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Staff Report 4.D 01/09/2017
Agenda Item #4.D DATE: January 9, 2017 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Dan St. John, F.ASCE — Director of Public Works and Utilities Curtis M. Bates, P.E., City Engineer SUBJECT: Accept the Petition, Consent and Waiver from the Two Landowners of the Riverfront Mixed Use Project Requesting the Formation of a Community Facilities District to Fund Certain Services; Adopt a Resolution Adopting Amended Local Goals and Policies for Special Tax Districts; and, Adopt a Resolution Declaring the Intention to Establish Community Facilities District 2016-01 and Authorize the Levy of a Special Tax to Fund Certain Public Services for the Riverfront Mixed Use Project, and Setting a Public Hearing and Directing the City Clerk to Publish Notice of a Public Hearing for the Formation of the Community Facilities District RECOMMENDATION It is recommended that the City Council authorize the following actions: • Accept the Petition, Consent and Waiver from the two landowners of the Riverfront Mixed Use Project requesting the formation of a Community Facilities District ("CFD") to fiend certain services • Adopt a Resolution Adopting Amended Local Goals and Policies for Special Tax Districts • Adopt a Resolution Declaring Intention to Establish Community Facilities District No. 2016-01 and Authorize the Levy of a Special Tax to Fund Certain Services to Fund Certain Public Services for the Riverfront Mixed Use Project, Setting a public hearing for February 27, 2017 at 7:00 p.m. for Public Comment on the City's Intention to Form a Community Facilities District for the Riverfront Mixed Use Project and the Levy of Special Taxes to Fund Certain Services and Directing the City Clerk to Publish a Notice of Public Hearing for the Formation of the Community Facilities District BACKGROUND The Riverfront Mixed Use Project ("Project") is an approved mixed use development within the Central Petaluma Specific Plan of the City of Petaluma ("City"). Resolution 2014-127 N.C.S., approving a tentative subdivision map for the Riverfront Subdivision, was adopted by the City Council on July 21, 2014. Resolution 2016-099 N.C.S., approving the Phase I final map for the Riverfront Subdivision, was adopted by the City Council on June 20, 2016. The Project is situated north of -the Petaluma River and west of Highway 101 near the Lakeville Highway interchange. The full build -out of the Project would include up to 273 residential units, approximately 53,000 square feet of retail and office, a select hotel with up to 120 -units, and approximately 4 acres of parks and a system of multiuse trails. The City will own and maintain the parks, street and street lighting facilities, landscape corridors, stormwater basins, and open space areas within the Project. In order to provide funding for these services, the formation of a Mello -Roos Community Facilities District ("CFD") and the levy of an annual special tax are proposed for the residential and nonresidential development within the Project. The Project was conditioned to establish a Landscaping and Lighting Assessment District ("LLAD") to provide for the on-going maintenance and servicing of the public improvements within the Project. However, City staff have been working closely with Basin Street Properties, Comstock Homes and SCI Consulting Group, the special tax consultant for the Project, to develop a better alternative to a LLAD for the Project. In recent years, public agencies are increasingly opting to use "Service CFDs" over LLADs to fund public improvements for new development projects because of several advantages. Service CFDs allow for more flexibility in their design so they can be structured to adapt to changes in the development plan for a project. The method of apportionment of the special tax to properties within the CFD must be based on reasonable criteria, but does not need to be based on the "special benefit" to the properties. Therefore, unlike LLADs that require a contribution from the General Fund for the "general benefit" to property, a CFD may find 100% of the identified services. Additionally, CFDs require less City resources for the annual administration and levy of the special tax. A community facilities district provides more flexibility on the use of special taxes collected than a typical landscape assessment district. A CFD is not subject to proposition 218 where as a LLAD is. A CFD can be used to provide services, maintenance, capital replacement and administration of various public facilities and services whereas a landscape assessment district is typically limited to landscaping, lighting, and related uses. A LLAD requires a special and general public benefit analysis while a CFD does not. Additionally, CFDs require less City resources for the annual administration and levy of the special tax. The proposed Riverfront CFD includes maintenance and capital replacement for public pathways, storm drain maintenance and treatment facilities, publicly accessed parking lot, lighting and electricity use, as well as landscaping and irrigation as identified in the attached public hearing report. It is recommended that a CFD be established in lieu of a LLAD for the Project. In 1978, California voters enacted Proposition 13, which limited the ability of local public agencies to increase property taxes based on a property's assessed value. In 1982, the Mello - Roos Community Facilities Act of 1982 ("Act") was created to provide an alternate method of financing public infrastructure and services. Under the Act, a CFD may fiord public improvements with a useful life of five years or more, such as park and recreational facilities, streets, sewer systems, schools, libraries, child care facilities and other basic infrastructure. CFDs may also fund the maintenance and servicing of public landscape areas, parks, street lights, roads and storm drainage system, and police and fire services to maintain service levels. 2 DISCUSSION As previously mentioned, the Project is conditioned to establish a Landscaping and Lighting District ("LLAD") to fund annual maintenance, servicing, repair and replacement of the public improvements within the Project. For the reasons mentioned previously, it is recommended that the City establish a CFD in lieu of a LLAD to field the public improvements associated with the Project. Council is asked to consider adoption of a resolution declaring the intention to establish the CFD for the Project (Attachment 3). Adoption of the resolution will commence the proceedings necessary to establish a CFD to provide funding for the required services. The two other actions requested support the resolution declaring intent to establish a CFD. Should the Council approve these actions, the matter would return to Council on February 27, 2017 for a public hearing, tallying of the ballots, and resolution of formation of the CFD. Similar to a LLAD assessment, the formula for calculating the annual special tax must be approved by the Council after a public hearing process. First, it is approved by the Council in a Resolution of Intention ("ROI"), and then by the qualified electors in the CFD voting at a special election conducted as a mailed -ballot election. The public services ("Services") that will be funded by the CFD are described in Exhibit A of the ROI. These services include the ongoing maintenance and servicing, including repair and replacement of parks, trails and recreation facilities, street and street lighting facilities, flood and storm protection facilities, storm water treatment facilities, landscape corridors, wetlands and open space areas within the Project. The Rate and Method of Apportionment Special Tax ("RMA"), set forth in Exhibit B of the ROI, provides the maximum annual special tax rates for six land use classifications and includes a provision to adjust the maximum special tax rates each year for inflation. Each fiscal year, the City will determine the special tax requirement and associated annual special tax rates for the CFD based upon maintenance and servicing costs within the Project. The CFD special tax shall be annually adjusted for inflation by the annual change in the San Francisco -Oakland -San Jose Consumer Price Index (CPI). A two thirds approval of registered voters within the CFD is required to increase the special tax assessment above the annual CPI adjustment. The special tax will be levied and collected in perpetuity until such time the City determines that the revenue is no longer needed. Prior to adoption of the ROI, the City Council must adopt a resolution amending the City's Local Goals and Policies for Special Tax Districts ("Policies). The Policies incorporate standard industry practices in the formation and administration of CFDs and are subject to amendment by the City Council at any time.. Adopted in May 2006, the City's current Policies only address the financing of public facilities. The proposed amendment simply permits allowable public services to be eligible for CFD financing. The Act provides that a public hearing must be held on the establishment of a CFD. hl order to consolidate and expedite the formation process to two Council meetings, the two participating landowners have signed a Petition, Consent and Waiver (Attachment 1) confirming their participation in the formation of the CFD and waiving certain timing and noticing requirements for typical special tax election. Accordingly, the two landowners have agreed to submit their ballots no later than February 27, 2017 at 4:30 p.m., so that the election results will be available at the Council meeting on that date. The ROI also directs staff to prepare a Public Hearing Report on the proposed CFD providing a description of the Services to be funded by the CFD and an estimate of the fair and reasonable cost of the Services and incidental expenses for the CFD. The Public Hearing Report includes a map showing the boundaries of the proposed CFD and the affected assessor's parcels. Attachment 4 is a preview of the required Public Hearing Report. Should the Council approve these actions, the following additional steps are required to complete the formation of the CFD: • The City Clerk records the boundary map with the County Recorder after the Resolution of Intention to Establish the CFD and Authorize Levy of the Tax, and prior to the Public Hearing. • A landowner special tax election ballot is mailed to the landowners within the Project, who will be asked to vote on whether they approve or disapprove of the formation of the CFD. • The public hearing is held on February 27, 2017 at approximately 7:00 p.m. at Petaluma City Council Chambers, 11 English Street, Petaluma, CA. • The Council adopts a Resolution Calling a Landowner Special Tax Election for the Formation of the CFD on February 27, 2017. • The election is held at approximately 7:00 PM on February 27, 2017, at which time the City Clerk opens the ballots, tallies the vote, and announces the results of the election. • The Council adopts a Resolution of Formation of the CFD on February 27, 2017. • The Council adopts a Resolution Declaring Results of the Landowner Special Tax Election, Determining Validity of Prior Proceedings, and Directing Recording of the Notice of Special Tax Lien on February 27, 2017. • Upon the final approval of the CFD, a notice of special tax lien will be recorded with the County Recorder, resulting in a lien on the assessor's parcels within the CFD. The proposed CFD consists of annual maintenance of the sports field, river park, landscaping, irrigation, streetlights, pathways, and storm water detention and treatment systems within public areas. The table that follows summarizes annual maintenance costs as well as sinking fund costs for capital replacement of facilities covered in the CFD. Please refer to figures two and three of Attachment 4, The Preliminary Public Hearing Report, for a detailed line item description of annual maintenance and capital replacement costs. City staff provided a comprehensive review of the proposed services and annual administration costs, including an analysis of unit costs for maintenance of items included in the proposed CFD as well as capital replacement costs for items included in the sinking fund. Based on that review, the developer adjusted upwards some unit costs, and added costs for additional maintenance, irrigation water use, administration and park security patrols costs. 4 Table: ESTIMATE OF ANNUAL CFD COSTS Cost Component (Annual Cost Residential O&M 38,709 Nonresidential O&M 41,367 Parks O&M 95,796 Subtotal O&M $175,872 Residential Sinking Fund 33,491 Nonresidential Sinking Fund 32,546 Subtotal Sinking Fund $66,037 Security Patrol 6,000 Contingency - 5% 12,395 City Admin Fee - 7% 17,354 Management Fee 25,000 Subtotal Other Costs $60,749 Total Annual CFD Costs (Rounded) $302,658 FINANCIAL IMPACTS Costs for the formation of the CFD have been paid by Basin Street Properties as part of the Riverfront Subdivision cost recovery development application. The cost of providing the Services and annually administering the CFD will be covered by the special tax levies with the CFD. The Finance Department will establish a cost center for the CFD within the existing landscape assessment district fund to allow for financial management by the City's program manager. ATTACHMENTS 1. Petition, Consent and Waiver from Landowners 2. Resolution Adopting Amended Local Goals and Policies for Special Tax Districts 3. Resolution Declaring the Intention to Establish Community Facilities District 2016-01 and Authorize the Levy of a Special Tax to Fund Certain Public Services for the Riverfront Mixed Use Project, and Authorize and Direct Certain Related Actions 4. Preliminary Public Hearing Report for the CFD Attachment 1 PETITION, CONSENT AND WAIVER PETITION, CONSENT AND WAIVER OF OWNERS OF PROPERTY REGARDING PROPOSED FORMATION OF CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT NO. 2016-01 (PETALUMA RI VERFRONT) REGARDING CERTAIN TIME LIMITS AND PROCEDURAL REQUIREMENTS WITH RESPECT TO A SPECIAL LANDOWNER'S ELECTION To: Honorable City Council City of Petaluma 11 English Street Petaluma, CA 94952 Attn: Claire Cooper, City Clerk Council Members: The undersigned is the owner (or duly authorized representative thereof) of all of the real property identified in Exhibit A and hereby requests that the City of Petaluma (the "City") initiate formation proceedings to Community Facilities District No. 2016-01 (Petaluma Riverfront) (the "CFD") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (Sections 53311, et seq., California Government Code) (the "Act"), and hereby respectfully petitions and shows as follows: The undersigned requests that the property identified in Exhibit A be included in the formation of the CFD as shown on a map of the proposed boundaries to be filed with the City Clerk and that the City take all steps necessary to complete the formation of the CFD and to levy a special tax therein for the purpose of financing the public services (the "Services") described in Exhibit B attached hereto and incorporated herein by reference. 2. The undersigned hereby certifies that as of the date indicated above his/her signature, the landowner listed herein is the owner of the property within the proposed boundaries of the CFD described in Exhibit A hereto (the "Property"). The undersigned further certifies that there have been no persons residing and registered to vote within the Property for each of the ninety (90) days preceding the date of this Petition, Consent and Waiver. 3. The undersigned hereby acknowledges that inclusion of the Property in the formation of the CFD is voluntary. 4. In furtherance of this waiver, we agree that the election may be conducted by mailed or hand -delivered ballot to be returned as quickly as possible to the office of the City Clerk and that the results of said election be canvassed and reported to you as soon as possible, and to the extent permitted by law. 5. In accordance with the provisions of the Act, and specifically Sections 53326(a) and Page 1 of 5 53327(b) thereof allowing certain time and conduct requirements relative to a special landowner election to be waived with the unanimous consent of all the landowners to be included in a community facilities district and concurrence of the election official conducting the election, the undersigned (i) expressly consents to the conduct of the special election at the earliest possible time following the adoption by the Council of a resolution of intention to form the CFD and (ii) expressly waives any requirement to have the special election conducted within the time periods specified in Section 53326 of the Act or in the California Elections Code. 6. The undersigned waives any requirements for the mailing of the ballot for the special election and expressly agrees that said election may be conducted by mailed or hand - delivered ballot to be returned as quickly as possible to the designated election official, being the office of the City Clerk at the same meeting of the Council as the public hearing of the formation of the CFD. 7. The undersigned expressly waives all applicable waiting periods for the election and waives the requirement for analysis and arguments relating to the special election, as set forth in Section 53327 of the Act, and consents to not having such materials provided to the landowner in the ballot packet, and expressly waives any requirements as to the form of the ballot. 8. The undersigned expressly waives all notice requirements relating to hearings and special elections, whether by posting, publishing or mailing, and whether such requirements are found in the California Elections Code, the California Government Code or other laws or procedures, including, but limited to any notice provided for by compliance with the provisions of Section 4101 of the California Elections Code. 9. The undersigned hereby consents to and expressly waives any and all claims based on any irregularity, error, mistake or departure from the provisions of the Act or other laws of the State and any and all laws and requirements incorporated therein, and no step or action in any proceedings relative to the CFD or the special election therein shall be invalidated or affected by any such irregularity, error, mistake or departure. 10. The undersigned hereby declares under penalty of perjury to be the owner of record or the authorized representative of the landowner. Page 2 of 5 7 2 0 Respectfully submitted as of this day of .Q) Y• 81'gn a t u r e: Title: The address of the above owner for purposes of receiving all notices and ballots is: .1 ulssl,ZLIIL? I (() 2(o Filed in the Office of the City Clerk of the City of Petaluma this day of 201(0 City Clerk Page 3 of 5 I "-�C-koLlq- oe,tob6r EXHIBIT A DESCRIPTION OF LANDOWNER PROPERTIES CITY OF PETALUMA Community Facilities District No. 201.6-01 (Petaluma Riverfront) Assessor's Parcel Number Acres Property Owner 136-690-008 Lot 8 15.78 Elacora Riverfront, LLC Page 4 of 5 9 EXHIBIT B DESCRIPTION OF SERVICES TO BE FINANCED BY THE CFD CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Riverfront) The types of services to be financed by the CFD ("Services") shall include the annual operation, maintenance and servicing, including repair and replacement of parks, trails and recreation facilities, street and street lighting facilities, flood and storm protection facilities, storm water treatment facilities, landscape corridors, wetlands and open space areas; any incidental expenses authorized by the Act; and any other miscellaneous or incidental services identified by the City necessary to provide the described Services herein including the collection and accumulation of funds to pay for anticipated Service, future repairs and replacements and cost shortfalls. Page 5 of 5 10 PETITION, CONSENT. AND WAIVER _ PETITION, CONSENT AND WAIVER OF OWNERS OF PROPERTY REGARDING PROPOSED FORMATION OF CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT NO. 2016-01 (PETALUMA RIVERFRONT) REGARDING CERTAIN TIME LIMITS AND PROCEDURAL REQUIREMENTS WITH RESPECT TO A SPECIAL LANDOWNER'S ELECTION To: Honorable City Council City of Petaluma I I English Street Petaluma, CA 94952 Attn: Claire Cooper, City Clerk Council Members: The undersigned is the owner (or duly authorized representative thereof) of all of the real property identified in Exhibit A and hereby requests that the City of Petaluma (the "City") initiate formation proceedings to Community Facilities District No. 2016-01 (Petaluma Riverfront) (the "CFD") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (Sections 53311, et seq., California Government Code) (the "Act"), and hereby respectfully petitions and shows as follows: 1. The undersigned requests that the property identified in Exhibit A be included in the formation of the CFD as shown on a map of the proposed boundaries to be filed with the City Clerk and that the City take all steps necessary to complete the formation of the CFD and to levy a special tax therein for the purpose of financing the public services (the "Services") described in Exhibit B attached hereto and incorporated herein by reference. 2. The undersigned hereby certifies that as of the date indicated above his/her signature, the landowner listed herein is the owner of the property within the proposed boundaries of the CFD described in Exhibit A hereto (the "Property"). The undersigned further certifies that there have been no persons residing and registered to vote within the Property for each of the ninety (90) days preceding the date of this Petition, Consent and Waiver. . 3. The undersigned hereby acknowledges that inclusion of the Property in the formation of the CFD is voluntary. 4. In furtherance of this waiver, we agree that the election may be conducted by mailed or hand -delivered ballot to be returned as quickly as possible to the office of the City Clerk and that the results of said election be canvassed and reported to you as soon as possible, and to the extent permitted by law. 5. In accordance with the provisions of the Act, and specifically Sections 53326(a) and Page] of 5 11 53327(b) thereof allowing certain time and conduct requirements relative to a special landowner election to be waived with the unanimous consent of all the landowners to be included in a community facilities district and ' concurrence of the election official conducting the election, the undersigned (i) expressly consents to the conduct of the special election at the earliest possible time following the adoption by the Council of a resolution of intention to form the CFA and (ii) expressly waives any requirement to have the special election conducted within the time periods specified in Section 53326 of the Act or in the California Elections Code. 6. The undersigned waives any requirements for the mailing of the ballot for the special election and expressly agrees that said election may be conducted by mailed or hand - delivered ballot to be returned as quickly as possible to the designated election official, being the office of the City Clerk at the same meeting of the Council as the public hearing of the formation of the CFD. 7. The undersigned expressly waives all applicable waiting periods for the election and waives the requirement for analysis and arguments relating to the special election, as set forth in Section 53327 of the Act, and consents to not having such materials provided to the landowner in the ballot packet, and expressly waives any requirements as to the form of the ballot. 8. The undersigned expressly waives all notice requirements relating to hearings and special elections, whether by posting, publishing or mailing, and whether such requirements are found in the California Elections Code, the California Government Code or other laws or procedures, including, but limited to any notice provided for by compliance with the provisions of Section 4101 of the California Elections Code. 9. The undersigned hereby consents to and expressly waives any and all claims based on any irregularity, error, mistake or departure from the provisions of the Act or other laws of the State and any and all laws and requirements incorporated therein, and no step or action in any proceedings relative to the CFD or the special election therein shall be invalidated or affected by any such irregularity, error, mistake or departure. 10. The undersigned hereby declares under penalty of perjury to be the owner of record or the authorized representative of the landowner. Page 2 of 5 12 Respectfully submitted as of this day of SMI By: qe- A && 4uyc- PIli Gz S{s Signature: Title: The address of the above owner for purposes of receiving all notices and ballots is: t N. Mvg. Sk rs� CA qelq�q Filed in the Office of the City Clerk of the City of Petaluma this day of aL 201kj dLu&� - City Clerk -R& ua(k� Page 3 of 5 13 PETALUMA RIVERFRONT, LLC A California limited liability company By: G&W Ventures, LLC Managing Member By. Matthew T. White, Manager 14 EXHIBIT A DESCRIPTION OF LANDOWNER PROPERTIES CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Riverfront) Assessor's Parcel Number Acres Property Owner 136-690-001 Lot 1 0.59 Petaluma Riverfront, LLC 136-690-002 Lot 2 1.37 Petaluma Riverfront, LLC 136-690-003 Lot 3 0.38 Petaluma Riverfront, LLC 136-690-004 Lot 4 0.96 Petaluma Riverfront, LLC 136-690-005 Lot 5 0.71 Petaluma Riverfront, LLC 136-690-006 Lot 6 1.10 Petaluma Riverfront, LLC 136-690-007 Lot 7 3.68 Petaluma Riverfront, LLC 136-690-009 Lot 9 6.28 Petaluma Riverfront, LLC 136-690-011 Parcel B 1.32 Petaluma Riverfront, LLC 136-690-012 Remainder Parcel 4.82 Petaluma Riverfront, LLC Page 4 of 5 15 EXHIBIT B DESCRIPTION OF SERVICES TO BE FINANCED BY THE CFD CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Rivet -front) The types of services to be financed by the CFD ("Services") shall include the annual operation, maintenance and servicing, including repair and replacement of parks, trails and recreation facilities, street and street lighting facilities, flood and storm protection facilities, storm water treatment facilities, landscape corridors, wetlands and open space areas; any incidental expenses authorized by the Act; and any other miscellaneous or incidental services identified by the City necessary to provide the described Services herein including the collection and accumulation of funds to pay for anticipated Service, future repairs and replacements and cost shortfalls. Page 5 of 5 16 Attachment 2 RESOLUTION ADOPTING AMENDED LOCAL GOALS AND POLICIES FOR SPECIAL TAXING DISTRICTS ESTABLISHED UNDER THE CITY OF PETALUMA SPECIAL TAX PROCEDURE CODE, CHAPTER 4.40 OF THE PETALUMA MUNICIPAL CODE AND THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982, GOVERNMENT CODE SECTION 53311 AND FOLLOWING WHEREAS, under the Mello -Roos Community Facilities Act of 1982, as amended, codified in Sections 53311 and following of the California Government Code ("Act"), and prior to the initiation of any proceedings thereunder, the City Council ("Council") of the City of Petaluma ("City") must adopt local goals and policies as provided in Section 53312.7 of the Act ("Goals and Policies"); and WHEREAS, the Goals and Policies are intended to provide general guidance in the formation for Community Facilities Districts ("CFDs") established pursuant to the Act, including identification of services and improvements eligible to be financed by a CFD, criteria for bond financing, disclosure requirements, outline of City proceedings, and other components associated with development of a CFD; and WHEREAS, by adoption of Ordinance no. 2119 N.C.S. on , 2001, the City enacted Chapter 4.40 of the Petaluma Municipal Code entitled "The City of Petaluma Special Tax Procedure Code" ("Special Tax Code"); and WHEREAS, section 4.40.020 of the Special Tax Code provides that the Special Tax Code is an alternative method of financing public and private facilities and municipal services, and that the provisions of the Special Tax Code do not affect or limit any other provisions of law authorizing or providing for the furnishing of facilities or services, or the raising of revenue for such purposes; and WHEREAS, by adoption of Resolution no. on May 1, 2006, in anticipation of formation of a special tax district for the Theater District Area in the City, the City Council adopted Local Goals and Policies for Special Tax Districts ("Local Goals") in accordance with the requirements of Section 53312.7(a) of the Act; and WHEREAS, the Local Goals, as adopted, expressly provide that they are intended to provide guidance and conditions for conducting proceedings for special tax districts established under the Special Tax Code, as well as for CFDs established under the Act; and WHEREAS, the City Council wishes to amend the City's existing Goals and Policies, most notably for the purpose of including the identification of services eligible to be financed by a CFD under the Act, in anticipation of formation of a CFD for the Riverfront Mixed Use Project, and for subsequent proceedings under the Special Tax Code or the Act as the City may in the future pursue. 17 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma, as follows: Section 1. Adoption. The "Amended Local Goals and Policies for Special Taxing Districts ("Amended Goals and Policies") attached hereto and made a part hereof as Exhibit A are hereby found to meet the requirements of the Mello -Roos Community Facilities Act of 1982 and are hereby adopted for purposes of compliance with that Act, as well as, when convenient therefore, for purposes of assisting with formation of Special Tax Districts pursuant to the City of Petaluma Special Tax Procedure Code, Chapter 4.40 of the Petaluma Municipal Code, subject to further amendment of such Amended Goals and Policies by the City Council as may be desirable or required from time to time. Section 2. Repeal. The Local Goals and Policies for Special Tax Districts adopted on May 1, 2006 pursuant to Resolution no. , are hereby repealed and replaced in their entirety, as of the effective date of this resolution. Section 3. Constitutionality, Severability. If any section, subsection, sentence, clause, phrase, or word of this resolution is for any reason held by a court of competent jurisdiction to be unconstitutional or invalid for any reason, such decision shall not affect the validity of the remaining portions of the resolution. The Council, hereby declares that it would have passed this resolution and each section, subsection, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more section(s), subsection(s), sentence(s), clause(s), phrase(s), or word(s) be declared invalid. Section 4. Effective Date. This resolution and the Amended Policies shall become effective from and after the date of the adoption of this resolution by the City Council. 18 Exhibit A CITY OF PETALUMA AMENDED LOCAL GOALS AND POLICIES FOR SPECIAL TAX DISTRICTS I. GENERAL. Section 53312.7(a) of the California Government Code requires that the City of Petaluma (the "City") consider and. adopt local goals and policies concerning the use of the Mello -Roos Community Facilities Act of 1982 (the "Act") prior to the initiation of proceedings on or after January 1, 1994 to establish a new community facilities district ("CFD") under the Act. The City of Petaluma (the "City") has adopted its "City of Petaluma Special Tax Procedure Code" (the "Special Tax Code"), codified as Chapter 4.40 of the Petaluma Municipal Code, under the Petaluma City Charter (the "Charter") and Sections 3, 5 and 7 of Article XI of the Constitution of the State of California. Section 4.40.020 of the Special Tax Code provides that the Special Tax Code is an alternative method of financing public and private facilities and municipal services, and that the provisions of the Special Tax Code do not affect or limit any other provisions of law authorizing or providing for the furnishing of facilities or services, or the raising of revenue for such purposes. Section 4.40.130 of the Special Tax Code incorporates the Act, but provides that in proceedings under the Special Tax Code exclusively for maintenance and/or services, the provisions of Section 53312.7 of the Act relating to goals and policies shall not apply. These Local Goals and Policies for Special Tax Districts or Community Facilities District (the "Local Goals") provide guidance and conditions for City proceedings for, and the issuance of bonds secured by special taxes levied in CFDs established under the Act, and when convenient therefore, for purposes of assisting with the formation of special tax districts ("TDs") under the Special Tax Code for the purpose of financing public facilities. The Local Goals are intended to be general in nature; specific details will depend on the nature of each particular financing. The Local Goals are applicable to special tax financings and are intended in particular to comply with the requirements of the Act contained in Section 53312.7 (a) of the Government Code. These Local Goals shall not apply to any assessment financing or any certificate of participation or similar financings involving leases of or security in public property. The Local Goals are subject to amendment by the City at any time. II. FINANCING PRIORITIES. Eligible Facilities. The real or tangible property eligible to be financed by a TD or a CFD must be owned by a public agency or public utility and must have a useful life of at least five (5) years, except that up to five percent of the proceeds of an issue may be used for facilities owned and operated by a privately -owned public utility. Any new development proposed within a TD or a CFD must be consistent with the City's general plan and must have received any required legislative approvals such as zoning or specific plan approvals. A TD or a CFD shall not vest any rights to future land use on any properties, including those which are responsible for paying special taxes. 19 The list of eligible public facilities includes, but is not limited to, the following: • Streets • Street lighting • Traffic signals and safety lighting • Landscaping on public property or in public easements • Sanitary sewer facilities • Storm drain facilities • Flood control facilities • Potable and reclaimed water facilities • Utility relocations • Elementary and secondary school sites and facilities • Libraries • Parks and recreational facilities • Public utilities • Cultural facilities • Police and fire protection facilities • Governmental facilities It is acknowledged that the Special Tax Code permits the financing of fee obligations imposed by governmental agencies, the proceeds of which fees are to be used to fund public capital improvements of the nature listed above and permitted by the Act. The funding of public facilities to be owned and operated by public agencies other than the City shall be considered on a case-by-case basis. If the proposed financing is consistent with a public facilities financing plan approved by the City, or the proposed facilities are otherwise consistent with approved land use plans for the property, the City shall consider entering into a joint financing agreement or joint powers authority in order to finance these facilities. In general, a joint agreement with the public agency that will own and operate any such facility must be entered into prior to the resolution of formation of any TD or CFD as required by the Special Tax Code or the Act. TDs or CFDs may also be formed for the purpose of refinancing any fixed special assessment or other governmental lien on property, to the extent permitted under the Special Tax Code or the Act, as applicable. Eligible Services. The services eligible to be financed by a CFD (the "CFD Services") are those identified in the Act, including without limitation Section 53313 of the Act. To the extent required by the Act, the CFD may only finance the CFD Services to the extent they are in addition to those provided in the territory of the CFD before the CFD was created, and the additional CFD Services may not supplant services already available within the territory of the CFD when the CFD was created. The services eligible to be financed by a TD ("TD Services") include, but are not limited to, those identified in Section 53313 of the Act, as well as those identified in Section 4.40.170(C) of the Special Tax Code. Priorities. Priority for TD or CFD financing shall be given to public facilities which: (a) are necessary for development to proceed in an orderly fashion, or (b) are otherwise coordinated to correspond to the phasing of the related private development project, if any. If appropriate, the City shall prepare a public facilities financing plan as a part of the specific plan or other land use document that identifies the public facilities required to serve a project, and the type of financing to be utilized for each facility. The City will attempt to schedule construction of TD- or CFD - financed facilities in a manner such that private development will not occur ahead of the installation of public infrastructure necessary to support that development. 21 III. CREDIT QUALITY OF BOND ISSUES. For all TD or CFD bond issues, the value of the taxable property included in the CFD (taking into account the value of the public improvements to be financed by the CFD) should be at least 3 times the principal amount of the bonds to be issued plus the outstanding principal amount of any outstanding bonds secured by a special tax or assessment lien on the property in the CFD„ unless otherwise specifically approved by the City Council as provided in Section 53345.8(b) or (c) of the Act. Property value may be based on either an appraisal or on assessed values as indicated on the county assessor's tax roll. The public lien amount shall include the bond issue currently being sold plus any public indebtedness secured by a lien on the properties to be taxed. The City will require that all major land use approvals and governmental permits necessary for development of land in the TD or CFD be substantially in place before bonds may be issued. In most cases, a reserve fund equal to the lesser of (i) 10% of the original proceeds of the bond issue, (ii) the maximum annual debt service on the bonds, or (iii) 125% of the average annual debt service on the bonds will be required for all bond issues for TDs or CFDs where less than fifty percent of the buildable acreage has been developed. A smaller reserve fund may be required by the City for bond issues in TDs or CFDs where over fifty percent of the buildable acreage has been developed. The City may disallow the sale of bonds or require additional credit enhancement for the bonds under certain circumstances, such as cases where the property value to public lien ratio is less than 3 to 1, excessive tax delinquencies exist with respect to the property in the CFD, or the project proposed to be constructed within the CFD is deemed to have poor economic viability. The City may consider exceptions to the these Local Goals for bond issues that do not represent an unusual credit risk, either due to credit enhancement or other reasons specified by the City, and/or which otherwise provide extraordinary public benefits, to the extent permitted by and subject to any applicable requirements of the Act. If the City requires letters of credit or other security, the credit enhancement shall be issued by a financial institution, in a form and upon terms and conditions satisfactory to the City. Any security required to be provided by the applicant may be discharged by the City upon the opinion of a qualified appraiser, retained by the City, that a value -to -lien ratio of three to one has been attained or based upon other criteria (such as diversity in ownership) specified by the City. As an alternative to providing other security, the applicant may request that a portion of the bond proceeds be placed in escrow with a trustee or fiscal agent in an amount sufficient to assure a value -to -lien ratio of at least three to one on the outstanding proceeds. The escrowed proceeds shall be released at such times and in such amounts as may be necessary to assure a value -to -lien ratio of at least three to one on the aggregate outstanding bond proceeds and other indebtedness secured by real property liens as required. 22 IV. DISCLOSURES. A. Purchasers of Property. As a minimum, any disclosures mandated by applicable state law shall apply to each TD or CFD to inform prospective purchasers of their obligations under the TD or CFD. In addition, there may be additional requirements mandated by the City for particular kinds of financings on a case-by-case basis. The City may prescribe specific forms to be used to disclose the existence and extent of obligations imposed by TD or CFD. B. Disclosure Requirements for the Resale of Lots. The City Finance Department shall provide a notice of special taxes to sellers of property (other than developers) which will enable them to comply with their notice requirements under Section 1102.6 of the Civil Code. This notice shall be provided by the City within five working days of receiving a written request for the notice. A reasonable fee may be charged for providing the notice, not to exceed any maximum fee specified in the Act. C. Continuing Bond Disclosure. Landowners in a TD or CFD that are responsible for ten percent (10%) or more of the annual special taxes must agree to provide: (i) initial disclosure at the time of issuance of any bonds; and (ii) annual disclosure as required under Rule 15c2-12 of the Securities Exchange Commission until the special tax obligation of the property owned by such owner drops below 10%. V. EQUITY OF SPECIAL TAX FORMULAS AND MAXIMUM SPECIAL TAXES. Special tax formulas for TDs or CFDs shall provide for minimum special tax levels, which satisfy the following payment obligations of a TD or a CFD: (a) a minimum 10% gross debt service coverage for all CFD bonded indebtedness, (b) the administrative expenses of the TD or CFD, and (c) amounts equal to the differences between expected earnings on any escrow fund and the interest payments due on related bonds of the TD or CFD. In addition, the special tax formula may provide for the following to be included in the Special Tax levels: (a) any amounts required to establish or replenish any reserve fund established in association with the indebtedness of the TD or CFD, (b) the accumulation of funds reasonably required for future debt service, (c) amounts equal to projected delinquencies of special tax payments, (d) the costs of remarketing, credit enhancement and liquidity facility fees, (e) the cost of acquisition, construction, furnishing or equipping of authorized Facilities, (f) lease payments for existing or future facilities, (g) costs associated with the release of funds from an escrow account, and (h) the costs of CFD or TD Services, as applicable, and (i) any other costs or payments permitted by law. 23 In addition, the City may, in its discretion, provide for a special tax to pay for TD or CFD services authorized under the Special Tax Code or the Act, as applicable. The special tax formula shall be reasonable in allocating public facilities' costs to parcels within the TD or CFD. Exemptions from the special tax may be given to parcels which are publicly owned, are held by a property owners' association, are used for a public purpose such as open space or wetlands, are affected by public utility easements making impractical their utilization for other than the purposes set forth in the easements, or have insufficient value to support bonded indebtedness. The total projected property tax levels (including ad valorem taxes, any maintenance, landscaping or other impositions on the land in the TD or CFD and other similar annual government charges levied on parcels in the TD or CFD, but excluding homeowners' association annual levies and as to any special tax levies, based on the expected special tax rates and not any "back -up" special taxes) for any TD or CFD (or, if a TD or CFD has multiple improvement areas, for each improvement area and not the entire TD or CFD) shall not exceed the lesser of (i) 2.0% of the estimated sales prices of the respective homes to be constructed in the TD or CFD (with such prices to be determined by reference to an absorption study or appraisal prepared for the TD or CFD or such other information as the City shall determine), or (ii) any maximum specified in the Special Tax Code or the Act. The annual increase, if any, in the maximum special tax for any parcel shall not exceed any maximum specified in the Special Tax Code or the Act. The increase in the special tax levied on any parcel as a consequence of delinquency or default by the owner of any other parcel shall not exceed any maximum specified in the Special Tax Code or the Act. Special taxes will only be levied on an entire county assessor's parcel, and any allocation of special tax liability of a county assessor's parcel to leasehold or possessory interest in the fee ownership of such county assessor's parcel shall be the responsibility of the fee owner of such parcel and the City shall have no responsibility therefore and has no interest therein. Failure of the owner of any county assessor's parcel to pay or cause to be paid any special taxes in full when due, shall subject the entire parcel to foreclosure in accordance with the Special Tax Code and the Act. The City may retain a special tax consultant to prepare a report which: (a) recommends a special tax for the proposed TD or CFD, and (b) evaluates the special tax proposed to determine its ability to adequately fund identified public facilities, administrative costs, services (if applicable) and other related expenditures. Such analysis may also address the resulting aggregate tax burden of all proposed special taxes plus existing special taxes, ad valorem taxes and assessments on the properties within the TD or CFD. VI. APPRAISALS. . The definitions, standards and assumptions to be used for appraisals shall be determined by City staff on a case-by-case basis, with input from City consultants and TD or CFD applicants, and by reference to relevant materials and information promulgated by the State of California. In any 24 event, the value -to -lien ratio shall be determined based upon an appraisal by an independent MA or ASA appraiser of the taxable property in the proposed TD or CFD. The appraisal shall be coordinated by and under the direction of, or otherwise as acceptable to, the City. All costs associated with the preparation of the appraisal report shall be paid by the entity requesting the establishment of the TD or CFD, if applicable, through the advance deposit mechanism. VII. CITY PROCEEDINGS. A. Petition. For new development projects, a petition meeting the requirements of the applicable authorizing law will be required. The applicant is urged to obtain unanimous waivers of the election waiting period. The applicant must specify in the application any reasonably expected impediments to obtaining petitions, including from co-owners and/or lenders of record (where required). Waiver of the petition shall be made only upon showing of extraordinary hardship. For existing development, petitions are preferred, but may be waived, depending on the nature of the project and degree of public importance. B. Deposits and Reimbursements. All City and consultant costs incurred in the evaluation of TD or CFD applications and the establishment of TDs or CFDs will be paid by the entity, if any, requesting the establishment of the TD or CFD by advance deposit increments. The City shall not incur any expenses for processing and administering TDs or CFDs that are not paid by the applicant or from TD or CFD bond proceeds. In general, expenses not chargeable to the TD or CFD shall be directly borne by the proponents of the TD or CFD. Any petition for formation of a TD or CFD shall be accompanied by an initial deposit in the amount determined by the City to fund initial staff and consultant costs associated with TD or CFD review and implementation. If additional funds are needed to offset costs and expenses incurred by the City, the City shall make written demand upon the applicant for such funds. If the applicant fails to make any deposit of additional funds for the proceedings, the City may suspend all proceedings until receipt of such additional deposit. The City shall not accrue or pay any interest on any portion of the deposit refunded to any applicant or the costs and expenses reimbursed to an applicant. Neither the City nor the TD or CFD shall be required to reimburse any applicant or property owner from any funds other than the proceeds of bonds issued by the TD or CFD or special taxes levied in the TD or CFD. C. Representatives. The City and the applicant shall each designate a representative for each financing district proceeding. The representatives shall be responsible for coordinating the activities of their respective interests and shall be the spokespersons for each such interest. The purpose of this requirement is to avoid duplication of effort and misunderstandings from failure to communicate effectively. In the case of the City, it allows the City's consultants to report to a single official who will, in turn, communicate with other staff members. D. Time Schedule. The final schedule of events for any proceeding shall be determined by the City, in consultation with its financing team and the applicant. Any changes will require 25 approval by the appropriate City official. Time schedules will (unless specific exceptions are allowed) observe established Council meeting schedules and agenda deadlines. To the extent possible, financings will be scheduled to allow debt service to be placed on the tax rolls with a minimum of capitalized interest. VIII. FINANCING TERMS. All terms and conditions of any TD or CFD bonds shall be established by the City. The City will control, manage and invest all TD or CFD issued bond proceeds. Each bond issue shall be structured to adequately protect bond owners and to not negatively impact the bonding capacity or credit rating of the City through the special taxes, credit enhancements, foreclosure covenant, and reserve funds. All statements and material related to the sale of bonds shall emphasize and state that neither the faith, credit nor the taxing power of the City is pledged to security or repayment of the Bonds. The sole source of pledged revenues to repay TD or CFD bonds are special taxes, bond proceeds and reserve funds held under the bond document, and the proceeds of foreclosure proceedings and additional security instruments provided at the time of bond issuance. The City shall select all consultants necessary for the formation of the TD or CFD and the issuance of bonds, including the underwriter(s), bond counsel, disclosure counsel, financial advisors, appraiser and the special tax consultant. Prior consent of the applicant shall not be required in the determination by the City of the consulting and financing team. IX. EXCEPTIONS TO THESE LOCAL GOALS. The City may find in limited and exceptional instances that a waiver of any of the above stated Local Goals is reasonable given identified special City benefits to be derived from such waiver. Such waivers will be granted by action of the City Council. 26 Attachment 3 Resolution No. RESOLUTION DECLARING THE INTENTION TO ESTABLISH COMMUNITY FACILITIES DISTRICT 2016-01 AND AUTHORIZE THE LEVY OF A SPECIAL TAX THEREIN TO FUND CERTAIN PUBLIC SERVICES FOR THE RIVERFRONT MIXED USED PROJECT CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Riverfront) WHEREAS, under the Mello -Roos Community Facilities Act of 1982, as amended (the "Act"), Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing at Section 53311, of the California Government Code, this Council is authorized to establish a Community Facilities District and to act as the legislative body for such Community Facilities District; and WHEREAS, the City desires to proceed with the establishment of a Community Facilities District in order to finance the annual operation, maintenance and servicing, including repairs and replacement of parks, trails and recreational facilities, street and street lighting facilities, flood and storm protection facilities, stormwater treatment facilities, landscape corridors, wetlands and open space areas within the Petaluma Riverfront development project; and WHEREAS, on January 9, 2017, by Resolution No. -_, the Council adopted amended local goals and policies concerning the use of the Act; and WHEREAS, the Council having received petitions from ONE HUNDRED PERCENT (100%) of the landowners in the proposed Community Facilities District requesting that the City initiate proceedings for the establishment of a Community Facilities District pursuant to the Act, for the purposes of paying the costs of services to be provided by the City pursuant to Sections 53313 and 53313.5 of the California Government Code that are necessary to meet increased demands placed upon the City as a result of the development of said real property ("Property"), and agreeing to the services to be provided by the City and the costs incidental thereto; and WHEREAS, the City Cleric has certified that the petitions presented to the Council complies with the requirements of Sections 53318 and 53319 of the California Govcrmlent Code. 27 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma, as follows: Section 1. Acceptance of Petitions. The Petitions including Consent and Waivers of the landowners of the Property comprising the proposed CFD is hereby accepted and the Council hereby determines that the public convenience and necessity require proceedings be undertaken to authorize the establislunent of the CFD pursuant to the Act. Section 2. Name of CFD. The name proposed for the Community Facilities District is the City of Petaluma Community Facilities District No. 2016-01 (Petaluma Riverfront) (the "CFD"). Section 3. Boundaries Described. The proposed boundaries of the CFD are as shown on the map on file with the City Cleric, which boundaries are hereby preliminarily approved and to which map reference is hereby made for further particulars. The City Clerk is hereby directed to record, or cause to be recorded, said map of the boundaries of the CFD in the office of the County Recorder of Sonoma County within fifteen days of the date of adoption of this Resolution, but in any event at least fifteen days prior to the public hearing specified in Section 8 below. Section 4. Services. The type of services proposed to be funded by the CFD and pursuant to the Act shall consist of those items listed as Services (the "Services") on Exhibit A attached hereto and hereby incorporated herein. Section 5. Special Tax. Except to the extent that funds are otherwise available to the CFD to pay for the Services, a special tax (the "Special Tax") sufficient to pay the costs thereof, secured by recordation of a continuing lien against all nonexempt real property in the CFD, will be levied annually within the CFD in perpetuity, and collected in the same manner as ordinary ad valorem property taxes, or in such other mamler as this Council or its designee shall determine, including direct billing of the affected property owners. The proposed rate and method of apportionment of the Special Tax among the parcels of real property within the CFD in sufficient detail to allow each landowner within the proposed CFD to estimate the maximum amount such owner will have to pay are described in Exhibit B attached hereto and hereby incorporated herein. Under no circumstances will the special tax to be levied against any parcel subject to the foregoing sentence be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the CFD by more than 10 percent. As specified by the Act, for purposes of this paragraph, a parcel shall be considered "used for private residential purposes" not later than the date on which an occupancy permit for private residential use is issued. Section 6. Voting Procedure. The levy of the Special Tax shall be subject to the approval of the qualified electors of the CFD at a special election. The proposed voting procedure shall be by mailed or hand -delivered ballot among the landowners in the proposed CFD, with each owner having one vote for each acre or portion of an acre such owner owns in the CFD. The Council hereby determines that the Services are necessary to meet increased demands placed upon the City as the result of development occurring within the CFD. Section 7. CFD Public Hearing Report. The City's Director of Public Works and Utilities, as the officer having charge and control of the Services in and for the CFD, or the designee of such official, is hereby directed to study 'said proposed Services and to make, or cause to be made, and file with the City Clerk a report in writing ("CFD Public Hearing Report") presenting the following information: (a) A description of the Services by type which will be required to adequately meet the needs of the CFD. (b) An estimate of the fair and reasonable cost of the Services including the cost of incidental expenses in connection therewith. The CFD Public Hearing Report shall be made a part of the record of the public hearing specified below. Section 8. Public Hearing. On February 27, 2017 at 7 p.m., or as soon as possible thereafter, in the City Council Chambers, located at 11 English Street, Petaluma, CA 94952, this Council, as legislative body for the CFD, will conduct a public hearing on the establishment of the CFD and consider and finally determine whether the public interest, convenience and necessity require the formation of the CFD and the levy of the Special Tax. Section 9. Notice of Hearing. The City Cleric is hereby directed to cause notice of the public hearing to be given by publication one time in a newspaper published in the area of the CFD. The publication shall be completed at least two weeks (14 days) before the date of the public hearing referenced in Section 8. The notice shall be substantially in the form specified in Section 53322 of the Act, with the form summarizing the provisions hereof hereby specifically approved. 29 EXHIBIT A DESCRIPTION OF SERVICES TO BE FUNDED BY THE CFD CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Riverfront) The types of services to be funded by the CFD ("Services") shall include the annual operation, maintenance and servicing, including repair and replacement of parks, trails and recreation facilities, street and street lighting facilities, flood and storm protection facilities, storm water treatment facilities, landscape corridors, wetlands and open space areas; security patrols, any incidental expenses authorized by the Act; and any other miscellaneous or incidental services identified by the City necessary to provide the described Services herein including the collection and accumulation of funds to pay for anticipated Service, future repairs and replacements and cost shortfalls. 30 EXHIBIT B RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Rivet -front) A Special Tax authorized under the Mello -Roos Community Facilities Act of 1982 applicable to the land in the Community Facilities District No. 2016-01 (the "CFD") of the City of Petaluma (the "City") shall be levied and collected according to the tax liability determined by the City through the application of the appropriate amount or rate described herein. A. DEFINITIONS "Acre" means each acre of the land area making up an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Map or other recorded County parcel map. "Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the actual or estimated costs incurred by the City to determine, levy and collect the Special Taxes, including the proportionate amount of the salaries and benefits of City employees whose duties are directly related to administration of the CFD and the fees of Special Tax levy administrator, other consultants, legal counsel, the costs of collecting installments of the Special Taxes upon the County tax rolls and any other incidental costs authorized by the Act. "Annual Escalation Factor" means an amount equal to the percentage increase during the preceding year in the Consumer Price hndex for All Urban Consumers in the San Francisco - Oakland -San Jose metropolitan area (CPI -U), as published by the U.S. Department of Labor, Bureau of Labor Statistics, or if this index ceases publication, an equivalent index. "Annual Special Tax" means the annual Special Tax, determined in accordance with Section D below to be levied in the CFD in any Fiscal Year on any Assessor's Parcel. "Assessor's Parcel" or "Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Number" means, with respect to an Assessor's Parcel, that number assigned to such Assessor's Parcel by the County for purposes of identification. "Base Year" means the Fiscal Year ending June 30, 2018. 31 "Building Permit" means a single permit or set of permits required to construct an entire structure. "CFD" or "CFD No. 2016-01" means Community Facilities District No. 2016-01 (Petaluma Riverfront) of the City of Petaluma. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining and providing for the levy and collection of the Special Tax. "City" means the City of Petaluma. "Council" means the City Council of the City of Petaluma, acting as the legislative body of the City and the CFD. "County" means the County of Sonoma, California. "County Assessor" means the Sonoma County Assessor. "Developed Property" means, in any Fiscal Year, all Assessor's Parcels in the CFD for which Building Permits have been issued on or prior to June 30 of the preceding Fiscal Year. These Assessor's Parcels can be classified into one of following groups: Single Family Detached, Single Family Attached, Multi -Family Residential, Retail / Other, Office, and Hotel / Motel. "Fiscal Year" means the period starting July 1 and ending the following June 30. "Hotel / Motel" means a Parcel designated by the County Assessor as having a hotel or motel land use. "Land Use Classification" means any of the classes listed in Section B(1). "Maximum Special Tax" means the greatest amount of Special Tax, determined in accordance with Sections B and C below that can be levied in the CFD in any Fiscal Year on any Assessor's Parcel. "Multi -Family Residential" means all Assessor Parcels of Developed Property for which a Building Permit has been issued for construction of a structure with more than one Residential Unit. This category includes but is not limited to apartment buildings, duplexes, triplexes, fourplexes and condominiums. "Nonresidential Building Area" means the "chargeable covered and enclosed space" as defined by California Government Code section 65995(b)(2) to be constructed on Retail / Other Property, Office Property and Hotel / Motel property. 32 "Office Property" means all Assessor Parcels of Developed Property for which a Building Permit has been issued for the construction of general, professional and medical office construction. "Public Property" means any property within the boundaries of the CFD that is either (i) owned by the federal goverrmlent, the State of California, the County, another public agency, or a private non-profit organization that owns and is responsible for conservation of open space areas or (ii) encumbered by an easement owned by any such public agency or private organization which easement makes the development of such property impractical. Notwithstanding the foregoing, a leasehold or other possessory interest in any such property which is subject to taxation pursuant to Section 53340.1 of the Act shall not constitute "Public Property." "Residential Unit" means each separate residential dwelling unit on an Assessor's Parcel that comprises an independent facility capable of conveyance or rental as distinct from adjacent residential dwelling units. An accessory residential dwelling unit that shares a Parcel with a Single Family Detached Residential Unit shall not be considered as a Residential Unit for the purposes of this RMA. "Retail / Other Property" means all Assessor Parcels of Developed Property for which a Building Permit has been issued for the construction of retail, commercial, and educational construction or other nonresidential construction and is not Hotel / Motel Property or Office Property. "RMA" means this Rate and Method of Apportionment of Special Tax. "Services" means the services authorized to be financed by the CFD as described in the Resolution of Intention for the CFD. "Single -Family Attached Property" means all Assessor Parcels of Developed Property for which a building permit has been issued for construction of a residential structure consisting of two or more Residential Units that share common walls, have separate Assessor's Parcel Numbers assigned to them (except for a duplex Residential Unit which may share an Assessor's Parcel Number with another duplex Residential Unit). "Single -Family Detached Property" means all Assessor Parcels of Developed Property for which a building permit has been issued for construction of a single-family Residential Unit that does not share a common wall with another Residential Unit. "Special Tax" means a Special Tax levied in any Fiscal Year to pay the Special Tax Requirement. "Special Tax Requirement" means the amount required in any Fiscal Year for the CFD to: 1) provide the Services; 2) pay for reasonable Administrative Expenses; 3) pay any amounts required to establish or replenish any reserve funds; and 4) cure any delinquencies in the payment of Special Taxes which have occurred in the prior Fiscal Year or pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year. 33 "State" means the State of California. "Taxable Property" means any Assessor's Parcel that is not Tax -Exempt Property. "Tax -Exempt Property" means any Parcel within the CFD which is not Developed Property or Undeveloped Property, and includes Public Property. "Undeveloped Property" means any Assessor's Parcel which is not Tax -Exempt Property, and for which no building permit has been approved and issued by June 30 of the previous Fiscal Year. B. DETERMINATION OF MAXIMUM SPECIAL TAX The Maximum Special Tax shall be calculated as follows: 1. Classification of Parcels. Each Fiscal Year, using the Definitions above and the Parcel records of the County Assessor's Secured Tax Roll of July 1, the City shall cause each Parcel of land in the CFD to be classified as Developed Property, Undeveloped Property, or Tax -Exempt Property. The City shall cause all Developed Property to be further classified as Single Family Detached, Single Family Attached, Multi -Family, Retail/Other Property, Office Property and Hotel / Motel Property. 2. Assignment of Maximum Special Tax. Each Fiscal Year, the Base Year Maximum Tax shown below shall be escalated as specified in Section C, Annual Adjustment of Maximum Special Tax, to determine the Maximum Special Tax for the upcoming Fiscal Year for each Land Use Classification. Land Use Classification Base Year Maximum Tax Developed Single Family Detached $945 per Residential Unit Developed Single Family Attached $695 per Residential Unit Developed Multi -Family $472 per Residential Unit Developed Retail / Commercial $741 per 1,000 sq. ft. of Property nonresidential building sq. ft. or portion thereof Developed Office Property $875 per 1,000 sq. ft. of nonresidential building sq. ft. or portion thereof Developed Hotel / Motel Property $741 per 1,000 sq. ft. of nonresidential building sq. ft. or portion thereof Undeveloped Property $7,750 per acre or portion thereof Tax -Exempt Property $0 34 3. Conversion of a Tax -Exempt Property to a Taxable Property. If a Tax -Exempt Property is not needed for public use and is converted to a private use, it shall become subject to the Special Tax. 4. Multiple Land Use Classifications. In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Classification. The Maximum Special Tax that can be levied on an Assessor's Parcel shall be the sum of the Maximum Special Taxes that can be levied for all Land Use Classes located on that Assessor's Parcel. The CFD Administrator shall determine the allocation to each Land Use Classification. C. ANNUAL ADJUSTMENT OF MAXIMUM SPECIAL TAX Beginning in January 2018 and each January thereafter, the Maximum Special Tax shall be adjusted each fiscal year in an amount equal to the percentage increase during the preceding year in the Consumer Price Index for All Urban Consumers in the San Francisco -Oakland - San Jose metropolitan area (CPI -U), as published by the U.S. Department of Labor, Bureau of Labor Statistics, or if this index ceases publication, an equivalent index. Each annual adjustment of the Maximum Special Tax shall become effective for the following Fiscal Year. D. DETERMINATION OF THE ANNUAL SPECIAL TAX Commencing with the Base Year, and for each subsequent Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Annual Special Tax on each Assessor's Parcel of Developed Property at up to one hundred percent of the applicable Maximum Special Tax to fund the Special Tax Requirement. If additional revenues are needed to meet the Special Tax Requirement, the Annual Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to one hundred percent of the Maximum Special Tax for Undeveloped Property. Under no circumstances will the Annual Special tax levied against any Assessor's Parcel of Developed Property increase by more than ten (10) percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel within the CFD. Subject to the foregoing, the amount of Annual Special Tax levied upon any Developed Property and Undeveloped Property in any Fiscal Year shall not exceed the Maximum Special Tax for such Fiscal Year as computed herein. E. DURATION OF THE SPECIAL TAX Assessor's Parcels in the CFD shall remain subject to the Special Tax in perpetuity. If the Special Tax ceases to be levied, the City or its designee shall direct the County Recorder to 35 record a Notice of Cessation of Special Tax. Such notice will state that the obligation to pay the Special Tax has ceased and that the lien imposed by the Notice of Special Tax Lien is extinguished. F. PREPAYMENT OF SPECIAL TAX Prepayment of the Special Tax is not authorized. G. APPEALS AND INTERPRETATION PROCEDURE Any property owner who feels that the portion of the Special Tax levied on the subject property is in error, may file a written appeal no later than April 10 of the Fiscal Year in which the levy occurred, with the Director of Public Works and Utilities or his or her designee, appealing the levy of the Special Tax on the subject property. The Director of Public Works and Utilities or his or her designee will promptly review the appeal, and, if necessary, meet with the applicant, and decide the merits of the appeal. If the findings of the Director of Public Works and Utilities or his or her designee verify that the Special Tax levied should be modified, the Special Tax levy for future Fiscal Years shall be corrected, and a credit against future Special Taxes shall be arranged, if applicable. Any overcharges shall be corrected solely by means of adjustments to future Special Tax levies; no cash refunds shall be made. Any dispute over the decision of the Director of Public Works and Utilities or his or her designee shall be referred to the City Manager and the decision of the City Manager shall be final and binding on all parties. Interpretation may be made by resolution of the Council for purposes of clarifying any vagueness or uncertainty as it relates to the application of the Special Tax rate, or application of the method of apportionment, or classification of properties or any definition applicable to the CFD. H. COLLECTION OF THE SPECIAL TAX The Special Tax shall be collected each year in the same manner and at the same time as ad valorem property taxes are collected and shall be subject to the same penalties and lien priorities in the case of delinquency as is provided for ad valorem taxes. The City shall cause the actions required above to be done for each Fiscal Year in a timely manner to assure that the schedule of the Special Taxes to be collected are received by the County Auditor for inclusion with billings for such ad valorem taxes for the applicable Fiscal Year. However, the CFD Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of the Agency or as otherwise determined appropriate by the CFD Administrator. 36 Attachment 4 CITY OF PETALUMA PRELIMINARY PUBLIC HEARING REPORT COMMUNITY FACILITIES DISTRICT NO. 2016-01 (PETALUMA RIVERFRONT) JANUARY 2017 1 W9. W CITY COUNCIL CITY OF PETALUMA -- Itin i" l I 4745 MANGLES BOULEVARD FAIRFIELD, CALIFORNIA 94534 PHONE 707.430.4300 FAx 707.430.4319 www.sci-cg.com (THIS PAGE INTENTIONALLY LEFT BLANK) CITY OF PETALUMA CITY COUNCIL David Glass, Mayor Dave King, Vice Mayor Chris Albertson, Member Teresa Barrett, Member Mike Healy, Member Gabe Kearney, Member Kathy Miller, Member CITY MANAGER John Brown ASSISTANT CITY MANAGER Scott Brodhun DIRECTOR OF PUBLIC WORKS AND UTILITIES Dan St. John, F.ASCE CITY ENGINEER Curtis Bates, P.E. PARK & LANDSCAPE MANAGER Ron DeNicola SPECIAL TAX CONSULTANT Blair Aas, SCI Consulting Group CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) Co0.nsultingroUp PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE II (THIS PAGE INTENTIONALLY LEFT BLANK) CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT N0.2016-01 (PETALUMA RIVERFRONT) IConsulting roup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE III TABLE OF CONTENTS INTRODUCTION.......................................................................................................................1 LANDUSE PLAN SUMMARY....................................................................................................2 DESCRIPTION OF SERVICES AND ANNUAL COST....................................................................... 3 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ........................................................ 6 OVERVIEW OF THE PROPOSED CFD SPECIAL TAX..................................................................10 USE OF SPECIAL TAX PROCEEDS....................................................................................10 ANNUAL SPECIAL TAX FORMULA.....................................................................................10 ANNUAL INFLATIONARY ADJUSTMENT..............................................................................10 PREPAYMENT OF SPECIAL TAX........................................................................................10 DURATION OF THE SPECIAL TAX .......................................................... ................10 MANNER OF COLLECTION...............................................................................................11 ANNUALREPORT.........................................................................................................11 EXHIBIT A - PROPOSED CFD BOUNDARIES AND MAINTENANCE PLAN.....................................12 EXHIBIT B - DESCRIPTION OF LANDOWNER PROPERTIES........................................................15 EXHIBIT C - DESCRIPTION OF SERVICES TO BE FUNDED BY THE CFD......................................16 EXHIBIT D - RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX...................................17 CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT N0.2016-01 (PETALUMA RIVERFRONT) a prtSUltingGrOU�} PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 TABLE OF FIGURES FIGURE 1 - LAND USE PLAN PAGE IV ................................................ . .............. 2 FIGURE 2 - ESTIMATE OF ANNUAL MAINTENANCE AND SERVICING COSTS...................................4 FIGURE 3 - ANNUAL CONTRIBUTION TO REPLACEMENT SINKING FUND ....................................... 5 FIGURE 4 -ALLOCATION OF ANNUAL COSTS............................................................................ 7 FIGURE 5 - DETERMINATION OF EQUIVALENT DWELLING UNITS (°EDUS")................................... 8 FIGURE 6 - DETERMINATION OF RATE AND METHOD OF APPORTIONMENT ................................... 9 CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT)GOr1SUItIngrOup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 1 INTRODUCTION The Petaluma Riverfront development ("project") is a proposed mixed use development within the Central Petaluma Specific Plan of the City of Petaluma ("Petaluma"). The project is situated north of the Petaluma River and west of Highway 1001 near the Lakeville Highway interchange. The maximum full build -out of the project would include up to 273 residential units, approximately 53,000 square feet of retail and office, a select hotel with up to 120 units, and approximately 4.0 acres of parks and a system of multiuse trails. The City will own and maintain the parks, trails and recreation facilities, street and street lighting facilities, flood and storm protection facilities, storm water treatment facilities, landscape corridors, wetlands and open space areas within the project. In order to providing funding for these services, the formation of a Mello -Roos Community Facilities District ("CFD") and the levy of an annual special tax is proposed for the residential and nonresidential development within the project. On January 9, 2017, the Petaluma City Council ("Council') will consider adoption of a resolution declaring its intent to establish a CFD in connection with the project; authorize the levy of the special tax therein; and schedule a public hearing on the matter for February 27, 2017, This CFD Public Hearing Report ("Report") was prepared pursuant California Government Code § 53321.5. The purpose of this Report is to provide the following information at the public hearing: • Describe the Services to be financed by the CFD. • Provide an estimate of the fair and reasonable cost of the Services and incidental expenses for the CFD. Additionally, the Report details the allocation of annual costs and special tax on residential and nonresidential land uses in the project. Four important exhibits are attached to this Report. Exhibit A shows the boundaries of the project and the proposed boundaries of the CFD. Exhibit B is the description of landowner property(ies) included in the formation of the proposed CFD. Exhibit C describes the Services will be financed by the proposed CFD. Exhibit D details the rate and method of apportionment of the proposed special tax. CITY OF PETALUMA FM,: COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) IConSultiIngG oup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 2 LAND USE PLAN SUMMARY The project provides for the ultimate development of 273 dwelling units and nearly 130,000 square feet of retail, office and hotel / motel uses. As shown in Appendix A to this Report, the project includes 6 taxable land use categories. FIGURE 1 — LAND USE PLAN Nonresidential Building Sq. Land Use Type Phase Dwelling Units Ft. Residential Single -Family Detached 2 134 Single -Family Attached 3 39 Multi -Family (Mixed Use) 1 100 Total Residential 273 0 Nonresidential Retail / Commerical 1 6,194 Office 1 47,000 Hotel / Motel 1 75,350 Total Nonresidential 0 128,544 Parks and Dedication Offsite Improvements Grand Total 273 128,544 Source: Basin -Street Properties CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) "-x _AConsuiltingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 3 DESCRIPTION OF SERVICES AND ANNUAL COST The types of services to be financed by the CFD ("Services") shall include the annual operation, maintenance and servicing, including repair and replacement of parks, trails and recreation facilities, street and street lighting facilities, flood and storm protection facilities, storm water treatment facilities, landscape corridors, wetlands and open space areas. A portion of the special taxes proceeds will be placed in a sinking fund to be used by the City to fund future maintenance needs including a set-aside for repairs and replacement. As summarized in Figure 4 on page 12, the total annual maintenance and servicing costs and annual sinking fund contribution for the Services required to meet the needs of the CFD at buildout of the project are estimated to be $260,304 annually. The cost for annual CFD Administration, proposed management of the City maintenance contracts for the Services and other incidental costs approximately $42,354 annually. The list of authorized Services to be financed by the CFD are further described in Exhibit C. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) S, AGQnsultingGroup PRELIMINARY PUBLIC HEARING REPORT, .JANUARY 2017 PAGE 4 FIGURE 2 - ESTIMATE OF ANNUAL MAINTENANCE AND SERVICING COSTS Cost Component Quantity Unit Cost Unit Annual Cost Street Lights Calc a b c= a* b Residential Land Uses 4,200 $0.24 SF $1,008 Street Lights 42 $37.00 Each $1,554 Street Landscaping 54,979 $0.24 SF $13,195 Multi -Use Path 25,000 $0.24 SF $6,000 Multi -Use Path Landscaping 42,500 $0.24 SF $10,200 Residential Irrigation 806,008 $0.00523 GL $4,215 Masonry Wall 730 $0.50 LF $365 Emergency Vechile Access with Gate 15,000 $0.10 SF $1,500 Bioretention Areas 7,000 $0.24 SF $1,680 Total Residential 11,500 $0.24 SF $38,709 Nonresidential Land Uses 4.6 $10,454 Acre $48,090 Street Lights 23 $37.00 Each $851 Street Landscaping 4,200 $0.24 SF $1,008 Multi -Use Path 9,300 $0.24 SF $2,232 Multi -Use Path Landscaping 5,000 $0.24 SF $1,200 Multi -Use Path Irrigation 164,735 $0.00523 GL $862 Central Green Landscaping 16,200 $0.24 SF $3,888 Central Green Irrigation 90,950 $0.00523 GL $476 Stormwater System Central Green SD 775 $6.10 LF $4,728 Stormwater System Parking Lot SD 360 $6.10 LF $2,196 Parking Lot Sweeping and Micro Resurfacing 65,000 $0.13 SF $8,450 Parking Lot Landscaping 11,500 $0.24 SF $2,760 Parking Lot Irrigation 205,100 $0.00523 GL $1,073 Emergency Vechile Access with Gate 37,000 $0.24 SF $8,880 Masonry Wall (Hopper St.) 450 $0.50 LF $225 Gravity Wall (Hopper St.) 650 $0.50 LF $325 Stamped Concrete Crosswalks 3,500 $0.53 SF $1,855 Chain Link Fence (Hopper St.) 720 $0.50 LF $360 Total Nonresidential $41,367 Parks River Park Maintenance 4.6 $10,454 Acre $48,090 River Park Irrigation 542,332 $0.00523 GL $2,836 Sports Field Maintenance 2.3 $15,682 Acre $36,068 Sports Field Irrigation 1,682,859 $0.00523 GL $8,801 Total Parks $95,796 Source: Basin Street Properties; Steven J. Lafranchi & Associates, Inc., City of Petaluma; SCI Consulting Group CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT N0. 2016-01 (PETALUMA RIVERFRONT) � =C®nsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 5 FIGURE 3 - ANNUAL CONTRIBUTION TO REPLACEMENT SINKING FUND Cost Component Quantity Unit Cost Unit Life Cycle Annual Reserve Street Lights Calc a b Each c d = a * b Residential Land Uses 4,200 $0.15 SF 30 $630 Street Lights 42 $200.00 Each 10%, 10 Yrs. $8,400 Street Landscaping 54,979 $0.15 SF 30 $8,247 Multi -Use Path 25,000 $0.11 SF 30 $2,750 Multi -Use Path Landscaping 42,500 $0.15 SF 30 $6,375 Masonry Wall 730 $5.67 LF 30 $4,139 E.V.A. 15,000 $0.08 SF 30 $1,200 Bioretention Areas 7,000 $0.34 SF 30 $2,380 Total Residential 37,000 $0.11 SF 30 $33,491 Nonresidential Land Uses Street Lights 23 $200.00 Each 10%, 10 Yrs. $4,600 Street Landscaping/Irrigation 4,200 $0.15 SF 30 $630 Multi -Use Path 9,300 $0.11 SF 30 $1,023 Multi -Use Path Landscaping/Irrigation 5,000 $0.15 SF 30 $750 Central Green Landscaping/Irrigation 16,200 $0.15 SF 30 $2,430 Stormwater System Central Green SD 775 $1.67 LF 30 $1,294 Stormwater System Parking Lot SD 360 $1.67 LF 30 $601 Parking Lot Replacement 65,000 $0.08 SF 20 $5,200 Parking Lot Landscaping/Irrigation 11,500 $0.15 SF 30 $1,725 E.V.A. 37,000 $0.11 SF 30 $4,070 Masonry Wall (Hopper St.) 450 $5.67 LF 50 $2,552 Gravity Wall (Hopper St.) 650 $5.67 LF 50 $3,686 Stamped Concrete Crosswalks 3,500 $0.83 SF 20 $2,905 Chain Link Fence (Hopper St.) 720 $1.50 LF 25 $1,080 Total Nonresidential $32,546 Source: Basin Street Properties; Steven J. Lafranchi & Associates, Inc., City of Petaluma; SCI Consulting Group CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT NO. 2016-01 (PETALUMA RIVERFRONT) '�'f_.!ConsulltingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 6 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX The special taxes within the CFD will be levied according formulas and provisions of the Rate and Method of Apportionment of Special Tax (the "RMA") which is attached as Exhibit D. Special taxes will be collected annually for each residential dwelling unit and per nonresidential building area square feet for retail / commercial, office and hotel / motel development within the CFD. In order to determine the annual maximum special taxes, the annual maximum costs are first allocated to residential and nonresidential land uses based on the benefit received from the Services. However, an employee is generally not considered to receive the same benefit from the City's park and recreational facilities as a resident of the City. Therefore, the cost allocation for the operation, maintenance and servicing of park and recreation facilities and the deferred maintenance and future replacement of park and recreation facilities includes a residential equivalent factor adjustment of 0.12 for the nonresidential EDUs. This residential equivalent factor for nonresidential land use represents the ratio of benefit one employee will receive from these specific Services, as compared to one resident. This adjustment results in an allocation between residential and nonresidential development of 93.7% and 6.3% respectively. CFD administrative costs, maintenance management costs, the cost of security patrols, and a 5% contingency are allocated between residential and nonresidential development in portion to the share of the project EDUs or 64.2% and 35.8% respectively. Figure 4 on the following page details the allocation of total annual Services costs. Appendix B presents the method of cost allocation between residential and nonresidential development. Next, the annual costs within the CFD are allocated to each land use based on equivalent dwelling unit ("EDU") factors. The determination of the EDU factors and total EDUs for each land use are provided in the subsequent figures. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) AConsulfingGYOUp PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 7 FIGURE 4 — ALLOCATION OF ANNUAL COSTS Cost Component Annual Cost % Cost Allocation Res. Nonres. $ Cost Allocation Res. Nonres. Residential Land Uses $72,200 100.0% 0.0% $72,200 $0 Nonresidential Land Uses $73,913 0.0% 100.0% $0 $73,913 Parks 1 $95,796 93.7% 6.3% $89,798 $5,998 Security Patrols $6,000 64.2% 35.8% $3,854 $2,146 Contingency (5%) $12,395 64.2% 35.8% $7,963 $4,432 Annual CFD Administration (7%) $17,354 64.2% 35.8% $11,148 $6,206 Maintenance Contract Managemen $25,000 64.2% 35.8% $16,060 $8,940 Total Annual Cost $302,658 $201,024 $101,635 Total EDUs 212.68 118.48 Total Cost per EDU $945.21 $857.82 Source: Basin Street Properties; City of Petaluma; SCI Consulting Group Notes: 1 Assumes an employee/hotel guest equivalent park use of 0.12 residents. CITY OF PETALUMA�� COMMUNITY FACILITIES DISTRICT NO. 2016-01 (PETALUMA RIVERFRONT) ';,IConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 FIGURE 5— DETERMINATION OF EQUIVALENT DWELLING UNITS ("EDUS") Residents per Dwelling Unit 1 Dwelling Units I Employees per 1,000 Sq. Ft. Land Use Type 1,000 Sq. Ft. I EDU Factor Units EDUs Calc a b=a/3.40 c d=b'c Residential Single -Family Detached Single -Family Attached Multi -Family Total Residential Nonresidential Retail / Commercial Office Hotel / Motel Total Nonresidential Notes: 3.40 1.00 134 134.0 2.50 0.74 39 28.7 1.70 0.50 100 50.0 273 212.7 2.94 0.86 6.2 5.4 3.47 1.02 47.0 48.0 2.94 0.86 75.4 65.2 128.5 118.5 PAGE 8 1 Residential density figures provided by Residential Specialty, LLC. Nonresidential density figures are from 2001 "Employment Density Study" prepared by The Natelson Company, Inc. for the Southern California Association of Governments expressed in terms of the number of employees per 1,000 square feet of building area. Hotel / Motel density includes hotel guests assuming 120 rooms, 65% occupancy and 2.0 persons per room, Figure 6 on the following page shows the allocation of the total maximum annual cost among the different land uses within the proposed CFD. The maximum special taxes for residential development are $945 per single-family detached home, $695 per single-family attached home and $472 per multi -family unit. The maximum special taxes for nonresidential development will be levied per 1,000 square foot of building area. They are $741 for retail / other property; $875 for office property and $741 for hotel / motel property. The maximum special tax for undeveloped property is $7,750 per acre. Tax exempt property shall not be subject to the special tax. It is estimated that the maximum special tax revenue at buildout of the project would be $302,484. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 \ 75- E & \ / G \ @ G / \ r/§z . a � <� � \® G% Q\ 7&/ 3 0 § m m _ _ � 7 ; \ ƒ � CM/_ c o n / ' c y e 3 S \ J r % %r--: R / §\ \ \ $ m R \ » \ / % 2 co _ 7 V> _ V> 3 c 4 C) / \ \ Q \ \ \ eLU\ @ ? . \ \ \ kk _ R R _ _ � 4 � * J , \ \ \ \ \ \ c c o Rc u \ u - � ® / \ ¢ & 2 C=� m \ \ k W / d 0 3 2 % A — — a \ d • � \ \ \ / \ / J § a \ ¥ \\+% J 2 7® / 3Z m M � 7 / \ / / s ± 0 f 3 s / / PAGE 10 OVERVIEW OF THE PROPOSED CFD SPECIAL TAX This section provides an overview of the structure and administration procedures of the CFD special tax. The specific administrative requirements are detailed in Exhibit C - Description of Services to be financed by the CFD and Exhibit D — Rate and Method of Apportionment of the Special Tax, USE OF SPECIAL TAX PROCEEDS The special tax will be used solely for the annual operation, maintenance and servicing, including repair and replacement of parks, trails and recreation facilities, street and street lighting facilities, flood and storm protection facilities, storm water treatment facilities, landscape corridors, wetlands and open space areas; any incidental expenses authorized by the Act; and any other miscellaneous or incidental services identified by the City necessary to provide the described Services herein including the collection and accumulation of funds to pay for anticipated Service, future repairs and replacements and cost shortfalls. ANNUAL SPECIAL TAX FORMULA Commencing with FY 2017-18, and for each subsequent Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Annual Special Tax on each Assessor's Parcel of Developed Property at up to one hundred percent of the applicable Maximum Special Tax to fund the Special Tax Requirement. If additional revenues are need to meet the Special Tax Requirement, the Annual Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to one hundred percent of the Maximum Special Tax for Undeveloped Property. ANNUAL INFLATIONARY ADJUSTMENT The CFD special tax shall be annual adjusted for inflation by the annual change in the San Francisco -Oakland -San Jose Consumer Price Index. PREPAYMENT OF SPECIAL TAX Prepayment of the CFD special tax is not authorized. DURATION OF THE SPECIAL TAX The CFD special tax shall be levied and collected annually beginning in Fiscal Year 2017- 18 in perpetuity or until such time as the City determines it no longer needs the special tax proceeds to fund the authorized services of the CFD. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) s-_ lConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 11 MANNER OF COLLECTION The special tax will be collected in the same manner and at the same time as ad valorem property taxes. At the City's option, the special tax may be billed directly to property owners. ANNUAL REPORT In accordance with Government Code Section 53343.1, the Director of Public Works and Utilities, or his or her designee, shall file a report with the Council no later 120 days after the last day of each fiscal year. In general, the annual report shall contain (a) the amount of special taxes collected for the year; (b) the amount of special tax proceeds expended for Services and with an identification of the categories of each type of service funded with amounts expended in each category; (c) the amount of special tax proceeds expended on administrative and other incidental costs; (d) and other information required by the Act. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) 'x' ConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 EXHIBIT A PROPOSED CFD BOUNDARIES AND MAINTENANCE PLAN CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Riverfront) CITY OF PETALUMA »` ' COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) rConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, DECEMBER 2016 ,, lo A Z O w LL w W ¢CO � o J N W W a_ m O U C6 W 0 C:) F N of O d Z W F rr- U � Z CO ft� W c _ W U i- J m U � J <Q a LL w H � LL Z Z O Z } w U U d #r 0 O}} Za y LL `r°pZ z p w O W WFZx Dpi CDN 0 OxQ W ¢ OUWz �m�FO pwOm zap z0a� omz W O O Z _ p z �. _ w z z W U) F- Z Q LLo aa� `ALL.- �pZi a a�c0i}¢¢ww¢ W Q V O Q Z y J1 a i�� N o Z z Y�r r O OZ W on z o w Q�� �=• O O ULL UO�< OW W rWJLLWapWW. �J�WOu-V_ Z Q J �O W 0¢ o KW UZQ =� woo- �Oz �rO Um p LL O pSaO>r/7m rF- m w�pz�?wy O {-' 7 = W� LL Q r w =0 Ix -O w rW O�Ozn 0 o '00' N�U� p a°-��o¢ O a W U LLO FQ 4 tx-otn�O��v�i U Q o ua.Q�o O w >a�Wm~a> o o~ r o O v yzwOvia.i� LL 0 Dmz� woa�m0=� Oaz00 �w� J I- W In Z W z J w wm-�O 0 W W,Ow WUW�o U ZLL'o tt W a00u- a -0p LL�KUW OLLvriWr w p K ¢zQ WxOp�x Wr =l -Z Z W W N Oa =�""' O -Q Q Q U I- O W ON U Wya>r Q U �OOFx-N O viz NO�p B LL H O a V Vi Q Six- ra Y m01-QNOFN wa-� Y. W NO mLL W W 0,07pLL �OUFN- Y Z, V Y =a2¢pUF O QUO Z99 CL D. Z W wW w 0Woo=w w o= w moi-- Vu,z iIiWWZS ru.�pr�ta-Oa _rOd2>2 LL¢ moo° ° °zoo°o=owl O U {�l�Y3i � rpt t W O 0 0 -99999 E 00000 �rnrnrnmrn •;i .(0mmmm N M { �2 M ro (L N0ct W(O c a o o O o 0 0 0 0 0 0 0 0 0000000 a mm(o(omm(o Q.M-rM-.M--.M--- s a t�3 , i LL 2 ?f r,£1 P qm kill hv�iC lo A Z O w LL w W ¢CO � o J N W W a_ m O U C6 W 0 C:) F N of O d Z W F rr- U � Z CO ft� W c _ W U i- J m U � J <Q a LL w H � LL Z Z O Z } w U U d #r I � a h„4b o Mas §€8€€ �`a��8 U I 55FFE.a� EEB�2�c�;� c u < t 800000®®p 8 Oc'YJOp©t�p i 'a P LZD'OtQ' WW!3;Z 213ddOH OOS 1N021 MIH NV -Id 30NVN31NIVW 1011:USIO S3111110V3 h11Nf1WW0o tW n3emna otln-saoa�,nnsaem�saa3nao s 4��9 � — 5'3NI'S3IVIDOSSVVI" N AVI T N3A315, 1� 1 `, EXHIBIT B — DESCRIPTION OF LANDOWNER PROPERTIES CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Riverfront) Assessor's Parcel Number Acres Propertv Owner 136-690-001 0.59 Petaluma Riverfront, LLC 136-690-002 1.37 Petaluma Riverfront, LLC 136-690-003 0.38 Petaluma Riverfront, LLC 136-690-004 0.96 Petaluma Riverfront, LLC 136-690-005 0.71 Petaluma Riverfront, LLC 136-690-006 1.10 Petaluma Riverfront, LLC 136-690-007 3.68 Petaluma Riverfront, LLC 136-690-008 15.78 Elacora Riverfront, LLC 136-690-009 6.28 Petaluma Riverfront, LLC 136-690-011 1.32 Petaluma Riverfront, LLC 136-690-012 4.82 Petaluma Riverfront, LLC CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 15 "V: iConsu[tingGroup PAGE 16 EXHIBIT C — DESCRIPTION OF SERVICES TO BE FUNDED BY THE CFD CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Riverfront) The types of services to be funded by the CFD ("Services") shall include the annual operation, maintenance and servicing, including repair and replacement of parks, trails and recreation facilities, street and street lighting facilities, flood and storm protection facilities, storm water treatment facilities, landscape corridors, wetlands and open space areas; security patrols, any incidental expenses authorized by the Act; and any other miscellaneous or incidental services identified by the City necessary to provide the described Services herein including the collection and accumulation of funds to pay for anticipated Service, future repairs and replacements and cost shortfalls. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RNERFRONT) ry1ConsultingGrou PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 17 EXHIBIT D — RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX CITY OF PETALUMA Community Facilities District No. 2016-01 (Petaluma Riverfront) A Special Tax authorized under the Mello -Roos Community Facilities Act of 1982 applicable to the land in the Community Facilities District No. 2016-01 (the "CFD") of the City of Petaluma (the "City") shall be levied and collected according to the tax liability determined by the City through the application of the appropriate amount or rate described herein. A. DEFINITIONS "Acre" means each acre of the land area making up an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Map or other recorded County parcel map. "Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the actual or estimated costs incurred by the City to determine, levy and collect the Special Taxes, including the proportionate amount of the salaries and benefits of City employees whose duties are directly related to administration of the CFD and the fees of Special Tax levy administrator, other consultants, legal counsel, the costs of collecting installments of the Special Taxes upon the County tax rolls and any other incidental costs authorized by the Act. "Annual Escalation Factor" means an amount equal to the percentage increase during the preceding year in the Consumer Price Index for All Urban Consumers in the San Francisco -Oakland -San Jose metropolitan area (CPI -U), as published by the U.S. Department of Labor, Bureau of Labor Statistics, or if this index ceases publication, an equivalent index. "Annual Special Tax" means the annual Special Tax, determined in accordance with Section D below to be levied in the CFD in any Fiscal Year on any Assessor's Parcel. "Assessor's Parcel" or "Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) 0 .AConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 18 "Assessor's Parcel Number" means, with respect to an Assessor's Parcel, that number assigned to such Assessor's Parcel by the County for purposes of identification. "Base Year" means the Fiscal Year ending June 30, 2018. "Building Permit" means a single permit or set of permits required to construct an entire structure. "CFD" or "CFD No. 2016-01" means Community Facilities District No. 2016-01 (Petaluma Riverfront) of the City of Petaluma. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining and providing for the levy and collection of the Special Tax. "City" means the City of Petaluma. "Council" means the City Council of the City of Petaluma, acting as the legislative body of the City and the CFD, "County" means the County of Sonoma, California. "County Assessor" means the Sonoma County Assessor. "Developed Property" means, in any Fiscal Year, all Assessor's Parcels in the CFD for which Building Permits have been issued on or prior to June 30 of the preceding Fiscal Year, These Assessor's Parcels can be classified into one of following groups: Single Family Detached, Single Family Attached, Multi -Family Residential, Retail / Other, Office, and Hotel / Motel. "Fiscal Year" means the period starting July 1 and ending the following June 30. "Hotel / Motel" means a Parcel designated by the County Assessor as having a hotel or motel land use, "Land Use Classification" means any of the classes listed in Section B(1). "Maximum Special Tax" means the greatest amount of Special Tax, determined in accordance with Sections B and C below that can be levied in the CFD in any Fiscal Year on any Assessor's Parcel. "Multi -Family Residential" means all Assessor Parcels of Developed Property for which a Building Permit has been issued for construction of a structure with more than CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) t "C ConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 k PAGE 19 one Residential Unit. This category includes but is not limited to apartment buildings, duplexes, triplexes, fourplexes and condominiums. "Nonresidential Building Area" means the "chargeable covered and enclosed space" as defined by California Government Code section 65995(b)(2) to be constructed on Retail / Other Property, Office Property and Hotel / Motel property. "Office Property" means all Assessor Parcels of Developed Property for which a Building Permit has been issued for the construction of general, professional and medical office construction. "Public Property" means any property within the boundaries of the CFD that is either (i) owned by the federal government, the State of California, the County, another public agency, or a private non-profit organization that owns and is responsible for conservation of open space areas or (ii) encumbered by an easement owned by any such public agency or private organization which easement makes the development of such property impractical. Notwithstanding the foregoing, a leasehold or other possessory interest in any such property which is subject to taxation pursuant to Section 53340.1 of the Act shall not constitute "Public Property." "Residential Unit" means each separate residential dwelling unit on an Assessor's Parcel that comprises an independent facility capable of conveyance or rental as distinct from adjacent residential dwelling units. An accessory residential dwelling unit that shares a Parcel with a Single Family Detached Residential Unit shall not be considered as a Residential Unit for the purposes of this RMA. "Retail / Other Property" means all Assessor Parcels of Developed Property for which a Building Permit has been issued for the construction of retail, commercial, and educational construction or other nonresidential construction and is not Hotel / Motel Property or Office Property. "RMA" means this Rate and Method of Apportionment of Special Tax. "Services" means the services authorized to be financed by the CFD as described in the Resolution of Intention for the CFD. "Single -Family Attached Property" means all Assessor Parcels of Developed Property for which a building permit has been issued for construction of a residential structure consisting of two or more Residential Units that share common walls, have separate Assessor's Parcel Numbers assigned to them (except for a duplex Residential Unit which may share an Assessor's Parcel Number with another duplex Residential Unit). CITY OF PETALUMA u COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) `"H> ConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 20 "Single -Family Detached Property" means all Assessor Parcels of Developed Property for which a building permit has been issued for construction of a single-family Residential Unit that does not share a common wall with another Residential Unit. "Special Tax" means a Special Tax levied in any Fiscal Year to pay the Special Tax Requirement. "Special Tax Requirement" means the amount required in any Fiscal Year for the CFD to: 1) provide the Services; 2) pay for reasonable Administrative Expenses; 3) pay any amounts required to establish or replenish any reserve funds; and 4) cure any delinquencies in the payment of Special Taxes which have occurred in the prior Fiscal Year or pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year. "State" means the State of California. "Taxable Property" means any Assessor's Parcel that is not Tax -Exempt Property. "Tax -Exempt Property" means any Parcel within the CFD which is not Developed Property or Undeveloped Property, and includes Public Property. "Undeveloped Property" means any Assessor's Parcel which is not Tax -Exempt Property, and for which no building permit has been approved and issued by June 30 of the previous Fiscal Year. B. DETERMINATION OF MAXIMUM SPECIAL TAX The Maximum Special Tax shall be calculated as follows: 1. Classification of Parcels. Each Fiscal Year, using the Definitions above and the Parcel records of the County Assessor's Secured Tax Roll of July 1, the City shall cause each Parcel of land in the CFD to be classified as Developed Property, Undeveloped Property, or Tax -Exempt Property. The City shall cause all Developed Property to be further classified as Single Family Detached, Single Family Attached, Multi -Family, Retail/Other Property, Office Property and Hotel / Motel Property. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) 3( A ConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 1, PAGE 21 2. Assignment of Maximum Special Tax. Each Fiscal Year, the Base Year Maximum Tax shown below shall be escalated as specified in Section C, Annual Adjustment of Maximum Special Tax, to determine the Maximum Special Tax for the upcoming Fiscal Year for each Land Use Classification. Land Use Classification Base Year Maximum Tax Developed Single Family Detached $945 per Residential Unit Developed Single Family Attached $695 per Residential Unit Developed Multi -Family $472 per Residential Unit Developed Retail / Commercial Property $741 per 1,000 sq. ft. of nonresidential building sq. ft. or portion thereof Developed Office Property $875 per 1,000 sq. ft. of nonresidential building sq. ft. or portion thereof Developed Hotel / Motel Property $741 per 1,000 sq. ft. of nonresidential building sq. ft. or portion thereof Undeveloped Property $7,750 per acre or portion thereof Tax -Exempt Property $0 3. Conversion of a Tax -Exempt Property to a Taxable Property. If a Tax -Exempt Property is not needed for public use and is converted to a private use, it shall become subject to the Special Tax, 4. Multiple Land Use Classifications. In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Classification. The Maximum Special Tax that can be levied on an Assessor's Parcel shall be the sum of the Maximum Special Taxes that can be levied for all Land Use Classes located on that Assessor's Parcel. The CFD Administrator shall determine the allocation to each Land Use Classification, CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) ::. <,IConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 `zF,, PAGE 22 C. ANNUAL ADJUSTMENT OF MAXIMUM SPECIAL TAX Beginning in January 2018 and each January thereafter, the Maximum Special Tax shall be adjusted each fiscal year in an amount equal to the percentage increase during the preceding year in the Consumer Price Index for All Urban Consumers in the San Francisco -Oakland -San Jose metropolitan area (CPI -U), as published by the U.S. Department of Labor, Bureau of Labor Statistics, or if this index ceases publication, an equivalent index. Each annual adjustment of the Maximum Special Tax shall become effective for the following Fiscal Year. D. DETERMINATION OF THE ANNUAL SPECIAL TAX Commencing with the Base Year, and for each subsequent Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Annual Special Tax on each Assessor's Parcel of Developed Property at up to one hundred percent of the applicable Maximum Special Tax to fund the Special Tax Requirement. If additional revenues are need to meet the Special Tax Requirement, the Annual Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to one hundred percent of the Maximum Special Tax for Undeveloped Property. Under no circumstances will the Annual Special tax levied against any Assessor's Parcel of Developed Property increase by more -than ten (10) percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel within the CFD. Subject to the foregoing, the amount of Annual Special Tax levied upon any Developed Property and Undeveloped Property in any Fiscal Year shall not exceed the Maximum Special Tax for such Fiscal Year as computed herein. E. DURATION OF THE SPECIAL TAX Assessor's Parcels in the CFD shall remain subject to the Special Tax in perpetuity. If the Special Tax ceases to be levied, the City or its designee shall direct the County Recorder to record a Notice of Cessation of Special Tax. Such notice will state that the obligation to pay the Special Tax has ceased and that the lien imposed by the Notice of Special Tax Lien is extinguished. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) I ConsuitingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 23 F. PREPAYMENT OF SPECIAL TAX Prepayment of the Special Tax is not authorized. G. APPEALS AND INTERPRETATION PROCEDURE Any property owner who feels that the portion of the Special Tax levied on the subject property is in error, may file a written appeal no later than April 10 of the Fiscal Year in which the levy occurred, with the Director of Public Works and Utilities or his or her designee, appealing the levy of the Special Tax on the subject property. The Director of Public Works and Utilities or his or her designee will promptly review the appeal, and, if necessary, meet with the applicant, and decide the merits of the appeal. If the findings of the Director of Public Works and Utilities or his or her designee verify that the Special Tax levied should be modified, the Special Tax levy for future Fiscal Years shall be corrected, and a credit against future Special Taxes shall be arranged, if applicable. Any overcharges shall be corrected solely by means of adjustments to future Special Tax levies; no cash refunds shall be made. Any dispute over the decision of the Director of Public Works and Utilities or his or her designee shall be referred to the Director of Public Works and Utilities and the Council and the decision of the Council shall be final and binding on all parties. Interpretation may be made by resolution of the Council for purposes of clarifying any vagueness or uncertainty as it relates to the application of the Special Tax rate, or application of the method of apportionment, or classification of properties or any definition applicable to the CFD. H. COLLECTION OF THE SPECIAL TAX The Special Tax shall be collected each year in the same manner and at the same time as ad valorem property taxes are collected and shall be subject to the same penalties and lien priorities in the case of delinquency as is provided for ad valorem taxes. The City shall cause the actions required above to be done for each Fiscal Year in a timely manner to assure that the schedule of the Special Taxes to be collected are received by the County Auditor for inclusion with billings for such ad valorem taxes for the applicable Fiscal Year. However, the CFD Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of the Agency or as otherwise determined appropriate by the CFD Administrator. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) ConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 PAGE 24 (THIS PAGE INTENTIONALLY LEFT BLANK) CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) 2'("'lConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, JANUARY 2017 V10