ACTION REPORT
June 8, 2021
FROM: Department of Management Services
SUBJECT: Resolution of Intent to form Community Facilities District No. 106 (Mountainview)
 
 
RECOMMENDATION:

1.  Adopt Resolution No. 2021-____, of the City Council of the City of Fontana of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes.

2.  Adopt Resolution No. 2021-____, of the City Council of the City of Fontana to Incur Bonded Indebtedness of the Proposed City of Fontana Community Facilities District No. 106 (Mountainview).

COUNCIL GOALS:
* To practice sound fiscal management by developing long-term funding and debt management plans.
DISCUSSION:
Lewis Investment Company/D.R. Horton have initiated the process to form a Community Facilities District for the purpose of financing the acquisition of certain public facilities that are eligible under the City financing goals and policies, namely sewer, storm drain, street improvements, landscaping and development impact fees.  The formation of the district will benefit the City by funding the infrastructure projects outside of the typical improvements that would be required for the project including a contribution for a project of community benefit.  CFD bond funding will allow for infrastructure to be built at one time reducing construction inconvenience for earlier residents and enhancing the overall community aesthetics.
 
The project consists of approximately 36.31 gross (20.82 net taxable) acres (156 residential lots), is located on the east side of Lytle Creek Road north of Summit Avenue.
 
The proposed Rate and Method of Apportionment (RMA) includes rates to pay for bonded indebtedness and maintenance of street lighting, landscaping and parks.  Initial assigned residential rates are proposed as follows:

 

Land
Use
Class

 

 

Residential Floor Area

 

Bond
Debt

 

 

Maint

 

 

Total

1 2,700 sf or greater $3,618 $590 $4,208
2 2,550 sf to less than 2,700 sf  $3,547 $590 $4,137
3 2,400 sf to less than 2,550 sf $3,501 $590 $4,091
4 2,250 sf to less than 2,400 sf $3,434 $590 $4,024
5 2,100 sf to less than 2,250 sf $3,367 $590 $3,957
6 1,950 sf to less than 2,100 sf $3,276 $590 $3,866
7 1,800 sf to less than 1,950 sf $3,185 $590 $3,775
8 1,650 sf to less than 1,800 sf $3,099 $590 $3,689
9 1,500 sf to less than 1,650 sf $3,013 $590 $3,603
10 Less than 1,500 sf $2,984 $590 $3,574

 

 

Sales prices for the homes have been estimated at $506,500 to $595,990.  The proposed rates have been established to provide a total tax rate of less than 1.95% of the home value per City Policy.
 
The proposed rates for bonded indebtedness will support $7.3 million of bonds, providing funds to finance $6.2 million of facilities and/or fees.  The proposed annual rate for maintenance of $590 per unit will be sufficient to fund the annual maintenance costs for street lighting, landscaping and parks within and surrounding the area of the CFD.  The rate also includes the maintenance costs related to the water quality system required by the State of California.  The maximum annual tax rate for maintenance have been set at $830 per unit with a 2% escalator per City Policy.
 
This action represents the first step in the process to establish the new district.  Adoption of the proposed resolutions will set the public hearing for July 13, 2021.  The levy of the proposed special taxes will be subject to the approval of the qualified electors of the new Community Facilities District at a special election.
 
The recommended action complies with the City Council's debt management objectives.
 
FISCAL IMPACT:
Most of the issuance costs are contingent upon the sale of the bonds and will be paid from proceeds.  The developer has deposited $60,000 with the City to pay for appraisal and miscellaneous costs that are non-contingent.
 
Annual debt service and maintenance costs will be paid from special taxes levied on the future homeowners within the district.
 
MOTION:
Approve staff recommendation.
SUBMITTED BY: REVIEWED BY:
APPROVED BY:
ATTACHMENTS:
Description: Type:
Resolution of Intent Resolution
Resolution to Incur Bonded Indebtedness Resolution
Boundary Map Backup Material
ITEM: CC-E