HomeMy WebLinkAbout1998-06-23; City Council; Resolution 98-212<
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RESOLUTION NO. 98-212
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, ADOPTING REVSIONS TO CITY
COUNCIL POLICY STATEMENT NO. 33
WHEREAS, Proposition 21 8 was approved by the voters in 1996 and changed some
of the regulations regarding the use and methods by which assessment district financing can
be used; and
WHEREAS, the City Council of the City of Carlsbad had previously adopted a
Council Policy governing the use of assessment district financing of public improvements;
and
WHEREAS, the City has adopted new titles for certain City staff since the last
revision of City Council Policy Statement 33 was approved.
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 revised City Council Policy 33 as shown in Exhibit 1 is hereby adopted.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City
Council held on the 23rd day of June , 1998 by the following vote, to wit:
AYES: Council Members Lewis, Finnila, Nygaard and Hall
NOES: None /' /'
ABSENT: Council Member Kulc
ATEST: -
ALEThA I. RAUTENKRANZ, City Clerk I (SEAL)
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exhibit 1
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CITY OF CARLSBAD
Policy No. 33
Effective Date 6/23/98
General Subject: Assessment District Financing Cancellation Date None
of Public Improvements Supersedes No. 7/28/92
COUNCIL POLICY STATEMENT Date Issued 6/23/98
Specific Subject; Policy for Use of 1915 Act Bond
I
Copies to: City Council, City Manager, City Attorney, Department and Division H
Employee Bulletin Boards, Press, File
I
BACKGROUND
In the past few years, the City Council has received several requests from property owners of 1
planned developments to use 191 5 Act Assessment District bond financing for public improveme
be constructed as a condition of such developments. The City Council has determined that tax-er
financing and 191 5 Act bonds should only be used if a mutual benefit to the City can be fou
addition to the special benefit conferred to the properties within the development. Counci
determined further that such a mutual benefit can be found in the construction of arterial street
compliment the City’s arterial street system by linking communities within the City. The u
assessment district financing for arterial streets may include sewer and water lines when the E
Works Director determines it is necessary that they be located within the street right-of-way. Prl
may also include other incidental construction such as drainage facilities located within an el
arterial highway and environmental mitigation required for the improvements.
Council has also determined that it is necessary to establish circumstances under which the City Cc
will approve assessment district financing as a guide to those who would seek to request it.
PURPOSE
To establish a policy regarding the requirements which must be met before the City Council will ap
the financing of public improvements using 19 15 Act assessment district bonds.
To establish a procedure for processing applications for assessment district financing and a staff r
committee to apply the requirements of this policy to such applications. The committee mal
consider recommending that the City initiate a district.
The policy is primarily intended to apply assessment districts proposed for property whi
predominantly undeveloped where the developers in the area propose to use public financing in 1
private financing for appropriate public improvements.
It is not the intent of this policy to relieve any developer of responsibilities for public improveme
conditions of development related to the subdividing of property, the processing of tentative 01
parcel maps, or master plan developments.
=xh
Page 2 of 6
CITY OF CARLSBAD
Policy No. 33
Effective Date 7/28/92
General Subject: Assessment District Financing Cancellation Date None
of Public Improvements Supersedes No. 6/9/87
COUNCIL POLICY STATEMENT Date Issued 7/28/92
1 1 Specific Subject: Policy for Use of 19 15 Act Bond
I
Copies to: City Council, City Manager, City Attorney, Department and Division E
Employee Bulletin Boards, Press, File ”
POLICY
1. The City may allow the financing of public improvements under the provisions of this policy 7
the public facilities represent, in the City’s opinion, a mutual benefit to the community
special benefit to the prospective residents of the development.
2. Facilities which may be considered shall be public facilities in dedicated rights-of-way easer
and for which a public agency has on-going responsibility to maintain and operate. The tyy
facilities to be financed are limited to:
(a) Arterial streets identified on the circulation element of the Carlsbad General Plan.
(b) Sewer and water lines to be located within the right-of-way of arterial streets when the I
(c) Drainage facilities and public utilities may be included which are appurtenant and incider
Works Director determines it is necessary that they be so located.
such streets.
(d) Environmental mitigation required for the project.
3. Project property value to lien ratio should be 4: 1 after the installation of the improvements to be
financed. A project may be approved with a ratio between 4: 1 and a minimum of 3: 1 if the ratio
recommended by both bond counsel and the underwriter and if the City Council finds the reduct
ratio to be within parameters acceptable to them. The value of the property proposed to be asse:
shall be determined by an M.A.I. appraisal, performed by an appraiser selected by the City.
4. Projects shall be at the stage where all criteria of this policy can be adequately assessed.
Developments proposed for inclusion in a district shall have already received environmental rev
and shall have already received all legislative approvals such as zoning, master plans, specific pl,
Local Facilities Management Plans. The City Council may approve a district that includes some
without legislative approvals if the improvement to be constructed is consistent with the Genera
and if the City Council finds the improvement is required in the public interest.
5. Assessment districts shall have the concurrence of the affected area’s property owner’s represen
not less than 60 percent, by area, of the land proposed to be assessed. The petition shall include
acceptance of this policy and a waiver of the property owners’ rights under the Majority Protest
The city Council is in no way required to proceed with the formation of an assessment district if
TI
I Page 3 of 6
CITY OF CARLSBAD
Policy No. 33
Effective Date 7/28/92
General Subject: Assessment District Financing Cancellation Date None
of Public Improvements Supersedes No. 6/9/87
COUNCIL POLICY STATEMENT Date Issued 7/28/92
I
Specific Subject: Policy for Use of 191 5 Act Bond
I
Copies to: City Council, City Manager, City Attorney, Department and Division H
Employee Bulletin Boards, Press, File "
Council finds that the creation of the district or the construction of the improvements will not be i
best interest of the City.
6. The City shall select the assessment engineer, bond counsel, required, the financial consultant an
required, an underwriter. In making such selections the City will take suggestions from the proje
proponents into account. The design engineer in consultation with and subject to approval of the
The bond counsel, underwriter and financial consultant will provide the City with a Statement of
Conflict of Interest related to real estate holdings within the district. The design engineer and
assessment engineer shall provide a Statement of Conflict of Interest as required under Section
87100.1 of the Government Code (see attached).
7. Bonds issued under this policy may be sold through a competitive or negotiated sale as determinc
the City Council. The Council will consider recommendations from staff and the City's financial
consultant in selecting a method of sale.
8. A sum sufficient to pay all fees and costs for the proposed assessment district prior to award of
contract shall be deposited with the City by the proponents of the district. The proponents shall a
be required to deposit with City a sum sufficient to cover all City costs incurred in connection wil
review of a proposed district including staff review, legal review, administration, plan checking,
investigation, City Council review, inspection and property appraisals. These sums will be retainc
City to the degree used if the district is not successfully completed or if such costs are not recover6
City from the district. If the district is confirmed any sum not retained by City shall be refunded i
cash or applied as a credit against the assessments at the option of the proponents.
9. Improvements shall be constructed in accordance with the Municipal Improvement Act of 19 13 ,
the assessment district bonds shall be issued in accordance with the Improvement Bond Act of 19
unless the City Council determines otherwise.
lO.Generally, there shall be no overlapping bond assessments or tax liens on the proposed special
assessment district at the time assessments are to be affirmed by the City. The City Council, up01
advise of bond counsel, may approve an overlap provided the combined assessments are within tl
property value ratios of Paragraph 3 of this policy.
1 1 .The proponents of the district must demonstrate to the satisfaction of the City Council that interir
financing or other means is available for the developments to be included within the district, adeq 4.2 '1
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Page 4 of 6
CITY OF CARLSBAD
Policy No. 33
Effective Date 7/28/92
General Subject: Assessment District Financing Cancellation Date None
of Public Improvements Supersedes No. 6/9/87
COUNCIL POLICY STATEMENT Date Issued 7/28/92
Specific Subject: Policy for Use of 191 5 Act Bond
~~ ~~
Copies to: City Council, City Manager, City Attorney, Department and Division H
Employee Bulletin Boards, Press, File ”
to meet all assessment obligations between the time the district is formed and the pay off of the
bonds or their assumption by the purchasers of the individual homes within the proposed
development. As part of the review, the City Council may also consider any indebtedness pres
existing against the properties to be assessed. The district proponents must bring all property t;
bills current and agree to keep them current prior to confirmation of the district.
12. If the City Council determines it is necessary, a financial feasibility study me be required by a
consultant selected by the City to be accomplished at the expense of the proponents of the distri
ascertain whether or not the proposed development will find market acceptance. The City Cow
may accept a private sale bond purchase agreement from a qualified underwriting firm on terms
conditions satisfactory to the City in lieu of such a study.
13. As part of the structuring of the financing for the district the City Council shall require that an
adequate reserve fimd be established to cover any potential defaults. The City is not required to
advance monies to the reserve fund to pay for delinquencies. It is the City’s intent that its Gene]
Fund not be obligated in any way for future delinquencies.
14. The City Council may require the district proponents to enter into an agreement with the City to
individually and jointly responsible for the cost of any foreclosures which the City determines ar
necessary in regard to the assessment district bonds. The City may, at its option, retain an attornc
prosecute the foreclosures in a timely manner in the name of the City and the proponent shall agrl
be responsible for all costs of such foreclosures. If the City Council approves a pass through of 2
bond to the purchaser of an individual lot, the proponents shall be relieved of their obligations zu
the agreement for such lot.
15. It is the policy of the City Council in approving basic legislative authorization for developments
as master plans for planned communities, to give such approvals as part of the City’s on-going
planning process. That is, the City,reserves the right to modify the approvals in the future as they
determine the public interest may require. Such approvals, when given, are subject to a condition
that the construction of any part of a development does not vest any rights to complete other port
of the development. Construction of public improvements pursuant to an assessment district in
undeveloped land, shall not vest any rights to the existing legislative approvals for the property tc.
assessed or to any particular level, type or intensity of use. Proponents of a district shall include
acknowledgment of this policy as part of their petition and shall expressly waive on their behalf 5
on behalf of their successors and assigns any cause of action based on the case of Fury v. County 1
qq
I Page 5 of 6
CITY OF CARLSBAD
Policy No. 33
Effective Date 7/28/92
General Subject: Assessment District Financing Cancellation Date None
of Public Improvements Supersedes No. 6/9/87
COUNCIL POLICY STATEMENT Date Issued 7/28/92
I Specific Subject: Policy for Use of 1915 Act Bond
I
Copies to: City Council, City Manager, City Attorney, Department and Division H
Employee Bulletin Boards, Press, File ”
Sacramento which might be applicable to properties to be assessed.
16. It is the City’s desire that proponents discharge the assessment district bonds applicable to their
property prior to the individual sale of individual lots. The City Council may approve a pass thl
of the bond obligation to a prospective purchaser at their sole discretion. A developer wishing tc
secure approval of a pass through must apply to the City in writing, requesting permission to do
The letter must contain a plan of how the prospective buyer will be notified and the steps taken 1
accomplish the pass through. The required procedure shall include, but not be limited to, all oft
following:
a) Provide for full disclosure of this and any other assessment financing applicable to the propel
prospective purchasers including principal interest rate, duration and amount of mo
payments.
b) List the amount of the assessment lien 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) Give prospective purchaser an option to have the assessment lien discharged prior to close ol
escrow or to assume the assessment lien by a pass through as a part of the sales price of the
house or by a reapportionment of the assessment. (Sample disclosure forms are attached to tl
policy). Once the request is received from the developer, it will be placed on the Council
agenda for consideration after a complete review of the request by staff and the Policy 33
Committee.
17. The principal purpose for the City Council’s approval of assessment district financing is to comr
the links in the City’s circulation system. The City Council in that regard will not favor a propo:
district which contemplates the construction of a portion of an arterial street unless it is extendec
logical way to connect with the City’s existing circulation system. The City may require that
proponents of a district expand the area to be included within a proposed district as may be nece:
to complete such circulation.
18. It is the Council’s policy that, in the event that there are surplus funds generated through the cre:
of an assessment district and the sale of bonds, these surplus funds shall be used as follows:
(a) To complete any work related to the project that the Council determines is equitable and
(b) The Council may direct staff to use a portion of this surplus to offset assessments to pro1
owners in following years in a manner consistent with the 19 13/15 Act statutes. Under this
reasonable as allowed by the 19 13/ 19 15 Act statutes.
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Page 6 of 6
CITY OF CARLSBAD
Policy No. 33
Effective Date 7/28/92
General Subject: Assessment District Financing Cancellation Date None
of Public Improvements Supersedes No. 6/9/87
COUNCIL POLICY STATEMENT Date Issued 7/28/92
Specific Subject: Policy for Use of 19 15 Act Bond
Copies to: City Council, City Manager, City Attorney, Department and Division €
Employee Bulletin Boards, Press, File "
policy, an amount of up to 5 percent of the total bond issue size not to exceed $1 million may be
to offset annual assessments without further Council action.
(c) Unless otherwise directed by Council, any amount in excess of that used to offset assessme:
described in (b) above will be used to call bonds at an appropriate bond call date, as determinl
staff and the City's financial advisor.
PROCEDURE:
1. It is the intention of the City Council that proponents of a district have an early opportunity to
the proposal reviewed by City staff for compliance with this policy. In that regard, the City Cc
hereby directs the creation of the Project Review Committee. The Committee shall consist (
City Manager, City Attorney, Community Development Director, Planning Director, Public VI
Director, Administrative Services Director (Chairperson), and Finance Director. The Comn
shall meet on request with proponents of a district to review a project to determine whether or nc
requirements of this policy have been satisfied. Committee review shall take place prior tc
presentation of an assessment district project to the City Council. Whenever any such projt
presented to the Council it shall be accompanied by a report containing the findings
recommendations of the Committee made in regard to such project. The Committee may requir
proponents to furnish any information necessary to the evaluation of the proposed district.
Committee may require all or any part of the deposits provided for in this policy to be made prj
the commencing their review of the project.
2. Upon review of the proposed assessment district and after considering the report of the Corn
the City Council shall determine whether or not to approve proceeding with the formation 0
district. It is the policy of the City Council of the City of Carlsbad to limit projects to the criter
forth in this policy. The City Council reserves to itself the authority to approve or disapprovc
proposed improvement district based upon the evidence received at the hearings held by the
Council. Any exceptions to the criteria of this policy will be approved only upon an express fin
by the City Council that the project is so affected with a public interest that the City should assj
providing tax free financing for the improvement in order to satisfy a public need. If the City Co:
approves proceeding with the formation of the district, City staff and the proponents shall procel
do that in accordance with State Law and the requirements of this policy.
3. Where there are multiple proponents of a proposed district they shall designate a spoke?
authorized to act for the proponents in their dealings with the City. The spokesman sha:
responsible for collecting any fees for deposit with the City, providing any necessary informatic
the City, and for communicating as necessary back to the proponents.
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