COUNCIL DISTRICT: 7
It is recommended that Council continue the public hearing opened on August 6, 2002 and take the following actions relating to the formation of Community Facilities District No. 8 (Communications Hill)
1. Adoption of a resolution for each of the following items to:
a. Form Community Facilities District No. 8 and authorize the levy of a special tax.
b. Call for a special election for Community Facilities District No. 8.
c. Declare the results of the special election; and if approved, direct the recording of the notice of the special tax lien for the District.
2. Approval of an ordinance imposing the levy of special taxes within Communities Facilities District No. 8.
CEQA: Not a project.
Communications Hill is a planned community that has special maintenance needs due to many unique features, including enhanced landscaped areas in the public right-of-way, open space and easement areas.
On June 11, 2002, Council adopted a Resolution of Intention to establish Community Facilities District (CFD) No. 8 pursuant to the City of San José Community Facilities District Financing Procedure (the “Law”); and to authorize the levy of special taxes on the properties within the District. Staff discovered that the maximum special taxes published were actually preliminary numbers and did not reflect the final figures that the consultant prepared to provide a feasible district and that staff, the developer, and property owners have agreed upon.
On July 26, 2002, ballots and election material were mailed to the qualified electors, who have been determined to be the owners of land within the District. The packet included a letter identifying the error in the Resolution of Intention and describing the balloting process.
On August 6, 2002, Council opened a public hearing to receive and record public comments regarding the District. At the hearing, Council directed staff to prepare a revised CFD report correcting the rate and method of calculation that was incorrectly published in the original CFD Report and Resolution of Intention. Council moved to continue the hearing in two weeks.
Attachment A is a report identifying the proposed modifications to the special tax and the effect that change will have on the property owners within the District. The property owners are already aware of the proposed change. The affected properties are shown in Attachment B. The boundaries of the District, as described in Attachment B are recorded in the Santa Clara County Recorder’s Office. The description of services to be provided by the District is listed in Attachment C and the Rate and Method of Apportionment of Special Tax is described in Attachment D.
At this August 20, 2002 meeting, Council will continue the public hearing to receive further comments regarding the District. If there is not a majority protest from the qualified electors and Council approves the modification to the maximum special tax, at the close of the public hearing, Council may adopt a resolution of formation that includes the modifications for CFD No. 8, and authorizes the levy of a special tax within the District. The Resolution of Formation will set forth the Council’s finding that all proceedings involved with the formation of the District were valid and in conformance with the Law.
Following the adoption of the Resolution of Formation, the Council may also adopt a resolution calling for the special election for the property owners to vote on the special tax and to approve an appropriations limit for the District separate from the City’s appropriation limit. The proposed annual appropriations limit for the District is in the amount of $1,700,000.
A special election will then be conducted and Council will direct the Clerk to tabulate the ballots for the District and report the results. If the election results in a two-thirds voter approval, the final actions for Council are the adoption of a resolution declaring the ballot tabulation results; and an ordinance imposing the levy of the special tax on those properties within District as described in the report.
The special tax for CFD No. 8 shall be collected this fiscal year by billing the property owners directly with City invoices. In future years, the special tax shall be collected in at the same time and the same manner as ordinary ad valorem property taxes, provided, however, that CFD No. 8 may, in any particular case, bill the taxes directly to the property owners off the County tax roll.
The Director of Public Works of the City of San Jose, or other officer as designated by the City Manager, is the officer of the City who 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 Section 53340.2 of the California Government Code.
Written notifications were sent to the property owners informing them of the incorrect rate and method of calculation published in the resolution and the CFD Report. Staff has also made personal contact with the property owners to ensure they understood the situation and the balloting process.
This memorandum, related documents and resolutions were prepared in cooperation with the Department of Transportation, the Offices of the City Attorney and City Clerk.
The developer has submitted a deposit of $30,000 to pay for the formation costs for the district, which has been depleted. The developer has been requested to submit an additional $20,000 to continue the formation process. This additional amount should be more than enough to complete the election and associated actions related to the formation. Any unused funds will be returned to the developer.
Director, Public Works Department
IMPACT OF PROPOSED MODIFICATIONS TO THE
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
FOR COMMUNITY FACILITIES DISTRICT NO. 8
Staff discovered errors in Exhibit B, Rate and Method of Apportionment of Special Tax (“RMA”), of Resolution No. 71019 adopted by Council on June 11, 2002 to form Community Facilities District (“CFD”) No. 8 (Communications Hill) (“Resolution of Intent”). Exhibit B, sets forth the maximum special tax rates for residential and non-residential property within CFD No. 8, as well as the procedure for allocating the total annual special tax to properties within the CFD. An incorrect version of the RMA was inadvertently included as Exhibit B to the Resolution of Intention.
The corrected maximum tax rate is:
Land Use Category
As Adopted in the Resolution
As Proposed for Modification
$300 per unit
$667 per unit
$2,806 per acre
$300 per acre
The funds collected through this tax will be used to maintain the unique public features of the Communications Hill planned development, including enhanced landscaped areas in the public right-of-way, open space and easement areas. The proposed operating budget for this district requires that the maximum special tax rate for Residential and Non-Residential Properties be modified in order for the District to be able to provide the services necessary for this planned community. The corrected tax amounts should have no negative impact on the property owners within the District; since the developer and property owners were involved in the discussions when staff and the consultant for the District were defining the maximum. The property owners have been notified of the misprint and understand that the District is only feasible if the maximum tax can be modified.