Title
A. RESOLUTION NO. 2014-106 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING AN ANNEXATION MAP SHOWING TERRITORY PROPOSED TO BE ANNEXED TO IMPROVEMENT AREA “C” OF COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT)
B. RESOLUTION NO. 2014-107 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARING ITS INTENTION TO AUTHORIZE THE ANNEXATION OF TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) AND IMPROVEMENT AREA “C” THERETO
Body
RECOMMENDED ACTION
Recommended Action
Council adopt the resolutions.
Body
SUMMARY
Otay Land Company, LLC has requested the City conduct proceedings to consider the annexation of territory into Improvement Area C of Community Facilities District No. 97-2 (Preserve Maintenance District) (CFD 97-2). The conditions of approval of the tentative map for Otay Ranch Village 8 West require that said annexation be a condition of the first final map for the project. CFD 97-2 was formed in 1998 and funds the maintenance of areas that have been conveyed to the preserve in accordance with the Otay Ranch Resource Management Plan. The City has retained the services of NBS as special tax consultant and Best, Best and Krieger LLP as legal counsel to provide assistance during the proceedings. Tonight’s action will initiate the formal proceedings to consider the annexation of Otay Ranch Village 8 West to CFD No. 97-2 and Improvement Area C thereof.
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 CFD No. 97-2 (Preserve Maintenance District). CFD 97-2 was originally divided into two Improvement Areas: Improvement Area A and Improvement Area B. Improvement Area A funds the costs of the Resource Monitoring Program as well as Preserve Operations and Maintenance within the boundaries of the Otay Ranch Preserve. Improvement Area B only funds the Resource Monitoring Program within that same area. Improvement Area C was formed in 2003 in conjunction with the annexation of Brookfield Shea Otay Village Eleven into CFD 97-2 and funds both the Resource Monitoring Program and Preserve Operations and Maintenance that are consistent with the requirements of the Otay Ranch Resource Management Plan Phases I and II and includes the pro-rata share of administrative expenses of CFD No. 97-2.
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 the Otay Ranch known as 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. 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. Staff has reviewed the proposed annexation boundary map, identified as Annexation Map No. 9 to CFD 97-2, and has found it ready and acceptable for approval by Council. 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 97-2 has four categories of taxation, as follows:
• Developed Parcels (Single-Family and Multi-Family Residences) are taxed based on the square footage of the structure. Industrial and Commercial Parcels are taxed on the acreage of the parcel.
• The Final Mapped properties, which include all single family and multi-residential parcels and all industrial and commercial parcels, for which a building permit has not been issued, are taxed on acreage of the parcel.
• Property not categorized as Developed or Final Mapped Property is taxed on acreage of the parcel.
• The Exempt Category includes all publicly owned parcels and Homeowner’s Association parcels.
Developed Parcels are those parcels for which a building permit has been issued. The proposed maximum special tax rate in the rate and method of apportionment was determined at the time of formation of CFD 97-2 in 1998.
Collection of Taxes
At the beginning of each fiscal year the City shall determine the amount of the Special Tax Liability (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 Liability for such Improvement Area. If this pool of funds is not enough to fund the Special Tax Liability for such Improvement Area, as may be the case in the early years of development, the district 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 Liability 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 Liability 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 territory proposed to be annexed to Improvement Area C of CFD 97-2 (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 Consumer Price Index.
• 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 Rate and Method of Apportionment of special taxes established for CFD 97-2 when CFD 97-2 was formed. 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 Liability for Improvement Area C may be less than the authorized maximum special tax.
Approved Maximum Special Taxes
The approved maximum special tax rates for fiscal year 2014/15 for Improvement Area C of CFD 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 |
Resolutions
There are two resolutions on tonight’s agenda, which, if adopted, will accomplish the following:
The RESOLUTION ADOPTING THE ANNEXATION MAP is the formal action adopting the Annexation Map No. 9 setting forth the boundaries of the territory proposed to be annexed to Improvement Area C of Community Facilities District No. 97-2 (Preserve Maintenance District).
The RESOLUTION OF INTENTION is the jurisdictional resolution declaring the intention of the City Council to authorize the annexation of the territory within Annexation Map No. 9 to Improvement Area C of Community Facilities District No. 97-2 (Preserve Maintenance District), to authorize the levy of a Special Tax, and to set the time and place for the public hearing on the proposed annexation and Special Tax authorization.
Future Actions
The public hearing and consideration of the adoption of a resolution submitting the authorization for the levy of special taxes to the qualified electors are scheduled for the City Council meeting of July 22, 2014, at 2:00 P.M.
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, nor has staff 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