AgdaPkt 2020-03-23 Joint SA PFA - Laserfiche WebLink

Browse Search

5.J. - Page 2 of 7 Under Chapter 2.5, commencing with Section 53311 of Part 1, Division 2, Title 5 of the California Government Code (the "Mello -Roos Act"), cities and other public agencies have the authority to finance certain public capital facilities and services through the levying of special taxes and the incurrence of bonded indebtedness and other debt within the boundaries of a community facilities district. District property owners propose to make the improvements necessary for FEMA to recertify the levee, and then sell the improved levee to the City. Property owners seek to replace the District with a community facilities district (a "CFD") empowered to finance the sale of the levee to the City, and to vote to assess themselves with a special tax, to be levied over a period of 15 years, that will fully pay for the City's acquisition of the improved levee. The property owners will continue to pay for the maintenance services presently financed with assessments levied on their properties in the District. These services include the costs of maintaining and operating the levee, storm drain and sewer facilities, and water facilities. The Mello Roos Act does not allow a special tax imposed in a CFD to finance services already being provided. ANALYSIS In order to achieve administrative efficiency, staff, with endorsement from City finance consultants, are recommending that the CFD replace the District and finance both the acquisition of the levee and the annual maintenance services presently financed by the District. Because the Mello Roos Act does not allow a special tax imposed in a CFD to finance services already being provided, the Mello Roos Law cannot be used both to pay for the levee acquisition and the annual maintenance expenses in the District; however, under its charter powers, the City is authorized to create an ordinance that replaces, changes or augments certain authorities that it has under State statutes. The proposed ordinance includes all of the provisions of the Mello Roos Act. The proposed ordinance also further expands the scope of services that may be financed to include any other services that the City Council has authorized in the resolution of formation for a CFD, and allows such services to replace or supplant those provided before the CFD was formed, despite the limitations in the Mello Roos Act. The proposed ordinance will reduce the administrative burden of periodically establishing new maintenance assessments in the District. These assessments are presently established every 5 years pursuant to a 5 -year budget, and, because the assessments are increased annually to account for inflation, require a Proposition 218 majority protest election when each 5 -year budget is approved by property owners. The maintenance portion of the proposed CFD special tax will have an automatic inflation adjustment and no future votes will be necessary. On March 9, 2020, the City Council, by unanimous vote, waived the first reading and introduced an ordinance adding Chapter 32, Article XIII to the Redwood City Municipal Code. FISCAL IMPACT There is no direct fiscal impact to adopting the proposed ordinance. Page 2 of 3 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 107