Title
Introduction of Ordinance Amending the Alameda Municipal Code by Amending Division IV (Annexation of Territory) of Subsection 3-70 (Special Tax Financing Improvement Code), of Division I (General Provisions), of Article IV (Special Tax Financing), of Chapter III (Finance and Taxation) to Allow for Alternative Procedures for Future Annexation of Property Consistent with Amended State Law. (Base Reuse 858)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Introduction of Ordinance Amending the Alameda Municipal Code by Amending Division IV (Annexation of Territory) of Subsection 3-70 (Special Tax Financing Improvement Code), of Division I (General Provisions), of Article IV (Special Tax Financing), of Chapter III (Finance and Taxation) to Allow for Alternative Procedures for Future Annexation of Property Consistent with Amended State Law.
BACKGROUND
On June 16, 2015, the City Council approved the Development Plan, and a Disposition and Development Agreement (DDA) between the City of Alameda and the developer, Alameda Point Partners (APP), for the 68-acre Site A development, which is the first major public/private development at Alameda Point since the former Navy base closed in 1997. The DDA for the Site A development requires APP to invest over $103 million in public infrastructure improvements and public amenities and provide annual funding for municipal services and transportation services and programs consistent with the approved Development Plan and Site A Transportation Demand Management (TDM) Compliance Strategy in compliance with the Alameda Point TDM Plan.
City staff and APP are proposing the formation of a Community Facilities District (CFD) under the City of Alameda’s Special Tax Financing Improvement Code [Alameda Municipal Code (AMC) Section 3-70] to fund annual municipal services and TDM services and programs associated with the Site A project in order to implement Section 3.1(c) of the DDA. On October 4, 2016, the City Council amended the AMC related to CFDs to allow for the financing of transportation services and programs. Since then, as future progress has been made towards establishing the Site A CFD, it became clear that additional changes to the AMC were necessary to allow the Site A CFD to eventually include all of Alameda Point.
All properties at Alameda Point to be transferred into private ownership, in addition to the property being conveyed to APP, such as in the adaptive reuse area, will be required to participate in the CFD to pay their “fair share” of the municipal and transportation services to be funded by the CFD. The CFDs established by the City for the Site A project will include a map of the rest of Alameda Point as a “future annexation area” so that these adaptive reuse parcels can be annexed into the existing CFD for municipal and transportation services at or soon after they are conveyed to private parties.
However, the AMC authority for establishing CFDs was established pursuant to an ordinance that was adopted before the provisions to CFDs in the Government Code was amended in 2007. As a result, staff is recommending an amendment to the AMC that would allow for alternative procedures for annexation of territory to CFDs formed under the AMC to be consistent with the 2007 amended State Law, which will make it easier for the City to annex other parts of Alameda Point into the CFD created by City for Site A.
The City has established several CFDs in the past to finance various public improvements and municipal services, most recently for the Alameda Landing Area. A CFD allows for the annual levy of a special tax on property in a designated area to pay costs of administering the CFD, and the payment of costs of services or public facilities the CFD is authorized to finance (as well as the payment of debt service on bonds issued for the CFD to finance public facilities). There is no impact on the General Fund or on owners of property outside of the CFD boundaries as a consequence of the establishment of a CFD.
DISCUSSION
The provisions of the Government Code relating to the annexation of property to community facilities districts formed under the Government Code were amended in 2007 (the “2007 Amendments”) to allow for annexations to occur in a more simplified manner than previously allowed.
Prior to the 2007 Amendments, to annex property to a CFD, the legislative body that sponsored the CFD needed to conduct proceedings that included the preparation of a boundary map indicating the area to be annexed, conduct a public hearing regarding the annexation, conduct an election by the qualified electors of the area to be annexed, and record an amendment to the notice of special tax lien previously recorded against the property in the community facilities district to which the property was being annexed. Those procedures typically took several months to complete.
The 2007 Amendments allow for a more simplified annexation process. They provided, in effect, that if the area to be annexed in the future is identified in the boundary map for the applicable CFD at the time of formation of the CFD, the public hearing required for the future annexation of property could be combined with the public hearing required for the establishment of the CFD. Then, when the time for annexation arose, all that was needed to complete the annexation process was the submission to the sponsoring public agency of the consent of the owner of the property to its annexation, and the subsequent recording of an amendment to the notice of special tax lien for the CFD. Thus, annexations to CFDs formed under the provisions of the Government Code can occur without any elongated process.
The Ordinance enacting the City’s Special Tax Financing Improvement Code as a part of the AMC was adopted before 2007, so that Code does not currently include provisions for the simplified annexation procedures contained in the 2007 Amendments to the Government Code. Because the City is moving forward to establish a CFD under the City’s Special Tax Financing Improvement Code in the Alameda Point area to pay for various municipal services, and the City anticipates the need for several annexations to that CFD after it has been formed, is now recommended that the City’s Special Tax Financing Improvement Code contained in the AMC be revised to allow for the same simplified annexation procedures currently allowed by the Government Code. Specifically, these changes will facilitate a simplified approach to the funding of municipal and transportation services and programs by means of the CFD established for Site A to annex additional property in the rest of Alameda Point.
FINANCIAL IMPACT
There is no financial impact to the General Fund or the Base Reuse Fund to adopt an ordinance amending Sub-section 3.70 of the Alameda Municipal Code (Establishment of a Community Facilities District to Finance Certain Services). In fact, these changes assist in the implementation of the fiscal neutrality policy for Alameda Point and help ensure that there are dedicated annual sources of funds for municipal services and transportation and TDM services and programs for new development at Alameda Point.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Division IV (Annexation of Territory) of Section 3-70 (Special Tax Financing Improvement Code), of Division I (General Provisions), of Article IV (Special Tax Financing), of Chapter III (Finance and Taxation).
ENVIRONMENTAL REVIEW
The proposed amendment to the Alameda Municipal Code regarding annexation of territory to community facilities districts is categorically exempt under California Environmental Quality Act (CEQA)pursuant to CEQA Guidelines section 15378(b)(4).
RECOMMENDATION
Introduce Ordinance amending the Alameda Municipal Code by Amending Division IV (Annexation of Territory) of Subsection 3-70 (Special Tax Financing Improvement Code), of Division I (General Provisions), of Article IV (Special Tax Financing), of Chapter III (Finance and Taxation) to allow for alternative procedures for future annexation of property consistent to community facilities, districts formed under the Alameda Municipal Code with amended State Law.
Respectfully submitted,
Jennifer Ott, Base Reuse Director
By,
Jennifer Ott, Base Reuse Director
Financial Impact section reviewed,
Elena Adair, Finance Director