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Home My WebLink About16-City Administrator '. CITY OF SAN BERNARDINO -REQUEST FOR COUNCIL ACTION From: Fred Wilson, City Administrator Subject: Authorize Staff to proceed with the preparation of documents and appropriate Municipal Code amendments to impose a special tax district for the operation and maintenance of the proposed Verdemont Fire Station on new development only. Dept: City Administrator's Office Date: July 30, 2003 OR\G\NAL MCC Date: August 4, 2003 Synopsis of Previous Council Action: Recommended Motion: That Staff be authorized to proceed with the preparation of documents and appropriate Municipal Code amendments to impose a special tax district for the operation and maintenance of the proposed Verdemont Fire Station on new development only. #l!k: Contact person: Fred Wilson, City Administrator Phone: 5122 Supporting data attached: Staff Report Ward(s): 5 FUNDING REQUIREMENTS: Amount: Source: (Acc!. No.) Acct. Description: Finance: Council Notes: Agenda Iter #/& q / J-J03 CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT: Authorization to proceed with the preparation of documents and appropriate Municipal Code amendments to impose a special tax district for the operation and maintenance of the proposed Verdemont Fire Station on new development only. BACKGROUND: The Mayor and Common Council has previously approved the increase in the Verdemont Infrastructure Fee ("VIP") in April 2003 from $1,500 to $3,000 per dwelling unit within the Verdemont Area. This fee was increased specifically to provide for the funding of the Verdemont Fire Station to be located on Palm A venue and Kendall Drive. The construction costs of the Verdemont Fire station will be funded with the proceeds ofan approximately $2M State of California Infrastructure Bank loan with the increased amount of the VIP being used to pay the debt service to the State on this loan. The operating costs for the Verdemont Fire Station will become an obligation of the City starting in FY2004-05. It is presently estimated that the annual costs of operation of the Verdemont Fire Station could range from $1,350,000-$1,850,000 for the first full year of operation with an assumed increase in operating expenses each year based on cpr. During the recent budget discussions for the 2003-04 City budget, it was recommended that a special tax district be formed utilizing where necessary, the provisions of Government Code Section 53311, et seq. to fund only the operational expenses of the Verdemont Fire Station. This special tax CFD would not be authorized to issue any bonds, and only those new development projects in the Verdemont Fire Station Service Area would be required to annex into the CFD. New construction of other commercial, retail and industrial projects in the Verdemont Fire Station Service Area would also be required to annex into the CFD. Existing development will not be subject to the provisions ofthe special tax district. The California Government Code provides for two types of elections: (1) a registered voters' election where 12 or more registered voters reside in the proposed district boundaries, and, (2) a landowners' election. The former CFD No. 995 was a landowners' election which imposed a special tax to pay for bonded indebtedness that varied from $900 to $1,200 per home per year and which was assumed by the homeowners when they purchased their homes. The current proposal would also provide for a landowners election or the execution of a document entitled "Consent to Include Property within a Communities Facilities District". Each developer or person seeking to develop any property within the Verdemont Fire Station Service Area would be 1 required to include their property within the CFD as a condition of approval or pay a Fire Station Impact O&M Fee. The problems encountered by the City regarding the former CFD 995 were brought about by the fact that only one of four potential housing projects as included in the original CFD 995 were ready to be built with all entitlements in place. When three ofthe four projects defaulted in the payment of taxes (Bice, Glazer's and Feldkamp), the debt service obligations on the CFD bonds was shifted to the homeowners. The City undertook several restructuring efforts to avoid this shift in special tax obligations to the homeowners. The present proposal does not allow any increases in the annual special tax to accommodate delinquencies, thus avoiding the most serious flaw encountered with the former CFD 995. The first step in this process would be to add a new section to the Municipal Code that imposes the obligation for a Fire Station Impact O&M Fee and allows the development to annex into the special tax district. The City would subsequently form the special tax district and adopt an Engineer's Report which would describe the various rates of the special tax and deal with other issues typically observed in similar types of special tax districts for operation and maintenance expenses of public facilities. It is proposed that the initial special tax district boundaries include the EDA owned Bice property located adjacent to the 1-215 Freeway north of Little League Drive plus any other properties willing to be included in the initial district formation process. The parameters of the special tax district are summarized below: 1. first year residential special tax rate would be $350 per single family residential unit increased by 2% per year. 2. first year commercial, retail, office and industrial special tax rate would be $2,500 per acre of development parcel increased by 2% per year. Example: The rate for a 40,000 square foot building on 3 acres would begin at $7,500 per year. 3. special tax would apply to any new construction of infill single family residential lots. 4. special tax would be imposed from the date of issuance of a certificate of occupancy by the City. 5. special tax would not apply to the reconstruction of a destroyed or damaged structure that was exempt from the special tax. 6. the City will be responsible to pay that proportionate amount of the costs of the Verdemont Fire Station from the City General Fund represented by the number of homes and other development that is presently existing in the Verdemont Fire Station Service Area; the special tax would apply only to new development. 7. no development would be allowed to occur within the Verdemont Fire Station Service Area unless the proj ect annexes into the special tax district or pays the Verdemont Fire Station Impact O&M Fee; a Municipal Code amendment to be adopted by Ordinance will impose this requirement. 8. no bonds can be issued and no debt can be incurred by the district payable from the special tax. 2 9. special tax district will only pay for the normal operating expenses of the Verdemont Fire Station, including salaries, benefits, utilities and repairs, and no capital improvements to the Fire Station or the purchase of vehicles. 10. the Verdemont Fire Station Service Area was determined through a study conducted by the Fire Department in 1990; the Service Area includes the area within the VIF plus the residential and industrial areas west of the 1-215 freeway within City boundaries (see attached map). RECOMMENDATION: Staff requests authorization to proceed with the preparation of documents and appropriate Municipal Code amendments to impose a special tax district for the operation and maintenance of the proposed Verdemont Fire Station on new development only. 3 z ~ ~. " I _"_ ...............................................--..--........................................................................................................:......................._-