For City Council Meeting August 26, 2025
TO: Honorable Mayor and City Council
APPROVAL: Tanya Williams, City Manager
FROM: Christina Taylor, Community Development Director
Title
Request City Council to: (1) Conduct a Public Hearing and Take Public Comment; (2) Adopt Resolution No. 8396, Authorizing The Annexation Of Territory To Community Facilities District No. 2016-1 (Public Services) (Annexation No. 8) And Authorizing The Levy Of A Special Tax And Submitting The Levy Of Tax To The Qualified Electors; (3) Adopt Resolution No. 8397, Calling A Special Election And Submitting To The Voters Of Annexation No. 8 Of City Of Rialto Community Facilities District No. 2016-1 (Public Services) Propositions Regarding The Annual Levy Of Special Taxes Within Annexation No. 8 To Finance Public Services, And The Establishment Of An Appropriations Limit; (4) Hold A Special Election by Opening Ballots; and, (5) Following The Election Adopt Resolution No. 8398 Making Certain Findings, Certifying The Results Of The Election And Adding Property To Community Facilities District No. 2016-1 (Public Services) (Annexation No. 8).
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council:
1) Conduct Public Hearing for Annexation No. 8 to CFD 2016-1;
2) Adopt a Resolution Authorizing the Annexation of Territory (Annexation No. 7) to CFD 2016-1;
3) Adopt a Resolution Calling a CFD Special Election;
4) Conduct the CFD Special Election; and,
5) Adopt a Resolution Certifying Special Election Results.
BACKGROUND
The Mello-Roos Community Facilities Act of 1982 (“Act”), being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, was created to provide an alternate method of financing for needed improvements and services. The Act allows the City Council to establish a Community Facilities District (“CFD”) for financing public improvements and services.
On September 27, 2016, the City Council approved Resolution No. 7003, a Resolution of Intention to Establish CFD 2016-1. On November 22, 2016, by Resolution No. 7031, the City Council established CFD 2016-1, a Mello Roos Community Facilities District with the intention that future residential developments within the City of Rialto (the “City”) would annex into this district when there is no CFD needed for public improvements. The City conditions new development to annex into CFD 2016-1 to fund increases in police protection services, fire protection and suppression services, ambulance and paramedic services, park maintenance and other public services within the City of Rialto arising from the increased need for such services in the new developments.
Since the formation of CFD 2016-1, the following nine (9) residential projects have been incorporated into the CFD: Serrano Place by RC Hobbs, Adams Grove by Crestwood Communities (Annexation No. 1), Etiwanda Homes by 642 N. Linden LLC (Annexation No. 2), Bella Villagio by Mr. Shareef Awad and Santiago by RC Hobbs (Annexation No. 3), Seasons at Acacia - East by Richmond American Homes (Annexation No. 4), Seasons at Acacia - West by Richmond American Homes (Annexation No. 5), The Depot by Century Communities (Annexation No. 6), and most recently Cedar Villas by Monte Vista Homes (Annexation No. 7).
On July 22, 2025, the City Council adopted Resolution No. 8372, which identified the boundary map for the territory proposed for Annexation No. 8 and declared its intention to authorize the annexation of that territory to Community Facilities District (CFD) 2016-1 (Public Services).
ANALYSIS/DISCUSSION
Annexation No. 8 into CFD 2016-1 entails the annexation of a proposed development known as “Althea Avenue Project” by ADC Rialto BFR, LLC. The site is located at the terminus of Althea Avenue, approximately 620 feet south of Merrill Avenue, and includes the development of 20 new single-family detached residential units. The annexation consists of approximately 2.60 acres and is within the boundaries of assessor’s parcel number 0131-141-71, as depicted on the Annexation Boundary Map (Exhibit D).
As part of the annexation process, the City contracted with DTA Municipal Solutions for the preparation of the necessary resolutions and balloting procedures for the annexation.
The Fiscal Year 25/26 tax rate for CFD 2016-1 is $357.48. Planned rate increases of the lesser of 3% or CPI occur at the start of each fiscal year (July 1st) to accommodate future increases in costs. If annexation is successful, the annual special tax of $357.48, and subsequently the planned increases, will be added to the property tax rolls for payment by each future homeowner after the homes have been occupied. ADC Rialto BFR, LLC., is aware of the annual tax rate for its development.
The attached resolutions will complete the proceedings for the annexation of the Althea Avenue Project into Community Facilities District 2016-1.
Registered Voter Certification
Since the boundary of the proposed Annexation No. 8 has fewer than 12 registered voters, as verified by the San Bernardino County Registrar of Voters (Exhibit E), the election to form the CFD is voted on by the current property owner(s).
The City Clerk received one (1) ballot from the property owner for the site included in Annexation No. 8 to CFD 2016-1.
Summary of Annexation Process
The City Council will be asked to open the public hearing to receive public comment related to proposed Annexation No. 8. Once the public hearing is closed, Council may then adopt the Resolution (Exhibit A) that approves the annexation of the property to CFD 2016-1. The Council will then be asked to adopt the Resolution calling for the Special Election (Exhibit B) and simultaneously hold the special election. The ballots will be tabulated and recorded by the City Clerk. If the election is successful, the Council will then adopt the Resolution Certifying the Results of the Election (Exhibit C), which, upon an affirmative vote of the electors, will complete the annexation of the property into CFD 2016-1. Subsequent to the certification of an affirmative vote, the City Clerk will cause an Amended Notice of Special Tax to be recorded with the County Recorder. Since this CFD has already been established by the Council, adopting an Ordinance and authorizing the levy of the special tax is not required.
ENVIRONMENTAL IMPACT
The proposed annexation to CFD 2016-1 is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
This action is consistent with Guiding Principle 3A in the General Plan:
Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
LEGAL REVIEW
The City Attorney has reviewed and approved the staff report and attached resolutions.
FINANCIAL IMPACT
Operating Budget Impact
The proposed CFD special tax of $357.48, and the subsequently planned rate increases set forth in the RMA, per developed single-family residential lot will be added to the property tax rolls for payment by each future homeowner. This action will generate $7,149.60 annually in the first year for police and fire services. The City will deposit the annual levies into the General Fund, and the City Council may then budget public services enhancements. The Police Department and Fire Department will receive their budgetary pro-rata shares of 39.6% and 26.4%, respectively, as funds are received. Additionally, the cost to create and process Annexation No. 8 to CFD 2016-1 is fully funded by the developer.
Capital Improvement Budget Impact
The annexation has no impact to the capital improvement budget.
Licensing
There is no business license required because of this action.