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HomeMy WebLinkAboutStaff Report 4.A 02/27/2017DATE: TO: Agenda Item #4.A February 27, 2017 Honorable Mayor and Members of the City Council through City Manager FROM: Dan St. �A— ctor of Public Works and Utilities Curtis Bat s, P.E., City Engineer SUBJECT: Proposed Community Facilities District No. 2016 -01, Petaluma Riverfront RECOMMENDATION It is recommended that the City Council conduct and authorize the following actions: • Hold a public hearing and take testimony on the proposed Community Facilities District No. 2016 -01 (the "CFD ") for Petaluma Riverfront. • Adopt a Resolution Forming the CFD. • Adopt a Resolution Calling a Special Election of the Qualified Electors of the Territory to be Included in the Formation the CFD. • Conduct a Special Election on the CFD formation during which the canvassing board opens the ballots, tallies the vote, and announces the results of the special election. • Adopt a Resolution Declaring Results of Special Tax Election, Determining Validity of Prior Proceedings, and Directing Recording of Amended Notice of Special Tax Lien. BACKGROUND The Petaluma 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 members worked 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 improvement 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 appointment 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 fund 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 LLAD. A CFD is not subject to Proposition 218 whereas 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 fund 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. 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 fund the public improvements associated with the Project. 2 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. On January 9, 2017, the Council approved Resolution 2017 -010 N.C.S, declaring intention to form the CFD and set February 27, 2017 at 7:00 p.m. as the date and time of the public hearing on the resolution of intention to form the CFD. In order to complete the formation process, the following actions are required: • The public hearing is held on February 27, 2017 at approximately 7:00 p.m. • The Council adopts a Resolution of Formation of the CFD. • The Council adopts a Resolution Calling a Landowner Special Tax Election for the Formation of the CFD. • 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 Declaring Results of the Landowner Special Tax Election, Determining Validity of Prior Proceedings, and Directing Recording of the Notice of Special Tax Lien. Pursuant to those actions, City staff, with the assistance of SCI Consulting Group, has completed the following steps in order to facilitate the formation of the CFD: • The map of the proposed boundary for CFD No. 2016 -01 was filed with.the County Recorder on January 17, 2017. • The CFD election ballot was mailed to the property owners at least 10 days prior to the date of the Public Hearing. The property owners are asked in the ballot whether they approve or disapprove of having their properties included in CFD No. 2016 -01. In order to consolidate and expedite the formation process to two Council meetings, the two participating landowners have signed a Petition, Consent and Waiver 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 by February 27, 2017 at 4:30 p.m., so that the election results will be available at that meeting. The resolution of intent also directed 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 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. The Public Hearing Report also includes a map showing the boundaries of the proposed CFD and the affected assessor's parcels. Attachment 4 is the required Public Hearing Report. Table: ESTIMATE OF ANNUAL CFD COSTS Cost Component 1 $60,749 (Annual Cost Residential O &M 38,709 Nonresidential O &M 41,367 Parks 0 &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 1 $60,749 Total Annual CFD Costs (Rounded) 1 $302,658 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. Upon the final approval of the CFD, a notice of special tax lien will be recorded with the County Recorder, resulting in a permanent lien on the assessor's parcels within the CFD. The lien continues in perpetuity unless the Council terminates the special tax obligation by later Council actions in accordance with the Act. 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. Draft Resolution Folming the CFD 2. Draft Resolution Calling a Special Election of the Qualified Electors of the territory to be included in the formation the CFD M 3. Resolution Declaring Results of Special Tax Election, Determining Validity of Prior Proceedings, and Directing Recording of Notice of Special Tax Lien 4. Public Hearing Report (Final Report) Attachment 1 RESOLUTION TO FORM A COMMUNITY FACILITIES DISTRICT CITY OF PETALUMA Community Facilities District No. 2016 -01 (Petaluma Riverfront) WHEREAS, on January 9, 2017, the City Council ( "Council ") of the City of Petaluma (the "City "), County of Sonoma, State of California, adopted Resolution No. 2017 -010 N.C.S. entitled "Resolution of the City Council of the City of Petaluma Declaring Intention to Establish a Community Facilities District and Authorize the Levy of Special Taxes Therein" (the "Resolution of Intention ") with respect to Community Facilities District No. 2016 -01 (Petaluma Riverfront) (the "CFD ") of the City pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the "Act "); and WHEREAS, the Resolution of Intention incorporates a map of the proposed boundaries of the CFD, states the services to be provided, the cost of providing such services and the rate and method of apportionment of the special tax to be levied within the CFD, and is on file with the City Clerk and the provisions thereof are incorporated herein by this reference as if fully set forth herein; and WHEREAS, the services to be provided as stated in the Resolution of Intention are set forth in Exhibit A attached hereto and hereby made a part hereof; and WHEREAS, notice of a public hearing relating to the establishment of the CFD, the extent of the CFD, the financing of certain types of services and all other related matters has been given, and a Public Hearing Report, as ordered by this Council, has been presented to this Council and has been made a part of the record of the hearing to establish such CFD, all pursuant to the Act and the Resolution of Intention relating to the proposed formation of the CFD; and WHEREAS, at the hearing all interested persons desiring to be heard on all matters pertaining to the formation of the CFD, the services to be provided therein and the levy of said special tax were heard and a full and fair hearing was held; and WHEREAS, written protests with respect to the formation of the CFD, the furnishing of specified types of services and the rate and method of apportionment of the special taxes have not been filed with the City Clerk by fifty percent (50 %) or more of the registered voters residing within the territory of the CFD or property owners of one -half (1/2) or more of the area of land within the CFD and not exempt from the proposed special tax; and WHEREAS, the special tax proposed to be levied in the CFD to pay for the proposed services to be provided therein has not been eliminated by protest by fifty percent (50 %) or more of the registered voters residing within the territory of the CFD or the owners of one -half (1/2) or I more of the area of land within the CFD and not exempt from the special tax. NOW, THEREFORE, BE IT RESOLVED, as follows: Section 1. Recitals Correct. The foregoing recitals are true and correct. Section 2. No Majority Protest. The proposed special tax to be levied within the CFD has not been precluded by majority protest pursuant to Section 53324 of the Act. Section 3. Prior Proceedings Valid. All prior proceedings taken by this Council in connection with the establishment of the CFD and the levy of the special tax have been duly considered and are hereby found and determined to be valid and in conformity with the Act. Section 4. Name of CFD. The community facilities district designated "Community Facilities District No. 2016 -01 (Petaluma Riverfront)" of the City is hereby established pursuant to the Act. Section 5. Boundaries of CFD. The boundaries of the CFD are as set forth in the map of the CFD heretofore recorded in the Sonoma County Recorder's Office as follows: Book 784 of Maps of Assessment and Community Facilities Districts at Page 4. Section 6. Description of Services. The type of services proposed to be financed by the CFD and pursuant to the Act shall consist of those items listed as services (the "Services ") in Exhibit A hereto and by this reference incorporated herein. Section 7. Public Hearing Report. The Public Hearing Report, as now submitted, shall stand as the Public Hearing Report for all future proceedings and all terms and contents are approved as set forth therein. Section 8. Special Tax. a. Except to the extent that funds are otherwise available to the CFD to pay for the Facilities and Services, a special tax (the "Special Tax ") sufficient to pay the costs thereof, secured by the recordation of a continuing lien against all nonexempt real property in the CFD, is intended to be levied annually within the CFD, and collected in the same manner as ordinary ad valorem property taxes or in such other manner as may be prescribed by this Council. b. 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 shown in Exhibit B attached hereto and by this reference incorporated herein. 7 Section 9. Responsible Official. The Director of Public Works and Utilities, located at 11 English Street, Petaluma, California 94952, telephone number (707) 778 -4303, or his or her designee, will be responsible for preparing annually a current roll of special tax levy obligations by assessor's parcel number and who will be responsible for estimating future special tax levies pursuant to the Act. Section 10. Special Tax Lien. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the Streets and Highways Code of California, a continuing lien to secure each levy of the special tax shall attach to all nonexempt real property in the CFD and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the City ceases. Section 11. Election. Pursuant to the provisions of the Act, the proposition of the levy of the special tax specified above shall be submitted to the qualified electors of the CFD at an election the time, place and conditions of which election shall be as specified by a separate resolution of this Council. Section 12. Effective Date. This Resolution shall take effect upon its adoption. PASSED AND ADOPTED bye the City Council of the City of Petaluma at a regular meeting of said Council held on the 27t day of February 2017, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 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. I EXHIBIT B 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. "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. 10 "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 Assessors 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. 11 "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 wails, 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. 12 "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. 13 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 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. 14 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 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 15 Utilities or his or her designee shall be referred to the Director of Public Works and Utilities, 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, 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. 16 Attachment 2 CALLING A SPECIAL TAX ELECTION CITY OF PETALUMA Community Facilities District No. 2016 -01 (Petaluma Riverfront) WHEREAS, on January 9, 2017, the City Council ( "Council ") of the City of Petaluma (the "District "), County of Sonoma, State of California, adopted Resolution No. 2017 -010 N.C.S. entitled "Resolution of the City Council of the City of Petaluma Declaring Intention to Establish a Community Facilities District" (the "Resolution of Intention ") with respect to Community Facilities District No. 2016 -01 (Petaluma Riverfront) (the "CFD ") of the District pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the "Act "); and WHEREAS, on February 27, 2017, the Council adopted Resolution No. entitled "A Resolution of the City Council of the City of Petaluma to Form a Community Facilities District" (the "Resolution of Formation "); and WHEREAS, pursuant to the provisions of the Resolution of Formation, a proposition to authorize the levy of special taxes within the CFD is to be submitted to the Qualified Electors of the CFD as required by the Mello -Roos Community Facilities Act of 1982, as amended (the "Act" NOW, THEREFORE, BE IT RESOLVED that the Council, acting as the legislative body of the CFD, hereby finds and determines as follows: Section 1. Qualified Electors. The Council has heretofore found that fewer than twelve persons have been registered to vote within the territory of the CFD for the ninety days preceding the close of the public hearing heretofore held by the Council for the purposes of these proceedings. Accordingly, the vote shall be by the landowners within the CFD (the "Qualified Electors "), and each qualified elector at the close of such public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the CFD. Section 2. Election Process. The ballot related to the levy of the CFD special tax shall be submitted to the Qualified Electors at a special election to be held on February 13, 2017, immediately following the adoption of this resolution. Such election shall be a special election to be conducted by the City Clerk (hereinafter referred to as the "Election Official "). If the proposition for the levy of the special tax receives the approval of more than two - thirds (2 /3rds) of the votes cast on the proposition, the special tax thereby approved may be levied as provided for in the Resolution of Formation. 17 Section 3. Petition on File. There is on file with the City Clerk a Petition, Consent and Waiver executed by each qualified elector of the CFD requesting a shortening of the time for the special election in order to expedite the process of formation of the CFD and unanimously waiving any requirement for analysis and arguments in connection therewith. Section 4. Conduct of the Election. The Election Official has consented to conducting the special election on February 27, 2017, which date is less than 125 days following the adoption of the Resolution of Formation. The special election shall be conducted by personally delivered or mailed ballots and in accordance with the provisions of law regulating elections of the CFD insofar as such provisions are determined by the City Cleric to be applicable. The voted ballots shall be returned to the City Clerk not later than 4:30 p.m. on February 27, 2017; provided that if all of the Qualified Electors have voted prior to such time, the election may be closed by the City Clerk. Section 5. Ballot. The form of the ballot for the election is attached hereto as Exhibit A and by this reference incorporated herein. The Election Official shall cause to be delivered to each of the Qualified Electors of the CFD a ballot in said form. Each ballot shall indicate the number of votes to be voted by the respective qualified elector based upon the number of acres of land or portion thereof which he or she owns within the CFD. The identification envelope for return of the ballot shall be enclosed with the ballot, shall have the postage prepaid and shall contain: (a) the name and address of the qualified elector; (b) a declaration, under penalty of perjury, stating that the qualified elector is the owner of record, or the authorized representative thereof, and is the person whose name appears on the identification envelope; (c) the printed name, signature and address of the qualified elector; (d) the date of signing and place of execution of the declaration described above; and (e) a notice that the envelope contains an official ballot and is to be opened only by the canvassing board. Analysis and arguments with respect to the ballot proposition are hereby waived. Section 6. Vote. The appropriate mark on the ballot placed in the voting square after the word "YES" shall be counted in favor of the adoption of the proposition, and the appropriate mark placed in the voting square after the word "NO" in the manner as authorized, shall be counted against the adoption of such proposition. Section 7. Receiving Ballots. The Election Official shall accept the ballots of the Qualified Electors in the office of the City Clerk to and including 4:30 p.m. on February 27, 2017, whether said ballots shall be personally delivered or received by mail. Section 8. Election Procedure. The Election Official is hereby authorized to take any and all steps necessary for holding the above special election. The Election Official shall perform and render all services and proceedings incidental to and connected with the conduct of the special election, including but not limited to, the following: A. Prepare and furnish the necessary election supplies for the conduct of the election. B. Cause to be printed the requisite number of official ballots, tally sheets and other necessary forms. C. Furnish official ballots for the Qualified Electors of the CFD. 18 D. Cause the official ballots to be presented to the Qualified Electors, as required by law. E. Receive the returns of the election and supplies. F. Sort and assemble the election material and supplies in preparation for the canvassing of the returns. G. Canvass the returns of the election. H. Furnish a tabulation of the number of votes given in the election. I. Conduct and handle all other matters relating to the proceedings and conduct of the election in the manner and form as required by law. PASSED AND ADOPTED bye the City Council of the City of Petaluma at a regular meeting of said Council held on the 27' day of February 2017, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 19 EXHIBIT A CITY OF PETALUMA Community Facilities District No. 2016 -01 (Petaluma Riverfront) OFFICIAL BALLOT SPECIAL TAX ELECTION This ballot is for the special landowner election. You must return this ballot in the enclosed postage paid envelope to the office of the City of Petaluma City Clerk no later than 4:30 p.m. on February 27, 2017, either by mail or in person. The office of the City Clerk is located at 11 English Street, Petaluma, CA 94952. To Vote, mark a cross (X) in the voting square after the word "YES" or after the word "NO." All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void. If you wrongly mark, tear, or deface this ballot, return it to the City Clerk for the City of Petaluma and obtain another. BALLOT MEASURE: Shall special taxes be levied annually on Taxable property within the City of Petaluma (`the City ") Community Facilities District No. 2016 -01 (Petaluma Riverfront) YES: (the "CFD "), County of Sonoma, State of California, to pay for the cost of services described in Exhibit "A" to Resolution No. adopted by the City Council on NO: January 9, 2017, and to pay expenses incidental thereto and to levy the collection of the special taxes, at the special tax rates and pursuant to the method of apportioning the special taxes set forth in Exhibit `B" to Resolution No. By execution in the space provided below, you also confirm your waiver of the time limit pertaining to the conduct of the election and any requirement for notice of election and analysis and arguments with respect to the ballot measure, as such waivers are described and permitted by Section 53326(a) and 53327(b) of the California Government Code. Number of Votes: Property Owner: Attention: Address: C Title: 20 Attachment 3 DECLARING RESULTS OF SPECIAL TAX ELECTION, DETERMINING VALIDITY OF PRIOR PROCEEDINGS, AND DIRECTING RECORDING OF NOTICE OF SPECIAL TAX LIEN CITY OF PETALUMA Community Facilities District No. 2016 -01 (Petaluma Riverfront) WHEREAS, in proceedings heretofore conducted by the City Council ( "Council ") of the City of Petaluma (the "District "), County of Sonoma, State of California, pursuant to the Mello - Roos Community Facilities Act of 1982, as amended (the "Act "), has previously undertaken proceedings to create and did establish the City of Petaluma Community Facilities District No. 2016 -01 (Petaluma Riverfront) (the "CFD ") pursuant to the terms and provisions of the "Mello - Roos Community Facilities Act of 1982," being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act "); and WHEREAS, the Council has heretofore adopted a resolution calling a special election of the qualified electors in the territory of land of the CFD as authorized by and accordance with the Act; and WHEREAS, the Council did call for and order to be held an election to submit to the qualified electors within the CFD a proposition relating to the levy of special taxes within the CFD; and WHEREAS, all requirements, including but not limited to any time limit, pertaining to the conduct of the special election have been waived by unanimous consent of the qualified electors of the CFD as authorized by the Act, which executed Landowner Petition, Waiver and Consent from each qualified elector is on file with the City Clerk and with the concurrence of the City Clerk as the designated election official (the "Election Official ") conducting the election; and WHEREAS, as authorized by the unanimous waiver of special election requirements by all qualified electors pursuant to the Act (California Government Code section 53326(a)), the special election is by ballot mailed with the Notice of Public Hearing to all of the property owners within the CFD by the Election Official, to be tabulated by the Election Official at 4:30 p.m. or as soon thereafter at the close of the public hearing on February 27, 2017; and WHEREAS, the Election Official has certified that a ballot in the form set forth in Exhibit A hereto was caused to be delivered to each of qualified electors in the CFD, that each ballot indicated the number of votes to be voted by the respective landowner to which it pertains, that each ballot was accompanied by all supplies and written instructions necessary for the use and return of the ballot, and that the envelopes to return the ballot were enclosed with the ballot, and contained the following: (a) the name and address of the landowner, (b) a declaration, under penalty of perjury, stating that the voter is the owner of record or authorized representative of the 21 landowner entitled to vote and is the person whose name appears on the envelope, (c) the printed name, signature and address of the voter, (d) the date of signing and place of execution of the declaration pursuant to clause (b) above, and (e) a notice that the envelope contains an official ballot; and WHEREAS, the City Clerk accepted the ballots of the qualified electors in her office upon and prior to 4:30 p.m. on February 27, 2017, or as soon thereafter as the matter could be heard, which is the special election date, whether said ballots be personally delivered or received by mail. The City Clerk also made available ballots to be marked at her office on the election day by said qualified electors; and WHEREAS, the City Clerk has on file a Canvass and Statement of Results of Election, a copy of which is attached hereto as Exhibit B; and WHEREAS, the Council has reviewed that canvass and hereby approves it; and WHEREAS, at this time said election has been held and the measure voted upon such measure did receive the favorable votes of at least 2/3's the qualified electors within the CFD, and this Council desires to declare the results of the election in accordance with the provisions of the Elections Code of the State of California. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PETALUMA, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT NO. 2016 -01 (PETALUMA RIVERFRONT), DOES HEREBY RESOLVE, DECLARE, FIND, DETERMINE AND ORDER AS FOLLOWS: Section 1. Recitals. The foregoing recitals are all true and correct. Section 2. Issues Presented. The issues presented at the special election were the levy of a special tax within the CFD pursuant to Resolution No. (the "Resolution of Formation'). Section 3. Canvass and Issues Approved. The Council hereby approves the Canvass and finds that it shall be a permanent part of the record of its proceedings for the CFD. Pursuant to the Canvass and Statement of Results of Election, the ballot proposition presented at the special election was approved by the qualified electors of the CFD by more than two - thirds of the votes cast at the special election. The City Clerk is hereby directed, pursuant to the provisions of the Elections Code of the State of California, to enter in the minutes the results of the election as set forth in said Canvass and Statement of Results of Election. Section 4. Proceedings Approved. Pursuant to the voter approval, the CFD is hereby declared to be fully formed with the authority to levy the special taxes in accordance with the approved Rate and Method of Apportionment of Special Tax as heretofore provided in these proceedings and in the Act. It is hereby found that all prior proceedings and actions taken by this Council with respect to the CFD were valid and in conformity with the Act. Section 5. Notice of Special Tax Lien. The City Clerk is hereby directed to complete, 22 execute and cause to be recorded in the office of the County Recorder of the County of Sonoma a notice of special tax lien in the form required by the Act, such recording to occur no later than 15 days following adoption by the Council of this resolution. PASSED AND ADOPTED by the City Council of the City of Petaluma at a regular meeting of said Council held on the 27th day of February, 2017, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 23 EXHIBIT A CITY OF PETALUMA Community Facilities District No. 2016 -01 (Petaluma Riverfront) OFFICIAL BALLOT SPECIAL TAX ELECTION This ballot is for the special landowner election. You must return this ballot in the enclosed postage paid envelope to the office of the City of Petaluma City Clerk for the no later than 4:30 p.m. on February 27, 2017, either by mail or in person. The office of the City Clerk is located at 11 English Street, Petaluma, CA 94952. To Vote, mark a cross (X) in the voting square after the word "YES" or after the word "NO." All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void. If you wrongly mark, tear, or deface this ballot, return it to the City Clerk for the City of Petaluma and obtain another. BALLOT MEASURE: Shall special taxes be levied annually on Taxable property within the City of Petaluma (`the City ") Community Facilities District No. 2016 -01 (Petaluma Riverfront) YES: (the "CFD "), County of Sonoma, State of California, to pay for the cost of services described in Exhibit "A" to Resolution No. adopted by the City Council on NO: January 9, 2017, and to pay expenses incidental thereto and to levy the collection of the special taxes, at the special tax rates and pursuant to the method of apportioning the special taxes set forth in Exhibit `B" to Resolution No. By execution in the space provided below, you also confirm your waiver of the time limit pertaining to the conduct of the election and any requirement for notice of election and analysis and arguments with respect to the ballot measure, as such waivers are described and permitted by Section 53326(a) and 53327(b) of the California Government Code. Number of Votes: Property Owner: Attention: Address: IN Title: 24 EXHIBIT B CITY OF PETALUMA Community Facilities District No. 2016 -01 (Petaluma Riverfront) CANVASS AND STATEMENT OF RESULT OF ELECTION I hereby certify that on this date, I canvassed the returns of the election held on this date, in Community Facilities District No. 2016 -01 (Petaluma Riverfront) of the City of Petaluma which election is designated as the Special Tax Election, and the total number of ballots cast and the total number of votes cast for and against the measure are as follows and the totals as shown for and against the measure are full, true and correct: Qualified Landowner Ballots Landowner Votes Ballots Cast Votes Cast YES NO City of Petaluma Community Facilities District No. 2016 -01 Special Tax Election February 27, 2017 2 .38 BALLOT MEASURE: Shall special taxes be levied annually on Taxable property within the City of Petaluma (`the City ") Community Facilities District No. 2016 -01 (Petaluma Riverfront) (the "CFD "), County of Sonoma, State of California, to pay for the cost of services described in Exhibit "A" to Resolution No. adopted by the City Council on January 9, 2017, and to pay expenses incidental thereto and to levy the collection of the special taxes, at the special tax rates and pursuant to the method of apportioning the special taxes set forth in Exhibit `B" to Resolution No. IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 27th day of February, 2017. CITY OF PETALUMA C City Clerk 25 Attachment 4 CITY OF PETALUMA PUBLIC HEARING REPORT COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) FEBRUARY 2017 PREPARED FOR: CITY COUNCIL CITY OF PETALUMA oW (THIS PAGE INTENTIONALLY LEFT BLANK) PAGE 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) IConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 PAGE li (THIS PAGE INTENTIONALLY LEFT BLANK CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 (PETALUMA RIVERFRONT) �ConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 PAGE III TABLE OF CONTENTS INTRODUCTION......................................................................................... ..............................1 LAND USE 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 MANNEROF 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) ConsultingGYOUp PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 PAGE IV TABLE OF FIGURES FIGURE1 - LAND USE PLAN ...................................................................... ..............................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 N0. 2016 -01 (PETALUMA RIVERFRONT) [COnSultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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 ") adopted 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 COMMUNITY FACILITIES DISTRICT No. 2016 -01 ( PETALUMA RIVERFRONT) SCIConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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 I 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) SCIConsulltiingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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) EConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 PAGE 4 FIGURE 2 - ESTIMATE OF ANNUAL MAINTENANCE AND SERVICING COSTS Annual Cost Component Quantity Unit Cost Unit Cost Calc a b c= a` b Residential Land Uses 4.6 $10,454 Acre $48,090 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 $38,709 Nonresidential Land Uses 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 No. 2016 -01 ( PETALUMA RIVERFRONT) SCAConsultiingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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 N0.2016 -01 ( PETALUMA RIVERFRONT) IConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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) SCIConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 PAGE 7 FIGURE 4— ALLOCATION OF ANNUAL COSTS Notes: 1 Assumes an employee /hotel guest equivalent park use of 0.12 residents. CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT N0. 2016 -01 (PETALUMA RIVERFRONT) SCIConsulltllngGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 % Cost Allocation $ Cost Allocation Annual Cost Component Cost Res, Nonres. 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 N0. 2016 -01 (PETALUMA RIVERFRONT) SCIConsulltllngGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 PAGE 8 FIGURE 5 — DETERMINATION OF EQUIVALENT DWELLING UNITS ( "EDUs 7) Residents per Dwelling Unit I Dwelling Units 1 Employees per 1,000 Sq. Ft. Land Use Type 1,000 Sq. Ft. EDU Factor Units EDUs Calc a b= a/3.40 c d =b *c Residential Single - Family Detached 3.40 1.00 134 134.0 Single - Family Attached 2.50 0.74 39 28.7 Multi - Family 1.70 0.50 100 50.0 Total Residential 273 212.7 Nonresidential Retail / Commercial 2.94 0.86 6.2 5.4 Office 3.47 1.02 47.0 48.0 Hotel / Motel 2.94 0.86 75.4 65.2 Total Nonresidential 128.5 118.5 Notes: 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) iConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 c \ » u CD / / 'IT E § / 7 \ - � CD / $ 7 7 2 2 k ƒ j� # 7 c y p ^// W f 7\ m G» w 2 3 = / a / / k \ 1- \ � Jc ± o _ _ CO. _ _ _ . k � a 3 CN @ / OR _ / - \ \ \ / k & R 2 2 2 co 2 4 . / / S + G , \ \ _ 6 6 6 a S k / � 2 _ k ¢ L) o = � o m $ f / 0 / 2 o \ §§ y 2 )/ 5 a f 2 y / m F / § % % f a \ \ / ƒ w / / / / J. E o I / / � � 0 O c c � � ■ c 0 Q U) § \ / \/ CN LU � 8 j (-6 LL- CD a- R � \ j /� k ) ca <c L" 0 -j \ w \ 0C) 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) ECOnsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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) SCIConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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) iConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 W w c� d 0 0 s. C N 0 V t�! 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Ix Q ¢ - rwLLU O Wrc HP ¢ ❑ LLO� Q �c O <OwO EOWm a� W m LL lQ d c Fxnz U zi Zw O F �JLL 8. no ] W oaNO �O w z Z W f4 (on Q LL O N ¢O}a wm p�Z W� Z U 'Mr 0, w n NNU ❑ wwoz" "L a.0 Q 'Q ' Li (n ��LLU�~LL Q W� Q Y ?' w O LUCLE _& =UZ � jO m y L. wp 0 ZWO- . � z vQ a � w Owm O U wW °wC VUz D O� o U a U U �3Ni�LLUI= w - U (L-!z 0 U H l O- ❑N� 0 U in, Q) f! 3� !) xEi( 11 I-- 03 G) N m000i- X000 O s000ga (0 (0CY) (0m z�aaa � F X000000 mot; .2999999 ❑ooddoo w�'y 2 rn rn rn rn rn rn mmcq<ocQcoco mwmwwww y ','i` $ ta Eli 0) o 4C3 D w ' 0 m CL a � U t G 9 t O a Q l F'/# NaLLC d 0 0 s. C N 0 V t�! H z O o' w o' w N _ ZD O � w m w LL- C) N O O Z w U � � O Z co w 0 W w = U '� CO � U � Q L L- nLL z z O W U U n PAGE 15 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 N0.2016 -01 (PETALUMA RIVERFRONT) SCIConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 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 RIVERFRONT) iConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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) SCIConsultinqGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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 I 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) SCIConsultinqGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 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 COMMUNITY FACILITIES DISTRICT No. 2016 -01 ( PETALUMA RIVERFRONT) SCIConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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) SCIIConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 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) SCIConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 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) SCIConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 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) SCIConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017 PAGE 24 (THIS PAGE INTENTIONALLY LEFT BLANK CITY OF PETALUMA COMMUNITY FACILITIES DISTRICT No. 2016-01 ( PETALUMA RIVERFRONT) (ConsultingGroup PRELIMINARY PUBLIC HEARING REPORT, FEBRUARY 2017