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Home My WebLink About2005/07/06 - Agenda Packet - Spec Wkshp (CFD) AGEND'A !: RANCHO tJUCAMONGA CITY COUNCIL ,..., ,, ,-' :.' :~SPECIAL WORKSHOP - ,Rancho Cucamonga Civic Center '~ Tri-Communities Conference Room · ~" ~ 1050OCi{/ic'Center Drive ~ Rancho Cucamonga, CA 91730 '~ A. CALL TO ORDER 1. Roll Call: · Alexander ,' , Gutierrez , Michael , Spagnolo , Williams__ B. PUBLIC COMMUNICATIONS This is the time and place for the general public to address the City Counci,L, Sta,,,te !aw prohibits the Council from addressing any issue not previously included on the.agepda~ The Council may receive testimony and set the matter for a subsequent m~eting. Comments are to be limited to five minutes per individual. . ~. ,~: ] C. ITEM(S) OF BUSINESS 1. DISCUSSION AND REVIEW OF COMMUNITY FACILITIES DISTRICT POLICIES AND GOALS~ INCLUDING JOINT COMMUNITY FACILITIES AGREEMENTS ' (JCFA) ,., ~- D. ADJOURNMENT I, Debra J. Adams, City Clerk of the City of Rancho Cucamonga, hereby certify that a true, accurate Copy of the foregoing agenda was posted on July 5, 2005, per Government Code 54954,2 at ~10500 Civic Center Drive, Rancho Cucamonga, California. : .,, . .... , ? ,,~RANCHO City of Rancho Cucamonga Community Facilities District (CFD) Workshop Presented by Warren Diven Jim Fabian David Taussig July 6, 2005 ~ Fieldman, Rolapp ~.~& Assodates DTA INDEPENDENT FINANCIAL AND INVESTMENT ADVISORS D [Members of the Presentation Team [] City Staff-Jack Lam, Pam Easter & Ingrid Bruce [] Bond Counsel & Disclosure Counsel - Warren Diven, Best Best & Krieger LLP Financial Advisor -Jim Fabian, Fieldman, Rolapp & Associates [] Special Tax Consultant & CFD Administrator - David Taussig, David Taussig & Associates ~ Fiddman, Rolapp DTA I l:l liar ~----*~.~es July 6, 2005 0-,......,,B~s.-B~s.r & U~,EG~i~ Page 1 I Review of City's Role as Lead Formation Process · Review Goals & Policies to make sure proposed CFD conforms to existing policies · Approve Resolutions initiating formation proceedings · Approve Joint Community Facilities Agreements (JCFA's) with other Public Agencies if required · Conduct Public Heating, Approve Resolutions Forming CFD, Conduct Election, Certify Election Results Bond Issuance · Insure Bond Issue complies with goals & policies · Approve the Preliminary Official Statement, Fiscal Agent Agreement and Continuing Disclosure Agreements · Execute Bond Purchase Agreement with Bond Underwriter CFD Administration · Approve Annual Special Tax Levy · Conduct Audit of Construction Expenses · Process requisitions to Fiscal Agent for payment requests · Provide Continuing Disclosure - Annual and Event · Conduct periodic Arbitrage Rebate Calculation ~Fieldman, Rohpp D~IA I g~ l~ Associates July 6, 2005 ,.,., ,....,,u,~,,~,- U~s*S,K~,~GE,,~ · A.,o.,.,..,,..,,,., .........Page 2 Review of City's existing Statement of Goals · ~.~UCAMONGA and Policies for the use of the Mello-Roos ~i~o.~,~ Community Facilities Act of 1982 Adopted by the City on July 27, 1999. Used to form CFD No.2000-01, CFD No. 2000-02, CFD No. 2001-01 (Series A & B), CFD No. 2003-01 (Series 2003-A & 2003-B), CFD No. 2000-03 (Amended) and CFD No. 2004-01. gl Meets the minimum requirements of Section 53312.7 of the Government Code. ~Vieldman, Rolapp j~y 6,2005 DTA I g] gic & Assodates o..,, ,....,, ~.~ ~..~,. ~,~.~., Page 5 City's existing CFD policies contain the ~ ~..R^NcHo £oll wi ~=~o~ o ng sections: ~'-~ Eligible Public Facilities and Priorities Credit Quality Required of Bond Issues Disclosure Requirements Equity of Tax Allocation Formulas Appraisals ~Fieldman, Rolapp DrlA =,:~tes July 6, 2005 .... ' '..,.', -~-..-~:j/,&..,K~...,,E~,., Page 6 Section 1.- Eligible Public Facilities and Priorities [] Improvements must have a useful life of 5 years or more. [] Bonds will not have a maturity date greater than the useful life of the facilities or improvements. [] Eligible public facilities include parks, parkways, open-space, schools, libraries, child care and other governmental facilities. [] None of the types of facilities will have priority over the others. ~Fieldman, Rolapp D~IA I gl lic & Associates July 6, 2005 ~;~.,:;..ff.,~ B~,~ '~ES','&'~,E~,,~ Page 7 Section 2.- Credit Quality reqmred of Bond cRA.¢.o UGAMONGA Issues gl City will require that the City's independent financial consultant review and report on the financial feasibility of the project to be financed. gl Credit enhancements may be required to improve the credit worthiness of the proposed financing. gl City reserves the right, in its sole discretion, to determine the acceptability of required credit facility. ~Fieldman, Rolapp & Associates .... INDEPmDENTFINANC~ALA,NDINVESIM~ITA~VlSOR$~--~ J~y 6, 2005 . ............... B~ ~.~&~,~.= Page 8 I Section 3.- D sclosure Requirements cR~C.o UCAMONGA [] Requires that the statutorily prescribed disclosure be made to the initial purchaser of property within a District. [] Requires the City to make available the information necessary to complete the disclosure certificate required for secondary transfers. [] City shah use all reasonable means to ensure compliance with applicable federal securities laws in connection with the issuance of bonds and the provision of annual information regarding any District established by the City with respect to which Bonds have been issued. [] City will require any developer whose development is material to the Bond issue to transmit appropriate information to the City to disclose. --- Fieldman, Rolapp DrlA II]g~ Lclates July 6, 2005 .... 0 ,..,.,, n~$-,, n,~sT& K,~.~,=E,,~ · ................................ Page 9 Secuon 4. Equity of Tax Allocation Formul:as,,, .o Requires the Rate and Method (RMA) must be both reasonable and equitable in apportioning the costs of public facilities. [] Requires all properties not otherwise exempted by the Act from taxation shall be subject to the special taxes. [] Limits the "overlapping" debt burden on any parcel to two percent (2%) of the expected assessed value of the parcel upon completion of the improvements. [] Requires a provision of a back up special tax to protect against any changes in development that would result in insufficient special tax revenues to meet the debt service requirements. [] Requires a formula of prepayment of the special tax. ~ Vieldman, Rolapp D~IA II]I~ & Associates July6,2005 °'"' ..... " HES'l' ][][IEt5T & KIrgIEGEI~) * ................................. Page 10 Section 5. - Appraisals Cl Requires the Appraisal shall reflect nationally recognized appraisal standards (i.e. Uniform Appraisal Standards for Federal Land Acquisition). Requires the Appraisal shall contain the purpose of the appraisal/description of the property/reliable approaches to value/a description of comparable sales/statement of value of property/ the effective date of the appraisal. Requires the appraiser have no conflict of interest in the real property being appraised. Requires the valuation of the property should be based on 3 premises (1) Raw Land Value (2) Project build out Value (3) Bulk Land Value. ~Fieldman, Rolapp Drl~ & Associates July 6, 2005 *..,. ..... ,, ~ ~"~" ......................... Page 11 Secuon 6.- F, xcepuons to these Policies The City may find in limited and exceptional instances that a waiver to any of the policies is reasonable given identified special benefits to be derived from such waivers. Such waivers are granted only by action of the City Council based upon specific public purpose or health and safety findings. -~---~ Fieldman, Rolapp DrlA I g:l g~ -~_~.~_ Associates July 6, 2005 :'~1:~,,I:,:::.',~ ~Es'r ~v. sa'&U~a,~cE,~a Page 12 Discussion of issues facing the City that necessitate a review of the City's existing CFD Goals and Policies Escalation of Home Prices has resulted in ability to levy higher special tax within 2 % industry threshold for maximum tax burden. Developer's selecting other Public Agencies as the lead agency (i.e. Efiwanda School District) to finance municipal improvements for CFD's located within the City's boundaries. Developer's requesting more items be included in CFD's. Changes in the industry and practices since adoption. Changes in CDIAC Appraisal guidelines since adoption. ~Fieldman, Rolapp D~IA I ~ lic & Assodates July 6, 2005 *..,. ..... ,1 I~E$'l' B£ST&K,,,~G~,,= Page 13 ]Proposed amendments to the City's CFD ~ cR~C.o UGAMONGA Goals and Policies ~'~ r~ CFD Application Process - A formal application will be required by all Developer's requesting a CFD and a procedure to review and evaluate the applications is being proposed. ~ Authorized Facilities & Services - A section updating authorized facilities and incorporating the ability to finance fire facilities and services is being proposed. a Land Use Approval - A section requiring all proposed CFD projects be consistent with the City's General Plan and have secured appropriate land use approvals from the City such as a Tentative Map before formation of a CFD is being proposed. al Absorption Study - A section requiring a formal independent market absorption study is being proposed. [] Disclosure Requirements - A standardized residential special tax disclosure form is being proposed. LFieldman, Rolapp DrlA ~ lJ lic ates july 6, 2005 D.,,, ...... , BEs',' R~.s-,.&m,,~ Page 14 ]Proposed amendments to the City's CFD ~ Goals and Policies (cont.) ~1 Special Taxes - It is proposed that the special tax for residential property will not escalate over the term of the special tax except for the maintenance portion of a CFD. Special Taxes - It is proposed to specify the maximum allowable rate of special taxes for residential property shall not cause the total tax and assessment obligation for such property, including projected ad valorem taxes and special assessments, to exceed one and eighty-five hundredths percent (1.85%) of the anticipated assessed value of residential property. Special Taxes - It is proposed to specify that only proceeds from the sale of CFD Bonds will be used to acquire facilities from Developers not on-going special tax revenues collected over the term of the CFD. Fiddman, Rolapp DrlA Proposed amendments to the City's CFD ~ Goals and Policies (cont.) Financial Security - A proposed addition to the Policy will require Developers to provide a Letter of Credit in the amount equal to two (2) years of debt service on the Bonds as long as they represent 20% or more share of the special tax burden. Joint Community Facilities Agreements - A proposed addition to the Policy will specify that the City will not enter into a JCFA unless there is compliance to the City's CFD Goals and Policies. LFieldman, Rolapp DqA ! l:l l~c S July 6, 2005 ~'*~'.;.,:~7" m~s.., n~s~:&~,;~,~,;~:.~ Page 16 "'Proposed amendments to the City's CFD ~ Goals and Policies (cont.) c}~b:°"-"°°A Bond Issuance - A proposed addition to the Policy would state the City is under no obligation to issue tax-exempt debt and the ability to issue tax-exempt debt depends upon the particular facts and circumstances of each CFD. Appraisals - A proposed addition to the Policy will require all appraisals to be prepared by a qualified M.A.I. and require the appraisal to conform to then published CDIAC guidelines for Land secured appraisals. ~--_-vm.4& wx~SO~.aatc~ July 6, 2005 .... , ,..,.,, u~.s~. U~sT&~,Ec~.~ Page 17 I Questions and Answers ~.~.o~ ]Next Steps ~ t.~RANcIqo To place on an upcoming City Council agenda amended Goals and Policies for discussion. ~Fieldman, Rolapp D~IA Il]Iii & Associates .... , ,....,, ..D~N~.r F~S.C~t n~ ,.W,,m~T ~WO.S July 6. 2005 . ............... m~.~- ~ ~ .,~,~, .,,. ~c,m ~ Page 19