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CITY OF INDIO AGENDA REPORT

May 19, 2004

TO: THRU: FROM:

Mayor and Council Tom Ramirez, City Manager k'C""-*) ) Jerry Carter, Finance Director cil

SUBJECT: Approval of Resolution of Intention forming the Community Facilities District 2004-1 and setting a time and place for a public hearing. SUMMARY: The City consistently has identified the impacts on police and fire facilities and services of residential growth. Commencing in 1995, as consideration for entering a Development Agreement, the City asked that the developer agree to a Mello-Roos Community Facilities District as needed in the future to address such impacts. In addition, the environmental impacts of growth on public services have been addressed by the City through the imposition of the current impact fees for police capital facilities and fire facilities. These impact fees are mitigation measures included as conditions of development. These fees will continue to be levied to pay for capital facilities to serve new growth. However, the costs of funding operation and maintenance of those new facilities represent impacts of residential growth that have not been addressed or mitigated. Staff has analyzed the costs of such operation and maintenance, which are summarized in the attached Cost of Service Analysis and Fiscal Impact of New Development analysis. Using the current 2003-04 budget figures for Public Safety (Police, Fire, Ambulance) of over $13,500,000 and using the 2003 population estimate for the City of Indio of 54,500, the cost of Public Safety per average household (3.2 persons) is approximately $806 per year. Of course, costs are expected to increase and population growth is expected to continue at the present rate for at least the next five (5) years. Consulting with Rudy Acosta, Economic Development Director for the City, staff expects the retail component of development to follow the housing starts and, within 510 years, provide the property tax and sales tax resources needed to fund Public Safety needs. In the early stages, however, funds must be generated to fund the needs until the retail component (sales tax and property tax) comes on line. Staff proposes that the CFD tax on a property be levied only for ten (10) fiscal years

1995 in DA for future Mello Roos. Growth - impacts

CFD 2004-1 for operation and funding of facilities.

ITEM NO.

2004-1 CFD CITY COUNCIL - May 19, 2004 PAGE 2

beginning in the fiscal year following the issuance of a building permit. The tax will end at the beginning of the eleventh (11th) year. As discussed with the Council in January, staff proactively has determined that the best manner to mitigate such impacts is through a Mello-Roos Community Facilities District, as described below. Each new residential development would be conditioned to annex into the "master" or "core" CFD. Pulte Homes is proposed to have a separate CFD. The CFD is not being "imposed" upon any developer. Instead, it is agreed upon in a development agreement or as a condition of approval as mitigation for Public Safety needs. In the event that a developer determines not to participate in such a CFD (whether framed as a mitigation measure or condition placed on a discretionary approval), additional conditions would be required to try to mitigate the impacts of lack of funding caused by residential growth. Unfortunately, it is almost impossible to mitigate the life/safety issue for residents raised by insufficient funding for operation and maintenance of emergency and public safety responders. In the attached spreadsheet, three possible special tax levels are provided to the Council showing the levies and annual revenues generated. Again, none of the scenarios would provide enough revenues to fully fund the cost of providing Public Safety services to a household. General Fund revenues would still be needed to pay the remaining balance. Each new development of four or more homes would be conditioned to annex into the existing Community Facilities District at one of the two rates selected by the Council depending on the Community restrictions, if any. Previous Council Action: On January 7, 2004 Council expressed a desire to establish written Goals and Policies for CFD's and AD's. On March 3, 2004 Council was provided the written Goals and Policies and accepted them by resolution. Financial Implications: Cost to establish the Communities Facilities District would be approximately $25,000 in Consulting Fees. Recommendation: Staff recommends approval of resolution authorizing the Resolution of Intention to establish a Community Facilities District for Public Safety Services (Police, Fire and Ambulance Services) on all new residential developments of four or more homes in the City of Indio. This levy would be for a period of ten years beginning with the fiscal year following the date the building permit was issued and sun setting on the eleventh anniversary of that date. Proposed Motion: Move approval of the Resolution of Intention of the City Council of the City of Indio to establish Community Facilities District No. 2004-1 for law enforcement, fire and paramedic Services, to authorize the levy of a special tax within said district, and to authorize staff to modify the Rate and Method of Apportionment to reflect the amounts approved by Council for "age restricted, gated communities" and "all other communities" .

Only 10 years.

J: \word \StaffReport-CFD3.doc

2004-1 CFD CITY COUNCIL - May 19, 2004 PAGE 3 List of Attachments: A. B. C. D. Spreadsheets (3) Resolution of Intention Boundary Map Rate and Method of Apportionment

J: \word1StaffReport-CFD3.doc

FISCAL IMPACT OF NEW DEVELOPMENT ON PUBLIC SAFETY SERVICES

POLICE BASED ON 1.0 SWORN OFFICERS / 1,000 POPULATION Each 312 new residential units (approximately 1000 people) would require 1 additional sworn officer Cost per home approximately $518 / year Average General Fund Revenue Approximately $490 / year, assume 33% allocated to Police Svcs. (approx. $1621 year) Net fiscal impact - annual shortfall of $356 I year

FIRE

BASED ON .77 TOTAL STAFF /1,000 POPULATION

Each 406 new residential units (approximately 1298 people) would require 1 additional firefighter Cost per home approximately $288 I year Average General Fund Revenue Approximately $490 / year, assume 18.3% allocated to Fire Svcs. (approx. $90 / year) Net fiscal impact - annual shortfall of $198 / year

POLICE 60,000 Calls for Service Average Cost per Call = $8,815,782 60,000 60,000 54,500 1,100 1,000 $147

Average Calls per Capita =

1.1

1,100 calls 11,000 Population

Average Cost per Residence

X 3.2 people / dwelling X $147 (cost per call) = $518 / YR

FIRE Calls for Service Average Cost per Call 4,578 4,896,953 $1,069 84 Calls x 54.5 4,578 54,500 0.084 84 calls / 1,000 Population

Average Calls per Capita =

Average Cost per Residence

84 Calls X 3.2 x 1069 = $288 1,000

CITY OF INDIO COMMUNITY FACILITIES DISTRICT

ENTITY

BUDGET 03-04

POPULATION 2003

PER CAPITA

PER HOUSEHOLD (@ 3.2 / household)

POLICE

8,815,782

54,500

$161.76

FIRE Total

4,896,953 13,712,735

54,500

$89.85 $251.61 $805.15

Above calculated at current staffing levels

Proposed Special Tax Amounts per Household Monthly Annually Aqe Restricted-Gated 3100 Homes $372,000 $496,000 $744,000 $1,116,000 Non Restricted 131 Homes $15,720 $20,960 $31,440 $47,160

$10 $13.34 $20 $30

$120 $160 $240 $360

RESOLUTION NO. RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF INDIO TO ESTABLISH COMMUNITY SERVICES DISTRICT NO. 2004-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN SAID DISTRICT WHEREAS, the City Council (the "Council") of the City of Indio (the "City") intends to establish City of Indio Community Services District No. 2004-1 (Law Enforcement, Fire and Paramedic Services) (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the Government Code of the State of California (the "Act"); and WHEREAS, the Council intends to finance law enforcement, fire and paramedic services that are in addition to those provided in the territory within the District prior to the formation of the District and do not supplant services already available within the territory proposed to be included in the District through the formation of the District subject to the levy of a special tax to pay for such services, being approved at an election to be held within the boundaries of the District; and WHEREAS, the Council intends to provide for the annexation in the future of territory (the "Future Annexation Area") to the District pursuant to the terms and provisions of the Act. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Indio as follows: The Council hereby determines to institute proceedings for the formation Section 1. of a community facilities district under the terms of the Act. The exterior boundaries of the community facilities district are hereby specified and described to be as shown on that certain map now on file in the office of the City Clerk entitled "Proposed Boundaries, City of Indio Community Services District No. 2004-1 (Law Enforcement, Fire and Paramedic Services)," which map indicates by a boundary line the extent of the territory included in the proposed community facilities district and shall govern for all details as to the extent of the District. On the original and one copy of the map of such District on file in the City Clerk's office, the City Clerk shall endorse the certificate evidencing the date and adoption of this Resolution. The City Clerk shall file the original of such map in her office and, within fifteen (15) days after the adoption of this Resolution, the City Clerk shall file a copy of such map so endorsed in the records of the County Recorder, County of Riverside, State of California. The Future Annexation Area, which area is to be subject to a special tax to Section 2. be levied, shall be comprised of undeveloped parcels within the boundaries of the City, other than those parcels already within the boundaries of the proposed District, that require a discretionary approval for development, which are developed for private residential purposes, and such other parcels as may be added upon the petition of the property owners thereof. Such

INDIO (OM CFD) - RESOLITTION OF INTENTION.DOC

Future Annexation Area may be annexed only with the unanimous approval of the owner or owners of each parcel or parcels at the time that parcel or those parcels are annexed. Section 3. The name of the proposed community facilities district shall be "City of Indio Community Services District No 2004-1 (Law Enforcement, Fire and Paramedic Services)." Section 4. Except where funds are otherwise available, it is the intention of the City Council to levy annually in accordance with procedures contained in the Act a special tax (the "Special Tax") sufficient to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within the District prior to the formation of the District and do not supplant services already available within the territory proposed to be included in the District, the costs of administering the levy and collection of the Special Tax and all other costs of the levy of the Special Tax, including any foreclosure proceedings, legal, fiscal, and financial consultant fees, election costs, and all other administrative costs of the tax levy. The Special Tax will be secured by recordation of a continuing lien against all non-exempt real property in the proposed District. The schedule of the rate and method of apportionment and manner of collection of the Special Tax is described in detail in Exhibit "A" attached hereto and by this reference incorporated herein. The Special Tax is apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act. The maximum Special Tax applicable to a parcel to be used for private residential purposes, as set forth in Exhibit A, is specified as a dollar amount which shall be calculated and established not later than the date on which the parcel is first subject to tax because of its use for private residential purposes, and such amount shall not be increased over time by an amount in excess of 2 percent per year. Under no circumstances will the Special Tax to be levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the proposed District. As specified by the Act, for purposes of this paragraph, a parcel shall be considered "used for private residential purposes" not later than the date on which an occupancy permit for private residential use is issued. Section 5. A public hearing (the "Hearing") on the establishment of the District and the proposed rate and method of apportionment of the Special Tax shall be held on July 7, 2004, at 6:00 o'clock p.m., or as soon thereafter as practicable, at the chambers of the City Council of the City of Indio, 150 Civic Center Mall, Indio, California 92202. Section 6. At the time and place set forth above for the hearing, any interested person, including all persons owning lands or registered to vote within the proposed District, may appear and be heard. Section 7. Each City officer who is or will be responsible for the District, if it is established, is hereby directed to study the proposed District and, at or before the time of the above-mentioned Hearing, file a report with the City Council, and which is to be made a part of the record of the Hearing, containing a brief description of the District and his or her estimate of

INDIO (OM CFD) - RESOLUTION OF INTENTION.DOC

the cost of providing additional law enforcement, fire and paramedic services within the boundary of the District. The City Manager is directed to estimate the fair and reasonable cost of all incidental expenses, including all costs associated with the creation of the District, determination of the amount of any special taxes, collection of any special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the City with respect to the District. The City may accept advances of funds from any sources, including Section 8. private persons or private entities, and is authorized and directed to use such funds for any authorized purpose, including any cost incurred by the City in creating the District. The City may enter into an agreement to repay all of such funds as are not expended or committed for any authorized purpose at the time of the election on the levy of the Special Tax, if the proposal to levy such tax should fail, and to repay all of such funds advanced if the levy of the Special Tax shall be approved by the qualified electors of the District. The City Clerk is hereby directed to publish a notice ("Notice") of the Section 9. Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the proposed District. Such Notice shall contain the text of this Resolution, state the time and place of the Hearing, a statement that the testimony of all interested persons or taxpayers will be heard, a description of the protest rights of the registered voters and landowners in the proposed District as provided in Section 53324 of the Act and a description of the proposed voting procedure for the election required by the Act. Such publication shall be completed at least 7 days prior to the date of the Hearing. The voting procedure with respect to the establishment of the District and Section 10. the imposition of the special tax shall be by hand delivered ballot election.

INDIO (OM CFD) - RESOLUTION OF INTENTION.DOC

PASSED, APPROVED and ADOPTED this by the following votes: AYES: NOES:

day of

, 2004

JACQUELINE BETHEL, MAYOR

ATTEST:

CYNTHIA HERNANDEZ DEPUTY CITY CLERK, CMC

INDIO (OM CFI)) - RESOLUTION OF INTENTION.DOC

EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

INDIO (OM CFD) - RESOLUTION OF INTENTION.DOC

RATE AND METHOD OF APPORTIONMENT FOR CITY OF INDIO COMMUNITY FACILITIES DISTRICT NO. 2004-1 (LAW ENFORCEMENT, FIRE and PARAMEDIC SERVICES)

A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels in Community Facilities District No. 2004-1 of the City of Indio ("CFD No. 2004-1") and collected each Fiscal Year commencing in Fiscal Year 2004-05, in an amount determined by the City Council of the City of Indio, through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 2004-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's parcel number. "CFD Administrator" means an official of the City, or designee thereof, responsible for providing for the levy and collection of the Special Taxes. "CFD No. 2004-1" means City of Indio Community Facilities District No. 2004-1 (Law Enforcement, Fire and Paramedic Services). "City" means the City of Indio. "City Council" means the City Council of the City. "Commercial or Industrial Property" means for each Fiscal Year, property for which a building permit for new construction of a commercial or industrial use building was issued after May 1, 2004. "County" means the County of Riverside. "Developed Multi-Family Residential Property" means for each Fiscal Year, all Taxable Property for which a building permit for new construction of a multi-family dwelling with two or more units was issued after May 1, 2004 and prior to June 30 of the prior Fiscal Year, exclusive of property for which the property owner pays Transient Occupancy Taxes or the property owner has entered into an agreement with the City pursuant to which such property owner pays Transient Occupancy Taxes. "Developed Property" means for each Fiscal Year, all Developed Multi-Family Residential Property, Developed Single-Family Residential Property and Developed Single-Family Restricted Residential Property. "Developed Single-Family Residential Property" means for each Fiscal Year, all Taxable Property for which a building permit for new construction of a single-family dwelling unit was

issued after May 1, 2004 and prior to June 30 of the prior Fiscal Year, excluding any Developed Single-Family Restricted Residential Property. "Developed Single-Family Restricted Residential Property" means for each Fiscal Year, all Taxable Property for which a building permit for new construction of a single-family dwelling unit was issued after May 1, 2004 and prior to June 30 of the prior Fiscal Year, which will be built in an age-restricted and gated subdivision. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Resolution of Formation" means the resolution adopted by the City as authorized by Section 53325.1 of the California Government Code. "Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2004] which are not exempt from the Special Tax pursuant to law or Section E below. "Transient Occupancy Taxes" means those taxes payable to the City pursuant to Ordinance No. 408, as it may be amended from time to time. "Undeveloped Property" means, for each Fiscal Year, all Assessor's Parcels not classified as Developed Property or Commercial or Industrial Property. B. ASSIGNMENT TO LAND USE CLASSES

Each Fiscal Year, all Taxable Property within CFD No. 2004-1 shall be classified as Developed Single-Family Residential Property, Developed Single-Family Restricted Residential Property or Developed Multi-Family Residential Property, and shall be subject to Special Taxes in accordance with the rate and method of apportionment determined pursuant to Sections C and D below. C. MAXIMUM SPECIAL TAX

1. Developed Single-Family Residential Property a. Maximum Special Tax The 2004-05 Maximum Special Tax for each Assessor's Parcel classified as Developed Single-Family Residential Property shall be S b. Increase in the Maximum Special Tax On each July 1, commencing on July 1, 2005, the Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.

Page 2

2. Developed Single-Family Restricted Residential Property a. Maximum Special Tax The 2004-05 Maximum Special Tax for each Assessor's Parcel classified as Developed Single-Family Restricted Residential Property shall be $ b. Increase in the Maximum Special Tax On each July 1, commencing on July 1, 2005, the Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. 3. Developed Multi-Family Residential Property a. Maximum Special Tax The 2004-05 Maximum Special Tax for each Assessor's Parcel classified as Developed Multi-Family Residential Property shall be $ multiplied by the number of separate dwelling units applicable to such Assessor's Parcel. b. Increase in the Maximum Special Tax On each July 1, commencing on July 1, 2005, the Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2004-05 and for each following Fiscal Year, the City Council shall levy the Special Tax at the Maximum Special Tax on all Developed SingleFamily Residential Property and Developed Multi-Family Residential Property. E. EXEMPTIONS; EXCLUSIONS No Special Tax shall be levied on Undeveloped Property, Commercial or Industrial Property or for Developed Property developed as part of a development with 4 units or less. In the event that a Developed Multi-Family Residential Property that has been excluded from a levy of the Special Tax by reason of the payment by the property owner of Transient Occupancy Tax, and should that payment be terminated, such Assessor Parcel shall not longer be excluded from Developed Multi-Family Residential Property and will be subject to the Special Tax. F. APPEALS AND INTERPRETATIONS Any taxpayer may file a written appeal of the Special Tax on his/her property with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the calculation of the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax on the appellant's property and/or provide a refund to the appellant. If the CFD Administrator disagrees with the appellant and the appellant is Page 3

dissatisfied with the determination, the appellant then has 30 days in which to appeal to the Board by filing a written notice of appeal with the Board Secretary, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for its disagreement with the CFD Administrator's determination. G MANNER OF COLLECTION The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2004-1 may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. H. PREPAYMENT OF THE SPECIAL TAX The Special Tax may not be prepaid. I. TERM OF THE SPECIAL TAX The Annual Maximum Special Tax shall be levied for a period not to exceed either (i) ten (10) years for each Assessor Parcel classified as Developed Property or (ii) until Law Enforcement, Fire and Paramedic Services are no longer being provided by the City within CFD No. 2004-1, whichever is earlier.

Page 4

TO: FROM:

CITY COUNCIL OF THE CITY OF INDIO LANDOWNER WITHIN CITY OF INDIO COMMUNITY FACILITIES DISTRICT NO. 2004-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) CONSENT AND WAIVER

The undersigned landowner does hereby certify under penalty of perjury that the following statements are all true and correct: 1 The undersigned are authorized to represent the landowner identified below and are its designated representatives to give the consent and waiver contained herein with respect to City of Indio Community Facilities District No. 2004-1 (Law Enforcement, Fire and Paramedic Services) (the "District") to be formed under the provisions of the "Mello-Roos Community Facilities Act of 1982" (the "Act"), being Chapter 2.5 of Part 1 of Division 2 of title 5 (commencing with Section 53311) of the California Government Code. 2. The undersigned hereby certify that as of the date indicated opposite their signatures, the landowner listed herein is the owner of a portion of the property within the proposed boundaries of the District described in Exhibit "A" hereto. 3. In accordance with the provisions of the Act, and specifically Sections 53326(a) and 53327(b) thereof allowing certain time and conduct requirements relative to a special landowner election to be waived with the unanimous consent of all the landowners to be included in a community facilities district and concurrence of the election official conducting the election, the undersigned (i) expressly consents to the conduct of the special election at the earliest possible time following the adoption by the City Council of a resolution forming the District and (ii) expressly waives any requirement to have the special election conducted within the time periods specified in Section 53326 of the Act or in the California Elections Code. 4. The undersigned waives any requirement for the mailing of the ballot for the special election and expressly agree that said election may be conducted by mailed or handdelivered ballot to be returned as quickly as possible to the designated election official, being the office of the City Clerk of the City Council and the undersigned request that the results of said election be canvassed and reported to the City Council at the same meeting of the City Council as the public hearing on the formation of the District or the next available meeting. 5. The undersigned expressly waives all applicable waiting periods for the election and waives the requirement for analysis and arguments relating to the special election, as set forth in Section 53327 of the Act, and consents to not having such materials provided to the landowner in the ballot packet, and expressly waives any requirements as to the form of the ballot. 6. The undersigned expressly waives all notice requirements relating to hearings and special elections, whether by posting, publishing or mailing, and whether such requirements are found in the California Elections Code, the California Government Code or

45416/452,1

other laws or procedures, including but limited to any notice provided for by compliance with the provisions of Section 4101 of the California Elections Code. The undersigned hereby consents to and expressly waives any and all 7. claims based on any irregularity, error, mistake or departure from the provisions of the Act or other laws of the State and any and all laws and requirements incorporated therein, and no step or action in any proceeding relative to the District or the special election therein shall be invalidated or affected by any such irregularity, error, mistake or departure. IN WITNESS WHEREOF, 1 hereunto set my hand this 2004 . day of

[NAME OF LANDOWNER}

By: Name: Title:

FILED IN THE OFFICE OF THE CITY CLERK OF THE CITY COUNCIL OF THE CITY OF INDIO THIS DAY OF , 2004.

Deputy City Clerk of the City Council of the City of Indio

45416852.1

EXHIBIT A PROPOSED BOUNDARIES OF THE CFD

45416852.1

CITY OF INDIO AGENDA REPORT


May 19, 2004

TO: THRU: FROM:

Mayor and Council Tom Ramirez, City Manager

14tAi

Jerry Carter, Finance Director (

r.

SUBJECT: Approval of Resolution of Intention forming the Community Facilities District 2004-2 and setting a time and place for a public hearing. SUMMARY: The City consistently has identified the impacts of residential growth on police and fire facilities and services. In 1995, as part of the consideration for entering a Development Agreement, Dimare agreed that: "Developer agrees to cooperate in the formation of or annexation to a community facilities district or a community services district or other similar district or the adoption of an impact fee for public safety purposes to serve residential uses. Such cooperation will consist of Developer consenting in writing to, and/or petitioning for, the formation of or annexation to such district and not protesting the formation of or annexation to such district or taking any action, directly or indirectly, to oppose formation of or annexation..." The City now is proceeding with the formation of such a CFD for operation and maintenance costs for Public Safety Services (police, fire and ambulance). Staff has analyzed the costs of such operation and maintenance, which are summarized in the attached Cost of Service Analysis and Fiscal Impact of New Development analysis. Using the current 2003-04 budget figures for Public Safety (Police, Fire, Ambulance) of over $13,500,000 and using the 2003 population estimate for the City of Indio of 54,500, the cost of Public Safety per average household (3.2 persons) is approximately $806 per year. Costs are expected to increase and population growth is expected to continue at the present rate for at least the next five (5) years. Consulting with Rudy Acosta, Economic Development Director for the City, staff expects the retail component of development to follow the housing starts and, within 5 -10 years, provide the property tax and sales tax resources needed to fund Public Safety needs. In the early stages, however, funds must be generated to fund the needs until the retail component (sales tax and property tax) comes on line. Staff proposes that the CFD tax on a property be levied only for ten (10) fiscal years

ITEM NO.

2004-2 CFD CITY COUNCIL - May 19, 2004 PAGE 2

beginning in the fiscal year following the issuance of a building permit. The tax will end at the beginning of the eleventh (11th) year. Realizing the critical nature of providing Public Safety services to all residents, staff is proposing that a Community Facilities District be formed for all new residential developments of four or more units for a ten year period, beginning with the fiscal year following the date the building permit was issued and sun setting on the eleventh anniversary of that date Pulte Homes is developing approximately 3100 units in the Shadow Hills area. Excluded from the CFD are any units for which building permits have been issued prior to May 1, 2004. This date is a policy determination recommended by staff, not a requirement of the development agreement. This excludes units where escrows have closed. Additional territory may be annexed to this CFD in the future. Because of timing and other issues, staff has determined that Pulte's CFD cannot be included in the city-wide CFD 2004-1 also being formed. However, it is very important to understand that the structure and tax rate of this CFD is exactly the same as that of the other CFD. The City believes it is important to address the Public Safety needs of the entire new residential community on an equal basis. STRUCTURE OF CFD: The tax will apply to any unit for which a building permit was issued on or after May 1, 2004. The tax is collected on the tax roll and will appear on the December, 2004, billing. The tax will be prorated in escrow. The developer is required by state law to disclose the CFD and the approximate amount of the annual tax in its report to the Department of Real Estate and in the advertising materials for the development. Therefore, although the developer votes for the CFD, the owners who will pay for it know before purchasing the property that the CFD is applicable and the approximate amount they will have to pay each year on their property tax bill. We will be working with Pulte to resolve issues regarding this disclosure. The City administers the CFD; the cost of administration is included in the amount charged. There is no additional administration charge. All formation costs, including special counsel and consulting fees, may be reimbursed from the tax. AMOUNT OF THE CFD: The CFD is not intended to cover all of the costs of providing Public Safety to new development but only to cover a portion of such costs. Staff recommends that the tax rate be lower for communities which are both age-restricted and gated, which data show have an average number of 1.9 persons per household as well as significantly lower number of calls for service. Thus staff and special counsel would propose to levy the tax on residences in communities which are both agerestricted AND gated at 2/3rds of the tax rate for other households. For example, if the tax were $240/household per year, households in age-restricted AND gated communities would be taxed at $180/year.

J:\wordICCStaffReport-Pulte CFD doc

2004-2 CFD CITY COUNCIL May 19, 2004 _

Staff is presenting four options for the tax as set out on the attached chart. There is a 2% annual increase in the tax similar to that for property taxes. Previous Council Action: On January 7, 2004 Council expressed a desire to establish written Goals and Policies for CFD's and AD's. On Mfirch 2, 222 j was provided the written Goals and Policies and accepted them by resolution. As noted, the Council approved a Development Agreement with Dimare in 1995. That Development Agreement was assigned to Pulte Homes in 1998 without any change to the provision quoted above. Financial Implications: Cost to establish the Communities Facilities District would be approximately $25,000 in Consulting Fees, which, as noted, may be reimbursed from the CFD. Recommendation: Staff recommends approval of resolution authorizing the Resolution of Intention to establish a Community Facilities District for Public Safety Services (Police, Fire and Ambulance Services) on all new residential developments of four or more homes in the City of Indio within the boundaries of this CFD 2004-2. This levy would be for a period of ten years beginning with the fiscal year following the date the building permit was issued and sun setting on the eleventh anniversary of that date. Proposed Motion: Move approval of the Resolution of Intention of the City Council of the City of Indio to establish Community Facilities District No. 2004-2 for law enforcement, fire and paramedic Services, to authorize the levy of a special tax within said district, and to authorize staff to modify the Rate and Method of Apportionment to reflect the amounts approved by Council. List of Attachments: A. B. C. D. Spreadsheets (3) Resolution of Intention Boundary Map Rate and Method of Apportionment

JAword1CCStaffReport-Pulte CFD doc

May-11-04

03:40pm

From-tuibright

+2136804518

T-038

P.011/015

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RESOLUTION NO. RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF INDIO TO ESTABLISH COMMUNITY FACILITIES DISTRICT NO. 2004-X ( 1LAW ENFORCEMENT, FIRE AM) PARAMEDIC SERVICES) AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN SAID DISTRICT WHEREAS, the City Council (the "Council") of the City of Indio (the "City") has received a written request (the "Request") for the establishment of a community facilities district (the "CFD"), signed by two members of the Council, describing the boundaries of the territory which is proposed for inclusion in the area and specifying the type of services to be financed by the proposed CFD, all pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the Government Code of the State of California (the "Act"); and WHEREAS, the Council has determined that the Request complies with the requirements of Section 53318(a) of the Act and now intends to form the CFD; and WHEREAS, the Council intends to finance law enforcement, fire and paramedic services that are in addition to those provided in the territory within the CFD prior to the formation of the CFD and do not supplant services already available within the territory proposed to be included in the CFD through the formation of the CFD subject to the levy of a special tax to pay for such services, being approved at an election to be held within the boundaries of the CFD; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Indio as follows: Section 1. The Council hereby determines to institute proceedings for the formation of a community facilities district under the terms of the Act. The exterior boundaries of the community facilities district are hereby specified and described to be as shown on that certain map now on file in the office of the City Clerk entitled "Proposed Boundaries, City of Indio Community Facilities District No. 2004-2 (Law Enforcement, Fire and Paramedic Services)," which map indicates by a boundary line the extent of the territory included in the proposed community facilities district and shall govern for all details as to the extent of the CFD. On the original and one copy of the map of such CFD on file in the City Clerk's office, the City Clerk shall endorse the certificate evidencing the date and adoption of this Resolution. The City Clerk shall file the original of such map in her office and, within fifteen (15) days after the adoption of this Resolution, the City Clerk shall file a copy of such map so endorsed in the records of the County Recorder, County of Riverside, State of California. Section 2. The name of the proposed community facilities district shall be "City of Indio Community Facilities District No. 20042 (Law Enforcement, Fire and Paramedic Services)."

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Except where funds are otherwise available, it is the intention of the City Section 3. Council to levy annually in accordance with procedures contained in the Act a special tax (the "Special Tax") sufficient to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within the CFD prior to the formation of the CFD and do not supplant services already available within the territory proposed to be included in the CFD, the casts of administering the levy and collection of the Special Tax and all other costs of the levy of the Special Tax, including any foreclosure proceedings, legal, fiscal, and financial consultant fees, election costs, and all other administrative costs of the tax levy. The Special Tax will be secured by recordation of a continuing lien against all non-exempt real property in the proposed CFD. The schedule of the rate and method of apportionment and manner of collection of the Special Tax is described in detail in Exhibit "A" attached hereto and by this reference incorporated herein. The Special Tax is apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act. The maximum Special Tax applicable to a parcel to be used for private residential. purposes, as set forth in Exhibit A, is specified as a dollar amount which shall be calculated and established not later than the date on which the parcel is first subject to tax because of its use for private residential purposes, and such amount shall not be increased over time by an amount in excess of 2 percent per year. Under no circumstances will the Special Tax to be levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the proposed CFD. As specified by the Act, for purposes of this paragraph, a parcel shall be considered "used for private residential purposes" not later than the date on which an occupancy permit for private residential use is issued. Section 4. A public hearing (the "Hearing") on the establishment of the CFD and the proposed rate and method of apportionment of the Special Tax shall be held on July 7, 2004, at 6:00 o'clock p.m., or as soon thereafter as practicable, at the chambers of the City Council of the City of Indio, 150 Civic Center Mall, Indio, California 92202. Section 5. At the time and place set forth above for the hearing, any interested person, including all persons owning lands or registered to vote within the proposed CFD, may appear and be heard. Section 6, Each City officer who is or will be responsible for the CFD, if it is established, is hereby directed to study the proposed CFD and, at or before the time of the above-mentioned Hearing, file a report with the City Council, and which is to be made a part of the record of the Hearing, containing a brief description of the CFD and his or her estimate of the cost of providing additional law enforcement, fire and paramedic services within the boundary of the CFD. The City Manager is directed to estimate the fair and reasonable cost of all incidental expenses, including all costs associated with the creation of the CFD, determination of the amount of any special taxes, collection of any special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the City with respect to the CFD.

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The City may accept advances of funds from any sources, including Section 7. private persons or private entities, and is authorized and directed to use such funds for any authorized purpose, including any cost incurred by the City in creating the CFD. The City may enter into an agreement to repay all of such funds as arc not expended or committed for any authorized purpose at the time of the election on the levy of the Special Tax, if the proposal to levy such tax should fail, and to repay all of such funds advanced if the levy of the Special Tax shall be approved by the qualified electors Cif the CFD. The City Clerk is hereby directed to publish a notice ("Notice") of the Section 8_ Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the proposed CFD. Such Notice shall contain the text of this Resolution, state the time and place of the Hearing, a statement that the testimony of all interested persons or taxpayers will be heard, a description of the protest rights of the registered voters and landowners in the proposed CFD as provided in Section 53324 of the Act and a description of the proposed voting procedure for the election required by the Act. Such publication shall be completed at least 7 days prior to the date of the Hearing. The voting procedure with respect to the establishment of the CFD and the Section 9_ imposition of the special tax shall be by hand delivered ballot election.

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PASSED, APPROVED and ADOPTED this by the following votes: AYES: NOES:

day of

, 2004

JACQUELINE BETHEL, MAYOR ATTEST:

CYNTHIA HERNANDIEZ DEPUTY CITY CLERK, CMC

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EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

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RATE AND METHOD OF APPORTIONMENT FOR CITY OF INDIO COMMUNITY FACILITIES DISTRICT NO. 2004-2 (LAW ENFORCEMENT, FIRE and PARAMEDIC SERVICES)

A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels in Community Facilities District No. 2004-2 of the City of Indio ("CFD No. 2004-2") and collected each Fiscal Year commencing in Fiscal Year 2004-05, in an amount determined by the City Council of the City of Indio, through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 2004-2, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's parcel number. "CFD Administrator" means an official of the City, or designee thereof, responsible for providing for the levy and collection of the Special Taxes. "CFI) No. 2004-2" means City of Indio Community Facilities District No. 2004-2 (Law Enforcement, Fire and Paramedic Services). "City" means the City of Indio. "City Council" means the City Council of the City. "Commercial or Industrial Property" means for each Fiscal Year, property for which a building permit for new construction of a commercial or industrial use building was issued after May 1, 2004. "County" means the County of Riverside. "Developed Multi-Family Residential Property" means for each Fiscal Year, all Taxable Property for which a building permit for new construction of a multi-family dwelling with two or more units was issued after May 1, 2004 and prior to June 30 of the prior Fiscal Year, exclusive of property for which the property owner pays Transient Occupancy Taxes or the property owner has entered into an agreement with the City pursuant to which such property owner pays Transient Occupancy Taxes. "Developed Property" means for each Fiscal Year. all Developed Multi-Family Residential Property, Developed Single-Family Residential Property and Developed Single-Family Restricted Residential Property. "Developed Single-Family Residential Property" means for each Fiscal Year, all Taxable Property for which a building permit fOr new construction of a single-family dwelling unit was

issued after May 1, 2004 and prior to June 30 of the prior Fiscal Year, excluding any Developed Single-Family Restricted Residential Property. "Developed Single-Family Restricted Residential Property" means for each Fiscal Year, all faxable Property for which a building permit for new construction of a single-family dwelling unit was issued after May 1. 2004 and prior to June 30 of the prior Fiscal Year, which will be built in an age-restricted and gated subdivision. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Resolution of Formation" means the resolution adopted by the City as authorized by Section 53325.1 of the California Government Code. "Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 20042 which are not exempt from the Special Tax pursuant to law or Section E below. "Transient Occupancy Taxes" means those taxes payable to the City pursuant to Ordinance No. 408. as it may be amended from time to time. "Undeveloped Property" means, for each Fiscal Year, all Assessor's Parcels not classified as Developed Property or Commercial or Industrial Property. B. ASSIGNMENT TO LAND USE CLASSES

Each Fiscal Year, all Taxable Property within CFD No. 2004-2 shall be classified as Developed Single-Family Residential Property, Developed Single-Family Restricted Residential Property or Developed Multi-Family Residential Property, and shall be subject to Special Taxes in accordance with the rate and method of apportionment determined pursuant to Sections C and D below. C. MAXIMUM SPECIAL TAX

1. Developed Single-Family Residential Property a. Maximum Special Tax The 2004-05 Maximum Special Tax for each Assessor's Parcel classified as Developed Single-Family Residential Property shall be $ b. Increase in the Maximum Special Tax On each July 1, commencing on July 1, 2005, the Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.

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2. Developed Single-Family Restricted Residential Property a. Maximum Special Tax The 2004-05 Maximum Special Tax for each Assessor's Parcel classified as Developed Single-Family Restricted Residential Property shall be $ b. Increase in the Maximum Special Tax On each July 1, commencing on July 1, 2005, the Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. 3. Developed Multi-Family Residential Property Maximum Special Tax The 2004-05 Maximum Special Tax for each Assessor's Parcel classified as Developed Multi-Family Residential Property shall be $ multiplied by the number of separate dwelling units applicable to such Assessor's Parcel. b. Increase in the Maximum Special Tax On each July 1, commencing on July 1, 2005, the Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2004-05 and for each following Fiscal Year, the City Council shall levy the Special Tax at the Maximum Special Tax on all Developed SingleFamily Residential Property and Developed Multi-Family Residential Property. E. EXEMPTIONS; EXCLUSIONS No Special Tax shall be levied on Undeveloped Property, Commercial or Industrial Property or for Developed Property developed as part of a development with 4 units or less. In the event that a Developed Multi-Family Residential Property that has been excluded from a levy of the Special Tax by reason of the payment by the property owner of Transient Occupancy Tax, and should that payment be terminated, such Assessor Parcel shall not longer be excluded from Developed Multi-Family Residential Property and will be subject to the Special Tax. F. APPEALS AND INTERPRETATIONS Any taxpayer may file a written appeal of the Special Tax on his/her property with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the calculation of the Special Tax is in eITOT. The CH) Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the (TD Administrator agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax on the appellant's property and/or provide a refund to the appellant. If the CFD Administrator disagrees with the appellant and the appellant is Page 3

dissatisfied with the determination, the appellant then has 30 days in which to appeal to the Board by filing a written notice of appeal with the Board Secretary, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for its disagreement with the CFD Administrator's determination. G MANNER OF COLLECTION The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2004-2 may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. H. PREPAYMENT OF THE SPECIAL TAX The Special Tax may not be prepaid. 1. TERM OF THE SPECIAL TAX The Annual Maximum Special Tax shall be levied for a period not to exceed either (i) ten (10) years for each Assessor Parcel classified as Developed Property or (ii) until Law Enforcement, Fire and Paramedic Services are no longer being provided by the City within CFD No. 2004-2, whichever is earlier.

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