HomeMy WebLinkAboutRES 2006-601
RESOLUTION NO. 2006-60
RESOLUTION OF THE CiTY COUNCIL
OF THE CITY OF DIAMOND BAR
ADOPTING LOCAL GOALS AND POLICIES
FOR COMMUNITY FACILITIES DISTRICTS AND
AUTHORIZING CITY MANAGER TO HIRE CONSULTANTS
WHEREAS, Section 53312.7(x) of the California Government Code provides that a
local agency may initiate proceedings to establish a community facilities district
pursuant to the Mello -Roos Community Facilities Act of 1982 (the "Act") only if it has
first considered and adopted local goals and policies concerning the use of the Act; and
WHEREAS, this City Council has determined that there may be a need for the City of
Diamond Bar (the "City") to initiate proceedings to establish a community facilities
district under the Act in connection with the financing of a municipal library; and
WHEREAS, this City Council has considered local goals and policies concerning the
use of the Act; and
WHEREAS, attached hereto as Appendix A is a compilation of such goals and policies
(the "Goals and Policies"); and
WHEREAS, this City Council desires to adopt the Goals and Policies as the City's local
goals and policies concerning the use of the Act;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DIAMOND BAR DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The Goals and Policies are adopted as the City's local goals and policies
concerning the use of the Act,
Section 2. The City Manager is hereby authorized and directed to take any actions and
do any things which may be deemed necessary or desirable in order to accomplish the
purposes of this Resolution, provided the same are not inconsistent with the provisions
hereof, including, but not limited to, the hiring of consultants, including Stradling Yocca
Carlson & Rauth, as Bond Counsel to the City, and Stone & Youngberg LLC, as
Underwriter to the City, to determine the feasibility of establishing a community facilities
district to establish a City-wide community facilities district in order to finance the
acquisition and operation of a municipal library.
Section 3. This Resolution shall take effect immediately upon its adoption.
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PASSED, APPROVED and ADOPTED by the City Council of the City of Diamond Bar
on June 20, 2006.
Carol Herrera, Mayor
I, Tommye Cribbins, City Clerk of the City of Diamond Bar, do hereby certify that
the foregoing Resolution was Passed, Approved and Adopted at a regular meeting of
the City Council of the City of Diamond Bar held on the 20th day of June ,
2006, by the following vote:
AYES: COUNCIL MEMBERS: Chang, Tanaka, Tye, WHerrera
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: MPT/zirbes
ABSTAINED: COUNCIL MEMBERS: None
Tomm e Cribbins, City Clerk
4 2006-60
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APPENDIX A
CITY OF DIAMOND BAR
LOCAL FOALS AND POLICIES FOR ALL
COMMUNITY FACILITIES DISTRICTS
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2006--60
1
1
CITY OF DIAMOND BAR
SUBJECT: Local Goals and Policies for all Community Facilities Districts of the
City of Diamond Bar
AUTHORIZATION: Resolution No. .2006-60
EFFECTIVE DATE: June 20, 2006
INTRODUCTION. Pursuant to Section 53312.7 of the California Government
Code, the City Council of the City of Diamond Bar (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 Diamond Bar (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.
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 planning area 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
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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
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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 band dbond counsel ona case-by-case basis.
proceeds grading acquisition will be
reviewed by the City an
It is secondarily the policy of the City to assist in the provision of other public
facilities when to do so is necessary,
the affected sole CFD, discretion
rve taxpayers residing
acting as the legislative y
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.
Ill. GOVERNMENT CREDIT QUALITY REQUIREMENTS FOR CFD BOND
ISSUES. All CFD bond issues should have a value to public lien ratio 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; 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
ioSu h ybond amended
from needtlme not tbetime.
rated by nationally -
recognized
forth above are met,
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
eab e d issue currently on real property cbeing urrently x existing against plus any tilic
the
indebtedness secured y
properties to be taxed.
Less than the minimum required value to public lien ratio, excessive tax
delinquencies, or pe the City
disallow the sale ofbondsorr require credit enhancement prior to bond sale. The
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DOCSOC/ 1174621 v21024168-0002
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.
IV. 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.
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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. 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 easements, oral have their
insufficientutilization
for
va uother
tothan
set forth to thesupport 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,
s
special taxes levied pursuant to the Act and assessments applicable to
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 a special tax for
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.
V1. APPRAISALS. It is the goal of the City to conform, as nearly a practicable,Standardsto
the California Debt and Investment Advisory Commission's Appraisal
for Land -Secured Financings, thevalue-to-liensuch
ratio,standards
when based upon amended
time. In any event, then appraisal, shall
DOCSOC/ 1174621 v2/024168-0002 2006-60
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.
Vil. '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. 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),
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bond counsel, financial advisors, appraiser and the special tax consultant.
Consultants shall provide evidence demonstrating 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. (resolution of the City o amemento tCounchese � exprcal essly policiesoals and b
essly amendingng these local
effected except by
goals and policies.
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