal Code, the Zone 15 LFMP and the Conditions of Approval. The Reimbursement Agreement is intended to be of the type described in Section VI.Eofthe Zone 15 LFMP(see p. l50) and could be similar to the form of reimbursement agreement approved by the City in Zone l4 pursuant to City Council Resolution No. 2004-293. The Reimbursement Agreement will include the following elements: • The benefit areas of the Reimbursement Agreement (each, a "Benefit Area") shall correspond to each of the Tax Zones as well as the properties in Zone 15 but outside the Zone 15 CFD as depicted in Exhibit "C" attached hereto (all, "Benefit Areas"). • The Benefit Areas corresponding to each Tax Zone within the Zone 15 CFD shalt only be subject to reimbursement payments for their fair share of the habitat mitigation costs of the College Boulevard Improvements. • The Benefit Areas corresponding to each of the properties outside of the Zone l5 CFD shall be subjeci to reimbursement payments for their fair share of all of the costs of the College Boulevard Improvements. 2 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided .. Initially, the established reimbucsement payments shall be based upon (l) the estimated costs of the College Boulevard Improvements and (2) the actual entitlements or the development assumptions for each Benefit Area in the Zone 1 S LFMP. The actual reimbursement payments shaH then be adjusted to reflect ( l) the actual costs of the College Boulevard Improvements and (2) the actual development entitlements (Le., units or GLA) for the Benefit Areas at the time the reimbursement payment is required. .. The reimbwsement payment for a Benefit Area shalL be made upon the earlier of (I) approval of the first final subdivision map Within the Benefit Area, (2) issuance of the first grading permit within the Benefit Area (excluding grading done for agricultural purposes). or (3) the conunencement of construction within the Benefit Area (excluding the construction of structures designed to support agricultural operations). • The reimbursement payment for each Benefit Area shan be subject to an annual inflationary adjustment based upon a ronstruction cost index until it is paid with respec[ t.o the Benefit Area. • The City's obligation to collect the reimbursement payment shall terminate on the date that is I 5 years following the City's acceptance of aJI College Boulevard Improvements. 9. The following is a suggested process for the approval of both the Zone 15 CFD and Reimbursement Agreement: • City consultant completes the fair share allocation of the estimated costs of the College Boulevard lmpmvements. • Bent-West submits to the City the concurrence of the owners of at least 65% of the land in the proposed Zone 15 CFD, as required by Policy 33. • The fair share allocation is presented to all Zone 15landowners within the Benefit Areas for review and comment in a meeting with City staff and consultants. • City consultants and staff prepare and circulate to the Zone 15 CfD landowners the Zone 15 CFD documents (i.e. the CFD resolutions and rate and method of apportionment of special taxes) and City staff prepares and submits to Bent-W~1 for review a draft Reimbursement Agreement. • The Zone 15 CFO is presented to the City's Policy 33 committee. • City Council adopts Zone 15 CFD Resolution ofintention and sets a public hearing for the formation of tbe Zone 15 CFD. • City Cotmcil conducts a public hearing on the Zone 15 CFD pursuant to the Mello-Roos Act and a public hearing on the approval of the Reimbursement J Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Agreement and the establishment of the Beuefit Areas pursuant to Carlsbad Municipal Code Section 20.16.042. • City conducts the Zone 15 CFD election and confirms the election results. • If the election is successful, City records the Zone 15 Notice of Special Tax Lien. • Subsequent to formation of the Zone 15 CFD, the City rould el.ect to permit the owner of a Benefit Area outside the Zone 15 CFD to annex into the Zone 15 CFD prior to the issuance of bonds in order to finance the Benefit Area's reimbursement payment obligation.. 4 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT"'A" College Boulevard Improvements District-Wide Improvements (all Tax Zone and Benefit Area Properties) S m~et [mprovernent-; Cannon Road -Reach 4A College Boulevard and Carmon Road Intersection Improvements College Blvd Core Improvements -Suruty Creek. Rd to Cannon Rd Water Improvements CMWD Reclaimed Water Line -12" (384 Zone) CMWD Water Line 12" (Service Area A-375 Zone-College) CMWD Water Line 12" (Service Area A -375 Zone-Cantarini Loop) CMWD Water Line 16" & 36'"' (Service Area B-490 Zone-College) CMWD Water Line 16" & 36" (Service Area B-490 Zone-'A' Street) Drainage Improvements College Bridge over Agua Hedionda Creek-Drainage Facility BL-L Detention Basin BJ-1 College Bridge -78" Storm Drain Extension-Portion of Drainage Facility BL-L College Blvd -Drainage Facility BR (66" culvert under College) Common Basins/Storm Drains Westside (College portion only) EC North Hydromodification Basin (College portion only) Frontage Improvements Habitat Mitigation Site EC Hydromod Basin (C.ollege portion only) RCOA Parcel J Basin BJ Parkway Landscaping RCOA Parcel 3 Basin BJ Soft Costs ADL Construction Support and Close--out for Frontages Leighton Geotech for College Grading TY UN Bridge Design and Inspection DesigJJ!Processnog soft costs reimbursement to Bent-West (incurred subsequent to 9-l 0-13) City Processing Costs (_pre-formation and formation) A-I Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided ~ific Improvements (certain Tax Zone and Benefit Area Properties) College Boulevard Frontage Improvements RCOA Parcel4 (Apartment portion only) MDR-Encinas Creek Cantarini Ranch Lubliner EC East WalMart (U>t ll) EC South ECNorth Dos Colinas Signal Cost at College/Street C Cantarini Ranch MDR-Encinas Creek DosColinas Signal Cost. at College/Street A Cantarini Ranch Dos Colinas Sewer Line North Cantarini Ranch MDR-Encinas Creek Sewer Line South Cantarini Ranch Oos Colinas Holly Springs Conm1.on Basins./Ston:n Drains Westside Cantarini Ranch DosColmas EC North Hydromodification Basin Cantarini Ranch A-2 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided :&bi~LMi~on (all Tax Zone and Benefit Area Properti~ College Boulevard Wetlands & Uplands Mitigation Improvements Costs for design, processing and construction ofimprovements only (no land costs or endowment, monitoring and maintenance costs) ~145P __ hn 9162 2 101l91101.J A--3 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT "B., NBS initial Drafi Cost Allocation (attached) B-l Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Ci~ of cam bad lont> 15 Estlmatad Dlztrlct·Wiae, Spoclflc, 11nd Habitat Mitigation lmprovoment Cost AllocllltiOnll Bft~ed upon ir~tomlnlion cont~Jned In the Oclobl'r 1 Q, 2011 City of Carl$bad Growth Mana9enu!!'l ProyrBm Local Facllllil!a Ml'1ftt:!oHN!nl Pliln Amendmetnt Zontt 15 (E) Total T1>~l Comm.n;lol Gtncral Plan Approved& Square iCU Olttrlet Wide Spoclflc Dtvelopmt nt Land Uao l'utUI'II Unit Foot.gu Rato por lmprovemont lmprov.mont .6el:l Q:!a!llt 9111tua r~e~ 0£•llln!!lo!l Projactfon• Projeotlgn_ Ullll §Q!.!I C!!!lal11 CQ!!alil 20&-o;0-11.00 WA~·MART STORES INC Partl~lpatln£1 MFR/COM \..·1 190 00,000 (3) 910 S2,391,137 se,a•o 2011.070·18..00 KAiO FAMILY LTO PARTNERSHIP Unontllled SFR RL-1(11) 64 0 4.00 2/l6 07~..1l71 0 20fi.()70.03·00 MANOANA CAL CO Unenlllled SFR RL·2(b) 165 0 4.00 eeo 1 ,7a-.~31 0 20&·070..07.00 MANOANA CAL CO Unenlltled SFR RL·2(b) 0 0 20e-oe0·23·00 BARLOW TIMOTHY Partlelputlng SFR RLM·10 12 0 4.00 46 126,126 0 20&-oeo-e 1·00 L VALL ENTERPRISES INC Parttclpullng SF'R RLM·11 19 0 4.00 76 19U&SI 0 1138-0!0·67.()0 HOLLY SPRINGS DEVELOPMENT LLC Plll'th:lpallng SFR RLM-2 I RLM·2A 42 0 4.00 1CI8 4'11,~-41 '10 120 2DQ..070·13·00 BENT-WEST LLC f'lirtlclpaUng SFR RLM-3A I RLM-4A 104 0 4.00 416 1,003,091 1,!130,040 1 e8.060·36..00 RANCHO CARLSBAD OWNERS ASSN Parttclp11lng HOA RLM-38 0 0 0.00 0 0 0 1 68·050·36-00 RANCHO CARLSBAD OWNERS ASSN Partlclp1Ung MFR RLM.:lC eo 0 2.:ZD 180 -472.~72 71,.1!1 20G·Oilo.71.00 W P GOLF & EQUESTRIAN LL C Portlelptllng Sf'R RLM·7 14 0 4.00 GG 147,1•7 138,272 20G.050>n.OO W P GOLF & EQUESTRIAN L L C P~rtlelplllng SFR RLM-8 ll 0 4.00 3ll 84 5Qol. 59,080 209..00ll-e8·00 W S ~DOS COLlNAS RIE I. L C Pertlclp~Ung SfR RLM·6A 4 0 4.00 1e -42,0-42 0 201l..060-tl8.00 BEPTON INVESTMENTS L L C Participating SFR RLM.SA a 0 4.00 32 64,084 130,8« 209..0110·70..00 W S L. OOS COL.INAS R/E ll. C Porttclpallng Sr. Uvlng RM·3 30~ 0 (4) 671 1,501,424 1,3?i,133 l~§;g~O:JJO..OQ li~I!S61i ~Bfili!S 6Pt.Bll:1&NT§ L~~ Paal,lilll!lll ~EB RMH·1 1iZ g u~ ~~~~ Z~2.A~~ mm Totalo: 1,1Q 10,000 3,711 SD.151,502 $3,Gn,oe6 (I) Q•n•rlll Plan Dui9M1111on o""rl«pa wllh poTUII ~010-07~14·00 ana 20P·07G-1e-oo. Poutl*l 20W.070.14-00 <Hvlilcpl<l with onv un«. Remaining unilli ond Information t~own on !)lircoi200.070.16-00 (b) Qonorol Pion OnlgnAiion Cl'<@t!op~ wltl\ parcoll 20!Hl70.0!-CO ond 20a-c7o-o7..00. lnfonnaUcn a hewn oo "",.,.' ~01!-07C..03·00 (1) T~.Q dlltrn:t<W!Oo coatatatoi•IO,t\:12,487 wnleh troct"""'-tho hab~~t f111tlgeuon ~oola ol$1,070 U&-4. Not dilllrlcl·wld& coa\t aro U ,751,503. Totlll m=y not tQuA! diX! lo roundii'IQ (2) Tela! may "ot•qual due to rourldlog, (3) TM EOU rato par MFR unH lo 1.90 11nd 11\Q !SOU ral!l p~r 1,000 cf oom<nerC!III•quaro 1oe11190 Ia e. so. (4) fh<l 01 oulotlr<l living un~ll ~re ~aal;nea 1.80 Eou. P"' untt eMd tho ~2'11ndepandsnt llvlnu unlto 81'11 autonl<l 1.80 eouo par unit. H1bltat Mltlggi!!!DI3l S28U13 73,878 190,'1flB .. 13,862 21 932 46.<482 120,0e2 0 51,846 16,161 10,38& -4,817 S,235 184,8P8 AUA~ $1,070,1113 ToUII lmpro\'trnont ce~ll!al $2,1!82,1!&0 741!,114& 1 ,92-4,SG7 139,&78 221,1!31 1!30,0<43 2,7<19 11!3 D 896,333 231,61!0 16-4,De3 48,8!9 22-4,183 3,0-46,.!6 lllU9 G14,ZU,GIIO Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Land LliD C11c SFR MFR Senior Care (In• Senior Care (A! Commercial MFRwel Cami Commercial w f Rgadwey EQUs{ll 1.00 0.70 0.30 0.20 10.00 0.35 5.00 City of Carlsbad Zone 1fi SOU Assignment ~ewer EQJJt12) 1.00 1.00 1.00 1.00 0.60 1.00 0.60 W.mitt gpusiSt 1.00 0.40 0.40 0.40 0.20 0.40 0.20 PCJID&ijf EDUal4l 1.00 0.15 0.20 0.20 0.30 0.15 0 30 (1) Bued upon SANDAG trip generation data (2) Based upon the City's sewer EDU assignment TQtll EQU11 4.00 2.25 1.90 1.80 11.10 1.90 6.10 (3) Based upon the watar connection fee methodology from the Carlsbad MWD 2012 Water Muter Plan (4) Eetlmated utilizing gene1111 plan land uee lmpervlouaneBil percentage' (6) Ae~umea approxlm11tely 60% of the traffic will utilize El Camino Real for 11cceas fir Unit Unit Unit Unit 1,000 BSF Unit 1,000 BSF Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT "C" Zone t 5 CFD TAx Zone & Benefit Area Properties (see attached) C-l Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 'C' ZONE 15 CFD TAX ZONE & BENEFIT AREA PROPERTIES HUNSAKER & ASSOCIATES !AN OICC:O, INC:. I'LIINNING "'lUi W'Pies Street ENCliNEUINC San Oleao, CA 92121 SUlVEYINC I'H(a58)55a-4!00• FX(8S11)556-1414 tx 27 T.a• 2onc Ql\4 lltn•nt MIG PrcfWtiu.d"9 In R:\OIMI!\6:~\Exhlb/ta on IO/J0/20H 0 .. ; 1 , DOS COUNAS 2. MOR "ENCINAS CREEK APTS" J. HOLLY SPRINGS 4. CANTARINI RANCH 5. RANCHO MILAGRO 6. WALMART (LOT 1 1) 7. EC SOUTH S. EC NORTH 9, RCOA P-4 10. KATO 11. MANOANA 12. BARLOW 1 :5. LUBL!NER 14. EO EAST [ I TAX ZONE/BENEFlT AREAS CITY or VJSTA I2222J BENEF'IT AREAS (NOT A PART OF' CF'D) Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided shashani From: Sent: To: Subject: Follow Up Flag: Flag Status: Russell W. Grosse (rusty.grosse@fsqp.com] Wednesday, July 23, 2014 4:20PM Ali Shashani Meeting at West reZone 15 issues Follow up Flagged -=#=-l . We have meetings set up with Stephen Powell who is the project manager for West on Zone 15 issues. Can I confirm a meeting at the West office on Tuesday July 291h at 2:30pm. Let me know if I can confirm the meeting. If you would like to meet here first and go over together, that would be fine. Their office is only 3 minutes away. Russell W. Grosse, CEO Foursquare Properties, Inc. Phor.e: 760 438 3141 Fax: 760 438 7615 rusty.grosse@fsqp.com Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided shashani From: Sent: To: Subject: Russell W. Grosse [rusty.grosse@fsqp.com] Monday, July 28, 2014 3:46 PM Ali Shashani Meeting Hi Ali: This is to confirm your meeting here with Rusty at 10 am on Wednesday the 301h here in our oHice and then on to meet at the West Office. Joan Hendrick, Administrative Assistant to Russell W. Grosse, CEO Foursquare Properties, Inc. Phone: 760 438 3141 Fax: 760 438 7615 rusty.grosse@fsgp.com Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided shashani From: Sent: To: Cc: Subject: Attachments: Ali, Steve Powell [powell@theriver.com) Wednesday, July 30, 2014 5:19PM Ali Shashani 'Russell W. Grosse' Zone 15 Improvements Cost Estimate Back-up CFD NO. 4 -Ex C -with backup-District Wide Authorized Improvements Cost Update -July 3 2014 with Backup.pdf, CFD NO.4-Ex H-College Habitat Mitigation Improvements-July 3 2014.pdf Thanks again for your time today. Per our discussion, I have attached the following documents that relate to co!>ts of improwment~ that are proposed to be shared by all participating properties according to cost-!>haring methodology that will be proposed by NBS and ultimately adopted by the City Council for CFD NO. 4 (Zone 15) 1. Exhibit C and cost estimate back-up documents,,thesc are the "District-Wide" improvements that arc proposed to be financed with tax-exempt bonds rc!>ulitng in an Annual Special Tax being applied to participating properties beginning at time of issuance of a grading permit. 2. Exhibit H cost estimate for the design, processing and construction of the Habitat Mitigation area ... effectively a "District-Wide" improvement that will result in a One-Time Special Tax being due at time of issuance of a grading permit. Please let me know if you have any questions about any of the information that I provided today or the contents of this email. Thanks .... Steveb Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided shashani From: Sent: To: Cc: Subject: Mr. Stephen Powell Project Manager Bent-West 5796 Armada Drive Suite 300 Carlsbad, CA 92008 Mr. Stephen Powell, All Shashani [ali.shashani@gmail.com] Tuesday, September 02, 2014 10:58 AM 'powell@theriver.com' 'chuck.mcbride@carlsbadca.gov'; 'Aaron Beanan'; 'attorney@carlsbadca.gov'; 'dobrien@westpartners.com' Proposed Bent-West College Blvd. CFD In the last week of July 2014 in a telephone conversation with Mr. Rusty Gross I became aware that Bent-West has been working on a CFD for College Boulevard. Upon my enquiries about this matter Mr. Gross arranged a meeting with you in your office on July 30, 2014 for explanation of Bent-West's proposed CFD plans. In that meeting you presented a map prepared by Bent-West's engineers Hunsaker & Associates on Bent-West's behalf titled "Zone 15 Participating Properties" in Bent-West's proposed CFD. I expressed my great astonishment of how Bent· West had been working on this CFD for almost two years and had kept us completely in the dark about a process that is supposed to be a public process, especially when you knowingly and falsely without our knowledge and agreement had misrepresented Mandana and Kato properties as "Zone 15 Participating Properties" in Proposed Bent-West College Blvd. CFD . As you well know our properties have no approved tentative maps and therefore it is impossible to speculate on the number of eventual dwelling units on these properties. Mandana's property which is approximately 27% of Bent-West's proposed CFD will not participate in Bent-West's proposed CFD and as you know Kato's property, which is approximately 14% of Bent-West's proposed CFD has also objected to Bent-West's proposed CFD. Without Mandana's and Kato's participation in Bent-West's proposed CFD Bent-West does not have the legally required 2/3 of land owner's by are a pa rticipation necessary to form this CFD. Ali Shashani Mandana Co . PO Box 10249 Newport Beach, CA 92658 Phone: 949.400.4404 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided February 10, 2015 Mr. Aaron Beanan, Senior Accountant City of Carlsbad Finance Department 1635 Faraday Avenue Carlsbad, CA92008 RE: Proposed financing plan for College Boulevard Dear Mr. Beanan, We have become aware that the City of Carlsbad is proposing to include our property in a possible financing plan proposed by Bent-West, LLC for the construction of Zone 15 improvements (College Boulevard). Generally, based on our understanding of the information presented to date we have no problem with the inclusion of our property in the financing plan as proposed by Bent- West, subject to everyone's understanding that: 1. Inclusion of our property in the financing plan will not result in a lien being placed on our property by the City or any other party. 2. The initial cost-share for our property will not exceed TWELVE THOUSAND DOLLARS ($12,000) per-unit cost-share for future new dwelling units. We understand that the cost-share may be adjusted during the fifteen year reimbursement agreement period to account for the application of the construction cost index, but for no other reason. 3. No cost-share as referenced above for the planning or construction of required Zone 15 improvements will be incurred by our property unless our property obtains development entitlements for additional residential units and an actual building permit for an additional entitled residential unit on our property is issued by the City of Carlsbad. 4. No cost-share as referenced above for the planning or construction of required Zone 15 improvements will be incurred by our property as a result of any new construction related to a remodel, addition or reconstruction of an existing residential unit regardless of the existing building footprint size or the addition of an otherwise approved "granny flat." 5. None of the foregoing will have any effect whatsoever on our property from and after fifteen years from the date of completion of College Boulevard. Sincerely, Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided February 10, 2015 Mr. Aaron Beanan, Senior Accountant City of Carlsbad Finance Department 1635 Faraday Avenue Carlsbad, CA92008 RE: Proposed fmancing plan for College Boulevard Dear Mr. Beanan, We have become aware that the City of Carlsbad is proposing to include our property in a possible financing plan proposed by Bent-West, LLC fo r the construction of Zone 15 improvements (College Boulevard). Generally, we have no problem with the inclusion of our property in the financing plan as proposed by Bent-West, subject to everyone's understanding that: 1. Inclusion of our property in the financing plan will not result in a lien being placed on our property by the City or any other party. 2. The initial cost-share for our property will not exceed TWELVE THOUSAND DOLLARS ($12,000) per-unit cost-share for future new dwelling units. We understand that the cost-share may be adjusted during the fifteen year reimbursement agreement period to account for the application of the construction cost index, but for no other reason. 3. No cost-share as referenced above tor the planning or construction of required Zone 15 improvements will be incurred by our property unless our property obtains development entitlements for additional residential units. 4. No cost-share as referenced above for the planning or construction of required Zone 15 improvements will be incurred by our property as a result of any new construction related to a remodel, addition or reconstruction of an existing residential unit regardless of the existing building footprint size or the addition of an otherwise approved ''granny flat." 5. No cost-share for the planning or construction of Zone 15 improvements (College Boulevard) will be incurred by our property unless an actual building pennit for an additional entitled residential unit on our property is issued by the City of Carlsbad. 6. None of the foregoing will have any effect whatsoever on our property from and after fifteen years from the date of completion of College Boulevard. Sincerely, The Owner of APN # 209-040-28 Hagaman Family Survivors 1990 Trust 'fl-' t. 4Ja"~ Trustee , Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided February 10,2015 Mr. Aaron Beanan, Senior Accountant City of Carlsbad Finance Department 1635 Faraday Avenue Carlsbad, CA 92008 RE: Proposed fmancing plan for College Boulevard Dear Mr. Beanan, We have become aware that the City of Carlsbad is proposing to include our property in a possible financing plan proposed by Bent-West, LLC for the construction of Zone 15 improvements (College Boulevard). Generally, we have no problem with the inclusion of our property in the financing plan as proposed by Bent-West, subject to everyone's understanding that: 1. Inclusion of our property in the financing plan will not result in a lien being placed on our property by the City or any other party. 2. Any proposed cost-share for our property will not exceed TWELVE THOUSAND DOLLARS ($12,000) per-unit cost-share for future new dwelling units, if any. We understand that the cost per unit may be adjusted in future years to accow1t for the application of the construction cost index, but for no other reason. 3. No cost-share as referenced above for the planning or construction of Zone 15 improvements will be incurred by our property unless our property obtains development entitlements for additional residential units. 4. No cost-share as referenced above for the planning or construction of required Zone 15 improvements will be incurred by our property as a result of any new construction related to a remodel or reconstruction of an existing residential unit or the addition of an otherwise approved "granny flat." 5. No cost-share for the planning or construction of Zone 15 improvements (College Boulevard) will be incurred by our property unless an actual building permit for entitled units on our property is issued by the City of Carlsbad. 6. None of the foregoing will have any effect whatsoever on our property from and after fifteen years from the date of completion of College Boulevard. Sincerely, The Owners of APN # 209-040-15 Chase Coman Trust Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided February 10,2015 Mr. Aaron Beanan, Senior Accountant City of Carlsbad Finance Department 1635 Faraday Avenue Carlsbad, CA 92008 RE: Proposed financing plan for College Boulevard Dear Mr. Beanan, We have become aware that the City of Carlsbad is proposing to include our property in a possible financing plan proposed by Bent-West, LLC for the construction of Zone 15 improvements (College Boulevard). Generally, we have no problem with the inclusion of our property in the financing plan as proposed by Bent-West, subject to everyone's understanding that: 1. Inclusion of our property in the financing plan will not result in a lien being placed on our property by the City or any other party. 2. Any proposed cost-share for our property will not exceed TWELVE THOUSAND DOLLARS ($12,000) per-unit cost-share for future new dwelling units, if any. We understand that the cost per unit may be adjusted in future years to account for the application of the construction cost index, but for no other reason. 3. No cost-share as referenced above for the planning or construction of Zone 15 improvements will be incurred by our property unless our property obtains development entitlements for additional residential units. 4. No cost-share as referenced above for the planning or construction of required Zone 15 improvements will be incurred by our property as a result of any new construction related to a remodel or reconstruction of an existing residential unit or the addition of an otherwise approved "granny flat." 5. No cost-share for the planning or construction of Zone 15 improvements (College Boulevard) will be incurred by our property unless an actual building permit for entitled units on our property is issued by the City of Carlsbad. 6. None of the foregoing will have any effect whatsoever on our property from and after fifteen years from the date of completion of College Boulevard. Sincerely, The Owners of APN # 209-040-45 Grosse 2005 Trust Trustee citM{l~~ Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided February 10, 2015 Mr. Aaron Beanan, Senior Accountant City of Carlsbad Finance Department 1635 Faraday Avenue Carlsbad, CA 92008 RE: Proposed financing plan for College Boulevard Dear Mr. Beanan, We have become aware that the City of Carlsbad is proposing to include our property in a possible financing plan proposed by Bent-West, LLC for the construction of Zone I 5 improvements (College Boulevard). Generally, we have no problem with the inclusion of our property in the financing plan as proposed by Bent-West, subject to everyone's understanding that: 1. Inclusion of our property in the financing plan will not result in a lien being placed on our property by the City or any other party. 2. Any proposed cost-share for our property will not exceed TWELVE THOUSAND DOLLARS ($12,000) per-unit cost-share for future new dwelling units, if any. We understand that the cost per unit may be adjusted in future years to account for the application of the construction cost index, but for no other reason. 3. No cost-share as referenced above for the planning or construction of Zone 15 improvements will be incurred by our property unless our property obtains development entitlements for additional residential units. 4. No cost-share as referenced above for the planning or construction of required Zone 15 improvements will be incurred by our property as a result of any new construction related to a remodel or reconstruction of an existing residential unit or the addition of an otherwise approved "granny flat." 5. No cost-share for the planning or construction of Zone 15 improvements (College Boulevard) will be incurred by our property unless an actual building permit for entitled units on our property is issued by the City of Carlsbad. 6. None of the foregoing will have any effect whatsoever on our property from and after fifteen years from the date of completion of College Boulevard. Sincerely, Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Zone 15 blfrastroctore Fia:mri!g and Reimbursement Program I. The Carlsbad City Council approved lhe Local Facilities Management Plan Amendment Zone l5(E) (lhe "Zone: 15 LFMP~) on January I 0, 2012 pursuant to City Council Resolution No. 201 t-285. 2. The Zone t 5 LFMP specifies various major infraslrnCtUre improvements J."equired to serve all new development within Zone l5. including the construction of College Boulevard from Cannon Road to the existing northerly terminus near EI Camino Real and related infrastructure improvements. as further described in Exhibit ... A"' attached hereto (the .. College Boulevard lmprovements""'). J. The City approved Carlsbad Tract No. 00-18 for the Bent-West property pursuant to Planning Commission Resolution No. 5753 and imposed various Conditions of Approval rncluding Conditions Nos. 50 through 56 requiring the ftrumcing and construction of the College Boulevard Improvements (the "'Conditions of Approval"). 4. Bent-West is proposing to advance 100% of the costs of the CoUege Boulevard Improvements (currently estimated to be S l4 ,39 5 .,580). subject to reimbW'Setllent from other benefitted properties within Zone l5 of their fair share of the costs of the College Boulevard Improvements. 5. The Zone 15 LFMP states that ""no single financing mechanism could satisfy the complex infrastructure requirement~ of this Zone." (Zone 15 LFMP, pp. 148-149) Consequently, Bent-West is proposing two financing mechanisms for the reimbursement of the costs of the College Boulevard Improvements from benefitted properties within Zone 15-a Community Facilities District established pursuant to the Mello-Roos Community Facilities Act of 1982. as amended (Government Code Section 53311, et seq.) (the "Zone 15 CFD") and a reimbursement agreement between Bent-West and the City pursuant to which the City would collect a reimbursement from all benefitted properties within Zone 15 (the "Reimbursement Agreement"). 6. The cost of the College Boulevard Improvements would be spread among the benefitted properties pursuant to a fair share cost methodology approved by the City and coUected from such properties pursuant to the Zone 15 CFD and the Reimbursement Agreement An initial draft of the cost allocation prepared by the City's consultant, NBS, is attached hereto a-; Exhibit"B". (A portion of the cost of some of the drainage and water line improYements are not included in the cost allocation but, in accordance with the Conditions of Approval, may be subject to separate reimbursement agreement~ providing for reimbursement from extsting fee programs.) 7. The Zone t 5 CFD would be established pursuant to City Council Resolution No. 2002-369 ("Policy 33") and the MeHo-Roos Act [t would include the following elements: • The Zone 15 CFD boundaries would include five properties that are currently entitled-Le., Dos Colinas, MDR!Encinas Creek Apartments, Holly Springs. Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided CanJarini Ranch and Rancho Milagro. Each such property would be designaled as its own "'Tax Zone"' within dleZone 15 CFD. • Tile special aax.e:s authorized for each Tax Zone would be based on (l) the Tax Zone's fair share of the estimated costs of those CoUege Boulevard improvements (excluding habitat mitigation for CoUege Boulevard) that are deemed eligible for financing through a CFD with tax -exempt bonds and (2) the existing entitlements or development assumptions for the Tax Zone included in the Zone 15 LFMP-i.e., unit counts or gross leasable area eGLA "'). • Pursuant to the City Council's action of Aprill5, 2014, the special taxes would not be required to be prepaid prior to the sale of individual residential lots to homeowners. • Special taxes will not be levied upon property within aT ax Zone prior to the earlier of ( 1) approval of the first final subdivision map within the Tax Zone, (2) issuance of the first grading permit within the Tax Zone (excluding grading done for agricultural purposes), or (3) the commencement of construction within the Tax Zone (excluding the construction of structures designed to support agricultural operations). The amotmt of bonds issued to fund the Zone 15 CFD Tax Zones' fair share of the College Boulevard Improvements shall be based upon the actual costs of the College Boulevard Improvements. 8. The Reimbursement Agreement would be entered into by the City pursuant to its police powers under Article XI, Section 1 of the California Constitution, Government Code Section 66486, Sections 20.16.041 and 20.16.042 of the Carlsbad Municipal Code, the Zone 15 LFMP and the Conditions of ApprovaL The Reimbursement Agreement is intended to be of the type described in Section VLEoftheZone 15 LFMP(see p. 150) and could be similar to the form of reimbursement agreement approved by the City in Zone 14 pursuant to City Council Resolution No. 2004-293. The Reimbursement Agreement will include the following elements: • The benefit areas of the Reimbursement Agreement (each, a ._.Benefit Area") shall correspond to each of the Tax Zones as well as the properties in Zone 15 but outside the Zone 15 CFD as depicted in Exhibit "C" attached hereto (all, '"Benefit Areas"). • The Benefit Areas corresponding to each Tax Zone within the Zone IS CFD shall only be subject to reimbursement payments for their fair share of the habitat mitigation costs of the College BouJevard Improvements. • The Benefit Areas corresponding to each of the properties outside of the Zone 15 CFD shall be subject to reimbursement payments for their fair share of all of the costs of the College Boulevard Improvements. 2 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided .. Initially, the established teimbursement payments shall be based upon (I } the estimaled costs of the College Boulevard Improvements and (2) the actual entitlements or the development asswnptions for each Benefit Area in the Zone 15 LFMP. The actual relmbuc;cment payments shall then be adjusted to reflect (I) the actual costs of the College Boulevard Improvements and (2) the actual developmem entitlements (Le., units or GlA) for the Benefit Areas at the time the reimbursement payment is required. • The reimbursement payment for a Benefit Area shall be made upon !he earlier of ( l) approval of the first final subdivision map within the Benefit Area, (2) issuance of the first grading permit within the Benefit Area (excluding grading done for agricuttural purposes), or (3} the commencement of construction within the Benefit Area (excluding the construction of structures designed to support agricultural operations). • The reimbursement payment for each Benefit Area shall be subject to an annual inflationary adjustment based. upon a construction cost index until it is paid with respect to the Benefit Area • The City•s obligation to collect the reimbursement payment shall terminate on tht date that is !5 years following the City's acceptance of all College Boulevard Improvements. 9. The following is a suggested process for the approval of both the Zone 15 CFD and Reimbursement Agreement: • City consultant completes the fair share allocation of the estimated costs of the College Boulevard Improvements. • Bent-West submits to the City the concurrence of the owners of at least 65% of the land in the proposed Zone 15 CFD, as required by Policy 33. • The fair share allocation is presented to all Zone 15 landowners within the Benefit Areas for review and comment in a meeting with City staff and consultants. • City consultants and staff prepare and circulate to the Zone 15 CFD landowners the Zone 15 CFD documents (i.e. the CFD resolutions and rate and method of apportionment of special ta."<es) and City staff prepares and submits to Bent-West for review a draft Reimbursement Agreement • The Zone 15 CPO is presented to the City's Policy 33 committee. • City Council adopts Zone t 5 CFD Resolution of [ntention and sets a public hearing for the fonnation of the Zone 15 CFD. • City Council conducts a public hearing on the Zone 15 CFD pursuant to the Mello-Roos Act and a public hearing on the approval of the Reimbursement 3 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Agreement and the establishment of the Be(lefit Areas pmsuant to Carlsbad Municipal Code Section 20.16.042. • City conducts the Zone 15 CFD election and confinns the election results. • If the election is successful. City records the Zone 15 Notice of Special Tax Lien. • Subsequent to formation of the Zone 15 CFD, the City could elect to permir the owner of a Benefit Area outside tbe Zone 15 CFD to annex into the Zone 15 CFD prior to the issuance of bonds in order to finance the Benefit Area's reimbursement payment obligation. 4 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT"'A" College Boulevani Improvements .District-Wide Improvements (all Tax Zone and Benefit Area Properties) Street Improvement~ Cannon Road -Reach 4A College Boulevard and Cannon Road Intersection Improvements College Blvd Core lmprovements -Sunny Creek Rd to Cannon Rd Water Improvements CMWD Reclaimed Water Line -nT' (384 Zone) CMWD Water Line 12" (Service Area A-3 75 Zone -College) CMWD Water Line 12"' (Service Area A-375 Zone -Cantarini Loop) CMWD Warer Line 16"" & 36'"' (Service Area B -490 Zone-College) CMWD Water Line 16" & 36" (Service Area B-490 Zone-'A' Street) Drainage Improvements College Bridge over Agua Hedionda Creek-Drainage Facility BL-L Detention Basin BJ-1 College Bridge -78" Storm Drain Extension-Portion of Drainage Facility BL-L College Blvd-Drainage Facility BR (66'' culvert under College) Common Basins/Storm Drains Westside (College portion only) EC North Hydromodification Basin (College portion only) Frontage Improvements Habit:ru: Mitigation Site EC Hydromod Basin (C.ollege portion only) RCOA Parcel) Basin BJ Park-way Landscaping RCOA Parcel 3 Basin BJ Soft Costs ADL Construction Support and Close-out for Frontages Leighton Geotech for College Grading TY UN Bridge Design and Inspection Des:ign!Processing soft costs reimbursement to Bent-West (incurred subsequent to 9-lO-lJ) City Processing Costs (pre-formation and fom1ation) A-l Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Specific Improvements (certain Tax Zone and Benefi[ Area Properties) College Boulevard Frontage Improvements RCOA Parcel4 (Apartment portion only) MDR -Encinas Creek Cantarini Ranch Lubliner ECEast WalMart (l.Alt 11) EC South EC North Dos Colinas Signal Cost at College/Street C Cantarini Ranch MDR-Encinas Creek DosColinas Signal Cost at Collego'Street A Canrarini Ranch DosColinas Sewer Line North Cantarini Ranch MDR-Encinas Creek Sewer Line Soui:h Cantarini Ranch DosColinas Holly Springs Common Basins/Storm Drains Westside Cantarini Ranch OosColinas EC North Hydromodification Basin Cantarini Ranch A-2 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Habitat Mitigation Call Tax Zone and Benefit A.rea Properties) College Boulevacd Wetlands & Uplands Mitigation Improvements Costs for design, processing and construction ofimprovements only (no land costs or endowment, monitoring and maintenance costs) A-3 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT "B" NBS lnitial Draft Cost Allocation (attached) B-1 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided Cit¥ ()f CaMbl.ld Zone 15 Eatimated Dletrlct·Wido, Speclflc, and Habitat Mitigation lmpnJvomont Co•t AJioc:atlon~ 611~ecl upon tntom"1tlon contslned In the Oclabor 19, 2011 City of Cl!rlsblld Growth Mana9em!!nl Progrem Local Faclllll11 ManAgement Pl~n Amendn1ent lone 15 (E} To till Total Commertllal O•nol'lll Pl•n Approllfld& Square scu Dletrlct Wtda Specific D•volopmcnt Land Vac Future Unit Footage Alit• ptr lmplflwmtnt lmprovtmtnt ~eN 2X!"!~ S!!tua T~l!ll !2!•111!!!IIIS!D PISII•UIIII!JJ l!!!ll•i!tl&!l !.loll lili!l.!l £IIIII Ill C!!ll!!il 209-Qg0·11..00 WAL·MART STORES INC Partlclp•tlng MFR/COM L·1 190 90,000 (:1) 1110 $2,381,137 $8,840 209.070·16·00 KATO FAMILY LTD PARTNERSHIP Unentitled SFR RL·l(o) tS4 0 4.00 2GO 072.671 0 208..070..03·00 MANOANA CAL CO Unentitled SFR RL·2(b) 185 0 4.00 a eo 1,7~.231 0 20G.CJ70·07·00 MANOANA CAL CO UnantltltO SFR RL.·2(b) 0 0 20ri.080.23·00 BARLOW TIMOTHY P11rtlclpatlng SFR RLM·10 12 0 4.00 48 128,1211 0 20;-oe0-&1·00 l YALL ENTERPRISES INC Participating SFR RLM-11 18 0 4.00 7!l 18Q,e99 0 188·0~0.57·00 HOLLY SPRINGS DEVELOPMENT U.C Partlc:lpatlng SFR Rl.M-.2/ RLM·2A 42 0 4.00 168 441 .~41 40,120 209-070·13·00 BENT-WEST LLC PartlclptUng SFR RLM-3A I RLM--\A 104 0 4.00 <1111 1.0113,091 1,~30,040 168..050·38·00 RANCHO CARLSBA.O OWNERS ASSN Participating HOA RLM-38 0 0 0.00 0 0 0 188·050·36·00 RANCHO CARLSBAD OWNERS ASSN Participating MFR RLM-3C ao 0 2.:!5 1110 472.Q?2 71,416 209-080· 71..00 W P GOLF & EQUESTRIAN L L C PartlelpeUng SFR RLM·7 14 0 4.00 ee 147,147 !18,272 201il.Q60·72·00 W P GOLF & EQUESTRIAN L L C f'lrtlclplllng SFR RLM·ft A 0 4.00 36 8~.594 se,oeo 209•0CI0·88·00 W S L DOS COLINAS RJE L L C Partlclpallng SFR RlM-&A 4 0 4.00 18 4l,042 (l 209-o60·ee-oo SEPTON INVESTMENTS L L C Participating EIFR RLM41A 8 0 4.00 32 14,064 130.S« 209..1)80· '70·00 W S L OOS COLINAS R/E I. L C Participating Sr. ~iving RM·3 30!S 0 (4) tl71 1,501,4:1.4 1,3711,133 l U:Q~!l-1:112·~11 ~N!;;Itlt.S QBi.~K e,PAR:WI.li:I!S t!.9 Pir:JI~It!lling !l:lEB Bblt!·l l2Z g a.&~ m ZGQ,@~ i!ZIUIII Totalo: 1,143 to,OOO 3,711 $D,7S1,&02 S3,en,oas (8) G&n.utl Plan Oes!Qnuuon ov•mpa wit~ po.rcola 20t-07CH4-00 •ncl 209.07~18.00. Purc:III20P..07~14-00 dtvo;loPid wfth cmv unll. RofNiinlng unilli ond lnlormtllon tnown on parc;;~l208-070.16<00. (b) Gon•r•l Plan Oc•l;naUcn ov•rlllpa wfth parcola 20t-OT0.03·00 and 201.070.07..00, lnfarmaUen ehaW"' on pil~l200.07o-03-0C (1) Tnv dlltrlgt-wldcl caata total $10,!2~.•87 wt\teh lnc!u~ ttoe habltot rnlt!Qallon cooli o111,070,984. Not cllltrict-wkM c011t1 aro sa,751.e03. Total may no1 oqu~l duo lo rounding (Z) 7otol n111y no1 oquel due to ooundlng. (3) TM 1001.1 rat• ""'MFA unn 11 uo end th" eou rate por 1.000 of conunorclltlaquaro roota;o Ia e &0. (A) Tho 01 euletocl living un«~ oro ua!Qn~ 1 !0 EOU• pt1r unlland !hd ~2~ lndepende•1t living unlla art aulgfl4td 1.&0 EOUo par unh. Hlblllt !l!!ll&•llocl&l $262,613 73,878 190.468 13,862 21,1132 48,482 120,082 0 51.9~6 18,101 10,3811 4,~17 9.235 164,81l8 §2,~U S1,070,8e:l T11tal lmprovomenl 02111131 s2,eeueo 746.549 1,92~.897 139,1l7S 221,(131 630.~3 2,7<19,183 0 ~llC1,333 231,680 1&4,063 48,689 224,163 3,046,<186 l.m.!l~a S14,311,tl80 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided BSI!I~~Ilt City of Carlsbad Zone16 EDU Assignment i;li:IIDIWI I.IDd 1.!11 QlfH r;guam ~!iYilt EC UJt2l Wuiat .1iQUa!3i EQ!Ja(~l SFR 1.00 1.00 1.00 1.00 MFR 0.70 1.00 0.40 0.15 Senior Care (In• 0.30 1.00 0.40 0.20 Senior Care (A! 0.20 1.00 0.40 0.20 Commerct111 10.00 0.60 0.20 0.30 MFR wet Cami 0.35 1.00 0.40 0.15 Commercial w f 5.00 0 60 0.20 0.30 (1) Baaed upon SANDAG trip generation datu (2) Based upon the City's sewer EDU assignment Iatal t;QUa 4.00 2.25 1.90 1.80 11.10 1.90 6.10 (3) Baaed upon the water connection foe mathodology from the Carlsbad MWO 2012 Water Mmster Plan (4) Estimated utilizing general plan land use lmpervlouaneu percentages (6) Atllumellapproxlmcteiy 50% of the traffic will utilize El Camino Real for ac~as .e.u Unit Unit Unit Unit 1,000 BSF Unit 1,000 BSF Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXIUBIT "C" Zone 15 CFD TAx Zone & Benefit Area Propenies (see attached) C-1 Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided EXHIBIT 'C ' ZONE 15 CFD TAX. ZONE & BENEFIT AREA PROPERTIES HUNSAKER & ASSOCIATES SAN OI(CO, INC PLANNING '1lfJl Waples Stteet ENONmlNC Sin DieJo, CA 92\21 SVIlvn'INC PH(a.5!)55a-UOO• fX(BS3)5SB-14H t:X '21 Tax Zcnc end 8tnent Area Prop4rtloo.dw~ In R•\08~11\k£.~9\Exhloltli on 10/30/2014 1 • DOS COUNAS 2. MDR "ENCINAS CREEK APTS" 3. HOLLY SPRINGS 4. CANTARINI RANCH 5. RANCHO MILAGRO 6. WALMART (LOT 1 1} 7. EC SOUTH 8. EC NORTH Q, RCOA P-4 10. KATO 11. MANOANA 12. BARLOW 13. LUBUNER 14. EC EAST I I TAX ZONE/BENEFIT AREAS CITY OF' Vl8TA 122221 BENEFIT AREAS (NOT A PART OF CFD) Continued to 10-6-2015, AB# 22,091Ordinance No. CS-273 Voided