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I REPORT <br /> To the Honorable Mayor and ,C..ity CouncilI <br /> From the City Manager1 <br />July 15, 2002 <br /> <br />Subject <br />Annual Tax Levy for the Pacific Shores Community Facilities District <br /> <br />Recommendation <br />It is recommended that the City Council adopt a resolution authorizing the lew of special <br />taxes for FY 2002/03 in the amount of $2,046,502 on the parcels within the Pacific Shores <br />Community Facilities District 2000-1. <br /> <br />Background <br />In 2000, the City Council established the Pacific Shores Community Facilities District <br />pursuant to the Mello-Roos Act of 1982 and authorized the issuance of $21,000,000 in <br />bonds to finance transportation improvement projects that the developer of the Pacific <br />Shores .project was required to undertake. The parcels within this district are exclusively <br />those parcels owned by the developer of the Pacific Shores project. <br /> <br />Bonds in the amount of $21,000,000 were issued in October 2000 and the repayment of <br />such is strictly the obligation of the property owners within the district; no general fund <br />resources or commitments support these bonds. These bonds are secured only by the <br />real property within the district. <br /> <br />During the formation of the district, the City Council committed to levying annual special <br />property taxes on the district property owners in an amount sufficient to pay for all principal, <br />interest, and administration costs. The resolution presented to Council this evening will <br />provide the county auditor authority to levy these taxes in FY 2002/03. <br /> <br />Alternatives <br />The Council could elect not to levy these taxes. Doing so would jeopardize the district's <br />ability to make principal and interest payments to bondholders and would likely cause a <br />default on the outstanding bonds. In addition to subjecting the Council to lawsuits, a <br />default would also likely eliminate the Council's ability to issue the second series of bonds. <br /> <br /> Fiscal impact <br /> No general fund resources are involved in supporting the district. All of the district's <br /> expenditures will be paid by the property owners within the district. <br /> <br /> Brian Ponty Edward Evere <br /> Director of Finance and Financial Planning City Manager <br /> <br /> <br />