HomeMy WebLinkAboutCC Resolution 12963 (Local Public Agency Goals & Policies)RESOLUTION NO. 12963
RESOLUTION OF THE SAN RAFAEL CITY COUNCIL
ADOPTING LOCAL PUBLIC AGENCY GOALS AND
POLICIES FOR COMMUNITY FACILITIES DISTRICTS
PURSUANT TO THE MELLO-ROOS COMMUNITY
FACILITES ACT OF 1982
WHEREAS, the City Council is considering the establishment of Community Facilities
Districts under and pursuant to the terms and provisions of the Mello -Roos Community Facilities
Act of 1982, as amended (the "Act"), Chapter 2.5, Part 1, Division 2, Title 5 of the Government
Code of the State of California; and
WHEREAS, the Act provides that any public agency initiating proceedings to establish a
Community Facilities District ("CFD") first consider and adopt local goals and policies; and
WHEREAS, the Council has determined to consider and adopt local goals and policies at
this time to govern any future CFD's it may establish.
NOW, THEREFORE, BE IT RESOLVED, the Council makes the following findings:
1. The City Council has considered the City of San Rafael Goals and Policies for
CFD's attached hereto as Exhibit A (the "Goals and Policies") and such Goals and Policies are
hereby adopted. The Goals and Policies include the following:
A. A statement of the priority that various kinds of public facilities and
services have for financing through the use of the Act, including public facilities to be owned
and operated by other public agencies, including school districts;
B. A statement concerning the credit quality to be required of any bond
issues, including criteria to be used in evaluating the credit quality;
C. A statement concerning steps to be taken to ensure that prospective
property purchasers are fully informed about their taxpaying obligations imposed under the Act;
D. A statement concerning criteria for evaluating the equity of tax allocation
formulas, and concerning desirable and maximum amounts of special tax to be levied against any
parcel pursuant to the Act; and
E. A statement of definitions, standards and assumptions to be used in
appraisals required by Section 53345.8 of the Act.
2. The City Council and its authorized representatives, are, and each of them acting
alone is, hereby authorized to execute any and all documents and agreements and do and perform
any and all acts and things, from time to time, consistent with this Resolution and necessary or
appropriate to carry the same into effect and to carry out its purpose.
E
3. This Resolution shall take effect immediately upon its adoption.
I, ESTHER C. BEIRNE, City Clerk of the City of San Rafael, hereby certify that the
foregoing Resolution No. 12963 was duly and regularly introduced and adopted at a regular
meeting of the City Council of said City held on Monday, the 7th day of June, 2010, by the
following vote, to wit:
AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
�s�f�s-lt e--- .
ESTHER C. BEIRNE, City Clerk
4
EXHIBIT A
CITY OF SAN RAFAEL
GOALS AND POLICIES
FOR COMMUNITY FACILITIES DISTRICTS
TABLE OF CONTENTS
Section
Page
I..........................................................................................................................INTRODUCTION I
II........................................................................................PRIORITIES FOR CFD FINANCING 1
III ..................................... CREDIT QUALITY REQUIREMENTS FOR CFD BOND ISSUES 2
IV... DISCLOSURE REQUIREMENTS FOR PROSPECTIVE PROPERTY PURCHASERS 3
V ................ EQUITY OF SPECIAL TAX FORMULAS AND MAXIMUM SPECIAL TAXES 3
VI....................................................................................................... APPRAISAL STANDARDS 4
VII................................................................................................................... OTHER MATTERS 7
CITY OF SAN RAFAEL
GOALS AND POLICIES FOR COMMUNITY FACILITIES DISTRICTS
I. INTRODUCTION
The Mello -Roos Community Facilities Act requires any public agency initiating proceedings to
establish a Community Facilities District (CFD) to first consider and adopt local goals and
policies related to CFDs. At a minimum, these goals and policies must include the following:
1. A statement of the priority that various kinds of public facilities and services will have for
financing through a CFD. Public facilities to be owned and operated by public agencies
other than the City must also be included in the statement of priorities.
2. A statement concerning the credit quality which is to be required of CFD bond issues.
This statement must include criteria for evaluating credit quality.
3. A statement concerning the steps to be taken to ensure that prospective property
purchasers are fully informed about special taxes imposed on property within any CFD.
4. A statement concerning the criteria to be used for evaluating the equity of tax allocation
formulas (i.e., special taxes allocated to different land use categories). This statement
must include the desirable and maximum special tax levels to be levied against any CFD
properties.
5. A statement establishing the criteria for preparing appraisals, including definitions,
standards, and assumptions to be used in appraisals.
The following are the local goals and policies adopted by the City of San Rafael.
II. PRIORITIES FOR CFD FINANCING
Priority for CFD financing shall be given to public facilities and services which: (a) provide
benefits of a regional nature, thereby serving not only the future residents of the CFD, but also
the communities outside of the CFD, or (b) are found by the City to provide "significant public
benefit." Once adequate provision has been made for facilities and services of a regional nature
or those providing significant public benefit, the City may also choose to finance public
improvements and services which primarily benefit residents within the CFD, or which provide
less significant public benefit.
The improvements eligible to be financed by a CFD must be owned and operated by a public
agency, and must have a useful life which is greater than the term of the bond issue, except that
up to five percent of the proceeds of any issue may be owned and operated by a privately -owed
public utility. The development proposed within a CFD must be consistent with the general plan
and must have already received legislative approvals such as zoning or specific plan approvals.
The construction of improvements pursuant to a CFD shall not vest any rights to future
entitlements on any properties, including those which are responsible for paying special taxes.
The list of eligible public facilities includes, but is not limited to:
Police and fire protection facilities
Ambulance and paramedic facilities
Government facilities
The funding of public facilities to be owned and operated by public agencies other than the City
shall be considered on a case-by-case basis. If the proposed financing is consistent with a public
facilities financing plan approved by the City, or the proposed facilities are otherwise deemed to
be appropriate for financing by a CFD and are consistent with approved land use plans for the
property, the City shall consider entering into a joint financing agreement or joint powers
authority in order to finance these facilities.
III. CREDIT QUALITY REQUIREMENTS FOR CFD BOND ISSUES
In order to minimize the likelihood of a CFD defaulting on its payment to bond holders, all CFD
bond issues shall require at least a three to one property value to public lien ratio. Property value
may be based on either an appraisal or on assessed values as indicated on the county assessor's
tax roll. The appraiser shall be selected by the City, and the appraisal shall be based on criteria
as described below under Section V of these goals and policies. The appraisal must be dated
within six months of the date the bonds are issued. The public lien amount shall be based on the
size of the bond issue currently being sold, plus any public indebtedness currently existing
against the properties to be assessed. Although it is not required that the value to lien ratio be
three to one on a parcel by parcel basis, consideration must be given to this ratio when
apportioning special taxes to different parcels, to assure the CFD property owners will accept
their responsibilities for paying the special taxes of each parcel.
A reserve fund equal to the lesser of (i) ten percent of the original proceeds of the bond issue,
(ii) the maximum debt service on all outstanding bonds, or (iii) 125 percent of the average annual
debt service on all outstanding bonds shall be required for all bond issues in CFDs where less
than 95 percent of the buildable acreage has been developed. A smaller reserve fimd may be
required by the City for bond issues in CFDs where over 95 percent of the buildable acreage has
been developed.
Property tax delinquency rates on parcels included in a CFD must be no greater than ten percent
on the date on which bonds are issued for that CFD. Each bond issue may require a current
(dated within six months) CFD absorption study prepared by a consultant hired by the City, if the
City determines that such objective data is necessary to analyze the feasibility of the project. An
inadequate property value to public lien ratio, tax delinquencies in excess of ten percent, or
projects of questionable economic viability may cause the City to disallow the sale of bond issues
or require additional credit enhancement prior to bond sale.
The City may consider exceptions to the above policies for bond issues that do no represent an
unusual credit risk, either due to credit enhancement or other reasons specified by the City.
Furthermore, the City will consider exceptions to these policies for projects which meet the
public policy goals relating to affordable housing and creation of employment opportunities or
tax revenues.
Bond issues which have less than a three to one value to lien ratio but are approved by the City
for public policy reasons must be approved by four-fifths of the members of the City's legislative
body.
IV. DISCLOSURE REQUIREMENTS FOR PROSPECTIVE PROPERTY
PURCHASERS
The Mello -Roos Act requires that certain disclosure certificates regarding the existence of a
community facilities district and the special tax obligation be provided to those individuals
purchasing property within the community facilities district. The City will require statutorily
prescribed disclosure be made to the initial purchaser of property within a community facilities
district, and it will make available the information necessary to complete the disclosure
certificate required for secondary transfers.
V. EQUITY OF SPECIAL TAX FORMULAS AND MAXIMUM SPECIAL TAXES
Special tax formulas shall provide for special tax levels which satisfy the following expenses of a
CFD:
110 percent gross debt service coverage for all bonded indebtedness
the reasonable and necessary administrative expenses of the CFD
amounts equal to the differences between expected earnings on any escrow fund
and the interest payments due on bonds of the CFD
Additionally, the special tax formula may provide for the following:
• lease payments for existing or future facilities
• the cost of providing services, as permitted under Section 53313
• the cost of remarketing, credit enhancement and liquidity facility fees
0 the cost of acquisition, construction, furnishing or equipping of facilities
• the accumulation of funds reasonably required for future debt service
• any amounts required to establish or replenish any reserve fund established in
association with the indebtedness of the CFD
• amounts equal to projected delinquencies of special tax payments
• any other costs or payments permitted by law
• costs associated with the release of funds from an escrow account
The special tax formula shall be reasonable and equitable in allocating public facilities costs to
parcels within the CFD. Exemptions from the special tax may be given to parcels which are
publicly owned, are held by a property owners association, are used for a public purpose such as
open space or wetlands, are affected by easements making impractical their utilization for other
than the purposes set forth in the easements, or have insufficient value to support bonded
indebtedness.
The total projected property tax levels for any residential parcel within a CFD shall not exceed
two percent of the projected initial sales price of a fully developed parcel (i.e., with a completed
structure). The total projected property tax level shall include ad valorem property taxes, special
taxes, special assessments, and other direct and overlapping debt supported by property taxes.
Commercial properties which provide economic benefits to the City may exceed the two percent
property tax level approved by the City.
The maximum special tax for any developed residential parcel shall not increase at a rate greater
than two percent annually. The special taxes formula should be structured such that special taxes
levied on developed property are consistent year to year. Changes in the special tax needs from
year to year should, to the degree possible, be borne by undeveloped property. Under no
circumstances shall the special tax levied on any parcel of developed property be increased by
more than ten percent as a consequence of delinquency or default by the owner of any other
parcel.
VI. APPRAISAL STANDARDS
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.
4
B. Standards of Appraisal
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:
a. The purpose and/or function of the appraisal, a definition of the property being
appraised, and a statement of the assumptions and limiting conditions affecting
the appraisal.
b. An adequate description of the physical characteristics of the property being
appraised, location, zoning, present use, and an analysis of highest and best use.
C. 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 area 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.
d. A description of comparable 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.
e. A statement of the value of real property.
f. The effective date of valuation, date of appraisal, signature and certification of the
appraisal.
E
C. Conflict of Interest
No appraiser or review appraiser shall have any interest direct or indirect in the real
property being appraised by the City that would in any way conflict with the preparation
or review of the appraisal.
D. Appraisal Premises
The appraisal should contain two or three values which shall be determined by the public
agency and its consultants.
1. Raw Land Value. (Premise #1). The total land within the project is valued "as
is."
a. With any existing infrastructure.
b. Without proposed infrastructure being financed.
C. With existing parcel configuration.
d. Considering planned densities allowed by the specific plan of the project.
This is a typical type of land valuation.
2. Proiect Build -out Value. (Premise #2). The total land within the project is valued
under projected conditions.
a. With proposed infrastructure being financed completed.
b. At the planned densities allowed by the existing entitlements.
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 #3). The total land within the project is valued under
projected conditions.
a. With proposed infrastructure being financed completed.
b. With existing parcel configuration.
R
C. Considering planned densities allowed by the special plan of the
project.
This premise should consider a discounted or "quick sale" valuation considering time,
cost and the possibility of a per unit value based on the total size of the project.
VII. OTHER MATTERS
The City may, with respect to a particular CFD, consider additional policies to those required by
the Mello -Roos Community Facilities Act, including policies related to developer deposits for
formation expenses, bond refundings, foreclosure covenants, and other issues.
h