FROM:
Finance
SUBJECT:
Title
Levy of a Special Tax in Community Facilities District No. 81 (Gabriella) for Fiscal Year 2025-2026
End
RECOMMENDATION:
Recommendation
Adopt Resolution No. 2025-063, Authorizing the Levy of Special Tax in Community Facilities District No. 81 (Gabriella) for Fiscal Year 2025-2026.
End
COUNCIL GOALS:
• Practice sound fiscal management by fully funding liabilities and reserves.
• Practice sound fiscal management by developing long-term funding and debt management plans.
DISCUSSION:
Community Facilities District No 81 (Gabriella) was established by Resolution No. 2016-022 on March 22, 2016, to finance public facilities and to pay annual landscape and lighting costs for the district. On March 6, 2018 the District issued $7,180,000 of Special Tax Bonds to finance the acquisition of certain major capital facilities (infrastructure) to serve properties within the District.
Pursuant to Government Code Section 53340, a resolution must be adopted by the City Council annually to levy a special tax to pay for the cost of providing public facilities, services, and incidental expenses. The rate and method of apportionment of the special tax was originally set forth in Ordinance No. 1743 approved and adopted by the City Council on March 22, 2016.
The special tax levied on each assessable parcel within the District is necessary to pay for the cost of providing public facilities and authorized administrative expenses (Facilities Special Tax A); and the annual landscape and lighting maintenance costs of the District (Services Special Tax B). The proposed Fiscal Year 2025-2026 special tax rates (Special Tax A and Special Tax B) are shown in Exhibit A.
The proposed special tax rates for Fiscal Year 2025-2026 were developed according to the Rate and Method of Apportionment (Exhibit B). Special tax rate A (bond) will remain the same as prior year and special tax rate B (maintenance) will increase 10% ($56.14) per parcel.
As recommended, the 10% increase for Special Tax B 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 District was established after the adoption of Proposition 218 and complies with its requirements because the District and the special taxes were approved by the consent of the property owner at the time the District was formed.
FISCAL IMPACT:
The proposed Fiscal Year 2025-2026 special tax rate A is the same as the prior year while special tax rate B will increase 10%. This will generate approximately $604,744; $481,246 for public facility expenses and $123,498 for landscape and lighting maintenance costs. Fully funding expenses without the use of fund balance would require a 36% increase to the maintenance assessment. The 3% increase will require the utilization of $29,650 or 77% of current estimated fund balance.
MOTION:
Approve staff recommendation.