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CONSIDERATION OF ANNEXATION OF TERRITORY (OTAY RANCH VILLAGE 8 WEST) TO COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT)
A. RESOLUTION NO. 2014-151 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT), MAKING CERTAIN DETERMINATIONS AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES TO THE QUALIFIED ELECTORS OF CERTAIN TERRITORY PROPOSED TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) AND IMPROVEMENT AREA "C" THERETO
B. RESOLUTION NO. 2014-152 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT), DECLARING THE RESULTS OF A SPECIAL ELECTION IN THAT TERRITORY DESIGNATED AS COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT), IMPROVEMENT AREA "C," ANNEXATION NO. 9, AND ADDING SUCH TERRITORY TO SUCH IMPROVEMENT AREA
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RECOMMENDED ACTION
Recommended Action
Council conduct the public hearing, adopt resolution A, direct City Clerk to conduct special election; if levy of taxes is approved by voters, adopt resolution B.
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SUMMARY
On June 17, 2014, the City Council initiated the Community Facilities District No. 97-2 (Preserve Maintenance District) ("CFD No. 97-2") annexation proceedings by adoption of Resolutions 2014-106 and 2014-107. Tonight's actions are the next steps in the formal proceedings to annex the territory within Otay Ranch Village 8 West into CFD No. 97-2 and Improvement Area C thereof: (a) conducting a public hearing pertaining to the proposed annexation and (b) immediately following such public hearing, conducting an election of the qualified electors regarding the authorization to levy special taxes within Otay Ranch Village 8 West and, following the canvas of the ballots received, declaring the results of such election. Special taxes levied within Improvement Area C fund the costs of the Resource Monitoring Program as well as Preserve Operations and Maintenance consistent with the requirements of the Otay Ranch Resource Management Plan Phases I and II, plus a pro-rata share of Administrative Expenses of CFD No. 97-2. The City has retained the services of NBS Government Finance Group as special tax consultant and Best, Best, and Krieger, LLP, as legal counsel to provide assistance during the proceedings.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of the creation of a governmental fiscal/funding mechanism which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
In July 1998, Council formed Community Facilities District No. 97-2 (Preserve Maintenance District). CFD No. 97-2 was originally divided into two Improvement Areas, Improvement Area A and Improvement Area B, that were designated when CFD No. 97-2 was formed. Special taxes levied within Improvement Area A fund the costs of the Resource Monitoring Program as well as Preserve Operations and Maintenance within the initial boundaries of the Otay Ranch Preserve. Special taxes levied within Improvement Area B only fund the Resource Monitoring Program within that same area. Improvement Area C was designated subsequent to the formation of CFD 97-2 and the designation of Improvement Areas A and B. Special taxes levied within Improvement Area C pay for both Preserve Operations and Maintenance and the Resource Monitoring Program consistent with the requirements of the Otay Ranch Resource Management Plan Phases I and II plus a pro-rata share of Administrative Expenses of CFD No 97-2. It is necessary to annex territory into Improvement Area C of CFD No. 97-2; as such boundaries may be modified from time to time.
Territory Proposed to be Annexed
The proposed boundaries of the territory proposed to be annexed to Improvement Area C of CFD No. 97-2 encompass the parcels located within Otay Ranch Village 8 West. Otay Ranch Village 8 West is approximately three hundred (300) acres located just south of Main Street/ Rock Mountain Road, east of the Otay Quarry, north of the Otay River and west of Village 8 East. The Otay Land Company, LLC owns the property within the proposed annexation and the project is proposed for approximately 621 single-family units and 1429 multi-family units, 5.75 acres of commercial, 1.15 acres of office space, parks, Community Purpose Facility land, and both a middle school and elementary school. The City Council previously approved an annexation boundary map for this territory, identified as Annexation Map No. 9, CFD No. 97-2 (Preserve Maintenance District), Improvement Area C. A reduced copy of the map is presented in Attachment 2.
Proposed Special Tax
The rate and method of apportionment of the special taxes authorized to be levied within the existing boundaries of CFD No. 97-2 has five categories of taxation, as follows:
1. Developed Parcels are those parcels for which a building permit has been issued. Developed Parcels (Single Family and Multi-Family Residences) are taxed based on the square footage of the structure. Developed Parcels of Industrial and Commercial Parcels are taxed on the acreage of the parcel.
2. The Final Mapped properties, which include all single-family residential and multi-family residential parcels and all industrial and commercial parcels created by a final subdivision map but for which a building permit has not been issued, are taxed on acreage of the parcel.
3. Undeveloped Property, i.e., Taxable Property not categorized as Developed or Final Mapped Property, is taxed on acreage of the parcel.
4. The Exempt Category includes all publicly owned parcels and Homeowner's Association parcels.
The Rate and Method of Apportionment for Annexation No. 9 uses the same methodology and maximum special tax rates as contained in the original rate and method of apportionment approved at the time of the designation of Improvement Area C of CFD No. 97-2.
Collection of Taxes
At the beginning of each fiscal year the administrator of CFD No. 97-2 shall determine the amount of the Special Tax Requirement (budget plus reserve) of each Improvement Area. Then, the special taxes will first be levied within each of the Improvement Areas on the Developed Parcels therein to fund the Special Tax Requirement for such Improvement Area. If this pool of funds is not enough to fund the Special Tax Requirement for such Improvement Area, as may be the case in the early years of development, CFD No. 97-2 will levy the special tax on the vacant land within such Improvement Area starting with Final Mapped Property. The buffer of having the vacant land covering any portion of the Special Tax Requirement not funded from special taxes levied on Developed Parcels within an Improvement Area will disappear once the Improvement Area has been fully developed. If the Special Tax Requirement for any fiscal year for an Improvement Area is less than the maximum special tax authorized to be levied on the Developed Parcels within such Improvement Area, the actual rate of the special taxes to be levied on such Developed Property in that specific year will be reduced accordingly.
Following is a brief discussion of some key issues regarding the "Rate and Method of Apportionment (RMA) of Special Taxes" proposed to be established for the territory proposed to be annexed to CFD No. 97-2, Improvement Area C: (See Exhibit "A" for full description of RMA):
The Maximum Special Tax Rates increase each year by a factor equal to the annual percentage change in the San Diego Metropolitan Area All Urban Consumer Price Index (All Items).
The RMA provides that the annual budget for any year may include an amount deemed necessary to maintain an adequate level of the operating reserve fund.
The maximum special tax rates are based on the original RMA of special taxes established for Improvement Area C of CFD No. 97-2 when Improvement Area C was designated. If the actual square footage of residential development and/or the acreage of non-residential (industrial and commercial) development within Improvement Area C meets or exceeds the projections on which the special tax rates were based, the actual special tax rate necessary to be levied annually within Improvement Area C to fund the Special Tax Requirement for Improvement Area C may be less than the authorized maximum special tax.
Approved Maximum Special Taxes
The approved maximum and actual special tax rates for fiscal year 2014/15 for Improvement Area C of CFD No. 97-2 are as follows:
Table 1. Maximum Special Tax for Monitoring
Special Tax Category |
Maximum Special Tax (Monitoring) |
Residential (per square foot) |
$0.0073 |
Non-Residential (per acre) |
$118.8962 |
Final Map Property (per acre) |
$118.8962 |
Undeveloped Property (per acre) |
$76.7357 |
Table 2. Maximum Special Tax for Operations & Maintenance
Special Tax CategoryMaximum Special Tax (Operations & Maintenance) |
|
Residential (per square foot) |
$0.0117 |
Non-Residential (per acre) |
$188.7566 |
Final Map Property (per acre) |
$188.7566 |
Undeveloped Property (per acre) |
$121.8241 |
Resolution
There are two resolutions on today's agenda, which, if adopted, will accomplish the following:
The RESOLUTION MAKING DETERMINATIONS is the formal action of the City Council making certain findings and determinations pertaining to the annexation of Otay Ranch Village 8 West to CFD No. 97-2, Improvement Area C, and authorizes the electors of such territory to vote on the authorization to levy special taxes within such territory.
Following adoption of the RESOLUTION MAKING DETERMINATIONS, The City Clerk, acting as the designated election official, will hold a special election within the territory proposed to be annexed to CFD No. 97-2, Improvement Area C, at which time the qualified electors of such territory, being the owners of land within such territory, will be entitled to vote on a ballot proposition to authorize the levy of the special taxes described above within such territory. Immediately following the receipt of the ballots from the qualified electors, the City Clerk shall cause the ballots received to be canvased. Upon completion of the canvas, the City Clerk will report the results of the election to the City Council.
The RESOLUTION DELARING RESULTS OF SPECIAL ELECTION is the formal action of the City Council declaring the results of the special election and, if the levy of such special tax is approved by the qualified electors, ordering the annexation of Otay Ranch Village 8 West to Improvement Area C of CFD No. 97-2.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of the property, which is the subject of this action. Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City's Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. This action supports the goal of Economic Vitality, which includes promoting and supporting the development of balanced communities, by providing a funding source for the maintenance of preserve open space.
CURRENT YEAR FISCAL IMPACT
Developer is responsible for all costs associated with the Annexation No. 9 to CFD 97-2. The City will recover the full cost of staff time expended in district annexation, thus there will be no fiscal impact.
ONGOING FISCAL IMPACT
The on-going administration will be funded entirely by the district, therefore there is no net fiscal impact.
ATTACHMENTS
Attachment 1 Rate and Method of Apportionment
Attachment 2 Annexation Map