10-11-2011 CC RPT 07 - Laserfiche WebLink

Home

Page 2 BACKGROUND In 2006 the then current owner /developer of the Riverwalk Vista project formed a community facilities district to provide a portion of the funding needed to develop the property and sell the homes. The formation proceedings occurred and the outcome was the special district known as CFD 2006 -1. Part of that process involved the adoption of an RMA which includes the formula from which the annual special tax levy is made. The special tax levy generates funds to either pay for eligible improvements directly or to repay bonds issued to fund those improvements. Since 2006, housing values have decreased dramatically. The special taxes levied on homes sold today using the original RMA would cause the effective tax rate to be higher than the current owner /developers of the property in Improvement Area No.1 can accept and still be able to sell the homes. The current owners have filed petitions with the City of Riverside to request change proceedings that would result in a revised RMA for Improvement Area No. 1. That revision would reduce the amount of taxes to be levied annually on the homes. With current market pricing considered, the new RMA will bring the total tax bill into a range of approximately 1.7 %. This is consistent with what was originally intended when the houses were to be priced at a higher level. On September 6, 2011, the City Council adopted a resolution of intention which commenced proceedings for the modification of the RMA for Improvement Area No.1 of CFD 2006 -1 and scheduled a Public Hearing and special election of the property owners for October 11, 2011 at 3:00 PM. Subsequent to the Public Hearing, the City Council will be asked to adopt a resolution (Recommendation 2 -(i) above) that calls for a special election of the property owners to vote on the question of whether to amend the RMA for the purpose of reducing the rates of special taxes on the properties within CFD 2006 -1. The attached Report Regarding Public Hearing and Special Election Concerning Revision of Rates and Method of Apportionment of Special Tax for Improvement Area No. 1 of Community Facilities District No. 2006 -1 ( Riverwalk Vista) documents the steps that have, or need to, occur relative to the change proceedings required for this action to become effective. The property owners voting in this election are anticipated to have returned their ballots in accordance with the timing laid out in the resolution calling the election, and thus allow the City Clerk to canvass the vote and declare the results of the special election immediately. In that case, the City Council may determine the results of the special election by adopting the second resolution (Recommendation 2 -(ii) above). This will conclude the proceedings, and if the measure is successful, the RMA will have been successfully amended and the current owners may continue with their plans to develop the property with a reduced rate of special taxes. FISCAL IMPACT The actions recommended have no fiscal impact on the City of Riverside. If approved, the completed change proceedings will reduce the annual special tax levy on the properties in Improvement Area No. 1 of CFD 2006 -1. 7 -2