October 5, 2022
Submitted via email
Dear Mayor Oglesby and City Council Members,
The Council is to consider resolutions related to a Community Facilities District (CFD) tomorrow. LandWatch asks that the Council consider two changes to the resolutions.
First, the proposed assigned tax rates for residential units should be restated on a per-square-foot or per-bedroom basis, rather than on a per dwelling unit basis. Tax assessments and impact fees that are made on a per dwelling unit basis force smaller dwelling units to subsidize larger units since they all pay the same tax. This forced subsidy inhibits development of affordable units and acts as a penalty to lower-income families.
Second, the resolutions should be modified to eliminate the future annexation area. The staff report does not identify development plans for this area, and we are not aware of any. It is not clear that the City has secured the agreement of the County to incorporate its land into a Mello-Roos district, much less to annex it in the future.
Although the staff report references “some flexibility to adjust the rate and method of apportionment applicable to the annexed area,” the staff report provides no discussion of that flexibility. Exhibit B to the Resolution of Intention states that future annexed areas will be in one or more distinct “Tax Zones,” i.e., not in the same “Tax Zone 1” that contains Campus Town. However, Exhibit B is entirely silent as to the method of apportionment that would apply to future Tax Zones for future annexed areas because its “Method of Apportionment of Special Taxes” only applies to Tax Zone 1.
In short, the resolutions are incomplete because they fail to specify how the City would assess future annexation areas. It makes no sense to include future annexed areas in this resolution without specifying how assessments would be made. And it makes no sense to rush into including possible future annexation areas in a Mello-Roos district before any actual plans are under consideration.
Finally, the Council should also request that staff provide the study and assumptions behind the proposed special taxes for fiscal 2023/2024, which appear in Table 1 of the staff report. It is not apparent how these rates were determined. For example, it is not apparent what public facilities these taxes would cover and what development is assumed to come online to pay for these facilities. We understand that these rates might eventually apply only to Tax Zone 1 (or maybe not – Exhibit B does not explain how future tax zones will be assessed), but the public and Council should know how these rates were determined.