TO: LINDA REICH, CITY MANAGER
FROM: KIM SAO, DIRECTOR OF FINANCE
SUBJECT
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Annexation of Territory into Community Facilities District No 2003-3 IA 5 for Municipal Services.
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RECOMMENDATION
1) Adopt Resolution No. 2025-013, declaring the City of Chino’s intention to annex Territory to Improvement Area 5 of Community Facilities District No. 2003-3 for municipal services; 2) schedule a public hearing for Tuesday, May 20, 2025; and 3) authorize the City Manager to execute all necessary documents on behalf of the City.
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FISCAL IMPACT
Annexation of the property will initially add an additional $2,102.50 of Special Taxes annually, to be levied within Improvement Area (IA 5) of Community Facilities District No. 2003-3 (CFD No. 2003-3) to be used for certain municipal services described in the Resolution of Formation for CFD No. 2003-3. As the balance of the property develops, additional revenues from the planned multi-family development will be levied annually for the same purpose. The projected revenue from the planned multi-family development will be between $108 and $138 per developed unit. The aggregate projected annual revenue is estimated to be $25,338 but will vary based upon the final number and size of multi-family units constructed.
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
• Responsible Long-Range Planning
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BACKGROUND
The City’s General Plan requires the City to ensure that new development within the City has a fiscally neutral effect on the General Fund. That principal has been applied to all new developments in The Preserve.
The City formed CFD 2003-3 in The Preserve to pay for certain public facilities and necessary ongoing municipal services authorized by the Mello-Roos Act and the formation documents with respect to CFD 2003-3. In addition, the City formed IA 5 of CFD 2003-3 for the purposes of levying special taxes exclusively for payment of municipal services and administrative expenses for IA 5 (Note: No public facilities are authorized to be financed through IA 5 and no CFD bonds will be issued payable by IA 5 Special Taxes).
The Rate and Method of Apportionment (RMA) for IA 5 includes the Special Tax rates for residential and non-residential properties. Authorized municipal services payable from IA 5 Special Taxes include maintenance of parkways, operation of storm drainage systems, and public safety services.
ISSUES/ANALYSIS
A parcel in The Preserve owned by Chino Preserve Development Corporation (effectively owned by Lewis Management Group) is now ready to be annexed into IA 5. This property is located south of Pine and east of Euclid Avenues. This property has been conditioned to annex into IA 5 and as such Lewis has submitted an application to proceed with the annexation. The annexation of this property will provide funding for necessary municipal services provided to the properties.
The Mello-Roos Act requires the City to adopt a Resolution of Intention to consider annexation of property into the District. 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 paper at least seven days prior to the public hearing. Additionally, the full notice must be mailed to the property owners prior to the election. After the public hearing has been held, assuming the City Council determines to proceed with the annexation process, an election will be held for the property owners within the territory proposed to be annexed. As there are fewer than 12 registered voters within the territory proposed to be annexed, the election will be a landowner election with each landowner receiving one vote for each acre or fraction thereof owned. Such property owners will cast their ballots which will be counted by the City Clerk, and if the annexation is approved by the property owner(s), the City Council will adopt a resolution declaring the results of the special election and ordering annexation of proposed property to IA 5 of CFD 2003-3 and the recordation of a Notice of Special Tax Lien on such annexed property.
On May 20, 2025, a public hearing will be scheduled to consider the proposed annexation and to hear any property owners or interested parties who wish to speak to the City Council on the proposed annexation. The annexation into IA5 of CFD 2003-3 shall be subject to approval of the qualified electors within the territory proposed to be annexed into IA5 of CFD 2003-3 at a special election. The proposed voting procedure shall be by special mail delivered ballots to the landowners in the proposed annexed area of Improvement Area 5 of CFD 2003-3 (in this case, only Chino Preserve Development Corporation).
Upon adoption of Resolution No. 2025-013, a ballot and a waiver form will be prepared and sent to each property owner. The waiver form allows the property owner to waive the standard 90-day waiting period between the calling of the special election and the actual election, along with certain other procedures. Each property owner has agreed to sign the waiver to ensure the election occurs on an expedited basis.
Attachment: Resolution No. 2025-013 (Exhibits A, B, and C)
Annexation Map No. 9