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HomeMy WebLinkAbout99-154 - Resolutions RESOLUTION NO. 99-154 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA ADOPTING A STATEMENT OF GOALS AND POLICIES FOR THE USE OF THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 RECITALS: WHEREAS, the City Council (the "City Council"') of the City of Rancho Cucamonga, California (the "City") proposes to undertake proceedings pursuant to the Mello-Roos Community Facilities Act of 198.2, as amended, commencing with Section 53311 of the California Government Code (the "Act"), to form a community facilities district; and WHEREAS, the Act provides that the City Council may initiate proceedings to establish a community facilities district pursuant to the Act only if it has first considered and adopted local goals and policies concerning the use of the Act. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The City Council adopts the Statement of Goals and Policies for the Use of The Mello-Roos Community Facilities Act of t982, substantially in the form attached hereto, marked "Exhibit A," with such revisions, amendments and completions as shall be approved by the City Manager. PASSED, APPROVED, AND ADOPTED this 21st day of July, 1999. AYES: Alexander, Biane, Curatalo Dutton, Williams NOES: None ABSENT: None ABSTAINED: None William J. Mayor IIII Resolution No. 99-154 Page 2 ATTEST: Debra J. CMC, City Clerk I, DEBRA J. ADAMS, CITY CLERK of the City of Rancho Cucamonga, California, do hereby certify that the foregoing Resolution was duly passed, approved and adopted by the City Council of the City of Rancho Cucamonga, California, at a regular meeting of said City Council held on the 21st day of July, 1999. Executed this 22"~ day of July, 1999, at Rancho Cucamonga, California. Debra J. CMC, City Clerk Resolution No. 99-154 Page 3 EXHIBIT A STATEMENT OF GOALS AND POLICIES FOR THE USE OF THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 Resolution No. 99-154 Page 4 TABLE OF CONTENTS SECTION PAGE I. INTRODUCTION ............................................... 1 II. DEFINITIONS ................................................. 1 Ill. ELIGIBLE PUBLIC FACILITIES AND PRIORITIES .................... 1 IV. CREDIT QUALITY REQUIRED OF BOND ISSUES .................... 2 V, DISCLOSURE REQUIREMENTS ................................... 2 Vl. EQUITY OF TAX ALLOCATION FORMULAS .......................... 2 VII. APPRAISALS ................................................. 3 VIII. EXCEPTIONS TO THESE POLICIES ................................ 5 Resolution No. 99-154 Page 5 STATEMENT OF GOALS ,AND POLICIES, FOR THE USE OF THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 I. INTRODUCTION The City of Rancho Cucamonga (the "City") has developed the following Goals and Policies on debt financing as guidelines to assist concerned parties in following the City's approach to community facilities district debt financing. It is the City's 9oal to support projects which address a public need and provide a public benefit. Proposed projects requesting community facility district debt financing will be evaluated to determine if such financing is financially viable and in the best interest of the City and current and future City and project residents. These Goals and Policies are designed to comply with Section 53312.7 of the Government Code. The City will consider applications requesting the formation of community facilities districts and the issuance of bonds to finance eligible public facilities pursuant to the Mello-Roos Community Facilities Act of 1982, as amended. The City reserves the right to request any additional reports, information or studies reasonably necessary in evaluating these applications. All City and any consultant costs incurred in evaluating applications requesting the establishment of community facility districts will be paid by the applicant(s) by advance deposit increments. The City shall not incur any non-reimbursable expense for processing such applications. Expenses not chargeable to the district shall be borne by the applicant. II. DEFINITIONS "Bonds"' means bonds authorized and issued under the Act. "City" means the City of Rancho Cucamonga. "District" means a Community Facilities District formed under the Act. "Public Facilities" means improvements authorized to be constructed or acquired under the Act. "Value" or "Fair Market Value" means the amount of cash or its equivalent which property would bring if exposed for sale in the open market under conditions in which neither buyer nor seller could take advantage of a difficulty of the other and both have knowledge o,f all of the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions upon us,gs ;red purposes. Resolution No. 99-154 Page 6 Ill. ELIGIBLE PUBLIC FACILITIES AND PRIORITIES The improvements eligible to be financed must be owned by a public agency or public utility, and must have a useful life of at least five (5) years. In any event, no Bonds shall be issued with a maturity date greater than the useful life of the facilities or improvements being financed. The development proposed within the District must be consistent with the City's general plan and must have received any required zoning or specific plan approvals. The list of public facilities eligible to be financed by a District include, but are not limited to, the following: · :,L. ocal Park, recreation, parkway and open-space facilities ,:, Libraries · :.Child care facilities ~ Other governmental facilities ~ Police & Fire Facilities In general, none of these types of facilities will have priority over the others; however, the City has final determination as to any facility's eligibility for financing, as well as the prioritization of facilities to be included within a District. IV. CREDIT C~UALITY REQUIRED OF BOND ISSUES In evaluating a proposed Bond issuance, the City will require that the City's independent financial consultant review and report on the financial feasibility of the project to be financed. It is important to the City to minimize the possibility of default. Credit enhancements may be required by the City either to improve the credit worthiness of the proposed financing or to insure that the debt service requirements of the proposed debt issue are met in a timely manner. The City will examine carefully the primary sources of payment of the Bonds as well as the provider of any required credit facility and the form that the credit facility will take. The rating of the provider, as well as the provider's capitalization, are of principal concern, and a reduction in either during the term of the credit facility to a level unacceptable to the City may require that an alternate credit facility be secured from an acceptable provider. The City reserves the right, in its sole discretion, to determine the acceptability of both the credit facility and its provider. Resolution No. 99-154 Page 7 _V. DISCLOSURE REQUIREMENTS (1) The Act requires that certain disclosure certificates regarding the existence of a District and the special tax obligation be provided to those individuals purchasing property within the District. The City will require that the statutorily prescribed disclosure be made to the initial purchaser of property within a District, and it will make available the information necessary to complete the disclosure certificate required for secondary transfers. (2) The City shall 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, including requiring any developer whose development is material to the Bond issue to transmit appropriate information to the City or its designee for disclosure to Bond investors. Vl. EQUITY OF' TAX ALLOCATION FORMULAS The rate and method of apportionment of the special tax must be both reasonable and equitable in apportioning 'the costs of the public facilities to be financed to each of the parcels within the boundaries of the proposed District. The rate and method of apportionment of the special tax is to provide for the administrative expenses of the proposed District, including, but not limited to, those expenses necessary for the enrollment and collection of the special tax and Bond administration. All property not otherwise exempted by the Act from taxation shall be subject to the special tax. The rate and method of apportionment may provide for exemptions to be extended to parcels that arE; to be dedicated at a future date to publi;c entities, held by a home owner's association, or designated open space. The annual special tax levy on each residential parcel developed to its final land use shall be approximately equal each year, except that a variation for administrative expenses will be allowed. The City will allow an annual escalation factor on parcels within a District. The maximurn annual special tax, together with ad valorem property taxes, special assessments or taxes for an overlapping financing district, or' any other charges, taxes, or fees payable from and secured by the property, including potential charges, taxes, or fees relating to authorized but unissued debt of public entities other than the City, in relation to the expected assessed value of each parcel upon completion of the private improvements to the parcel is of great importance to the City in ev.alL~,ating the proposed financing. Resolution No. 99-154 Page 8 The objective of the, City is to limit the "overlapping" debt burden on any parcel to two percent (2%) of the expected assessed value of the parcel upon completion of the improvements. In evaluating whether this objective can be met, the City will consider the aggregate public service needs for the proposed project. It will consider what public improvements the applicant is proposing to be financed in relation to these aggregate needs and decide what is an appropriate amount to make available in public financing to the identified public improvements. This evaluation will be based in part on information obtained from other taxing entities that have jurisdiction to impose a levy on the affected parcels. The total maximum annual special taxes that can be collected from taxable property in a District, taking into account any potential changes in land use or development density or rate, and less all projected administrative expenses, must be equal to at least one hundred ten percent (110%) of the gross annual debt service on any Bonds issued by or on behalf of the District in each year that said Bonds will remain outstanding. The rate and method of apportionment of the special tax may include a provision for a backup tax to protect against any changes in development that would result in insufficient special tax revenues to meet the debt service requirements of the District. Such backup tax shall be structured in such a manner that it shall not violate any provisions of the Act regarding cross-cotlateralization limitations for residential properties. A formula to provide for the prepayment of the speciat tax may be provided; however, neither the City nor the District shall be obligated to pay for the cost of determining the prepayment amount which is to be paid by the applicant. VI__L APPRAISALS (If Required) A. Definition of Appraisal. An appraisal is a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information. B. Standards of Appraisal. The format and level of documentation for an appraisal depend on the complexity of the appraisal problem. A detailed appraisal shall be prepared for complex appraisal problems. A detailed appraisal shall reflect nationally recognized appraisal standards, including, to the extent appropriate, the Uniform Appraisal Standards for Federal Land Acquisition. An appraisal must contain sufficient documentation, including valuation data and the appraiser's analysis of the data, to support his or her opinion of value. At a minimum, the appraisal shall contain the following items: 1. The purpose and/or the function of the appraisal, a definition of the estate being appraised, and a statement of the assumptions and limiting conditions affecting the appraisal. Resolution No. 99-154 Page 9 2. An adequate description of the physical characteristics of the property bein9 appraised, location, zoning, present use, an analysis of the highest and best use. 3. All relevant and reliable approaches to value consistent with commonly accepted professional appraisal practices. If a discounted cash, flow analysis is used, it should be supported with at least one other valuation method such as a market approach using sales that are at the same stage of land development. If more than one approach is utilized, there shall be an analysis and reconciliation of approaches to value that are sufficient to support the appraiser's opinion of value. 4. A description of cornparable sales, including a description of all relevant physical, legal, and economic factors such as parties to the transaction, source, and method of financing, and verification by a party involved in the transaction. 5. A statement of the value of the real property. 6. The effective date of valuation, date of appraisal, signature, and certification of the appraiser. C. Conflict of Interest. No appraiser or' review appraiser shall have any interest direct or indirect ir~ the real property being appraised for the Agency that would in any way conflict with the preparation or review of the appraisal Compensation for making an appraiisal shall not be based on the amount of the valuation. D..District Appraisal Premises. The valuation of proposed Districts should be based on three premises: 1. Raw Land Value (Premise No. 1). The total land within the project is valued "as is" a. With any existing infrastructure. b. Without proposed infrastructure being financed. c. With ex:isting parcel configuration. d. Considering planned densities allowed by the specific plan of the project. This is a typical type of land valuation. 2. Project Build Out Value (Premise No. 2). The total land within the project is valuec~ under proiected conditions: a. With proposed infrastructure being financed completely. b. At the planned densities allowed by the specific plan. Resolution No. 99-154 Page 10 c. Land development is at the stage of being marketed to merchant builders or tentative tract maps ready to be filed. This is a projected value based on project plans predicated on market conditions continuing as projected. 3. Bulk Land Value (Premise No. 3). The total land within the project is valued under projected conditions: a. With proposed infrastructure being financed completely. b. With existing parcel configuration. c. Considering planned densities allowed by the specific plan of the project. This premise should consider a discounted or "quick sale" valuation considering time, costs, and the possibility of a per unit value based on the total size of the project. VIII. EXCEPTIONS TO THESE POLICIES The City may find in limited and exceptional instances that a waiver to any of the above stated policies is reasonable given identified special City benefits to be derived from such waiver. Such waivers are granted only by action of the City Council based upon specific public purpose or health and safety findings,,