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    17.    
City Council Regular
Meeting Date: 11/10/2020  

SUBJECT:
ANNUAL REPORTS AND RESOLUTIONS SETTING SPECIAL TAX FOR 2021 FOR COMMUNITY FACILITIES DISTRICTS NO. 1, 2, 4, 5, 6, 8, 9, AND 10
 
RECOMMENDATION:
  1. Receive and file the annual reports for Community Facilities Districts No. 1, 2, 4, 5, 6, 8, 9, and 10 (Exhibit A), pursuant to Government Code Section 53411. 
     
  2. Adopt the following Resolutions entitled:
     
    1. A RESOLUTION OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF COMMUNITY FACILITIES DISTRICT NO. 1, ESTABLISHING THE ANNUAL SPECIAL TAX; 
       
    2. A RESOLUTION OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF COMMUNITY FACILITIES DISTRICT NO. 2, ESTABLISHING THE ANNUAL SPECIAL TAX;
       
    3. A RESOLUTION OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF COMMUNITY FACILITIES DISTRICT NO. 4, ESTABLISHING THE ANNUAL SPECIAL TAX; 
       
    4. A RESOLUTION OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF COMMUNITY FACILITIES DISTRICT NO. 5, ESTABLISHING THE ANNUAL SPECIAL TAX; 
       
    5. A RESOLUTION OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF COMMUNITY FACILITIES DISTRICT NO. 6, ESTABLISHING THE ANNUAL SPECIAL TAX;  
       
    6. A RESOLUTION OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF COMMUNITY FACILITIES DISTRICT NO. 8, ESTABLISHING THE ANNUAL SPECIAL TAX; 
       
    7. A RESOLUTION OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF COMMUNITY FACILITIES DISTRICT NO. 9, ESTABLISHING THE ANNUAL SPECIAL TAX; 
       
    8. A RESOLUTION OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF COMMUNITY FACILITIES DISTRICT NO. 10 (FAIRFIELD RANCH), ESTABLISHING THE ANNUAL SPECIAL TAX 
       
BACKGROUND/ANALYSIS:
Annually, in accordance with California Government Code Section 53411, the City’s Finance Director must file a report with the City Council which identifies the funds collected and expended for each of the City’s Community Facilities Districts (CFDs). 
 
In addition, annually the City Council adopts a resolution establishing each CFD's maximum tax rate for the next calendar year and fiscal year.  The CFDs were formed to finance certain infrastructure and public facilities in the development of the Chino Hills areas.  The CFDs within Chino Hills and their proposed tax rates for the 2021 calendar year and 2021-22 fiscal year are as follows:
  Tax "A"1    Tax "B"2 Tax "C"3
CFD No. 1     Rolling Ridge $5,399.80   $636.44 N/A
CFD No. 2     Los Ranchos $5,399.80   $636.44 N/A
CFD No. 4     The Oaks $5,399.80   $636.44 N/A
CFD No. 5     Soquel/Rincon/Woodview $5,399.80   $636.44 N/A
CFD No. 6     Carbon Canyon $5,399.80   $636.44 N/A
CFD No. 8     Butterfield N/A4   $636.44 N/A
CFD No. 9     Rincon $5,399.80   $636.44 (By
Agreement)
 
                        Special Tax
    Residential 
$ per unit    
Non-Residential
$ per acre   
CFD No. 105 Fairfield Ranch    
  Zone 1 $1,506.57 to $2,625.13 N/A
  Zone 2 $1,779.39 to $2,766.09 N/A

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Tax “A” is a pass through to the Chino Valley Unified School District for school development purposes that is collected at the building permit stage.

Tax “B” is a per residential dwelling unit charge, or per equivalent dwelling unit, levied for CFD debt service and infrastructure improvements collected on an annual basis beginning with initial occupancy for a maximum of 25 years.

Tax “C” is a development financing mechanism “unique” to CFD No. 9.

For CFD No. 8, Chino Valley Unified School District and the developer handled school development by a separate agreement, negating the need for Tax “A” within this CFD.

Special Taxes for CFD No. 10 Residential Properties are assessed based on building square footage.  The Special Tax is levied to fully satisfy the Zone 1 Special Tax Requirement and Zone 2 Special Tax Requirement, but in no event shall it be levied after Fiscal Year 2038-39.
___________________________________
 
The formation documents for CFDs 1, 2, 4, 5, 6, and 9 provide for:
  • An annual escalation in Tax “A” of three percent, effective January 1 each year.  
  • An annual escalation in Tax “B” of two percent, effective January 1 each year. 
The formation documents for CFD 10 provide for an escalation in the Special Tax of two percent on July 1 each year.  CFD 10 does not levy at the maximum rate, but levies only for the debt service on bonds and administrative costs.
The escalation factor for Tax “A”, which is a one-time tax payable when a building permit is issued, can be implemented as of January 1 each year, and has been reflected in the proposed resolutions to increase on January 1, 2021.  However, the escalation factor for Tax “B” cannot be implemented until July 1 each year because the January 1 effective date falls during a tax year for which Tax “B” has already been levied. Therefore, the escalation factor for Tax “B” and for the CFD 10 Special Tax will be implemented as of July 1, 2021 (affecting tax year 2021-22 tax rates) and is reflected in the proposed resolutions.
ENVIRONMENTAL (CEQA) REVIEW:
This proposed action is exempt from review under the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.), because it does not involve any commitment to a specific project which could result in a potentially significant physical impact on the environment; and, constitutes an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. Accordingly, this action does not constitute a "project" that requires environmental review (see specifically 14 CCR § 15378(b)(4-5)).
FISCAL IMPACT:
Approval of this item will provide the necessary funds to insure adequate debt service funding, construction, and acquisition of needed public facilities.  All assessments received by the CFDs are deposited in accounts restricted in use for CFD purposes.
REVIEWED BY OTHERS:
This agenda item has been reviewed by the City's bond counsel, Norton Rose Fulbright; the City's consultant for special district administration services, Willdan Financial Services; and by the City's financial advisor, Harrell & Company Advisors.
Attachments
Exhibit A - Annual Report
Resolution - CFD No. 1
Resolution - CFD No. 2
Resolution - CFD No. 4
Resolution - CFD No. 5
Resolution - CFD No. 6
Resolution - CFD No. 8
Resolution - CFD No. 9
Resolution - CFD No. 10

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