FROM:
Management Services
SUBJECT:
Title
Resolution of Intent to form Community Facilities District No. 107 (Highland)
End
RECOMMENDATION:
Recommendation
1. Adopt Resolution No. 2021-_096 of the City Council of the City of Fontana of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes.
2. Adopt Resolution No. 2021-097 of the City Council of the City of Fontana to Incur Bonded Indebtedness of the Proposed City of Fontana Community Facilities District No. 107 (Highland).
End
COUNCIL GOALS:
• To practice sound fiscal management by developing long-term funding and debt management plans.
DISCUSSION:
Stratham has initiated the process to form a Community Facilities District for the purpose of financing the construction and/or acquisition of certain public facilities that are eligible under the City financing goals and policies, namely sewer, storm drain, street improvements, facilities and landscaping. The formation of the district will benefit the City by funding the infrastructure projects outside of the typical improvements that would be required for the project including a contribution for a project of community benefit. CFD bond funding will allow for infrastructure to be built at one time reducing construction inconvenience for earlier residents and enhancing the overall community aesthetics.
The project consists of approximately 11.06 gross (7.19 net taxable) acres (107 residential lots) and is located north of South Highland Avenue between San Sevaine Road and Hemlock Avenue.
The proposed Rate and Method of Apportionment (RMA) includes rates to pay for bonded indebtedness and maintenance of street lighting, landscaping and parks. Initial assigned residential rates are proposed as follows:
|
Land Use Class |
Residential Floor Area |
Bond Debt |
Maint |
Total |
|
1 |
2,150 SF or greater |
$3,321 |
$373 |
$3,694 |
|
2 |
2,000 SF to less than 2,150 SF |
$3,290 |
$373 |
$3,663 |
|
3 |
1,850 SF to less than 2,000 SF |
$3,183 |
$373 |
$3,556 |
|
4 |
1,700 SF to less than 1,850 SF |
$3,125 |
$373 |
$3,498 |
|
5 |
1,550 SF to less than !,700 SF |
$3,072 |
$373 |
$3.445 |
|
6 |
1,400 SF to less than 1,550 SF |
$2,938 |
$373 |
$3,311 |
|
7 |
Less than 1,400 |
$2,832 |
$373 |
$3,205 |
Sales prices for the homes have been estimated at $507,500 to $588,000. The proposed rates have been established to provide a total tax rate of less than 1.95% of the home value per City Policy.
The proposed rates for bonded indebtedness will support $4.3 million of bonds, providing funds to finance $3.6 million of capital facilities. The proposed annual rate for maintenance of $373 per unit will be sufficient to fund the annual maintenance costs for street lighting, landscaping, and parks within and surrounding the area of the CFD. The maximum annual tax rate for maintenance has been set at $520 per unit with a 2% escalator per City Policy.
This action represents the first step in the process to establish the new district. Adoption of the proposed resolutions will set the public hearing for October 26, 2021. The levy of the proposed special taxes will be subject to the approval of the qualified electors of the new Community Facilities District at a special election.
The recommended action complies with the City Council’s debt management objectives.
FISCAL IMPACT:
Most of the issuance costs are contingent upon the sale of the bonds and will be paid from proceeds. The developer has deposited $60,000 with the City to pay for appraisal and other miscellaneous costs that are non-contingent.
Annual debt service and maintenance costs will be paid from special taxes levied on the future homeowners within the district.
MOTION:
Approve staff recommendation.