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    14.    
City Council Regular
Meeting Date: 01/14/2020  

SUBJECT:
WRITE-OFF OF UNCOLLECTIBLE SPECIAL TAXES
RECOMMENDATION:
Authorize the Finance Director to direct Willdan Financial Services, the City's special district administrator, to write off $23,431.47 in uncollectible Community Facilities District No. 1 special taxes, penalties and interest incurred from December 10, 1999, through      September 3, 2019.
BACKGROUND/ANALYSIS:
Willdan Financial Services (Willdan), the City's special district administrator, receives payment information from San Bernardino County (County) approximately three times a year. This information is then provided to the Finance Department with reports detailing out the delinquent parcels in each special district. The Finance Department, with assistance from Willdan, will send reminder letters or reach out to property owners with significant delinquent balances. In the past two years, staff has worked to have the large delinquencies paid off in full to avoid the costly foreclosure process. 
 
The focus of the most recent report was special taxes that are not on the County roll because they were hand billed. These parcels listed in Attachment No. 1 were hand billed their first year due to a water connection data delay or they were previously owned by a governmental agency. In an attempt to collect, City staff sent out invoices to the property addresses. Many of the property owners contacted City staff asking for a waiver because they were not the property owner at the time of the hand bill. 
 
Since the Community Facilities District No. 1 bonds were defeased on December 12, 2019, (moneys irrevocably escrowed to pay off bonds in March 2020) the covenant to foreclose for the benefit of bond owners is gone and the City has the option to write off these stale delinquencies. It seems unfair to hold subsequent purchasers to these delinquent amounts when they had no notice via foreclosure action or recorded delinquency. Bond Counsel has recommended we ask City Council for authorization to write off the delinquent special taxes and remove them from the delinquency listing. 
ENVIRONMENTAL (CEQA) REVIEW:
This recommended action is exempt from  review under  the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA regulations (14 California Code of Regulations ("CCR") §§ 15000, et seq.) because this action involves government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment and constitute an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. Accordingly, the recommended action does not constitute a "project" that requires environmental review (see specifically 14 CCR § 15378(b)(4-5)).  
FISCAL IMPACT:
The proposed write-off of the uncollectible special taxes will have no effect on fund balance because revenue is recorded when collected and the year-end accruals are based on amounts actually receipted within 60 days of the fiscal year end. No delinquent collections have been included in any projection of amounts available in CFD No. 1 for capital projects.
REVIEWED BY OTHERS:
This agenda item has been reviewed by the City’s bond counsel, Norton Rose Fulbright; the City’s special district administrator, Willdan Financial Services; and by the City's financial advisor, Harrell & Company Advisors.
Attachments
Attachment No. 1 - Uncollectible CFD No. 1 Special Taxes

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