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APPROVE A RESOLUTION AUTHORIZING EXECUTION OF A JOINT COMMUNITY FACILITIES AGREEMENT WITH THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY RELATED TO THE LIGURIAN VILLAGE PROJECT
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RECOMMENDATION
It is recommended City Council adopt a resolution to:
1. Authorize and approve the use of the Bond Opportunities for Land Development Program to finance improvements related to the Ligurian Village project.
2. Authorize the City Manager, or designee, to enter into the Joint Community Facilities Agreement with the California Municipal Finance Authority.
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Summary
Approval of the Joint Community Facilities Agreement (“JCFA”) with the California Municipal Finance Authority (“CMFA”) would allow the developer of the Ligurian Village project to use land-secured bond financing to pay for City sewer improvements.
DISCUSSION
Background
The CMFA is a joint exercise of powers authority, the members of which include numerous cities, counties and other local agencies in the State, including the City. The CMFA has established its Bond Opportunities for Land Development Program (the “BOLD Program”) to allow the financing through the levy of special taxes under the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”) of certain public facilities, development impact fees and/or mitigation payments that finance public facilities.
LGI Homes plans to construct 236 single-family detached residential units as part of its “Ligurian Village” development project (the “Project”), which is located within San Joaquin County, but will receive sewer service from the City, requiring the payment of development impact fees paying for sewer facilities and/or construction of sewer facilities, in each case, to be owned and operated by the City.
LGI Homes has requested the CMFA form a community facilities district (“CFD”) through the BOLD Program to finance eligible public facilities, particularly County public facilities. LGI Homes has also requested that the City enter into the JCFA with CMFA to allow the CMFA to also finance City sewer improvements through the CFD.
If the CFD is formed, a special tax would be levied only on the property within the CFD (i.e., within the Project) to pay for special tax bonds issued by the CMFA that would pay for authorized improvements. The City will not be responsible for the conduct of any proceedings under the Act for the formation of the CFD, the levy or collection of special taxes for the CFD or any required remedial action in the case of delinquencies in any special tax payments, or the issuance, sale or administration of any bonds issued in connection with the BOLD Program.
FINANCIAL SUMMARY
There is no cost for the City to execute the JCFA and authorize the financing of City sewer fees and facilities for the Project. CMFA would pay for the costs of application processing, bond financing and managing the ongoing special tax administration for the CFD, including submitting the annual special tax levy. CMFA recovers its cost through special taxes levied on property within the CFD. Any additional administrative costs that may be incurred by the City as a result of executing the JCFA or participating in the BOLD Program can be submitted to CMFA for reimbursement in accordance with applicable law and so long as CFD funds are available.