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HomeMy WebLinkAboutCC AG PKT 2006-07-24 #L , J .. IN. AGENDA REPORT DATE: July 24, 2006 TO: Honorable Mayor and Members of the City Council FROM: Keith A. Evanoff, LIMA, CRP, CRRA Director of Administrative Services /Treasurer SUBJECT: Approval of the Annual Special Taxes for Community Facilities District No. 2005 -01 "Pacific Gateway" SUMMARY OF REQUEST: That Council adopts the attached resolution approving the fiscal year 2006 -2007 special tax levies for Community Facilities Districts No. 2005 -01 "Pacific Gateway Business Center ". BACKGROUND: In January 2006, the City approved the establishment of Community Facilities District 2005 -01 known as the Pacific Gateway Business Center ( "the District "). On February 13, 2006 the City Council approved Ordinance No. 1542 levying the Special Taxes within the District. Subsequently, in May 2006 the City issued $8,800,000 of CFD Bonds to fund the cost of various improvements within the District. The City contracted with David Taussig & Associates, Inc. ( "Taussig ") to calculate special taxes for the District for fiscal year 2006 -2007. The special taxes collected are considered special revenue. Special revenue sources are legally restricted to specific purposes. As a result, this special tax is not included in general fund revenues. Special taxes were segregated into two groups: A and B. Special Tax A will satisfy debt service on the Bonds ( "Debt Service ") and Special Tax B will satisfy costs related to the maintenance of parks, parkways and open space within the District ( "Landscape Maintenance "). Exhibit A of the resolution shows the fiscal year 2006 -2007 special tax levy for each parcel being taxed. A discussion of the development status, financial obligations and the special tax requirements for fiscal year 2006 -2007 for each CFD is included in the Administration Report prepared by Taussig in July 2006. A copy of the Report is attached to this summary and is also on file in the City Clerk's office. The method of assessment for Special Taxes A & B is described in the Rate and Method of Apportionment section of the CFD Report prepared by Taussig and submitted to Council on January 23, 2006. Special Tax A allows for a maximum assessment on Developed Property of $14,997.06 per Acre and on Undeveloped Property of $15,189.84 per Acre. These rates will be increased by an amount equal to two percent (2 %) for fiscal year (2007- 2008). However, interest payments on the bonds due through September 1, 2007 in the amount of $585,715 were Agenda Item ,L. funded in the original bond issue. Therefore, the Special Tax A will not be levied on District property for fiscal year 2006 -2007. The maximum Landscape Maintenance assessment shall be equal to $2,369.46 per Acre within the District. This rate is to be increased by an amount equal to two percent (2 %) for the following fiscal year. Total estimated revenues for fiscal year 2006 -2007 are $85,570. Total estimated expenditures for landscape maintenance and administration are $85,570. FISCAL IMPACT: There is no fiscal impact to the General Fund. RECOMMENDATION: Staff recommends that Council approve the attached resolution authorizing the 2006 -2007 annual special taxes for the Communities Facilities District No. 2005 -01. /0-e--ef:P. 7' Keith A. Evanoff, LIMA RP, CRRA Director of Administrative Services/Treasurer NO' D/ P API" tf D: ..i 4r Jo :. Bahorski Ci,' Manager Agenda Item CITY OF SEAL BEACH COMMUNITY FACILITIES DISTRICT No. 2005 -01 (PACIFIC GATEWAY BUSINESS CENTER) July 10, 2006 ADMINISTRATION REPORT FISCAL YEAR 2006 -2007 CITY OF SEAL BEACH COMMUNITY FACILITIES DISTRICT NO. 2005-01 (PACIFIC GATEWAY BUSINESS CENTER) • Prepared for Prepared by CITY OF SEAL BEACH DAVID TAUSSIG & ASSOCIATES, INC. 211 Eighth Street 1301 Dove Street, Suite 600 Seal Beach, California 90740 Newport Beach, California 92660 (949) 955 -1500 Table of Contents Section Page Introduction 1 I. Special Tax Classifications and Development Update 2 Special Tax Classifications 2 Development Update 2 II. Fiscal Year 2006 -2007 Special Tax Requirement for Facilities 3 III. Fiscal Year 2006 -2007 Special Tax Requirement for Services 4 IV. Method of Apportionment 5 Maximum Special Taxes 5 Apportionment of Special Tax A 5 Apportionment of Special Tax B 5 EXHIBITS Exhibit A: Fiscal Year 2006 -2007 Special Tax Roll Introduction This report provides an analysis of the financial and administrative obligations of Community Facilities District No. 2005 -01 ( "CFD No. 2005 -01 ") of the City of Seal Beach (the "City") resulting from the sale of the $8,800,000 Series 2006 Special Tax Bonds (the "2006 Bonds ") in May 2006. CFD No. 2005 -01 is a legally constituted governmental entity established under the Mello -Roos Community Facilities Act of 1982, (the "Act ") as amended. The Act provides an alternative method for the financing of certain public capital facilities and services. Specifically, CFD No. 2005 -01 is authorized to issue up to $10,000,000 in bonds. The proceeds of the Series 2006 Bonds are to be used for the acquisition, purchase, construction, expansion, improvement, or rehabilitation of certain roadway improvements, water and sanitary sewer improvements, dry utility and joint trench improvements, landscaping improvements, as well as sewer, water, park, storm drain, and transportation improvements to be funded through development fees, which will serve the new construction in CFD No. 2005 -01. In addition, CFD No. 2005 -01 is authorized to levy the Special Tax B for the maintenance of parks, parkways, and open space. The bonded indebtedness of CFD No. 2005 -01 is both secured and repaid through the annual levy and collection of the Special Tax A from all property subject to the tax within the community facilities district. In calculating the special tax liability for fiscal year 2006 -2007, this report examines the financial obligations of the current fiscal year and analyzes the level of development within CFD No. 2005 -01. This report is organized into the following sections: Section I Section I provides an update of the development status of property within CFD No. 2005 - 01. Section II Section II determines the special tax requirement for facilities of CFD No. 2005 -01 for fiscal year 2006 -2007. Section III Section III determines the special tax requirement for services of CFD No. 2005 -01 for fiscal year 2006 -2007. Section IV Section IV reviews the methodology used to apportion the special tax requirement for facilities and the special tax requirement for services between Developed and Undeveloped Property. Tables of the 2006 -2007 Special Tax A and Special Tax B for each classification of property are included. City of Seal Beach Page I Community Facilities District No. 2005 -01 July 10, 2006 I. Special Tax Classifications and Development Update Special Tax Classifications The methodology employed to calculate and apportion the special tax is contained in a document entitled the Rate and Method of Apportionment. The Rate and Method of Apportionment defines four primary categories of Taxable Property, namely "Developed Property", "Property Owner Association Property", "Public Property" and "Undeveloped Property". Developed Property is distinguished from Undeveloped Property by the issuance of a building permit. Specifically, property for which a building permit was issued after January 1, 2005 and prior to March 1 of the previous Fiscal Year will be classified as Developed Property in the following fiscal year. For example, all property in CFD No. 2005 -01 for which building permits were issued after January 1, 2005 and prior to March 1, 2006 will be classified as Developed Property in fiscal year 2006 -2007. Development Update Background research was conducted to determine the amount and type of development activity that occurred during the previous fiscal year. Review of the City of Seal Beach's building permit records indicate that after January 1, 2005 and prior to March 1, 2006, building permits for 28.76 acres of non - residential property had been issued within CFD No. 2005 -01. A total of 16.17 gross acres in the district are considered Undeveloped Property. City of Seal Beach Page 2 Community Facilities District No. 2005 -01 July 10, 2006 II. Fiscal Year 2006 -2007 Special Tax Requirement for Facilities • For fiscal year 2006 -2007, the Special Tax Requirement for Facilities is 50, as there are sufficient funds available in the Capitalized Interest Account to pay for the FY 2006 -07 obligations. Community Facilities District No. 2005 -01 Fiscal Year 2006 -2007 Special Tax Requirement for Facilities FUND BALANCES AS OF MAY 31, 2006 CAPITALIZED INTEREST ACCOUNT $585,715 RESEARVE FUNDS IN EXCESS OF RESERVE REQUIREMENT $0 INTEREST ACCOUNT $0 SPECIAL TAX FUND $0 SURPLUS FUND $0 REMAINING FISCAL YEAR 2005 -2006 OBLIGATIONS INTEREST DUE SEPTEMBER 1, 2006 ($124,320) PRINCIPAL DUE SEPTEMBER 1, 2006 $0 ADMINISTRATIVE EXPENSES $0 FISCAL YEAR 2005 -2006 SURPLUS / (SHORTFALL): $461,395 FISCAL YEAR 2006 -2007 OBLIGATIONS: CFD ADMINISTRATIVE EXPENSES [1] $0 INTEREST DUE MARCH 1, 2007 ($230,698) INTEREST DUE SEPTEMBER 1, 2007 ($230,698) PRINCIPAL DUE SEPTEMBER 1, 2007 $0 FISCAL YEAR 2006- 2007,SPECIAL TAX REQUIREMENT: [2J $0 []I The FY 2006 -2007 Administrative Expenses In the amount of S35,000 was funded through the Issuance of the Senes 2006 Bonds. [2) May not sum due to rounding City of Seal Beach Page 3 Community Facilities District No. 2005 -01 July 10, 2006 III. Fiscal Year 2006 -2007 Special Tax Requirement for Services Pursuant to the Rate and Method of Apportionment, the Special Tax B may be levied in CFD No. 2005 -01 to: (i) pay for (a) maintenance of parks, parkways and open space benefiting property within CFD No. 2005 -01, (b) pay Administrative Expenses not funded through the Special Tax Requirement for Facilities as determined by the CFD Administrator; less (ii) a credit for funds available to reduce the annual Special Tax B levy, as determined by the CFD Administrator. For fiscal year 2006 -2007 the Special Tax Requirement for Services equals $85,570. The Maximum Special Tax B and Actual Special Tax B for each land use class in CFD No. 2005 -01 for Fiscal Year 2006 -2007 is shown on page 6. The Special Tax roll, which lists the Actual Special Tax B levied against each Assessor's Parcel, is included as Exhibit A. Fiscal Year 2006 -2007 Special Tax Requirement for Services Component Amount Maintenance $85,570 Administration [1] $0 Total $85,570 [1 ] Administration Fees included in the 2006 Bonds. City of Seal Beach Page 4 Cotntnunity Facilities District No. 2005 -01 July 10, 2006 • IV. Method of Apportionment Maximum Special Taxes The amount of special taxes that CFD No. 2005 -01 may levy is strictly limited by the maximum special taxes set forth in the Rate and Method of Apportionment. The maximum special tax for Undeveloped Property and the assigned special tax for each classification of Developed Property are specified in Section C of the Rate and Method of Apportionment.' Apportionment of Special Tax A Section D.1 of the Rate and Method of Apportionment for CFD No. 2005 -01 describes the steps in which Assigned Special Tax A shall be levied each Fiscal Year in order to satisfy the Special Tax Requirement for Facilities. The first step states that the Council shall levy the Special Tax A Proportionately on each Assessor's Parcel of Developed Property at up to 100% of the Assigned Special Tax A. If the sum of the amount collected in step one is insufficient to satisfy the Special Tax Requirement for Facilities, then the second step is applied. The second step states that the Council shall Proportionately levy the Special Tax A on each Assessor's Parcel of Undeveloped Property up to the Maximum Special Tax A applicable to each Assessor's Parcel of Undeveloped Property to satisfy the Special Tax Requirement for Facilities. The third and fourth steps are designed to accommodate changes in land use and are intended to be used only as a last resort. Since actual land uses have not substantially deviated from the original projections, these steps are not necessary. For fiscal year 2006 -2007, the Special Tax Requirement for Facilities is $0, as there are sufficient funds available in the Capitalized Interest Account to pay for the FY 2006 -07 obligations. Apportionment of Special Tax B Section D.2 of the Rate and Method of Apportionment for CFD No. 2005 -01 describes the steps in which the Maximum Special Tax B shall be levied each Fiscal Year in order to satisfy the Special Tax Requirement for Services. The first step states that the Special Tax B shall be Proportionately levied against each Assessor's Parcel of Developed Property at up to 100% of the applicable Maximum Special Tax B. If the special taxes raised pursuant to the first step are less than the Special Tax Requirement for Services, then the second step is applied. The second step states that the Special Tax B shall be levied against each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax B for Undeveloped Property. Technically, Section (' states that the Maximum Special Tax A fora parcel of Developed Property is equal to the greater of (r) the "Backup Special - lax A" or (ir) the Assigned Special Tax A. The Backup Special Tax A was established for thecontrngaicy ofa shortfall in revenues resulting from significant changes in development densities. The contingency for which the Backup Special Tax A was established does not exist and hence, all discussion of Maximum Special Tax A for Developed Pi open). focuses on the Assigned Special Tax A City of Seal Beach Page 5 Community Facilities District No. 2005 -01 July 10, 2006 Application of the Maximum Special Tax B under the first step generates special tax revenues of S68,145.67 from Developed Property, leaving $17,424.33 to be levied against Undeveloped Property. Dividing the remaining $17,424.33 by the 16.17 acres of Undeveloped Property results in a special tax of $1,077.57 per acre of Undeveloped Property. The fiscal year 2006 -2007 Maximum and Actual Special Tax B are shown for each classification of Developed Property and Undeveloped Property in the following table and graphically below. The Special Tax Roll which lists the total special tax levy for each parcel is shown in Exhibit A. Community Facilities District No. 2005 -01 Fiscal Year 2006 -2007 Special Tax A for Developed Property and Undeveloped Property Assigned /Maximum FY 2006 -2007 Description Special Tax A Actual Special Tax A Developed Property $1 2,352.20 per Acre $0 per Acre Undeveloped Property $15,189.84 per Acre $0 per Acre Community Facilities District No. 2005 -01 Fiscal Year 2006 -2007 Special Tax B for Developed Property and Undeveloped Property Assigned/Maximum FY 2006 -2007 Description Special Tax B Actual Special.Tax B Developed Property $2,369.46 per Acre $2,369.46 per Acre Undeveloped Property $2,369.46 per Acre $1,077.57 per Acre K: \CLIENTS2 \Seal Beach \admen \cfd2005 -01 \2006 -07 \2005 -01 ADM.doc City of Seal Beach Page 6 Community Facilities District No. 2005 -01 July 10, 2006 IN 0 V 'Z' Di4 'Z ' . CI e4 Ctr ce • & ..4 .b X tt,‘ • 4 `2 .,• 7.••.< s •• .! .: • • • : ; - '''''2 -, ... a ' • m , ',It • 2: - ,, I I. .....' f" - ... ' ..• , 1 c•-.7 0 1:14 a ,i.,.. I-I !..(rt $.-',.. 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RESOLUTION OF THE CITY OF SEAL BEACH COMMUNITY FACILITIES DISTRICT NO. 2005-01 (PACIFIC GATEWAY BUSINESS CENTER) ESTABLISHING ANNUAL SPECIAL TAX FOR FISCAL YEAR 2006/2007 WHEREAS, the City Council of the CITY OF SEAL BEACH (the "City"), has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors relating to the levy of a special tax in the City's Community Facilities District No. 2005 -01 (Pacific Gateway Business Center) (the "District "), all as authorized pursuant to the terms and provisions of the "Mello -Roos Community Facilities Act of 1982 ", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California. WHEREAS, the City Council, by Ordinance as authorized by Section 53340 of the Government Code of the State of California, has authorized the levy of a special tax to pay for costs and expenses related to said District. WHEREAS, the City Council desires to establish the specific rate of the special tax to be collected for the next fiscal year. NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: SECTION 1. That the above recitals are all true and correct. SECTION 2. That the special tax rates for each tax category to be used to generate special tax revenues, which will be collected to pay for the costs and expenses for the next fiscal year (2006/2007) for the District, is hereby determined and established as set forth in the attached, referenced and incorporated Exhibit "A ". SECTION 3. That the rate as set forth above does not exceed the amount as previously authorized by Ordinance of the City Council, and is not in excess of that as previously approved by the qualified electors of the District. SECTION 4. The special tax shall be collected in the same manner as ordinary ad valorem property taxes are collected, and shall be subject to the same penalties and same procedure and sale in cases of any delinquency for ad valorem taxes, and the Tax Collector is hereby authorized to deduct reasonable administrative costs incurred in collecting any said special tax. SECTION 5. All monies above collected shall be paid into the District funds. SECTION 6. The Auditor of the County is hereby directed to enter in the next County assessment roll on which taxes will become due, opposite each lot or parcel of land effected in a space marked "public improvements, special tax" or by any other suitable designation, the installment of the special tax, and for the exact rate and amount of said tax, reference is made to the attached Exhibit "A ". SECTION 7. The County Auditor shall then, at the close of the tax collection period, promptly render to the City a detailed report showing the amount and /or amounts of such special tax installments, interest, penalties and percentages so collected and from what property collected, and also provide a statement of any percentages retained for the expense of making any such collection. SECTION 8. Special Taxes are to be levied on all non - exempt parcels within the District. Should it be discovered that any taxable parcels are not submitted to the County Auditor for inclusion into the 2006/2007 Tax Roll subsequent to the submittal deadline of August 10, 2006 the City Council directs the City of Seal Beach staff or their agents to bill such parcels directly via U.S. mail using the rates as approved in Exhibit "A ". PASSED, APPROVED AND ADOPTED BY THE City Council of Seal Beach, at a meeting hereof held on the 24 day of July , 2006 by the following vote: AYES: COUNCILMEMBERS NOES: COUNCILMEMBERS ABSENT: COUNCILMEMBERS Mayor ATTEST: Linda Devine, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF SEAL BEACH ) I, Linda Devine, City Clerk for the City of Seal Beach, California, do hereby certify that the foregoing resolutions is the original copy of Resolution Number on file in that office of the City Clerk, passed, approved an adopted by the City Council of the City of Seal Beach at regular meeting hereof held on the 24 day of July , 2006. Linda Devine, City Clerk Exhibit A Community Facilities District No. 2005 -01 (Pacific Gateway Business Center) Special Tax Levy Fiscal Year 2006/2007 Tract Lot FY 2006 -07 FY 2006 -07 Special Tax A Special Tax B 16375 1 $0 $7,677.05 16375 2 $0 $7,866.61 16375 3 $0 $10,615.18 16375 4 $0 $5,926.64 16375 5 $0 $21,893.81 16375 6 $0 $7,250.55 16375 7 $0 $12,842.47 16375 10 $0 $3,469.78 16375 12 $0 $4,612.00 16375 13 $0 $3,415.90 Total Number of Parcels Taxes 10 Total FY 2006 -07 Special Taxes $85,569.99