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HomeMy WebLinkAboutReso 1995-17873 NOT APPROVED RESOLUTION NO. 17873 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING CHANGES TO COUNCIL POLICY NO. 505-02 ON ASSESSMENT DISTRICT PROCEEDINGS TO INCLUDE AN INCREASE IN THE ORIGINAL CHARGE AND OTHER MINOR CHANGES WHEREAS, in October, 1990, the City Council established an origination charge of one percent (1%) for use of developer initiated assessment district financing; and, WHEREAS, as part of the overall revenue plan for the City, a public hearing has been set for April 18, 1995 to consider increasing the origination charge applicable for use of assessment district financing; and, WHEREAS, in as much as staff is working on a proposal for use of this type of financing for one of the City's developers in the near future, it is appropriate to consider the origination charge at this time; and, WHEREAS, staff is also recommending other changes to the policy on assessment district financing. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby adopt changes to Council Policy No. 505-02 on assessment district proceedings to include an increase in the origination charge and other minor changes, attached hereto and incorporated herein by reference as if set forth in full. Presented by Approved as to fO'~rn by John P. Lippitt Bru~ceM.//2( ~~ Boogaa d Director of Public Works City Attorney Resolution No. 17873 Page 2 CITY OF CttULA VISTA SUBJECT: EARLY LIENING ASSESSMENT PROCEDURE POLICY EFFECTIVE AND ORIGINATION CHARGE POLICY NUMBER DATE PAGE 505-02 04-25-95 1 OF 4 ADOPTED BY: Resolution No. 17873 I DATED: 04-25-95 BACKGROUND The City Council adopted Ordinance No. 2397 CChula Vista Version of the 1913 Act") which modified the State version of the 1913 Act to permit the City to lien assessments against subject property prior to the completion of the infrastructure improvements ("Early Liening Procedure"). On October 9, 1990, the City Council, at a public hearing, authorized the imposition of a 1% Origination Charge imposed on all assessment district proceedings in which the City engages. On April 25, 1995, the City Council, at a public hearing authorized an increase to the Origination Charge. PURPOSE It is necessary to establish a policy to guide staff in implementing said Ordinance No. 2397, and the use of the Early Liening Procedure permitted therein. It is necessary to establish a policy to guide staff in imposing said Origination Charge recognizing that the origination charge is an acknowledgment of the City allowing the use of its bonding capability. POLICY RE: Use of Chula Vista Version of the 1913 Act. 1. Assessment districts financing should only be used to fmance the cost of "backbone" infrastructure. "Backbone" infrastructure, shall, for the purposes of this policy, mean infrastructure improvements that are of a general, overall benefit to the entire properties which are, or will be, the subject matter of the entire district. By way of example, such items shah include: A. Arterial and collector streets B. Transmission-type utility facilities It shah not include local property access roads within residential subdivisions, and shah not include distribution utility radiities such as water and sewer laterals and local distribution mains. 2. Deposit to cover estimate of staff costs. In any developer-initiated assessment district proceeding, the developer shah deposit with the City a sum of money ("Processing Deposit") which the Director of Public Works shall reasonably determine -' .........T ...............................IT Resolution No. 17873 Page 3 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: EARLY LIENING ASSESSMENT PROCEDURE POLICY EFFECTIVE AND ORIGINATION CHARGE POLICY NUMBER DATE PAGE 505-02 04-25-95 2 OF 4 ADOFrED BY: Resolution No. 17873 I DATED: 04-25-95 represents the approximate cost to which the City will be put, including all staff time, out-of-pocket expenses, overhead, consultant expenses, in processing the developer's application for special assessment district fmancing. RE: Use of the Early Lieninn Procedure. 1. When Early Liening Procedure is to be Used. Special Assessment District financing shah permit the use of the Early Liening Procedure in those cases where the backbone infrastructure would not otherwise be completed without such procedure prior to the time that the houses will be initially marketed. The purpose of this policy is to give full disclosure of all financing costs to the initial home-buyer prior to purchase of the property. 2. Contingency Permitted to be Financed. Since the assessments to benefitted land would be levied prior to the completion of construction, a contingency amount, not to exceed ten percent (10%) of the estimated costs of the unconstructed improvements may be allowed to be financed and made a part of the assessed amount. 3. Developer Agreement to Absorb Excess Costs. The developer must enter into an agreement which provides that, if the costs of the subject infrastructure improvements exceed the amount of the financing made available by the sale of bonds (including such contingency as may be permitted by this Policy), the Developer shah be responsible for, and shaH, absorb the excess costs. 4. Assessments to be Adjusted to Reflect Cost Savings. If the final project costs are less than the estimated cost plus contingency, the assessments shah be adjusted downward. The costs associated with adjusting assessments shah be borne by the Developer, and he shall enter into an agreement to this effect. 5. Payment for Improvements. Regardless of the use of the Early Liening Procedure, payment for from bond proceeds improvements under an Acquisition and Financing Agreement shah not be made until all improvements for a particular project, as determined by the Director of Public Works, are completed and accepted by the City, and the assessment engineer has certified the final cost thereof. Resolution No. 17873 Page 4 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: EARLY LIENING ASSESSMENT PROCEDURE POLICY EFFECTIVE AND ORIGINATION CHARGE POLICY NUMBER DATE PAGE 505-02 04-25-95 3 OF 4 ADOPTED BY: Resolution No. 17873 ] DATED: 04-25-95 A project shall be deemed as all improvements within a particular street or easement including street improvements, sewer, drainage, and utihties. If more than one project is being financed by one disuict, as deemed and approved by the Director of Public Works, then partial release of funds can occur, as each project is completed. Any deviation of project definition shah be approved by the Director of Public Works. For example, payment for a sewer in a future road right-of-way, which road is not financed by the subject district, would probably be approved by the Director. RE: Imposition of Origination Char~es. 1. The Originalion Charge imposed by Resolution No. 15897 as modified by Resolution Nos. 16367 and 17873 shah be charged when special assessment districts are formed at the request of private Developers. The Charge shah be as follows: INITIAL C. APrrAL CItARGE TYPE OF DISTRICT OIIFIdlY I~IMBURSFJ~IF.J~F BCItF~DIILR 1% of estimated Acquisition By Developer. Single payment from bond proceeds to bond sale Assessments to be developer upon completion of all paid in fall prior to improvements in the district; or multiple final map approval of payments (4 max,) from bond proceeds final lot configuration to developer based upon completion of pursuant to a develop- each phase of the improvements in the ment agreement or final district such as all facaities within map condition, a particular street. 1-1/29/6 of estimated Acquisition By Developer. Bond Single payment from bond proceeds to payoff over normal developer upon completion of all 20-25 year period improvements to the district. through annual tax collection. 2~6 of estimated Acquisition By Developer. Bond Multiple !xtyments (4 max.) from bond bond sale payoff over normal proceeds to developer based upon 20-25 year period completion of each phase of the through annual tax district such as all facilities collection. within a particular street. 3% of estimated Construction By City through bond No payment is made to developer bond sale proceeds. as construction funds are initially provided by the City through sale of bonds. Said Origination Charge shall be based on the estimated bond sale amount outlined in the Find Engineer's Report presented and approved at the time of the public hearing. ............. 7 ......................................! Resolution No. 17873 Page 5 COUNCIL POLICY ¢,;l'lY OF CHULA VISTA SUBJECT: EARLY LIENING ASSESSMENT PROCEDURE POLICY EFFECTIVE AND OPdGINATION CHARGE POLICY NUMBER DATE PAGE 505-02 04-25-95 4 OF 4 ADOPTED BY: Resolution No. 17873 I DATED: 04-25-95 2. Said Origination Charge shah be paid not later than the date set for the award for sale of bonds. If the special district is not formed and bonds are not sold through no fault of the developer/applicant, that portion of the Origination Charge and Processing Deposit beyond unreimbursed costs to the City incurred in connection with the proceedings shah be returned. 3. The Origination Charge shah not be financed out of the proceeds of any assessment district bonds subsequently issued for the public facilities. The charge paid to the City shah not be included in the assessment district costs except as specified in Paragraph 2 of the Use of Early Liening Procedure section of this policy. 4. The proceeds from all Origination Charges shall be deposited into the General Fund of the City. ORIGINAL RESOLUTION ADOPTING THIS POLICY WAS: 15897 APPROVED 10-09-90. .~ '- AMENDMENT TO ORIGINAL RESOLUTION: 16367 APPROVED 10-08-91. ........... ~r ......................................... Resolution No. 17873 Page 6 NOT PASSED, APPROVED and ADOPTED by the City Council of the City of Chula Vista, California, this 25th day of April, 1995, by the following vote: YES: Councilmembers: Moot, Padilia, Rindone, Horton NOES: Councilmembers: None ABSENT: Councilmembers: None ABSTAIN: Councilmembers: None Shirley Horton, Mayor ATTEST: Beverly A. Authelet, City Clerk