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HomeMy WebLinkAbout2017-2542 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 RESOLUTION NO. 2017-254 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, ADOPTING LOCAL GOALS AND POLICIES RELATING TO COMMUNITY FACILITIES DISTRICTS WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and a charter city that is duly organized and existing under and pursuant to the Constitution and laws of the State of California (the "State"); and WHEREAS, the City has been approached by one or more developers that desire to form a community facilities district pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (the "Act") to finance certain public facilities to be owned and operated by the City and/or other public agencies; and WHEREAS, pursuant to Government Code Section 53312.7 of the Act, the City must adopt local goals and policies relating to the use of the Act to finance public facilities prior to initiating proceedings to form a community facilities district; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: Section 1. The "Local Goals and Policies of the City of San Bernardino For Community Facilities District Financing Programs" attached to this Resolution as Exhibit "A" (the "Policies") are hereby approved. The Policies may be amended from time to time by the City Council as necessary to comply with legal requirements. Section 2. The Mayor, any member of the City Council, the City Attorney, the City Manager, the Finance Director and City staff are hereby directed and authorized to take all actions necessary to comply with the Policies. Section 3. This Resolution shall take effect immediately upon its adoption. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, ADOPTING LOCAL GOALS AND POLICIES RELATING TO COMMUNITY FACILITIES DISTRICTS I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and City Council of the City of San Bernardino at a Joint Regular Meeting thereof, held on the 20'h day of December 2017, by the following vote, to wit: Council Members: AYES MARQUEZ X 001-0 lIli R Lei_ VALDIVIA X(M) SHORETT X(S) NICKEL X RICHARD X MULVIHILL X NAYS ABSTAIN ABSENT Georgeararena, C ' y Clerk The foregoing Resolution is hereby approved this 20th day of December 201,7- R. Carey Davx ., Mayor City of Sann'iernardino Approved as to form: Gary D. Saenz, City Attorney By. - 2 CITY OF SAN BERNARNDINO SUBJECT: Local Goals and Policies for all Community Facilities Districts of the City of San Bernardino AUTHORIZATION: Resolution No. EFFECTIVE DATE: December 20, 2017 I. INTRODUCTION. Pursuant to Section 53312.7 of the California Government Code, the City Council of the City of San Bernardino (hereafter the "City Council") hereby states its goals and policies concerning the use of Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (hereafter the "Act") in providing adequate public capital infrastructure, facilities and equipment for the residents of the City of San Bernardino (the "City"). The following goals and policies shall apply to all community facilities districts (each a "CFD") hereafter formed by the City. Any policy or goal stated herein may be supplemented or amended or deviated from upon a determination by the City Council that such supplement, amendment or deviation is necessary or desirable, and any policy or goal stated herein shall be deemed amended or supplemented in the event, and as of the date, if ever, that such amendment or supplement is required to ensure compliance with the Act or any other laws of the State of California or federal laws of the United States of America. II. PRIORITIES FOR CFD FINANCING UNDER THE ACT. Priority for CFD financing shall be given to public facilities directly benefiting the City as well as those improvements identified by the City as the most necessary to serve the specific needs of the portion of the City in which the CFD will be located. The financing of public facilities to be owned and operated by public agencies other than the City shall be considered on a case by case basis. The list of eligible public facilities include but are not limited to the following: Streets, highways and bridges Street lighting Traffic signals and safety lighting Parks Governmental facilities Sanitary sewer facilities Storm drain facilities Potable and reclaimed water facilities Flood control facilities Libraries Public utilities Police and fire protection facilities Recreation facilities, including golf courses Biological mitigation measures involving land acquisition, dedication and revegetation Landscaping In general, none of the foregoing types of facilities will have priority over the others, however, the City has final determination as to any facility's eligibility for financing, as well as the prioritization of facilities to be included within a financing district. Use of bond proceeds for grading and right-of-way acquisition will be reviewed by the City and bond counsel on a case-by-case basis. It is secondarily the policy of the City to assist in the provision of other public facilities when to do so is necessary, in the sole discretion of the City Council acting as the legislative body of the affected CFD, to serve taxpayers residing within or owning property within the City boundaries. Additionally, the City may finance any one or more of the types of services specified in Section 53313 of the Act. Priority for CFD financing shall be given to services provided by or directly benefiting the City and, if multiple services are to be financed, with no service having priority over another service; provided, however, the City has final determination as to any service's eligibility for financing. The City shall not finance services on behalf of other public agencies. III. GOVERNMENT CREDIT QUALITY REQUIREMENTS FOR CFD BOND ISSUES. All CFD bond issues should have a value to public lien ratio in aggregate in an amount no less than that required by law (not less than 3:1) after calculating the value of the financed public improvements to be installed. It is the policy of the City to refrain from the issuance of any CFD bonds unless at the time of issuance of any CFD bonds, (i) maximum special tax revenues from the CFD are reasonably expected to provide at least one hundred ten percent (110%) debt service coverage for each year of the term of such bonds plus administrative expenses; and (ii) the bond issuance document establishes, and includes a covenant to cause special taxes to be levied in an amount sufficient to maintain, for the term of such bonds, a reserve fund securing such bonds in an amount equaling the lowest of (i) ten percent (10%) of the original proceeds of such bonds, or (ii) the largest amount, for any bond year during the term of such bonds, of principal and interest payable on such bonds, or (iii) one hundred twenty-five percent (125%) of the average amount payable, for any bond year, of principal and interest on the outstanding bonds of such bond issue (provided, however, that depletion may occur to pay debt service in the last two (2) years of such term). Further, it is the policy of the City to comply with all provisions of the Act including, but not limited to, Section 53345.8, as such Section may be amended from time to time. If the criteria set forth above are met, such bond issues need not be rated by nationally -recognized rating agencies. Property value may be based on either an appraisal or on assessed values as indicated on the current assessor's tax roll. The appraiser shall be selected by the City, and the appraisal shall be based on standards promulgated by the State of California and otherwise determined applicable by the City. The public lien amount shall include the bond issue currently being sold plus any public indebtedness secured by a lien on real property currently existing against the properties to be taxed. Less than the minimum required value to public lien ratio, excessive tax delinquencies, or projects of poor economic viability may cause the City to disallow the sale of bonds or require credit enhancement prior to bond sale. The City may consider exceptions to the above policies for bond issues that do not represent an unusual credit risk, either due to credit enhancement or other reasons specified by the City, and which otherwise provide extraordinary public benefits. If the City requires letters of credit or other security, the credit enhancement shall be issued by an institution, in form and upon terms and conditions satisfactory to the City. The cost of the credit enhancement shall be the responsibility of the property owner. 2 N. DISCLOSURE REQUIREMENTS FOR THE PROSPECTIVE PROPERTY PURCHASERS. A. Disclosure Requirements for Developers. Developers who are selling lots or parcels that are within a CFD shall provide disclosure notice to prospective purchasers that complies with all of the requirements set forth in Section 53341.5 of the Government Code. The disclosure notice must be provided to prospective purchasers of property at or prior to the time the contract or deposit receipt for the purchase of property is executed. Developers shall keep an executed copy of each disclosure document as evidence that disclosure has been provided to all purchasers of property within a CFD. B. Disclosure Requirements for the Resale of Lots. The City shall provide a notice of special taxes when requested to sellers of property (other than developers) which will enable them to comply with their notice requirements under Section 1102.6 of the Civil Code. A reasonable fee may be charged for providing the notice, not to exceed any maximum fee specified in the Act. V. EQUITY OF SPECIAL TAX FORMULAS AND MAXIMUM SPECIAL TAXES. Special tax formulas for CFD's shall provide for minimum special tax levels which satisfy the following expenses of all CFD's: (a) at least 110 percent debt service coverage for all CFD bonded indebtedness, (b) the reasonable and necessary administrative expenses of the CFD, and (c) amounts equal to the differences between expected earnings on any escrow fund and the interest payments due on bonds of the CFD. Additionally, the special tax formula may provide for the following: (a) any amounts required to establish or replenish any reserve fund established in association with the indebtedness of the CFD, (b) the accumulation of funds reasonably required for future debt service, (c) amounts equal to projected delinquencies of special tax payments, (d) the costs of remarketing, credit enhancement and liquidity facility fees, (e) the cost of acquisition, construction, furnishing or equipping of facilities, (f) lease payments for existing or future facilities, (g) costs associated with the release of funds from an escrow account, and (h) any other costs or payments permitted by law, including, but not limited to, financing any one or more of the types of services specified in Section 53313 of the Act. The special tax formula shall be reasonable and equitable in allocating public facilities' costs to parcels within the CFD. Unless the City determines that special circumstances warrant a change, the special tax formula originally accepted for the CFD shall remain the same in order to ensure equity as originally envisioned at the time of CFD formation. At the time of formation of the CFD, exemptions from the special tax may be given to parcels which are publicly owned, are held by a property owner's association, are used for a public purpose such as open space or wetlands, are affected by public utility easements making impractical their utilization for other than the purposes set forth in the easements, or have insufficient value to support bonded indebtedness. It is the goal of the City that maximum Mello -Roos special taxes on residential owner - occupied property, when taken together with ad valorem taxes, any other special taxes levied pursuant to the Act and assessments applicable to such property, do not exceed in any year two percent (2%) of the greater of the assessed value or appraised value of such property. Nevertheless, special taxes on residential owner -occupied property, when taken together with ad valorem taxes, any other special taxes levied pursuant to the Act and assessments applicable to such property, may exceed in any year two percent (2%) of the greater of the assessed value or appraised value of such property if the City determines at the time of formation of a CFD that over the term of the bonds, the special taxes, ad valorem taxes and assessments are expected to average two percent (2%) or less per year of the greater of the assessed value or appraised value of such property. It is further the policy of the City to comply with the provisions of Section 53321 of the Act with respect to the escalation of maximum taxes. Special taxes will only be levied on an entire County Assessor's parcel, and any allocation of special tax liability of a County Assessor's parcel to leasehold or possessory interest in the fee ownership of such County Assessor's parcel shall be the responsibility of the fee owner of such parcel (except where the City is the fee owner of the parcel and has, subsequent to the date of adoption of these goals and policies, leased the parcel pursuant to a lease with a term of at least 5 years, in which case the lessee shall have the responsibility for the special tax liability) and the City shall have no responsibility therefor and has no interest therein. Failure to pay or cause to be paid any special taxes in full when due, shall subject the entire parcel to foreclosure in accordance with the Act. The City shall have a report prepared which: (a) recommends special tax rates and methods of allocation among parcels in the proposed CFD, and (b) evaluates the special tax proposed to determine it ability to adequately fund identified public facilities, City administrative costs, services (if applicable) and other related expenditures. VI. APPRAISALS. It is the goal of the City to conform, as nearly as practicable, to the California Debt and Investment Advisory Commission's Appraisal Standards for Land - Secured Financings, as such standards may be amended from time to time. In any event, the value -to -lien ratio, when based upon an appraisal, shall be determined based upon an appraisal by an independent MAI appraiser of the property proposed in the CFD. The appraisal shall be coordinated by and under the direction of the City. All costs associated with the preparation of the appraisal report shall be paid by the entity requesting the establishment of the CFD. VII. TERMS AND CONDITIONS OF BONDS. All terms and conditions of the bonds shall be established by the City. The City will control, manage and invest all CFD issued bond proceeds. Each bond issue shall be structured to adequately protect bond owners and to not negatively impact the bonding capacity or credit rating of the City through the special taxes, credit enhancements, foreclosure covenant, and special reserve. All statements and material related to the sale of bonds shall emphasize and state that neither the faith, credit nor the taxing power of the City is pledged to security or repayment of the Bonds. The sole source of pledged revenues to repay CFD bonds are special taxes, bond proceeds and reserve funds held under the bond document, and the proceeds of foreclosure proceedings and additional security instruments provided at the time of bond issuance. The applicant shall provide (and shall cause such consultants and representatives to provide) such information, certifications, and writings as may be requested from time -to -time by the City, its bond counsel, staff, appraiser and consultants, including, but not limited to, a federal securities law opinion of counsel to the applicant addressed to the City and the underwriter for the proposed bonds regarding the accuracy and completeness of the information contained in the offering document for the bonds relating to the applicant and its proposed development within the CFD. The City may from time -to -time enact and amend procedures to implement the goals and policies herein set forth. In such event, the applicant shall comply with the requirements under such procedures. VIII. CFD COST DEPOSITS AND REIMBURSEMENTS. All City and consultant costs incurred in the evaluation and the establishment of CFD's will be the responsibility of the entity requesting the establishment of the CFD. Applicants will from time -to -time advance to City amounts for costs and expenses as estimated by City. The City shall not incur any non - reimbursable expenses for processing and administering CFD's proposed by applicants other than the City. Expenses not chargeable to the CFD shall be directly borne by the applicant. The City may charge an administrative fee as part of the bond issue in order to recover any costs incurred in the evaluation and formation of the CFD which has not been paid. IX. EXCEPTIONS TO THESE POLICIES. The City may find in limited and exceptional instances that a waiver to any of the above stated policies is reasonable given identified special City benefits to be derived from such waiver. Such waivers will be granted only by action of the City Council. X. USE OF CONSULTANTS. The City shall select all consultants necessary for the formation of the CFD and the issuance of bonds, including the underwriter(s), bond counsel, financial advisors, appraiser and the special tax consultant. Consultants shall provide evidence demonstrating that they are experienced in the formation of CFDs and the issuance of CFD bonds and that they do not have any legally disqualifying conflicts of interest (under the Political Reform Act and such other laws concerning such conflicts as may be applicable). Prior consent of the applicant shall not be required in the determination by the City of the consulting and financing team. XI. AMENDMENTS. No amendments to these local goals and policies may be effected except by resolution of the City Council expressly amending these local goals and policies.