TO: LINDA REICH, CITY MANAGER
FROM: ROB BURNS, DIRECTOR OF FINANCE
SUBJECT
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Declaration of Intention to Establish Improvement Area 11 in Community Facilities District 2003-3 and incur Bonded Indebtedness for the Improvement Area.
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RECOMMENDATION
1) Adopt Resolution No. 2024-011, declaring the City of Chino’s intention to establish Improvement Area No. 11 in Community Facilities District No. 2003-3; 2) adopt Resolution No. 2024-012 declaring the City of Chino’s Intention to Incur Bonded Indebtedness for the proposed Improvement Area 11 of the Community Facilities District No. 2003-3; 3) approve a Reimbursement Agreement between the City of Chino and The Chino Preserve Development Corp.; and 4) authorize the City Manager to execute all necessary documents on behalf of the City.
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FISCAL IMPACT
The City will receive City Services Tax revenue of approximately $139,182 per year upon build out of Improvement Area 11. This revenue is intended to offset the cost of providing City services to the homes within CFD 2003-3.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
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BACKGROUND
Lewis Operating Corporation (Lewis) is the primary land developer in The Preserve. Lewis is currently developing their land with residential, commercial and community facilities. As part of the development of The Preserve, the City of Chino is requiring Lewis to build the necessary public infrastructure to serve the residents and businesses of the new project area. In order to help Lewis finance the cost of the required infrastructure improvements, the City has formed Community Facilities District (CFD) No. 2003-3.
CFD No. 2003-03 was formed in 2004 and was designed to utilize Improvement Areas to issue bonds as The Preserve developed over time to finance certain public facilities, and to pay for necessary ongoing municipal services authorized by the Mello-Roos Act and the formation documents with respect to CFD No. 2003-3. To date, ten Improvement Areas have been established. The public improvements for the Lewis project have consisted of backbone infrastructure such as sewer, water and gas lines, storm drain connections, streets, curb and gutters, streetlight and traffic signal improvements, landscaped medians, fire station, joint use community center and other required facilities. Authorized municipal services payable from the improvement areas include maintenance of parks, parkways, and open space; flood and storm protection; operation of storm drainage systems; and public safety services.
Lewis has approached the City and wishes to establish Improvement Area 11 within CFD No. 2003-3. See attached map.
ISSUES/ANALYSIS
Current Government Code provisions require the City to adopt a Resolution of Intention to establish the Improvement Area, and to declare its intention to incur bonded indebtedness for the proposed Improvement Area. The City must also set a public hearing date for no less than 30 days, and no more than 60 days after the date the Resolution of Intention is approved. Prior to the public hearing, a public notice must be published in a local newspaper. After the public hearing has been held, an election is held for the affected property owners to cast their ballots. The ballots are then counted, and if the Improvement Area is approved by the property owner(s), the City adopts a resolution determining the formation of the Improvement Area.
On May 7, 2024, a public hearing will be scheduled on the following:
1. Establishment of Improvement Area 11 and the levy of a special tax therein
2. Approval of the proposed bonds for Improvement Area 11
The levy of the proposed special tax shall be subject to approval of the qualified electors of the CFD at a special election. The proposed voting procedure shall be by mail or hand delivered ballots to the landowners in the proposed Improvement Area 11.
Pursuant to Section 53314.9 of the Mello-Roos Community Facilities Act of 1982, the City proposes to authorize bonded indebtedness for financing the acquisition and/or construction of certain public improvements and City development impact fees not to exceed the aggregate principal amount of $20,000,000.
The CFD bonds are payable from and secured by special taxes, which are levied upon each individual property within Improvement Area 11. The General Fund of the City of Chino is not obligated to pay debt service on the bonds.
Attachments: Resolution No. 2024-011 (Exhibits A, B, C)
Resolution No. 2024-012
Reimbursement Agreement
Improvement Area 11 Boundary Map
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