HomeMy WebLinkAboutAgenda Packet 1998/07/28
Tuesday, July 28, 1998
6:00 p.m.
". '. . .
em d~ar. IInder penalty of perjury that I am
Of:::Y:fd t~ ~~: CClity of Chura Vista in the
thl .y ark and that I posted
theS :::'~da/No~ce on .th.e Bulletin Board at
DATED ~~BU"d,"g and Ci~ Hall on
\ / SIGNED
R ular Mee in f h Cit 0 h Ista
Council Chambers
Public Services Building
CALL TO ORDER
1. ROLL CALL: Councilmembers Moot_, Padilla_, Rindone_, Salas_, and Mayor ROrlolt.-.
2. PLEDGE OF ALLEGIANCE TO THE FLAG. MOMENT OF SILENCE
3. APPROVAL OF MINUTES: None submitted.
4. SPECIAL ORDERS OF THE DAY:
A. Oath of Office: Economic Development Commission - Chris Bitterlin; and International
Friendship Commission - Michie Crockett.
B. The American Red Cross Certificate of Merit, signed by President Clinton, will be presented by
Gabriela VanderMolen, Director of South Bay Service Center, to Fernando Briseno.
C. Proclamation commending Bonita Valley 12U All-Stars upon winning the California State
Championship. The proclamation will be presented by Mayor Horton to David Marin, Team
Manager.
D. Update on Port District Matters by David Malcolm, Chair, Port Commission.
CONSENT CALENDAR
(1lems 5 Ihrough 16)
The staff recommendations regarding the following items listed under the Consent Calendar will be enacted by
the Council by one motion without discussion unless a Councilmember, a member of the public, or City staff
requests that the item be pulled for discussion. If you wish to speak on one of these items, please fill out a
"Request to Speak Form" available in the labby and submit it to the City Clerk prior to the meeting. Items pulled
from the Consent Calendar will be discussed after Board and Commission Recommendations and Action Items.
Items pulled by the public will be the first items of business.
5. WRITTEN COMMUNICATIONS:
A. Letter from the City Attorney stating that to the best of bis knowledge from observance of
actions taken in Closed Session on July 14, 1998, tbat tbere were no reportable actions wbicb
are required under tbe Brown Act to be reported. It is recommended that the letter be
received and filed.
B. Resignation from the International Friendship Commission - Daniel Wood. It is
recommended that the resignation be accepted with regret and the City Clerk be directed to post
immediately according to the Maddy Act in the Clerk's Office and the Public Library.
C. Letter of resignation from the Youth Commission - James J, Alfaro, [t is recommended that
the resignation be accepted with regret and the City Clerk be directed to post immediately
according to the Maddy Act in the Clerk's Office and the Public Library.
D. Letter from Arlen Shire requesting that the Library bours be changed, It is recommended
that the request be referred back to staff for review as part of the preparation of the fiscal year
1999-2000 budget.
Agenda
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July 28, 1998
E. Letter from Robert L. McCauley, Chair, Veterans Advisory Commission, requesting that
the main entrance street that leads to the Chula Vista Veterans Home he designated and
named as "Veterans Home Blvd." 11 is recommended that tbis request be referred to the
Planning Department for report back to Council. .
6. ORDINANCE 2739-B Al>DING SECTIONS 5.40.1150 AND 5.40.060 TO THE MUNICIPAL CODE
RELATING TO THE PROHIBITION OF SOLICITING AND PEDDLING IN CERTAIN AREAS
AND pt{OHIBITING THE SELLING OF TICKETS OF Al>MISSION TO PLACES OF PUBLIC
ASSEMBLAGE IN PUBLIC PLACES AND PLACES OPEN TO THE PUBLIC (second rea~ and
adoDtionl - With COuncil's recent approval for the Universal Amphitheater to conduct business within the
City, an ordinance is required to prohibit any unauthorized person(s) from selling tickets for admission to
amphitheater events, or any otber future places of public amusement or entertainment whicb may want to
conduct business for profit in tbe City. An ordinance is also required to probibittbe peddling or vending
of goods, merchandise or memorabilia in certain areas, specifically in proximity to tbe amphitheater, or
other sites in which venues and/or events are located. Staff recommends Council place the ordinance on
second reading and adoption. (Chief of Police)
7. RESOLUTION 19097 APPROVING AN AGREEMENT WITH THE CITY OF NATIONAL CITY
FOR USE OF THE CHULA VISTA ANIMAL SHELTER, AND AUTHORIZING THE MAYOR TO
EXECUTE SAID AGREEMENT - The City bas provided animal sbeltering services to National City
since 1968. Cbula Vista bid on tbis new contract and National City accepted. The cost to National City
is $43,224 a year whicb reflects National City's sbare of staff costs, direct supplies, and service costs
(veterinary services, medical/lab supplies, food, animal disposal costs and utilities). If costs increase tben
tbe contract may be adjusted to reflect National City's sbare in tbe second and third year. Staff
recommends approval of the resolution. (Chief of Police)
8. RESOLUTION 19098 ADOPTING THE MEMORANDUM OF UNDERSTANDING (MOU)
PROVISIONS WITH THE CHULA VISTA POLICE OFFICERS ASSOCIATION (CVPOA) ,
AMENDING THE FISCAL YEAR 1998/99 BUDGET AND APPROPRIATING FUNDS TO COVER
LABOR COST INCREASES AS REFLECTED IN EXHIBIT A - Pursuant to Council direction, staff
bas reacbed agreement (pending City Council adoption) on a five year MOU witb tbe CVPOA. A formal
MOU will be brougbt to Council for final approval at a later date. Staff recommends approval of tbe
resolution. (Director of Human Resources and Director of Finance) 4/5th's vote required.
9. RESOLUTION 19099 AUTHORIZING THE MAYOR TO EXECUTE THE ECONOMIC
DEVELOPMENT INITIATIVE APPLICATION TO HOUSING AND URBAN DEVELOPMENT
(BUD) FOR A $100,000 GRANT TO FUND A LOAN LOSS RESERVE FOR THE PROPOSED
SECTION 108 CHULA VISTA SMALL BUSINESS REVOLVING LOAN FUND PROGRAM -
Council previously approved biring tbe consulting firm of Claggett Wolfe (CW) to assist staff to develop
a HUD Section 108 Small Business Revolving Loan Program. In February 1998, Council autborized
submittal of a Section 108 application to HUD to "reserve" $1 million in City borrowing capacity to fund
tbe proposed Small Business Revolving Loan Fund (RLF). The application is currently being processed;
staff anticipates receiving approval by September 1998. CW and staff are currently preparing tbe City's
Section 108 RLF Program Guidelines for future submission to Council. Council also previously autborized
CW to prepare an Economic Development Initiative grant application in tbe event tbat HUD issued a Notice
of Funding Availability (NOFA). A NOFA bas now been issued and CW bas prepared an application
requesting $100,000 for a Loan Loss Reserve fund to supporttbe new Small Business Loan program. Staff
recommends approval of tbe resolution. (Director of Community Development)
10. RESOLUTION 19100 WAIVING THE FORMAL BIDDING PROCESS AS IMPRACTICAL AND
A W AImING PURCHASE AGREEMENT TO BLUE SKY REMEDIATION SERVICES, INC. FOR
TV INSPECTION OF STORM DRAINS - The beavy rains during last winter accelerated tbe failure of
three Corrugated Metal Pipe (CMP) storm drains. Tbese failures were at Malta A venue, Oleander Avenue,
and Corte Maria Avenue. Since the City bas approximately 110,000 lineal feet of CMP storm drains 15
years or older, the fiscal year 1998/99 budget contains $85,000 for immediate contractor inspection of these
storm drains. Section 2.56.070 of tbe Municipal Code requires tbat formal bids be obtained for purcbases
in excess of $25,000 unless Council finds tbat obtaining tbe bids is impractical. Formal bidding requires
more time tban obtaining informal bids as staff bas done in this case. Since staff believes tbat tbe
inspection of tbe storm drains needs to be done as soon as possible so tbat extremely serious problems can
be identified, staff believes tbat it is impractical to take tbe time to go througb the formal bidding process.
Staff recommends approval of tbe resolution. (Director of Public Works and Director of Finance)
Agenda
11.
12.
13.
14.A.
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July 28, 1998
RES.3brIOl'lI9101 W AIVJNG THE FORMAL BIDDING PROCESS AS IMPRACTICAL AND
AW. ING PURCHASE AGREEMENT TO PEARPOINT, INC. FOR PURCHASE OF TV
INSPECTION EQUIPMENT AND SOFTWARE FOR STORM DRAINS AND SEWERS AND
APPROPRIATING ADDITIONAL FUNDS - The heavy rains during last winter accelerated the failure
of three Corrugated Metal Pipe (CMP) storm drains. These failures were at Malta Avenue, Oleander
Avenue, and Corte Maria Avenue. Since the City has approximately 110,000 lineal feel of CMP storm
drains 15 years or older, the fiscal year 1998/99 budget contains $85,000 for immediate contractor
inspection of these storm drains. Section 2.56.070 of the Municipal Code requires that formal bids be
obtained for purchases in excess of $25,000 unless Council finds that obtaining the bids is impractical.
Since Pearpoint is the manufacturer of our current sewer TV inspection system, it is impractical to entertain
bids from other manufacturers whose equipment would not be compatible with the City's current Pearpoint
system. Staff has negotiated with Pearpoint to obtain full trade in value for our current inspection
camera/tractor and competitive pricing on the new equipment. Staff recommends approval of the
resolution. (Director of Public Works and Director of Finance) 4/5th's vote required.
RESOLUTION 19102 ACCEPTING BIDS AND AWARDING CONTRACT FOR "K" STREET
SEWER EXTENSION FROM DATE A VENUE TO 150 FEET EASTERLY IN THE CITY (SW-211)"
Sealed bids were received on June 17, 1998. The work includes trenching, trench shorting, installation
of 8-inch PVC sewer pipe, installation of sewer laterals, traffic control preservation and restoration of
property, and other miscellaneous work specified in the contract documents. Staff recommends approval
of the resolution. (Director of Public Works)
RESOLUTION 19103 APPROVING AN AMENDMENT TO THE "STATEMENT OF GOALS AND
POLICIES REGARDING THE EST ABLISHMENT OF COMMUNITY FACILITIES DISTRICTS" -
On January 13, 1998, Council approved the "Statement of goals and policies regarding the establishment
of Community Facilities Districts." Said document establishes that the aggregate of all taxes and
assessments appearing on the property tax bill of a residential parcel shall not exceed 2 % of the initial sales
price ("maximum tax "). The policy also includes all special taxes levied by Community Facilities Districts
in the "maximum tax" calculation. Tonight's action will amend the policy to only include special taxes
levied to fund the construction or acquisition of public infrastructure in the "maximum tax" calculation.
Special taxes levied to fund the perpetual operation of open space districts will not be considered. In
addition, staff is recommending to lower the "maximum tax" percentage for residential parcels from 2%
to 1.9% of the initial sale price for those developments proposing the formation of open space districts.
Staff recommends approval of the resolution. (Director of Public Works)
RESOLUTION 19104 MAKING APPOINTMENTS IN PROPOSED COMMUNITY FACILITIES
DISTRICT NUMBER 97-1 (OPEN SPACE MAINTENANCE DISTRICT [OTAY RANCH - SPA
ONE, VILLAGES 1 & 5]) - The Otay Ranch Company and McMillin Otay Ranch have requested the City
conduct proceedings for the formation of Community Facilities District Number 97-1. The conditions of
approval of the tentative map require that the district be established prior to approval of the first final "B"
map. This district will fund the perpetual operation and maintenance of open space slopes, pedestrian
bridges, drainage channels, detention basins, medians and parkways of Otay Ranch SPA One. The City
has retained the services of Berryman & Henigar as special lax consultant and Brown, Diven, Hessle &
Brewer as legal counsel to provide assistance during the proceedings. Tonight's actions will initiate the
formal proceedings leading to the establishment of Community Facilities District Number 97-1. Staff
recommends approval of the resolutions. (Director of Public Works)
B.
RESOLUTION 19105 ADOPTING A BOUNDARY MAP SHOWING THE BOUNDARIES OF THE
TERRITORY PROPOSED FOR THE INCLUSION IN PROPOSED COMMUNlTY FACILITIES
DISTRICT NUMBER 97-1 (OPEN SPACE MAINTENANCE DISTRICT [OTAY RANCH - SPA
ONE, VILLAGES 1 & 5])
RESOLUTION 19106 DECLARING ITS INTENTION TO ESTABLISH COMMUNITY
FACILITIES DISTRICT NUMBER 97-1 (OPEN SPACE MAINTENANCE DISTRICT [OTAY
RANCH - SPA ONE, VILLAGES 1 & 5]) AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX
THEREIN TO FINANCE CERTAIN SERVICES
RESOLUTION 19107 ORDERING AND DIRECTING THE PREPARATION OF A "REPORT"
FOR PROPOSED COMMUNITY FACILITIES DISTRICT NUMBER 97-1 (OPEN SPACE
MAINTENANCE DISTRICT [OTAY RANCH - SPA ONE, VILLAGES 1 & 5])
C.
D.
Agenda
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July 28, 1998
IS.A. RESOLUTION 19108 MAKlNG APPOINTMENTS IN PROPOSED COMMUNITY FACILITIES
DISTRICT NUMBER 97-2 (PRESERVE MAINTENANCE DISTRICT) - The Otay Ranch Company
and McMillin Otay Ranch have requested the City to conduct proceedings for the formation of Community
Facilities District Number 97-2. The conditions of approval of the tentative map require that the district
be established prior to approval of the first final "B" map. This district will fund the perpetual operation,
maintenance and monitoring of the Otay Ranch Habitat Preserve. The City has retained the services of
Berryman & Henigar as special tax consultant and Brown, Diven, Hessle & Brewer as legal counsel to
provide assistance during the proceedings. Tonight's action will initiate tbe formal proceedings leading
to the establishment of Community Facilities District Number 97-2. Staff recommends approval of the
resolutions. (Director of Public Works)
B, RESOLUTION 19109 ADOPTING A BOUNDARY MAP SHOWING THE BOUNDARIES OF THE
TERRITORY PROPOSED FOR THE INCLUSION IN PROPOSED COMMUNITY FACILITIES
DISTRICT NUMBER 97-2 (PRESERVE MAINTENANCE DISTRICT)
C. RESOLUTION 19110 DECLARING ITS INTENTION TO ESTABLISH COMMUNITY
FACILITIES DISTRICT NUMBER 97-2 (pRESERVE MAINTENANCE DISTRICT) AND TO
AUTHORIZE THE LEVY OF A SPECIAL TAX THEREIN TO FINANCE CERTAIN SERVICES
D. RESOLUTION 19111 ORDERING AND DIRECTING THE PREPARATION OF A "REPORT"
FOR PROPOSED COMMUNITY FACILITIES DISTRICT NUMBER 97-2 (PRESERVE
MAINTENANCE DISTRICT)
16.A. RESOLUTION 19112 MAKlNG APPOINTMENTS IN PROPOSED COMMUNITY FACILITIES
DISTRICT NUMBER 98-1 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [OTAY
PROJECT, LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2, 2 WEST, 6, 7 & PLANNING AREA 12])
The Otay Project Company and McMillin Otay Ranch, Inc. have requested the City to conduct proceedings
for the formation of Community Facilities Districts (CFD) Number 98-1 and 98-2. These districts will
fund the operation and maintenance of certain improvements that will be constructed during development
of Otay Ranch SPA One, but provide henefits to areas outside of SPA One. There is a companion item
in tonight's agenda related with the formation of CFD Number 97-1, which would provide for the
maintenance of landscaping improvements within SPA One. The districts herein proposed are termed
interim due to the intention to modify these districts to include maintenance of final landscaping for those
areas. The City has retained the services of Berryman & Henigar as special tax consultant and Brown,
Diven, Hessle & Brewer as legal counsel to provide assistance during the proceedings. Tonight's action
will initiate the formal proceedings leading to the establishment of Community Facilities District Number
98-1 and 98-2. Staff recommends approval of the resolutions. (Director of Public Works)
B. RESOLUTION 19113 ADOPTING A BOUNDARY MAP SHOWING THE BOUNDARIES OF THE
TERRITORY PROPOSED FOR INCLUSION IN PROPOSED COMMUNITY FACILITIES
DISTRICT NUMBER 98-1 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [OTAY
PROJECT, LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2, 2 WEST, 6, 7 & PLANNING AREA 12])
C. RESOLUTION 19114 DECLARING THE INTENTION TO ESTABLISH COMMUNITY
FACILITIES DISTRICT NUMBER 98-1 (INTERIM OPEN SPACE MAINTENANCE DISTRICT
[OTAY PROJECT, LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2, 2 WEST, 6, 7 & PLANNING
ARE 12]) AND TO AUTHORIZE LEVY OF A SPECIAL TAX THEREIN TO FINANCE CERTAIN
SERVICES
D. RESOLUTION 19115 ORDERING AND DIRECTING THE PREPARATION OF A "REPORT"
FOR PROPOSED COMMUNITY FACILITIES DISTRICT NUMBER 98-1 (INTERIM OPEN
SPACE MAINTENANCE DISTRICT [OTAY PROJECT, LLC-OVP-SPA ONE, VILLAGES 1
WEST, 2, 2 WEST, 6, 7 & PLANNING AREA 12])
Agenda
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July 28, 1998
E. RESOLUTION 19116 MAKING AP~INTMENTS IN PROPOSED COMMUNITy FACILITffiS
DISTRICT NUMBER 98-2 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [MCMILLIN _
D.A. AMERICA, OTAY - SPA TWO, VILLAGES 6 & 7])
F. RE~9LUTION 19117 ADOPTING A BOUNDARY MAP SHOWING THE BOUNDAIUli:S OF THE
TERlUTORY PROPOSED FOR INCLUSION IN PROPOSED COMMUNITY FACILITIES
DiSTRICT NUMBER 98-2 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [MCMiLLIN -
D.A. AMERICAN, OTAY - SPA TWO, VILLAGES 6 & 7])
G. RESOLUTION 19118 DECLARING THE INTENTION TO ESTABLISH COMMUNITY
FACILITffiS DISTRICT NUMBER 98-2 (INTERIM OPEN SPACE MAINTENANCE DISTRICT
[MCMILLIN - D.A. AMERICAN, OTA Y - SPA TWO, VILLAGES 6 & 7]) AND TO AUTHORIZE
LEVY OF A SPECIAL TAX THEREIN TO FINANCE CERTAIN SERVICES
H. RESOLVTION 19119 ORDERING AND DIRECTING THE PREPARATION OF A "REPORT"
FOR PROPOSED COMMUNITY FACILITffiS DISTRICT NUMBER 98-2 (INTERIM OPEN
SPACE MAINTENANCE DISTRICT [MCMILLIN - D.A. AMERICA, OTAY - SPA TWO,
VILLAGES 6 & 7])
· · · END OF CONSENT CALENDAR · · ·
ADJOURNMENT TO REGULAR AND/OR JOINT MEETING OF THE REDEVELOPMENT AGENCY
ORAL COMMUNICATIONS
This is an opportunity for the general public to address the City Council on any subject motter within the
Council'sjurisdiction that is not an item on this agenda for public discussion. (State law, however, generally
prohibits the City Council from taking action on any issues not included on the posted agenda.) If you wish to
address the Council on such a subject, please complete the "Request to Speak Under Oral Communications
Form" available in the lobby and submit it to the City Clerk prior to the meeting. Those who wish to speak,
please give your name and address for record purposes and follow up action.
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
The following items have been advertised and/or posted as public hearings as required by law. If you wish to
speak to any item, please fill out the "Request to Speak Form" available in the lobby and submit it to the City
Clerk prior to the meeting.
17. PUBLIC HEARING TO CONSIDER PLACING DELINQUENT SEWER CHARGES ON THE
RESPECTIVE PROPERTY TAX BILLS FOR COLLECTION - Council shall consider placing
delinquent sewer charges on the respective property tax bills for collection at the time set for hearing
together with any objections or protests by interested parties. At the conclusion of the hearing, Council
shall either approve the account as submitted or as modified or corrected by Council. Council shall then
approve a resolution assessing such amounts as liens upon the respective parcels of land as they are shown
upon the last available assessment roll. The amounts shall be charged to the property owners on the next
regular tax bill. Staff recommends this Duhlic hearim! be continued to the meetinl! of AUl!ust 4. 1998.
(Director of Finance)
Agenda
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July 28, 1998
18. PUBLIC HEARING DECLARING THE INTENT TO INCREASE THE OPEN SPACE DISTRICT
NUMBER 10 ASSESSMENT ON THE BELLA NEVONA SUBDlVlSION - On May 26, 1998, Council
approved the proposal to: (1) subdivide a parcel consisting of 5.25 gross acres into 28 lots for the Bella
Nevona subdivision ranging in size from 5,000 square feet to 8,300 square feet; (2) amend the development
standards contained in the Ranchero Sectional Planning Area to allow a reduction in minimum lot sizes and
set hack requirements; (3) order the initiation of assessment ballot procedures applicable to the pateel for
which it is proposed that the Open Space District Numher 10 assessment will be increased; and (4) schednle
a puhlic hearing on the intent to. increase the Open Space District Nuntber 10 assessment on this
subdivisij>n. Staff recommeudllthis Dublic hearinll be continued to tl1~ meetioo of AUl!ust 4. 1998.
(Director of Public Works) Continued from the meeting of July 14, 1998.
19. PUBLIC HEARING DECLARING THE INTENT TO ESTABLISH COMMUNITY FACILlTffiS
DISTRICT NUMBER 98-3 (OPEN SPACE MAINTENANCE DISTRICT NUMBER 35 [SUNBOW
11]) PURSUANT TO THE PROVISIONS OF THE "MELLO-ROOS COMMUNITY FACILlTffiS
ACT OF 1982," FOR THE PURPOSE OF FINANCING CERTAIN PUBLIC SERVICES THROUGH
THE LEVY OF A SPECIAL TAX TO PAY FOR ALL OR A PORTION OF SUCH PUBLIC
SERVICES AND THE INTENT TO AUTHORIZE A SPECIAL TAX TO PAY FOR ALL OR A
PORTION OF SUCH PUBLIC SERVICES - The Ayres Land Company has requested the City to
conduct proceedings for the formation of Community Facilities District Number 98-3. This district will
fund the perpetual operation and maintenance of open space slopes, drainage channels, detention basins,
medians and parkways of Sunbow II. The City has retained the services of Dick Jacobs Associates as
special tax consultant and Brown, Diven, Hessel & Brewer as legal counsel to provide assistance during
the proceedings. Staff recommend. this Dublic hearinll be continued to the meet;"!! of AUl!nst 4. 1998.
(Director of Public Works)
20. PUBLIC HEARING TO AMEND ORDINANCE NUMBER 2579 (ESTABLISHING AN INTERIM
PRE-SR 125 DEVELOPMENT IMPACT FEE TO PA Y FOR TRANSPORT A TION FACILITffiS IN
THE CITY'S EASTERN TERRITORffiS) BY ALLOWING THE DIF TO MAKE LOANS FOR
TRANSPORT A TION OR ROAD PURPOSES - It is recommended that this item be tabled. (Director
of Public Works)
BOARD AND COMMISSION RECOMMENDATIONS
This is the time the City Council will consider items which have been forwarded to them for consideration by one
of the City's Boards, Commissions, and/or Committees.
None submitted.
ACTION ITEMS
The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by
the Council, staff, or members of the general public. The items will be considered individually by the Council
and staff recommendations may in certain cases be presented in the alternative. Those who wish to speak, please
fill out a "Request to Speak" f011ll available in the lobby and submit it to the City Clerk prior to the meeting.
None submitted.
Agenda
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July 28, 1998
ITEMS PULLED FROM THE CONSENT CI\LENPAR
This is the time the City Council wUl discuss items which have been removed from the Consent Calendar.
Agenda items puUed at the request of the public will be considered prior to those pulled by Councilmembers.
OTHER BUSINESS
21. CITY MANAGER'S REPORT(Sl
A. Scheduling of meetings.
22. MAYOR'S REPORT(Sl
A. Ratification of reappointments (terms will expire June 30, 2002):
Aging, Commission on - Anne H. Fabrick and William Lane;
Appeals and Advisors, Board of - Marshall Compton and M. Kevin O'Neill;
Charter Review Committee - Harriet Acton and John M. Dorso;
Cultural Arts Commission - Brent A. Curd and Thomas J. Erhardt;
Economic Development Commission - Martin Calvo (Mayor Nominate) and Christopher Lewis
(Realtors Nominate);
Ethics, Board of - Joanne E. Carson and Ricardo Gibert;
Housing Advisory Commission - Margaret J. Helton (At-Large) and Rosa L. Lopez-Gonzalez
(Lender);
Human Relations Commission - Maria Perman and Virgil Pina;
International Friendship. Commission - Paul Catanzaro and Anthony Ciotti, Sr.;
Library Board of Trustees - Eleanore Valdovinos;
Mobilehome Rent Review Commission - Jeanne Reynolds and Dr. Christine Smith;
Olay Valley Road Project Area Committee - Marco Polo Cortes (At-Large);
Parks and Recreation Commission - Catherine M. Radcliffe;
Planning Commission - Robert S. Thomas and John A. Willett;
Resource Conservation Commission - Robert Fisher;
Safety Commission - Carol Gove, John M. Liken and Cindy Miller;
Town Centre Project Area Committee - Donna L. Vignapiano;
Veterans Advisory Commission - Robert L. McCauley and William H. Poindexter; and
Youth Commission - Angela Kodicek (Chula Vista High School), Rickey Welch (Chula Vista High
School) and David E. Taboada (Hilltop High School). Continued from the meeting of July
14, 1998.
23. COUNCIL COMMENTS
Councilmember Salas
A. Ratification of appointment to the Economic Development Commission - Charles Moore (to fill
vacancy created by Commissioner Tuchscher, whose term expires on Juoe 30, 1999).
ADJOURNMENT
The meeting will adjourn to (a closed session and thence to) the regular City Council meeting 00 August 4, 1998
at 4:00 p.m. in the City Council Chambers.
A special meeting of the Redevelopment Agency will be held immediately following the City Council meeting.
Tuesday, July 28, 1998
5:30 p.m.
'" declar. ..nder penalty of perjury that' am
employed by the City of Chula Vista in the
Oftlce of the City Clerk and that I posted
this Agenda/Notice on the Bulletin Board at
the Public ~rv~; Building _~~ o~ ..
DATED. ~ '.!?rt ',r-SIGNED -----
Council Chambers
Public Services Building
City of Chula Vista City Council
CLOSED SESSION AGENDA
Effective April 1, 1994, there have been new amendments to the Brown Act. Unless the City Altorney, the City
Manager or the City Council states otherwise at this time, the Council will discuss and deliberate on the following
items of business which are permitted by law to be the subject of a closed session discussion, and which the
Council is advised should be discussed in closed session to best protect the interests of the City. The Council is
required by law to return to open session, issue any reports of final action taken in closed session, and the votes
taken. However, due to the typical length of time taken up by closed sessions, the videotaping will be terminated
at this point in order to save costs so that the Council's return from closed session, reports of final action taken,
and adjournment will not be videotaped. Nevertheless, the report of final action taken will be recorded in the
minutes which will be available in the City Clerk's Office.
1. CONFERENCE WITH LEGAL COUNSEL REGARDING:
1. Existing litigation pursuant to Government Code Section 54956.9
. In Re: Whitewater Canyon LLC, Case #98-08520-All.
2. Anticipated litigation pursuant to Government Code Section 54956.9
. Potential filing of significant litigation: One case.
CONFERENCE WITH LABOR NEGOTIATOR - Pursuant to Govermnent Code Section 54957.6
. Agency negotiator: David Rowlands or designee for CVEA, WCE, POA, IAFF, Executive
Management, Mid-Management, and Unrepresented.
Employee organization: Chula Vista Employees Association (CVEA) and Western Council of
Engineers (WCE) , Police Officers Association (POA) and International Association of Fire
Fighters (IAFF).
Unrepresented employee: Executive Management, Mid-Management, and Unrepresented.
2. REPORT OF ACTIONS TAKEN IN CLOSED SESSION
July 23, 1998
TO:
The Honorable Mayor and City Council ~
David D. Rowlands, Jr., City Manager~ \?Q ",
City Council Meeting of July 28, 1998
FROM:
SUBJECT:
This will transmit the agenda and related materials for the regular City Council meeting of Tuesday,
July 28, 1998. Comments regarding the Written Communications are as follows:
5a. This is a letter from the City Attorney stating that to the best of his knowledge from
observance of actions taken in Closed Session on 7/14/98, there were no actions taken which
are required under the Brown Act to be reported.
IT IS RECOMMENDED THAT THIS LETTER BE RECEIVED AND FILED.
5b6c. IT IS RECOMMENDED THAT DANIEL WOOD'S RESIGNATION FROM THE
INTERNATIONAL FRIENDSHIP COMMISSION AND JAMES J. ALFARO'S
RESIGNATION FROM THE YOUTH COMMISSION BE ACCEPTED WITH REGRET
AND THE CITY CLERK BE DIRECTED TO POST IMMEDIATELY ACCORDING TO
THE MADDY ACT IN THE CLERK'S OFFICE AND THE PUBLIC LIBRARY.
5d. . This is a letter from Arlen Shire recommending that the Civic Center Library open at 9:00
a.m. rather than 10:00 a.m. IT IS RECOMMENDED THAT THIS REQUEST BE
REFERRED BACK TO STAFF FOR REVIEW AS PART OF THE PREPARATION OF
THE FY 1999-2000 BUDGET. Also, these additional morning hours at Civic Center
Library are already programmed and will be implemented if Proposition L, the Library
quarter of a cent sales tax, is approved by the voters in March 1999.
5e. This is a letter from Robert McCauley, Chairman of the Veterans Advisory Commission,
requesting that the main entrance street that leads to the Chula Vista Veterans Home be
designated and named as "Veterans Home Blvd." IT IS RECOMMENDED THAT THIS
REQUEST BE REFERRED TO THE PLANNING DEPARTMENT FORREPOR T BACK
TO COUNCIL.
DDR:mab
"
S:-~~
INFORMATION MEMORANDUM
July 16, 1998
FROM:
The Honorable Chairman and Members of the Redevelopme~t ency
David D. Rowlands, Jr., Executive Director ~ ~ .
S' (J ~
Chris Salomone, Executive Secretary C-
TO:
VIA:
SUBJECT:
Status of Broadway Village Business Homes Project
The City Council determined to declare the Developers of the Broadway Village Business Homes Project in default
on May 5, 1998 and so notified the Citrons. The matter was turned over to the City's litigator to proceed with
recovery of property conveyed to the Citrons and the Phase" property still owned by the Agency, but in escrow.
On July 6, staff received the attached memorandum from the Citrons indicating that they are still working on
the project and, once again, anticipate funding approval in the near future. On July 14th, staff received a
request to provide a prospective lender with project documents. Upon direction from the City's litigator, the
documents requested were sent to the lender.
The City Attorney's office has begun analysis of appropriate legal remedies based upon the Disposition and
Development Agreement and numerous related documents. We are informed that a formal Notice of Exercise will
be recorded and delivered on or before July 24, 1998. The Citrons will have 3D days from such delivery to
accomplish, through an escrow to be opened through Chicago Title, delivery of the Reverter Deed back to the
Agency of Parcel I.
Assuming the Citrons fail to voluntarily reconvey, the City's litigator is prepared to file an action for Declaratory
Relief and to forfeit title on August 24, 1998.
IIFKJ H'IHOMEICOMMOEVIINFOMEMOISTATBBHWuly 16. 199B 13,63pm1]
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'7te .a4stor ~tels {/rOU/,
A Joelen Enterprises Subsidiary
Facsimile Cover Sheet
To: Chris Salomone, Director
Company: Chula Vista Community Development
Phone: 691-5047
Fax: 476-5310
From: Josef & Lenore Citron
Company: Joelen Enterprises
East Coast Tele/Fax: 843/626-1897 619/424-4474 Coronado Hotel
East Coast Cellular: 843/446-4420 ^- Rings Through _^
Date: 7/6/98 11 :47:23 PM EDT
Pages incl. This page: 1
CHRIS:
You have not heard from us since I spoke to you because there was nothing
new I could tell you, We have now, however, a definite answer 011 financing
coming by the end of this week. This is from a source that wants to do a
much larger deal with us, as we find that this is the best way of interesting big
money in the Broadway BusinessHomes. (I believe that I may have told you
that they are calling it the "Broadway Commons" project, indicating their
Eastern U, S, source.)
We hear many upsetting things about what the City may do, but thank
goodness you haven't done any of them yet. We are on an August funding
time frame, and that is a great month, (only a late year), [Or a year late, as
may be the case here.]
I don't know if you have seen the new ad campaign that Anthony Furlano's
office has put on. If not, we'll ask him to send you some of the copy. Please
stay tuned,
~V?--
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~~~~
CllY OF
CHUlA VISTA
OFFICE OF THE CITY A TIORNEY
Date:
July 21, 1998
From:
The Honorable Mayor and City Council
John M. Kaheny, City Attorney~~
Report Regarding Actions Taken in Closed Session
for the Meeting of 7/14/98
To:
Re:
The City Council met in Closed Session on 7/14/98 to discuss:
Anticipated litigation pursuant to Government Code Section 54956.9:
Significant exposure to litigation pursuant to subdivision (b) : Two
cases
Conference with Real Property Negotiator - Property: Approximately
72.5 acres of property located at the southwest quadrant of Otay
Valley Road and Otay Rio Road - Universal Concerts, Inc. - terms
for modification of Sublease.
Labor negotiations.
The Redevelopment Agency met in Closed Session on 7/14/98 to
discuss:
Conference with Real Property Negotiator - 340-386 Bay Boulevard
(5 parcels totaling 3.65 acres) - San Diego Unified Port District;
B. F. Goodrich - purchase/lease terms and conditions.
The City Attorney hereby reports to the best of his knowledge from
observance of actions taken in the Closed Session in which the City
Attorney participated, that there were no reportable actions which
are required under the Brown Act to be reported.
JMK: 19k
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276 FOURTH AVENUE' CHULA VISTA' CALIFORNIA 91910 . (619) 691-5037 . FAX (619) 585-5612
@F\I;l{;.(mmEr~.
RECEIVED
'518 Jl 15 Al0:41
CITY OF CHULA VISTt,
CITY CLERK'S OFFICE
July 15, 1998
TO: Beverly Authelet, City Clerk
FROM: Armando Buelna, Assistant to the Mayor and Council
SUBJECT: RESIGNATION FROM THE INTERNATIONAL FRIENDSHIP
COMMISSION
This is to inform you that Mr. Daniel Wood has verbally resigned from the International
Friendship Commission. Mr. Wood now works out of Escondido, and this makes it
difficult to attend the International Friendship Commission meetings. Please place this
item on the next available agenda to allow the City Council to formally accept his
resignation.
ab
cc: Fran Larson, Chair, International Friendship Commission
International Friendship Commission Secretary
cc,'
WRITTEN COMMUNICATIONS
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July 14, 1998
Dear Y ouit Commlss1on~
uU(': lu my fuii lllIle Jub anu my ueUleaUUn11l euiiege, i wlii have lu leslgn
after four years on the board. I feel with school and work I have not enough. time to be a
good member MIne commission.
i want to rhank Rosemary, Cathy, Otticer Pugsiey tor chelf ume and ei:i:ort. You {Mee
lUtVt; tiunt: a gH::ai Jub lor lilt; YOUth Hi ow L:UII11IlUIlliy. i wlii always iake ii1~ SKli1S 1
learned in the commission with me through out my life. I wiH never forget how much of
an impact we made to the commumry at one rime.
iiWl1K you,
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Best of Luck to bveryone
;~.P'~~
James J. Alfaro
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WRlnEN COMMUNICATIONS
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Jul-14-9B 07:54 Bon;ta Enterpr;ses
619 5B5-3227
P.Ol
city of Chula vista
Veterans Advisory commission
337 E. Naples street
Chula Vista, CA 91911
(619) 585-3227
Ira); ~- @ fULL
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July 13, 1998
Honorable Shirley Horton
and city council
276 Fourth Avenue
Chula Vista, CA 91910
Dear Madam Mayor and Council;
Your Veterans Commission has recommended that a street in the
city be designated and named to remember the many veterans who have
served this nation. Accordingly, it is recommended that the main
entrance street that leads to the Chula Vista Veterans Home be
designated and nallled as .. Veterans Home Blvd. It
Presently the street is named Medical Center Drive, and has no
repeat NO persons or businesses with an address on that street.
Further the illuminated signs on Telegraph Canyon Road clearly
denotes that the Sharp Medical Facility is in that direction and
finally the road that leads up to Sharp Hospital is named Medical
Center Court.
We would like your approval and support of this request for
street naming.
Sincerely
~t.~c~
Chairman, CV VAC
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ORDINANCE NO.
ct.?:1 7- (]
The city
c~
AN ORDINANCE ADDING SECTIONS 5.40. 050 .Jdfb~
5.40.060 TO THE CITY OF CHULA VISTA 1!~AL
CODE RELATING TO THE PROHIBITION OF S~ TING
AND PEDDLING IN CERTAIN AREAS ~ IBITING
THE SELLING OF TICKETS OF ADMI TO PLACES
OF PUBLIC ASSEMBLAGE I~ :C\~ PLACES AND
PLACES OPEN TO THE PUBLI~
Council of the City of Chula vista does ordain as follows:
SECTION I:
added to Chapter
follows:
Section 5.40.050 and Section 5.40.060 are hereby
5.40 of the Chula vista Municipal Code to read as
Section 5.40.050 SOliciting, peddling Prohibited in certain Areas
A. Notwithstanding any of the provisions of this Chapter, it shall
be unlawful for any person, either as principal or agent, to
solicit, peddle, hawk or sell or vend any goods, wares, or
merchandise, services, magazines, periodicals or other
publications, or subscriptions for the same, regularly published
. newspapers excepted, or offer to, or distribute to any person any
coupon, certificate, ticket or card which is redeemable in goods,
wares, merchandise, or services upon any street, sidewalk, alley,
plaza or in any park or public place with the following limits of
the City of Chula Vista:
Any public area within a three
intersections of Heritage Road and Otay
Chula vista.
(3) mile radius of the
Valley Road in the City of
Section 5.40.060. selling of Tickets of Admission to Places of
Public Assemblage in Public Places and Places Open to the Public
Prohibited - Exceptions
A. It is the purpose and intent of this ordinance to prohibit the
unauthorized sale or resale for profit of admission tickets to
places of public amusement or entertainment including, but not
limited to, stadiums, auditoriums, theaters, arenas and
amphitheaters.
B. No person shall sell or resell for profit or offer to sell or
resell for profit any ticket of admission to a place of public
assemblage in or upon any public street sidewalk, park, or other
public place or in or upon any place which is open to the public,
except as otherwise provided herein.
~
~-/
C. The provisions of paragraph B of this section shall not include
or apply to the sale of such tickets at or from any ticket office,
booth, or other similar place regularly and permanently established ~
and maintain therefor with the express permission and authorization
of the person or governmental agency in charge, care, or control or
the property where such office, booth or place is located.
D. For purposes of this section the following words and phrases
are defined as follows:
1. "Place of Public Assemblage" shall mean every place of
public amusement or entertainment, stadium, auditorium, theater,
athletic field, concert hall, arena or amphitheater which is open
to the public upon compliance with requirements for admission
thereto.
2. "Place Open to the Public" shall mean every place of public
amusement or entertainment, stadium, auditorium, theater, athletic
field, concert hall, arena or amphitheater and the property upon
which such place is located q.r any other property contiguous
thereto which is under the same care, management, or control.
3. "For Profit" shall mean for a price higher than the face
value of the ticket.
SECTION II: This ordinance shall take effect and be in full
force on the thirtieth day from and after its adoption.
-.,
Presented by
Approved as to form by
Richard Emerson,
Chief of Police
pn
M. Kaheny,
-.,
~ 6~.;Z
COUNCIL AGENDA STATEMENT
ITEM TITLE:
/frl97
RESOLUTION Approving Agreement with National
City for Use of the Chula Vista Animal Shelter.
Item:
Meeting Date:7/28/98
7
REVIEWED BY:
City Ma
City At
SUBMITTED BY:
Chief of
(4/5ths Vote: Yes No XX )
--
The City of Chula Vista has provided Animal Shelter service for the
City of National City since 1968. Chula Vista bid on a new
contract and National City accepted. The cost to National City is
$43,224 a year which reflects National City's share of staff costs,
direct supplies and service costs (veterinary services,
medical/lab supplies, food, animal disposal costs and utilities)
If costs increase then the contract may be adjusted to reflect
National City's share in the 2nd and 3rd year of the contract.
RECOMMENDATION:
That the City Council approve the resolution authorizing the Mayor
to enter into a three year agreement with the City of National City
for shelter service from July 1, 1998 through June 30, 2001.
BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable
DISCUSSION: The City of Chula Vista has provided Animal Shelter
services to National City since 1968. Since then, we have enjoyed
a good working relationship while providing sheltering services.
In December of 1997 the National City Police Department sent a bid
request for shelter only services. Two agencies responded,
San Diego County and Chula Vista. The contract for sheltering only
services has been awarded to Chula Vista in the amount of $43,224.
The amount captures the increased enhanced shelter services to
National City. The terms of the agreement are as follows.
Services to be Rendered:
* normal animal shelter services, including the sheltering,
feeding, medicating, exercising, adopting, euthanasia and
disposal of dogs, cats and other small animals held for the
City of National City
'7-/
1 ,
* reasonable access to shelter office and facilities to National
City Animal Control Officers
* provide shelter services for residents of National City Monday
through Friday 9:00 to 5:00 and 10:00 to 4:00 on Saturday. The
shelter will be closed on Sunday and all major holidays.
* accept all stray animals from National City residents at no
charge. Other appropriate fees will be charged for National
City residents. A $20.00 fee will be charged to relinquish, for
euthanasia, or to redeem animals from the shelter. A $5.00
adoption fee will be charged.
* Chula Vista agrees to provide National City Animal Control
Officers assistance in emergency situations.
Excluded Services:
* Chula Vista shall not be responsible for issuing dog, or other
animal licenses to National City residents or for collecting the
fee for same.
* Chula Vista shall not be responsible for enforcement of rabies
vaccination requirements for National City residents or for
collecting the fee for same.
* Chula Vista shall not issue citations for animal related
violations that occur within the City of National City.
Release of Liability:
* National City shall defend, indemnify, protect and hold
harmless Chula Vista, it's elected and appointed officers and
employees, from and against all claims for damages and
liability, arising out of the conduct of the consultant, or any
agent or employee, subcontractors, or others in connection with
the execution of the work covered by this agreement, except only
for those claims arising from the sole negligence or sole
willful misconduct of the City, its officers, or employees.
Revenue:
* The new agreement reflects an increase in revenue from $34,128
last year to $43,224 for the first year of service. This
increase reflects National City's share of staff costs at
$27,165 and for Direct Supplies and Services costs (veterinary
services, medical/lab supplies, food, animal disposal costs and
utilities) at $16,059 which equals $43,224. Subsequent years
will be adjusted to reflect M.O.D. salary increases and
services.
7-~
Termination of the Agreement:
* The contract may be terminated for Convenience at any time and
for any reason, by giving written notice of such termination and
specifying the effective date thereof, at least thirty days
before the effective date of such termination.
* The contract may be terminated for Cause if, through any cause,
either party shall substantially fail to fulfill in a timely and
proper manner any obligation under this Agreement, or violate
any of its covenants, agreements or conditions of this
Agreement, the parties shall have the right to terminate this
Agreement by giving written notification of such termination and
specifying the effective date thereof at least five days before
termination.
FISCAL IMPACT: The agreement will generate $43,224 in revenue per
year ($3,602/month) from National City for providing sheltering
only services.
7-3
RESOLUTION NO.
/9t?97
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AGREEMENT WITH THE
CITY OF NATIONAL CITY FOR USE OF THE CHULA
VISTA ANIMAL SHELTER, AND AUTHORIZING THE
MAYOR TO EXECUTE SAID AGREEMENT
WHEREAS, the Police Department, through its Animal
Regulation Division, currently provides animal shelter services for
the City of National City; and
WHEREAS, these services have been provided since 1968;
and
WHEREAS, National City has agreed to pay the actual costs
to Chula Vista for providing such services plus applicable Full
Cost Recovery program charges.
NOW, THEREFORE, BE IT RESOLVED the City Council of the
City of Chula Vista does hereby approve an Agreement with the City
of National City for the Use of Chula Vista Animal Shelter
Facilities and Services, a copy of which is on file in the office
of the City Clerk as Document No.
BE IT FURTHER RESOLVED that the Mayor of the City of
Chula Vista is hereby authorized and directed to execute said
Agreement for and on behalf of the City of Chula Vista.
Presented by
Approved as to form by
Richard Emerson, Chief of
Police
M. Kaheny, C't
torney
H,\home\lorraine\Cdrive\rs\animal.NC
7~L/
AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND THE CITY OF
NATIONAL CITY PROVIDING FOR THE USE OF CHULA VISTA ANIMAL SHELTER
FACILITIES AND SERVICES
THIS AGREEMENT, made and entered into this 1st day of July 1998, by and between the
CITY OF CHULA VISTA, a municipal corporation hereinafter called Chula Vista and the
City of National City, hereinafter called "National City".
WITNESS
WHEREAS, National City does not have an animal shelter and desires to use the
Chula Vista Animal Shelter as a shelter for the impounding, adoption, redemption and
disposition of dogs, cats and other small animals, and
WHEREAS, Chula Vista has an animal shelter adequate to serve the needs of
National City in addition to the needs of the City of Chula Vista, and
WHEREAS, National City and Chula Vista entered into an agreement for animal
sheltering services on July 1,1987, and was lasted amended July 1991, and,
WHEREAS, National City now desires to enter an agreement again with Chula
Vista beginning FY 1998-99 for the use of animal shelter facilities of Chula Vista for the
impounding, adoption, redemption and disposition of dogs, cats and other small animals,
and
WHEREAS, Chula Vista is willing to amend said agreement in the manner set forth
herein.
NOW, THEREFORE, IT IS AGREED by and between Chula Vista and National City
as follows:
1. Chula Vista agrees to permit the City of National City the use of animal shelter
facilities owned and operated by the City of Chula Vista and presently located at 690 Otay
Valley Road for the impounding, adoption, redemption and disposition of dogs, cats and
other small animals subject to the provisions of National City Animal Ordinances.
2. Chula Vista agrees to perform all normal animal shelter services, including the
sheltering, feeding, medicating, exercising, adopting, euthanasia and disposal of dogs,
cats and other small animals held for the City of National City.
3. Chula Vista agrees to provide reasonable access to shelter office and facilities to
National City Animal Control Officers.
4. Chula Vista agrees to provide shelter services for residents of National City
Monday through Friday 9:00 to 5:00 and 10:00 to 4:00 on Saturday. The shelter will be
closed on Sunday and all major holidays. Chula Vista agrees to notify National City of
changes in shelter hours in advance.
,.-/
/-p
5. Chula Vista agrees to accept all stray animals from National City residents at no
charge. Other appropriate fees INiIl be charged for National City residents. A $20.00 fee
INiIl be charged to relinquish, for euthanasia, or to redeem animals from the shelter. A
$5.00 adoption fee INiIl be charged.
6. National City Animal Control Officers shall deliver all animals found INithin that
jurisdiction to the Chula Vista shelter and comply INith all written and verbal policies and
procedures of the Chula Vista Animal Shelter.
7. Chula Vista agrees to provide National City Animal Control Officers assistance in
emergency situations. Chula Vista also agrees to continue its mutually beneficial
arrangement INith the National City ARO, to transport animals to and from other shelters
and Veterinary clinics when feasible.
8. Chula Vista shall not be responsible to any resident of National City, or to the City
of National City, because of the destruction of any animal delivered to and accepted by the
shelter pursuant to this agreement, and the City of National City agrees to hold harmless
the City of Chula Vista from any claims arising from damage or injury to animals belonging.
to residents of the City of National City and delivered to the Chula Vista Animal Shelter.
National City shall defend, indemnify, protect and hold harmless Chula Vista, it's elected
and appointed officers and employees, from and against all claims for damages and
liability, arising out of the conduct of the consultant, or any agent or employee,
subcontractors, or others in connection INith the execution of the work covered by this
agreement, except only for those claims arising from the sole negligence or sole INillful
misconduct of the City, its officers, or employees. National City's indemnification shall
include any and all costs, expenses, attorney's fees, and liability incurred by the City, its
officers, agents, or employees in defending against such claims, whether the same
proceed to judgement or not. Further, National City, at its own expense shall, upon written
request by the City, defend any such suit or action brought against the City, its officers,
agents, or employees. National City indemnification of the City shall not be limited by any
prior or subsequent declaration by City of National City.
9. Commencing on July 1, 1998, and extending through June 30, of 2001, National
City agrees to contract for the aforementioned services and facilities. The cost of the first
year of the contract INiIl be $43,224 or $3,602 per month. Subsequent years INiIl be
adjusted fairly based on increasing costs or services and supplies. The Finance
Department of the City of Chula Vista shall, as of the first day of each month, credit
National City INith the amount of monies 'received during the previous month from National
City residents as fees for redemption of National City animals. The balance of funds
remaining to be paid a two percent (2%) service and billing charge shall be applied. The
Finance Department shall submit the billing to National City on or before the 10th day of
the month follolNing the billing period and that amount shall be due and payable upon
receipt by National City, but no later than the last day of the billing month.
10. Chula Vista agrees to hold all dogs and cats found INithout owner information for a
period of no less than three (3) days. Dogs and cats found INith a National City license or
other identification INiIl be held for no less than five (5) days. As per applicable Penal Code
sections, animals INith communicable diseases and severe injuries or illness may be
euthanized prior to the normal holding period. Chula Vista INiIl attempt to notify owners of
identified animals as to the whereabouts of the animal and the holding period. National
7-?
City shall relinquish all animals not claimed or adopted to the City of Chula Vista for
disposition in accordance with all applicable laws, policy or procedure as deemed
appropriate by the Chula Vista Animal Shelter Manager.
.Excluded Services
1. Chula Vista shall not be responsible for issuing dog, or other animal licenses to
National City residents or for collecting the fee for same.
2. Chula Vista shall not be responsible for enforcement of rabies vaccination
requirements for National City residents or for collecting the fee for same.
3. Chula Vista shall not issue citations for animal related violations that occur within
the City of National City.
It is further agreed that this agreement shall take effect on the first day of July, 1998 and
shall terminate on the 30th day of June, 2001; provided that either party may terminate this..
agreement at any time by giving the other party written notice of intention to terminate
thirty (30) days following said notice.
Termination of Agreement for Convenience.
Either party may terminate this Agreement at any time and for any reason, by giving
specific written notice of such termination and specifying the effective date thereof, at least
thirty(30) days before the effective date of such termination. If the Agreement is
terminated by National City as provided for in this paragraph, Chula Vista shall be entitled
to receive just and equitable compensation for all services performed prior to the effective
date of such termination.
Termination of Aoreement for Cause.
If, through any cause, either party shall substantially fail to fulfill in a timely and proper
manner any obligation under this Agreement, or violate any of its covenants, agreements
or conditions of this Agreement, the Parties shall have the right to terminate this
Agreement by giving written notification of such termination and specifying the effective
date thereof at least five (5) days before termination. If the Agreement is terminated by
National City as provided for in this paragraph, Chula Vista shall be entitled to receive just
and equitable compensation for all services performed prior to the effective date so such
termination.
Notices and Desionation of Administrator
A. All notices and demands shall be given in writing by personal delivery or first-class
mail, postage prepaid. Notices shall be addressed to the Administrator, or his/her
designee, designated below for the respective Party; provided that, if any Party gives
notice of a change of name or address, notices to the giver of that notice shall thereafter
be given as demanded in that notice. Notices shall be deemed received seventy-f'.No (72)
hours after deposit in the United States mail.
7~7
---I
B. The following, including their respective addresses, are hereby designated as
Administrators for the purposes of this Agreement only:
City of Chula Vista:
Chief of Police, and his/her designee
276 Fourth Avenue
Chula Vista, CA 91910
City of National City:
Chief of Police, and his/her designee
IN WITNESS WHEREOF, the parties hereto have executed this agreement on the date
here in above set forth.
CITY OF CHULA VISTA
CITY OF NATIONAL CITY
Mayor, City of Chula Vista
ATTEST:
City Clerk
APPROVED AS TO FORM BY:
~;~~
7--0'
COUNCIL AGENDA STATEMENT
REVIEWED BY:
Item gI
Meeting Date 07/28/98
Resolution J7'~9'~oPting the Memorandum of Understanding
(MOU) provisions with the Chula Vista Police Officers Association
(CVPOA), amending the Fiscal Year 98/99 Budget and appropriating
funds to cover labor cost increases as reflected in Exhibit A
Director of Human Re~~es (:,6
Director of Finance / ~ / \1\
City Manager~ ~ ~\
(4/5ths Vote: Yes -X No _)
ITEM TITLE:
SUBMITTED BY:
Pursuant to Council direction, staff has reached agreement (pending City Council adoption)
on a five year Memorandum of Understanding with the CVPOA. Details of the MOU
provisions follow, and a formal revised MOU will be brought to Council for final approval
at a later date.
RECOMMENDATION: Adopt Resolution which approves the CVPOA MOU provisions,
amends the budget, and appropriates funds to cover resulting labor cost increases.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION: Following is a summary of wage and benefit adjustments agreed to in a five
year MOU with the CVPOA:
Fiscal Year 1998 - 1999
. Employer paid employee contribution to PERS will be increased by 2% effective
August 14, 1998, and by 1% effective January 1, 1999.
. The City and CVPOA agree to meet and confer on Flex Plan revisions to include
a "cash-back" option.
. Effective January 1, 1999, represented employees may elect to remove dependents
from City provided medical coverage, with any remaining funds to be received by
the employee on a post tax basis.
. Effective August 14, 1998, the mileage reimbursement rate will be at the rate
prescribed and allowed for non taxable reimbursement pursuant to applicable
provisions by the Internal Revenue Code.
. Martin Luther King, Jr. Birthday will be added as a hard holiday.
. Field Training Officer (FTO) Pay will increase to $1.00 per hour effective
August 14,1998.
'6-/
Page 2, Item _
Meeting Date 07/28/98
. Uniform Cleaning Allowance for Detectives will increase to $300 annually effective
August 14, 1998.
. Call-back Pay will increase to $50.00 effective August 14, 1998.
Fiscal Year 1999 - 2000
. Employer paid employee contribution to PERS will be increased by 1 % effective
the first full pay period in July 1999 and 2% effective the first full pay period in
January 2000.
Fiscal Year 2000 - 2001
. 2% base wage increase for Police Sergeants effective the first full pay period in
July 2000.
. 5% base wage increase effective the first full pay period in January 2001.
Fiscal Year 2001 - 2002
. A survey will be conducted in October, 2001 to comparable positions in 9 other law
enforcement agencies in San Diego County to attempt to reach number three
position. Increase shall be a minimum of 2% and shall not exceed 5% effective the
first full pay period of January, 2002.
Fiscal Year 2002 - 2003
. Stand-by pay will be increased from $37.50 to $75.00 per week, effective the first
full pay period in July 2002.
. A survey will be conducted in October 2002, and the resulting increase will be
implemented in the manner described for FY 01/02, and will become effective the
first full pay period beginning on or after January 1, 2003.
FISCAL IMPACT: FY 1999 gross costs are $249,688 with revenue offsets of $41,025,
resulting in a net cost of $208,663.
Exhibit A -
(f~2.
Emplovee Services
Police Department Employee Services
Non-Departmental Employee Services
Total Empl. Svcs.
Estimated Revenues
Police Training Reimbursement Program
Police Reimbursements
Special Police Department Services
Emergency Response
Dispatching Services
Total Estimate Revenues
Estimated Net Cost
?/3
254,288
(4,600)
10,000
28,000
1,825
100
1,100
Attachment A
$249,688
$41,025
$208,663
RESOLUTION NO.
/1tJrr
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING MEMORANDUM OF
UNDERSTANDING WITH THE CHULA VISTA POLICE
OFFICERS ASSOCIATION (CVPOA), AMENDING THE
FISCAL YEAR 98/99 BUDGET AND APPROPRITAING
FUNDS TO COVER LABOR COST INCREASES AS
REFLECTED IN EXHIBIT A
WHEREAS, the Management Negotiation Team representing the
City Manager of the City of Chula Vista, acting for and on behalf
of the City Council of the City of Chula Vista, have heretofore met
and conferred with the Chula Vista Police Officers Association
(POA) , an organization representing sworn members of the Chula
Vista Police Department from Peace Officer up through the rank of
Police Lieutenant, in accordance with the provisions of Section
3500 et seq. of the Government Code of the State of California; and
WHEREAS, the provisions of a Memorandum of Understanding
jointly prepared by said parties as a result of meeting and
conferring in good faith has been presented to the City Council in
closed session.
NOW, THEREFORE, BE IT RESOLVED that the City Council of
the City of Chula Vista does hereby approve the provisions of the
Memorandum of Understanding Concerning Wages and Other Terms and
Conditions of Employment with the Chula Vista Police Officers
Association reflected in Exhibit B.
BE IT FURTHER RESOLVED that staff is directed to return
to the City Council with the amended Memorandum of Understanding to
include said provisions for final ratification.
BE IT FURTHER RESOLVED that based on $41,025 of revenues
and available fund balances, the amount of $249,688 is hereby
appropriated from the unappropriated balance of the General Fund as
shown on Exhibit A.
Presented by
Approved as to form by
Candy Emerson, Director of
Human Resources
H:\home\lorraine\cdrive\rS\POA.MOU
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COUNCIL AGENDA 8T A TEMENT
BACKGROUND:
Item 9
Meeting Date 7128198
RESOLUTION / 7 ~ 79 AUTHORIZING THE MAYOR TO EXECUTE THE ECONOMIC
DEVELOPMENT INITIATIVE ApPLICATION TO HOUSING AND URBAN DEVELOPMENT (HUD) FOR
A $100,000 GRANT TO FUND A LOAN Loss RESERVE FOR THE PROPOSED CHULA VISTA
SMALL BUSINESS REVOLVING LOAN FUND PROGRAM
Community Development Director C_S .
C;~ M,",g''DR ~ ~ _. V.... Y..l ..~
ITEM TITLE:
SUBMITTED BY:
REVIEWED BY:
Council previously approved hiring the consulting firm of Claggett Wolfe (CW) to assist staff to develop a HUD
Section 108 Small Business Revolving Loan Program. In February 1998, the City Council authorized submittal of
a Section 108 application to HUD to "reserve" $1 million in City borrowing capacity to fund the proposed Small
Business Revolving Loan Fund (RLF) (see attached). The application is currently being processed; staff anticipates
receiving approval by September, 1998. CW and staff are currently preparing the City's Section 108 RLF Program
Guidelines for future submission to Council.
Council also previously authorized CW to prepare an Economic Development Initiative (EOI) grant application in
the event that HUD issued a Notice of Funding Availability (NOFA). EOI is a HUD grant program designed to
mitigate the risk to a municipality of utilizing the Section 108 Program (as discussed in previous reports to
Council, the City's future CDBG entitlement grants are pledged as collateral for Section 108 Business Loans.) A
Notice of Funding Availability has now been issued and CW has prepared an application requesting $100,000 for
a loan loss Reserve fund to support the new Small Business loan program.
In order to compete for these funds, an EDI grant application needs to be submitted by July 30, 1998. It must
be accompanied by a Section 108 loan application, or such an application must be in process, as is the case
with ours which is currently under review by HUD. Note: No business loans will be made until after Council has
approved the Chula Vista RlF Program Guidelines, including specific eligible uses of funds, underwriting criteria,
and administrative policies and procedures.
RECOMMENDATION: That Council adopt the resolution authorizing the Mayor to execute the Economic
Development Initiative Grant Application requesting $100,000 for funding a loan loss Reserve for the proposed
Chula Vista Small Business Revolving loan Fund Program.
BOARDSICOMMISSIONS RECOMMENDATION: Not applicable.
9-/
Page 2, Item _
Meeting Date 07128198
DISCUSSION:
The EDI program was created in 1994 and is used to enhance the Section 108 loan/loan Guarantee Program
by further minimizing the potential loss of future CDBG allocations. (The City is developing Program Guidelines
which will act to minimize loan defaults via moderate to conservative underwriting criteria, capped loans to start.
up companies and for working capital, and other program policies.) HUD has allocated $38 million for this EDI
round of which $10 million has been set aside for a demonstration project. leaving $28 million for distribution.
Competition is very intense, with applications rated on the following factors:
a) Capacity of the applicant and relevant organizational experience;
b) Distress/extent of the problem;
c) Soundness of approach;
d) leveraging of Section 108 funds with other resources; and
e) Comprehensiveness and coordination with financing partners
CW indicates that the City's application should be competitive based upon the modest amount of funds requested
and the fact that we have already submitted a Section 108 loan application and are fairly far along in program
development.
If the City's EDI application requesting a $100,000 grant is awarded, the ED! funds will replace the $100,000
loan loss Reserve "set aside" in the City's pending application for a $1 million Section 108 loan authorization.
This will result in an increase of the pool of available business loan funds from $900,000 to $1 million. Perhaps
most importantly, the ED! grant money would be used to reimburse HUD for any small business borrower defaults
up to the $100,000 amount, eliminating the need to encumber future CDBG entitlement funds for this purpose.
(As a reminder, statistics show an average loan default rate for these types of RlF programs of approximately
5%; CW believes that the proposed 10% loan loss Reserve should be more than adequate.)
FISCAL IMPACT: If successful, this action would result in a $100,000 award to the City to be used for a
loan loss reserve for the new Section 108 Small Business RlF. Council previously appropriated CDBG funds for
CW to prepare the EDI grant application, and authorized staff time for program development. There is no
negative fiscal impact associated with staff's recommendation to submit the EOI grant application.
IOOAl H,IHOMEICOMMOEVISTAFF.REPI12.16.97ISECTION.108 [Ju~ 21, 1998 14,02pmll
~~ ~~
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~-
9-~
RESOLUTION NO.
/<?C?r9
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA AUTHORIZING THE MAYOR TO EXECUTE THE ECONOMIC
DEVELOPMENT INITIATIVE APPLICATION TO HOUSING AND
URBAN DEVELOPMENT (HUD) FOR A $100,000 GRANT TO FUND
A LOAN LOSS RESERVE FOR THE PROPOSED SECTION 108
CHULA VISTA SMALL BUSINESS REVOLVING LOAN FUND
PROGRAM
WHEREAS, Council previously approved hiring the consulting firm of Claggett Wolfe
to assist staff to develop a HUD Section 108 Small Business Revolving Loan Program, in addition
to preparing an Economic Development Initiative (EDI) grant application in the event HUD issues
a Notice of Funding Availability (NOFA); and
WHEREAS, EDI is a HUD grant program designed to mitigate the risk to a
municipality of utilizing the Section 108 program; and
WHEREAS, HUD has issued a NOFA and the consultant has prepared an EDI
application for a $100,000 grant to fund a loan loss reserve for City's Section 108 RLF program;
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista
does hereby authorize and direct the Mayor to execute the EDI application to HUD for a $100,000
grant to fund a loan loss reserve for the proposed Chula Vista Small Business Revolving Loan Fund
Program.
Presented by
Approved as to form by
GL~
Chris Salomone
Director of Community Development
"
9~3
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COUNCIL AGENDA STATEMENT
Item ,;z CJ
Meeting Date 211 0/98
ITEM TITLE: RESOLUTION / SB/ '1 Y AUTHORIZING THE MAYOR TO EXECUTE THE SECTION 108
ApPLICATION TO HOUSING AND URBAN DEVELOPMENT (HUD) TO AUTHORIZE $1 MILLION FOR
FUNDING THE PROPOSED CHULA VISTA SMALL BUSINESS REVOLVING LOAN FUND PROGRAM
SUBMITTED BY: Community Development Director (~~ J
REVIEWED RY, C;~ M,""" JG '1;~ 1415ths V..., Y"-1- ..~
BACKGROUND:
Council previously approved hiring a consultant to assist staff to develop a HUD Section 108 loan/loan Guarantee
Program. On August 5, 1997, Council approved the Consultant's Phase I feasibility findings Snd directed staff
and the Consultant to proceed with: 1) preparing a Section 108 Generic Application seeking HUD authorization
for the City to make Section 108 loans; and 2) developing a Small Business Revolving loan Fund (RlF) Program.
Staff was directed to prepare a comprehensive RlF Program Manual, and to return to Council with the proposal
Manual as well as recommended program staffing. Two public hearings were subsequently held in November and
December to receive public comment on the proposed amendment to the City's FY 1997/98 COBG Consolidated
Annual Plan to include the Small Business loan Program (see page 11, Attachment A). No comments were
received and the Plan was amended accordingly.
RlF program development has continued. Staff is now recommending that Council approve submission of the
Generic Application to HUD for $1 million in Section 108 loan authorization, giving Chula Vista the option to
access these funds in the future for specific loans to private business (see Application, Attachment B). Per HUD
requirements, the application summarizes proposed basic underwriting criteria and anticipated public benefits.
The Chula Vista RlF Program Manual delineating detailed policies and procedures will be brought to Council in
2.3 months. A Chula Vista RlF loan Committee is being fonmed to assist staff with developing the RlF
guidelines. Staff is requesting Council approval of the application now (prior to adoption of the Program Manual)
because: 1) HUD review and approval of the Generic Application is a 6 month process; and 2) the Generic
Application's basic underwriting criteria are very conservative, and if changed at all, will be "tightened" to reduce
risk to the City even further. Approval now will eliminate a 6 month delay in program implementation from the
time of the RlF Manual's adoption by Council. No loans will be made until aher Council has approved
specific eligible uses of funds, and specific underwriting criteria, as well as RlF policies and
procedures.
RECOMMENDATION: That Council adopt the resolution authorizing the Mayor to execute the HUD Section
108 Generic Application to authorize $1 million for funding the proposed Chula Vista Small Business Revolving
Loan Fund Program.
9 ~ /1- I
Page 2, Item _
Meeting Date 02/1 0/98
BOARDS/COMMISSIONS RECOMMENDATION: Staff presented a HUD Section 108 funded Business
Loan/Loan Guarantee Program Issue Paper to the EDC. The EDC by consensus recommended that staff move
forward on the project.
DISCUSSION:
A. HUD SECTION 108 PROGRAM SUMMARY
As discussed in previous staff reports, Section 108 authorization allows the City to offer a Revolving Loan Fund
(RLF) to assist businesses in Chula Vista to expand, and to help recruit new businesses to the City. Eligible loan
activities under HUD regulations include real estate and equipment acquisition, construction, rehabilitation of
commercial and industrial buildings, working capital, and tenant improvements. Under the Section 108 program,
the City can "borrow against" its future annual COBG allocations to make loans to private business. The Section
108 loans are guaranteed by HUD and are issued by a private investor to the City of Chula Vista which in turn
loans to a private business. The business loans are repaid by the business borrowers. In addition to the City's
pledged annual CoBG funds as collateral. the City will require borrower security. The proposed Section 108
application requests HUll to approve $1 million in Chula Vista loan authorization. Section 108 funds will be
drawn down only as needed for each individual business loan.
The proposed application provides that $100,000 of the $1 million authorization be set aside as a loan loss
reserve. Risk to the City created by loan defaults is reduced by the conservative underwriting criteria outlined
in the proposed application and by an RLF Loan Committee's review of each loan application. (See Attachment
C for a detailed discussion of the Section 108 program as provided to Council with previous reports.) Review
of comparable RLF programs across the country found an average default rate of less than 5%; however, the
proposed 10% loss reserve allows the City a greater "comfort" margin. The Section 108 loan loss reserve will
be replaced over time with program income generated by RLF fees and interest. At no time will the general fund
be used for loan repayment. Section C.4. below describes City default liability and procedures in more detail.
B. CHUlA VISTA SECTION 108 RtF POLICIES AND PROCEOURESISTAFFlNG
As noted previously, no loans will be made to Chula Vista businesses until after Council has approved a Chula
Vista RLF Program Manual which delineates specific underwriting criteria and program policies. Per Council
direction, the City's Section 108 consultant, Claggett Wolfe, is currently assisting staff to develop these
guidelines. Additionally, as discussed in previous reports, staff is establishing a Chula Vista RLF Loan Committee,
with representatives from local lenders and the business/economic development community. (See Attachment D
for more information regarding the RLF Loan Committee.) This Committee will be instrumental in determining
program guidelines and in reviewing and approving future individual loans. Examples of RLF policies currently
being developed include the determination of eligible businesses and uses of funds, targeted geographic areas
and/or industries (if any), minimum and maximum loan amounts, specific underwriting criteria (interest rate, fees,
collateral required, de.bt ratios, etc.). private loan match and equity requirements, application review and approval
process. Upon completion of the recommended RLF guidelines, staff will return to Council with the proposed
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Page 3, Item _
Meeting Date 0211 0/98
Program Manual, as well as specific recommendations related to RLF staffing needs. As noted in previous
reports, typical local Section 108 RFP programs are supported by 1.5 full time staff. Staff has been further
evaluating optional staffing scenarios. At this time, staff intends to submit a request to Council for $20,000
in FY 1998199 CDBG funds for a contractual RLF Loan officer. Community Development Department staff are
currently analyzing department-wide workload and staffing issues as part of the FY 1998/99 budget process in
light of the progress made to date on the RLF and the Council identified areas of improvement. It is anticipated
that additional Community Development staffing may be needed to support Council priorities and that RLF
administration could be one of this new staffer's responsibilities.
C. SECTION 108 ApPLICATION TO HUn
HUD requires that the City seek public input concerning the inclusion of the Section 108 Business Loan activity
in the City's CDBG Consolidated Annual Plan prior to application submittal. Council held two public hearings on
this activity as well as the application to HUD and received no public comment. The proposed Section 108 Small
Business Loan Program was subsequently added to the City's CDBG Plan on December 13, 1997. (Council will
recall that extensive business community input was solicited previously as part of the consultant's feasibility
analysis.)
Staff is now seeking Council approval to submit (see Attachment D). The purpose of the Section 108 application
is to obtain a Section 108 loan authorization amount. This amount cannot exceed five times the City's annual
entitlement amount. In Chula Vista's case, our entitlement is approximately $2.1 million, which allows us a
maximum loan authorization amount of $10.5 million. We are requesting $1 million. HUD requires the Section
108 application to generally describe the following: 1) How loan funds will be used; 2) Basic standard
underwriting criteria; 3) How CDBG National Objectives and Chula Vista Community Development Objectives will
be met; 4) What security will be provided; 5) How the individual loan repayment schedules will be structured;
and 6) certain standard legal certifications. These 6 sections of the proposed application are summarized and
explained below:
1. Project Description (Schedule A in Attachment D):
The Chula Vista RLF will be utilized to provide incentive financing for expanding and new companies within
the City of Chula Vista. The Section 108 application is "Generic." Individual transactions will be identified
in the future and must comply with the underwriting criteria outlined in the application (see item #2 below,
and Schedule B in Attachment D) Under the Generic Application, eligible loan activities include real estate,
personal property, working capital, tenant improvements, and furniture, fixtures and equipment. HUD requires
that the application identify general uses of funds. Consistent with the Consultant's Feasibility Study findings
that there is a lack of incentive financing in Chula Vista for real and personal property acquisition and for
working capital. as well as with our goal to minimize risk, staff recommends that the RLF be funded at
$1.000,000, with $700,000 allocated for real property, $150,000 for personal property, and $150,000 for
working capital.. If, as the RLF is implemented, it becomes desirable to modify the loan distribution it can
be done easily with an amendment to the application.
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Page 4, Item _
Meeting Date 02/1 0/98
2. Underwriting Criteria (Schedule B in Attachment D):
"Generic" Section 108 applications to HUD allow cities to subsequently approve multiple loans without having
to seek HUD Central approval for each individual transaction. This is based on the fact that all loans must
meet ore.aooroved underwritina criteria as put forth in the City's application. These standard criteria are
recommended by HUD and reflect a law risk profile. The proposed application identifies basic criteria for both
Business loans and Investor loans. These are described below:
Business loans
Business loan transactions involve loans repaid from cash flow generated by the business' sale of goods or
services. The company must demonstrate ability to generate sufficient cash flow to cover debt service, as
well as capital expenditures and working capital. The projected debt coverage must be 1.15 or greater.
Each loan will be sacured by a specific lien on real and personal property with loan-to.value ratios as follows:
Real Property: Up to 80% loan to value
Personal Property: Up to 75% loan to Value
Receivables: Up to 75% loan to value
Inventory: Up to 60% loan to value
loan maturities may not exceed the economic life of the asset financed. Borrowers must contribute
sufficient equity to protect the interests of the City of Chula Vista and must personally guarantee each
transaction. Specific terms of each equity requirement and personal guarantee will be determined at the
discretion of the City's loan committee. The company must demonstrate sound accounting practices, and
must have experience in operating a successful business venture. In addition, the borrower must be reputable
and have good credit history.
Investor Deal
Investor transactions involve loans to finance income producing real estate. Debt service is paid from cash
flow generated by leases to third parties. The investor deal must have a strong market for the space to be
leased, in addiiion to having at least 50% of the project pre.leased to good tenants. The projected debt
coverage should be in excess of 1.15. The maximum loan to value is 80% of the lower of: 1) cost or 2)
value.
3. National and Community Development Objectives (Schedule C & D in Attachment 0):
The RLF will adhere to the CDBG national objective of low/mod benefit by providing employment
opportunities, at least 51 % of which will be available to, or held by, low and moderate income citizens. The
RLF will meet community development objectives by enhancing current efforts to expand entrepreneurship,
eliminating slum and blight, and creating new jobs. In addition, each project will conform to the public
benefit thresholds (i.e. 1 job per $50,000 of each RLF loan, or 1 job per $35,000 of total RlF loans made
over the course of the program.).
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Page 5. Item _
Meeting Date 02/10/98
4. Additional Security (Schedule E in Attachment 0):
Under the Section 108 program, HUO guarantees notes issued by private investors. Proceeds are loaned to
the City which, in turn, loans money to local businesses. Because HUO guarantees the notes (and in turn
requires the City to pledge its annual COBG allocations as collateral), the investor is able to borrow funds
at very competitive rates. The City's application specifies that the City will also place liens on the assets
financed, and may require personal guarantees as well, depending on the individual loan's risk factors.
local Section 108 RlF Programs with relatively conservative criteria such as we are proposing typically
experience loan default rates less than 5%. In the event of a business' "incurable" default on its loan, the
City is liable for repayment to the private investor. In order for HUO to be able to issue notes to payoff
the private investor on behalf of the City, the City's Section 108 authorization must include the default
repayment amount. Therefore, staff has included a $100,000 (10%) loan loss reserve fund in its $1 million
Section 108 authorization request. Based upon the City's proposed conservative underwriting criteria, the
$100,000 reserve amount is expected to more than enough to cover anticipated defaults.
Although HUO will issue notes to payoff the investor should a default occur (up to the City's authorized loan
loss reserve amount), the City is then liable to repay HUO from its annual COBG grants. Impact on the City's
annual COSG funds is mitigated by the fact that the City is able to payoff the individual loan for a period
of up to 20 years.
In summary, the default process and the liability to the City and HUO are as follows:
1) Business defaults on loan
2) HUO issues notes (up to City's Section 108 authorized amount; our application requests a
$100,000 loan loss "reserve:)
3) HUO repays investor
4) City repays HUO using annual COSG grants over a period up to 20 years.
To further mitigate the risk to the City, the RlF Program is being designed to include a 1 % administrative
fee with these future proceeds going to an "unencumbered" loan loss Reserve. This program income will
ultimately be used to directlv repay the private investors, as needed, eliminating any further City liability to
HUO.
Finally, staff is continuing to monitor HUD's Economic Development Initiative (ED I) program which offers cash
grants to fund a Section 108 loan loss Reserve. It is uncertain when HUO will open this program to
competitive applications.
5. loan Repayment (Schedule F in Attachment 0):
HUO does not recommend, and in most cases will not allow a lump sum draw down by the City of the
Section .108 allocation. Funds will be drawn down only as loans are made, and will be paid back to the
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Page 6, Item _
Meeting Date 02/1 0/98
private investor as payments are received by the City from the private borrower. In general, real property
loans will be paid back over a period up to 20 years; personal property loans will be paid back over a period
up to 7 years; and working capital loans will be paid back over a period up to 3 years. If private borrowers
default on their payments, the City is liable for repayment to HUD. As discussed above, the maximum
anticipated loss rate is 10%. A worst case scenario is illustrated by the hypothetical (and virtually
impossible) draw down and default of the entire $1,000,000. The resulting repayment to HUD by the City,
using annual CDBG entitlement grants, is illustrated in Schedule F of Attachment D. This chart shows
payments in the $80,000 to $90,000 range years 1-3, decreasing to $42,000 in year 4, and staying in that
general range through year 20. The payments are higher in the first few years because the working capital
and personal property loans are paid back over 3 and 7 years, respectively.
6. Certifications (Schedule G in Attachment 0):
HUD requires that the City of Chula Vista certify it has the legal authority to pledge grants; that the
proposed project can not be implemented without the Section 108 loan; that the City is presently not
debarred or suspended from transactions by any Federal department; that the City has not or will not engage
in lobbying activities pursuant to this application; and that the City will provide a drug-free workplace.
E. SECTION 108 LOAN ApPLICATION REVIEW PROCESS
The application will be submitted to the HUD Area Office in Los Angeles for review prior to submission to the
HUD Central Office in Washington D.C. The Area Office will review the application for compliance with Section
108 eligibility regulations. After determining the application is complete, the Area office will submit the
application to the HUO Central Office in Washington D.C. for final approval. The Central Office verifies the
eligibility and underwrites the transaction. The HUD Central Office review will result in one of three likely
outcomes: 1) approved application; 2} denied application; or 3) approved application in a lesser amount. The
total HUD review process is anticipated to take 3.5 to 6 months.
FISCAL IMPACT: Council previously appropriated CDBG funds for the Section 108 consultant and authorized
staff time for program development. There is no additional fiscal impact associated with staff's recommendation
to submit the Section 108 application.
As staff has discussed in previous reports, there are, however, staffing impacts and potential direct fiscal impacts
of future RLF program implementation. These include:
1) Existing Staff: Substantial Community Development and legal staff time to further develop Program
Guidelines (policies, procedures, legal documents, establishment of Loan Committee, etc., and the Program
Manual compilation for future submission to Council).
2) Additional RLF Staff: RLF programs of similarly sized cities are typically supported by the equivalent of 1.5
full time positio~s. Staff will be submitting a request for $20,000 in FY 1998/99 CDBG funds to contract
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Page 7. Item _
Meeting Date 02/1 0/98
a loan consultant/community.based financing agency for services pertaining to credit analysis, processing,
closing, and servicing RLF loans. As part of the FY 1998199 budget process, staff is evaluating the need for
an additional steff person within the Community Development Department due to increased workloads and
expanded Council priorities. Staff is reviewing the potential for administration of the RLF program (including
program marketing, contract administration, Loan Committee management, and CDBG compliance) to be among
several duties assigned to a new staff person.
3) Loan Defaults: There is a risk of individual loan default and therefore the need for the City to use future
CDBG funds to repay loans. This is discussed in detail in Section CA.
(DOAl H:IHOMEI,COMMDEV\STAFF.RE?\12.16.97\SECT10N.10B [January 30,1998 {3:S1pmll
CHECKLIST AND SUBMISSION TABLE OF CONTENTS
The following checklist helps you to ensure that all of the required items have been submitted in order to receive
consideration for funding. The applicant should assemble the application packagein the order shown below, check
off each item included in its submission package and note the corresponding page number where the response is located.
Check
Off
0'
0'
0'
0'
[3"
o
Gr
~
g
G'
0'
if
~
~
~
o
o
o
o
,.
Transmittal Letter
Checklist and Submission Table of Contents
Applicant Narrative Statement
EDIIBEDI/I08/CDBG Funding Eligibility Statement
Reauest ror Loan Guarantee A!fsistance(check off one orlhe four options)
0' Formal application
o Brief description; formal application to he submitted in 60 days
D Copy of Section 108 tonn gunrnnlee approvnl document
o Request for Section 108 loan guarantee amendment to increase previously approved amount
Resnonse to RatinP.' Factors
#1
#2
Capacity of the Applicant and Relevant Organizational Experience
Distress/Extent of the Problem
Distress/Extent of the Problem form (optional)
o
#3 Soundness of Approach
#4 Leveraging Resources/Financial Need
Source & Use Statement NCJT'E: r~c.""uoeo
As
T"~LE. .
tiS Comprehensiveness and Coordination
Aonlicntion Forms and Certifications
Standard Form for Applicntion for Federal Assistance (SF.424)
Drug~Free Workplace Certification (l-IUD-50070)
Certification nnd Disclosure Form Regarding Lobbying (~F-LLL)
Applicnnt/Recipient Disclosure Update Report (HUD.2880)
Applicant Certifications
Certification Regarding Debarment & Suspension (HUD-2992)
Certification of Consistency with EZ/Ee Strategic Plan Nor
A~\"\c.A13.LE
Aonendices
Written Agreements or Signed Letters of Understanding ~ Rating Factor 1
Third Party Funding Commitment Letters - Rating Factor 4, subfactor 2
Acknowledgment of Application Receipt
q--A-fI
Page
Number
cover page
p.
p.
p.
p.-
p.
p.
p.
p.
p.
p.
p
p.
p.
p.
p.
p.
p.
p.
p.
p.
last page
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C. Narrative Statement
The City of Chula Vista has submitted (March 6, 1998) an application requesting a
$1,000,000 HUD Section 108 Loan Guarantee to fund a proposed City of Chula Vista
Small Business Revolving Loan Fund (RLF). As part of this activity, the City has
proposed to set aside $100,000 of the $1,000,000 for a loss reserve to allow for a
moderate level of risk for the projects to be funded through the RLF. The $100,000 in
EDI grant funds-if awarded-will be used to fund this loss reserve which will free the
City to increase the level of available HUD Section 108 Loan Guarantee funds from
$900,000 to the full $1,000,000 requested.
As discussed above, the EDI grant funds-if awarded-will be used to support the
broader HUD Section 108 funded Small Business RLF. The proposed activity and the
intended use of the EDI grants funds will meet the rating factors detailed in the
subsequent sections as follows:
Caoacitv of the Aoolicant and Relevant Organizational Exoerience - The City of
Chula Vista has a favorable record in administering its CDBG and HOME
programs, and has managed numerous economic development projects of similar
size and scope to the proposed activity. In addition, the City will be contracting
out various aspects of loan program administration including marketing, screening
(both underwriting and program eligibility), packaging, closing and servicing.
The City is reviewing the qualifications of several service providers serving the
San Diego market with experienced staff and established operating "systems" for
each component of RLF implementation. Candidates include one of the nation's
largest SBA 504 lenders and one of the State of California's most active
California Regional Guarantee Program lenders, each of which have been
involved in the origination and servicing of hundreds of transactions.
Distress/Extent of the Problem - The area that will be targeted by the RLF is
comprised of 10 census tracts that constitute the western portion of the City. The
level of distress covered by these census tracts can be measured in both absolute
and relative terms. The western portion of the City-including the downtown
corridor--can be characterized by high unemployment, lower incomes, high
crime and disinvestment while the eastern portion of the City can be characterized
by low unemployment, higher incomes, low crime and higher end commercial
and residential development. Although the City has two significantly impacted
census tracts, the entire area of distress covers 38% of the City's 26 census tracts
which, in turn, house over 36% of the City's residents. The geographic area
covered by these census tracts stretches the entire length of the City from north to
south, and thus, due to its size, dilutes the true level of distress within the City as
represented by the 1990 Census data. The level of distress is characterized by
areas of poverty, high concentrations oflow to moderate income households, high
unemployment, a high percentage of single female heads of household with
q --/1-9
related children, high levels of crime and economic disparity with other parts of
the City and the region. :
Soundness of Aooroach - The City has taken pro-active steps to ensure the
success of the RLF. First, it conducted a feasibility analysis to identify the type
and extent of need. Next, it developed an Operations Manual to provide specific
guidelines for implementation. The City structured the program to maximize
public benefit while minimizing risk. The activity will focus on creating jobs that
will be accessible to low to moderate income residents, and those previously on
welfare by establishing linkages through the South County Career Center and the
South Bay Solutions Collaborative. At the same time, the RLF has established
guidelines that reflect the low risk profile identified in the Price Waterhouse
underwriting criteria, and the Chula Vista Loan Committee comprised of lenders
and community representatives to review and approve/deny applications. Based
on the work completed to date, it is clear that the City's RLF program has
considerable momentum, and that approval of the EDI application will accelerate
the progress and produce viable results in a timely manner.
Leveraging ResourceslFinancial Need - The City has proposed a program that-if
approved-will result in a leverage ratio of HUD Section 108 Loan Guarantee
fund to ED! grant funds of 10:1. The $100,000 in ED! grant funds will be used
for a funded loss reserve for the proposed $1,000,000 Small Business RLF and
thus, will allow the City to make the full amount of HUD Section 108 Loan
Guarantee funds available to potential, qualified third party borrowers. To ensure
the long-term viability of the program, the City has established interest rates
allowing for the addition of a 1 % spread onto the costs of funds, monthly
repayment schedules, terms that match those established for both interim and
permanent funds, and a fee structure designed to recover costs-where
practicable.
Comorehensiveness and Coordination - As discussed above, the City has been pro-active
in the development of its proposed HUD Section 108 supported RLF. Prior to submitting
the HUD Section 108 application and the ED! application, the City completed a
feasibility study to determine the specific capital needs-both type and level of
demand--of the business and development community. In addition, the City has
prepared an Operations Manual outlining specific guidelines for program implementation
and coordination with the City's broader economic development activities. The City also
maintains integrated committees and commissions to ensure that information and
outcomes from the program are shared with community participants and City
departments, and that direct linkages are established with local and regional job
development programs to create job opportunities for low to moderate income residents
and for individuals previously on welfare.
Each of the projects funded through the Small Business RLF is expected to qualify as a
national objective through the creation and retention of new job opportunities, the
majority of which will be held by, or alternatively available to, low to moderate income
9--/1-10
,'1,
;n
-----T
residents [24 CFR 570.208(a)(4)]. If applicable, the City will utilize the presumptions
enumerated in the Streamlined Rule (March 1996). ..
The Small Business RLF will provide funding to eligible special economic development
activities. Consequently, all projects funded through the RLF are expected to qualify as
eligible activities under 24 CFR 570. 703(i)(I) conforming to eligible activities specified
under 24 CRF 570.203, special economic development, except for those activities
specifically identified as ineligible under 24 CFR 570.207. Since the eligible activity is
special economic development, the appropriateness guidelines under 24 CFR 570.209
will apply.
9 -A-II
,-
D. EDI/Section 108/CDBG Funding Eligibility Statement
The City will use the requested Section 108 and EDI funds as well as its CDBG
entitlement funds to support a Small Business RLF. The Small Business RLF will
provide funding to eligible economic development activities. Consequently, all projects
funded through the RLF are expected to qualify as eligible activities under 24 CFR
570.703(i)(I) conforming to eligible activities specified under 24 CRF 570.203, special
economic development, except for those activities specifically identified as ineligible
under 24 CFR 570.207. Funds will be allocated as follows, and will result in the creation
or retention of a minimum of 32 jobs (1 job per $31,250) filled by, or made available to
low to moderate income individuals.
Source Proposed Use! Amount
Section 108 Real Property $700,000
Personal Property $150,000
Working Capital $150,000
EDI Funded loss reserve $100,000
CDBG Activity Delivery Cost $20,000
I Eligible uses specified under 24 CFR 570.207(i)(I) conforming to eligible
activities specified under 24 CFR 570.203
To meet the voluntary financial aspects related to the appropriateness guidelines (24 CFR
570.209); the City will follow the best practices suggested in the regulations.
Accordingly, City staff will analyze project costs for completeness and reasonableness,
including verification from independent parties. Large transactions will require cost
certification. In addition, all sources of financing must be firmly committed before any
Section 108 will be disbursed and EDI subsequently set aside in the funded loss reserve.
In general, Section 108 disbursements and EDI set asides will reflect the percentage of
the proj ect that Section 108 finances. Furthermore, the underwriting staff will document
that Section 108 and EDI funds are not replacing conventional sources, that the Section
108 participation does not over subsidize the deal, and that the transaction is feasible with
Section 108 participation. Standards have also been set in the Operations Manual to
ensure that at least one full-time equivalent job is created or retained per $35,000 of
Section 108 funds used. The City has also outlined implementation practices in its
Operations Manual to ensure that the program does not violate the standards established
for individual activities as outlined in 24 CFR 570.209.
E. Request for Section 108 Loan Guarantee Assistance
The City of Chula Vista submitted a HUD Section 108 Loan Guarantee application on
March 6, 1998. This application presents the proposed program-a Small Business
RLF-that will be supported by this EDI application.
9- /J-/~
-I
EDI/BEDI/SECTlON I08/CDBG FUNDING ELIGIBILITY ST A 1:EMENT
Applicant:
Project Name/Title:
City of Chula Vista
~m.::\ l' Rll~; np.ss Revolvinq Loan Fund
Instructions: Fill in the dollar amount for the Section 108 eligible activity and the corresponding EDl or BEDI,
Section 108, and CDSG source.
"",,,'';' ce""" -,~ ',''';e,b,,! ~ ;"_';''''~!I! ii," "'~;",;",<
,,:,'EDlor'BEDI'l
Acquisition orRnl Property
24 CFR 570.703(a)
Rehabilitation of Publicly Owned Rnl Property
24 CFR 57Q703{b)
Pllymenl of Interest
24 CFR 570,703(.:)
Relocuion rayments
24 CPR 570703(d)
Clearance, Demolition, Removal
24 CFR 570703(c)
Sile Preparation
24 CPR S70,703(f)
Payment of Issuanee Feu
24 CFR 570.703(g)
Housing Rehabilitation
24 CFR 570.703{h)
. Economic Development Activities 100,000 1,000,000 20,000 1,120,000
24 CFR S70.703(i) (and 570203/204)
Con,truction orHou,ing
24 CFR 570.703(j)
Debl Servin Renrve
24 CFR 570703{k)
Public Facilitiu
24 CFR 570.703(1)
Public Facilitiu - Colonias
24 CFR 570.703(m)
Subtola[ 1,120,000
Costs Paid wilh Non CDBG.Related Fund .it'L.,.; .,ii..,..........!'..,' '....,,>i,:Ji........
."r 1,120,000
Total Project Costs 31 .....,...,:.,'CS;~., li:;:,',,.,",,,,;;:-,';.,'"
Public Benefit Projects with eligible economic development activities under 24 CFR S70.703(i) (see line indicated with an
asterisk above) are subject to the public benefit standards under 24 CFR 570.209.
A. If this project will meet the public benefit standard based upon the number of jobs to be created [see 570.209(b)(3)(i)(A)1.
enter the total number of jobs: Ii? I
B. If this project will meet the public benefit standard based upon the number of low- and moderate-income persons served in the
project area [see 570.209(b)(3)(i)(B)1. enter the number of low- and moderate.income persons living in the project area
I l
II These are abbreviau:d descriptions of the eligible Section 108 activities defined at 24 CFR 570.703.
2/ CDSa grants and program income other than EDl, SEDI or Section 108
3/ This figure should match the total provided on the Sources & Uses Statement.
9~/J-13
F. Rating Factors
Rating Factor 1: Capacity of the Applicant and Relevant Organizational
Experience
The City of Chula Vista will contract out the delivery of its Section 108/ EDI loan
program to an experienced service providers that has extensive experience in the
following areas:
. Marketing
. Screening
. underwriting
. program eligibility
. Packaging
. Approving
. Closing
. Disbursing
. Servicing
The San Diego market offers several qualified service providers with experienced staff,
and established operating "systems" for each component of implementation. These firms
are skilled in both credit analysis and CDBG/Section 108 eligibility. The city is
reviewing the qualifications of several service providers, and will execute a contract
within 30 days following the approval of the HUD Section 108 application. Candidates
include service providers that currently originate and service hundreds of transactions.
The City of Chula Vista has a favorable record in administering its CDBG and HOME
programs. The City has managed numerous economic development projects of similar
size and scope and has performed with distinction.
The City has developed an Operations Manual for implementing its Section 108 program
as a Revolving Loan Fund. The manual was developed after a market survey determined
there was a need for the advantages that Section 108 financing can provide to small and
medium sized businesses and small developers.
In general, the City will require the following from the service provider:
Marketing
The service provider will market the program to bankers, realtors, accountants,
appraisers, contractors, and other primary sources of potential transactions. In addition,
the service provider will complete the quarterly direct mailings (one page) to existing
businesses. The direct mail will concisely enumerate the advantages of Section 108 (long
term, fixed rate, and "A" rate) and give the company a contact to call for additional
information. In addition, the City will arrange press events for initial completed projects.
9-- A-It!
Screening
Before projects are taken to the Chula Vista Loan Committee, City staff will screen
projects for HUD eligibility, and the service provider's staff will screen the project for
creditworthiness. Accordingly, staff from the City and the service provider will focus
their efforts only on those transactions that are eligible and have a reasonable chance of
success. Staff will consist of seasoned credit analysts and will basically utilize the Price
Waterhouse underwriting guidelines for low risk deals as a threshold. A copy of the
guidelines is included in the Section 108 application, which was submitted to HUD on
March 6, 1998.
Screening is critical to the success of the effort. Staff from the City and the service
provider will identify critical issues early and allocate time to projects with good
prospects for completion.
Packaging
Once a transaction passes screening, it is then packaged for review by the Chula Vista
Loan Committee. The Operating Manual suggests the components of a loan package
although the service provider will have input as well.
Approving
If the project satisfies the risk profile and HUD eligibility, the Chula Vista Loan
Committee will issue a loan approval. The borrower may take this commitment to secure
a conventional, interim loan or proceed with the interim credit facility provided by the
Fiscal Agent. Since the City has submitted a generic application (BUD Central approves
the underwriting criteria), the City only needs approval for each specific transaction from
the Area HUD Office concerning eligibility.
Disbursing
The service provider will utilize checklists to disburse funds to the third party borrower
and comply with all Fiscal Agent requirements concerning the custodial lender and the
"Guaranteed Loan Account." The service provider will require documentation for all
disbursements, including retainages, cost certifications, and inspections for large
construction projects.
Servicing
The service provider will service all third party loans and deposit payments into the
"Loan Repayment Account" held by the local custodial lender. In addition to providing
the accounting to the City concerning loan balances, current loans, information for
calculating 1099's, etc., the service provider will also provide full portfolio management
such as reviewing collateral annually, collecting and analyzing financial statements once
q --/1-15"
a year, confirming payment of taxes and insurance, loan workouts, grading loans, etc.
The Fiscal Agent will service the loan from the City to the private investors.
The City will meet with the service provider quarterly to review results and fine-tune the
program.
q---- A-lro
Rating Factor 2: Distress/Extent of the Problem
The City is situated in the southern portion of San Diego County, less than 10 miles north
of the Mexican border. The proposed Revolving Loan Fund to be created with funds
received from the HUD Section 108 application (submitted March 6, 1998)---if
approved- and the loan loss reserve funded through with EDI funds-if approved-
have been established to increase the level of public and private investment in areas of
disinvestment within the City, and to fund projects that will result in the creation of jobs
that will be filled by~r made available to--the City's low to moderate income
residents. The RLF will be targeted to an area consisting of 10 census tracts that
comprise the western portion of the City (1990 Census Tract Numbers: 123.02, 124.01,
124.02,125,126,127,130,131.01,132.01 and 132.03). The level of distress covered by
these census tracts can be measured in both absolute and relative terms. The western
portion of the City-including the City southwestern, Broadway and 3rd Avenue
districts--can be characterized by high unemployment, lower incomes, high crime and
disinvestment while the eastern portion of the City can be characterized by low
unemployment, higher incomes, low crime and higher end commercial and residential
development. Although the City has two significantly impacted census tracts, the entire
area of distress is much broader covering 38% of the City's 26 census tracts and housing
over 36% of the City's residents. The geographic area covered by these census tracts
stretches the entire length of the City from north to south, and thus, due to its size, dilutes
the true level of distress within the City as represented by the 1990 Census data.
Specific factors that highlight the level of current-and potential future-distress in the
area to be served by the Revolving Loan Fund include:
Poverty Rate - The poverty rates for the census tracts in the target area are presented
below (Source: 1990 Census of Population and Housing STF1/STF3).
Poverty Rate Target/Project Area Jurisdiction
11.7% Census Tract 123.02 City ofChula Vista
14.1% Census Tract 124.01 City of Chu1a Vista
17.2% Census Tract 124.02 City of Chula Vista
16.3% Census Tract 125 City of Chula Vista
14.7% Census Tract 126 City ofChu1a Vista
13.7% Census Tract 127 City of Chula Vista
10.5% Census Tract 130 City of Chula Vista
13.3% Census Tract 131.01 City ofChula Vista
19.8% Census Tract 132.01 City ofChula Vista
16.8% Census Tract 132.03 City of Chula Vista
q -- ,A -{ '7
Concentration of Low-and Moderate Income Households - The target area is
characterized by a consistently high percentage of low- and moderate income
households as shown below (Source: 1990 Census of Population and Housing
STFlISTF3).
% Low- and
Moderate Income Target/Project Area Jurisdiction
Households
65.1 % Census Tract 123.02 City of Chula Vista
55.3% Census Tract 124.01 City ofChula Vista
56.7% Census Tract 124.02 City of Chula Vista
72.3% Census Tract 125 City of Chula Vista
56.7% Census Tract 126 City ofChula Vista
64.9% Census Tract 127 City ofChula Vista
48.7% Census Tract 130 City ofChula Vista
54.2% Census Tract 131.01 City of Chula Vista
65.17% Census Tract 132.01 City of Chula Vista
61.3% Census Tract 132.03 City ofChula Vista
Unemolovment - In 1990 annual average unemployment was 5.6% Nationally and
4.7% in Chula Vista. During the same period, all but two of the census tracts in the
target area had unemployment that exceeded both national and local unemployment
levels (Source: 1990 Census of Population and Housing STFlISTF3).
% Unemployment Target/Project Area Jurisdiction
8.2% Census Tract 124.01 City of Chula Vista
11.6% Census Tract 124.02 City ofChula Vista
15.5% Census Tract 125 City ofChula Vista
7.5% Census Tract 126 City of Chula Vista
7.6% Census Tract 127 City ofChula Vista
6.8% Census Tract 130 City ofChula Vista
6.5% Census Tract 132.01 City of Chula Vista
17.3% Census Tract 132.03 City of Chula Vista
Household Make-Uo - The target area is characterized by a high percentage of
households headed by single females with related children (SHH wlRC) as shown in
the following table (Source: 1990 Census of Population and Housing STFlISTF3).
q---- /I-If{
% SHH wlRC Target/Project Area Jurisdiction
7% Census Tract 123.02 City ofChula Vista
10% Census Tract 124.01 City ofChula Vista
11% Census Tract 124.02 City of Chula Vista
9% Census Tract 125 City ofChula Vista
10% Census Tract 126 City of Chula Vista
8% Census Tract 127 City of Chula Vista
9% Census Tract 130 City ofChula Vista
10% Census Tract 131.01 City ofChula Vista
10% Census Tract 132.01 City ofChula Vista
12% Census Tract 132.03 City ofChula Vista
Crime - In 1997 56% of the total violent and property related crime in the City
occurred in the target area (Source: City of Chula Vista Police Department).
% Total Crime & Target/Project Area Jurisdiction
IncidencesllOOO
2.0% & 78.3 Census Tract 123.02 City ofChula Vista
4.8% & 107.7 Census Tract 124.01 City ofChula Vista
2.8% & 38.7 Census Tract 124.02 City of Chula Vista
8.2% & 75.3 Census Tract 125 City of Chula Vista
3.6% & 70.7 Census Tract 126 City ofChula Vista
11.3% & 179.0 Census Tract 127 City of Chula Vista
3.9% & 47 Census Tract 130 City of Chula Vista
9.7% & 115.6 Census Tract 131.01 City ofChula Vista
6.2% & 65.1 Census Tract 132.01 City ofChula Vista
3.7% & 52.0 Census Tract 132.03 City ofChula Vista
Economic Disparitv - Economically, the western and eastern parts of the City are
divided into two distinctly divergent areas. The western portion of the City has
median housing values from $112,500 to $154,400 and median household incomes
ranging from $19,000 to $29,100. At the same time, the eastern portion of the City
east of 1-805 has median housing values from $204,000 to $271,000 and median
household incomes from $46,000 to $65,000 (Source: 1990 Census of Population and
Housing STF1/STF3).
When combined, the factors highlighted above indicate a high level of distress over a
large area of the City. This area-should City's BUD Section 108 and EDI application
be approved-will be provided with additional support to economically empower
residents and business by creating jobs and leveraging the level of private sector
investment in the target area.
q ----- A-/9
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133.05
102.00
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q--A -~O
Rating Factor 3: Soundness of Approach
If the Section 108 loan and the accompanying ED! application are approved, the City can
begin delivery of the Revolving Loan Fund immediately. The City has already
completed the strategic planning process, and is ready to proceed with implementation.
The City has completed a needs assessment that documented that the Chula Vista
business and development community are under served, and that a market exists for the
loan product that will be developed with Section 108 funds. Moreover, the City has
written an Operations Manual, which outlines procedures for marketing, packaging,
approving, closing, disbursing and servicing Section 108 loans. As part of its Section
108 application (submitted March 6, 1998), the City developed underwriting guidelines
which reflect the low risk profile specified in the Price Waterhouse criteria. In addition,
the City has access to a number of qualified service providers to assist with
implementation including, CDC Small Business Finance Corporation--{)ne of the largest
SBA 504 lenders in the nation, and California Southern Small Business Development
Corporation one of the State's leading lenders for the California Regional Loan
Guarantee Program. The program has considerable momentum with the recent formation
of the Chula Vista Loan Committee, and pending negotiations with potential service
providers for loan program administration. The program is established and awaiting
approval from HOD of the Section 108 application. Consequently, approval of an EDI
funding request will accelerate the process, and produce visible results in a timely
manner.
As discussed earlier, the program will be targeted to census tracts that have higher
poverty rates, higher unemployment and lower reinvestment levels than the City in
general. The program will create or retain a minimum of 32 jobs (at a rate of
approximately $31,250 per job), the majority of which will be available to, or held by,
low to moderate income residents. This increment will not resolve all of the investment
problems, eliminate poverty or remove unemployment from the respective census tracts;
however, a successful effort can make a substantive difference in the lives of the
residents in the area and for individuals previously on welfare. Likewise, a $1.1 million
to $2.2 million infusion of new investment (also to be used as a leveraging factor) can
create immediate, visible and lasting change.
The loan products will offer businesses and entrepreneurs tremendous value, and will
control risks relative to conventional financing. The extended maturities (up to 20 years
for real estate) will reduce debt service burden. The fixed interest rates will mitigate the
risk of a floating rate tied to a variable index such as the prime. Small businesses and
small entrepreneurs have limited ability to pass increased debt service costs through to
their customers or tenants. Although the interest rates to third party borrowers are not
necessarily low (treasuries plus 1.5%), they are reasonable and approximate the cost of
"A" rated bonds. Accordingly, the program in Chula Vista provides unrated third party
borrowers with the advantages ofrated corporate debt. Combined with availability, these
advantages enable many more potential borrowers to expand, form a business, or build
and lease real property. The obvious results are new employment opportunities
c? ----/I - ';1..(
(especially for area residents and former welfare recipients), visible new investment, and
increased tax base. .
Concerning additional security requirements, each borrower must conform to the
underwriting guidelines presented in the Section 108 application and execute a specific
lien (mortgage, DCC filing) and general lien (corporate and personal guarantee). The
City will utilize the EDI funds as a funded loss reserve (10%). Since future losses (loan
balances of defaults less proceeds of liquidation) discounted to a current value are
projected as less than the present value of the reserve, the program satisfies the provision
of the Credit Reform Act. The line of security is 1) specific lien, 2) general liens, and
3) loss reserve. By controlling risk, the City should not have to utilize future CDBG
entitlement to repay Section 108 debt service (although by statute the pledge must remain
in force for the life of the loan.)
The City has included the underwriting guidelines in its generic Section 108 application,
as submitted to HUD on March 6, 1998. Once the City receives approval, it will only
need an eligibility determination by the HUD Area Office for approval of individual
transactions since HUD will have already approved the underwriting criteria. The
guidelines reflect the low risk profile identified in the Price Waterhouse underwriting
criteria.
To ensure that the jobs created are available to area residents and former welfare
recipients, the City will make all employment opportunities accessible to the South
County Career Center and the South Bay Solutions Collaborative. The Career Center
offers one stop services for both employers and employees and is a partnership between
local community organizations and private industry. The South Bay Solutions
Collaborative was formed to coordinate and improve the services available to individuals
making the transition from welfare to work. Representatives include social service and
employment development providers, educational institutions, economic development
agencies, and the business community. Both organizations will make area residents and
individuals previously on welfare aware of the new job opportunities, assist them in
developing job skills, and coordinate all services and opportunities available to these
groups. RLF loan applicants will be referred to these available resources to maximize the
linkages between job creation and available labor force.
The proposed proj ect schedule is presented on the next page.
q -- A -,;).~
Project Schedule:
Time following Approval of
Task HUn Section 108 application
Execute Agreement with Service Provider 30 days
for Implementation
Finalize Application for Third Parties 45 days
Receive Approval for EDV 108 90-105 days
Initial Marketing 30 days
First Loan Approval 60-90 days
Finalize closing, disbursing, & servicing 60 days after first loan
procedures
Flow of Projects 180 days
cJ -- A -.;..3
Rating Factor 4:
Leveraging ResourceslFinancial Need
Levera!!e of Section 108 Funds
The City has submitted (March 6, 1998) an application requesting a $1,000,000 HUD.
Section 108 Loan Guarantee to fund a proposed City of Chu1a Vista Small Business
Revolving Loan Fund (RLF). The amount of ED! funding requested with this application
is $100,000, resulting in a leverage ratio of 10: 1 in Section 108 funds to ED! funds.
Financial Feasibilitv
The City has structured the underwriting criteria included in its Section 108 application
(submitted March 6, 1998) to allow for a moderate level of risk for which it has proposed
to set aside $100,000 of the $1,000,000 requested as a loss reserve. The City will use the
$100,000 in ED! funds-if awarded-to fund this loss reserve, and thus increase the
amount of capital available for loans to third party borrowers to the full $1,000,000 in
Section 108 funds requested.
The City of Chu1a Vista has structured its RLF to maintain the financial feasibility of the
program. Specific program guidelines that are documented in the City's Operations
Manual to ensure this outcome include:
. Interest rates for third party borrowers will include the addition of a 1 % spread
onto the cost of funds for interim loans offered by the Fiscal Agency after the
Level #1 transaction is closed. The City will re-10an the HUD 108 funds to third
parties on the same terms as the cost of funds (match use to source).
. Interest rates for third party borrowers will include the addition of a 1 % spread
onto the cost of funds for the permanent loan and essentially match the terms of
the Section 108 notes. However, payment from the third party borrower will be
collected monthly, and will not match the City's semi-annual payment to the
Fiscal Agent.
. Application fees (including all out of pocket expenses for appraisals, credit
checks, lien checks, etc.), issuance fees, origination fees, and servicing fees will
be paid by the third party borrower.
. The City's intent is to recover the costs associated with the program and not to
generate any significant program income as a result of this activity.
In addition to cost recovery, the City has established the following underwriting criteria
for determining project feasibility.
Business Loans
Business loans are defined as transactions involving operating companies. Debt
service is paid from cash flow generated from the sale of goods or the provision of
servIces.
9.-- ,A -~cf
Ability to Repav
Each transaction must indicate a high probability of repayment from either
existing cash flow, projected cash flow or a combination of both. The stabilized
debt coverage should be equal to or greater than 1.15.
In addition to paying the burden on debt service, the company must also evidence
the capability of generating sufficient cash flow to fund capital expenditures and
investments in working capital.
Collateral
Each loan will be secured by a specific lien on real and personal property where
possible (mortgages, UCCs, security agreements, etc.) along the following lines:
. Real Property: Up to 80% Loan to Value
. Personal Property Up to 75% Loan to Value
. Receivables Up to 75% of Receivables (Receivables
must involve creditworthy customers and be
aged less than 90 days. In addition,
concentration over 20% should be excluded.)
Up to 60% Loan to Value (based on liquid
.
Inventory
value).
Loan maturities must reflect the economic life of the asset financed.
Guarantees
Borrowers must inject sufficient equity to protect the interests of the City of
Chula Vista and corporately and personally guarantee each transaction. The terms
surrounding each guarantee will be determined at the discretion of the loan
committee.
Balance Sheet Analvsis
The balance sheet of each borrower must be sound concerning the collection of
receivables, the management of inventory, payables, accruals, etc, the amount of
net worth and the quality of debt.
Experience of Management
The management team of each borrower must have direct or transferable
experience sufficient to operate the venture successfully, including but not limited
to, marketing, operations, personnel, finance, pricing, sales, and collections.
Character
All borrowers and guarantors must be reputable and have a good credit history.
Investor Deals
Investor transactions involve income producing real estate and are also referred to as
real estate lending or developer deals. Debt service is paid from cash flow generated
by leases to third parties.
q~ A-~S-
Abilitv to Reoav
A low to moderate risk investor deal has strong market for its space to be leased;
alternatively, it has a high percentage of pre-leasing (at least 50%) with good
tenants. The projected debt coverage is in excess of 1.15. Moreover, investors
receive a market return and the developer receives reasonable compensation for
hislher efforts.
A low to moderate risk real estate transaction provides a reasonable time for the
property to achieve occupancy stabilization and funds an adequate leasing reserve
in the budget. In addition, the developer annually funds a replacement reserve for
components of the property, which wear out periodically (roof, HV AC,
appliances, etc.)
Collateral
The maximum loan to value is 80% of the lower of 1) cost or 2) value. The
appraisal should be completed by an SRA or MAl with experience in this type of
property and for simple fee purposes. Staff must critically evaluate the appraisal
to insure that the methods of valuation and the fundamental analysis of
determining Net Operating Income are sound.
Capacitv/Experience
The development team in the transaction should have expenence with other
projects which are similar in size and scope to the project. The development team
includes the developer the architect, the contractor, the leasing agent, the
management company and, for larger projects, the syndicator. All members of
the development team should be successful and have adequate resources to
complete their respective tasks.
Developer Commitment
For complicated tax reasons, it is difficult for developers to personally or
corporately guarantee permanent mortgages involving limited partners, especially
if there are significant tax benefits involved in the transaction. Nevertheless,
developers can evidence commitment in the following ways:
. Sign a recourse note during construction.
. Guarantee completion of construction and absorb cost overruns.
. Guarantee cash flow shortfalls due to leasing or operations.
. Defer payment of the development fee until the project is built and/or the
project achieves the desired debt coverage for a specified period oftime.
If the project does not involve investors other than the developer, the developer
should sign a recourse note on the permanent loan.
Character
All borrowers and guarantors must be reputable and have a good credit history.
q -11- ,;Lk
Levera!!e of Other Financial Resources
Program guidelines established for the City's proposed RLF require a minimum private
financing contribution of 50% for all investor and user deals. However, the underwriting
staff and loan committee may consider projects with a lower level of private financing
based on level of public benefit and the strength of the deal as long as it conforms with
the program's established underwriting criteria. In addition to private sector
contributions, the City is providing $20,000 of CDBG funding to offset program
operating expenses not covered by fee revenue and anticipates future CDBG support for
the program.
q-A-~7
Applicant:
Project NarnelTitle:
RA TING FACTOR 4: LEVERAGING RESOURCES/FINANCIAL.NEED
SOURCES & USES STATEMENT .
City of Chula Vista
Sm?lll Business Revolvinq Loan Fund
["ii """""~~,,,,~ "'"'"",. i). mn....\:;ii~,,~}.
'.":."::'''':::['i,,:' "'''''''''''''''",,,,,,, , illi" ~ AClluisition of Real Pronutv
EDI or BEDI (circle one) 100,000 Construction/Reh a b
Section 108 1,000,000 (excL infrastructure & remediation
CDOG 20,000 Infrastructure
Remediation
M&E
Workin2' Canital
"f.",,,.',.',,:,::,,,.,.,,:,,,,,,,,,,,,,,,,,,.,:.,,,, k~tti$lf,"<"'''''':~ 1,000,000
5' Ui,:" Creation of Loan Fund for
ED Activities
Proiect Deliverv Costs 20,000
Contingencv
Loan Loss Reserve 100,000
Land Writedown
Interest Rate Writedown
P~,;;.."" . '(i'/d'~bt tinancincr\ :':'"'''' .'i Credit Enhancements
EQuitv
TOTAL: 11,120,000 ITOTAL: I 1,120,000 I
Instructions: Fill in the dollar amounts corresponding to each project source in theArnount column on the left half
of the table. Sources of funding not listed should be added under the relevant category (Federal, State/Local, Private).
For each of the project uses (on the right half of the table), fill in the dollar amount to be spent in theAmount column.
Add additional uses in the blank lines at the bottom of the Uses column.
q-- A-~
Rating Factor 5: Comprehensiveness and Coordination
The City has been pro-active in the development of its proposed HUD Section 108
Revolving Loan Fund (RLF) and the establishment of an organizational structure that
facilitates the interaction and coordination between City departments, community based
organizations and the private sector.
Prior to submitting the HUD Section 108 application and the EDI application, the City
developed a strategy to coordinate and integrate its activities with local and regional
groups and organizations. The strategy involved the completion of a feasibility study to
determine the specific capital needs-both type and level of demand---of the business
and development community in Chula Vista. This was followed by the preparation of an
Operations Manual which provides specific guidelines for program implementation and
coordination with the City's broader economic development activities. These efforts
involved comprehensive research and coordination with the following groups and
organization.
. A cross-section of business owners from different business sectors located in
various targeted areas throughout the City.
. A cross-section of commercial real estate and housing developers involved in the
revitalization of the downtown area, and the development of undeveloped or
imderutilized properties with designated Redevelopment Areas and throughout the
City.
. Private and community based lenders serving---or with the capacity to serve-the
City. These organizations included small independent banks, major regional and
state-wide commercial lending institutions, the regional micro-lending
organization, the regional SBA 504 Certified Development Corporation, the
regional multi-bank Community Development Corporation, and the regional
office for the California Regional Loan Guarantee Program established by the
California Trade and Commerce Agency.
. Community based organizations including the Chamber of Commerce, the Small
Business Development & International Trade Center and the regional business
incubator.
. City departments and commissions including Business Licensing, Redevelopment
Agency, Community Development and the Chula Vista Economic Development
Commission
Activities for the RLF will be coordinated by City of Chula Vista's Community
Development Department (CDD). The City is currently negotiating with a number of
qualified service providers and will, upon approval of the HUD Section 108 application,
award a contract to administer the RLF. This service provider will originate the loans
and present them to the Chula Vista Loan Committee for review and approval as well as
ongoing portfolio management. City staff will screen applicants for CDBG eligibility.
The CDD will coordinate regular information dissemination within the City to ensure that
all groups-including the Redevelopment Agency, the Economic Development
Commission and the City Council-share relevant information and are appraised of
overall program activities, and to appraise them of the loan application and manage the
C}-/l-:L9
portfolio. Due to the structure of the Chula Vista Loan Committee and Economic
Development Commission as well as the contracting out of the program. administration
function, other groups and organizations will be involved in the sharing of information
and outcomes. The City has gone to great lengths to ensure that the Chula Vista Loan
Committee and the Economic Development Commission have members that represent
key groups and organizations within the community and region including the Chamber of
Commerce, local developers, local lenders, the Small Business Development Center, and
area business and property owners. In addition, the service providers being consider for
contract administration will be integrated into this effort with information and outcomes
being further shared through their own various Board of Directors which include a broad
spectrum of representatives from the public, private and not-for-profit communities.
As discussed above, the City has established linkages with various groups and
organizations both within the City and the region. To coordinate program activities and
to ensure that solutions are holistic and comprehensive, the City will have regular
meetings. with the Chula Vista Loan Committee and make regular presentations to the
Chula Vista Economic Development Commission. In addition, as part of its participation
in the South County Career Center and the South Bay Solutions Collaborative, the City
will be integrating RLF program activities, solutions and outcomes with a extensive
network of service providers including social service and employment development
agencies, educational institutions, economic development organizations and the business
community.
4-- /1-.3.0
Application for Federal
Assistance
01B Awroval No. 0348-00'
2. Date Submitted Applicant Identifier
~ype of Submission: 3. Dale Received by Stale Slale ~pplication Identifier
Application Pre-application
o Construction o Construction 4. Date Received by Federal Agency Federalldentilier
Q Non~Construction o Non-Construction
5. Applicant Information
Legal Name City of Chula Vista Organizational Unit
Address (give city, county, Stale, and zip code): Name, telephone number, and facsimile number of the person 10 be ccntacte&.o
matters Involving this application (give area codes)
276 Fourth Avenue
Chula Vista, CA 91910 Cheryl Dye
619-691-5047
619-476-5310 (fax)
6. Employer Identification Number (EJN): 7. Type of Applicant: (enter appropriate letter in box) [J
GQ-I 61 0 I 0 1 0 I 6 I 9 I 0 I A. Slate J. Private University
8. County K. Indian Tribe
8. Type of Application: C. Municipal L. Individual
Il9 New D Continuation D Revision D. Township M. Profit Organization
E. Interstate N. Nonprofit
If Revision, enter appropriate letter(s) in box(es): D D F. Intermunicipal O. Public Housing Agency
G. Special District P. Other (Specify):
A. Increase Award B. Decrease Award C. Increase Duration H. Independent School Dist.
D. Decrease Duration Other (specify): I. State Controlled Institution of Higher Learning
9. Name of Federal Agency:
U.S. Department of Housing and Urban Development
10. Catalog of Federal Domestic Assistance Number: 11. Descriptive Title of Applicant's Project:
[!B] - GIiliJ EDI Funded Loss Reserve for
ille: Section 108 Revolving Loan Fund
CDBG
12. Areas Atfected by Project (cities, counties. States, etc.):
City of Chula Vista
13. Proposed Project: 14. Congressional Districts of;
Start Date I Ending Date a. Applicant I b. Project 50th
9/1/98 50th
15. Estimated Funding: 116.ls Ap lication ~ubject to ~evj~w by St~te !=xecutive Order 1~372 Process?
a.
Yes
ThiS pre-applicatIon/applicatIon was made available to the
State Executive Order 12372 Process for review on:
Date:
b. No [Jg Program is not covered by E.O. 12372
on Debt?
If .Ves," explain below or attach an explanation
DNa
a.
are true and correct, the document hcbeen dl
'Jrized by the governing body of the applicant and the applicant will comply with the attached assurances if the assistande awardc
.led Name of Authorized Representative b. TitleM c. Telephone Number
. ayor (619) 691-504~,
d. Signature at Authorized Representative
e. Dale Signed
Previous Editions Not Usable
Authorized for Local Reproduction
9--,A -.31
form SF-424 (4/'
Prescribed by OMS Circular A~1
I,
:y
Application for Federal Assistance
Funding Matrix
The applicant must provide a funding matrix as shown below listing each program for which Federal
funding is being requested.
Program' Requested Federal State Local Other
Dollar Share Share
Amount
HUD/EDI 100,000 100,000
HUD/Section 108 (Submitte d March 6, 1998)
.
* For FHIPs, show both initiative and component
q --- II-~-'-
Page no: D
Certification for
a Drug-Free Workplace
U.S. Department of Housing
and Urban Development
Applicant Name
Citv of Chula Vista
.""gram/Activity Receiving Federal Grant Funding:
Small Business Revolving Loan Fund
Acting on behalf of the above named Applicant as its Authorized Official, I make the following certifications and agreements
the Department of Housing and Urban Development (HUD) regarding the sites listed below:
I certify that the above named Applicant will or will continue (I) Abide by the terms of the statement; and
to provide a drug-free workplace by: .
(2) NotIfy the employer in writing of his or her con vi
a. Publishing a statement notifying employees that the UTI- tion for a violation of a criminal drug statute occurring in t
lawful manufacture, distribution, dispensing, possession, or use workplace no later than five calendar days after such convictic
of a controlled substance is prohibited in the Applicant's work-
place and specifying the actions that will be taken against
employees for violation of such prohibition.
b. Establishing an on-going drug-free awareness program to
inform employees m
(1) The dangers of drug abuse in the workplace;
(2) The Applicant's policy of maintaining a drug-free
workplace;
(3) Any available drug counseling, rehabilitation, and
employee assistance programs; and
(4) The penalties that may be imposed upon employees
irug abuse violations occurring in the workplace.
c. Making it a requirement that each employee to be engaged
in the performance of the grant be given a copy of the statement
required by paragraph a.;
d. Notifying the employee in the statement required by para-
graph a. that, as a condition of employment under the grant, the
employee will m
e. Notifying the agency in writing, within ten calendar da
after receiving notice under subparagraph d.(2) from an er
ployee or otherwise receiving actual notice of such convictic
Employers of convicted employees must provide notice, inclu
ing position title, to every grant officer or other designee I
whose grant activity the convicted employee was workin
unless the Federalagency has designated a central point for t
receipt of such notices. Notice shall include the identificatil
number(s) of each affected grant;
f. Taking one of the following actions, within 30 calenn
days of receiving notice under subparagraph d.(2), with resp'
to any employee who is so convicted ___
(I) Taking appropriate personnel action against such
employee, up to and including termination, consistent with t
requirements of the Rehabilitation Act of 1973, as amended;
(2) Requiring such employee to participate satisfact
rily in a drug abuse assistance or rehabilitation program a
proved for such purposes by a Federal, State, or local health, I,
enforcement, or other appropriate agency;
g. Making a good faith effort to continue to maintain a dru
free workplace through implementation of paragraphs a. thru
2. Sites for Work Performance. The Applicant shall list (on separate pages) the site(s) for the performance of work done in connection with t
HUD funding of the program/activity shown above: Place of Performance shall include the street address, city, county. Statrn,dazip COI
Identify each sheet with the Applicant name and address' and the program/activity receiving grant funding.)
Check here D if there are workplaces on file that are not identified on the attached sheets.
I hereby certify that all the information stated herein, as well as any information provided in the accompaniment herewith,pise and accura
Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties.
(18 U.S.C.1001,1010, 1012; 31 U.S.C. 3729, 3802)
/' of Authorized Official:
~
Dale:
0- A -~.3
Signature:
x
form HUD-S0070 (3/0
ref. Handbooks 7417.1,7475.13,7485.1 &
Certification of Payments
to Influence Federal Transactions
U.S. Department of Housing
and Urban Development
Office of Public and Indian Housing
Applicant Name
City of Chula Vista
Program/Activity Receiving Federal Grant Funding
Small Business Revolving Loan Fund
The undersigned certifies. to the best of his or her knowledge and beiief. that:
(I) No Federal appropriated funds have been paid or will be
paid, by or on behalf of the undersigned, to any person for
influencing or attempting to influence an officer or employee of
an agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connec-
tion with the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into
of any cooperative agreement, and the extension, continuation,
renewal, amendment, or modification of any Federal contract,
grant, loan, Of. cooperative agreement.
(2) If any funds other than Federal appropriated funds have
been paid or will be paid to any person for influencing or
(" "llpting to influence an officer or employee of an agency. a
.lber of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with this
Federal contract, grant, loan, or cooperative agreement, the
undersigned shall complete and submit Standard Form-LLL,
Disclosure Form to Report Lobbying, in accordance with its
instructions.
(3) The undersigned shall require that the language of thi,
certification be included in the award documents for all subaward~
at all tiers (including subcontracts, subgrants, and contracV
under grants, loans, and cooperative agreements) and that al
subrecipients shall certify and disclose accordingly.
This certification is a material representation of fact upon whicl
reliance was placed when this transaction was made or entere{
into. Submission of this certification is a prerequisite for makin1
or entering into this transaction imposed by Section 1352, Titl<
31, U.S. Code. Any person who fails to file the require,
certification shall be subject to a civil penalty of not less thai
$10,000 and not more than $100,000 for each such failure.
I hereby certify that all the info~mation stated herein, as well as any information provided in the accompaniment herewith~rise and accurat1
Warning: HUD will prosecute false claims and statements. Convicti'on may result in criminal and/or civil penalties.
(18 U.S.C.'1001, 1010, 1012; 31 U,S.C. 3729, 3802)
Name of Authorized Official:
Title:
Jre:
Date:
x
q ---/1-.3.4
form HUD 50071 (3/9'
ref. Handboooks 7417.1,7475.13,7485.1, & 7485.
Previous edition is obsolete
Disclosure of Lobbying Activities
Approved by OMS 0348.004E
Complete this form to disclose lObbying activities pursuant to 31 U.S.C. 1352
(See reverse side for Instructions.)
Public Reporting Burden for this collection of information is estimated to average 30 minutes per response, inc.luding the timtcr reviewing instructions
ching existing data sources, gathering and maintaining the data needed, and completing and reviewing the co~lection of intmation. Please do not returr
," completed form to the Office of Management and Budget; send it to the address provided by the sponsoring agency.
1. Type of Federal Action: 2. Status of Federal Action: 3. Report Type:
~ a. contract [Jg a. bid/offer/application ~ a. initial filing
B b. grant b. initial award b. material change
c. cooperative agreement c. post-award For Material Change Only:
d. loan year quarter
e. loan guarantee
f. loan insurance date of last report
4. Name and Address of Reporting Entity: 5. It Reporting Entity in No.4 is Subawardee, enter Name and Address
Dprime o Subawardee lier , if known: of Prime:
City of Chu1a Vista
276 Fourth Avenue
Chu1a Vista, CA 91910
Congressional District, if known: . Congressional District, if known:
6. Faderal DepartmenUAgency: 7. Federal Program Name/Description:
HUD EDI/Section 108
CFDA Number, if applicable:
'ederal Action Number,if known: 9. Award Amount, if known:
S
100,000
10a. Name and Address of Lobbying Registrant
(if individual, last name, first name, MI):
No lobbying activities have been
undertaken for this federal action
b. Individuals Performing Services (including address if different from No
lOa.) (last name, first name, Ml):
11. Information requested through this form is authorized by sec.319,1 Signature:
Pub. L. 101-121, 103 Stat. 750. as amended by sec. 10; Pub. L. 104r
65. Stat. 700 (31 U.S.C. 1352). This disciosure of lobbying activities
is a material representation of fact upon which reliance was placed Print Name:
by the above when this transaction was made or entered into. Thi~
"isclosure is required pursuant to 31 U.S.C. 1352. This informati01 .
Jill be reported to the Congress semiannually and will be available Tille:
for public inspection. Any person who fails to file the required
disclosure shall be subject to a civil penaity of not less than $10,000
and not more than $100.000 for each such failure. I
Authorized for Local Reproductlor
Standarcr. Form-~LL (1/96:
Applicant/Recipient
Disclosure/Update Report
U.S. Department of Housing
and Urban Development
Office of Ethics
OMS Approval No. 2510-0011 (exp.3/31/9<
Instructions. (See Public Reporting Statement and Privacy Act Statement and detailed instructions on page 4.)
(I Applic~ntlRecipient Information Indicate whether this is an Initial RePora
1. ApplicanVRecipient Name. Address, and Phone (include area code)
City of Chu1a Vista
or an Update Rep~rt
Scx::ial. Sealr ity N..rrter or
Employer In MJrrl:=
95-6000690
2. Project Assisted! to be Assisted (ProjecVActivity name and/or number and its location by Street address, City, and State)
Small Business Revolving Loan Fund
3. Assistance Requested/Received
Funds for Loss Reserve
4. HUD Program
EDI
5. Amount RequestedlReceiv:
$ 100,000
Part II. Threshold Determinations - Applicants Only
1. Are you requesting HUD assistance for a specific project or activity, as provided by 24 CFR Part 12, Subpart
C, and have you received, or can you reasonably expect to receive, an aggregate amount of all forms of
covered assistance from HUD, States, and units of general local government, in excess of $200,000 during
the Federal fiscal year (October 1 through September 30) in which the application is submitted? Dyes
If Yes, you must complete the remainder of this report.
If No, you must sign the certification below and answer the next question.
I hereby certify that this information is true. (Signature) Date
2. Is this application for a specific housing project that involves other government assistance? 0 Yes
If Yes, you must complete the remainder of this report.
If No, you must sign this certification.
I hereby certify that this information is true. (Signature) Date
If your answers to both questions are No, you do not need to complete Parts [II, IV, or V, but you must sign the
certification at the end of the report.
Part III. Other Government Assistance Provided/Requested
ONO
Q9No
DenartmentlState/LocaJ Anenc\I Name and Address
Proaram
Tvne of Assistance
Amount Reauested/Provided
I. mere other government assistance that is reportable in this Part and in Part V, but that is reported only in Part '{C] Yes 0
If there is no other government assistance, you must certify thet this information is true.
I hereby certify that this information is true. (Signature)
page9:;;- /I-.iU,
. Date
form HUD-2BBO (3l
ref. See 102, HRA 1989; PL. 101 .,
Part IV. Interested Parties
Alphabetical list of all persons with a reportable financial
interest in the project or activity
(for individuals, give the last name first)
Social Security Number or
Employee [0 Number
Type of Participation I
in ProjecVActivity
Funding is for a loss reserve to support a prop sed HUD Section 10
funded Small Business Revclving Loan Fund. The Program is awaitin
approval of the HUD Secticn 108 application, th s no projects have
been funded. At this timE , no interested part'es have been
identified.
If there are no persons with a reportable financial interest, you must certify that this information is true.
I hereby certify that this information is true, (Signature)
'1-/1
page2of:' -.3 7
ref. Sec 102,
Financial Interest
in ProjecUActivity
($ and %)
'Date
form HUD-2BBO(319'
HRA 1989: PL. 101 - 23
Part V. Report on Expected Sources and Uses of Funds
Source
1) BUD Section 108
2) BUD EDI
3) CDBG
$1,000,000
$100,000
$20,000
If there are no sources of funds, you must certify that this information is true.
I hereby certify that this information is true. (Signature)
Date
Use
1) BUD Section 108
2) BUD EDI
3) CDBG
Small Business Revolving Loan Fund
Funded Loan Loss Reserve
Program Delivery
If there are no uses of funds, you must certify that this information is true.
I hereby certify that this information is true. (Signature)
Certification
Warning: If you knowingly make a false statement on this form, you may be subject to civil or criminal penalties under Section 1001 dtl,
18 of the United States Code. In addition, any person who knowingly and materially violates any required disclosure of informan, includin!
ir ional non-disclosure, is subject to civil money penalty not to exceed $10,000 for each violation.
i certify that this information is true and complete.
Signature
Date
9-~
Page3of7
I Date
form HUD-2SS0 (3192
ref. See t02. HRA 19S9; PL. lOt - 23'
Applicant Nondiscrimination Certifications
As the duly authorized representative of the applicant, 1 certify that the applicant:
1. Will comply with all Federal statutes relating to
nondiscrimination. These include but are not
limited to;
a) Title VI of the Civil Rights Act of 1964
(42 V.S.C. 2000d) and regulations
pursuant thereto (24 CFR Part 1), which
prohibit discrimination on the basis of
race, color or national origin;
b) Section 504 of the Rehabilitation Act of
1973, as amended (29 V.S.C. P94), and
implementing regulations at 24 CFR Part
8, which prohibit discrimination on the
basis of handicap;
c) the Age Discrimination Act of 1975, as
amended (42 V.S.C. ~~610l-6l07), and
implementing regulations at 24 CFR Part
146, which prohibit discrimination on the
basis of age; and,
d) the requirements of any other
nondiscrimination statute(s) which may
apply to the application.
2. Will comply with the Fair Housing Act of (42
V.S.C. 3601-19), as amended, and with
implementing regulations at 24 CFR Part 100
et seq., which prohibit discrimination in
housing on the basis ofrace, color, religion,
sex, handicap, familial status or national
origin, and administer its programs and
activities relating to housing in a manner to
affirmatively further fair housing.
3. Will comply with Section 109 of the Housing
and Community Development Act of 1974, as
amended, (42 V.S.C. 5301-5322), which states
that no person shall on the ground of race,
color, national origin, religion, or sex be
excluded from participation in, be denied the
benefits of, or be subjected to discrimination
under any program or activity funded in whole
or in part with funds made available under this
title.
Signature of Authorized Certifying Official; Applicant:
X
Title; Date;
tJ-A,3l/
Certification Regarding
Debarment and Suspension
\ ,ication A: Certification Regarding Debannent,5uspension, and
Other Responsibility Matters. Prinary Covered Transactions
1. The prospective primary participant certifies to the best of its knowl-
edge and belief that its principals;
3. Are not presently debarred, suspended, proposed for debarment.
declared ineligible, or voluntarily excluded from covered transactions
by any Federal debarment or agency;
b. Have not within a three-year period preceding this proposal,
been convicted of or had a civil judgment rendered against them for
commission of fraud or a criminal offense in connection with obtain-
ing, attempting to obtain, or performing a public (Federal, State, or
local) transaction or contract under a public transaction; violation of
Federal or State antitrust statutes or commission of embezzlement, theft,
forgery, bribery, falsification, or destruction of records, making false
statements, or receiving stolen property;
c. Are not presently indicted for or otherwise criminally or civilly
charged by a governmental entity (Federal, State, or local) with
commission of any of the offenses enumerated in parugraph (l)(b) of
this certification; and
d. Have not within a three-year period preceding this application!
proposal had one or more public transactions (Federal, State, or local)
terminated for cause or default. .
2. Where the prospective primary participant is unable to certify to
anv of the statements in this certification, such prospective participant
attach an explanation to this proposal.
Instructions for Certification (A)
1. By signing and submitting this proposal, the prospective primary
participant is providing the certification set out below.
2. The inability of a person to provide the certification required below
will not necessarily result in denial of participation in this covered
transaction. The prospective participant shall submit an explanation
of why it cannot provide the certification set out below. The certifi-
cation or explanation will be considered in connection with the
department or agency's determination whether to enter into this
transaction. However, failure of the prospective primary participant to
furnish a certification or an explan.ation shall disqualify such person
from participation in this transaction.
3. The certification in this c-lause is a material representation of fact
upon which reliance was place when the department or agency deter~
mined to enter into this transaction. If it is later determined that the
prospective primary participant knowingly rendered an erroneous
certification, in addition to other remedies available to the Federal
Government, the department or agency may terminate this transaction
for cause of default.
U.S. Department of Housing
and Urban Development
4. The prospective primary participant shall provide immediate writ
ten notice to the department or agency to whom this proposal i'
submitted if at any time the prospective primary participant learns tha
its certification was erroneous when submitted or has become errone
ous by reason of changed circumstances.
5. The terms covered transaction, debarred, suspended, ineligible
lower tier covered transaction, participant, person, primary cov
ered transaction, principal, proposal, and voluntarily excluded a'
used in this clause, have the meanings set out in the Definitions an,
Coverage sections of the rules implementing Executive Order 12549
You may contact the department or agency to which this proposal i.
being submitted for assistance in obtaining a copy of these regulations
6. The prospective primary participant agrees by submitting thi~
proposal that, should the proposed covered transaction be entered into
it shall not knowingly enter into any lower tier covered transactiol
with a person who is debarred, suspended, declared ineligible, 0
voluntarily excluded from participation in this covered transaction
unless authorized by the department or agency entering into thi
transaction.
7. The prospective primary participant further agrees by submittin~
this proposal that it will include the clause titled "Certificatioi
Regarding Debarment, Suspension, Ineligibility and Voluntary Exclu
sian. Lower Tier Covered Transaction," provided by the departmen
or agency entering into this covered transaction, without modification
in all lower tier covered transactions and in all solicitations for lowe
tier covered transactions.
8. A participant in a covered transaction may rely upon a certificatiol
of a prospective participant in a lower tier covered transaction that i
is not debarred, suspended, ineligible, or voluntarily excluded from th,
covered transaction, unless it knows that the certification is erroneous
A participant may decide the method and frequency by which i
determines this eligibility of its principals. Each participant may, bu
is not required to, check the Nonprocurement List.
9. Nothing contained in the foregoing shall be construed to requir;
establishment of a system of records in order to render in good faith tho
certification required by this clause. The knowledge and informatio,
of a participant is not required to exceed that which is norm all
possessed by a prudent person in the ordinary course of busines
dealings.
10. Except for transactions authorized under paragraph (6) of thes
instructions, if a participant in a covered transaction knowingly enter
into a lower tier covered transaction with a person who is suspende'
debarred, ineligible, or voluntarily excluded from participation in thi
transaction, in addition to other remedies available to the Fedep'
Government, the department or agency may terminate this transactio
for cause of default.
~-II-~o
Peg: 1 of 2
form HUD-2992 (3198
Certific.ation B: Certification Regarding Debarmen4 Suspension, Ineli~
gibility and Voluntary Exclusion - Lower Tier Covered Transactions
1. The prospective lower tier participant certifies, by submission of
t"';" proposal, that neither it nor its principals is presently debarred,
.:nded, proposed for debarment, declared ineligible, or voluntarily
excluded from participation in this transaction by any Federal depart-
ment or agency.
2. Where the prospective lower tier participant is unable to certify to
any of the statements in this certification, such prospective participant
shall attach an explanation to this proposal.
Instructions for Certification (B)
1. By signing and submitting this proposal, the prospective lower tier
purticipant is providing the certification set out below.
2. The certification in this clause is a material representation of fact
upon which reliance was pluced when this transaction was entered into.
If it is later determined that the prospective lower tier participant
knowingly rendered an erroneous certification, in addition to other
remedies available to the Federal Government, the department or
agency with which this transaction originated rimy pursue available
remedies, including suspension and/or debarment.
3. The prospective lower tier participant shall provide immediate
wrinen notice to the person to which this proposul is submitted if at any
time the prospective lower tier participant learns that its certification
was erroneous when submitted or has become erroneous by reason of
changed circumstances.
4. The terms covered transaction, debarred, suspended, ineligible,
lower tier covered transaction, participant, person, primary cov-
ered transaction, principal, proposal, and voluntarily excluded as
in this clause, have the meanings set out in the Definitions and
L.... ~erage sections of rules implementing Executive Order 12549. You
muy contuct the person to which this proposal is submitted for assis-
tance in obtaining a copy of these regulations.
5. The prospective lower tier participant agrees by submitting thi'
proposal that, should the proposed covered transaction be entered into
it shall not knowingly enter into any lower tier covered transactio I
with a person who is debarred, suspended, declared ineligible, 0
voluntarily excluded from participation in this covered transaction
unless authorized by the department or agency with which this trans
action originated.
6. The prospective lower tier participant further agrees by submittin!
this proposal that it will include this clause titled "Certificatiol
Regarding Debarment, Suspension, Ineligibility and Voluntary Exclu
sian - Lower Tier Covered Transaction," withoutmodification, in al
lower tier covered transactions and in all solicitations for lower tie
covered transactions.
7. A participant in a covered transaction may rely upon a certificatioi
of a prospective participant in a lower tier covered transaction that i
is not debarred, suspended, ineligible, or voluntarily excluded from th.
covered transaction, unless it knows that the certification is erroneous
A participant may decide the method and frequency by which i
determines the eligibility of its principals. Each participant may, bu
is not required to, check the Nonprocurement List.
8. Nothing contained in the foregoing shall be construed to requin
establishment of a system of records in order to render in good faith th.
certification required by this clause. The knowledge and informatior
of a participant is not required to exceed that which is normaIl~
possessed by a prudent person in the ordinary course of busines'
dealings.
9. Except for transactions authorized under paragraph (5) of thes;_
instructions, if a participant in a lower covered transaction knowing!)
enters into a lower tier covered transuction with a person who i~
suspended, debarred, ineligible, or voluntarily excluded from partici
pation in this transaction, in addition to other remedies available to th.-
Federal Government, the department or agency with which this trans
action originated may pursue available remedies including suspensior
and/or debarment.
Apolicant
. City of Chula Vista
Date
Signature of Authorized Certifying Official
TItle
'-20f:l-A -4 I
form HUD-2992 (3198)
Certification of Consistency
with the EZlEC Strategic Plan
u.s. Department of Housing
and Urban Development
I certify that the proposed activities/projects in this application are consistent with the Strategic Plan of a Federally-de8iC;ed Empowerrne
Zone (EZ). Enterprise Community (EC), or Urban Enhanced Enterprise Community.
(Type or clearly print the following information:)
Applicant Name:
Not Applicable
Name of the Federal
Program to which the
applicant is applying:
Name of EZ/EC:
I further certify that the proposed activities/projects will be located within the EZ/EC and serves EZ/EC residents. (2 points)
Name of the
Official Authorized
to Certify the EZ/EC:
Title:
Signature:
Date:
Page' 07:- A -t/ :L
ferm HUD-2990 (3/9'
Acknowledgment of
Application Receipt
U.S. Department of Housing
aITe Urban Development
Type or clearly print the Applicant's name and full address In the space below.
City of Chula Vista
Community Development Department
276 Fourth Avenue
Chula Vista, CA 91910
(fold line)
Type or clearly print the following information:
Name of the Federal
Program to which the
applicant is applying:
U.S. Dept. of HUD EDI
To Be Completed by HUD
D
HUD received your application by the deadline and will consider it for funding. In accordance
with Section 103 of the Department of Housing and Urban Development Reform Act of 1989.
no information will be released by HUD regarding the relative standing of any applicant until
funding announcements are made. However, you may be contacted by HUD after initial
screening to permit you to correct certain application deficiencies.
D
HUD did not receive your application by the deadline; therefore, your application will not
receive further consideration. Your application is:
D Enclosed
D Being sent under separate cover
Processor's Name
Date of Receipt
9-/1-43
Page no: -D
COUNCIL AGENDA STATEMENT
IteID-.L b7
Meeting Date 07/28/98
M TLE R I. /9/ (/ P.. th fi I b'dd' ., I
ITE TI: eso utlOn Walvmg e orma 1 mg process as Impractlca
and awarding Purchase Agreement to Blue Sky Remediation Services,
Inc., for TV Inspection of Storm Drains.
SUBMITTED BY: D!rector Of~ublic worksA!'pl.QL,
DuectorofFmance ~~~^
REVIEWED BY: City Manager'DR ~ ~li (4/5ths Vote: Yes_Nol)
The heavy rains during last winter accelerate~the failure of three Corrugated Metal Pipe (CMP)
storm drains. These failures were at Malta Avenue, Oleander A venue, and Corte Maria Avenue.
Since the City has approximately 110,000 lineal feet ofCMP storm drains 15 years or older, the
FY98-99 budget contains $85,000 for immediate contractor inspection of these storm drains.
Section 2.56.070 of the Municipal Code requires that formal bids be obtained for purchases in
excess of $25,000 unless Council fmds that obtaining the bids is impractical. The formal bidding
process requires more time than obtaining informal bids as staff has done in this case. Since staff
believes that the inspection of the storm drains needs to be done as soon as possible so that
extremely serious problems can be identified and repaired immediately to protect the health and
safety of Chula Vista residents, staff believes that it is impractical to take the time to go through
the formal bidding process, which includes minimum advertising times. However, to ensure that
the City received the lowest price possible under the circumstances, staff followed the formal
bidding process with the exception of normal advertising. Staff prepared specifications for the
inspection and forwarded them to the four inspection firms in the region that use the same
inspection software as the City. A pre-bid conference was held on July 13, 1998. Sealed bids
were required and bids were opened on July 21, 1998, with Blue Sky Remediation Services
responding with the lowest bid @ $0.72 per lineal foot for a total contract cost of $79,200 for
110,000 lineal feet.
RECOMMENDATION: Adopt the Resolution finding that the formal bidding process is
impractical and awarding Purchase Agreement to Blue Sky Remediation Services for TV
Inspection of Storm Drains
BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable
DISCUSSION: Prior to adoption of the FY98-99 budget, staff presented a report
(attached) to City Council concerning the CMP storm drain pipe in the City. Staff recommended
contracting out the initial inspection work, which involves TV inspecting roughly 110,000 lineal
feet of CMP that is 15 years of age or older. Staff received a verbal quote from one of the firms that
inspected the Malta Avenue site for the City. They quoted an estimate of $.68 per lineal foot for
this work, which reflects a reduced cost per linear foot because of the large amount of linear footage
included. When bids were opened, the actual costs were $0.72, $0.75, and $0.77 per lineal foot.
The increase was due to the clause that allowed the City to reduce the total number of lineal feet
jCJ/ )
Page 2, IteIlL__
Meeting Date 07/28/98
from 110,000 to about 80,000 lineal feet at the City's option. This reduction might be desirable
depending on conditions found during the inspection. The contractor estimated that the work could
take 14 weeks, based on inspecting 1,500 lineal feet per day, and making assumptions that the
locations are reasonably accessible, that the pipes are 90 - 95% free of debris, and that all of the
CMP can be completely inspected. Some pipes may be damaged to the point that the camera can
not pass through as a result of implosion of the pipe bottom, deep holes in portions of the bottom
and other failures. Staff used these assumptions in making the budget recommendation and
preparing the job specifications.
Using these same assumptions and assuming the City purchases a storm drain camera, we estimate
that it would take two City staff22 weeks to perform this work, at roughly the same cost of $.68 per
lineal foot (assumes using one Senior Maintenance Worker and one Maintenance Worker II), and
assuming that staff would be devoted solely to this work. It would take longer for City staff because
contractors have more experience TV inspecting storm drains and have more personnel available to
perform this work. Since there will be a delay in the City getting a storm drain camera and the fact
that our staff would have to be pulled off sewer maintenance work to devote to this inspection work,
we recommend using a contractor.
After this initial inspection, staff recommends that ongoing inspection of CMP and other storm
drains be performed by Public Works Operations crews, and that a storm drain inspection program
be established, such as is done for the sewer system. Additional staffmg may be needed, which will
be evaluated during the year, and may be the subject of a budget proposal for 1999-2000. In order
for in-house inspection to be done, a storm drain camera and tractor will be needed. Staff
recommends replacing the new sewer camera and tractor, with a more versatile camera that can be
used in both sewers and storm drains, but which will require two different types of tractors. This is
the subject of an accompanying Agenda Statement.
A copy of the contractor's disclosure information is attached to this Agenda Statement.
FISCAL IMP ACT: $85,000 was included in the FY98-99 budget. This was calculated using
the estimated lineal feet and the estimated cost per lineal foot ($0.68) with a 15 percent
contingency. The contract cost per lineal foot is $0.72. The total amount of the Purchasing
Agreement is $79,200 which is within the budgeted amount.
Attachments:
. Report on Evaluation of Corrugated Metal Pipe (CMP) Storm Drains Throughout the
City.
. Contractor's Disclosure Statement NQTSCANNED
D:\WINWORD\BUDGE1\A113 TV Inspection Contract.doc
File #: 0780-05
/CJ-~
RESOLUTION NO.
/9/cO
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA WAIVING THE FORMAL BIDDING PROCESS
AS IMPRACTICAL AND AWARDING PURCHASE AGREEMENT
TO BLUE SKY REMEDIATION SERVICES, INC. FOR TV
INSPECTION OF STORM DRAINS
WHEREAS, the heavy rains during last winter accelerated
the failure of three Corrugated Metal Pipe (CMP) storm drains at
Malta Avenue, Oleander Avenue and Corte Maria Avenue; and
WHEREAS, since the City has approximately 110,000 lineal
feet of CMP storm drains 15 years or older, the FY 98-99 budget
contains $85,000 for immediate contractor inspector of these storm
drains; and
WHEREAS, Section 2.56.070 of the Municipal Code requires
that formal bids be obtained for purchases in excess of $25,000
unless Council finds that obtaining bids is impractical; and
WHEREAS, the formal bidding process requires more time
than obtaining informal bids and since staff believes that the
inspection of the storm drains needs to be done as soon as possible
to identify and repair serious problems to protect the health and
safety of Chula Vista residents, it is impractical to take the time
to go through the formal bidding process; and
WHEREAS, to ensure that the Ci ty received the lowest
price possible under the circumstances, staff followed the formal
bidding process with the exception of normal advertising; and
WHEREAS, staff prepared specifications for the inspection
and forwarded them to the four inspection firms in the region that
use the same inspection software as the City; and
WHEREAS, a pre-bid conference was held on July 13, 1998
with sealed bids opened on July 21, 1998 and Blue Sky Remediation
Services responded with the lowest bid @ $0.72 per lineal foot for
a total contract cost of $79,200 for 110,000 lineal feet.
NOW, THEREFORE, BE IT RESOLVED the City Council of the
City of Chula Vista does hereby waive the formal bidding process as
impractical and awarding Purchase Agreement to Blue Sky Remediation
Services, Inc. for the TV inspection of storm drains for a total
contract cost of $79,200 for 110,000 lineal feet.
Presented by
Approved as to form by
John P. Lippitt, Director of
Public Works
H:\home\lorraine\cdrive\rs\bluesky.bid
/C!-3//o-f
YOu'Me required :0 Ole a Statement of DisClosure of cer:ai.'l ownersi:ip or financial ir:teresrs, payme~ts. or
cainpailin ccntributions, on all :natters which will require discretionary actior: on ~e part of the City C.Junc;]
P!ar.ning COmmission, and :1Il Other OQciai bOdies The foUewing information must be disclosed:
.'
. u r \.,.1:1 U J...\ Y l.":l L.-\ l)l:\(..J..U~ L ru. ~ 1.-\ j l!,.vU;.Y!
,.\..\~'
~~
1. List tl1e names of all persons having a !inanciaj interest in the property which is the subjecr of the
application or tl1e Contract, e.g.. owner, applicant, Contractor, subccntrac:or. material SUPP~er
Dora Pina
2 If lilY person' identified purSUant to (1) above is a corporation or pannership, list the names or' an
individuals owning more tha.'1 10% of the shares in tbe corporation or OWning any partnersitip interest ill
. tile ~nersr.ip.
Dora Pina
3. If any person" identified pursuant to (1) above is non-profit organizatlon or a trus:, list :he :l3Ines of !on,
persvn semng as director of the non-prefit organization Or as t:ustee or benefic:ary 'Jr trustor of the
trust.
.
4. Have you bad more than $250 worth of business :ransacted with any rnembe:- of the City scaff, Boards.
COmmissions, Committees, and Council within the past twelve rnonth~ Yes _ )Ie -X. If yes, please
indicate persen(sj:
5. Please identify each and every person, inducing any agents, employees, consui,ants, or incepencen:
Col1t:actors who you have assigned to represent you before the City in this malter.
-
Have you and/or your officers or agems, in the aggregate, contributed more than $1,000 toa Counell
member in the Current or preceding election period? Yes _ )10 ...!-... If yes, state which Cound
rnernbers(s): _
.
/0-'1
Supplemental Budget Report
June 15, 1998
TO:
The Honorable Mayor and City Council
VIA:
David D. Rowlands, Jr., City Manager
John Lippitt, Director of Public Works ~~
FROM:
SUBJECT:
Evaluation of Corrugated Metal Pipe (CMP) Storm Drains Throughout
the City
One of the policy issues discussed in the proposed 1998-99 City Budget is the need to inspect
the older CMP storm drain pipe throughout the City, and to .:finance improvements where
needed. The City has had three known locations this year where CMP has failed, and sinkholes
have resulted. These locations are at Malta Avenue, Oleander Avenue, and Corte Maria
Avenue. All three culverts at these locations run between structures. Only Malta Avenue's
failure resulted in a significant impact to the property. The other two failed in places that were
far enough away from structures that only accessory facilities were impacted.
Staff believes th2t it is essential that we immediately evaluate the older CMP drains to
det,."",ine ifproblems exist rather than:find out during the rainy season. Staffbelieves that we
ne-d to inspect the pipes, evaluate methods for relining and/or replacing theses pipe where
needed, draft a capital improvement project (ClP) proposal, determine a financing means for
the short term to make any necessary improvements, and develop an ongoing :financing method
for maintRining repairing and/or replacing this pipe. Staff has received an estimate from a
contractor to inspect the CMP storm drains, and has received a proposal regarding purchase
of a storm drain camera from the vendor who provided the new sewer van and sewer pipeline
insp"'...cti.on system.
RECOMMENDATION: That the City Council a) amend the proposed 1998-99 budget to
include a loan of $85,000 from the Sewerage Facilities Replacement Fund to the Storm Drain
Revenue Fund for contract inspection of the CMP storm drains; b) amend the proposed 1998-
99 budget to include $23,450 from the Sewerage Facilities Replacement Fund and a loan of
$9"6,550 from the Sewerage Facilities Replacement Fund to the Storm Drain Revenue Fund for
the purchase of a replacement sewer TV camera, new storm drain TV camera, and tractors for
same; and c) direct staff to bring back a ClP project during 1998-99 with proposed funding
sources and schedule, upon the completion of the TV inspection and evaluation.
Jc:J~5
Supplemental Budget Report
Evaluation of CMP
Page 2
DISCUSSION:
Insoection of the CMP Storm Drains
Staff recommends contracting out the initial inspection work, which involves TV inspecting
roughly 110,000 lineal feet of CMP that is 15 years of age or older. Staff received a verbal
quote from one of the firms that inspected the Malta Avenue site for the City. They quoted
an estimate of $.68 per lineal foot for this work, which reflects a reduced cost per linear foot
b--.Miuse of the large amount of linear footage included.. The contractor estimates that the work
could take 14 weeks, based on inspecting 1,500 lineal feet per day, and making assumptions
that the locations are reasonably accessible, that the pipes are 90 - 95% free of debris, and that
all of the CMP can be completely inspected.. Some pipes may be rl~m~ged to the point that
the camera can not pass through as a result of implosion of the pipe bottom, deep holes in
portions of the bottom and other failmes.
Using these same assumptions and assuming the City pmchases a storm drain camera, we
estimate that it would take two City staff 22 weeks to perform this work, at roughly the same
cost of $.68 per lineal foot (assumes using one Senior Maintenance Worker and one
Maintenance Worker 11), and assuming that staff would be devoted solely to this work. It
would take longer for City staff because the contractor has more experience TV inspecting
storm drains and has more personnel available to perform this work. Since there would be a
delay in the City getting a storm drain camera and the fact that om staff would have to be
pulled off 5.-'"Wer maintenance work to devote to this inspection work, we reco=end using a
contractor. There are very few firms that specialize in this type of work. Based on the
estimated lineal feet and per lineal foot cost, staff reco=ends appropriating $85,000, which
. provides for a contingency of roughly 15 percent.
After this initial inspection, staff reco=ends that ongoing inspection of CMP and other storm
drains be performed by Public Works Operations crews, and that a storm drain inspection
program be established, such as is done for the 5.-"Wer system. Additional staffing may be
needed, which will be evaluated dming the year, and may be the subject of a budget proposal
for 1999-2000. In order for in-house inspection to be done, a storm drain camera and tractor
will be needed. Staff recommends replacing the new sewer camera and tractor, with a more
versatile camera that can be used in both sewers and storm drains, but which will require two
_ diITerent types of tractors.
Purchase of a New TV Insoec1ioD Svstem .
In October 1997, the City Council awarded a pmchase order contract to Pearpoint, Inc. for the
pmchase of a replacement sewer TV van and sewer pipeline inspection system. This system
includes a TV camera mounted on a tractor. Neither the camera nor the tractor are e"-'PlosioD
proof. The tractor is too small to effectively operate in the larger storm drains so if staff is
going to insr"...ct both sewers and storm drains, we will need a tractor for both operations.
)??--?
Supplemental Budget Report
Evaluation of CMP
Page 3
Pempoint has offered to give the City full credit for the camera and tractor purchased, since
it 'was just delivered and installed very recently, and sell us a new "explosion proof' camera
and two "explosion proof" tractors. 1
An explosion proof sewer camera was not initially purchased because our initial interpretation
of OSHA regulalions and a cost savings associated with a non-explosion proof sewer camera
7""..sulted in the decision tba1 an e"."plosion proof camera was not necessary. Further research
by the new Safety Risk Analyst resulted in his determin~tion that OSHA Regulations did
require tba1 the camera be explosion proof b<-...cause we cannot prove tba1 all areas that the
camera is sent into are below the Lower F1~mm~hle Limit (LFL) of 10 %. Explosion proof
equipment is required when the LFL is 10% or greater. . Gas detectors would be needed to
establish the LFL and det=ine if the atmosphere is below 10%; however, it is not possible
to sep.d a gas detector with the camera through the sewer lines and storm drains.
Consequently, purchase of explosion proof tractors and camera is necel!Sary to ensure
compliance with the OSHA regulations.
,
The proposed storm drain tractor will have hydraulic adjustments for setting camera height and
is steerable for maneuvering around debris. The proposed new camera will have a zoom lens
for use in the larger storm drain pipes to locate problem areas. The additional cost for the
explosion proof sewer Camera and tractor is $23,450, which can be charged to sewer funds, and
the cost for the new storm drain steerable tractor, with lights and cranes and other parts, is
$96,550.
Develornnent of a CIP for CMP Reolacement and Rel;n;n"
Based on the data received from the TV inspection, Operations and Engineering staff will
review the tapes and evaluate the condition of the pipes, estimate the cost for making
improvements, and det=ine the best course of action for making repairs, and replacing or
relining pipes. We have been working with the City Attorney's office and Finance regarding
financing of this work. We will continue to work with them and will bring forward a
financing plan with a Cll' proposal for Council consideration.
Options staff will be considering include going to the voters to vote on merging the Sewerage
Facilities Replacement Fund and the Storm Drain Revenue Fund to allow expenditures on both
So..-wer replacement and storm drain replacement. The City Attorney's Office will be
investigating whether or not the Proposition 218 requirements apply. Other options include
loans from the Sewerage Facilities Replacement Fund, to be paid back over a number of years,
'We could not keep the recently purchased camera, since it is not explosion proof. It is
physically iInpossible to mix explosion proof tractors with non-explosion proof cameras.
/eJ-l
Supplemental Budget Report
E....aluation of CMP
. Page 4
or increasing the Storm Drain fees to cover the cost of the CMP repairs (which would also
require a vote of the electorate).
FISCAL IMPACT: Funding of $181,550 would need to be loaned from the Sewerage
Facilities Replacement Fund to the Storm Drain Revenue Fund for the initial inspection work
and to purchase the necessary TV inspection equipment in order for staff to perform the
inspections in the future. At this point, the cost of any repair work to the CMP is unknown.
In the worst case, staff estimates that we may need to spend $10 million over a period of
several years. Since the City currently collects approximately $450,000 annually in storm drain
revenue, which is insufficient to fund work of that magnitude, staff will be evaluating loan
options, fee increases, or other funding sources.
An additional appropriation of $23,500 would be needed from the Sewerage Facilities
Replacement Fund to fund the upgrade of the existing sewer camera and trl!ctor.
l:..-\homC\Cll.pdmia\cmptep.989
/tfl--~
~-----
COUNCIL AGENDA STATEMENT
ITEM TITLE:
IteIILL/
Meeting Date 07/28/98
Resolution /9/ tJ /waiving the formal bidding process as impractical
and awarding Purchase Agreement to Pearpoint, Inc. for purchase of TV
inspection equipment and software for Storm Drains and Sewers and
appropriating additional funds.
SUBMITTED BY: Director of Public works,6)~~L
Director of Finance 0/
REVIEWED BY: City Manager-:DR ~ ~ (4/5ths Vote: Yes---X-No_)
The heavy rains during last winter accelerated the failure of three Corrugated Metal Pipe (CMP)
storm drains. These failures were at Malta Avenue, Oleander Avenue, and Corte Maria Avenue.
Since the City has approximately 110,000 lineal feet of CMP storm drains 15 years or older, the
FY98-99 budget contains $85,000 for immediate contractor inspection of these storm drains.
The budget also contains funds for a replacement sewer TV camera and tractors for both sewers
and storm drains. Section 2.56.070 of the Municipal Code requires that formal bids be obtained
for purchases in excess of $25,000 unless Council finds that obtaining the bids is impractical.
Since Pearpoint is the manufacturer of our current sewer TV inspection system, it is impractical
to entertain bids from other manufacturers whose equipment would not be compatible with the
City's current Pearpoint system. Staff has negotiated with Pearpoint to obtain full trade in
(original purchase price) value for our current inspection camera/tractor and competitive pricing
on the new equipment.
RECOMMENDATION: Adopt the Resolution finding that the formal bidding process is
impractical and awarding Purchase Agreement to Pearpoint, Inc., for TV inspection equipment
and software for storm drains and sewers and appropriating additional funds.
BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable
DISCUSSION: Prior to adoption of the FY98-99 budget, staff presented a report
(attached) to City Council concerning the CMP storm drain pipe in the City. Staff recommended
contracting out the initial inspection work (the subject of an accompanying Agenda Statement),
which involves TV inspecting roughly 110,000 lineal feet of CMP that is 15 years of age or older.
After this initial inspection, staff recommended, and Council approved, that ongoing inspection of
CMP and other storm drains be performed by Public Works Operations crews, and that a storm
drain inspection program be established, such as is done for the sewer system. Additional staffing
may be needed, which will be evaluated during the year, and may be the subject of a budget
proposal for 1999-2000. In order for in-house inspection to be done, a storm drain camera and
tractor will be needed. Staff recommends replacing the existing sewer camera and tractor with a
more versatile camera that can be used in both sewers and storm drains, but which will require two
different types of tractors.
To minimize the fmancial impact of this action, staff has negotiated a package with Pearpoint that
credits the City with the original cost of the existing camera and tractor ($31,617). This enables the
//-/
Page 2, IteITI.-__
Meeting Date 07/28/98
City to implement the proposed program without any loss of money on the original camera and
tractor. In addition, staff has upgraded the proposed new camera and tractors system to make it an
"explosion proof' system. I This will enable the City to meet a recent interpretation of OSHA
requirements made by the City's new Safety Risk Analyst. Basically, what "explosion proof'
means is that the system is certified by an OSHA recognized laboratory. The certification says that
the inspection system is guaranteed not to emit any sparks from the electrical system in the camera
and tractor that could cause explosive gasses in the sewer or storm drain line to ignite. A more
complete explanation is included in the attached report previously forwarded to Council.
The proposed storm drain tractor will have hydraulic adjustments for setting camera height and is
steerable for maneuvering around debris. The proposed new camera will have a zoom lens which
works better in both sewer and storm drain pipes that are larger than 12 inches. The additional costs for the
explosion proof sewer camera and tractor is $23,450, which can be charged to sewer funds, and the
cost for the new storm drain steerable tractor, with lights, bumper crane, and other parts, is $96,450.
The costs are more completely displayed in the table below:
Item Price
New Sewer Camera $30,212
New Sewer Tractor $16,242
Ughtheads for new Sewer Camera System $6,582
Mandatory training, testing, and certification for explosion proof
equipment $1,500
Sub TTl lor new Sewer Camera & Tractor: $54,536
Discount $3,500
TTl new Sewer Camera & Tractor: $51,036
Trade In Allowance for existing system $31,617
TTl cost new Sewer Camera & Tractor: $19,419
Sewer % of zoom lens: $2,344
New Sewer System Price with Sales Ta $23,450
Storm Drain Camera % of zoom lens $17,364
New high capacity power supply $8,125
New storm drain steerable tractor with lightheads and other equipment $62,648
Bumper crane, sonde, and other improvements for TV van $5,664
TTi for new steerable storm drain tractor syste $94,001
Trade in existing power supply unit: $4,488
Net cost for new steerable storm drain tractor syste $89,513
New steerable storm drain tractor cost with sales ta $96,450
lWe could not keep the recently purchased camera, since it is not explosion proof. It is physically
impossible to mix explosion proof tractors with non-explosion proof cameras.
//--.2
Page 3, Item___
Meeting Date 07/28/98
The software used by our Pearpoint system is called Flexidata™, has a copy protection scheme,
and carmot be used on more than one computer. A point not considered when the current budget
was prepared is that the Engineering sewer section has a valid need for its own copy of
FlexidataTM. As part of the sewer replacement program, Engineering sewer staff needs the
. ability to update the TV inspection data base after CIP project repairs to various sewer lines.
What this means is that after contractors have done the work required in the City's sewer rehab
projects, Engineering sewer staff will be able to update the sewer database to reflect these
changes. This will interconnect with the City's GIS and automatically update that database as
well. This information will, in turn, be passed on to Public Works Operations for use in the field.
This software normally costs $9,617, but Pearpoint has agreed to sell a copy to the City for
$7,300.
FISCAL IMPACT: Sufficient funds ($120,000) are included in the adopted budgets for the
Sewerage Facilities Replacement and Storm Drain Revenue Funds for purchase ofthe sewer and
storm drain TV inspection equipment. An additional $7,300 is required to be appropriated to the
Sewerage Facilities Replacement Fund for purchase of the Flexidata™ software.
Attachments:
. Report on Evaluation of Corrugated Metal Pipe (CMP) Storm Drains Throughout the
City. _ Sc~ /c? -5 /C?-tb /C?-7 /6-8 ---/~
./ ./ / -g--
D:\WINWORD\BUDGE1\A113 Storm Drain Camera.doc ~ l _..~ A ~ ,... LJ h:r-.
File: 0780-05 ~ &j ~ /~- ~ -
J/-~
RESOLUTION NO.
/9/0/
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA WAIVING THE FORMAL BIDDING PROCESS
AS IMPRACTICAL AND AWARDING PURCHASE AGREEMENT
TO PEARPOINT, INC. FOR PURCHASE OF TV INSPEC-
TION EQUIPMENT AND SOFTWARE FOR STORM DRAINS
AND SEWERS AND APPROPRIATING ADDITIONAL FUNDS
WHEREAS, the heavy rains during last winter accelerated
the failure of three Corrugated Metal Pipe (CMP) storm drains at
Malta Avenue, Oleander Avenue, and Corte Maria Avenue; and
WHEREAS, since the City has approximately 110,000 lineal
feet of CMP storm drains 15 years or older, the FY 98-99 budget
contains $85,000 for immediate contractor inspection of these storm
drains and funds for a replacement sewer TV camera and tractors for
both sewers and storm drains; and
WHEREAS, Section 2.56.070 of the Chula Vista Municipal
Code requires that formal bids be obtained for purchases in excess
of $25,000 unless Council finds that obtaining the bids is
impractical; and
WHEREAS, since Pearpoint is the manufacturer of our
current sewer TV inspection system, it is impractical to entertain
bids from other manufacturers whose equipment would not be
compatible with the City's current Pearpoint system; and
WHEREAS, staff has negotiated with Pearpoint to obtain
full trade-in value for our current inspection camera/tractor and
competitive pricing on the new equipment.
NOW, THEREFORE, BE IT RESOLVED the City Council of the
City of Chula Vista does hereby waive the formal bidding process as
impractical and award Purchase Agreement to Pearpoint, Inc. for
purchase of TV inspection equipment and software for storm drains
and sewers.
BE IT FURTHER RESOLVED that the amount of $7,300 is
required to be appropriated to the Sewerage Facilities Replacement
Fund for purchase of the Flexdata'M software.
Presented by
Approved as to form by
John P. Lippitt, Director of
Public Works
H:\home\lorraine\cdrive\rs\storm.cam
)/~f
Supplemental Budget Report
June 15, 1998
TO:
The Honorable Mayor and City Council
VL.60..:
David D. Rowlands, Jr., City Manager
John Lippitt, Director of Public Works Qy./"
FROM:
SUBJECT:
Evaluation of Corrugated Metal Pipe (CMP) Storm Drains Throughout
the City
One of the poliey issues discussed in the proposed 1998-99 City Budget is the need to inspect
the older CMP storm drain pipe throughout the City, and to :finance improvements where
needed.. The City has had three known locations this year where CMP has failed, and sinkholes
have resulted. . These locations are at Malta Avenue, Oleander Avenue, and Corte Maria
Avenue. All three culverts at these locations run between structures. Only Malta Avenue's
failure resulted in a signiiicant impact to the property. The other two failed in places that were
far enough away from structures that only accessory facilities were impacted.
Staff believes thRt it is essential that we immediately evaluate the older CMP drains to
detP.nTl;ne if problems exist rather than find out during the rainy season. Staff believes that we
n-d to inspect the pipes, evaluate methods for relining and/or replacing theses pipe where
needed, draft a capital improvement project (CIP) proposal, determine a financing means for
the short 1= to make any necessary improvements, and develop an ongoing financing method
for maint,,;n;ng repairing andlor replacing this pipe. Staff has received an estimate from a
contractor to inspect the CMP storm drains, and has received a proposal regarding purchase
of a storm drain camera from the vendor who provided the new sewer van and sewer pipeline
inspo-...ction system.
RECOMMENDATION: That the City Council a) amend the proposed 1998-99 budget to
include a loan of $85,000 from the Sewerage Facilities Replacement Fund to the Storm Drain
Revenue Fund for contract inspection of the CMP storm drains; b) amend the proposed 1998-
99 budget to include $23,450 from the Sewerage Facilities Replacement Fund and a loan of
$9'6,550 from the Sewerage Facilities Replacement Fund to the Storm Drain Revenue Fund for
the purchase of a replacement sewer TV camera, new storm drain TV camera, and tractors for
same; and c) direct staff to bring back a CIP project during 1998-99 with proposed funding
sources and schedule, upon the completion of the TV inspection and evaluation.
//-~
Supplemental Budget Report
Evaluation of CMP
Page 2
DISCUSSION:
lnsD'-..-etion of the CMP Storm Drains
Staff recommends contracting out the initial inspection work, which involves TV inspecting
roughly 110,000 lineal feet of CMP that is 15 years of age or older. Staff received a verbal
quote from one of the firms that inspected the Malta Avenue site for the City. They quoted
an estimate of $.6& per lineal foot for this work, which reflects a reduced cost per linear foot
because of the large amount of linear footage included. The contractor estimates that the work
could take 14 weeks, based on inspecting 1,500 lineal feet per day, and making assumptions
that the locations are reasonably accessible, that the pipes are 90 - 95% free of debris, and that
all of the CMP can be completely inspected. Some pipes may be n~m~8ed to the point that
the camera can not pass through as a result of implosion of the pipe bottom, deep holes in
portions of the bottom and other failures.
Using these same assumptions and assuming the City purchases a storm drain camera, we
estimate that it would take two City staff 22 weeks to perform this work, at roughly the same
cost of $.6& per lineal foot (assumes using one Senior Maintenance Worker and one
Maintenance Worker TI), and assuming that staff would be devoted solely to this work. It
would take longer for City staff because the contractor has more experience TV inspecting
storm drains and has more personnel available to perform this work. Since there would be a
delay in the City getting a storm drain camera and the fact that our staff would have to be
pulled off 5.."Wer maintenance work to devote to this inspection work, we reco=end using a
conttactor. There are very few firms that sp"'...cialize in this type of work. Based on the
estimated lineal feet and per lineal foot cost, staff reco=ends appropriating $&5,000, which
provides for a contingency of roughly 15 percent.
lI.:ft.er this initial inspection, staff recommends that ongoing inspection of CMP and other storm
drains be performed by Public Works Operations crews, and that a storm drain inspection
program be established, such as is done for the sewer system. Additional staffing may be
needed, which will be evaluated during the year, and may be the subject of a budget proposal
for 1999-2000. In order for in-house inspection to be done, a storm drain camera and tractor
will be needed. Staff recommends replacing the new sewer camera and tractor, with a more
versatile camera that can be used in both sewers and storm drains, but which will require two
. difIerent types of tractors.
Purchase of a New TV Insoection Svstem
In October 1997, the City Council awarded a purchase order contract to Pearpoint, Inc. for the
purchase of a replacement sewer TV van and sewer pipeline inspection system. This system
includes a TV camera mounted on a tnlctor. Neither the camera nor the tractor are e},:plosion
proof. The tra...""1or is too small to effectively operate in the larger storm drains so if staff is
going to ~...c:t both sewers and storm drains, we will need a tractor for both operations.
I/-?
Supplemental Budget Report
Evaluation of CMP
Page 3
Peazpoint has offered to give the City full credit for the camera and tractor purchased, since
it 'was just delivered and installed very recently, and sell us a new "explosion proof' camera
and two "explosion proof" tractors. 1
An explosion proof sewer camera was not initially purchased because our initial interpretation
of OSHA regulations and a cost savings associated with a non-explosion proof sewer camera
resulted in the decision that an e},,"p10sion proof camera 'was not necessary. Further research
by the new Safety Risk Analyst resulted in his determination that OSHA Regulations did
require that the camera be explosion proof b<-..cause we cannot prove that all areas that the
camera is sent into are below the Lower Flllmmllhle Limit (LFL) of 10 %. Explosion proof
equipment is required when the LFL is 10% or greater. . Gas detectors would be needed to
establish the LFL and determine if the atmosphere is below 10%; however, it is not possible
to send a gas detector with the camera through the sewer lines and storm drains.
Consequently, purchase of explosion proof tractors and camera is nece~sary to ensure
compliance with the OSHA regulations.
..
Tne proposed storm drain tractor will have hydraulic adjustments for setting camera height and
is steerable for maneuvering around debris. The proposed new camera will have a zoom lens
for = in the larger storm drain pipes to locate problem areas. The additional cost for the
explosion proof sewer camera and tractor is $23,450, which can be charged to sewer funds, and
the cost for the new storm drain steerab1e tractor, with lights and cranes and other parts, is
$96,550.
Deve100ment of a CIP for CMP Ren1acement and Relininlz
Based on the data received from the TV inspection, Operations and Engineering staff will
review the tapes and evaluate the condition of the pipes, estimate the cost for making
improvements, and determine the best course of action for mlllring repairs, and replacing or
relining pipes. We have been working with the City Attomey's office and Finance regarding
:financing of this work. We will continue to work with them and will bring forward a
financing plan with a CIP proposal for Council consideration.
Options staff will be considering include going to the voters to vote on merging the Sewerage
Facilities Replacement Fund and the Storm Drain Revenue Fund to allow expenditures on both
sewer replacement and storm drain replacement. The City Attorney's Office will be
. investigating whether or not the Proposition 218 requirements apply. Other options include
loans from the Sewerage Facilities Replacement Fund, to be paid back over a number of years,
'We could Dot keep the recently purchased camera, since it is Dot explosion proof. It is
physically impossible to mix explosion proof tractors with non-explosion proof cameras.
)/-7
Supplemental Budget Report
Evaluation of CMP
Page 4
or increasing the Storm Drain fees to cover the cost of the CMP repairs (which would also
require a vote of the electorate).
FISCAL IMPACT: Funding of $181,550 would ne<>..d to be loaned from the Sewerage
Facilities Replacement Fund to the Storm Drain Revenue Fund for the initial inspection work
and to purchase the necessary TV inspection equipment in order for staff to perform the
inspections in the future. At this point, the cost of any repair work to the CMP is unknown.
In the worst case, staff estimates that we may need to spend $10 million over a period of
s"''"Veral years. Since the City currently collects approximately $450,000 annually in storm drain
revenue, which is insufficient to fund work of that mRgJ"itude, staff will be evaluating loan
options, fee increases, or other funding sources.
An additional appropriation of $23,500 would be needed from the Sewerage Facilities
R..'"P1acement Fund to fund the upgrade of the existing sewer camera and ~tor.
J:::\iwme\c:npdmin''ICmpf'ep.989
//-6'
COUNCIL AGENDA STATEMENT
Item / cZ
Meeting Date: 7/28/1998
ITEM TITLE: Resolution J 9/ ?J .2 Accepting bids and awarding contract for "K Street
Sewer Extension from Date Avenue to ISO feet easterly in the City ofChula Vista,
California (SW-211)."
SUBMITTED BY: Director of Public Works ~ _
REVIEWED BY: City Manage1))~ ~~\ (4/5ths Vote: YecNoX)
At 2:00 p.m. on June 17, 1998, in Conference Rotj I in the Public Services Building, the Director of Public
Works received sealed bids for "K Street Sewer Extension from Date Avenue to ISO feet easterly in the City
ofChula Vista, California (SW-211)." The work includes trenching, trench shoring, installation of 8-inch
PVC sewer pipe, installation of sewer laterals, traffic control, preservation and restoration of property, and
other miscellaneous work specified in the contract documents.
RECOMMENDATION: That Council accept bids and award the contract for the "K Street Sewer
Extension from Date Avenue to ISO feet easterly in the City ofChula Vista, California (SW-211)" to Basile
Construction, Inc. of San Diego, California, for $21,871.17.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION: Included in the FY1997-98 CIP Budget is a project for the installation of an 8-inch sewer
main extension in "K" Street from Date Avenue to 150 feet easterly. The two parcels at 508 and 512 "K"
Street have been connected for twenty years to a sewer main, located in a sewer easement, through a multiple
lateral connection in private property. Consequently, as a result of this substandard connection, these two
parcels continue to experience sewage backup problems through the years. An extension to the existing
8-inch sewer main in Date Avenue needs to be constructed to adequately service the affected parcels. The
existing common lateral will be abandoned and inoperative after the new sewer main and laterals have been
installed.
Engineering staff prepared plans and specifications, advertised the project, and received bids on
June 17, 1998.
Bids were received from five contractors as follows:
CONTRACTOR BID AMOUNT
1. Basile Construction, Inc. - San Diego, California. $21,871.17
2. Walter H. Barber & Son, Inc. - La Mesa, California. $30,741.00
3. MJC Construction, Inc. - Chula Vista, California. $33,150.00
4. Underground Utilities, Inc. - Spring Valley, California. $34,950.00
5. Salzano Engineering - El Cajon, California. $38,924.34
The low bid by Basile Construction is below the Engineer's estimate of $37,890.00 by $16,018.83 or 42.2%.
Engineering staff checked the references provided by the contractor and their work has been satisfactory.
/c2-j
Page No.2, Item
Meeting Date: 7/28/1998
Basile Construction has also done CIP projects for the City and their work has been satisfactory. Staff has
reviewed the low bid and recommends awarding the contract to Basile Construction, Inc.
Disclosure Statement
Attachment "A" is a copy of the contractor's Disclosure Statement.
Environmental Status
The Environmental Review Coordinator has reviewed the work involved in this project and has determined
that the project is exempt under Section 15301, Class I (b) of the California Environmental Quality Act
(Minor Alterations of Existing Public Improvements or Public Structures).
Prevailing: Waie Statement
The source of funding for this project is Trunk Sewer Capital Reserve (600-6008). Contractors bidding this
project were not required to pay prevailing wages to persons employed by them for the work under this
project. No special minority or women owned business requirements were necessary as part of the bid
documents. Disadvantaged businesses were encouraged to bid through the sending of the Notice to
Contractors to various trade publications.
Financial Statement
FUNDS REQUIRED FOR CONSTRUCTION
A. Contract Amount $21,871.17
B. Contingencies (approximately less than 20%) $4,000.00
C. Staff Costs (Design & Inspection) $8,000.00
TOTAL FUNDS REQUIRED FOR CONSTRUCTION $33,871.17
FUNDS AVAILABLE FOR CONSTRUCTION
A. Trunk Sewer Capital Reserve (600-6008-SW211) $33,871.17
TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $33,871.17
FISCAL IMP ACT: Funding used for this project will come form the Trunk Sewer Capital Reserve funds
(600-6008). Upon completion of the project, the sewer main will require routine City maintenance.
Attachments:
A - Contractor's Disclosure Statement
NOT SCANNED
H:\HOME\ENGINEER\DEStGN\S\f0J211113.S0L
/:2 -;L
RESOLUTION NO.
J9/tJ;2,
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING BIDS AND AWARDING
CONTRACT FOR "K" STREET SEWER EXTENSION FROM
DATE AVENUE TO 150 FEET EASTERLY IN THE CITY
OF CHULA VISTA, CALIFORNIA (SW-211)"
WHEREAS, at 2:00 p.m. on June 17, 1998, in Conference
Room 1 in the Public Services Building, the Director of Public
Works received the following sealed bids for "K Street Sewer
Extension from Date Avenue to 150 feet easterly in the City of
Chula Vista, California (SW-211) .":
CONTRACTOR Brn AMOUNT
1. Basile Construction, Inc. - San Diego, $21,871.17
California.
2 . Walter H. Barber & Sonl Inc. - La Me- $30,741.00
sa, California.
3. MJC Construction, Inc. - Chula Vista, $33,150.00
California.
4. Underground Utilities, Inc. - Spring $34,950.00
Valley, California.
5. Salzano Engineering - EI Cajon, Cali- $38,924.34
fornia.
WHEREAS, the low bid by Basile Construction is below the
Engineer's estimate of $37,890.00 by $16,018.83 or 42.2% and staff
has reviewed the low bid and recommends awarding the contract to
Basile Construction, Inc.; and
WHEREAS, the Environmental Review Coordinator has
reviewed the work involved in this project and has determined that
the project is exempt under Section 15301, Class 1 (b) of the
California Environmental Quality Act (Minor Alterations of Existing
Public Improvements or Public Structures); and
WHEREAS, the source of funding for this project is Trunk
Sewer Capital Reserve (600-6008) and contractors bidding this
proj ect were not required to pay prevailing wages to persons
employed by them for the work under this project; and
WHEREAS, no special minority or women owned business
requirements were necessary as part of the bid documents, however,
1
/2-3
disadvantaged businesses were encouraged to bid through the sending
of the Notice to Contractors to various trade publications.
NOW, THEREFORE, BE IT RESOLVED the City Council of the
City of Chula Vista does hereby accept bids and award the contract
for "K" Street Sewer Extension from Date Avenue to 150 feet
easterly in the City of Chula Vista to Basile Construction, Inc. of
San Diego in the amount of $21,871.17.
BE IT FURTHER RESOLVED that the Mayor of the City of
Chula Vista is hereby authorized to execute said contract on behalf
of the City of Chula Vista.
Presented by
Approved as to form by
~~
John P. Lippitt, Director
of Public Works
H,\home\lorraine\cdrive\rS\KStreet.bid
2
)c2 ~i
THE CITY OF CHiJiA VISTA DISCLOSuRE- ST A TEMEJ\'T
You ar~ required to fil~ a Statement of Disclosure of certain ownership or fmancial interests, payments, or campaign contributions,
on all matters which will require discretionary action on the pan of the City Council, Planning Commission, and all other official
bodies. The following il!formation must be disclosed:
I. List the names of all persons having a fmancial interest in the propeny which is the subject of the application or the Contract,
e.g., owner, applicant, Contractor, subcontractor, material supplier.
2. If any person" identified pursuant to (1) above is a corporation or partnership, list the names of all individuals owning more
than ] 0 % of the shares in the corporation or owning any partnership interest in the partnership.
3. If any person" 'identified pursuant to (I) above is non-profit organization or a trust, list the names of any person serving as
director of the non-profit organization or as trustee or beneficiary or trustor of the trust.
4. Have you had more than $250 worth of business transacted with any member of the City staff, Boards, Commissions,
Committees, and Council within the past twelve month? Yes VNo _ If yes, please indicate person(s):
B'fY'"o,.', L-.JA.~~
5. Please identify each and evety person, including any agents, employees, consultants, or ind~dent Contractors who you
have assigned to r~resent you before the City in this matter.
6. Have you and!or your officers or agents, in the aggregate, contributed more than $1,000 to a Council member in the current
or preceding election period? Yes _ No ~f yes, state which Council mernbers(s):
Date:
(,-11- Gj ~
" " " (NOTE: Attached additiOnaJl7% necessary) " " "
7 _ <fS~'
Signature of Contractor! Applicant
P P>-II-er-J BASl/-e....
Print or type name of Contractor! Applicant
" Person is defined as: "Any individual, firm, co-pannership, joint venture, association, social club, fraternal organization,
corporation, estate, trust, receiver, syndicate, this and any other county, city or country, city municipality, district, or other political
subdivision, or any other group or combination acting as a unit.
/
15)02---;::.
MEMORANDUM
June 29,1998
File No. 0735-IO-SW211
TO: Dave Rowlands, City Manager
John Kaheny, City Attorney
Robert Powell, Director of Finance
Beverly Authelet, City Clerk
Roberto Saucedo, Senior Civil Engineer
John P. Lippitt, Director of Public Works If"
FROM:
SUBJECT: Resolution Accepting bids and Awarding Contract for "K Street
Sewer Extension from Date Avenue to 150 feet easterly in the City ofChula Vista,
California (SW-211)."
Financial Statement
FUNDS REQUIRED FOR CONSTRUCTION
A. Contract Amount $21,871.17
B. Contingencies (approximately less than 20%) $4,000.00
C. Staff Costs (Design & Inspection) $8,000.00
TOTAL FUNDS REQUIRED FOR CONSTRUCTION $33,871.17
FUNDS AVAILABLE FOR CONSTRUCTION
A. Trunk Sewer Capital Reserve (600-6008-SW211) $33,871.17
TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $33,871.17
H:\HOME\ENGINEER\DESIGN\SVV211113.S0l
/:2~~
COUNCIL AGENDA STATEMENT
Item /:5
Meeting Date 7/28/98
ITEM TITLE:
Resolution /9/ 6'....:[pprOVing an amendment to the "City of Chula Vista
statement of goals and policies regarding the establishment of Community
Facilities Districts" .. /
SUBMITTED BY: Director of Public Works rrtr
REVIEWED BY, Cioy _'j)\2.. ~ ~
On January 13, 1998 Council approved the "City of Chula Vista statement of goals and policies
regarding the establishment of Community Facilities Districts". Said document establishes that
the aggregate of all taxes and assessments appearing on the property tax bill of a residential parcel
shall not exceed 2 % of the initial sales price ("maximum tax"). The policy includes all special
taxes levied by Community Facilities Districts (CFDs) in the "maximum tax" calculation.
Tonight's action will amend the policy to only include special taxes levied to fund the construction
or acquisition of public infrastructure in the "maximum tax" calculation. Special taxes levied to
fund the perpetual operation of open space districts will not be considered. This is consistent with
the existing policy for assessments district fmancing, which excludes assessments levied by "1972
Act" open space districts from the "maximum tax" limit.
(4/5ths Vote: Yes~o..xJ
RECOMMENDATION: That Council:
1. approve the resolution amending the "City of Chula Vista statement of goals and
policies regarding the establishment of Community Facilities Districts" and
2. direct staff to base the maximum special taxes on reduced densities (Option 2).
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
Back~round
Most of the existing open space districts within the City have been established by the "1972
Landscaping & Lighting Act. On June 3, 1997, Council considered several alternatives ("1972
Act", CFDs, and Homeowner's Association) for funding the operation and maintenance of public
landscaping improvements. At that meeting, because of the impacts of Proposition 218 on "1972
Act" districts, Council directed staff to suspend the formation of open space districts via the
"1972 Act"and to utilize CFDs for funding the on-going operation and maintenance of public
landscaping improvements in new developments when a homeowner association is not formed to
perform these services.
/3-/
Page 2, Item_
Meeting Date 7/28/98
Because the fInancial obligation for the property, imposed by a public fmancing district, is
usually decided by the City in consultation with the developer but without the input of the
ultimate payer of that obligation, Council has adopted stringent limits on the amount of special
taxes and assessments that overburden developing areas, as follows:
On October, 17 1991, Council adopted a "Policy of Use of Assessment Districts" which limits
the amount assessed to residential dwelling units such that the aggregate of all property taxes,
special taxes, and annual debt service for improvement special assessments does not exceed 2%
of the sale price. It should be noted that the policy only included "improvement special
assessments" levied by assessment districts formed to fInance the construction of public
infrastructure. Special annual assessments levied by "1972 Act" districts for funding the perpetual
operation and maintenance of open space districts were excluded from the "maximum tax"
calculation. The reason for this exclusion is the diversity of available funding mechanism for
maintaining landscaping improvements (i.e. , 1972 Act open space district, HOA, or a combination
of both). To only include "1972 Act" assessments in the "maximum tax" would not provide a
uniform and fair criteria for measuring the fmancial impact on the future property owner.
Similarly, the Community Facilities District Policy ("CFD Policy") adopted by Council on
January 13, 1998 requires that the aggregate of the ad valorem taxes, special taxes and
assessments appearing on the property tax bill of a residential parcel shall not exceed 2 % of the
initial sale price. The policy, however, treats all special taxes the same, even though some might
be levied by CFDs formed to fmance construction of capital improvements (roads, sewers, storm
drains, etc.) and some might be imposed by CFDs funding the operation and maintenance of
public improvements (i.e., open space districts).
Discussion on the Proposed Amendment to the CFD PoliQ'
By approving the proposed amendment Council will make the CFD Policy consistent with
Assessment District Policy by excluding special taxes levied by CFDs formed to fund the
operation and maintenance of open space districts from the "maximum tax" calculation.
Tonight, Council will also be considering the approval of several resolutions conducive to the
formation of CFD Nos. 97-1 to fund the operation and maintenance of the Otay Ranch SPA One
Open Space District, and CFD No. 97-2 which will fund the operation and maintenance of the
Otay Ranch Preserve.
The maximum tax rates for CFD Nos. 97-1 and 97-2 are based on the best estimate by the
developers of the size (square footage) of residential buildings and acreage of non-residential
parcels at build out ("target densities"). These target densities are market-driven and there is no
assurance that they will be accomplished. Higher densities than projected may translate in lower
taxes to the property owners, which is desirable. Conversely, lower densities may result in
defIciencies in the annual tax collection, because higher taxes can only be levied if approved by
/3--2
Page 3, Item_
Meeting Date 7/28/98
2/3 of the property owners. Two options have been analyzed to provide for any deficiencies in the
annual tax collection resulting from a decrease in the target densities, as follows:
Option 1
Lery an annual Extraordinary Special Tax on vacant land (Le., endowment) to
cover the deficit in the annual collectible tax. This tax would be paid by the
owners of vacant land (developer or guest builders) and deposited in an interest
earning account and shall generate enough income to cover the annual deficit
(adjusted by inflation) in perpetuity.
This option is NOT RECOMMENDED. Staff believes that an endowment will
be difficult to administer and may have significant financial impacts on the City
considering the unpredictability of interest rates and inflation. Should the interest
rates drop, the endowment would not generate enough income to cover the annual
deficit. The developers also considers that this option carries a heavy financial
burden. Preliminary calculations estimate that an endowment of approximately
$7.0 million may be needed to provide for a reduction of 15% in densities.
Option 2
Base the maximum special taxes on reduced densities. This approach would result
in higher initial maximum special taxes on future homeowners. After build out,
the maximum special tax may be reduced to reflect the actual reduction in the
target densities. This option is RECOMMENDED by staff.
This approach has been followed in the proposed CFDs No. 97-1 and 97-2 where
a 15% reduction in densities has been assumed to determine the maximum special.
tax rates. The developers have agreed to this approach contingent upon Council
approval of the proposed amendment to the CFD Policy, which would exclude
taxes levied by those districts from the "maximum tax" calculation. They are
concerned that, if not excluded, the "increased" maximum taxes will decrease
their ability to use bonded indebtedness to fund the construction of backbone
infrastructure (that both developers are also pursuing) for their developments.
City staff and the Legal Counsel (Brown, Diven, Hessle & Brewer) have reviewed the proposed
amendments to the CFD Policy and recommend Council approval. As mentioned before,
consideration by Council of the subsequent items on CFDs. Nos. 97-1 and 97-2 are contingent
on Council approval of the proposed amendment. In the event that the proposed changes in the
CFD Policy are not approved, staff recommends that Council does not consider the agenda items
on CFDs. Nos. 97-1 (and companion CFDs Nos. 98-1 and 98-2), and CFD No. 97-2 and direct
staff to prepare a new tax methodology for future Council consideration. Both developers agree
with staff recommendation.
):J-J
Page 4, Item_
Meeting Date 7/28/98
FISCAL IMPACT: None to the General Fund. McMillin and Otay Ranch Development have
agreed to pay for all City staff and consultant cost incurred in the processing the proposed
amendment.
H:\HOME\ENGlNEER\AGENDA\TWOPER.LDT
July 22, 1998 (4.39pm)
)3;1
RESOLUTION NO.
/9/oJ
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AMENDMENT TO THE
"CITY OF CHULA VISTA STATEMENT OF GOALS AND
POLICIES REGARDING THE ESTABLISHMENT OF
COMMUNITY FACILITIES DISTRICTS"
WHEREAS, on January 13, 1998 Council approved the "City
of Chula Vista statement of goals and policies regarding the
establishment of Community Facilities Districts" which establishes
that the aggregate of all taxes and assessments appearing on the
property tax bill of a residential parcel shall not exceed 2% of
the initial sales price ("maximum tax"); and
WHEREAS, the
Community Facilities
calculation; and
policy includes all special taxes levied by
Districts (CFDs) in the "maximum tax"
WHEREAS,
include special
acquisition of
calculation; and
staff
taxes
public
recommends amending the policy to only
levied to fund the construction or
infrastructure in the "maximum tax"
WHEREAS, special taxes levied to fund the perpetual
operation of open space districts will not be considered which is
consistent with the existing policy for assessments district
financing, which excludes assessments levied by "1972 Act" open
space districts from the "maximum tax" limit.
NOW, THEREFORE, BE IT RESOLVED the City Council of the
City of Chula Vista does hereby amend the "City of Chula Vista
statement of goals and policies regarding the establishment of
Community Facilities Districts" to exclude special taxes levied by
CFDs formed to fund the operation and maintenance of open space
districts from the maximum tax calculation.
BE IT FURTHER RESOLVED that staff is directed to base the
maximum special taxes on reduced densities (Option 2) .
Presented by
Approved as to form by
John P. Lippitt, Director of
Public Works
CL- ~~~ ~
John M. Kaheny, City ttorney
H:\home\lorraine\cdrive\rs\goals.cfd
J~~5
""
COUNCIL AGENDA STATEMENT
ITEM TITLE:
A.
Itemg
Meeting Date 7/28/98
Resolution /9/ tl Lj of the City Council of the City of
Chula Vista, California making appointments in proposed Commu-
nity Facilities District No. 97-1 (Open Space Maintenance District
[Otay Ranch - SPA One, Villages 1 & 5])
Resolution J 91 tJ? 5 of the City Council of the City of Chula
Vista, California adopting a boundary map showing the boundaries of
the territory proposed for inclusion in proposed Community Facilities
District No. 97-1 (Open Space Maintenance District [Otay Ranch -
SPA One, Villages 1 & 5])
C. Resolution /9/ C? of the City Council of the City of Chula
Vista, California declaring its intention to establish Community
Facilities District No. 97-1 (Open Space Maintenance District [Otay
Ranch - SPA One, Villages 1 & 5]) and to authorize the levy of a
special tax therein to fInance certain services
B.
D. Resolution / 9/ t? ? of the City Council of the City of Chula
Vista, California ordering and directing the preparation of a "Report"
for proposed Community Facilities District No. 97-1 (Open Space
Maintenance District [Otay Ranch - SPA One, Villages 1 & 5])
SUBMITTED BY: Director of Public Works rr;
REVIEWED BY: City Manage~ ~ ~ (4/5ths Vote: Yes_NoX)
The Otay Ranch Company and McMillin Otay ~Ch have requested the City to conduct proceedings
for the formation of Community Facilities District No. 97-1. The conditions of approval of the
tentative map require that the district be established prior to approval of the first fInal "B" map. This
district will fund the perpetual operation and maintenance of open space slopes, pedestrian bridges,
drainage channels, detention basins, medians and parkways of Otay Ranch SPA One. The City has
retained the services of Berryman & Henigar as special tax consultant and Brown, Diven, Hessle &
Brewer as legal counsel to provide assistance during the proceedings. Tonight's action will initiate
the formal proceedings leading to the establishment of Community Facilities District No. 97-1.
RECOMMENDATION: That Council:
1) Approve the resolution making appointments of the City Council as the
legislative body for CFD No. 97-1,
2) Approve the resolution adopting the boundary map for CFD No. 97-1,
3) Approve the resolution declaring the intention to establish CFD No. 97-1 and
to levy a special tax to fInance certain services,
4) Approve the resolution ordering and directing the preparation of the "Report"
for CFD No. 97-1.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
1'/-/
'.
Page 2, Item_
Meeting Date 7/28/98
DISCUSSION:
On January 13, 1998, Council adopted the "City of Chula Vista statement of goals and policies regarding
the establishment of Community Facilities Districts". The approval of this document ratified the use
of CFDs as a public financing mechanism for (I) the construction and/or acquisition of public
infrastructure, and (2) the financing of authorized public services, including services provided by open
space districts. This policy is being considered for amendment tonight in a separate item to exclude
taxes levied by maintenance districts, such as CFD No. 97-2, from the 2% maximum tax criterion.
On April 28, 1998, Council enacted the "Chula Vista Community Facilities District Ordinance". This
ordinance adopted the Mello-Roos Act with modifications to accomplish the following: I)
incorporate all maintenance activities authorized by the "Landscaping & Lighting Act of 1972"
("1972 Act"), 2) include maintenance activities not listed in the "Mello-Roos Act" or the "1972
Act" (Le., monitoring activities on privately owned parcels within the Otay Ranch Preserve, and
maintenance of pedestrian bridges and community gardens proposed in Otay Ranch SPA One), and
3) establish an operating reserve fund for open space districts.
Community Facilities Districts will provide the necessary funding for the operation and maintenance
of public landscaping improvements by levying an annual "special tax", which is collected from the
property owners in conjunction with the property taxes. There is no direct cost to the City. All
expenses related to the district administration (including levying and collecting the special taxes) are
funded by the district.
The proposed CFD No. 97-1 is consistent with the above mentioned Ordinance and the proposed
amended Council Policy. In addition, staff has met numerous times with both developers to discuss
their concerns, clarify the intent of the policy and ordinance, and review the methodology for the
apportionment of the special taxes. All of the issues raised by the developers have been thoroughly
discussed and solutions, satisfactory to all parties, have been incorporated in the "Rate and Method
of Apportionment" . Both developers also requested greater accountability as to the annual tax to be
levied on developer (vacant) land and asked for greater involvement in preparing the annual district's
budgets. These issues will be the subject of an "implementing agreement" that will be brought before
Council in conjunction with the resolution of formation of the district.
Staff, the legal counsel, and the special tax consultant have reviewed the proposed methodology and
consider it ready for Council approval.
Area of Benefit
The proposed boundary of CFD No.97-1 encompasses all parcels located within the Otay Ranch SPA
One, Villages I and 5, which includes the Otay Ranch Company and McMillin Otay Ranch project
(total acreage = 1,093). At buildout, the district will contain a total of 2,758 Single Family
Residences, 2,300 Multifamily Residences, 7.9 acres of commercial, and 10.4 acres of Community
Purpose Facilities (churches, day care, etc.). Staff has reviewed the proposed boundary map and has
found it acceptable and ready for approval by Council. A reduced copy of the map is presented in
Exhibit 1.
Descrintion of facilities
The proposed CFD 97-1 will fund the operation and maintenance of the public landscaping
improvements (Le., open space slopes, trails, detention basins, drainage channels, pedestrian bridges,
parkways and medians) within the Otay Ranch SPA One for both: The Otay Ranch Company and
/1/--.2
Page 3, Item_
Meeting Date 7/28/98
McMillin Otay Ranch projects (see Exhibit 2). A complete list of said public facilities is presented
in Exhibit 3.
The district proposes the creation of the following three Special Tax Areas (see Exhibit 4):
. Special Tax Area "A" includes all the parcels within the district. The taxes levied on Area
"A" will provide for the maintenance of all those common improvements (Le., medians,
parkways, pedestrian bridges, drainage improvements, path lighting, etc.) providing benefit
to all of SPA One (regardless of ownership).
. Special Tax Area "B" encompasses only those areas within SPA One within the Otay Ranch
Company project. This Area will provide for the maintenance of open space, slopes, trails,
and walls within the public open space lots. Only the Otay Ranch Company will dedicate open
space lots to the City over the slopes fronting Paseo Ranchero, Telegraph Canyon Road, Otay
Lakes Road, East Palomar Drive, and Olympic Parkway. All slopes within the McMillin
project will be privately maintained by their MHOA.
Both developers are also proposing the formation of individual Master Homeowners' Association
(MHOA) which will complement the maintenance obligations of the district, as follows:
. The Otay Ranch Company MHOA will maintain the entry monuments at the major entrances
to the project, minor private open space lots within the subdivision, parkways along private
local and collector streets, and private pedestrian parks. There are some areas within the right
of way that are not included in the landscaping budgets for the maintenance district and will
be maintained by the MHOA. The developer will be required to include these areas in the
CC&R's for the MHOA to address maintenance, liability and insurance issues.
. The McMillin Otay Ranch MHOA will maintain the major open space slopes along La Media
Road, Telegraph Canyon Road, Otay Lakes Road, East Palomar Street and Olympic Parkway.
In addition, the developer is proposing that the MHOA maintain the public landscaping
improvements (including trees) within the parkways (behind the curb) along Santa Cora
Avenue. The developer will be required to include these areas in the CC&R's for the MHOA
to address maintenance, liability and insurance issues.
There is one companion item in tonight's agenda relating to the formation of CPD No. 98-1 (The
Interim Open Space Maintenance District, Otay Project,) and CPD No. 98-2 (The Interim Open Space
Maintenance District, McMillin). These districts will include lands owned by the Otay Ranch
Company and McMillin outside of SPA One. The special taxes collected from those areas will provide
funding for the maintenance of certain improvements which will be constructed by SPA One but
provide benefit to those areas outside of SPA One.
Cost Estimate
The estimated annual budget for CPD No. 97-1 is $ 1,621,000. This budget includes a total of
$1,425,298 for maintenance, $171,602 for administration by the Parks and Recreation Department,
and $24,100 for CPD administration (preparing reports, levying and collecting taxes, public
assistance, etc.) by the Engineering Division. Staff (Parks & Recreation and Engineering) has
reviewed and approved the proposed budget. Exhibit 5 contains a detailed annual budget for the
district at buildout of SPA One. The unit prices used in determining the budget are based on historical
) Jj~ 3
Page 4, Item_
Meeting Date 7/28/98
costs of maintenance of similar improvements within existing Open Space Maintenance Districts in
the City.
Proposed Special Tax
The district has four categories of taxation, as follows:
. Residential Developed Parcels (single and multi family residences) are taxed based on the
square footage of the building.
. Non-Residential Developed Parcels (commercial and community purpose facilities) are taxed
based on acreage of the parcel
. The Vacant Land category includes all the parcels for which a building permit has not been
issued. The tax on Vacant Land is based on the total acreage of the parcel.
. The Exempt Category includes all public parcels within the district.
Developed parcels are those parcels for which a building permit has been issued. The maximum rate
of the tax on all developed parcels is determined by dividing the estimated armual budget at buildout
of each special tax area (plus a reserve allocation of 10% of the armual budget) by the total estimated
square footage of development at buildout. The apportionment methodology assumes that one acre
of Non-Residential properties is equal to 6 single family residences. The special tax consultant
considers this a reasonable assumption which has been used in other CFDs throughout California.
This ratio is corroborated by data published by the San Diego Area Association of Governments
(SANDAG) which provides that the "people generation" of one acre of commercial property is
approximately 5.6 times the number of people in a single family residence
The maximum tax rate on Vacant Land has been estimated by the dividing the estimated armual budget
at buildout of each special tax area (plus a reserve allocation of 10% of the armual budget) by the total
acreage of all parcels within the district.
Collection of Taxes
At the beginning of each fiscal year the City shall determine the amount of the Special Tax Liability
(budget plus reserve) of each Special Tax Area. Then, the special taxes will first be levied on the
developed parcels (Residential and Non-Residential). If this pool of funds is not enough to meet the
armual need, as may be the case in the early years of development, the district will levy a tax on the
Vacant Land. The buffer of having the vacant land covering any remaining costs will disappear once
the area has been fully developed. If the armual need is less than the collectible tax from the
Developed Parcels, the special taxes to be levied in that specific year will be reduced accordingly.
Following is a brief discussion of some key issues regarding the "Rate and Method of Apportionment
of the Special Taxes" :
. The maximum special taxes may be adjusted each year for inflation using a factor equal to the
lesser of the armual change of the San Diego Consumer Price Index or the California Fourth
Quarter Per Capita Personal Income.
. The "City of Chula Vista Community Facilities District Ordinance" requires that the developer
maintain the landscaping improvements for a minimum period of one year. During this
/'1-1
Page S, Item_
Meeting Date 7/28/98
period, the City will collect the special taxes with the purpose of building up an operating
reserve not to exceed 100% of the annual budget. The special tax formula provides that the
annual budget for any year may include an amount deemed necessary to maintain an adequate
level of reserve fund.
. The maximum tax rates are based on the best estimate by the developers of the square
footage ofresidential development (reduced by a 15% margin of error). This assumed
reduction in total square footage has the net result of raising the max tax that can be levied
on future residential parcels to account for any loss in projected square footage and the
corresponding revenue.
. The special tax formula provides that any cost due to delinquent taxes on vacant land shall
be apportioned to the project (Otay Ranch Company or McMillin) where the delinquent
parcels are located. This will eliminate any crossed-collateralization issues between the
two developers by making the delinquent developer solely responsible for correcting any
delinquency originating from their project.
. The annual budgets used to calculate the tax rates are only the "best estimates"of the cost
of maintenance at buildout. There is always a risk that actual expenses in future years
may be higher than the total maximum collectible taxes. This may result in reduced level
of maintenance of the landscaping, unless the property owners approve an increase in the
tax rates (2/3 voter's approval is required) which is considered unlikely. Staff believes,
however, that the proposed tax rates contain enough of a cushion in the reserve, the
inflation adjustment, and the assumed reduction of total square footage to minimize future
problems.
Proposed Maximum Taxes
The rate of special tax levy broken down by zone for this district for a typical dwelling matrix is
as follows:
Zones A & B Zone A
Otay Ranch McMillin Otay Ranch
Single Family Detached (2000 SF) $564 $168
Single Family Detached (1200 SF) $338 $101
Attached (1100 SF) $310 $92
Multi Family (1000 SF) $282 $84
Commercial 1 Industrial ( 1 Acre) $3681 $1143
Vacant Land $4163 $1293
Comparison to other Open Space Maintenance Districts
The total estimated budget for CFD No. 97-1 at buildout is $1,421,203 with an annual maximum
tax of $430 for a 2,000 square foot single family residence located in Zones A and B. A 2,000
square foot residence located in Zone A only has a maximum tax of only $124 due to the open
/'1-5'
Page 6, Item
Meeting Date 7/28/98
There are four resolutions on today's agenda which, if adopted, will accomplish the following:
The RESOLUTION MAKING APPOINTMENTS is the formal action of the City Council
appointing itself as the legislative body of the proposed CFD.
The RESOLUTION ADOPTING THE BOUNDARY MAP is the formal action adopting the map
and setting forth the boundaries of the proposed CFD.
The RESOLUTION OF INTENTION is the jurisdictional resolution declaring the intention on
the City Council to establish the proposed CFD, authorize the levy of a special tax, and set the
time and place for the public hearing.
The RESOLUTION ORDERING THE "REPORT" is the formal action of the City Council
directing the preparation of a detailed report containing a description of the services and its
estimated cost.
Future Actions
. Public hearings, certification of the election results, and levy of the special tax are herein
scheduled for September 1, 1998 at 6:00 p.m.
FISCAL IMPACT: All costs of formation of the district are being borne by the developers and
the on-going administration will be funded entirely by the district. The City will receive the
benefit of full cost recovery for staff cost involved in the following activities: 1) district
formation (staff cost estimated at $12,000), and 2) district administration in perpetuity (estimated
annual staff cost at buildout of $171 ,602 for the Department of Park and Recreation and
$24,100 for the Engineering Division).
Exhibits:
1-
Boundary Map
2- Landscaping Improvements
List of facilities
Special Tax Areas
Cost Estimate for the District
3 -
4-
5 -
July 22, 1998
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Exhibit 3
List of Facilities
The proposed services include all direct, administrative, and incidental annual costs and
expenses related to providing for the maintenance and servicing of public facilities including
irrigation, cultivation, installation and replacement of plant material, tree trimming and
necessary supplies; personnel, utility and equipment costs; contract services where applicable;
maintenance and servicing of parks, parkway landscaping and medians, drainage facilities,
pedestrian bridges and open space slopes, trails and walls, including:
Special Tax Area A
Parkway Landscaping and Medians and Regional Trails which includes:
a) The median along Telegraph Canyon Road between Paseo Ranchero and Otay
Lakes Road*
b) The median along Otay Lakes Road between Telegraph Canyon road and the
eastern boundary of Otay Ranch SPA One*
c) The southerly parkway along Telegraph Canyon Road from Paseo Ranchero to Otay
Lakes Road
d) The southerly parkway along Otay Lakes Road between Telegraph Canyon Road
and the eastern boundary of Otay Ranch SPA One
e) The easterly parkway of Paseo Ranchero between Telegraph Canyon Road and
Olympic Parkway
f) The northerly parkway along Olympic Parkway between Paseo Ranchero and the
eastern boundary of Otay Ranch SPA One
g) The median along East Palomar Street between Paseo Ranchero and Olympic
Parkway
h) The median along Olympic Parkway between Paseo Ranchero and the centerline of
future SR125*
i) The median along Paseo Ranchero between Telegraph Canyon Road and Olympic
Parkway*
j) The median and parkways along La Media Road between Otay Lakes Road and
Olympic Parkway
k) Regional trails along Paseo Ranchero, La Media, Telegraph Canyon Road, Otay
Lakes Road, and Olympic Parkway
I) The northerly and southerly parkway along East Palomar between Paseo Ranchero
and Olympic Parkway.
* Special Tax Area A will contribute an amount not to exceed 50 percent of the costs of
maintenance. . ) Lj~ 9:
Drainage Facilities which include:
a) A pro-rata share of the detention basin and channel in the Telegraph Canyon
drainage area from Paseo Ranchero to the eastem boundary of SPA One
b) A pro-rata share of the detention basin and channel in the Poggi Canyon drainage
area from east of Paseo Ranchero to the eastem boundary of SPA One
Pedestrian Bridges which include:
a) The bridge between Villages One and Five
b) A pro-rata share of the bridge between Villages One and Two
c) A pro-rata share of the bridge between Villages Five and Six
Special Tax Area 8
Open Space, Slopes, Trails and Walls which include:
a) Connector trails within open space slopes along Telegraph Canyon Road and
Olympic Parkway which are within the public right-of-way or dedicated open space
and located within the boundaries Cifthe District.
b) Slope areas adjacent to Telegraph Canyon Road, Paseo Ranchero, East Palomar
Street and Olympic Parkway which are within public open space areas and located
within the boundaries of the District.
c) Perimeter walls or fences adjacent to Telegraph Canyon Road, Paseo Ranchero,
Olympic Parkway and East Palomar Street which are within public open space areas
or within the public right-of-way and located within the boundaries of the District.
Maintenance shall. include the fumishing of services and materials for the ordinary and usual
operation, maintenance and servicing of any improvement or appurtenant facilities, including
repair, removal or replacement of all or any part of the improvement or appurtenant facilities,
providing for the life, growth, health and beauty of the landscaping, including cultivation,
irrigation, trimming, spraying, fertilizing and treating for disease or injury; the removal of
trimmings, rubbish, debris and other solid waste. Maintenance also means the fumishing of
water for the irrigation of the landscaping, the installation of planting or landscaping, or the
installation or construction of supplemental facilities including any facilities which are necessary
or convenient for the maintenance of eligible facilities.
The foregoing services shall be provided by the City, either with its own forces or by contract
with third parties, or any combination thereof, as determined by the City.
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Exhibit 5
CFD 97-1
Annual Cost Estimate Summary
Zone "A" (Otay Ranch Portion)
Water
Electricity
Materials & Supplies
Slopes, medians, parkways, trails, other
Channels and detention basins
Pedestrain Bridges
City Staff Overhead
Assessment Engineer
Subtotal
Zone "A" (McMillin Otay Ranch Portion)
Water
Electricity
Materials & Supplies
Slopes, parkways, trails, other
Trees
Channels and detention basins
Pathway Lighting Maintenance
Pedestrain Bridges
City Staff Overhead
Assessment Engineer
Subtotal
Total Zone "A"
Zone "B" (Otay Ranch)
Water
Electricity
Materials & Supplies
Slopes, trails, basins, channels, pedestrain bridges and other
Trash Collection
City Staff Overhead
Subtotal
District Total
h:-asmtdist\98s-97 -1
/ Y -/ ;J-,
76,580
10,599
13,491
275,002
18,837
4,800
23,320
16,056
438,686
27,249
1 ,482
5,190
81,031
10,980
8,258
585
2,400
12,468
8,033
157,676
b~o,302
228,383
2,070
43,081
614,100
1,120
135,874
1,024,628
1,620,990
RESOLUTION NO.
/9/tJy--
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA MAKING APPOINTMENTS IN PROPOSED COMMUNITY
FACILITIES DISTRICT NO. 97-1 (OPEN SPACE MAINTENANCE DISTRICT
[OTAY RANCH - SPA ONE, VILLAGES I & 5])
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
"City Council"), desires to initiate proceedings to create a Community Facilities District pursuant
to the terms provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter
2.5, Part I, Division 2, Title 5 of the Government Code of the State of California (the "Act") and
the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers
reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution
of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to
collectively as the "Community Facilities District Law"). This Community Facilities District shall
hereinafter be designated as COMMUNITY FACILITIES DISTRICT NO. 97-1 (OPEN SPACE
MAINTENANCE DISTRICT [OTAY RANCH - SPA ONE, VILLAGES I & 5]) (hereinafter
referred to as the "District"); and,
WHEREAS, at this time, the legislative body is desires to appoint and designate itself as
the legislative body of the District, in order to allow the proceedings to go forward to completion
in accordance with the provisions of law.
NOW, THEREFORE IT IS HEREBY RESOLVED:
SECTION I. The above recitals are all true and correct.
SECTION 2. Throughout the course of these formation proceedings and following the
formation thereof, the City Council of the City will be acting as the legislative body of proposed
Community Facilities District No. 97-1 (Open Space Maintenance District [Otay Ranch - SPA
One, Villages I & 5]), which shall upon the formation thereof be a legally constituted
governmental entity as defined by Section 53317 of the Government Code of the State of
California.
SECTION 3. All applicable regulatory rules of the City, including date, time and place
of meetings, as well as notice requirements shall be applicable for all proceedings conducted by
this legislative body as the governing body of the Community Facilities District.
SECTION 4. The Star News, or another newspaper of general circulation, is hereby
designated as the newspaper for all publications as required by law and as necessary for
completion of this District.
I
/;j~- /
PRESENTED BY:
John P. Lippitt
Director of Public Works
h:\SHARED\ENGI NEER\LORRAINE\APPTRES. 971
APPROVED AS TO FORM BY:
0---- ~~ #r-
John M. Kaheny
City Attorney
2
/'1/9 ~.z
RESOLUTION NO.
/9/ tJ..5
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, ADOPTING A BOUNDARY MAP SHOWING THE
BOUNDARlES OF THE TERRITORY PROPOSED FOR THE INCLUSION IN
PROPOSED COMMUNITY FACILITIES DISTRlCT NO. 97-1 (OPEN SPACE
MAINTENANCE DISTRlCT lOT A Y RANCH - SPA ONE, VILLAGES 1 & 5])
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA
(hereinafter referred to as the "legislative body of the local Agency"), desires to initiate
proceedings to create a Community Facilities District pursuant to the terms and provisions of the
"Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5
of the Government Code of the State of California (the "Act") and the City of Chula Vista
Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of
Chula Vista under Sections 3,5 and 7 of Article XI of the Constitution of the State of California
(the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community
Facilities District Law"). This Community Facilities District shall hereinafter be designated as
COMMUNITY FACILITIES DISTRlCT NO. 97-1 (OPEN SPACE MAINTENANCE DISTRlCT
lOT A Y RANCH - SPA ONE, VILLAGES 1 & 5]) (hereinafter referred to as the "District"); and,
WHEREAS, there has been submitted a map showing the boundaries of the territory
proposed for inclusion in the District including properties and parcels of land proposed to be
subject to the levy of a special tax by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
SECTION 1. The above recitals are all true and correct.
SECTION 2. The map designated as "BOUNDARlES OF COMMUNITY FACILITIES
DISTRlCT NO. 97-1 (OPEN SPACE MAINTENANCE DISTRlCT [OTAY RANCH - SPA
ONE, VILLAGES 1 & 5])" showing the boundaries of the territory proposed for inclusion in the
District, including properties and parcels of land proposed to be subject to the levy of a special
tax by the District, is hereby adopted.
SECTION 3. A certificate shall be endorsed on the original and on at least one (1) copy
of the map of the District, evidencing the date and adoption of this Resolution, and within fifteen
(15) days after the adoption of the Resolution fixing the time and place of the hearing on the
formation or extent of such District, a copy of such map shall be filed with the correct and proper
endorsements thereon with the County Recorder, all in the manner and form provided for in
Sections 3110 and 3111 of the Streets and Highways Code of the State of California.
1
)~B--/
PRESENTED BY:
John P. Lippitt
Director of Public Works
H: \shared\engineer\lorraine\mapres. '!71
APPROVED AS TO FORM BY:
c~~~
John Kaheny
City Attorney
2
It! [l-eJ-
RESOLUTION NO.
/9 II/&,
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, DECLARING ITS INTENTION TO ESTABLISH COMMUNITY
FACILITIES DISTRICT NO. 97-1 (OPEN SPACE MAINTENANCE
DISTRICT [OTAY RANCH - SPA ONE, VILLAGES 1 & 5]) AND TO
AUTHORIZE THE LEVY OF A SPECIAL TAX THEREIN TO FINANCE
CERTAIN SERVICES
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
"City Council"), at this time is desirous to initiate proceedings to create a Community Facilities
District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of
1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of
California (the "Act") and the City of Chula Vista Community Facilities District Ordinance
enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of
Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the
Ordinance may be referred to collectively as the "Community Facilities District Law"). This
Community Facilities District shall hereinafter be referred to as COMMUNITY FACILITIES
DISTRICT NO. 97-1 (OPEN SPACE MAINTENANCE DISTRICT [OTAY RANCH - SPA
ONE, VILLAGES 1 & 5]) (hereinafter referred to as the "District"); and,
WHEREAS, this City Council is now required to proceed to adopt its Resolution of
Intention to initiate the proceedings for the establishment of such District, to set forth the
boundaries for such District, to indicate the type of public services to be financed by such
District, to indicate the rate and apportionment of a special tax sufficient to finance such services,
to set a time and place for a public hearing relating to the establishment of such District; and,
WHEREAS, a map of such District has been submitted showing the boundaries of the
territory proposed for inclusion in the District including properties and parcels of land proposed
to be subject to the levy of a special tax by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
RECITALS
SECTION 1. The above recitals are all true and correct.
INITIATION OF PROCEEDINGS
SECTION 2. These proceedings are initiated by this City Council pursuant to the
authorization of Section 53318 of the Government Code of the State of California.
1
/'Ic - /
BOUNDARIES OF DISTRICT
SECTION 3. It is the intention of this City Council to establish a Community Facilities
District pursuant to the provisions of the Community Facilities District Law, and to determine
the boundaries and parcels on which special taxes may be levied to finance certain services. A
description of the boundaries of the territory proposed for inclusion in the District including
properties and parcels of land proposed to be subject to the levy of a special tax by the District
is as follows:
All that property as shown on a map as previously approved by this City Council, such
map designated by the name of this Community Facilities District, a copy of which is on
file in the Office of the City Clerk and shall remain open for public inspection.
NAME OF DISTRICT
SECTION 4. The name of the proposed Community Facilities District to be established
shall be known and designated as COMMUNITY FACILITIES DISTRICT NO. 97-1 (OPEN
SPACE MAINTENANCE DISTRICT [OTAY RANCH - SPA ONE, VILLAGES 1 & 5]).
DESCRIPTION OF SERVICES
SECTION 5. It is the further intention of this City Council to finance certain services that
are in addition to those provided in or required for the territory within the District and will not
be replacing services already available. A general description of the services to be provided is
as follows:
The maintenance and servicing of public facilities including irrigation, cultivation,
installation and replacement of plant material, tree trimming and necessary
supplies, personnel, utility and equipment costs; contract services where applicable;
maintenance and servicing of parks, parkway landscaping and medians, drainage
facilities, pedestrian bridges and open space slopes, trails and walls.
SPECIAL TAX
SECTION 6. It is hereby further proposed that, except where funds are otherwise
available, a special tax sufficient to pay for such services and related incidental expenses
authorized by the Community Facilities District Law, secured by recordation of a continuing lien
against all non-exempt real property in the District, will be levied annually within the boundaries
of such District. Under no circumstances will the special tax be increased as a consequence of
delinquency or default by the owner of any other parcel or parcels used for private residential
purposes within the District by more than 10 percent. For further particulars as to the rate and
method of apportionment of the proposed special tax, reference is made to the attached and
incorporated Exhibit "A", which sets forth in sufficient detail the method of apportionment to
2
/L-jC-~
allow each landowner or resident within the proposed District to clearly estimate the maximum
amount that such person will have to pay for such services.
The special taxes herein authorized, to the extent possible, shall be collected in the same
manner as ad valorem property taxes and shall be subj ect to the same penalties, procedure, sale
and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes
that may not be collected on the County tax roll shall be collected through a direct billing
procedure by the Treasurer.
PUBLIC HEARING
SECTION 7. NOTICE IS GIVEN THAT ON THE 1st DAY OF SEPTEMBER, 1998,
AT THE HOUR OF 4:00 O'CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE
CITY COUNCIL BEING THE COUNCIL CHAMBERS, CITY HALL, LOCATED AT 276
FOURTH AVENUE, CHULA VISTA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD
WHERE THIS CITY COUNCIL WILL CONSIDER THE ESTABLISHMENT OF THE
PROPOSED COMMUNITY FACILITIES DISTRICT, THE PROPOSED METHOD AND
APPORTIONMENT OF THE SPECIAL TAX, AND ALL OTHER MATTERS AS SET FORTH
IN THIS RESOLUTION OF INTENTION. THAT AT THE ABOVE-MENTIONED TIME
AND PLACE FOR PUBLIC HEARING ANY PERSONS INTERESTED, INCLUDING
TAXPAYERS AND PROPERTY OWNERS MAY APPEAR AND BE HEARD, AND THAT
THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE
ESTABLISHMENT OF THE DISTRICT, THE EXTENT OF THE DISTRICT, OR THE
FURNISHING OF THE SERVICES, WILL BE HEARD AND CONSIDERED. ANY
PROTESTS MAYBE MADE ORALLY OR IN WRITING. HOWEVER, ANY PROTESTS
PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL
BE IN WRITING AND CLEARLY SET FORTH THE IRREGULARITIES AND DEFECTS TO
WHICH THE OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH
THE CITY CLERK OF THE CITY COUNCIL ON OR BEFORE THE TIME FIXED FOR THE
PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN IN WRITING AT ANY
TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING.
IF A WRITTEN MAJORITY PROTEST AGAINST THE ESTABLISHMENT OF THE
DISTRICT IS FILED, THE PROCEEDINGS SHALL BE ABANDONED. IF SUCH
MAJORITY PROTEST IS LIMITED TO CERTAIN SERVICES OR PORTIONS OF THE
SPECIAL TAX, THOSE SERVICES OR THAT TAX SHALL BE ELIMINATED BY THE
CITY COUNCIL.
ELECTION
SECTION 8. If, following the public hearing described in the Section above, the City
Council determines to establish the District and proposes to levy a special tax within the District,
the City Council shall then submit the levy of the special taxes to the qualified electors of the
District. If at least twelve (12) persons, who need not necessarily be the same twelve (12)
3
/1}C- J
persons, have been registered to vote within the District for each of the ninety (90) days
preceding the close of the public hearing, the vote shall be by registered voters of the District,
with each voter having one (I) vote. Otherwise, the vote shall be by the landowners of the
District who were the owners of record at the close of the subject hearing, with each landowners
or the authorized representative thereof, having one (I) vote for each acre or portion of an acre
of land owned within the District.
A successful election relating to the special tax authorization shall, as applicable, establish
and/or change the appropriations limit as authorized by Article XIIIB of the California
Constitution as it is applicable to this District. .
NOTICE
SECTION 9. Notice of the time and place of the public hearing shall be given by the
City Clerk in the following manner:
A. A Notice of Public Hearing shall be published in the legally designated newspaper
of general circulation, such publication pursuant to Section 6061 of the
Government Code, with such publication to be completed at least seven (7) days
prior to the date set for the public hearing.
B. A Notice of Public Hearing shall be mailed, postage prepaid, to each property
owner within the boundaries of the proposed District; such mailing to the
property owners shall be to the address as shown on the last equalized assessment
roll. Such mailing shall be completed at least fifteen (15) days prior to the date
set for the public hearing.
PRESENTED BY:
APPROVED AS TO FORM BY:
John P. Lippitt
Director of Public Works
C~~-k
John Kaheny
City Attorney
H: \sbared\engineer\lorraine\roi. 971
4
/L/c-I
Community Facliltles L flct No. 97-1
Page 1
ExnlDlt A
Rate and Method of
Apportionment
ANNUAL TAX
A Special Tax shall be levied annually on land within Community Facilities
District No. 97-1 (Open Space Maintenance District) of the City of Chula Vista
(the "District"), and collected according to the Special Tax Liability determined by
the City of Chula Vista (the "City") through the application of the following
procedures. All of the property within the District, unless otherwise exempted by
law or the express provisions of the rate and method of apportionment
expressed below, shall be taxed to the extent and in the manner provided below
All Parcels within the District are assigned to Special Tax Area A In addition,
certain Parcels are also assigned to Special Tax Area B based upon their
location. A map of the Special Tax Areas is included as Exhibit B. The Special
Tax which shall be levied upon each Parcel shall be the aggregate sum of the
Special Tax for each Special Tax Area within which the Parcel is located.
All Special Taxes applicable to Parcels shall be collected in the same manner
and at the same time as ordinary ad valorem property taxes, and the Special
Taxes so levied will be subject to the same penalties and procedures, sale and
lien priority in case of delinquency as is provided for ad valorem taxes.
DEFINITIONS
Acre or Acreage means the area of a Parcel as shown on the latest maps of the
Assessor of the County of San Diego, or, if the area of such Parcel is not shown
on such Assessor's maps, the area as shown on a current recorded subdivision
map, parcel map, record of surveyor other recorded document creating or
describing the Parcel. If the preceding maps are not available, the area shall be
determined by the City Engineer.
Administrative Expenses means the direct and indirect expenses incurred by
the City in carrying out its duties with respect to the District (including, but not
limited to, the levy and collection of the Special Taxes) including the fees and
expenses of its counsel. Any fees of the County related to the District or the
collection of Special Taxes, an allocable share of the salaries of City staff
directly related thereto, any amounts paid by the City from its general fund with
respect to the District, and expenses incurred by the City in undertaking actions
to foreclose on properties for which the payment of Special Taxes is delinquent,
and all other costs and expenses of the City related to the District.
Building Square Foot or Square Footage means the square footage as shown
on the Parcel's building permit(s), excluding garages or other structures not
used as living space.
M:$project\chulavis\97 -1 A
P-jC-b
Community F ac ,s Dlstnct No 97-1
Page 2
Exnl:JJt P-,
Rate and Method 0;
Apportionment
City means the City of Chula Vista.
Developed Parcel means Taxable Property for which a foundation building
permit or other form of building permit has been issued as of March 1 of the
preceding Fiscal Year.
District means the Open Space Maintenance District - SPA One (Villages 1 & 5)
of the Community Facilities District No. 97-1 of the City of Chula Vista.
Facilities means those improvements defined in Part 11 of the Special Tax
Report dated July 1,1998 for Community Facilities District No. 97-1 of the City
of Chula Vista.
Fiscal Year means the period starting on July 1 and ending the following June
30.
Maximum Special Tax means the maximum special tax that can be levied within
CFD No. 97-1 by the City Council in any Fiscal Year for each Parcel of Taxable
Property.
Non-Res.idential Uses shall include all Developed Parcels which are not zoned
for Residential Uses including commercial, industrial, and community public
facility (CPF) uses.
Operating Fund means a fund that shall be maintained for each Special Tax
Area within the District for any Fiscal Year to pay for the actual costs of
maintenance, repair, and replacement of the Facilities, and the Administrative
Expenses.
Operating Fund Balance means the amount of funds in the Operating Fund at
the end of the preceding Fiscal Year.
Operating Fund Requirement means for any Fiscal Year an amount for each
Special Tax Area equal to the budgeted costs of the maintenance, repair and
replacement of the Facilities which have been accepted and maintained by the
District or are reasonably expected to be accepted and maintained by the
District during the current Fiscal Year plus the budgeted Administrative
Expenses of the District for the current Fiscal Year in which Special Taxes are
levied.
Parcel means any San Diego County Assessor's Parcel or portion thereof that is
within the boundaries of the District designated on a map of the San Diego
M:$project\chulavis\97 -1 A
j'1C-(,
Community Facilities r :nct No 97-1
Page 3
Exn:blt A
Rate and Method of
Apportionment
County Assessor and which has been assigned a discrete identifYing number on
the equalized tax rolls of the County.
Reserve Fund means a fund that shall be maintained for each Special Tax Area
to provide necessary cash flow for operations and maintenance for the first six
months of each Fiscal Year, working capital to cover maintenance and repair
cost overruns and delinquencies that may arise in connection with the collection
of Special Taxes and a reasonable buffer against large variations in annual
special tax amounts.
Reserve Fund Balance means the amount of funds in the Reserve Fund at the
end of the preceding Fiscal Year.
Reserve Fund Requirement means the required balance in the Reserve Fund
equal to up to 100% of the Operating Fund Requirement.
Residential Uses shall include those residential uses as permitted in the City
zoning ordinance.
Special Tax means the special tax or special taxes actually levied within CFD No.
97-1.
Special Tax Area means one of the two specific areas compnslng specific
Parcels as shown in Exhibit B of the Special Tax Report dated July 1, 1998 for
Community Facilities District No. 97-1 of the City of Chula Vista.
Special Tax Liability for any Fiscal Year is an amount determined for each
Special Tax Area sufficient to pay the costs of the District, including: (i) the
amount required to be deposited into the Operating Fund to meet the Operating
Fund Requirement, less the Operating Fund Balance, and (ii) the total amount
required to be deposited into the Reserve Fund if any, to meet the Reserve Fund
Requirement, less the Reserve Fund Balance.
Taxable Property is all real property or Parcels within the boundaries of the
District which are not exempt from the Special Tax pursuant to law, or which are
not classified or assigned to the Exempt Category as defined herein.
Cateaories of Special Taxes
Residential Category:
The residential category includes each Developed Parcel within the District
which is zoned for Residential Uses by the City ("Residential Category").
M:$project\chulavis\97 -1 A
/L/C-7
Community Faci, s District No. 97-1
Page 4
Exhibit A
Rate and Method of
Apportionment
. The Maximum Special Tax that may be levied within Special Tax Area A for
Fiscal Year 1998/99 on each Developed Parcel assigned to the Residential
Category shall be $0.0844 per Building Square Foot.
. The Maximum Special Tax that may be levied within Special Tax Area B for
the Fiscal Year 1998/1999 on each Developed Parcel assigned to the
Residential Category shall be $0.1977 per Building Square Foot.
Said Maximum Special Tax Rates shall be increased or decreased each Fiscal
Year thereafter by a factor which shall be the lesser of the annual percentage
change in the January to January San Diego Metropolitan Area All Urban
Consumer Price Index (All Items) or the annual percentage change in the
estimated California Fourth Quarter Per Capita Personal Income as contained in
the Governor's budget published every January.
Non-Residential Category
The non-residential category includes all Developed Parcels in the District which
are not zoned by the City for Residential Uses ("Non-Residential Category").
~
. The Maximum Special Tax that may be levied within Special Tax Area A for
the Fiscal Year 1998/99 on each Developed Parcel assigned to the Non-
Residential Category shall be $1,143 per Acre (said amount to be levied pro
rata for any portion of an Acre).
. The Maximum Special Tax that may be levied within Special Tax Area B for
the Fiscal Year 1998/99 on each Developed Parcel assigned to the Non-
Residential Category shall be $2,538 per Acre (said amount to be levied pro
rata for any portion of an Acre).
Said Maximum Special Tax rates shall be increased or decreased each Fiscal
Year thereafter by a factor which shall be the lesser of the annual percentage
change in the January to January San Diego Metropolitan Area All Urban
Consumer Price Index (All Items) or the annual percentage change in the
estimated California Fourth Quarter Per Capita Personal Income as contained in
the Governor's budget published every January.
Exempt Category
The exempt category includes each property owned by, conveyed or irrevocably
offered for dedication to a public agency, land which is in the public right-of-way,
unmanned utility easements which make utilization for other than the purpose
M:$project\chulavis\97 -1 A
/iC-?'
Community Facilities l [rict No 97-1
Page 5
Exhibit A
Rate and Method of
Apportionment
set forth in the easement impractical, common areas, private streets and parks.
and open space lots ("Exempt Category"). .
Vacant Land Category
The vacant land category includes each Parcel of Taxable Property assigned to
the District not subject to a Special Tax under any other category described
above ("Vacant Land Category").
The Maximum Special Tax which may be levied on each Parcel within the
Vacant Land Category for Fiscal Year 1998/99 shall be the rates set forth in
Table 1 below (said amount to be levied pro rata for any portion of an Acre).
Said Maximum Special Tax shall be increased or decreased each Fiscal Year
thereafter by a factor which shall be the lesser of the annual percentage change
in the January to January San Diego Metropolitan Area All Urban Consumer
Price Index (All Items) or the annual percentage change in the estimated
California Fourth Quarter Per Capita Personal Income as contained in the
Governor's budget published every January.
TABLE 1
Vacant Land Category
Maximum Special Tax Rate per Acre
Special Tax Area
Special Tax Area A
Special Tax Area B
Maximum
Special Tax Rate
$1,293/Acre
$2,870/Acre
Assionment to Cateoories of Special Taxes
On or about July 1 of each year (but in any event in sufficient time to include the
levy of the Special Taxes on the County's secured tax roll) the City shall assign
each Parcel within the District to the Residential Category, Non-Residential
Category, Exempt Category, or Vacant Land Category. Parcels subject to levy
shall be determined based upon the records of the San Diego County Assessor.
Levy and Apportionment of Special Taxes
The City shall determine the Special Tax Liability of each Special Tax Area in
each Fiscal Year on or about every July 1 (but in any event in sufficient time to
include the levy of the Special Taxes on the County's secured tax roll). Special
Taxes shall then be levied on each Parcel assigned to the Residential Category,
M:$project\chulavis\97 -1 A
IfC-9
Community Faci: s Distnct No. 97-1
Page 6
Exhibit A
Rate and Method of
Apportionment
Non-Residential Category, and Vacant Land Category within each Special Tax
Area in the following order of priority:
Step 1: Determine the maximum revenue which could be generated in each
Special Tax Area by multiplying the total Building Square Footage of all
Developed Parcels assigned to the Residential Category in each
Special Tax Area by the Maximum Special Tax per Building Square Foot
and adding to that the maximum Special Tax revenue which could be
generated by multiplying the total Acreage of all Developed Parcels
assigned to the Non-Residential Category in each Special Tax Area by
the Maximum Special Tax per Acre.
Step 2: If the total Special Tax revenue as calculated in Step 1 for the Special
Tax Area is greater than the Special Tax Liability of such Special Tax
Area, reduce the Special Tax for each Parcel proportionately so that the
Special Tax levy for the Fiscal Year is equal to the Special Tax Liability
for the Fiscal Year.
Step 3: If the total Special Tax revenue as calculated in Step 1 is less than the
Special Tax Liability of such Special Tax Area, a Special Tax shall be
levied upon each Parcel assigned to the Vacant Land Category. The
Special Tax for the Vacant Land Category shall be calculated as the
lessor of
--..
(i) The Special Tax Liability for each Special Tax Area, less the total of
funds generated for all Parcels within that Special Tax Area under
Step 1 above, divided by the total Acres for all Parcels assigned to
the "Vacant Land Category" within that Special Tax Area.
OR,
(ii) the Maximum Special Tax rate for Parcels within that Special Tax
Area.
However, in the event it is determined that the Special Tax Liability for
Special Tax Area A includes delinquent Special Taxes from Parcels in
the Vacant Land Category from the prior Fiscal Year, the City shall
determine the amount of such delinquent Special Taxes that arose from
such Parcels and identify the owner(s). The amount of delinquent
Special Taxes, if any, that arose from each owner shall first be divided
by the total Acres owned by such owner(s), and collected from the
respective owner with the remaining portion of the Special Tax Liability
not related to delinquent Special Taxes to be collected from Parcels in
M:$project\chulavis\97 -1 A
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Community Facilities District No. 97-1
Page 7
Exhibit A
Rate and Method 0;
Apportlonmen:
the Vacant Land Category according to the procedure set forth in the
preceding paragraph
Step 4: The total Special Tax for each Parcel shall be the sum of the Special
Taxes for each Special Tax Area in which a Parcel is located.
M:$project\chulavis\97 -1 A
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RESOLUTION NO.
/9/t1?
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA, CALIFORNIA, ORDERING AND DIRECTING THE PREPARATION
OF A "REPORT" FOR PROPOSED COMMUNITY FACILITIES DISTRICT
NO. 97-1 (OPEN SPACE MAINTENANCE DISTRICT [OTAY RANCH -
SPA ONE, VILLAGES 1 & 5])
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA,
CALIFORNIA (the "City Council"), has declared its intention to
initiate proceedings to create a conununity Facilities District
pursuant to the terms and provisions of the "Mello-Roos conununity
Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2,
Title 5 of the Government Code of the State of California (the
"Act") and the City of Chula vista conununity Facilities District
Ordinance enacted pursuant to the powers reserved by the city of
Chula vista under sections 3, 5 and 7 of Article XI of the
Constitution of the State of California (the "Ordinance") (the Act
and the Ordinance may be referred to collectively as the "Community
Facilities District Law"). This Community Facilities District
shall hereinafter be designated as COMMUNITY FACILITIES DISTRICT
NO. 97-1 (Open Space Maintenance District [Otay Ranch - SPA One,
Villages 1 & 5]) (hereinafter referred to as the "District"); and,
WHEREAS, this City Council directs, pursuant to the provisions
of section 53321.5 of the Government Code of the State of
California, the preparation of a "Report"to provide more detailed
information relating to the proposed District, the proposed
services, and estimate of the cost of providing such services.
NOW, THEREFORE IT IS HEREBY RESOLVED:
SECTION 1.
The above recitals are all true and correct.
SECTION 2. The Director of Public Works is hereby directed
and ordered to prepare a "Report" to be presented to this City
Council, generally setting forth and containing the following:
SERVICES: A full and complete description of the public
services proposed to be financed.
COST ESTIMATE: A general cost estimate setting forth costs of
providing such services.
SPECIAL TAX: Further particulars and documentation regarding
implementation, definitions and all other matters necessary to
clearly set forth the rate, method and apportionment for the
authorized special tax.
1
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SECTION 3. Such "Report", upon its preparation, shall be
submitted to this city council for review, and such "Report" shall
be made a part of the record of the public hearing on the
Resolution of Intention to establish such District.
PRESENTED BY:
APPROVED AS TO FORM BY:
John P. Lippitt
Director of Public Works
a~~~
John Kaheny
City Attorney
H: \ shared\ engineer\ lorraine \ reprtres. 971
2
/7'/)-2
COUNCIL AGENDA STATEMENT
ITEM TITLE:
A.
Item /5
Meeting Date 7/28/98
Resolution / 9/ t:? r Making appointments in proposed
Community Facilities District No. 97-2 (Preserve Maintenance
District)
B. Resolution / '71 (}7 r Adopting a boundary map showing
the boundaries of the territory proposed for the inclusion in
proposed Community Facilities District No.97-2 (Preserve
Maintenance District)
C. Resolution / q / / Cl Declaring its intention to establish
Community Facilities District No.97-2 (Preserve Maintenance
District) and to authorize the levy a special tax therein to finance
certain services
D. Resolution /9/ 1/ Ordering and directing the
preparation of a "Report" for proposed Community Facilities
District No. 97-2 (Preserve Maintenance District)
SUBMITTED BY: Director of Public Works / \\^i\
REVIEWED BY: City Manage~ '0';\ ~\ \ (4/Sths Vote: Yes_No..xJ
The Otay Ranch Company and McMillin Otay ~ch have requested the City to conduct
proceedings for the formation of Community Facilities District No. 97-2. The conditions of
approval of the tentative map require that the district be established prior to approval of the first
final "B" map. This district will fund the perpetual operation, maintenance and monitoring of the
Otay Ranch Habitat Preserve. The City has retained the services of Berryman & Henigar as
special tax consultant and Brown, Diven, Hessle & Brewer as legal counsel to provide assistance
during the proceedings. Tonight's action will initiate the formal proceedings leading to the
establishment of Community Facilities District No. 97-2.
RECOMMENDATION: Will be delivered under separate cover Friday, 7/24/98.
/ y;.C
COUNCIL AGENDA STATEMENT
ITEM TITLE:
A.
Item 15
Meeting Date 7/28/98
Resolution /9 It? g/ Making appointments in proposed
Community Facilities District No. 97-2 (Preserve Maintenance District)
B. Resolution /'11 CJ'1 Adopting a boundary map showing the
boundaries of the territory proposed for the inclusion in proposed
Community Facilities District No.97-2 (Preserve Maintenance District)
C. Resolution /91/ I? Declaring its intention to establish
Community Facilities District No.97-2 (Preserve Maintenance District)
and to authorize the levy a special tax therein to finance certain services
D. Resolution /9 IJ) Ordering and directing the preparation
of a "Report" for proposed Community Facilities District No. 97-2
(Preserve Maintenance District)
SUBMITTED BY: Director of Public Works
REVIEWED BY: City Manage~ 'otY ~ (4/5ths Vote: Yes_NoX)
The Otay Ranch Company and McMillin Otay ~anch have requested the City to conduct proceedings
for the formation of Community Facilities District No. 97-2. The conditions of approval of the tentative
map require that the district be established prior to approval of the first final "B" map. This district will
fund the perpetual operation, maintenance and monitoring of the Otay Ranch Habitat Preserve. The
City has retained the services of Berryman & Henigar as special tax consultant and Brown, Diven,
Hessle & Brewer as legal counsel to provide assistance during the proceedings. Tonight's action will
initiate the formal proceedings leading to the establishment of Community Facilities District No. 97-2.
RECOMMENDATION: That Council:
1) Approve the resolution making the appointment of the City Council as the
legislative body of CFD No. 97-2,
2) Approve the resolution adopting the boundary map of CFD No. 97-2,
3) Approve the resolution declaring the intention to establish CFD No. 97-2 and
authorize the levy of a special tax to pay for certain services,
4) Approve the resolution ordering and directing the preparation of the "Report"
for CFD No. 97-2
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
An important goal of the Otay Ranch Project is the establishment of a permanent preserve to protect
and enhance biological, paleontological, cultural and scenic resources, maintain biological diversity,
and promote the survival and recovery of native species and habitats. The management of the
preserve will be the joint responsibility of the County of San Diego and the City ofChula Vista (see
Exhibit 1). Both jurisdictions will act as the Preserve Owner Manager (POM). The areas of the
preserve which would be maintained by the proposed CFD would be dedicated incrementally as final
maps are approved.
/~-- /
Page 2, Item_
Meeting Date 7/28/98
The proposed district differs in many respects from the traditional landscaping districts within the
City. The most notable differences are that it provides for the maintenance and biota monitoring
of lands that are owned both by the City and the County and even lands that are privately owned
and outside of the City boundary. At Otay Ranch buildout, a total of 11,375 acres would be
dedicated as permanent preserve. It is anticipated that approximately 2,700 acres of the preserve
would be in the City ofChula Vista, 8,300 acres would be under County of San Diego jurisdiction,
and the remainder would be within the City of San Diego boundaries.
Community Facilities Districts will provide the necessary funding for the operation and
maintenance of public landscaping improvements by levying an annual "special tax", which will
be collected from the property owners in conjunction with the property taxes. The annual tax
collection (excepting the amount budgeted for CFD administration by the City) will be made
available to the paM for funding the maintenance and monitoring activities of the Preserve. There
is no direct cost to the City unless, after buildout, the resource agencies require a level of
maintenance higher than the estimated maximum tax. All expenses related to the district
administration (including levying and collecting the special taxes) are funded by the district.
On January 13, 1998, Council adopted the "City of Chula Vista statement of goals and policies
regarding the establishment of Community Facilities Districts". The approval of this document
ratified the use of CFDs as a public fmancing mechanism for (1) the construction and/or
acquisition of public infrastructure, and (2) the financing of authorized public services, including
services provided by open space districts. This policy is being considered for amendment tonight
in a separate item to exclude taxes levied by maintenance districts, such as CFD No. 97-2, from the
2% maximum tax criterion.
On April 28, 1998, Council enacted the "Chula Vista Community Facilities District Ordinance". This
ordinance adopted the Mello-Roos Act with modifications to accomplish the following: 1)
incorporate all maintenance activities authorized by the "Landscaping & Lighting Act of 1972"
("1972 Act"), 2) include maintenance activities not listed in the "Mello-Roos Act" or the "1972
Act" (i.e., monitoring activities on privately owned parcels within the Otay Ranch Preserve, and
maintenance of pedestrian bridges and community gardens proposed in Otay Ranch SPA One), and
3) establish an operating reserve fund for open space districts.
The proposed CFD No. 97-2 is consistent with the above mentioned Ordinance and the proposed
amended Council Policy. In addition, City staff has met numerous times with both developers to
discuss their concerns, clarify the intent of the policy and ordinance, and review the methodology for
the apportionment of the special taxes. All of the issues raised by the developers have been thoroughly
discussed and solutions, satisfactory to all parties, have been incorporated in the "Rate and Method of
Apportionment". Both developers also requested greater accountability as to the annual tax to be levied
on developer (vacant) land and asked for greater involvement in preparing the annual district's budgets.
These issues will be the subject of an "implementing agreement" that would be brought before Council
in conjunction with the resolution of formation of the district.
City staff, the legal counsel, and the special tax consultant have reviewed the proposed methodology
and consider it ready for Council approval. County of San Diego staff has also reviewed and approved
the proposed scope of the district and budget.
15 "'d-.
Page 3, Item_
Meeting Date 7/28/98
Area of Benefit
The proposed boundary of CFD No. 97-2 encompasses all the ownership of the Otay Ranch Company
and McMillin Otay Ranch within the Otay Valley Parcel (3,140 acres). It is assumed that only SPA
One, Villages 1 and 5 will be fully developed and that areas outside SPA One would remain
undeveloped. At buildout, SPA One will contain a total of 2,758 Single Family Residences, 2,300
Multifamily Residences, 7.9 acres of commercial, 10.4 Acres for Community Purpose Facilities
(churches, day care, etc.). The remaining parcels (outside of SPA One) have a total area of 2,094
acres. Staff has reviewed the proposed boundary map and has found it acceptable and ready for
approval by Council. A reduced copy of the map is presented in Exhibit 2.
Descriotion of Activities
The Resource Management Program (RMP) Phase II approved by the City and the County dictates
that the following activities must be performed to effectively manage and maintain the preserve:
. Imolementation of an armual biota monitoring which shall identify changes in quality and
quantity of onsite biological resources, including sensitive wildlife species, sensitive plant
species, and sensitive habitat types. CFD No. 97-2 will initially provide the funding for
performing the monitoring program over the entire area of the preserve (1 1,375 acres) which
includes lands located within the County of San Diego, City of San Diego, and the City of
Chula Vista. In addition, CFD No. 97-2 would fund the monitoring of private properties that
in the future would be dedicated to the preserve. As additional areas of the Otay Ranch
Project (beyond the district boundary) are developed, they will be required to provide for
their proportional share of the monitoring cost, which in turn may reduce the tax collected
from CFD No. 97-2 properties.
. Maintenance of the areas conveved to the preserve. These areas will be dedicated
incrementally as final map are approved. The maintenance activities are directed to protect,
maintain, and enhance the natural resources in perpetuity. CFD No. 97-2 only includes the
maintenance of 1,243 acres corresponding to the estimated conveyance obligation of SPA
One according to the Resource Management Program Phase II. It should be noted that some
of the land dedicated to the preserve may be located outside of the City of Chula Vista's
jurisdiction. The Otay Ranch Preserve will be built incrementally as future final maps over
the whole Otay Ranch Project are approved. CFD No. 97-2 is only the first step towards
providing the necessary funding for maintaining the overall Otay Ranch Preserve. Additional
maintenance obligations will require modification of existing CFDs and/or formation of new
fmancing districts.
A detailed description of these activities is presented in Exhibit 3.
It should be noted that the "Chula Vista Community Facilities District Ordinance" only authorizes
funding of the maintenance, operation and management of public property in which the City has a
property interest. Therefore, services on property conveyed to another public agency (i.e., US
Wildlife Service) in which the City does not have a property interest are not eligible for funding by
CFD No. 97-2. In addition, the Resolution ofIntention, which is before Council tonight, expressly
excludes the maintenance, operation, and management of federal lands from the activities to be
fmanced by CFD No. 97-2
I~J
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Page 4, Item_
Meeting Date 7/28/98
Cost Estimate
The estimated annual budget for CFD No. 97-2 is $ 157,466. This budget includes a total of $34,550
for maintenance, $72,000 for monitoring, $25,916 for administration by the Preserve Owner Manager,
and $25,000 for CFD administration (preparing reports, levying and collecting taxes, public assistance,
etc.) by the Engineering Division. City and County Staff have reviewed and approved the proposed
budget. Exhibit 4 contains a detailed annual budget for the district at buildout of SPA One. There
are two components to the cost of the district: 1) maintenance of lands that have been conveyed to the
preserve at final "B" map approval, and 2) monitoring of the entire area of the preserve.
The budget for the maintenance component is based on a comparably sized preserve (the Santa Rosa
Plateau Ecological Preserve located in Riverside County, west of Temecula) with an annual
maintenance cost of $37.06 per acre. This includes an administration cost component (by the Preserve
Owner Manager) estimated at 25.6% of said cost ($9.49 per acre). This unit cost is also consistent
with the Multi Species Conservation Program which proposes a cost of $36.50 per acre for similar
activities.
The monitoring component is based on estimates prepared by Dudek and Associates in accordance with
the Resource Monitoring Program Phase II, for the following species/activities:
. Coastal Sage Scrub
. Wetland / Riparian Habitat
. Valley Needle grassland
. Woodlands
. Sensitive Species
. Wildlife Corridor Monitoring
. Annual Monitoring Reports
The expenses for the district may vary substantially from year to year due to certain studies and surveys
occurring less frequently than an annual basis. For purposes of calculating the tax rates, a uniform
annual cost has been assumed. Staff considers that those fluctuations can be provided for by including
in the annual budget a proportional cost of those activities. The taxes collected will be earmarked for
future funding of said specific activities when required by the POM.
The CFD administration cost (Le., preparing report, levying and collecting taxes, public assistance,
etc, ) is estimated at $25,000. CFD administration will be performed by the City.
Imorovement Areas
This district has been set up with two improvement areas (see Exhibit 5), as follows:
. Area "A" consists of Otay Ranch SPA One. This Area will be responsible for (1) the
maintenance of the areas conveyed to the preserve during development of SPA One, and (2)
a pro-rata share of the overall monitoring program.
. Area "B" consists of all lands within the district outside of SPA One. This Area will only be
responsible for a pro-rata share of the monitoring component. It has been assumed that this
area will remain undeveloped (no conveyance obligations).
Prooosed Soecial Tax
The district has four categories of taxation, as follows:
/5"1
Page 5, Item_
Meeting Date 7/28/98
. Category I includes all Developed Parcels for which a building permit has been issued, and
include the following: (I) Residential Parcels (single and multi family residences) which will
be taxed based on the square footage of the house and (2) Non-Residential Parcels (commercial
and community purpose facilities) which will be taxed based on acreage of the parcel.
. Category II includes all parcels for which a Final Map has been recorded but no building
permit has been issued. These parcels will be taxed based on the acreage of the parcel.
. Category III (Vacant Land) includes all the parcels for which neither a final map has been
recorded or a building permit has been issued. The tax on Vacant Land is based on the total
acreage of the parcel.
. The Exempt Category includes all public parcels within the district.
The maximum rate of the tax on all developed parcels is determined by dividing the estimated annual
budget of Area "A" (plus a reserve allocation of 10 % of the annual budget) by the total estimated
square footage of construction. The apportionment methodology assumes that one acre of Non-
Residential properties is equal to 6 single family residences. The special tax consultant considers this
a reasonable assumption which has been used in other CFDs throughout California. This ratio is
corroborated by data published by the San Diego Area Association of Governments (SANDAG) which
provides that the "people generation" of one acre of commercial property is approximately 5.6 times
the number of people in a single family residence.
The maximum tax rate for Category II, Final Map, has been estimated by dividing the estimated
annual budget of each area (plus a reserve allocation of 10% of the annual budget) by the estimated
total acreage of all taxable parcels in future final maps.
The maximum tax rate on Category III, Vacant Land, has been estimated by dividing the estimated
annual budget of each tax area (plus a reserve allocation of 10% of the annual budget) by the total
gross acreage of all parcels within the district.
Collection of Taxes
At the beginning of each fiscal year the City shall determine the amount of the Special Tax Liability
(budget plus reserve) of each Improvement Area. In Area "A", the special taxes will first be levied
on the developed parcels (Residential and Non-Residential). If this pool of funds is not enough to meet
the annual need, the district will levy a tax on the Category II (Final Maps). Next, if the collection still
is not enough, the district will levy a tax on the Category III (Vacant Land). The buffer of having the
vacant land covering any remaining costs will disappear once the area has been fully developed. Area
"B" contains only vacant land and only Category III tax rates would be levied. If the annual need is
less than the collectible tax, the special taxes to be levied in that specific year would be reduced
accordingly.
Following is a brief discussion of some key issues regarding the "Rate and Method of Apportionment
of the Special Taxes" :
. The maximum special taxes may be adjusted each year by a factor equal to the lesser of the
annual change of the San Diego Consumer Price Index or the California Fourth Quarter Per
Capita Personal Income.
. The "City of Chula Vista Community Facilities District Ordinance" requires that the developer
maintain lands within the preserve for a minimum period of one year. The developer, at the
time of each final "B" map, will be requested to provide irrevocable offers of dedication of
preserve lands. It is anticipated that the City and County would not accept the offer of land for
/S---s-
Page 6, Item_
Meeting Date 7/28/98
a minimum of one year. During this period, the Developer will be expected to maintain such
land so that the City can collect the special taxes with the purpose of building up an operating
reserve not to exceed 100% of the annual budget. The special tax formula provides that the
annual budget for any year may include an allocation for replenishing the reserve fund.
. The maximum tax rates are based on the best estimate by the developers of the square footage
of residential buildings and acreage of non-residential parcels at buildout with a IS % reduction
so that there would be some margin for error in the event that the developers do not build the
projected total square footage. This margin raises the maximum allowable tax so that if a lower
amount of development occurs (up to a 15 % reduction) the City will still be able to cover the
expenses with a 10% reserve.
. The special tax formula provides that any cost due to delinquent taxes on vacant land shall be
apportioned to the project (Otay Ranch Company or McMillin) where the delinquent parcels
are located. This will eliminate any crossed-collateralization issues between the two developers
by making the delinquent developer solely responsible for correcting any delinquency
originating from their project.
. The annual budgets used to calculate the tax rates are only the best "estimates" of the cost of
maintenance at district buildout. There is always a risk that actual expenses in future years
may be higher than the total maximum collectible taxes. This may result in reduced levels of
maintenance of the landscaping, unless the property owners approve an increase in the tax rates
(2/3 voter's approval is required) which is considered unlikely. Staff believes, however, that
the proposed tax rates contain enough of a cushion in the reserve, inflation adjustment, and the
Extraordinary Tax to minimize future problems.
ProDosed Maximum Taxes
The rate of special tax levy broken down by Improvement Area for this district for a typical dwelling
matrix is as follows:
Estimate of Annual Special Tax
Area "A" Area "B" 1)
Maintenance Monitoring Maintenance Monitoring
Single Family Detached (2000 SF) $15.63 $9.85
Single Family Detached (1200 SF) $9.38 $5.91
Attached (11 00 SF) $8.60 $5.42
Multi Family (1000 SF) $7.82 $4.92
Commercial 1 CPF ( I acre) $128.53 $80.96
Final Mapped Land (1 acre) $128.53 $80.96
Vacant Land (1 acre) $81.30 $51.18 $51.18
I) It is assumed that only area "A" will be developed and that Area "B" will remain vacant. Area "B"
is only responsible for a pro-rata share of the monitoring program.
Resolutions
There are four resolutions in today's agenda which, if adopted, would accomplish the following:
/ytt
-,
Page 7, Item_
Meeting Date 7/28/98
The RESOLUTION MAKING APPOINTMENTS is the formal action of the City Council appointing
itself as the legislative body of the proposed CFD.
The RESOLUTION ADOPTING THE BOUNDARY MAP is the formal action adopting the map and
setting forth the boundaries of the proposed CFD.
The RESOLUTION OF INTENTION is the jurisdictional resolution declaring the intention on the City
Council to establish the proposed CFD, authorize the levy of a special tax, and set the time and place
for the public hearing.
The RESOLUTION ORDERING THE "REPORT" is the formal action of the City Council directing
the preparation of a detailed report containing a description of the services and its estimated cost.
Future Actions
. Public hearings, certification of the election results, and levy of the special tax are herein
scheduled for September I, 1998 at 4:00 p.m.
FISCAL IMPACT: All cost of formation of the district are being borne by the developers and the
on-going administration will be funded entirely by the district. The City will receive the benefit of full
cost recovery for staff costs involved in the following activities: 1) district formation (staff cost
estimated at $12,000), and 2) district administration (estimated annual staff costs of $24,100)
Exhibits:
1-
2-
3 -
4 -
5 -
Otay Ranch Preserve
Map of the District
List of Activities
Cost Estimate
Improvement Areas
July 24, 1998
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Exhibit 3
List of Activities
A. Preserve Operations and Maintenance
1. Preserve Maintenance: Develop and implement programs to maintain, operate and
manage preserve habitat values through: cultivation, irrigation, trimming, spraying,
fertilizing, or treatment of disease or injury; removal of trimmings; rubbish, debris,
and other solid waste; maintenance of trails; removal and control of exotic plants
species (weeds); and control of cowbirds through trapping efforts.
2. Securitv: Develop and implement security programs to: enforce "no trespassing"
rules; curtail activities that degrade resources, such as grazing, shooting, and illegal
dumping; remove trash, litter, and other debris; control access; prohibit off-road
traffic; and maintain fences and trails.
3. Preserve Imorovements: Acquire (through lease or purchase) equipment or install
improvements necessary to perform the maintenance, monitoring and security
functions described herein.
B. Resource Monitoring Program
1. Biota Monitorinq; Implement the annual biota monitoring and reporting program
consistent with the RMP to identify changes in the quality and quantity of preserve
resources inCluding wildlife species, sensitive plants and sensitive habitat types.
/.5'"-/tl
- ,
Exhibit 4
Cost Estimate
--
Maintenance Budget --
Maintenance of 1,243 acres - Improvement Area A $34,550
Preserve Administration $11,516
Allocable Portion of District Administration (36.5%) $9,135
Subtotal Maintenance Budaet $55,201
---
Monitori~_g Bud_get ---- ---
Annualized Costs $72,000
Contra:! Administration $14,400
Allocable Portion of District Administration (63.5%) --
$15,865
Subtotal Monitoring Budaet $102,265
Total Budget - $157,466
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RESOLUTION NO.
/9/t1?ff'
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA MAKING APPOINTMENTS IN PROPOSED COMMUNITY
FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT)
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
"City Council"), desires to initiate proceedings to create a Community Facilities District pursuant
to the terms provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter
2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act") and
the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers
reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution
of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to
collectively as the "Community Facilities District Law"). This Community Facilities District shall
hereinafter be designated as COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE
MAINTENANCE DISTRICT) (hereinafter referred to as the "District"); and,
WHEREAS, at this time, the legislative body is desires to appoint and designate itself as
the legislative body of the District, in order to allow the proceedings to go forward to completion
in accordance with the provisions of law.
NOW, THEREFORE IT IS HEREBY RESOLVED:
SECTION 1. The above recitals are all true and correct.
SECTION 2. Throughout the course of these formation proceedings and following the
formation thereof, the City Council of the City will be acting as the legislative body of proposed
Community Facilities District No. 97-2 (Preserve Maintenance District), which shall upon the
formation thereof be a legally constituted governmental entity as defined by Section 53317 of the
Government Code of the State of California.
SECTION 3. All applicable regulatory rules of the City, including date, time and place
of meetings, as well as notice requirements shall be applicable for all proceedings conducted by
this legislative body as the governing body of the Community Facilities District.
SECTION 4. The Star News, or another newspaper of general circulation, is hereby
designated as the newspaper for all publications as required by law and as necessary for
completion of this District.
John P. Lippitt
Director of Public Works
APPROVED AS TO FORM BY:
"\_,,--1\A~~ ~
John M. Kaheny
City Attorney
PRESENTED BY:
h:\SHARED\ENGINEER\LORRAINE\APPTRES.972
)5/;-/
RESOLUTION NO.
/9/tJ9
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, ADOPTING A BOUNDARY MAP SHOWING THE
BOUNDARIES OF THE TERRITORY PROPOSED FOR THE INCLUSION IN
PROPOSED COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE
MAINTENANCE DISTRICT)
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA
(hereinafter referred to as the "legislative body of the local Agency"), desires to initiate
proceedings to create a Community Facilities District pursuant to the terms and provisions of the
"Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part I, Division 2, Title 5
of the Government Code of the State of California (the "Act") and the City of Chula Vista
Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of
Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California
(the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community
Facilities District Law"). This Community Facilities District shall hereinafter be designated as
COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT)
(hereinafter referred to as the "District"); and,
WHEREAS, there has been submitted a map showing the boundaries of the territory
proposed for inclusion in the District including properties and parcels of land proposed to be
subject to the levy of a special tax by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
SECTION 1. The above recitals are all true and correct.
SECTION 2. The map designated as "BOUNDARIES OF COMMUNITY FACILITIES
DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT)" showing the boundaries of
the territory proposed for inclusion in the District, including properties and parcels of land
proposed to be subject to the levy of a special tax by the District, is hereby adopted.
SECTION 3. A certificate shall be endorsed on the original and on at least one (1) copy
of the map of the District, evidencing the date and adoption of this Resolution, and within fifteen
(IS) days after the adoption of the Resolution fixing the time and place of the hearing on the
formation or extent of such District, a copy of such map shall be filed with the correct and proper
endorsements thereon with the County Recorder, all in the manner and form provided for in
Sections 3110 and 3111 of the Streets and Highways Code of the State of California.
PRESENTED BY:
APPROVED AS TO FORM BY:
John P. Lippitt
Director of Public Works
(~ ~~o
John Kaheny
City Attorney
~rlk
v
H : \shared\engineer\lorraine\mapres .972
;5'tJ - /
RESOLUTION NO.
/9//tP
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, DECLARING ITS INTENTION TO ESTABLISH COMMUNITY
FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT)
AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX THEREIN TO
FINANCE CERTAIN SERVICES
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
"City Council"), at this time is desirous to initiate proceedings to create a Community Facilities
District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of
1982", being Chapter 2.5, Part I, Division 2, Title 5 of the Government Code of the State of
California (the "Act") and the City of Chula Vista Community Facilities District Ordinance
enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of
Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the
Ordinance may be referred to collectively as the "Community Facilities District Law"). This
Community Facilities District shall hereinafter be referred to as COMMUNITY FACILITIES
DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) (hereinafter referred to as the
"District"). and
, ,
WHEREAS, this City Council is now required to proceed to adopt its Resolution of
Intention to initiate the proceedings for the establishment of such District, to set forth the
boundaries for such District, to indicate the type of public services to be financed by such
District, to indicate the rate and apportionment of a special tax sufficient to finance such services,
to set a time and place for a public hearing relating to the establishment of such District; and,
WHEREAS, a map of such District has been submitted showing the boundaries of the
territory proposed for inclusion in the District including properties and parcels of land proposed
to be subject to the levy of a special tax by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
RECITALS
SECTION 1. The above recitals are all true and correct.
INITIATION OF PROCEEDINGS
SECTION 2. These proceedings are initiated by this City Council pursuant to the
authorization of Section 53318 of the Government Code of the State of California.
I
I5'C-/
BOUNDARIES OF DISTRICT
SECTION 3. It is the intention of this City Council to establish a Community Facilities
District pursuant to the provisions of the Community Facilities District Law, and to determine
the boundaries and parcels on which special taxes may be levied to finance certain services. A
description of the boundaries of the territory proposed for inclusion in the District including
properties and parcels of land proposed to be subject to the levy of a special tax by the District
is as follows:
All that property as shown on a map as previously approved by this City Council, such
map designated by the name of this Community Facilities District, a copy of which is on
file in the Office of the City Clerk and shall remain open for public inspection.
NAME OF DISTRICT
SECTION 4. The name of the proposed Community Facilities District to be established
shall be known and designated as COMMUNITY FACILITIES DISTRICT NO. 97-2
(PRESERVE MAINTENANCE DISTRICT).
DESCRIPTION OF SERVICES
SECTION 5. It is the further intention of this City Council to finance certain services that
are in addition to those provided in or required for the territory within the District and will not
be replacing services already available. A general description of the services to be provided is
as follows:
The monitoring, maintenance, operation and management of public property in
which the City has a property interest and which conforms to the requirements of
the Ordinance or private property within the Otay Ranch Preserve which is
required by the Preserve Owner/Manager to be maintained as open space or for
habitat maintenance or both. Such property may be located outside the boundaries
of the District and outside the jurisdictional boundaries of the City. Such services
shall not include the maintenance, operation and management of any property
owned, maintained, operated and/or managed by the federal and/or state
government as open space and/or for habitat maintenance.
The costs of such services shall include the performance by employees of all functions,
including operation and maintenance.
SPECIAL TAX
SECTION 6. It is hereby further proposed that, except where funds are otherwise
available, a special tax sufficient to pay for such services and related incidental expenses
authorized by the Community Facilities District Law, secured by recordation of a continuing lien
2
/.5C"oZ
\-
against all non-exempt real property in the District, will be levied annually within the boundaries
of such District. Under no circumstances will the special tax be increased as a consequence of
delinquency or default by the owner of any other parcel or parcels used for private residential
purposes within the District by more than 10 percent. For further particulars as to the rate and
method of apportionment of the proposed special tax, reference is made to the attached and
incorporated Exhibit "A", which sets forth in sufficient detail the method of apportionment to
allow each landowner or resident within the proposed District to clearly estimate the maximum
amount that such person will have to pay for such services.
The special taxes herein authorized, to the extent possible, shall be collected in the same
manner as ad valorem property taxes and shall be subj ect to the same penalties, procedure, sale
and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes
that may not be collected on the County tax roll shall be collected through a direct billing
procedure by the Treasurer.
PUBLIC HEARING
SECTION 7. NOTICE IS GIVEN THAT ON THE 1st DAY OF SEPTEMBER, 1998,
AT THE HOUR OF 4:00 O'CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE
CITY COUNCIL BEING THE COUNCIL CHAMBERS, CITY HALL, LOCATED AT 276
FOURTH AVENUE, CHULA VISTA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD
WHERE THIS CITY COUNCIL WILL CONSIDER THE ESTABLISHMENT OF THE
PROPOSED COMMUNITY FACILITIES DISTRICT, THE PROPOSED METHOD AND
APPORTIONMENT OF THE SPECIAL TAX, AND ALL OTHER MATTERS AS SET FORTH
IN THIS RESOLUTION OF INTENTION. THAT AT THE ABOVE-MENTIONED TIME
AND PLACE FOR PUBLIC HEARING ANY PERSONS INTERESTED, INCLUDING
TAXPAYERS AND PROPERTY OWNERS MAY APPEAR AND BE HEARD, AND THAT
THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE
ESTABLISHMENT OF THE DISTRICT, THE EXTENT OF THE DISTRICT, OR THE
FURNISHING OF THE SERVICES, WILL BE HEARD AND CONSIDERED. ANY
PROTESTS MAY BE MADE ORALLY OR IN WRITING. HOWEVER, ANY PROTESTS
PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL
BE IN WRITING AND CLEARLY SET FORTH THE IRREGULARITIES AND DEFECTS TO
WHICH THE OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH
THE CITY CLERK OF THE CITY COUNCIL ON OR BEFORE THE TIME FIXED FOR THE
PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN IN WRITING AT ANY
TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING.
IF A WRITTEN MAJORITY PROTEST AGAINST THE ESTABLISHMENT OF THE
DISTRICT IS FILED, THE PROCEEDINGS SHALL BE ABANDONED. IF SUCH
MAJORITY PROTEST IS LIMITED TO CERTAIN SERVICES OR PORTIONS OF THE
SPECIAL TAX, THOSE SERVICES OR THAT TAX SHALL BE ELIMINATED BY THE
CITY COUNCIL.
3
ISC--y
ELECTION
SECTION 8. If, following the public hearing described in the Section above, the City
Council determines to establish the District and proposes to levy a special tax within the District,
the City Council shall then submit the levy of the special taxes to the qualified electors of the
District. If at least twelve (12) persons, who need not necessarily be the same twelve (12)
persons, have been registered to vote within the District for each of the ninety (90) days
preceding the close of the public hearing, the vote shall be by registered voters of the District,
with each voter having one (I) vote. Otherwise, the vote shall be by the landowners of the
District who were the owners of record at the close of the subject hearing, with each landowners
or the authorized representative thereof, having one (1) vote for each acre or portion of an acre
of land owned within the District.
A successful election relating to the special tax authorization shall, as applicable, establish
and/or change the appropriations limit as authorized by Article XIIIB of the California
Constitution as it is applicable to this District.
NOTICE
SECTION 9. Notice of the time and place of the public hearing shall be given by the
City Clerk in the following manner:
A. A Notice of Public Hearing shall be published in the legally designated newspaper
of general circulation, such publication pursuant to Section 6061 of the
Government Code, with such publication to be completed at least seven (7) days
prior to the date set for the public hearing.
B. A Notice of Public Hearing shall be mailed, postage prepaid, to each property
owner within the boundaries of the proposed District; such mailing to the property
owners shall be to the address as shown on the last equalized assessment roll.
Such mailing shall be completed at least fifteen (15) days prior to the date set for
the public hearing.
PRESENTED BY:
APPROVED AS TO FORM BY:
Gv-~~
John M. Kaheny
City Attorney
John P. Lippitt
Director of Public Works
H : \shared \engineer\lorraine\roi . 972
4
/5C-'1
Community Facilities Dis ,t No. 97-2
Page 1
Exhibit j..,
Rate and Method of
Apportionment
.-
ANNUAL TAX
A Special Tax shall be levied annually on each Parcel of land within the Preserve
Maintenance District, Community Facilities District No. 97-2 of the City of Chula Vista
(the "District"), and collected according to the Special Tax Liability determined by the
City of Chula Vista (the "City") through the application of the following procedures All
of the property within the District, unless otherwise exempted by law or the express
provisions of the rate and method of apportionment expressed below, shall be taxed to
the extent and in the manner provided below.
All Parcels within the District are included within either Improvement Area A or
Improvement Area B. A map of the Improvement areas is included as Exhibit B.
All Special Taxes applicable to Parcels be collected in the same manner and at the
same time as ordinary ad valorem property taxes, and Special Taxes so levied will be
subject to the same penalties and procedures, sale and lien priority in case of
delinquency as is provided for ad valorem taxes.
DEFINITIONS
Acre or Acreage means the area of a Parcel as shown on the latest maps of the
Assessor of the County of San Diego, or if the area of such Parcel is not shown on
such Assessor's maps, the area as shown on a current recorded subdivision ma::J,
parcel map, record of surveyor other recorded document creating or describing the
Parcel. If the preceding maps are not available, the area shall be determined by the
City Engineer.
Administrative Expenses means the direct and indirect expenses incurred by the City
in 'carrying out its duties with respect to the District (including, but not limited to, the
levy and collection of the special taxes) including the fees and expenses of its counsel,
any fees of the County related to the District or the collection of special taxes, an
allocable share of the salaries of City staff directly related thereto and a proportionate
amount of the City's general administrative overhead related thereto, any amounts paid
by the City from its general fund with respect to the District, and all other costs and
expenses of the City related to the District.
Building Square Foot or Square Footage means the square footage as shown on a
Parcel's building permit, excluding garages or other structures not used as living space.
City means the City of Chula Vista.
M:\Sproject\chul a vis\9 7 - 2./:"
/sc-S"
.>
Community Facilities Dls,,Jct No. 97-2
Page 2
Exhibit A
Rate and Method of
Apportionment
Developed Parcel means Taxable Property for which a foundation building permit or
other form of building permit has been issued as of March 1 of the preceding Fiscal
Year.
District means the Preserve Maintenance District Community Facilities District
No. 97-2 of the City of Chula Vista.
Final Map means a recorded Tract Map or Parcel Map.
Fiscal Year means the period starting on July 1 and ending the following June 30.
Improvement Area means one of the two specific areas as shown in Exhibit B.
Maximum Special Tax means the maximum special tax that can be levied within each
Improvement Area within CFD No. 97-2 by the City Council in any Fiscal Year for each
Parcel of Taxable Property.
Non-Residential Parcels shall include each Parcel within the District which is zoned
for other than Residential Uses by the City.
Non-Residential Uses shall include all Developed Parcels which are not zoned for
Residential Uses including commercial, industrial, and Community Public Facilities
(CPF).
Operating Fund means a fund that shall be maintained for each Improvement Area
within the District for any Fiscal Year to pay for Resource Monitoring and/or Preserve
Operations and Maintenance activities and Administrative Expenses.
Operating Fund Balance means the amount of funds in the Operating Fund for each
Improvement Area at the end of the preceding Fiscal Year.
Operating Fund Requirement means for any Fiscal Year an amount for each
Improvement Area equal to the Resource Monitoring Fund Requirement and the
Preserve Operations and Maintenance Fund Requirement for the current Fiscal Year in
which Special Taxes are levied.
Parcel means any San Diego County Assessor's Parcel or portion thereof that is within
the boundaries of the District designated on a map of the San Diego County Assessor
and which has been assigned a discrete identifying number on the equalized tax rolls
of the County.
Preserve Operations and Maintenance means those activities defined in Part II A. of
the Special Tax Report dated July 1,1998 for Community Facilities District No. 97-2 of
the City of Chula Vista.
M: ISproject\ch u I a vis\S 7-2.;
/.5c-"
Community Facilities Di~ .;t No. 97-2
Page 3
Exhibit A
Rate and Method of
Apportionment
Preserve Operations and Maintenance Fund Requirement means for any,Fiscal
Year an amount equal to the budgeted costs for Preserve Operations and Maintenance
plus a pro-rata share of the budgeted Administrative Expenses of the District for the
current Fiscal Year in which Special Taxes are levied.
Residential Parcels shall include each Parcel within the District which is zoned for
Residential Uses by the City.
Residential Uses shall include those residential uses as permitted in the City zoning
ordinance.
Reserve Fund means a fund that shall be maintained for each Improvement Area to
provide necessary cash flow for the first six months of each Fiscal Year, working capital
to cover monitoring, maintenance and repair cost overruns and delinquencies that may
arise in connection with the collection of Special Taxes and a reasonable buffer against
large variations in annual special tax amounts.
Reserve Fund Balance means the amount of funds in the Reserve Fund at the end of
the preceding Fiscal Year.
Reserve Fund Requirement means an amount equal to up to 100% of the Operating
Fund Requirement for any Fiscal Year.
Resource Monitoring Program means those activities defined in Part II B. of the
Special Tax Report dated July 1,1998 for Community Facilities District No. 97-2 of the
City of Chula Vista.
Resource Monitoring Fund Requirement means for any Fiscal Year an amount for
each Improvement Area equal to the Improvement Area's fair share of the budgeted
costs of the Resource Monitoring Program plus a pro rata share of the budgeted
Administrative Expenses of the District for the current Fiscal Year in which Special
Taxes are levied. An Improvement Area's ''fair share" shall be based upon the
Improvement Area's percentage of the total acreage within the Otay Ranch General
Development Plan Planning Area for which a Resource Monitoring Program funding
mechanism has been established.
Special Tax means the special tax or special taxes actually levied within CFD No. 97-2
each Fiscal Year.
Special Tax Liability for any Fiscal Year is an amount sufficient to pay the costs of an
Improvement Area within the District equal to: (i) the Resource Monitoring Fund
Requirement, and Preserve Operations and Maintenance Fund Requirement, less the
Operating Fund Balance, and (ii) the Reserve Fund Requirement. less the Reserve
Fund Balance.
M: \Sproject\chulavis\97 - 2A
/5C-?
Community Facilities u._.rict No 57-2
Page 4
Exhibit A
Rate and Method of
Apportionment
Tax Categories are those Categories I, II and III described in the body hereof. "
Taxable Property is all real property or Parcels within the boundaries of the District
which are not exempt from the Special Tax pursuant to the law or which are not
classified or assigned to the Exempt Category as defined herein.
Cateaories of Special Taxes
Category I
Category I includes each Developed Parcel within the District. (Category I)
The Maximum Special Tax for Resource Monitoring, and Preserve Operations and
Maintenance that may be levied for Fiscal Year 1998/99 on each Developed Parcel
shall be at the rates set forth in Table 1 below. For Residential Parcels the Special Tax
shall be levied based upon Building Square Footage and for Non-Residential Parcels
shall be levied based on Acreage. The Maximum Special Tax shall be increased or
decreased each Fiscal Year thereafter by a factor which is the lesser of the annual
percentage change in the January to January San Diego Metropolitan Area All Urban
Consumer Price Index (All Items) or the annual percentage change in the estimated
California Fourth Quarter Per Capita Personal Income as contained in the Governor's
budget published every January.
r-
TABLE 1
Maximum Special Tax
Category I
Resource Operation &
Monitoring Maintenance
Residential Parcels I $0.0049 per sq. ft. $0.0078 per sq. fi.
Non-Residential Parcels $80.96 per Acre $128.53 per Acre
Category 11
Category II includes each Parcel of Taxable Property within the District for which a
Final Map has been recorded, but which is not classified as a Developed Parcel
(Category II).
The Maximum Special Tax for Resource Monitoring, and Preserve Operations and
Maintenance that may be levied for Fiscal Year 1998/99 on each Parcel in Category II
shall be as shown in Table 2 below (said amount to be levied pro rata for any portion of
an Acre). Said Maximum Special Tax shall be increased or decreased each Fiscal
Year thereafter by a factor which is the lesser of the annual percentage change in the
January to January San Diego Metropolitan Area All Urban Consumer Price Index (All
Items) or the annual percentage change in the estimated California Fourth Quarter Per
M:\SprojectlchulavisI97 - 2A
/~c-~
Community Facilities Disl,,~i No. 97-2
Page 5
Exhibit A
Rate and Method of
Apportionment
Capita Personal Income as contained In the Governor's budget published., every
January.
TABLE 2
Maximum Special Tax
Category II
Resource Operation &
Monitoring Maintenance
$80.96 per Acre $128.53 per Acre
Category 1\1
Category 1Il includes each Parcel of Taxable Property within the District not subject to a
Special Tax under any other category ("Category III").
The Maximum Special Tax which may be levied for Fiscal Year 1998/99 on Taxable
Property within Category III shall be as shown in Table 3 below (said amount to be
levied pro rata for any portion of an Acre). Said Maximum Special Tax shall be
increased or decreased each Fiscal Year thereafter by a factor which is the lesser of
the annual percentage change in the January to January San Diego Metropolitan Area
All Urban Consumer Price Index (All Items) or the annual percentage change in the
estimated California Fourth Quarter Per Capita Personal Income as contained in the
Governor's budget published every January.
TABLE 3 .
Maximum Special Tax
Category III
Resource Operation &
Monitoring Maintenance
$51.21 per Acre $81.30 per Acre
Exempt Category
The Exempt Category includes each property owned, conveyed or irrevocably offered
for dedication to a public agency, or land which is in the public right-of-way, unmanned
utility easements which make utilization for other than the purpose set forth in the
easement impractical, common areas, private streets and parks, and open space lots
("Exempt Category").
Assianment to Cateaories of Soecial Tax
On or about July 1 of each year, (but in any event in sufficient time to include the levy
of the Special Taxes on the County's secured tax roll), the City shall assign each Parcel
within the District to Category I, Category II, Category III or the Exempt Category.
M :\$project\chulavis\97 -2A
/Sc.- c;
Community Facilities Dislrict No. 97-2
Page 6
Exhibit A
Rate and Method of
Apportionment
Parcels subject to levy shall be determined based upon the records of the San-Diego
County Assessor.
Levy and Apportionment of Special Taxes
The City shall determine the Special Tax Liability for each Improvement Area in each
Fiscal Year on or about every July 1. Special Taxes shall then be levied on each
Parcel classified as the Category I, Category II, or Category III in the following order of
priority:
Improvement Area A
Step 1: Determine the revenue which could be generated by Parcels assigned to
Category I by multiplying the Building Square Footage for Parcels classified as
Residential Parcels by the Maximum Special Tax per Building Square Foot for
Resource Monitoring, and Preserve Operations and Maintenance for Parcels
and adding to that the maximum revenue which could be generated by
multiplying the total acres for Parcels classified as Non-Residential Parcels by
the Maximum Special Tax per Acre for Resource Monitoring and Preserve
Operations and Maintenance.
.~-
Step 2: If the total revenue as calculated in Step 1 is greater than the estimated
Special Tax Liability for Improvement Area A, reduce the Special Tax for each
Parcel proportionately so that the Special Tax levy for the Fiscal Year is equal
to the Special Tax Liability for the Fiscal Year.
Step 3: If the total revenue as calculated in Step 1 is less than the Special Tax Liability
for Improvement Area A, a Special Tax shall be levied upon each Parcel within
Improvement Area A, classified as Category II. The Special Tax for Parcels
assigned to Category II shall be calculated as the lessor of:
(i) The Special Tax Liability for Improvement Area A as determined by the
City, less the total revenue generated for all Parcels under Step 1 above,
divided by the total Acres for all Parcels within Improvement Area A
assigned to Category II,
OR
(ii) the Maximum Special Tax rate for Parcels assigned to Category II
Step 4: If the total revenue as calculated in Step 1 and 3 is less than the Special Tax
Liability, for Improvement Area A, a Special Tax shall be levied upon each
Parcel within Improvement Area A classified as Category III. The Special Tax
for Parcels assigned to Category III shall be calculated as the lessor of:
M :\Soroiect\ch u Javis\9',:2 A
--=
/ .!:JL-/{}
Community Facilities Ois"..;t No. 97-2
Page 7
Exhibit A
Rate and Method of
Apportionment
(i) The Special Tax Liability for Improvement Area A as determined :by the
City, less the total revenue generated for all :parcels under Step 1 and 3
above, divided by the total Acres for all Parcels within Improvement Area A
assigned to Category III,
OR
(ii) the Maximum Special Tax rate for Parcels assigned to Category III and
within Improvement Area A
However, in the event it is determined that the Special Tax Liability for Improvement
Area A includes delinquent Special Taxes from Parcels in Category III from the prior
Fiscal Year, the City shall determine the amount of delinquent taxes that arose from
such Parcels and identify the owner(s). The amount of delinquent Special Taxes, if
any, that arose from the applicable owner(s) shall first be divided by the total Category
III Acres owned by such owner(s) and collected from the applicable owner(s) with the
remaining portion of the Special Tax Liability not related to delinquent Special Taxes to
be collected from all Parcels in Category III according to the procedure set forth in the
preceding paragraph.
Improvement Area B
Step 1: Determine the revenue which could be generated by Parcels assigned to
Improvement Area B for Resource Monitoring by multiplying the total Acres for
Parcels assigned to Category III by the Maximum Special Tax for Category Ill.
Step 2: If the total revenue as calculated in Step 1 is greater than the Special Tax
Liability for Improvement Area B, reduce the Special Tax for each Parcel
proportionately so that the Special Tax levy for the Fiscal Year is equal to the
Special Tax Liability for Improvement Area B for the Fiscal Year.
However, in the event it is determined that the Special Tax Liability for Improvement
Area B includes delinquent Special Taxes from Parcels in Category III from the prior
Fiscal Year, the City shall determine the amount of delinquent taxes that arose from
such Parcels and identify the owner(s). The amount of delinquent Special Taxes, if
any, that arose from the applicable owner(s) shall first be divided by the total Category
III Acres owned by such owner(s) and collected from the applicable owner(s) with the
remaining portion of the Special Tax Liability not related to delinquent Special Taxes to
be collected from all Parcels in Category III according to the procedure set forth in the
Step 1 and Step 2 above.
M:\Sproject\ch u lavis\97 - 2A
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RESOLUTION NO.
/9///
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA, CALIFORNIA, ORDERING AND DIRECTING THE PREPARATION
OF A "REPORT" FOR PROPOSED COMMUNITY FACILITIES DISTRICT
NO. 97-2 (PRESERVE MAINTENANCE)
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA,
CALIFORNIA (the "City Council"), has declared its intention to
initiate proceedings to create a Community Facilities District
pursuant to the terms and provisions of the "Mello-Roos Community
Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2,
Title 5 of the Government Code of the State of California (the
"Act") and the City of Chula vista Community Facilities District
Ordinance enacted pursuant to the powers reserved by the city of
Chula vista under sections 3, 5 and 7 of Article XI of the
Constitution of the State of California (the "Ordinance") (the Act
and the Ordinance may be referred to collectively as the "Community
Facilities District Law"). This Community Facilities District
shall hereinafter be designated as COMMUNITY FACILITIES DISTRICT
NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) (hereinafter referred to
as the "District"); and,
WHEREAS, this city Council directs, pursuant to the provisions
of section 53321.5 of the Government Code of the State of
California, the preparation of a "Report"to provide more detailed
information relating to the proposed District, the proposed
services, and estimate of the cost of providing such services.
NOW, THEREFORE IT IS HEREBY RESOLVED:
SECTION 1.
The above recitals are all true and correct.
SECTION 2. The Director of Public Works is hereby directed
and ordered to prepare a "Report" to be presented to this City
Council, generally setting forth and containing the following:
SERVICES: A full and complete description of the public
services proposed to be financed.
COST ESTIMATE: A general cost estimate setting forth costs of
providing such services.
SPECIAL TAX: Further particulars and documentation regarding
implementation, definitions and all other matters necessary to
clearly set forth the rate, method and apportionment for the
authorized special tax.
SECTION 3. Such "Report", upon its preparation, shall be
submitted to this City Council for review, and such "Report" shall
be made a part of the record of the public hearing on the
Resolution of Intention to establish such District.
1
/5'D -/
PRESENTED BY:
John P. Lippitt
Director of Public Works
H: \sbared\engineer\lorraine\reprtres. 972
APPROVED AS TO FORM BY:
rl.--~~ ~.
John Kaheny
City Attorney
2
/ .5/:) - ;2..
,
COUNCIL AGENDA STATEMENT
ITEM TITLE:
A.
Item / t".
Meeting Date 7/28/98
Resolution /9'// :2.. making appointments in proposed
Conununity Facilities District No. 98-1 (Interim Open Space
Maintenance District [Otay Project, LLC-OVP-SP A One, Villages I
West, 2, 2 West, 6, 7, & Planning Area 12])
B. Resolution / '7 I I .3 adopting a boundary map showing the
boundaries of the territory proposed for inclusion in proposed Commu-
nity Facilities District No. 98-1 (Interim Open Space Maintenance
District [Otay Project, LLC-OVP-SPA One, Villages I West, 2, 2 West,
6,7, & Planning Area 12])
C. Resolution / 7 J / Lj declaring the intention to establish
Community Facilities District No. 98-1 (Interim Open Space Mainte-
nance District [Otay Project, LLC-OVP-SPA One, Villages 1 West, 2,
2 West, 6, 7, & Planning Area 12]) and to authorize levy of a special tax
therein to finance certain services
D. Resolution / <J / / 3 ordering and directing the preparation of
a "Report" for proposed Community Facilities District No.98-1 (Interim
Open Space Maintenance District [Otay Project, LLC-OVP-SPA One,
Villages I West, 2, 2 West, 6, 7, & Planning Area 12])
E. Resolution / 1 / J ? making appointments in proposed
Community Facilities District No. 98-2 (Interim Open Space Mainte-
nance District [McMillin - D.A. America, Otay - SPA Two, Villages
6 & 7])
F. Resolution / f 1/ 7 adopting a boundary map showing the
boundaries of the territory proposed for inclusion in proposed Commu-
nity Facilities District No. 98-2 (Interim Open Space Maintenance
District [McMillin - D.A. America, Otay - SPA Two, Villages 6 & 7])
G. Resolution I 9// ~ declaring the intention to establish
Community Facilities District No. 98-2 (Interim Open Space Mainte-
nance District [McMillin - D.A. America, Otay - SPA Two, Villages
6 & 7]) and to authorize levy of a special tax therein to finance certain
services
H. Resolution /1119 ordering and directing the preparation of
a "Report" for proposed Community Facilities District No. 98-2
(Interim Open Space Maintenance District [McMillin - D.A. America,
Otay - SPA Two, Villages 6 & 7])
SUBMITTED BY: Director of Public Works ~
REVIEWED BY, Ci" M'M"" l:R , ~
'/~ -)
(4/Sths Vote: Yes_No..xJ
Page 2, Item_
Meeting Date 7/28/98
The Otay Project Company and McMillin Otay Ranch, Inc. have requested the City to conduct
proceedings for the formation of Community Facilities Districts No. 98-1 and 98-2. These districts will
fund the operation and maintenance of certain improvements that will be constructed during development
of Otay Ranch SPA One, but provide benefit to areas outside of SPA One. There is a companion item
in tonight's agenda related with the formation of CFD No. 97-1, which would provide for the
maintenance of landscaping improvements within SPA One. The districts herein proposed are termed
interim due to the intention to modify these districts to include maintenance of final landscaping for
those areas. The City has retained the services of Berryman & Henigar as special tax consultant and
Brown, Diven, Hessle & Brewer as legal counsel to provide assistance during the proceedings.
Tonight's action will initiate the formal proceedings leading to the establishment of Community
Facilities Districts No. 98-1 and 98-2.
RECOMMENDATION: That Council:
1) Approve the resolutions making the appointment of the City Council as
the legislative body for CFD No. 98-1,
2) Approve the resolutions adopting the boundary map for CFD No. 98-1,
3) Approve the resolutions declaring the intention to establish CFD No. 98-1 and
to levy a special tax to pay for certain services,
4) Approve the resolutions ordering and directing the preparation of the "Report"
for CFD No. 98-1,
5) Approve the resolutions making the appointment of the City Council
as the legislative body for CFD No. 98-2,
6) Approve the resolutions adopting the boundary map for CFD No. 98-2,
7) Approve the resolutions declaring the intention to establish CFD No. 98-2 and
to levy a special tax to pay for certain services,
8) Approve the resolutions ordering and directing the preparation of the "Report"
for CFD No. 98-2
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
The proposed districts would provide the necessary funding for the operation and maintenance of public
landscaping improvements by levying an annual "special tax", which is collected from the property
owners in conjunction with the property taxes. There is no direct cost to the City. All expenses related
to the district administration (including levying and collecting the special taxes) are funded by the
district.
The purpose of CFDs No. 98-1 and No. 98-2 is to guarantee developer payments for the landscaping
improvements being constructed with SPA I but that are within future projects. For example, the slopes
on the west side of Paseo Ranchero are being constructed now and will require landscaping. CFD 98-1
will maintain this area until development occurs west of Paseo Ranchero and the ultimate maintenance
district is formed. The boundary of CFD 98-1 is those lands outside of SPA I owned by the Otay Ranch
Company, the boundary of CFD 98-2 is those lands outside of SPA I owned by the McMillin Company.
The developers propose to deposit with the City, at the beginning of each fiscal year, the amounts
required to maintain said facilities during that year. They also agree to the formation of the proposed
CFDs, which include areas outside SPA One, as a backup funding mechanism. In the event any of the
/~-;L.
Page 3, Item_
Meeting Date 7/28/98
developers default in their obligation, the City will levy and collect special taxes for funding said
activities.
Staff, the legal counsel, and the special tax consultant have reviewed the proposed taxing methodology
and consider it ready for Council approval.
Area of Benefit
The proposed boundary of CFD No. 98-1 encompasses all parcels located within the Otay Ranch,
Villages 1 West, 2, 2 West, 6 and 7 owned by the Otay Ranch Company (total acreage = 1,265, see
Exhibit I). CFD No. 98-2 comprises all the parcels within Otay Ranch Village 6 and 7 owned by the
McMillin Company (total acreage =401, see Exhibit 2).
Staff has reviewed the proposed boundary maps and has found them acceptable and ready for approval
by Council.
Description of facilities
The proposed CFD Nos. 98-1 and 98-2 will fund their fair share of operating and maintaining the public
landscaping associated with facilities to be constructed in conjunction with the development of the Otay
Ranch SPA One. Such improvements include the pro-rata share of Telegraph Canyon Channel, Poggi
Canyon Channel, medians and parkways along Olympic Parkway and Paseo Ranchero, etc. A complete
list of the facilities to be maintained by each of the districts in presented in Exhibit 3 and 4.
Cost Estimate
The estimated annual budget for CFD No. 98-1 is $137,849. This budget includes a total of $125,753
for maintenance, $10,896 for administration by Parks and Open Space and $1,200 for CFD
administration (preparing reports, levying and collecting taxes, public assistance, etc.) by the
Engineering Division.
The estimated annual budget for CFD No. 98-2 is $19,073. This budget includes a total of $16,669
for maintenance, $1,204 for administration by Parks and Open Space and $1,200 for CFD administra-
tion by the Engineering Division.
Staff (Parks, Open Space, and Engineering) has reviewed and approved the proposed budgets. Exhibit
5 contains a detailed annual budget for the districts. The unit prices used in determining the budget are
based on historical costs of maintenance of similar improvements within existing Open Space Districts
in the City.
Pro.posed Special Tax and Collection
Both districts have only one category of taxation based on acreage. At the beginning of each fiscal year,
the City will calculate and notify the developers of the amount of the annual budget (maintenance cost
plus reserve). The developers have the option of depositing said amount with the City, prior to July 15,
in which case the tax will not be levied. If the deposit is not received by that date, the City will proceed
to levy and collect the corresponding tax.
The maximum tax rate has been estimated by the dividing the estimated annual budget at buildout (plus
a reserve allocation of 10% of the annual budget) by the total acreage of all parcels within the district.
Following is a brief discussion of some key issues regarding the "Rate and Method of Apportionment
of the Special Taxes":
1&-3
Page 4, Item_
Meeting Date 7/28/98
. The maximum special taxes may be adjusted each year for inflation using a factor equal to the
lesser of the annual change of the San Diego Consumer Price Index or the California Fourth
Quarter Per Capita Personal Income.
. The "City of Chula Vista Community Facilities District Ordinance" requires that the developer
maintain the landscaping improvements for a minimum period of one year. During this period,
the City will collect the special taxes with the purpose of building up an operating reserve not
to exceed 100% of the annual budget. The special tax formula provides that the annual budget
for any year may include an amount deemed necessary to maintain an adequate level of reserve
fund.
. The annual budgets used to calculate the tax rates are only the "best estimates" of the cost
of maintenance. There is always a risk that actual expenses in future years may be higher
than the total maximum collectible taxes. This may result in reduced levels of maintenance
of the landscaping, unless the developers provide for the deficit or approve an increase in
the tax rates (2/3 voter's approval is required) which is considered unlikely. Staff believes,
however, that the proposed tax rates contain enough of a cushion in the reserve and the
inflation adjustment to minimize future problems.
Proposed Maximum Taxes
The rate of special tax levy broken down by district by acre is as follows:
Otay Ranch, McMillin Otay
CFD 98-1 Ranch, CFD 98-
2
One Acre of Land $108.95 $47.53
Resolutions
There are four resolutions for each district in today's agenda which, if adopted, would accomplish
the following:
The RESOLUTION MAKING APPOINTMENTS is the formal is the formal action of the City
Council appointing itself as the legislative body of the proposed CFD.
The RESOLUTION ADOPTING THE BOUNDARY MAP is the formal action adopting the map
and setting forth the boundaries of the proposed CFD.
The RESOLUTION OF INTENTION is the jurisdictional resolution declaring the intention on the
City Council to establish the proposed CFDs, authorize the levy of a special tax, and set the time
and place for the public hearing.
The RESOLUTION ORDERING THE "REPORT" is the formal action of the City Council
directing the preparation of a detailed report containing a description of the services and its
estimated cost.
/iP --7
Page 5, Item_
Meeting Date 7/28/98
Future Actions
. Public hearings, certification of the election results, and levy of the special tax are herein
scheduled for September 1, 1998 at 6:00 p.m.
FISCAL IMPACT: All costs of formation of the district are being borne by the developers and
included in the cost for the companion CFD No. 97-1 (SPA One). The ongoing administration
would be funded entirely by the district. The City will receive the benefit of full cost recovery for
staff cost involved in district administration (estimated annual staff cost at buildout of $12,100 for
the Department of Park and Recreation and $2,400 for the Engineering Division for both districts).
Exhibits:
1-
2-
3 -
4-
5 -
Boundary Map, CFD 98-1
Boundary Map, CFD 98-2
List of facilities to be maintained, CFD 98-1
List of facilities to be maintained, CFD 98-2
Cost Estimate, CFD 98-1 & CFD 98-2
July 22. 1998
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Exhibit 3
List of Facilities to be Maintained, CFD 98-1
---
Part II - Description of Facilities and Services
Section 53311.5 of the Act and the provisions of the Ordinance provide for alternate financing
of certain services in developing areas. Since there are no other means of financing ~vailable
to the City, and since the services are required to meet additional demands on the City as a
result of development occurring adjacent to and within the proposed District, the financing of
the proposed services is in accordance with Section 53313.5 of the Act and the provisions of
the Ordinance.
The proposed services include all direct, administrative, and incidental annual costs and
expenses related to providing for the maintenance and servicing of public facilities including
irrigation, cultivation, installation and replacement of plant material, tree trimming and
necessary supplies; personnel, utility and equipment costs; contract services where applicable;
maintenance and servicing of parks, parkway landscaping and medians, drainage facilities,
pedestrian bridges and open space slopes, trails and walls, including:
Parkway Landscaping and Medians which includes:
a) Median in Telegraph Canyon Road between the western property boundary of Village
One West and Paseo Ranchero (not to exceed 50% of maintenance cost).
b) Parkway in Telegraph Canyon Road (southern side) between the western property
boundary of Village One West and Paseo Ranchero.
c) Median in Paseo Ranchero between Telegraph Canyon Road and Olympic Parkway
(not to exceed 50% of maintenance cost).
d) Parkway in Paseo Ranchero (western side) between Telegraph Canyon Road and
Olympic Parkway.
e) A pro-rata share of the median in Olympic Parkway between Paseo Ranchero and
the eastern Otay Project, LLC property boundary (not to exceed 50% of maintenance
cost).
f) A pro-rata share of the Parkway in Olympic Parkway (southern side) between Paseo
Ranchero and the eastern Otay Project, LLC property boundary.
Open Space Slopes include:
a) Temporary Open Space Slopes west of Paseo Ranchero between Telegraph
Canyon Road and Olympic Parkway (within Village One West).
b) Temporary Open Space Slopes south of Olympic Parkway between Paseo
Ranchero and La Media Road (within Village Two).
Drainage Facilities which include:
a) A pro-rata share of the detention basin and channel in the Telegraph Canyon
drainage area between the western property boundary in Vmage One West and
Paseo Ranchero (within Otay Project, LLC ownership).
M:/$projecllchulavista/CFD98-1.doc
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b) A pro-rata share of the detention basin and channel in the Poggi Canyon drainage
area between the western property boundary in Village Two west and the eastern
property boundary (within Otay Project, LLC ownership).
Pedestrian Bridges which include:
a) A pro-rata share of the bridge between Villages One and Two
Maintenance shall include the furnishing of services and materials for the ordinary and usual
operation, maintenance and servicing of any improvement or appurtenant facilities, including
repair, removal or replacement of all or any part -of the improvement or appurtenant facilities,
providing for the life, growth, health and beauty of the landscaping, including cultivation,
irrigation, trimming, spraying, fertilizing and treating for disease or injury; the removal of
trimmings, rubbish, debris and other solid waste. Maintenance also means the furnishing of
water for the irrigation of the landscaping, the installation of planting or landscaping, or the
installation or construction of supplemental facilities including any facilities which are necessary
or convenient for the maintenance of eligible facilities.
The foregoing services shall be provided by the City, either with its own forces or by contract
with third parties, or any combination thereof, as determined by the City.
M:/$projectlchulavista/CFD98-1.doc
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Exhibit 4
List of Facilities to be Maintained, CFD 98-2
Part II - Description of Facilities and Services
Section 53311.5 of the Act and the provisions of the Ordinance provide for alternate financing
of certain services in developing areas. Since there are no other means of financing .available
to the City, and since the services are required to meet additional demands on the City as a
result of development occurring adjacent to and within the proposed District, the financing of
the proposed services is in accordance with Section 53313.5 of the Act and the provisions of
the Ordinance. .
The proposed services include all direct, administrative, and incidental annual costs and
expenses related to providing for the maintenance and servicing of public facilities including
irrigation, cultivation, installation and replacement of plant material, tree trimming and
necessary supplies; personnel, utility and equipment costs; contract services where applicable;.
maintenance and servicing of parks, parkway landscaping and medians, drainage facilities,
pedestrian bridges and open space slopes, trails and walls, including:
Parkway Landscaping and Medians which includes:
a) A pro-rata share of the median in Olympic Parkway along the boundary with Special
Tax Area C, CFD No. 97-1 (not to exceed 50% of maintenance cost).
b) A pro-rata share of the Parkway in Olympic Parkway (southern side) along the
boundary with SpecialTaxArea C, CFD 97-1.
Open Space Slopes include:
a) Temporary Open Space Slopes south of Olympic Parkway along the boundary of
Special Tax Area C, CFD 97-1.
Drainage Facilities which include:
a) A pro-rata share of the detention basin and channel in the Poggi Canyon drainage
area.
Maintenance shall include the furnishing of services and materials for the ordinary and usual
operation, maintenance and servicing of any improvement or appurtenant facilities, including
repair, removal or replacement of all or any part of the improvement or appurtenant facilities,
providing for the life, growth, health and beauty of the landscaping, including cultivation,
irrigation, trimming, spraying, fertilizing and treating for disease or injury; the removal of
trimmings, rubbish, debris and other solid waste. Maintenance also means the furnishing of
water for the irrigation of the landscaping, the installation of planting or landscaping, or the
installation or construction of supplemental facilities including any facilities which are necessary
or convenient for the maintenance of eligible facilities.
The foregoing services shall be provided by the City, either with its own forces or by contract
with third parties, or any combination thereof, as determined by the City.
M:/Sproject/chulavista/CFD98-1.doc
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Annual Cost Estimate Summary
CFD 98-1 (Otay Ranch Interim)
Medians, slopes, basins, channels & other
City Staff Overhead
Assessment Engineering
Subtotal
CFD 98-2 (McMillin Otay Ranch Interim)
Medians, slopes, basins, channels & other
City Staff Overhead
Assessment Engineering
Subtotal
J/P-//
125,753
10,896
1,200
137,849
16,669
1,204
1,200
19,073
RESOLUTION NO. /9 J / d-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA MAKING APPOINTMENTS IN PROPOSED COMMUNITY
FACILITIES DISTRICT NO. 98-1 (INTERIM OPEN SPACE MAINTENANCE
DISTRICT [OTAY PROJECT, LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2,
2 WEST, 6, 7 AND PLANNING AREA 12])
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
"City Council"), desires to initiate proceedings to create a Community Facilities District pursuant
to the terms provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter
2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act") and
the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers
reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution
of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to
collectively as the "Community Facilities District Law"). This Community Facilities District shall
hereinafter be designated as COMMUNITY FACILITIES DISTRICT NO. 98-1 (INTERIM
OPEN SPACE MAINTENANCE DISTRICT [OTAY PROJECT, LLC-OVP-SPA ONE,
VILLAGES 1 WEST, 2, 2 WEST, 6, 7 & PLANNING AREA 12]) (hereinafter referred to as
the "District")' and
, ,
WHEREAS, at this time, the legislative body is desires to appoint and designate itself as
the legislative body of the District, in order to allow the proceedings to go forward to completion
in accordance with the provisions of law.
NOW, THEREFORE IT IS HEREBY RESOLVED:
SECTION 1. The above recitals are all true and correct.
SECTION 2. Throughout the course of these formation proceedings and following the
formation thereof, the City Council of the City will be acting as the legislative body of proposed
Community Facilities District No. 98-1 (Interim Open Space Maintenance District [Otay Project,
LLC-OVP-SPA One, Villages 1 West, 2, 2 WEST, 6, 7 and Planning Area 12]), which shall
upon the formation thereof be a legally constituted governmental entity as defined by Section
53317 of the Government Code of the State of California.
SECTION 3. All applicable regulatory rules of the City, including date, time and place
of meetings, as well as notice requirements shall be applicable for all proceedings conducted by
this legislative body as the governing body of the Community Facilities District.
SECTION 4. The Star News, or another newspaper of general circulation, is hereby
designated as the newspaper for all publications as required by law and as necessary for
completion of this District.
1
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PREPARED BY:
John P. Lippitt
Director of Public Works
H : \shared\engineer\lorraine\apptres .981
APPROVED AS TO FORM BY:
(j - ~-~
John Kaheny
City Attorney
2
/tij-:J-
RESOLUTION NO.
/c;//3
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, ADOPTING A BOUNDARY MAP SHOWING THE
BOUNDARIES OF THE TERRITORY PROPOSED FOR THE INCLUSION IN
PROPOSED COMMUNITY FACILITIES DISTRICT NO. 98-1 (INTERIM
OPEN SPACE MAINTENANCE DISTRICT lOT A Y PROJECT, LLC-OVP-SP A
ONE, VILLAGES 1 WEST, 2, 2 WEST, 6, 7 & PLANNING AREA 12])
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA
(hereinafter referred to as the "legislative body of the local Agency"), desires to initiate
proceedings to create a Community Facilities District pursuant to the terms and provisions of the
"Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5
of the Goverrunent Code of the State of California (the "Act") and the City of Chula Vista
Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of
Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California
(the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community
Facilities District Law"). This Community Facilities District shall hereinafter be designated as
COMMUNITY FACILITIES DISTRICT NO. 98-1 (INTERIM OPEN SPACE MAINTENANCE
DISTRICT [OTAY PROJECT, LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2, 2 WEST, 6, 7
AND PLANNING AREA 12]) (hereinafter referred to as the "District"); and,
WHEREAS, there has been submitted a map showing the boundaries of the territory
proposed for inclusion in the District including properties and parcels of land proposed to be
subject to the levy of a special tax by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
SECTION 1. The above recitals are all true and correct.
SECTION 2. The map designated as "BOUNDARIES OF COMMUNITY FACILITIES
DISTRICT NO. 98-1 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [OTAY
PROJECT, LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2, 2 WEST, 6, 7 AND PLANNING
AREA 12])" showing the showing the boundaries of the territory proposed for inclusion in the
District including properties and parcels of land proposed to be subject to the levy of a special
tax by the District is hereby adopted.
SECTION 3. A certificate shall be endorsed on the original and on at least one (1) copy
of the map of the District, evidencing the date and adoption of this Resolution, and within fifteen
(15) days after the adoption of the Resolution fixing the time and place of the hearing on the
formation or extent of such District, a copy of such map shall be filed with the correct and proper
endorsements thereon with the County Recorder, all in the marmer and form provided for in
Sections 3110 and 3111 of the Streets and Highways Code of the State of California.
1
/ti3 "'(
PRESENTED BY:
John P. Lippitt
Director of Public Works
H :\shared\attorney\lorraine\mapres. 98]
APPROVED AS TO FORM BY:
U----f1~~
John Kaheny
City Attorney
2
)4>[3--2
RESOLUTION NO. / '7/ J 'I
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, DECLARING ITS INTENTION TO ESTABLISH COMMUNITY
FACILITIES DISTRICT NO. 98-1 (INTERIM OPEN SPACE MAINTENANCE
DISTRICT [OTAY PROJECT, LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2,
2 WEST, 6, 7 AND PLANNING AREA 12]) AND TO AUTHORIZE THE
LEVY A SPECIAL TAX THEREIN TO FINANCE CERTAIN SERVICES
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
"City Council"), at this time is desirous to initiate proceedings to create a Community Facilities
District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of
1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of
California (the "Act") and the City of Chula Vista Community Facilities District Ordinance
enacted pursuant to the powers reserved by the City of Chu1a Vista under Sections 3, 5 and 7 of
Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the
Ordinance may be referred to collectively as the "Community Facilities District Law"). This
Community Facilities District shall hereinafter be referred to as COMMUNITY FACILITIES
DISTRICT NO. 98-1 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [OTAY
PROJECT, LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2, 2 WEST, 6, 7 AND PLANNING
AREA 12]) (hereinafter referred to as the "District"); and,
WHEREAS, this City Council is now required to proceed to adopt its Resolution of
Intention to initiate the proceedings for the establishment of such District, to set forth the
boundaries for such District, to indicate the type of public services to be financed by such
District, to indicate the rate and apportionment of a special tax sufficient to finance such services,
to set a time and place for a public hearing relating to the establishment of such District; and,
WHEREAS, a map of such District has been submitted showing the boundaries of the
territory proposed for inclusion in the District including properties and parcels of land proposed
to be subject to the levy of a special tax by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
RECITALS
SECTION 1. The above recitals are all true and correct.
INITIATION OF PROCEEDINGS
SECTION 2. These proceedings are initiated by this City Council pursuant to the
authorization of Section 53318 of the Government Code of the State of California.
1
J~C-/
BOUNDARIES OF DISTRICT
SECTION 3. It is the intention of this City Council to establish a Community Facilities
District pursuant to the provisions of the Community Facilities District Law, and to determine
the boundaries and parcels on which special taxes may be levied to finance certain services. A
description of the boundaries of the territory proposed for inclusion in the District including
properties and parcels of land proposed to be subject to the levy of a special tax by the District
is as follows:
All that property as shown on a map as previously approved by this City Council, such
map designated by the name of this Community Facilities District, a copy of which is on
file in the Office of the City Clerk and shall remain open for public inspection.
NAME OF DISTRICT
SECTION 4. The name of the proposed Community Facilities District to be established
shall be known and designated as COMMUNITY FACILITIES DISTRICT NO. 98-1 (Interim
Open Space Maintenance District [Otay Project, LLC-OVP-SPA One, Villages 1 West, 2, 2
WEST, 6, 7 and Planning Area 12]).
DESCRIPTION OF SERVICES
SECTION 5. It is the further intention of this City Council to finance certain services that
are in addition to those provided in or required for the territory within the District and will not
be replacing services already available. A general description of the services to be provided is
as follows:
The maintenance and servicing of public facilities including irrigation, cultivation,
installation and replacement of plant material, tree trimming and necessary
supplies, personnel, utility and equipment costs; contract services where applicable;
maintenance and servicing of parks, parkway landscaping and medians, drainage
facilities, pedestrian bridges and open space slopes, trails and walls.
SPECIAL TAX
SECTION 6. It is hereby further proposed that, except where funds are otherwise
available, a special tax sufficient to pay for such services and related incidental expenses
authorized by the Community Facilities District Law, secured by recordation of a continuing lien
against all non-exempt real property in the District, will be levied annually within the boundaries
of such District. Under no circumstances will the special tax be increased as a consequence of
delinquency or default by the owner of any other parcel or parcels used for private residential
purposes within the District by more than 10 percent. For further particulars as to the rate and
method of apportionment of the proposed special tax, reference is made to the attached and
incorporated Exhibit "A", which sets forth in sufficient detail the method of apportionment to
?
/4 C,-;L
allow each landowner or resident within the proposed District to clearly estimate the maximum
amount that such person will have to pay for such services.
The special taxes herein authorized, to the extent possible, shall be collected in the same
manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale
and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes
that may not be collected on the County tax roll shall be collected through a direct billing
procedure by the Treasurer.
PUBLIC HEARING
SECTION 7. NOTICE IS GIVEN THAT ON THE 1st DAY OF SEPTEMBER, 1998,
AT THE HOUR OF 4:00 O'CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE
CITY COUNCIL BEING THE COUNCIL CHAMBERS, CITY HALL, LOCATED AT 276
FOURTH AVENUE, CHULA VISTA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD
WHERE THIS CITY COUNCIL WILL CONSIDER THE ESTABLISHMENT OF THE
PROPOSED COMMUNITY FACILITIES DISTRICT, THE PROPOSED METHOD AND
APPORTIONMENT OF THE SPECIAL TAX, AND ALL OTHER MATTERS AS SET FORTH
IN THIS RESOLUTION OF INTENTION. THAT AT THE ABOVE-MENTIONED TIME
AND PLACE FOR PUBLIC HEARING ANY PERSONS INTERESTED, INCLUDING
TAXPAYERS AND PROPERTY OWNERS MAY APPEAR AND BE HEARD, AND THAT
THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE
ESTABLISHMENT OF THE DISTRICT, THE EXTENT OF THE DISTRICT, OR THE
FURNISHING OF THE SERVICES, WILL BE HEARD AND CONSIDERED. ANY
PROTESTS MAY BE MADE ORALLY OR IN WRITING. HOWEVER, ANY PROTESTS
PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL
BE IN WRITING AND CLEARLY SET FORTH THE IRREGULARITIES AND DEFECTS TO
WHICH THE OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH
THE CITY CLERK OF THE CITY COUNCIL ON OR BEFORE THE TIME FIXED FOR THE
PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN IN WRITING AT ANY
TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING.
IF A WRITTEN MAJORITY PROTEST AGAINST THE ESTABLISHMENT OF THE
DISTRICT IS FILED, THE PROCEEDINGS SHALL BE ABANDONED. IF SUCH
MAJORITY PROTEST IS LIMITED TO CERTAIN SERVICES OR PORTIONS OF THE
SPECIAL TAX, THOSE SERVICES OR THAT TAX SHALL BE ELIMINATED BY THE
CITY COUNCIL.
ELECTION
SECTION 8. If, following the public hearing described in the Section above, the City
Council determines to establish the District and proposes to levy a special tax within the District,
the City Council shall then submit the levy of the special taxes to the qualified electors of the
District. If at least twelve (12) persons, who need not necessarily be the same twelve (12)
persons, have been registered to vote within the District for each of the ninety (90) days
3
/&L~3
preceding the close of the public hearing, the vote shall be by registered voters of the District,
with each voter having one (1) vote. Otherwise, the vote shall be by the landowners of the
District who were the owners of record at the close of the subject hearing, with each landowners
or the authorized representative thereof, having one (1) vote for each acre or portion of an acre
of land owned within the District.
A successful election relating to the special tax authorization shall, as applicable, establish
and/or change the appropriations limit as authorized by Article XIIIB of the California
Constitution as it is applicable to this District.
NOTICE
SECTION 9. Notice of the time and place of the public hearing shall be given by the
City Clerk in the following manner:
A. A Notice of Public Hearing shall be published in the legally designated newspaper
of general circulation, such publication pursuant to Section 6061 of the
Government Code, with such publication to be completed at least seven (7) days
prior to the date set for the public hearing.
B. A Notice of Public Hearing shall be mailed, postage prepaid, to each property
owner within the boundaries of the proposed District; such mailing to the property
owners shall be to the address as shown on the last equalized assessment roll.
Such mailing shall be completed at least fifteen (15) days prior to the date set for
the public hearing.
PRESENTED BY:
APPROVED AS TO FORM BY:
John P. Lippitt
Director of Public Works
~11!t~~
John Kaheny
City Attorney
h: \shared\engineer\lorraine\roi. 981
4
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Community Facilities lJistrict t~o. 98-1
Page 1
- - .- -. r
t:.X,1I:)!l ~.
Rate and !Jieth:J:J Cj~
Ap;::>:)iti:):l:Tle7l~
----
ANNUAL TAX
A Special Tax shall be levied annually on land within Community Facilities
District No. 98-1 (Interim Open Space Maintenance District) of the City of Chula
Vista (the "District"), and collected according to the Special Tax Liability
determined by the City of Chula Vista (the "City") through the application of the
fOllowing procedures. All of the property within the District, unless otherwise
exempted by law or the express provisions of the rate and method of
apportionment expressed below, shall be taxed to the extent and in the manne,
provided below.
All Special Taxes applicable to Parcels shall be collected in the same manne,
and at the same time as ordinary ad valorem property taxes, and that SDecial
Taxes so levied will be subject to the same penalties and procedures, sale anj
lien priority in case of delinquency as is provided for ad valorem taxes.
DEFINITIONS
Acre or Acreage means the area of a Parcel as shown on the latest maps of the
Assessor of the County of San Diego, or, if the area of such Parcel is not shown
on such Assessor's maps, the area as shown on a current recorded subdivision
map, parcel map, record of surveyor other recorded document creating Dr
describing the Parcel. If the preceding maps are not available, the area shall be
determined by the City Engineer.
Administrative Expenses means the direct and indirect expenses incurred by
. the City in carrying out its duties with respect to the District (including, but ;lGl
. . limited to, the levy and collection of the Special Taxes) including the fees a;la
expenses of its counsel. Any fees of the County related to the District Dr the
collection of Special Taxes, an allocable share of the salaries of City staff
directly related thereto, any amounts paid by the City from its general fU;la with
respect to the District, and expenses incurred by the City in undertaking actiG;lS
to foreclose on properties for which the payment of Special Taxes is delinquent,
and all other costs and expenses of the City related to the District.
City means the City of Chula Vista
District means the Interim Open Space Maintenance District - SPA One
(Villages One West, Two West, and portions of Villages Two. Six. Seve" a:lj
M:SprojectlchulavisI93-1 a
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Community Facilities District No. 98-1
Page 2
Exhibit A
Rate and Iv'lethod of
Ap::Jortionmen:
Planning Area 12) of the Community Facilities District No. 98-1 of the City of
Chula Vista.
Facilities means those improvements defined in Part II of the Special Tax
Report dated July 1, 199B for Community Facilities District No. 98-1 of the City
of Chula Vista.
Fiscal Year means the period starting on July 1 and ending the following June
30.
Maximum Special Tax means the maximum special tax that can be levied within
CFD No. 98-1 by the City Council in any Fiscal Year for each Parcel of Taxable
Property.
Operating Fund means a fund that shall be maintained within the District for
any Fiscal. Year to pay for the actual costs of maintenance, repair, and
replacement of the Facilities, and the Administrative Expenses.
Operating Fund Balance means the amount of funds in the Operating Fund at
the end of the preceding Fiscal Year.
Operating Fund Requirement means for any Fiscal Year an amount equal to
the budgeted costs of the maintenance, repair and replacement of the Facilities
which have been accepted and maintained by the District or are reasonably
expected to be accepted and maintained by the District during the current Fiscal
Year plus the budgeted Administrative Expenses of the District for the current
Fiscal Year in which Special Taxes are levied.
Parcel means any San Diego County Assessor's Parcel or portion thereof that is
. within the boundaries of the District designated on a map of the San Diego
'County Assessor and which has been assigned a discrete identifying number on
the equalized tax rolls of the County.
Reserve Fund means a fund that shall be maintained to provide necessary cash
flow for operations and maintenance for the first six months of each Fiscal Year,
working capital to cover maintenance and repair cost overruns and
delinquencies that may arise in connection with the collection of Special Taxes
and a reasonable buffer against large variations in annual special tax amounts.
Reserve Fund Balance means the amount of funds in the Reserve Fund at the
end of the preceding Fiscal Year.
/6t!-6
M:Smoiect\chuiavis\98-1 a
~
Community Facilities uistrict No. 98-1
Page 3
~xhjb;: ;.,
Rate ami IJiethod oj
A~p8:ijC)nme::l~
r-
Reserve Fund Requirement means the required balance in the Reserve r:,;nd
equal to up to 100% of the Operating Fund Requirement.
Special Tax means the special tax or special taxes actually levied within CFD No.
98-1. . .
Special Tax Liability for any Fiscal Year is an amount determined sufficient to
pay the costs of the District, including: (i) the amount required to be deposited
into the Operating Fund to meet the. Operating Fund Requirement, less the
Operating Fund Balance, and (ii) the total amount required to be deposited into
the Reserve Fund if any, to meet the Reserve Fund Requirement, less the
Reserve Fund Balance.
Taxable Property is all real property or Parcels within the boundaries of the
District which are not exempt from the Special Tax pursuant to law, or which are
not classified or assigned to the Exempt Category as defined herein.
Cateoories of Soecial Taxes
Taxable Category
The taxable land category includes each Parcel of Taxable Property assigned to
the District (Taxable Category).
The Maximum Special Tax which may be levied on each Parcel within the
Taxable Category for Fiscal Year 1998/99 shall be $ 103 per Acre (said amount
to be levied pro rata for any portion of an Acre). Said Maximum Special Tax shall
be increased or decreased each Fiscal Year thereafter by a factor which shall be
the lesser of the annual percentage change in the January to January San Diego
. Metropolitan Area All Urban Consumer Price Index (All Items) or the annual
"percentage change in the estimated California Fourth Quarter Per Capita
Personal Income as contained in the Governor's budget published every
January.
Exempt Category
The exempt category includes each property owned by, conveyed or irrevocably
offered for dedication to a public agency, land which is in the public right-oi-way,
unmanned utility easements which make utilization for other than the pur::>ose
set forth in the easement impractical, common areas, private streets and parks,
and open space lots (Exempt Category).
Assianment to Cateoories of SDecial Taxes
/b{! --- 7
M:Sproject\chuiavis\98-1 a
~
Community Facilities District No. 93-1
Page 4
Exhibit A
Rate and Method of
Apportionment
On or about July 1 of each year (but in any event in sufficient time to include the
levy of the Special Taxes on the County's secured tax roll) the City shall assign
each Parcel within the District to the Taxable Category, or Exempt Category.
Parcels subject to levy shall be determined based upon the records of the San
Diego County Assessor.
LevY and Aooortionment of Soecial Taxes
The City shall determine the SpeCial Tax Liability for the District in each Fiscal
Year on or about every July 1 (but in any event in sufficient time to include the
levy of the Special Taxes on the County's secured tax roll). Special Taxes shall
then be levied on each Parcel within the District as follows:
Step 1: The Special Tax per Acre for Parcels assigned to the Taxable Category
shall be calculated as the lessor of:
(i) The Special Tax Liability for the District as determined by the City,
divided by the total Acres for all Parcels assigned to the Taxable
Category,
OR,
(ii) the Maximum Special Tax rate for Parcels assigned to the Taxable
Category
Step 2: The City shall advise the owner of Parcels within the District of the
Special Tax Liability for the next Fiscal Year.
Step 3: :The owner(s) of Parcels within the District, may at its election, deposit
. funds with the City prior to July 15 each Fiscal Year, in an amount equal
to the Parcel's Special Tax which shall be deposited into the Operating
Fund and Reserve Fund of the District.
Step 4: If the funds deposited with the City is less than the Parcel's Special Tax
for the Fiscal Year, then a Special Tax shall be, levied equal to the
Parcel's Special Tax as determined in Step 1 minus any funds
deposited for the current Fiscal Year pursuant to Step 3.
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RESOLUTION NO.
/9//~
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA, CALIFORNIA, ORDERING AND DIRECTING THE PREPARATION
OF A "REPORT" FOR PROPOSED COMMUNITY FACILITIES DISTRICT
NO. 98-1 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [OTAY
PROJECT, LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2, 2 WEST, 6,
7 AND PLANNING AREA 12])
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA,
CALIFORNIA (the "City Council"), has declared its intention to
initiate proceedings to create a Community Facilities District
pursuant to the terms and provisions of the "Mello-Roos Community
Facili ties Act of 1982", being Chapter 2.5, Part 1 , Division 2,
Title 5 of the Government Code of the State of California (the
"Act") and the City of Chula Vista Community Facilities District
Ordinance enacted pursuant to the powers reserved by the City of
Chula Vista under Sections 3, 5 and 7 of Article XI of the
Constitution of the State of California (the "Ordinance") (the Act
and the Ordinance may be referred to collectively as the "Community
Facili ties District Law"). This Community Facilities District
shall hereinafter be designated as COMMUNITY FACILITIES DISTRICT
NO. 98-1 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [OTAY PROJECT,
LLC-OVP-SPA ONE, VILLAGES 1 WEST, 2, 2 WEST, 6, 7 AND PLANNING AREA
12]) (hereinafter referred to as the "District"); and,
WHEREAS, this City Council directs, pursuant to the provisions
of Section 53321.5 of the Government Code of the State of
California, the preparation of a "Report"to provide more detailed
information relating to the proposed District, the proposed
services, and estimate of the cost of providing such services.
NOW, THEREFORE IT IS HEREBY RESOLVED:
SECTION 1.
The above recitals are all true and correct.
SECTION 2. The Director of Public Works is hereby directed
and ordered to prepare a "Report" to be presented to this City
Council, generally setting forth and containing the following:
SERVICES: A full and complete description of the public
services proposed to be financed.
COST ESTIMATE: A general cost estimate setting forth costs of
providing such services.
SPECIAL TAX: Further particulars and documentation regarding
implementation, definitions and all other matters necessary to
clearly set forth the rate, method and apportionment for the
authorized special tax.
/~ 1)-1
SECTION 3. Such "Report", upon its preparation, shall be
submitted to this City Council for review, and such "Report" shall
be made a part of the record of the public hearing on the
Resolution of Intention to establish such District.
PRESENTED BY:
APPROVED AS TO FORM BY:
~~~
City Attorney
John P. Lippitt
Director of Public Works
H: \shared\engineer\lorraine\reprtres. 981
2
!~P-2.
RESOLUTION NO.
/? II?
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA MAKING APPOINTMENTS IN PROPOSED COMMUNITY
FACILITIES DISTRICT NO. 98-2 (INTERIM OPEN SPACE MAINTENANCE
DISTRICT [MCMILLIN - D.A. AMERICA, OTAY - SPA TWO, VILLAGES
6 & 7])
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
"City Council"), desires to initiate proceedings to create a Community Facilities District pursuant
to the terms provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter
2.5, Part I, Division 2, Title 5 of the Government Code of the State of California (the "Act") and
the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers
reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution
of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to
collectively as the "Community Facilities District Law"). This Community Facilities District shall
hereinafter be designated as COMMUNITY FACILITIES DISTRICT NO. 98-2 (INTERIM
OPEN SPACE MAINTENANCE DISTRICT [MCMILLIN - D.A. AMERICA, OTAY - SPA
TWO, VILLAGES 6 & 7]) (hereinafter referred to as the "District"); and,
WHEREAS, at this time, the legislative body is desires to appoint and designate itself as
the legislative body of the District, in order to allow the proceedings to go forward to completion
in accordance with the provisions of law.
NOW, THEREFORE IT IS HEREBY RESOLVED:
SECTION I. The above recitals are all true and correct.
SECTION 2. Throughout the course of these formation proceedings and following the
formation thereof, the City Council of the City will be acting as the legislative body of proposed
Community Facilities District No. 98-2 (Interim Open Space Maintenance District [McMillin -
D.A. America, Otay - SPA Two, Villages 6 & 7]), which shall upon the formation thereof be
a legally constituted governmental entity as defined by Section 53317 of the Government Code
of the State of California.
SECTION 3. All applicable regulatory rules of the City, including date, time and place
of meetings, as well as notice requirements shall be applicable for all proceedings conducted by
this legislative body as the governing body of the Community Facilities District.
SECTION 4. The Star News, or another newspaper of general circulation, is hereby
designated as the newspaper for all publications as required by law and as necessary for
completion of this District.
I
/j,f ,-/
PRESENTED BY:
John P. Lippitt
Director of Public Works
h:\SHARED\ENGINEER\LORRAINE\APPTRES .982
APPROVED AS TO FORM BY:
-0 -~~
John Kaheny
City Attorney
2
/j,E-~
RESOLUTION NO.
J'll}?
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, ADOPTING A BOUNDARY MAP SHOWING THE
BOUNDARIES OF THE TERRITORY PROPOSED FOR THE INCLUSION IN
PROPOSED COMMUNITY FACILITIES DISTRICT NO. 98-2 (INTERIM
OPEN SPACE MAINTENANCE DISTRICT [MCMILLIN - D.A. AMERICA,
OTA Y - SPA TWO, VILLAGES 6 & 7])
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA
(hereinafter referred to as the "legislative body of the local Agency"), desires to initiate
proceedings to create a Community Facilities District pursuant to the terms and provisions of the
"Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part I, Division 2, Title 5
of the Goverrunent Code of the State of California (the "Act") and the City of Chula Vista
Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of
Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California
(the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community
Facilities District Law"). This Community Facilities District shall hereinafter be designated as
COMMUNITY FACILITIES DISTRICT NO. 98-2 (INTERIM OPEN SPACE MAINTENANCE
DISTRICT [MCMILLIN - D.A. AMERICA, OTAY - SPA TWO, VILLAGES 6 & 7])
(hereinafter referred to as the "District"); and,
WHEREAS, there has been submitted a map showing the boundaries of the territory
proposed for inclusion in the District including properties and parcels of land proposed to be
subject to the levy of a special tax by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
SECTION I. The above recitals are all true and correct.
SECTION 2. The map designated as "BOUNDARIES OF COMMUNITY FACILITIES
DISTRICT NO. 98-2 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [MCMILLIN -
D.A. AMERICA, OTAY - SPA TWO, VILLAGES 6 & 7])" showing the showing the
boundaries of the territory proposed for inclusion in the District including properties and parcels
of land proposed to be subject to the levy of a special tax by the District is hereby adopted.
SECTION 3. A certificate shall be endorsed on the original and on at least one (I) copy
of the map of the District, evidencing the date and adoption ofthis Resolution, and within fifteen
(15) days after the adoption of the Resolution fixing the time and place of the hearing on the
formation or extent of such District, a copy of such map shall be filed with the correct and proper
endorsements thereon with the County Recorder, all in the manner and form provided for in
Sections 311 0 and 3111 of the Streets and Highways Code of the State of California.
It;:: / /
PRESENTED BY:
APPROVED AS TO FORM BY:
r^--,~~~
John Kaheny
City Attorney
John P. Lippitt
Director of Public Works
H : \shared \engineer\lorraine\mapres. 982
2 Ij~'-,z
RESOLUTION NO. /9'// f5'
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, DECLARING ITS INTENTION TO ESTABLISH COMMUNITY
FACILITIES DISTRICT NO. 98-2 (INTERIM OPEN SPACE MAINTENANCE
DISTRICT [MCMILLIN - D.A. AMERICA, OTA Y - SPA TWO, VILLAGES
6 & 7]) AND TO AUTHORIZE THE LEVY A SPECIAL TAX THEREIN TO
FINANCE CERTAIN SERVICES
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
"City Council"), at this time is desirous to initiate proceedings to create a Community Facilities
District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of
1982", being Chapter 2.5, Part I, Division 2, Title 5 of the Government Code of the State of
California (the "Act") and the City of Chula Vista Community Facilities District Ordinance
enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of
Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the
Ordinance may be referred to collectively as the "Community Facilities District Law"). This
Community Facilities District shall hereinafter be referred to as COMMUNITY FACILITIES
DISTRICT NO. 98-2 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [MCMILLIN-
D.A. AMERICA, OTA Y - SPA TWO, VILLAGES 6 & 7]) (hereinafter referred to as the
"District")' and
, ,
WHEREAS, this City Council is now required to proceed to adopt its Resolution of
Intention to initiate the proceedings for the establishment of such District, to set forth the
boundaries for such District, to indicate the type of public services to be financed by such
District, to indicate the rate and apportionment of a special tax sufficient to finance such services,
to set a time and place for a public hearing relating to the establishment of such District; and,
WHEREAS, a map of such District has been submitted showing the boundaries of the
territory proposed for inclusion in the District including properties and parcels of land proposed
to be subject to the levy of a special tax by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
RECITALS
SECTION 1. The above recitals are all true and correct.
INITIATION OF PROCEEDINGS
SECTION 2. These proceedings are initiated by this City Council pursuant to the
authorization of Section 53318 of the Government Code of the State of California.
I
/?G~/
BOUNDARIES OF DISTRICT
SECTION 3. It is the intention of this City Council to establish a Community Facilities
District pursuant to the provisions of the Community Facilities District Law, and to determine
the boundaries and parcels on which special taxes may be levied to finance certain services. A
description of the boundaries of the territory proposed for inclusion in the District including
properties and parcels of land proposed to be subject to the levy of a special tax by the District
is as follows:
All that property as shown on a map as previously approved by this City Council, such
map designated by the name of this Community Facilities District, a copy of which is on
file in the Office of the City Clerk and shall remain open for public inspection.
NAME OF DISTRICT
SECTION 4. The name of the proposed Community Facilities District to be established
shall be known and designated as COMMUNITY FACILITIES DISTRICT NO. 98-2 (INTERIM
OPEN SPACE MAINTENANCE DISTRICT [MCMILLIN - D.A. AMERICA, OTAY - SPA
TWO, VILLAGES 6 & 7]).
DESCRIPTION OF SERVICES
SECTION 5. It is the further intention of this City Council to finance certain services that
are in addition to those provided in or required for the territory within the District and will not
be replacing services already available. A general description of the services to be provided is
as follows:
The maintenance and servicing of public facilities including irrigation, cultivation,
installation and replacement of plant material, tree trimming and necessary
supplies, personnel, utility and equipment costs; contract services where applicable;
maintenance and servicing of parks, parkway landscaping and medians, drainage
facilities, pedestrian bridges and open space slopes, trails and walls.
SPECIAL TAX
SECTION 6. It is hereby further proposed that, except where funds are otherwise
available, a special tax sufficient to pay for such services and related incidental expenses
authorized by the Community Facilities District Law, secured by recordation of a continuing lien
against all non-exempt real property in the District, will be levied annually within the boundaries
of such District. Under no circumstances will the special tax be increased as a consequence of
delinquency or default by the owner of any other parcel or parcels used for private residential
purposes within the District by more than 10 percent. For further particulars as to the rate and
method of apportionment of the proposed special tax, reference is made to the attached and
incorporated Exhibit "A", which sets forth in sufficient detail the method of apportionment to
2
) tf, G - cJ.-.
allow each landowner or resident within the proposed District to clearly estimate the maximum
amount that such person will have to pay for such services.
The special taxes herein authorized, to the extent possible, shall be collected in the same
manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale
and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes
that may not be collected on the County tax roll shall be collected through a direct billing
procedure by the Treasurer.
PUBLIC HEARING
SECTION 7. NOTICE IS GIVEN THAT ON THE 1st DAY OF SEPTEMBER, 1998,
AT THE HOUR OF 4:00 O'CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE
CITY COUNCIL BEING THE COUNCIL CHAMBERS, CITY HALL, LOCATED AT 276
FOURTH A VENUE, CHULA VISTA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD
WHERE THIS CITY COUNCIL WILL CONSIDER THE ESTABLISHMENT OF THE
PROPOSED COMMUNITY FACILITIES DISTRICT, THE PROPOSED METHOD AND
APPORTIONMENT OF THE SPECIAL TAX, AND ALL OTHER MATTERS AS SET FORTH
IN THIS RESOLUTION OF INTENTION. THAT AT THE ABOVE-MENTIONED TIME
AND PLACE FOR PUBLIC HEARING ANY PERSONS INTERESTED, INCLUDING
TAXPAYERS AND PROPERTY OWNERS MAY APPEAR AND BE HEARD, AND THAT
THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE
ESTABLISHMENT OF THE DISTRICT, THE EXTENT OF THE DISTRICT, OR THE
FURNISHING OF THE SERVICES, WILL BE HEARD AND CONSIDERED. ANY
PROTESTS MAYBE MADE ORALLY OR IN WRITING. HOWEVER, ANY PROTESTS
PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL
BE IN WRITING AND CLEARLY SET FORTH THE IRREGULARITIES AND DEFECTS TO
WHICH THE OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH
THE CITY CLERK OF THE CITY COUNCIL ON OR BEFORE THE TIME FIXED FOR THE
PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN IN WRITING AT ANY
TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING.
IF A WRITTEN MAJORITY PROTEST AGAINST THE ESTABLISHMENT OF THE
DISTRICT IS FILED, THE PROCEEDINGS SHALL BE ABANDONED. IF SUCH
MAJORITY PROTEST IS LIMITED TO CERTAIN SERVICES OR PORTIONS OF THE
SPECIAL TAX, THOSE SERVICES OR THAT TAX SHALL BE ELIMINATED BY THE
CITY COUNCIL.
ELECTION
SECTION 8. If, following the public hearing described in the Section above, the City
Council determines to establish the District and proposes to levy a special tax within the District,
the City Council shall then submit the levy of the special taxes to the qualified electors of the
District. If at least twelve (12) persons, who need not necessarily be the same twelve (12)
persons, have been registered to vote within the District for each of the ninety (90) days
3
/~ G...3
preceding the close of the public hearing, the vote shall be by registered voters of the District,
with each voter having one (I) vote. Otherwise, the vote shall be by the landowners of the
District who were the owners of record at the close of the subject hearing, with each landowners
or the authorized representative thereof, having one (I) vote for each acre or portion of an acre
of land owned within the District.
A successful election relating to the special tax authorization shall, as applicable, establish
and/or change the appropriations limit as authorized by Article XIIIB of the California
Constitution as it is applicable to this District.
NOTICE
SECTION 9. Notice of the time and place of the public hearing shall be given by the
City Clerk in the following manner:
A. A Notice of Public Hearing shall be published in the legally designated newspaper
of general circulation, such publication pursuant to Section 6061 of the
Government Code, with such publication to be completed at least seven (7) days
prior to the date set for the public hearing.
B. A Notice of Public Hearing shall be mailed, postage prepaid, to each property
owner within the boundaries of the proposed District; such mailing to the property
owners shall be to the address as shown on the last equalized assessment roll.
Such mailing shall be completed at least fifteen (15) days prior to the date set for
the public hearing.
PRESENTED BY:
APPROVED AS TO FORM BY:
(L ~O-<~
'V
John Kaheny
City Attorney
John P. Lippit
Director of Public Works
h: \SHARED\ENGINEER\LORRAINE\ROI. 982
4
)~ c- z(
Community Facilities Dis, i No 98-2
Page 1
Exhibit A
Rate and Method
Apportionment
r-
ANNUAL TAX
A Special Tax shall be levied annually on land within Community Facilities District No.
98-2 (Interim Open Space Maintenance District) of the City of Chula Vista (the
"District"), and collected according to the Special Tax Liability determined by the City of
Chula Vista (the "City") through the application of the following procedures. All of the
property within the District, unless otherwise exempted by law or the express provisions
of the rate and method of apportionment expressed below, shall be taxed to the extent
and in the manner provided below.
All Special Taxes applicable to Parcels shall be collected in the same manner and at
the same time as ordinary ad valorem property taxes, and that Special Taxes so levied
will be subject to the same penalties and procedures, sale and lien priority in case of
delinquency as is provided for ad valorem taxes.
DEFINITIONS
Acre or Acreage means the area of a Parcel as shown on the latest maps of the
Assessor of the County of San Diego, or, if the area of such Parcel is not shown on
such Assessor's maps, the area as shown on a current recorded subdivision map,
parcel map, record of surveyor other recorded document creating or describing the
Parcel. If the preceding maps are not available, the area shall be determined by the
City Engineer.
Administrative Expenses means the direct and indirect expenses incurred by the City
in carrying out its duties with respect to the District (including, but not limited to, the
levy and collection of the Special Taxes) including the fees and expenses of its
counsel. Any fees of the County related to the District or the collection of Special
Taxes, an allocable share of the salaries of City staff directly related thereto, any
amounts paid by the City from its general fund with respect to the District, and
expenses incurred by the City in undertaking actions to foreclose on properties for
which the.payment of Special Taxes is delinquent, and all other costs and expenses of
the City related to the District.
City means the City of Chula Vista
District means the Interim Open Space Maintenance District - SPA Two (Villages 6 &
7) of the Community Facilities District No. 98-2 of the City of Chula Vista.
Facilities means those improvements defined in Part II of the Special Tax Report dated
July 1, 1998 for Community Facilities District No. 98-2 of the City of Chula Vista.
Fiscal Year means the period starting on July 1 and ending the following June 30.
M: $project\chulavis\98-2A
/00-3
Community Facilitie~ strict No. 98-2
Page 2
Exhibit A
Rate and Method
Apportionment
Maximum Special Tax means the maximum special tax that can be levied within CFD
No. 98-2 by the City Council in any Fiscal Year for each Parcel of Taxable Property
Operating Fund means a fund that shall be maintained within the District for any Fiscal
Year to pay for the actual costs of maintenance, repair, and replacement of the
Facilities, and the Administrative Expenses.
Operating Fund Balance means the amount of funds in the Operating Fund at the end
of the preceding Fiscal Year.
Operating Fund Requirement means for any Fiscal Year an amount equal to the
budgeted costs of the maintenance, repair and replacement of the Facilities which have
been accepted and maintained by the District or are reasonably expected to be
accepted and maintained by the District during the current Fiscal Year plus the
budgeted Administrative Expenses of the District for the current Fiscal Year in which
Special Taxes are levied.
Parcel means any San Diego County Assessor's Parcel or portion thereof that is within
the boundaries of the District designated on a map of the San Diego County Assessor
and which has been assigned a discrete identifying number on the equalized tax rolls
of the County.
Reserve Fund means a fund that shall be maintained to provide necessary cash flow
for operations and maintenance for the first six months of each Fiscal Year, working
capital to cover maintenance and repair cost overruns and delinquencies that may arise
in connection with the collection of Special Taxes and a reasonable buffer against large
variations in annual special tax amounts.
Reserve Fund Balance means the amount of funds in the Reserve Fund at the end of
the preceding Fiscal Year.
Reserve Fund Requirement means the required balance in the Reserve Fund equal to
up to 100% of the. Operating Fund Requirement.
Special Tax means the special tax or special taxes actually levied within CFD No. 98-2.
Special Tax Liability for any Fiscal Year is an amount determined sufficient to pay the
costs of the District, including: (i) the amount required to be deposited into the
Operating Fund to meet the Operating Fund Requirement, less the Operating Fund
Balance, and (ii) the total amount required to be deposited into the Reserve Fund if
any, to meet the Reserve Fund Requirement, less the Reserve Fund Balance.
Taxable Property is all real property or Parcels within the boundaries of the District
which are not exempt from the Special Tax pursuant to law, or which are not classified
or assigned to the Exempt Category as defined herein.
M: $project\chulavis\98-2A
/& G--?
Community Facilities Dis. .;t No 98-2
Page 3
Exhibit A
Rate and Method
Apportionment
.~
Cateaories of Special Taxes
Taxable Category
The taxable land category includes each Parcel of Taxable Property assigned to the
District (Taxable Category).
The Maximum Special Tax which may be levied on each Parcel within the Taxable
Category for Fiscal Year 1998/99 shall be $ 47.52 per Acre (said amount to be levied
pro rata for any portion of an Acre). Said Maximum Special Tax shall be increased or
decreased each Fiscal Year thereafter by a factor which shall be the lesser of the
annual percentage change in the January to January San Diego Metropolitan Area All
Urban Consumer Price Index (All Items) or the annual percentage change in the
estimated California Fourth Quarter Per Capita Personal Income as contained in the
Governor's budget published every January.
Exempt Category
The exempt category includes each property owned by, conveyed or irrevocably
offered for dedication to a public agency, land which is in the public right-of-way,
unmanned utility easements which make utilization for other than the purpose set forth
in the easement impractical, common areas, private streets and parks, and open space
lots ("Exempt Category").
Assiqnment to Cateqories of Special Taxes
On or about July 1 of each year (but in any event in sufficient time to include the levy of
the Special Taxes on the County's secured tax roll) the City shall assign each Parcel
within the District to the Taxable Category, or Exempt Category. Parcels subject to levy
shall be determined based upon the records of the San Diego County Assessor.
Levv and Apportionment of Special Taxes
The City shall determine the Special Tax Liability for the District in each Fiscal Year on
or about every July 1 (but in' any event in sufficient time to include the levy of the
Special Taxes on the County's secured tax roll). Special Taxes shall then be levied on
each Parcel within the District as follows:
Step 1: The Special Tax for Parcels assigned to the Taxable Category shall be
calculated as the lessor of:
(i) The Special Tax Liability for the District as determined by the City, divided
by the total Acres for all Parcels assigned to the Taxable Category,
OR,
M: $project\chulavis\98-2A
/c:; G - 7
Community Facilities _ ,strict No. 98-2
Page 4
Exhibit A
Rate and Method
Apportionment
(ii) the Maximum Special Tax rate for Parcels assigned to the Taxable
Category
Step 2: The City shall advise the owner of Parcels within the District of the Special Tax
Liability for the next Fiscal Year.
Step 3: The owner(s) of Parcels within the District, may at its election, deposit funds
with the City prior to July 15 of each Fiscal Year, in an amount equal to the
Parcel's Special Tax which shall be deposited into the Operating Fund and
Reserve Fund of the District.
Step 4: If the funds deposited with the City are less than the Parcel's Special Tax
obligation for the Fiscal Year, then a Special Tax shall be levied equal to the
Parcel's Special Tax as determined in Step 1 minus any funds deposited for
the current Fiscal Year pursuant to Step 3.
M: $project\chulavis\98-2A
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RESOLUTION NO. /9/19
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, ORDERING AND DIRECTING THE PREPARATION OF A
"REPORT" FOR PROPOSED COMMUNITY FACILITIES DISTRICT NO.
98-2 (INTERIM OPEN SPACE MAINTENANCE DISTRICT [MCMILLIN -
D.A. AMERICA, OTA Y - SPA TWO, VILLAGES 6 & 7])
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
"City Council"), has declared its intention to initiate proceedings to create a Community
Facilities District pursuant to the terms and provisions of the "Mello-Roos Community
Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government
Code of the State of California (the "Act") and the City of Chula Vista Community
Facilities District Ordinance enacted pursuant to the powers reserved by the City of
Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of
California (the "Ordinance") (the Act and the Ordinance may be referred to collectively
as the "Community Facilities District Law"). This Community Facilities District shall
hereinafter be designated as COMMUNITY FACILITIES DISTRICT NO. 98-2 (INTERIM
OPEN SPACE MAINTENANCE DISTRICT [MCMILLIN - D.A. AMERICA, OTAY - SPA
TWO, VILLAGES 6 & 7]) (hereinafter referred to as the "District"); and,
WHEREAS, this City Council directs, pursuant to the provisions of Section
53321.5 of the Government Code of the State of California, the preparation of a
"Report"to provide more detailed information relating to the proposed District, the
proposed services, and estimate of the cost of providing such services.
NOW, THEREFORE IT IS HEREBY RESOLVED:
SECTION 1. The above recitals are all true and correct.
SECTION 2. The Director of Public Works is hereby directed and ordered to
prepare a "Report" to be presented to this City Council, generally setting forth and
containing the following:
SERVICES: A full and complete description of the public services proposed to be
financed.
COST ESTIMATE: A general cost estimate setting forth costs of providing such
services.
SPECIAL TAX: Further particulars and documentation regarding implementation,
definitions and all other matters necessary to clearly set forth the rate, method
and apportionment for the authorized special tax.
1
I?J-!--j
SECTION 3. Such "Report", upon its preparation, shall be submitted to this City
Council for review, and such "Report" shall be made a part of the record of the public
hearing on the Resolution of Intention to establish such District.
PRESENTED BY:
APPROVED AS TO FORM BY:
G-r~~
John Kaheny
City Attorney
John P. Lippitt
Director of Public Works
H :\sha red\eng i neer\lorria n e \reptres. 98 2
2
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,
'7. 2...ci
~(jtfbC~
July 28,1998
Mayor Shirley Horton & City Council members
276 4th Avenue
Chula Vista, CA 91910
Dear Mayor and City Council:
We tried contacting over 300 organizations including the mayor no one has helped us.
Millennium Entrepreneurs would like to give your organization an opportunity to
participate in our Sponsorship Program for youth entrepreneurs. You could make a
positive difference in the life of a student by sending him or her to Youth Entrepreneur
Camp, August 7-16 at San Diego State University. For sponsoring a student to camp you
would in return receive free advertisement for your business. These are the benefits:
$270 will send a student to day camp for 10 days.
$370 will cover residential camp for 10 days.
$200 will provide a partial campership.
Millennium Entrepreneurs receives the funding.
Student Entrepreneur receives a Youth Entrepreneur Camp Scholarship.
Tax deduction for your business.
Community exposure for your business
Business publicity
Now, that we told you what we wanted, let me now tell you who we are. Millennium
Entrepreneurs is a training organization that provides business development services to
youth in grades 3-12. We provide business camps and after school programs. We are
located in Chu1a Vista. We have camp sites in various locations and overseas.
477 Marina Parkway Suite 107 Chula Vista, CA 919110 619.476.7655 Fax 619.231.3665
.
----
.
2.
Our goal is to coordinate entrepreneurial services for America's youth by preventing
future unemployment, welfare, high school dropouts, youth crime and youth gangs.
Our mission is to teach our youth how to stimulate their minds by creating a business
during the critical time after school hours and during those long summer months.
Our objectives are to locally, nationally, and internationally teach entrepreneurship to
youth ages 8-18 and motivate them to think about self-employment and plan their future
independence.
We need your help in training tomorrow's business leaders today. Sponsor a child to
camp and in return receive free labor as a "Thank You" for helping to build the 21 ,t
Century workforce and entrepreneurs. We hope you will be able to find us a youth
motivational speaker.
Please contact me at (619) 476-7655. I am looking forward to meeting you and
discussing a youth worker for your business. Camp starts August 7-16, 1998 at
San Diego State University. WE ARE DESPARTLY TRYING TO SEND 10
DISADV ANT AGE YOUTHS TO CAMP IN AUGUST.
:;;;:;~~rrb4t4
Tonja McCoy-Marble
Founder/CEO
** $370 per student would cover meals and lodging.
CITY COUNCIL AGENDA STATEMENT
Item
/7
Meeting Date 7/~~lq~
ITEM TITLE.
PUBLIC HEARING.
Placement of Certain
Charges on property Tax
Regarding the Proposed
Delinquent Sewer Service
Bills for Collection
SUBMITTED BY.
Director Of Finance~~
City Manag';-~\o(j ~!./5tha Vot" y,,__Noif',
REVIEWED BY.
Adoption of this resolution will enhance the collection process for
delinquent sewer service charges by reducing the amount of
uncollectible losses and ensure that payment will be received on a
more timely basis. This will increase annual revenues to the Sewer
Fund as well as reduce operating costs.
RECOMMENDATION.
That the city Council continue the public
hearing to the next city Council meeting of
August 4, 1998 in order to give property
owners additional time to pay the delinquent
charges and avoid having liens placed on their
property.
BOARDS/COMMISSIONS RECOMMENDATIONS.
Not applicable.
/7-/
COUNCIL AGENDA STATEMENT
Item / 'i5
Meeting Date 8/4/98
ITEM TITLE:
Public Hearing declaring the intent to increase the Open Space District
#10 assessment on the Bella Nevona subdivision.
Resolution
approving an increase on the Open Space District
#10 assessment for the Bella Nevona Subdivision.
SUBMITTED BY:
Director of Public Works
~
/'
4/5 Vote YeL-- No X
REVIEWED BY:
~ity Manager 1)<<'- \J~
On May 26, 1998, the City Council approved the proposal to 1) subdivide a parcel consisting
of 5.25 gross acres into 28 lots for the Bella Nevona subdivision ranging in size from 5,000
sq. ft to 8,300 sq. ft. and 2) amend the development standards contained in the Ranchero
Sectional Planning Area (plan) to allow a reduction in minimum lot sizes and set back
requirements and 3) order the initiation of assessment ballot procedures applicable to the parcel
for which it is proposed that the Open Space District #10 assessment will be increased and 4)
schedule a public hearing on the intent to increase the Open Space District #10 assessment on
this subdivision.
RECOMMENDATION: That Council continue the public hearing to 8/4/98 at 4:00 P.M.
/&- - /
COUNCIL AGENDA STATEMENT
Item /9
Meeting Date 7/28/98
ITEM TITLE: Public Hearing declaring the intent to establish Community Facilities
District No. 98-3 (Open Space Maintenance District #35 [SUNBOW II])
pursuant to the provisions of the "Mello-Roos Community Facilities Act
of 1982", for the purpose of financing certain public services through
the levy of a special tax to pay for all or a portion of such public
services and the intent to authorize a special tax to pay for all or a
portion of such public services.
SUBMITTED BY: Director of Public Works ~
REVIEWED BY: City Manager:D~ ~ ~ (4/5ths Vote: Yes_NoX)
The Ayres Land Company has requested th~City: conduct proceedings for the formation of
Community Facilities District No. 98-3. This district will fund the perpetual operation and maintenance
of open space slopes, drainage channels, detention basins, medians and parkways of Sunbow II. The
City has retained the services of Dick Jacobs Associates as special tax consultant and Brown, Diven,
Hessel & Brewer as legal counsel to provide assistance during the proceedings. Tonight's action will
finalize the formal proceedings leading to the establishment of Community Facilities District No. 98-3.
RECOMMENDATION: That Council continue the Public Hearing to August 4, 1998 at 4:00 P.M.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
On June 23, 1998, Council approved the following four resolutions related to Sunbow II CFD #98-3
(Open Space District # 35):
I). Resolution #19061 , making appointments in proposed CFD # 98-3 (Open Space District (OSD)
#35), which is the formal action of the City Council appointing itself as the legislative body of
the proposed CFD;
2). Resolution#19062, adopting a boundary map showing the boundaries of the territory proposed
for inclusion in CFD #98-3, which is the formal action adopting the map and setting forth the
boundaries of the proposed CFD;
3). Resolution #19063, declaring its intention to establish CFD #98-3 and to authorize the levy of
a special tax therein to finance certain services and setting the time and place for the public
hearing;
4). Resolution #19064, ordering and directing the preparation of a "Report" for proposed CFD
#98-3 (OSD 35[SUNBOW II]) which is the formal action of the City Council directing the
preparation of a detailed report containing a description of the services and its estimated cost.
Community Facilities Districts will provide the necessary funding for the operation and maintenance
of public landscaping improvements by levying an annual "special tax", which is collected from the
19-/
Page 2, Item_
Meeting Date 7/28/98
property owners in conjunction with the property taxes. There is no direct cost to the City. All
expenses related to the district administration (including levying and collecting the special taxes) are
funded by the district.
Prooosed Boundary
The proposed boundary of CFD # 98-3 encompasses all parcels located within Sunbow II, which
includes a total acreage of 602 acres. At buildout, the district will contain a maximum total of 1,946
dwelling units (1128 Single Family Residences, 818 Multifamily Residences), 11.0 acres of
commercial, an 11.0 acre elementary school site, and a 46.0 acre industrial site. Staff has recorded
the boundary map on July 01, 1998, being within 15 days of the June 23, 1998 approval of Council
Resolution # 19062.
Tonil!ht's Actions
. It is recommended that the Public Hearing, certification of the election results, levy of the
special tax and accepting the "Engineer's Report" for CFD # 98-3 be continued for one week
to the Council meeting of August 4, 1998 at 4:00 P.M.in order to comply with the noticing
requirements for the "Mello-Roos Community Facilities Act of 1982".
FISCAL IMPACT: All costs of formation of the district are being borne by the developers and the
on-going administration will be funded entirely by the district. The City will receive the benefit of full
cost recovery for staff cost involved in district formation and district administration in perpetuity.
July 16, 1998
H:\HOME\ENGINEER\AGENDA \SUNBOWIIPHCONT.FXR
CFD #98-3 (File:0725-30-0SD35)
/9~2
COUNCIL AGENDA STATEMENT
Item ;2.. ()
Meeting Date 7/28/98
ITEM TITLE:
Public Hearing to consider amending Ordinance # 2579 (establishing an
interim pre-sr125 development impact fee to pay for transportation
facilities in the city's eastern territories) by allowing the dif to make
loans for transportation or road pU1Poses.
Director of Public Works ~
SUBMITTED BY:
REVIEWED BY: City Manager ~
1)t-~ -4
(4/Sths Vote: Yes_NoX)
It is recommended that this item be tabled.
c2cJ / /