HomeMy WebLinkAboutCC AG PKT 2002-08-12 #M AGENDA REPORT Co
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DATE: August 12, 200
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TO: Honorable Mayor and City Council
THRU: John B. Bahorski, City Manager
FROM: Mac Cummins, Associate Planner / Special Projects Manager
SUBJECT ;, Heron Pointe (Hellman Ranch) Community Facilities
District (CFD)
SUMMARY OF REQUEST:
That City Council:
• Adopt a resolution adopting local goals and policies concerning the use of the
Mello -Roos Community Facilities Act of 1982, as amended.
• Adopt a resolution stating its intention to establish Community Facilities District
No. 2002 -1 (Heron Pointe), stating its intention to authorize the levy of a special
tax and setting the time and date for a hearing.
• Adopt a resolution stating its intention to incur bonded indebtedness in an
amount not to exceed $5,000,000 for Community Facilities District No. 2002 -1
(Heron Pointe)
• Authorize staff to enter into an agreement with the legal firm of Jones Hall to
act as disclosure counsel
BACKGROUND:
When the Hellman Ranch development agreement was signed, it was contemplated that a
Community facilities District ( "CFD ") would be created to help finance some of the
public improvements necessary for the effective development of the Hellman Ranch. On
August 13, 2001, the City Council granted staff the authorization to proceed with
preparing the necessary documents to form a CFD,, and to enter into a
deposit/reimbursement agreement with John Laing Homes. The actions the Council takes
this evening will begin the process to legally form the district. A public hearing will be
held on September 23, 2002. After this hearing, the City Council may adopt additional
resolutions forming the CFD and authorizing the incurrance of indebtedness, may hold a
landowner election regarding the special tax, may adopt an ordinance to levy the special
tax, and may approve resolutions authorizing the issuance of bonds.
Agenda Item X1
The proposed CFD will include all residential parcels located in the Hellman Ranch
development (to be marketed as Heron Pointe), and will issue bonds to finance certain
public improvements (including certain public improvements normally financed through
development fees). Once the CFD has been formed, a special tax will be levied against
each residential parcel in the development for a period of up to 40 years. This special tax
will be paid by homeowners, and the proceeds of the special tax will be used to make
debt service payments on the bonds issued by the CFD.
Nature of a CFD
A Community Facilities District is a special district authorized to levy a special tax to
finance the acquisition or construction of public improvements. Typically, a CFD issues
bonds in order to raise immediately available funds, uses the proceeds of these bonds to
acquire or construct improvements, and then levies an annual special tax against
properties in order to retire and pay debt service on the bonds. The special tax is
collected on each homeowner's property tax bill, and the amount of the tax may vary
from year to year in order to meet the principal and interest payments due on outstanding
bonds.
Proposition 13 generally limits ad valorum property taxes (i.e. taxes based on property
values) to 1% of property value. However, this limit does not apply to the special tax,
levied by a CFD, since taxes levied by a CFD are not based on property value.
Including the proposed CFD special tax, staff envisions that the maximum effective tax
burden for homes within the District will be approximately 1.6% (including the general
ad valorum tax and all special taxes levied by other government agencies). This rate is
fairly typical of new development which is taking place in Orange County (Ladera
Ranch, 1.96 %). In some parts of the County, the tax rate can climb over 2% (Newport
Coast, 2.2 %). Infill projects tend to experience higher effective tax rates because infill
land costs are generally higher than land costs in areas slated for initial development.
With a higher land cost, the developer is left with less revenue to pay for public
improvements. As such, CFD's or assessment districts are created to deal with the
necessities of public improvements.
Major Steps in a Community Facilities District Financing:
1. City authorizes contracts with financing consultants and enters into service
contracts with consultants.
2. Consultants, in conjunction with City Staff and Developer, prepare rate and
method of apportionment for special tax, develop program of improvements, and
establish community facilities district goals and guidelines for City.
3. City Council Approves Resolutions of Intention to form CFD and to authorize the
issuance of bonded indebtedness.
4. After giving proper notice by mail and by publication, City Council holds public
hearing and adopts resolutions forming district, authorizing issuance of debt, and
calling election. With landowner consent, election is held at same City Council
meeting in a landowner election. City Council then certifies results of election
and passes first reading of ordinance levying the special tax. This meeting takes
place approximately one month following the adoption of the Resolutions of
Intention.
5. City Council adopts Ordinance Levying Special Tax
6. Bond Underwriter, in conjunction with City Staff and Consultants, designs bond
solution to meet goals of City, and enters into purchase agreement to purchase
bonds from the City.
7. Bonds close and funds become available for acquisition or construction of
improvements.
(NOTE: The City is currently in Steps 2 & 3)
Key Personnel in formation of Heron Pointe CFD:
City Of Seal Beach:
Lead City Liason/Project Manager: Mac Cummins
City Manager: John Bahorski
Director of Development Services: Lee Whittenberg
Director of Public Works /City Engineer: Doug Dancs
City Attorney: Quinn Barrow
Bond Counsel: Robin Harris/Mark Mandell (Richards, Watson & Gershon)
City Consultant Team
Financial Consultant: Larry Rolapp & Jim Fabian (Fieldman, Rolapp, & Associates)
Special Tax Consultant: Andrea Roess (David Taussig & Associates)
Appraiser: Steve White
Underwriter: Dawn Vincent (Stone & Youngberg)
Disclosure Counsel: Scott Ferguson
Hellman Ranch CFD Team:
John Laing Homes Contact: Joanie Madrid
Improvements to be completed through CFD:
A. Grading Improvements
The CFD proposes to grade the access road to Gum Grove Park and the public
easement area of the project entry road .
B. Roadway Improvements
The CFD proposes to construct roadway improvements in conformance with the
Hellman Ranch Specific Plan. Currently, Seal Beach Boulevard is not improved
to the extent required by the Specific Plan. A meandering five -foot wide sidewalk
along the project frontage and offsite southerly to Bolsa Avenue is required. The
existing signal system at the entry must be upgraded and a left -turn median pocket
added. Also, existing striping will be modified and existing overhead utility lines
will be undergrounded.
C. Water Improvements
The CFD proposes to construct water facilities to serve the project. Water supply
is proposed to be looped through the site, with two connections to existing mains
in Seal Beach Boulevard and one connection to Adolfo Lopez Drive. This not
only will serve the public safety of the project and its surrounding area, it will also
increase the City's water system performance in the vicinity of the project.
D. Sewer Improvements
The CFD proposes to construct sewer facilities including gravity pipelines, lift
station and force mains to serve the proposed CFD and adjacent properties. There
will also be improvements to the City owned sewer pump station.
E. Dry Utilities
The CFD proposes to construct on -site joint trench facilities and the street lights
along Seal Beach Boulevard. These facilities are to be constructed as a
requirement of the Specific Plan and Vesting Tentative Tract Map 15402.
F. Park, Access, Landscape and Wall Improvements
The CFD proposes to construct landscape improvements. The construction of
these improvements is a requirement of the Specific Plan. These improvements
will consist of landscaping, an access roadway to Gum Grove Park, park
improvements and a park Interpretive Center. A parking lot for park visitors near
the tract entry will also be provided. This will provide outdoor recreation for
project residents as well as the citizens of the City of Seal Beach.
The nature and scope of the work to be done within each of these categories is included
as an attachment to this staff report.
In addition to the work described above and the various resolutions attached for
consideration, the Council, under state law, is required to adopt local goals and policies
with regard to the creation of special tax financing districts. Staff has prepared a draft
Local Goals and Policies report and attached it. These Goals and Policies, if adopted, will
be City -wide, and not just for this project, Heron Pointe.
The City also needs to contract with an outside attorney to act as the disclosure counsel
for the sale of the bonds to insure that all the appropriate information is represented to the
marketplace throughout the bonding process. Staff is recommending the firm of Jones
Hall, which is located in San Francisco. The sum total of the monies to be paid will be
generated by the bond proceeds, and no City funds will be utilized. A copy of the
proposed contract is enclosed as an attachment for your review.
FISCAL IMPACT:
None. If approved by property owners, special taxes from CFD 2002 -1 will pay the
costs associated with the bonds and maintenance. Further, the proposed bonds are not
backed by the general fund, and will be repayable solely from the special taxes
generated from Heron Pointe.
RECOMMENDATION:
6171 ,61,(.
Mac Cummins
Associate Planner / Special Projects Manager
Attachments (6)
1. Resolution Adopting Local Goals and Policies
2. City of Seal Beach Proposed Local Goals and Policies with regard to use of the
Mello -Roos Community Facilities Act of 1982, as amended
3. Resolution of Intention to Form a Community Facilities District
4. Resolution of Intention to Incur Indebtedness
5. Draft Facilities Report - Community Facilities District 2002 -1
6. Draft contract with Jones Hall for disclosure counsel services
NOTED AND APPROVED:
. f /
John' Bahorski, City Manager
Agenda Item
Attachment 1
) 1
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SEAL BEACH
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 SEAL BEACH
(the "City ") proposes to undertake proceedings pursuant to the Mello -Roos Community Facilities
Act of 1982, 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 SEAL BEACH DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The City Council finds that the Statement of Goals and Policies for the
Use of the Mello -Roos Community Facilities Act of 1982, attached hereto and incorporated
herein as Exhibit "A" (the "Goals and Policies "), meet the requirements of the Act and the City
Council hereby adopts the Goals and Policies for purposes of complying with the Act.
PASSED, APPROVED AND ADOPTED this 12th day of August, 2002.
Mayor
ATTEST:
City Clerk
•
S7296 \1085 \678881.1 1
EXHIBIT A
STATEMENT OF GOALS AND POLICIES FOR THE USE OF
THE MELLO -ROOS COMMUNITY FACILITIES ACT OF 1982
57296 \1085 \678881.1 A -1
Attachment 2
CITY OF SEAL BEACH
STATEMENT OF LOCAL GOALS AND POLICIES
CONCERNING THE USE OF THE
MELLO -ROOS COMMUNITY FACILITIES ACT
OF 1982, AS AMENDED
Pursuant to Section 53312.7 of the California Government Code, the City Council of the City
of Seal Beach (the "City Council ") hereby states its goals and policies concerning the use of
Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the
"Act ") in providing public infrastructure improvements permitted to be financed pursuant to the Act
for property within the City of Seal Beach (the "City ") and for the refunding of existing debt on land
within the City. In addition, the Act may be used to provide for the maintenance, repair,
reconstruction and replacement of any of the foregoing infrastructure improvements. The following
goals and policies shall apply to each community facilities district (a "CFD ") hereafter formed by
the City. Any policy or goal stated herein may be supplemented or amended or deviated from, and
new goals and policies may be added hereto, from time to time upon a determination by the City
Council that such supplement, amendment, deviation or addition is necessary or desirable; and any
policy or goal stated herein shall be deemed amended or supplemented in the event, and as of the
date, if ever, that such amendment or supplement is required to ensure compliance with the Act or
any other laws of the State of California or federal laws of the United States of America.
I. Priority that Various Kinds of Public Facilities Shall have for Financing Through the
Use of the Act.
It is the policy of the City to give first priority to the financing, through the use of the
Act, of public infrastructure improvements directly benefiting the City, which improvements may
include, but are not limited to, streets, roads, water facilities, sewer facilities, storm drain facilities,
libraries, parks, open space and golf courses and for the refunding of existing debt on land within a
CFD. It is also the policy of the City to assist in the financing of other public facilities when to do so
will, in the sole discretion of the City Council, acting as the legislative body of the affected CFD,
result in a savings to residents or property owners within the City boundaries, for example, by
reducing costs of bond issuance and/or administrative expenses; provided that such assistance does
not interfere with the financing of public infrastructure improvements directly benefiting the City.
In addition to any other form of assistance permissible under the law and under these goals and
policies, the City may assist in the financing of facilities by using the proceeds of a special tax or a
special tax bond to pay development fees, the proceeds of which will be used by the City or by
another public agency to finance public infrastructure improvements.
II. Credit Quality to be Required of Bond Issues, Including Criteria to be Used in
Evaluating the Credit Quality.
It is the policy of the City to comply with all provisions of the Act including, but not
limited to, Section 53345.8, as such Section may be amended from time to time. All CFD bond
issues should have at least a three to one property value to public lien ratio after calculating the value
of the financed public infrastructure improvements to be installed, unless otherwise specifically
approved by the City Council as provided in Section 53345.8(b) or (c) of the Act. Property value
may be based on either an appraisal or on full cash values as indicated on the county assessor's tax
roll. The appraiser shall be selected by or otherwise acceptable to the City, and the appraisal shall be
based on standards promulgated by the State of California and otherwise determined applicable by
S7296 \1085 \681156.2 1
City staff and consultants. The date of value set forth in the appraisal must be within nine months of
the date the bonds are issued. The public lien amount shall include the bond issue currently being
sold plus any public indebtedness secured by a lien on real property currently existing against the
properties to be taxed. Bond issues need not be rated by nationally - recognized rating agencies, so
long as all of the requirements of this Section II are met.
It is the policy of the City to refrain from the issuance of any CFD bonds unless at
the time of issuance of any CFD bonds each of the following conditions is met:
A. Special tax revenues from the CFD issuing the bonds are reasonably expected
to provide at least one hundred ten percent (110 %) debt service coverage for each year of the term of
such bonds; and
B. The CFD has established, and has covenanted to cause to be levied,
covenant a special tax in an amount sufficient to maintain, for the term of such bonds (provided,
however, that depletion may occur to pay debt service in the last two (2) years of such term), a
reserve fund securing such bonds in an amount equaling the lowest of (i) ten percent (10 %) of the
original proceeds of such bonds, or (ii) the largest amount, for any bond year during the term of such
bonds, of principal and interest payable on such bonds, or (iii) one hundred twenty -five percent
(125 %) of the average amount payable, for any bond year, of principal and interest on the
outstanding bonds of such bond issue.
III. Steps to be Taken to Ensure that Prospective Property Purchasers are Fully Informed
About Their Taxpaying Obligations.
It is the goal of the City that all taxpayers residing within, or owning property within,
the boundaries of a CFD heretofore or hereafter established by the City will receive the form of
notice required by Section 53341.5 of the Act, at the time set forth therein, as such Section may be
amended from time to time. In order to comply with this goal, it is the policy of the City to provide
Section 53340.2 notice of special tax to any individual requesting such notice or any owner of
property subject to a special tax levied by the City within five (5) working days of receiving a
request for such notice.
IV. Criteria for Evaluating the Equity of Tax Allocation Formulas, and Concerning
Desirable and Maximum Amounts of Special Tax to be Levied Against Any Parcel.
It is the goal of the City that each taxpayer residing within, or owning property
within, the boundaries of any CFD hereafter established by the City pay special taxes which
generally reflect such taxpayer's fair and reasonable share of their projected benefit from, and/or
burden upon, the facilities to be constructed and/or maintained or of any refunding of existing debt
within the CFD by such CFD. It is the goal of the City that maximum Mello -Roos special taxes on
residential owner- occupied property, when taken together with ad valorem taxes, any other special
taxes levied pursuant to the Act and assessments applicable to such property, do not exceed in any
year two percent (2 %) of the greater of the full cash value indicated on the County Assessor's tax
roll or appraised value of such property. Nevertheless, special taxes, when taken together with ad
valorem taxes, any other special taxes levied pursuant to the Act and assessments applicable to such
property, may exceed in any year two percent (2 %) of the greater of the full cash value, or the
appraised value of such property if the City determines at the time of formation of a CFD that over
the term of the bonds, the special taxes, ad valorem taxes and assessments are expected to average
two percent (2 %) or less per year of the greater of the full cash value or appraised value of such
S7296 \1085 \681156.2 2
property. It is further the policy of the City to comply with the provisions of Section 53321 of the
Act with respect to the escalation of maximum taxes.
V. Defmitions, Standards, and Assumptions to be Used in Appraisals Required by
Section 53345.8.
It is the goal of the City to conform, as nearly as practicable, to the California Debt
and Investment Advisory Commission's Appraisal Standards for Land - Secured Financings, as such
standards may be amended from time to time, provided, however, that this City Council may
additionally amend such standards from time to time as it deems necessary and reasonable, in its
own discretion, to provide needed infrastructure improvements within the City, while still
accomplishing the goals set forth herein.
S7296 \1085 \681156.2 3
Attachment 3
f -02 RESOLUTION NO.
tESOLUTION OF INTENTION OF THE CITY COUNCIL
OF THE CITY OF SEAL BEACH
TO ESTABLISH CITY OF SEAL BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-01 (HERON POINTE)
AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX
WITHIN CITY OF SEAL BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-01 (HERON POINTE)
RECITALS:
WHEREAS, the CITY COUNCIL (the "City Council ") of the CITY OF SEAL BEACH
(the "City") desires to undertake proceedings to establish a community facilities district pursuant
to the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section
53311 of the California Government Code (the "Act "), to finance public facilities to serve the
area of land hereinafter described, and
WHEREAS, there has been submitted to the City Council a petition of WL Homes, LLC,
a Delaware Limited Liability Corporation (the "Landowner ") requesting the formation by this
City Council of a community facilities district pursuant to the Act, and
WHEREAS, the Act authorizes the City Council to establish a community facilities
district and to levy special taxes within that district.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Intention. The City Council hereby declares its intention to conduct
proceedings for the formation of a community facilities district under the terms of the Act.
Section 2. Name of District. The name of the proposed community facilities district is
"City of Seal Beach Community Facilities District No. 2002 -01 (Heron Pointe)" (the "District ").
Section 3. Boundaries of District. The exterior boundaries of the District are shown on
that certain map now on file in the office of the City Clerk entitled "Proposed Boundaries of City
of Seal Beach Community Facilities District No. 2002 -01 (Heron Pointe)," which map indicates
by a boundary line the extent of the territory included in the proposed District and shall govern
for all details as to the extent of the District. On the original and one copy of such map, the City
Clerk shall endorse the certificate evidencing the date and adoption of this Resolution. The City
Clerk shall file the original of such map in her office and, within 15 days after the adoption of
this Resolution, the City Clerk shall file a copy of such map so endorsed in the records of the
County Recorder, County of Orange, State of California, and in any event this map shall be filed
no later than 15 days before the public hearing specified in Section 7 below.
S7296 \1085 \678880.2 1
Section 4. Facilities. The type of public facilities proposed to be provided within the
District and to be financed under the Act shall consist of those facilities set forth on Exhibit "A,"
attached hereto and incorporated herein by reference (the "Facilities "). The City Council hereby
finds that the proposed Facilities are necessary to meet increased demands placed upon the City
as a result of development occurring in the District. The Facilities may be acquired from one or
more property owners as completed public facilities pursuant to Section 53314.9 of the Act
and/or constructed with District funds pursuant to Section 53316.2 of the Act. The cost of the
Facilities shall include incidental expenses, as defined in Exhibit "A" and may include
reimbursement of money advanced by the owner of property within the District to pay
development fees charged by the city and used by the City to finance improvements.
Section 5. Special Tax.
a. Except where funds are otherwise available to pay for the Facilities and/or the
principal and interest as it becomes due on bonds of the District issued to finance the Facilities, it
is the intention of the City Council to levy annually in accordance with procedures contained in
the Act a special tax (the "Special Tax ") within the District sufficient to pay for the costs thereof,
including incidental expenses. The Special Tax will be secured by recordation of a continuing
lien against all non - exempt real property in the District and will be collected in the same manner
as ordinary ad valorem property taxes are collected, or in such other manner as may be provided
by the City Council including, without limitation, direct billing of the affected property owner,
and shall be subject to the same penalties, procedure, sale and lien priority in case of delinquency
as applicable for ad valorem property taxes. In the first year in which such a Special Tax is
levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred
to the District pursuant to Section 53314 of the Act and interest thereon.
b. The proposed rate and method of apportionment of the Special Tax (the "Rate and
Method ") among parcels of real property in the District, in sufficient detail to allow each resident
or landowner within the proposed District to estimate the maximum amount such resident or
owner will have to pay, is shown in Exhibit "B," attached hereto and incorporated herein by
reference.
The Special Tax is based on the expected demand that each parcel of real property within
the proposed District will place on the Facilities and on the benefit that each parcel derives from
the right to access the Facilities. The City Council hereby determines the rate and method of
apportionment of the Special Tax set forth in Exhibit `B" for the District to be reasonable. The
obligation to pay the Special Tax may be prepaid as set forth in Exhibit `B ".
c. In the case of any Special Tax to pay for the Facilities to be levied against any parcel
used for private residential purposes: (i) the maximum Special Tax shall be specified as a dollar
• amount which shall be calculated and thereby established not later than the date on which the •
parcel is first subject to the tax because of its use for private residential purposes and which
amount shall not be increased over time over two percent per year; (ii) the tax year after which
no further Special Tax subject to this sentence shall be levied or collected shall be as set forth in
Exhibit "B" hereto; and (iii) under no circumstances will the Special Tax levied against any
parcel subject to this sentence be increased as a consequence of delinquency or default by the
S7296 \1085 \678880.2 2
owner of any other parcel within the District by more than ten percent. For the purposes hereof,
a parcel is used for "private residential purposes" not later than the date on which an occupancy
permit for private residential use is issued.
Section 6. Bonds. It is the intent of the City Council, acting as the legislative body of the
District, to cause bonds to be issued under the Act on behalf of the District to finance, in whole
or in part, the acquisition and/or construction of the Facilities. Bonds will be in the aggregate
principal amount of not to exceed $5,000,000, at a maximum interest rate not in excess of twelve
percent per annum or such rate not in excess of the maximum rate permitted by law at the time
the bonds are issued, and the term of the bonds of each series shall not exceed thirty -one years
from the date of issuance of such series of bonds or such longer term as is then permitted by law.
Section 7. Hearing. A public hearing (the "Hearing ") on the establishment of the
District, the extent of the District, the furnishing of specified types of public facilities within the
District, and the proposed rate and method of apportionment of the Special Tax shall be held on
September 23, 2002, at 7:00 p.m., or as soon thereafter as practicable, at the chambers of the City
Council of the City of Seal Beach, 211 Eighth Street, Seal Beach, California 90740. At the
Hearing, any interested person or taxpayer, including all persons owning lands or registered to
vote within the proposed District, may appear and be heard.
Section 8. Report. The City officer who is or will be responsible for the Facilities to be
financed by the District, if it is established, is hereby directed to study the proposed District and,
at or before the time of the above - mentioned Hearing, file, or cause to be filed, a report with the
City Council, which is to be made a part of the record of the Hearing, containing the following:
(a) a brief description of the Facilities by type which will in his or her opinion be required
to adequately meet the needs of the District; and
(b) an estimate of the fair and reasonable cost of financing the Facilities, including the
cost of acquiring land and easements and any incidental expenses, and including the costs of the
proposed bond financing and all other related costs, as provided for in Section 53345.3 of the
Act.
Section 9. Advances. The City may accept advances of funds or work in -kind from any
source, including, but not limited to, private persons or private entities, and is authorized and
directed to use such funds or that work in -kind for any authorized purpose, including, but not
limited to, paying any cost incurred by the City in creating the District. The City may enter into
an agreement with the person or entity advancing the funds or work -in -kind, to repay all or a
portion of the funds advanced, or to reimburse the person or entity for the value, or cost,
whichever is less, of the work -in -kind, as determined by the City Council, with or without
interest. •
•
Section 10. Published Notice. The City Clerk is hereby directed to publish a notice
( "Notice ") of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of
general circulation published in the area of the proposed District. Such Notice shall be
S7296 \1085 \678880.2 3
substantially in the form specified in Section 53222 of the Act. Publication of the Notice shall be
completed at least 7 days prior to the date of the Hearing.
Section 11. Mailed Notice. The City Clerk is hereby directed to send a copy of the
Notice of the Hearing by first -class mail, postage prepaid, to each registered voter and to each
landowner within the proposed District as shown on the last equalized assessment roll. Mailing
of the Notice shall be completed at least 15 days prior to the date of the Hearing.
Section 12. Voting. Should the City Council determine to form the District, a special
election will be held within the District to authorize the issuance of bonds and the levy of the
Special Tax in accordance with the procedures contained in Section 53326 of the Act. If held,
the proposed voting procedure at the election will be a landowner vote with each landowner who
is the owner of record of land within the District at the close of the Hearing, or the authorized
representative thereof, having one vote for each acre or portion thereof owned within the District.
Ballots for the special election may be distributed by mail with return postage prepaid or by
personal service.
Section 13. Tender of Bonds. Except to the extent limited in any bond resolution or trust
indenture related to the issuance of bonds, the City Council hereby reserves to itself all rights and
powers set forth in Section 53344.1 of the Act (relating to tenders of bonds in full or partial
payment of any installment of the special tax or the interest or penalties thereon which may be
due or delinquent).
PASSED, APPROVED AND ADOPTED this 12th day of August, 2002.
Mayor
ATTEST:
City Clerk
S7296 \1085 \678880.2 4
EXHIBIT "A"
DESCRIPTION OF FACILITIES
The cost of the facilities shall include incidental expenses, including the costs associated with
forming the District, issuance of bonds, determination of the amount of the Special Tax,
collection of the Special Tax, costs incurred in order to carry out the authorized purposes of the
District, any other expenses, incidental to the construction, completion and inspection of the
authorized work and the attributable costs of engineering and inspection. The facilities shall be
constructed, whether or not acquired in their completed states, pursuant to plans and
specifications approved by the City and the officials thereof.
Facilities
Public improvements with a useful life of not less than five years including (i) street, sidewalk,
street light, traffic signal, drainage, signage median and appurtenant improvements to Seal Beach
Boulevard, Aldolpho Lopez Drive, and Heron Pointe, including, but not limited to, relocation of
existing overhead utilities lines and construction of joint trench in furtherance of public safety,
(ii) water and sanitary improvements serving real property within the District, including, but not
limited to, a sewer lift station, (iii) dry utility improvements and burd vaults serving the District,
(iv) improvements to Gum Grove Park, including, but not limited to, landscaping and access
improvements, (v) landcape improvements along Seal Beach Boulevard, (vi) sewer, water, park,
storm drain, and transportation improvements to be funded through development fees charged by
the City of Seal Beach in connection with the development of real property within the District.
S7296 \1085 \678880.2 A -1
EXHIBIT "B"
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
S7296 \1085 \678880.1 B -1
RATE AND METHOD OF APPORTIONMENT FOR
CITY OF SEAL BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(HERON POINTE)
A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels in the City of Seal
Beach Community Facilities District No. 2002 -1 (Heron Pointe) ( "CFD No. 2002-1") and collected
each Fiscal Year commencing in Fiscal Year 2002 -03, in an amount determined by the City Council
of the City of Seal Beach, through the application of the Rate and Method of Apportionment as
described below. All of the real property in CFD No. 2002 -1, unless exempted by law or by the
provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area
shown on the applicable final map, parcel map, condominium plan, or other recorded County
parcel map.
"Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter
2.5, Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs
directly related to the administration of CFD No. 2002 -1: the costs of computing the Special
Taxes and preparing the annual Special Tax collection schedules (whether by the City or
designee thereof or both); the costs of collecting the Special Taxes (whether by the County or
otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee
(including its legal counsel) in the discharge of the duties required of it under the Indenture;
the costs to the City, CFD No. 2002 -1 or any designee thereof of complying with arbitrage
rebate requirements; the costs to the City, CFD No. 2002 -1 or any designee thereof of
complying with City, CFD No. 2002 -1 or obligated persons disclosure requirements
associated with applicable federal and state securities laws and of the Act; the costs
associated with preparing Special Tax disclosure statements and responding to public
inquiries regarding the Special Taxes; the costs of the City, CFD No. 2002 -1 or any designee
thereof related to an appeal of the Special Tax; the costs associated with the release of funds
from any escrow account; and the City's annual administration fees and third party expenses.
Administrative Expenses shall also include amounts estimated or advanced by the City or
CFD No. 2002 -1 for any other administrative purposes of CFD No. 2002 -1, including
attorney's fees and other costs related to commencing and pursuing to completion any
foreclosure of delinquent Special Taxes.
"Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an
assigned Assessor's parcel number.
"Assessor's Parcel Map" means an official map of the County Assessor of the County
designating parcels by Assessor's parcel number.
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CFD No. 2002 -1 (Heron Pointe) Page 1
"Assigned Special Tax" means the Special Tax for each Land Use Class of Developed
Property, as determined in accordance with Section C below.
"Backup Special Tax" means the Special Tax applicable to each Assessor's Parcel of
Developed Property, as determined in accordance with Section C below.
"Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether
in one or more series, issued by the City on behalf of CFD No. 2002 -1 under the Act.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement and providing for the levy and collection of the
Special Taxes.
"CFD No. 2002 -1" means the City of Seal Beach Community Facilities District No. 2002 -1
(Heron Pointe).
"City" means the City of Seal Beach.
"Council" means the City Council of the City.
"County" means the County of Orange.
"Developed Property" means for each Fiscal Year, all Taxable Property, exclusive of
Taxable Public Property and Taxable Property Owner Association Property, for which a
building permit for new construction was issued after January 1, 2001 and prior to January 1
of the prior Fiscal Year.
"Fiscal Year" means the period starting July 1 and ending on the following June 30.
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to
time.
"Land Use Class" means any of the classes listed in Table 1 below.
"Maximum Special Tax" means the Maximum Special Tax, determined in accordance with
Section C below, that can be levied in any Fiscal Year on any Assessor's Parcel.
"Non- Residential Property" means all Assessor's Parcels of Developed Property for which
a building permit was issued for a non - residential use.
"Outstanding Bonds" means all Bonds which are deemed to be outstanding under the
Indenture.
"Proportionately" means, for Developed Property, that the ratio of the actual Special Tax
levy to the Assigned Special Tax is equal for all Assessor's Parcels of Developed Property.
For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax
levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor's Parcels of
Undeveloped Property. For Taxable Public Property and Taxable Property Owner
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CFD No. 2002 -1 (Heron Pointe) Page 2
Association Property, "Proportionately" means that the ratio of the actual Special Tax levy
per Acre to the Maximum Special Tax per Acre is equal for all Assessor's Parcels of Taxable
Public Property or Taxable Property Owner Association Property, as applicable.
"Property Owner Association Property" means, for each Fiscal Year, any property within
the boundaries of CFD No. 2002 -1 that was owned by a property owner association,
including any master or sub - association, as of January 1 of the prior Fiscal Year.
"Public Property" means, for each Fiscal Year, any property within CFD No. 2002 -1 that is
owned by, irrevocably offered for dedication to, or dedicated to the federal government, the
State, the County, the City or any other public agency as of June 30 of the prior Fiscal Year;
provided however that any property leased by a public agency to a private entity and subject
to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with
its use. To ensure that property is classified as Public Property in the first Fiscal Year after it
is acquired by, irrevocably offered for dedication to, or dedicated to a public agency, the
property owner shall notify the CFD Administrator in writing of such acquisition, offer, or
dedication not later than June 30 of the Fiscal Year in which the acquisition, offer, or
dedication occurred.
"Residential Floor Area" means all of the square footage of living area within the
perimeter of a residential structure, not including any carport, walkway, garage, overhang,
patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be
made by reference to the building permit(s) issued for such Assessor's Parcel.
"Residential Property" means all Assessor's Parcels of Developed Property for which a
building permit has been issued for purposes of constructing one or more residential dwelling
units.
"Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's
Parcel of Taxable Property to fund the Special Tax Requirement.
"Special Tax Requirement" means that amount required in any Fiscal Year for CFD No.
2002 -1 to: (i) pay debt service on all Outstanding Bonds; (ii) pay periodic costs on the
Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds;
(iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish
any reserve funds for all Outstanding Bonds; (v) pay directly for acquisition or construction
of CFD No. 2002 -1 facilities eligible under the Act; (vi) pay for reasonably anticipated
delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the
previous Fiscal Year; less (vii) a credit for funds available to reduce the annual Special Tax
levy, as determined by the CFD Administrator pursuant to the Indenture.
"State" means the State of California.
"Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No.
2002 -1 which are not exempt from the Special Tax pursuant to law or Section E below.
"Taxable Property Owner Association Property" means all Assessor's Parcels of
Property Owner Association Property that are not exempt pursuant to Section E below.
City of Seal Beach August 8, 2002
CFD No. 2002 -1 (Heron Pointe) Page 3
"Taxable Public Property" means all Assessor's Parcels of Public Property that are not
exempt pursuant to Section E below.
"Trustee" means the trustee or fiscal agent under the Indenture.
"Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as
Developed Property, Taxable Public Property or Taxable Property Owner Association
Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, all Taxable Property within CFD No. 2002 -1 shall be classified as
Developed Property, Taxable Public Property, Taxable Property Owner Association
Property, or Undeveloped Property, and shall be subject to Special Taxes in accordance with
the rate and method of apportionment determined pursuant to Sections C and D below.
C. MAXIMUM SPECIAL TAX
1. Developed Property
a. Maximum Special Tax
The Maximum Special Tax for each Assessor's Parcel classified as
Developed Property shall be the greater of (i) the amount derived by
application of the Assigned Special Tax or (ii) the amount derived by
application of the Backup Special Tax.
b. Assigned Special Tax
The Fiscal Year 2002 -03 Assigned Special Tax for each Land Use Class is
shown below in Table 1.
TABLE 1
Fiscal Year 2002 -03
Assigned Special Taxes for Developed Property in
Community Facilities District No. 2002 -1
(Heron Pointe)
Land Use, r � _ ;t;:.. ri • •
g Classy • yy Description • Residential' Floor =Area 'Assigned Special;�Taax ,
.e •aYSA' .. •
• 1 Residential Property . >— 4,000 s.f. $5,350 per unit •
2 Residential Property 3,750 — 3,999 s.f. $5,078 per unit
•
3 Residential Property 3, 500 — 3,749 s.f. $4,900 per unit
4 Residential Property < 3,500 s.f. $4,570 per unit
City of Seal Beach August 8, 2002
CFD No. 2002 -1 (Heron Pointe) Page 4
Land Use ' ;
Class Description Residential Floor Area Assigned Special Tax
=
5 Non - Residential Property NA $41,977 per Acre
c. Backup Special Tax
The Fiscal Year 2002 -03 Backup Special Tax for an Assessor's Parcel of
Developed Property shall equal $41,977 per Acre.
d. Increase in the Assigned Special Tax and Backup Special Tax
On each July 1, commencing on July 1, 2003, the Assigned Special Tax and
the Backup Special Tax shall be increased by an amount equal to two percent
(2 %) of the amount in effect for the previous Fiscal Year.
2. Undeveloped Property, Taxable Public Property, and Taxable Property Owner
Association Property
a. Maximum Special Tax
The Fiscal Year 2002 -03 Maximum Special Tax for Undeveloped Property,
Taxable Public Property, and Taxable Property Owner Association Property
shall be $47,043 per Acre.
b. Increase in the Maximum Special Tax
On each July 1, commencing on July 1, 2003, the Maximum Special Tax for
Undeveloped Property, Taxable Public Property, and Taxable Property
Owner Association Property shall be increased by an amount equal to two
percent (2 %) of the amount in effect for the previous Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2002 -03 and for each following Fiscal Year, the Council shall
determine the Special Tax Requirement and shall levy the Special Tax until the amount of
Special Taxes equal the Special Tax Requirement: The Special Tax shall be levied each
Fiscal Year as follows:
First: The Special Tax shall be levied Proportionately on each Assessor's Parcel of
Developed Property at up to 100% of the applicable Assigned Special Tax;
Second: If additional monies are needed to satisfy the Special Tax Requirement after the
first step has been completed, the Special Tax shall be levied Proportionately on each
Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for
Undeveloped Property;
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CFD No. 2002 -1 (Heron Pointe) Page 5
Third: If additional monies are needed to satisfy the Special Tax Requirement after the first
two steps have been completed, then the levy of the Special Tax on each Assessor's Parcel of
Developed Property whose Maximum Special Tax is determined through the application of
the Backup Special Tax shall be increased in equal percentages from the Assigned Special
Tax up to the Maximum Special Tax for each such Assessor's Parcel;
Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first
three steps have been completed, then the Special Tax shall be levied Proportionately on each
Assessor's Parcel of Taxable Property Owner Association Property at up to the Maximum
Special Tax for Taxable Property Owner Association Property; and
Fifth: If additional monies are needed to satisfy the Special Tax Requirement after the first
four steps have been completed, then the Special Tax shall be levied Proportionately on each
Assessor's Parcel of Taxable Public Property at up to the Maximum Special Tax for Taxable
Public Property.
Notwithstanding the above, under no circumstances will the Special Tax levied against any
Assessor's Parcel of Residential Property for which an occupancy permit for private
residential use has been issued be increased by more than ten percent as a consequence of
delinquency or default by the owner of any other Assessor's Parcel within the CFD.
E. EXEMPTIONS
No Special Tax shall be levied on up to 4.27 Acres of Property Owner Association Property.
Tax - exempt status will be irrevocably assigned by the CFD Administrator in the
chronological order in which property becomes Property Owner Association Property.
However, should an Assessor's Parcel no longer be classified as Property Owner Association
Property, its tax - exempt status will be revoked. No Public Property shall be exempt from
Special Tax, except as required by law.
Public Property or Property Owner Association Property that is not exempt from Special
Taxes under this section shall be subject to the levy of the Special Tax and shall be taxed
Proportionately as part of the fourth or fifth step in Section D above, at up to 100% of the
applicable Maximum Special Tax for Taxable Public Property or Taxable Property Owner
Association Property.
F. APPEALS AND INTERPRETATIONS
Any taxpayer may file a written appeal of the Special Tax on his/her property with the CFD
Administrator, provided that the appellant is current in his/her payments of Special Taxes.
During the pendency of an appeal, all Special Taxes previously levied must be paid on or
before the payment date established when the levy was made. The appeal must specify the
reasons why the appellant claims the calculation of the Special Tax is in error. The CFD
Administrator shall review the appeal, meet with the appellant if the CFD Administrator
deems necessary, and advise the appellant of its determination. If the CFD Administrator
agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax
on the appellant's property and /or provide a refund to the appellant. If the CFD
Administrator disagrees with the appellant and the appellant is dissatisfied with the
determination, the appellant then has 30 days in which to appeal to the Council by filing a
written notice of appeal with the City clerk, provided that the appellant is current in his/her
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CFD No. 2002 -1 (Heron Pointe) Page 6
payments of Special Taxes. The second appeal must specify the reasons for its disagreement
with the CFD Administrator's determination.
G. MANNER OF COLLECTION
The Special Tax will be collected in the same manner and at the same time as ordinary ad
valorem property taxes; provided, however, that CFD No. 2002 -1 may directly bill the
Special Tax, may collect Special Taxes at a different time or in a different manner if
necessary to meet its financial obligations, and may covenant to foreclose and may actually
foreclose on delinquent Assessor's Parcels as permitted by the Act.
H. PREPAYMENT OF SPECIAL TAX
The following definition applies to this Section H:
"CFD Public Facilities Cost" means either $3.015 million in 2002 dollars, which shall
increase by the Construction Inflation Index on July 1, 2003, and on each July 1 thereafter, or
such lower number as (i) shall be determined by the CFD Administrator as sufficient to
provide the public facilities to be provided by CFD No. 2002 -1 under the authorized bonding
program for CFD No. 2002 -1, or (ii) shall be determined by the Council concurrently with a
covenant that it will not issue any more Bonds to be supported by Special Taxes levied under
this Rate and Method of Apportionment as described in Section D.
"Construction Fund" means an account specifically identified in the Indenture to hold
funds which are currently available for expenditure to acquire or construct public facilities
eligible under the Act.
"Construction Inflation Index" means the annual percentage change in the Engineering
News - Record Building Cost Index for the City of Los Angeles, measured as of the calendar
year which ends in the previous Fiscal Year. In the event this index ceases to be published,
the Construction Inflation Index shall be another index as determined by the CFD
Administrator that is reasonably comparable to the Engineering News - Record Building Cost
Index for the City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities Cost minus (i) public facility
costs previously paid from the Construction Fund, (ii) moneys currently on deposit in the
Construction Fund, and (iii) moneys currently on deposit in an escrow fund that are expected
to be available to finance facilities costs.
"Outstanding Bonds" means all Previously Issued Bonds which are deemed to be
outstanding under the Indenture after the first interest and/or principal payment date
following the current Fiscal Year.
"Previously Issued Bonds" means all Bonds that have been issued by CFD No. 2002 -1
prior to the date of prepayment.
1. Prepayment in Full
The obligation of an Assessor's Parcel to pay the Special Tax may be prepaid and
permanently satisfied as described herein; provided that a prepayment may be made
City of Seal Bead: August 8, 2002
CFD No. 2002 -1 (Heron Pointe) Page 7
•
only for Assessor's Parcels of Developed Property or Undeveloped Property for
which a building permit has been issued, and only if there are no delinquent Special
Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of
an Assessor's Parcel intending to prepay the Special Tax obligation shall provide the
CFD Administrator with written notice of intent to prepay. Within 30 days of receipt
of such written notice, the CFD Administrator shall notify such owner of the
prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a
reasonable fee for providing this service. Prepayment must be made not less than 45
days prior to the next occurring date that notice of redemption of Bonds from the
proceeds of such prepayment may be given to the Trustee pursuant to the Indenture.
The Prepayment Amount (defined below) shall be calculated as summarized below
(capitalized terms as defined below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Prepayment Amount
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CFD No. 2002 -1 (Heron Pointe) Page 8
As of the proposed date of prepayment, the Prepayment Amount (defined below)
shall be calculated as follows:
Paragraph No.:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax
and Backup Special Tax applicable for the Assessor's Parcel to be prepaid. For
Assessor's Parcels of Undeveloped Property (for which a building permit has been
issued) to be prepaid, compute the Assigned Special Tax and Backup Special Tax for
that Assessor's Parcel as though it was already designated as Developed Property,
based upon the building permit which has already been issued for that Assessor's
Parcel.
3. (a) Divide the Assigned Special Tax computed pursuant to paragraph 2 by the total
estimated Assigned Special Taxes for the entire CFD No. 2002 -1 based on the
Developed Property Special Taxes which could be charged in the current Fiscal Year
on all expected development through buildout of CFD No. 2002 -1, excluding any
Assessor's Parcels which have been prepaid, and
(b) Divide the Backup Special Tax computed pursuant to paragraph 2 by the
estimated Backup Special Taxes at buildout of CFD No. 2002 -1 using the Backup
Special Tax amount for the current Fiscal Year, excluding any Assessor's Parcels
which have been prepaid.
4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the
Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and
prepaid (the "Bond Redemption Amount ").
5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the
applicable redemption premium, if any, on the Outstanding Bonds to be redeemed
(the "Redemption Premium ").
6. Compute the current Future Facilities Costs
7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the
amount determined pursuant to paragraph 6 to compute the amount of Future
Facilities Costs to be prepaid (the "Future Facilities Amount ").
8. Compute the amount needed to pay interest on the Bond Redemption Amount from
the first bond interest and/or principal payment date following the current Fiscal Year
until the earliest redemption date for the Outstanding Bonds.
9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal
Year which have not yet been paid.
10. Compute the minimum amount the CFD Administrator reasonably expects to derive
from the reinvestment of the Prepayment Amount (as defined below) less the Future
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CFD No. 2002 -1 (Heron Pointe) Page 9