FROM:
Finance
SUBJECT:
Title
Levy of a Special Tax in Community Facilities District No. 1 (Southridge Village) for Fiscal Year 2025-2026.
End
RECOMMENDATION:
Recommendation
Adopt Resolution No. 2025-051, Authorizing the Levy of a Special Tax in Community Facilities District No. 1 (Southridge) for Fiscal Year 2025-2026.
End
COUNCIL GOALS:
• Practice sound fiscal management by developing long-term funding and debt management plans.
DISCUSSION:
To mitigate the fiscal impact of Southridge Village, the City Council adopted Resolution 84-13 establishing Community Facilities District No. 1 (Southridge). The District was established to fund and provide the following services:
• Police Services
• Fire protection, suppression, ambulance and paramedic services
• Operation and maintenance of parks and parkways
Pursuant to the Special Tax Rate and Method of Apportionment, adopted by the City Council on November 15, 1983, the special tax rate in the District may annually increase by an amount which is the lesser of (1) the annual increase in the consumer price index (CPI) as determined by the U.S. Department of Labor Statistics or (2) five percent (5%) of the maximum special tax rate.
The proposed Fiscal Year 2025-2026 maximum special tax rate for the District is $1,126.71 per equivalent dwelling unit. This reflects a 3.4% ($37.05) increase over the prior fiscal year as the annual increase in CPI was 3.4%. The actual tax will increase by 10% ($79.80) to $877.82.
As recommended, the 10% increase proposed doesn’t fully fund the maintenance expenses for the District and use of fund balance is required. The City is conducting a citywide comprehensive analysis and review of its community facility districts. Following this, the City will present recommendations to the Council for a long-term funding plan to ensure that services are fully funded, and districts remain sustainable.
The City's special taxes for this District have been reviewed in light of the passage of Proposition 218. The recommended actions comply with the provisions of this proposition.
A listing of the parcels and the related specific tax for each parcel is available for viewing in the City Clerk's office.
FISCAL IMPACT:
The proposed actual tax of $877.82 per dwelling unit will generate approximately $6.51 million to fund police services, fire protection, and landscape maintenance for the District. It is projected that the proposed actual rate will generate sufficient revenues to cover the costs of providing these services to the District. Fully funding expenses without the use of fund balance would require a 27% increase to the maintenance assessment. The 10% increase will require the utilization of $908,957 or 100% of current estimated fund balance.
MOTION:
Approve staff recommendation.