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HomeMy WebLinkAbout97-02 WIA ResolutionRESOLUTION NO. WIA 97-02 A RESOLUTION OF THE BOARD IF DIRECTORS OF THE WESTSIDE IMPROVEMENT AUTHORITY ADOPTING LOCAL GOALS AND POLICIES FOR COMMUNITY FACILITIES DISTRICTS WHEREAS, Section 53312.7(a) of the California Government Code requires that the Board of Directors of the Westside Improvement Authority (the "Authority") consider and adopt local goals and policies for community facilities districts ("CFDs") prior to the initiation of proceedings by the Authority to establish a CFD under the provisions of Chapter 2.5 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Act"); and WHEREAS, this Board of Directors intends to consider the establishment of a CFD related to the financing of public improvements and the potential acquisition of land for public benefit and public purposes in the Westside area of the City of Temecula, and desires at this time to adopt local goals and policies for CFDs so that it may commence proceedings for establishing a community facilities districts to finance public infrastructure improvements and land acquisition for public purposes in such area; and WltEREAS, Authority staff has caused to be prepared a draft of goals and policies for CFDs of the Authority (the "Goals and Policies"), the form of which is on file with the Secretary, and this Board of Directors has duly considered said Goals and Policies. NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Westside Improvement Authority that the Goals and Policies, in the form on file with the Secretary, are hereby adopted as the local goals and policies of the Authority for CFDs, and are intended to meet the requirements of Section 53312.7(a) of the Act. R~sos.WIA\97-02 I PASSED, APPROVED AND ADOPTED, by the Improvement Authority at a regular meeting held on the 9th eek, CMC/AAE City Clerk/Authority Secretary Bo~fit~f Directors of the Westside ,~f Steqen J.~ord, Chairperson [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, June S. Greek, Secretary of the Westside Improvement Authority, do hereby certify that the foregoing Resolution No. WlA 97-02 was duly and regularly adopted by the Board of Directors of the Westside Improvement Authority at a regular meeting thereof held on the 9th day of December, 1997, by the following vote: AYES: 4 AUTHORITY MEMBERS: Comerchero, Lindemarts, Roberts, Ford NOES: 0 AUTHORITY MEMBERS: None ABSENT: 0 AUTHORITY MEMBERS: None ABSTAINED: I AUTHORITY MEMBERS: Stone un:S. CM C/A City Clerk/Authority Secretary Resos.WIA\97-02 2 Attachment to WIA Resolution 97-02 LOCAL GOALS AND POLICIES FOR COMIMUNFTY FACILITIES DISTRICTS I. INTRODUCTION. Section 53312.7(a) of the California Government Code requires that the Westside Improvement Authority (the ~Authority~) consider and adopt local goals and policies concerning the use of the Mello-Roos Community Facilities Act of 1982 (the "Act"), prior to the initiation of proceedings to-establish a new community facilities district ('CFD~) under the Act. The following goals and policies are intended to meet the minimum requirements of the Act, and may be amended or supplemented by resolution of the Board of Directors of the Authority at any time. II. GOALS. The Authority will consider the use of the Act for financing public facilities and services only in connection with the financing of public infrastructure improvements and the potential acquisition and maintenance of land for public benefit and public purposes in the Westside area of the City of Temecula (the "City"), or as otherwise referenced in an owner participation or development agreement to which the City or the Redevelopment Agency of the City of Temecula is a party. Any request for a CFD which is not integral to the installation of public improvements or the potential acquisition and/or maintenance of land for public benefit and public purposes in such area will require amendment of these goals and policies, and will be considered on a case by case basis. All Authority and noncontingent consultant costs incurred in the evaluation anti establishment of new CFDs will be paid by 'the proponents of the CFD. The Authority shall use all reasonable efforts not incur any expense for processing a CFD which are not eligible to be reimbursed from CFD bond proceeds. Expenses incurred by the Authority that are not chargeable to the CFD shall be borne by the proponent of the CFD. /I/. ELIGIBI.~ PUBLIC FACILITIES AND SERVICES. The improvements eligible to be financed by a CFD must be owned by a public agency or public utility, and must have a useful life of at least five (5) years, except that up to five percent of the proceeds of an issue may be used for facilities owned and operated by a privately-owned public utility. The improvements must be consistent with any relevant specific plan approvals. A CFD shall not vest any rights to future land use on any properties, including those which are responsible for paying special taxes. The list of public facilities eligible to be financed by a CFD include, but are not limited to, the following: property value to public lien ratio, excessive tax delinquencies, or projects of poor economic viability may cause the Authority to disallow the sale of bonds or require credit enhancement prior to bond sale. If the Authority requires letters of credit or other security in connection with the issuance of bonds for a CFD, the credit enhancement shall be issued by an institution, in a form and upon terms and conditions satisfactory to'the Authority. Any security required to be provided may be discharged by the Authority upon the opinion of a qualified appraiser, retained by the Authority, that a value-to-lien ratio of three to one has been attained. As an alternative to providing other security, a portion of the bond proceeds may be placed in escrow with a corporate agent in an amount sufficient to assure a value-to-lien ratio of at least three to one on the outstanding proceeds, or other appropriate release requirements. VI. DISCLOSURE PURCHASERS. FOR PROSPECTIVE PROPERTY A. Disclosure Reauirements 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 of 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 Treasurer of the Authority shall provide a notice of special taxes 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. This notice shall be provided by the Treasurer of the Authority within five working days of receiving a written request for the notice, unless otherwise permitted under the Act. A reasonable fee may be charged for providing the notice, not to exceed any maximum fee specified in the Act. VII. EQUITY OF SPECIAL TAX FORMULAS AND MAXIMUM SPECIAL TAXES. Special tax formulas for CFDs shall provide for minimum special tax levels which satisfy the following expenses of a CFD: (a) 110 percent gross debt service coverage for all CFD bonded indebtedness, (b) the projected 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, 0g) costs associated with the release of funds from an escrow account, and (h) any other costs or payments permitted by the Act and applicable law. The special tax formula shall be reasonable and equitable in allocating public facilities' costs to parcels within the CFD, unless otherwise agreed to by at least a majority of the property owners to be subject to the special tax. Exemptions from the special tax may be given to parcels which · Freeway Offramps · Street Improvements · Street lighting · Traffic signals and safety lighting · Landscaping in public right-of-ways · Governmental facilities · Sanitary sewer facilities · Storm drain facilities · Flood control facilities ~ · Potable and reclaimed water facilities · Convention Center · Utility relocations · Elementary and secondary school sites and facilities · Libraries · Public utilities · Police and fire protection facilities · Public parking structures · Cultural facilities · Child care facilities · Parks and recreational facilities The funding of public facilities to be owned and operated by public agencies other than the Authority shall be considered on a case-by-case basis. If the proposed facilities are appropriate for financing by a CFD and are consistent with approved land use plans for the property, the Authority shall consider entering into a joint financing agreement in order to finance these facilities. A joint agreement with the public agency that will own and operate any such facility must be entered into prior to the adoption of the resolution of formation relating to the formation of any CFD. The Authority will consider on a case-by-case basis CFDs established for the provisions of services eligible to be funded under the Act. Eligible services are as specified in the Act. IV. PRIORITIES FOR CFD FI~ANCI1NG. Priority for CFD financing shall be given to public facilities which: (a) are necessary for development in the Westside area of the City, or (b) are otherwise incident to development or redevelopment in such area. V. CREDIT QUALITY REQ~NTS FOR CFD BOND ISSUES. All CFD bond issues should have at least a three to one property value to public lien ratio after calculating the value of the financed public improvements to be installed and any private improvements for which financing is reasonably assured, unless the Board of Directors of the Authority finds and determines that the proposed bonds do not present any unusual credit risk or, by a four-fifths vote, that the proposed bond issue should proceed for specified public policy reasons. Property value may be based on either an appraisal or on assessed values as indicated on the county assessor's tax roll. Any appraiser shall be selected by the Authority (or the City on behalf of the Authority), and the appraisal shall be based on standards determined applicable by Authority staff and consultants. The appraisal must be dated within six months of the date the bonds are issued. The public lien amount ghall include the bond issue currently being sold plus any public indebtedness secured by a fixed lien on real property currently existing against the properties to be taxed. A reserve fund equal to the lesser of (I) ten percent of the original proceeds of the bond issue, (ii) the maximum annual debt service on the bonds, or (iii) one hundred twenty-five percent of the average annual debt service on the bonds is considered as appropriate for any bond issue where less than seventy-five percent of the buildable acreage has been developed. A smaller reserve fund may be appropriate for bond issues in CFDs where over seventy-five percent of the buildable acreage has been developed. The reserve fund may be maintained by or on behalf of a public financing authority, if such an authority purchases the CFD bonds, and need not be held under the fiscal agent agreement pursuant to which the CFD bonds are issued. Less than a three to one are publicly owned, are held by a property owners' 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. The total. projected property tax levels for any CFD shall not exceed any maximum specified in the Act. The annual increase, if any, in the maximum special tax for any parcel shall not exceed any maximum specified in the Act. The increase in the special tax levied on any parcel as a consequence of delinquency or default by the owner of any other parcel shall not exceed any maximum specified in the Act. The Authority (or the City~on behalf of the Authority) shall retain a special tax consultant to prepare a report which: (a) recommends a special tax for the proposed CFD, and (b) evaluates the special tax proposed to determine its ability to adequately fund identified public facilities, Authority administrative costs, services (if applicable) and other related expenditures. Such analysis shall also address the resulting aggregate tax burden of all proposed special taxes plus existing special taxes, ad valorem taxes and assessments on the properties within the CFD. VIH. APPRAISALS. The definitions, standards and assumptions to be used for appraisals shall be determined by Authority staff on a case-by-case basis, with input from Authority consultants and CFD proponents, and by reference to relevant materials and information promulgated by the State of California. In any event, the value-to-lien ratio shall be determined based upon an appraisal by an independent MAI appraiser of the proposed CFD. The appraisal shall be coordinated by and under the direction of the Authority (or the City on behalf of the Authority). All costs associated with the preparation of the appraisal report shall be paid by the proponents . of the CFD through an advance deposit mechanism, or from uneneumbered funds of the Authority. The Authority shall have discretion to retain a consultant to prepare a report to verify market absorption assumptions and projected sales prices of the properties which may be subject to the maximum special tax in the CFD. IX. TERMS AND CONDITIONS OF BONDS. All terms and conditions of any CFD bonded indebtedness shall be established by the Authority, after consultation with the-Authority's consultantS, City staff and the proponents of the CFD. The Authority will control, manage and invest, or cause to be controlled, managed and invested, all CFD bond proceeds. Each bond issue shall be structured so as to minimize any impact on the bonding capacity or any credit rating of the Authority or the City. All statements and material related to the sale of bonds shall emphasize and state that neither the faith, nor general credit of the Authority or the City is pledged to security or repayment of the bonds. The sole source of pledged revenues to repay CFD bonds shall be the 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, unless otherwise specifically agreed to in writing by the Authority. X. CFD INITIAL COSTS. All Authority and consultant costs incurred in the evaluation of CFD applications and the establishment of CFDs will be paid by the proponents of the CFD by advance deposit increments, or from unencumbered funds of the Authority. The Authority shall use reasonable efforts not to incur any non-reimbursable expenses for processing and administering CFDs. In general, expenses not chargeable to the CFD shall be directly borne by the proponents of the CFD. XI. USE OF CONSULTANTS. The Authority (or the City on behalf of the Authority) 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, market absorption study consultant and the special tax consultant, after reasonable consultation with the proponents of the CFD. Prior consent of any proponent of a CFD shall not be required in the determination by the Authority.of the consulting and financing team. XII. EXCEPTIONS TO Ti~.SE POLICIES. The Authority may find that a waiver of any of the above stated policies is reasonable given identified Authority benefits to be derived from such waiver. Such waivers only will be granted by action of the Board of Directors of the Authority.