For City Council Meeting on March 25, 2025
TO: Honorable Mayor and City Council
FROM: Tanya Williams, City Manager
AUTHOR: Colby Cataldi, Director of Community Development
Title
Request City Council to Adopt Proposed Resolution No. 8331 to approve the Joint Community Facilities Agreement in connection with Community Facilities District No. 2024-1 of the Colton Joint Unified School District.
Body
RECOMMENDATION
Staff recommends that the City Council adopt a Resolution approve the Joint Community Facilities Agreement in connection with Community Facilities District No. 2024-1 of the Colton Joint Unified School District.
BACKGROUND
Community Facilities Districts (CFDs) are established pursuant to the provisions of the California Government Code Section 53311 et seq. (commonly known as the “Mello-Roos Community Facilities Act of 1982”) (Act) and are a form of financing that can be used by cities, counties, school districts, and special districts. CFDs raise money through special taxes that must be approved by 2/3 of the voters within a CFD. The City Council is the legislative body of any CFD the City forms. Most often, CFDs are formed by the landowner prior to subdivision. A CFD can be formed to finance a wide list of improvements, which include roads, water facilities, sewers and schools. The taxes are secured by a continuing lien and are levied against property within the CFD on an annual basis. The revenue stream is used to pay debt service on bonds.
It should be noted, in the case of CFD No. 2024-1 of the Colton Joint Unified School District, the CFD was formed by and administered by Colton Joint Unified School District.
ANALYSIS/DISCUSSION
On September 19, 2024, the Board of Education of the Colton Joint Unified School District (the “School District”) formed and established Community Facilities District No. 2024-1 of the Colton Joint Unified School District (the “CFD”) over certain property within the School District (the “Property”) owned by Avila Collection, LLC, a Nevada limited liability company (“Owner”). The Property is located within unincorporated portions of the County of San Bernardino and is also located within the boundaries of the School District and the sewer service boundaries of the City. The proposed development on the Property will consist of 181 multi-family residential units.
Section 53316.2 of the Act provides that a community facilities district may finance facilities to be owned or operated by a public agency other than the agency that created the community facilities district pursuant to a joint community facilities agreement. The School District and the Owner have requested that the City enter into a Joint Community Facilities Agreement (the “JCFA”) in order to provide for the financing for all or a portion of sewer treatment and collection fees imposed by the City upon the Property (the “City Fees”), which City fees will be used for sewer treatment and collection facilities owned and operated by the City and Rialto Utility Authority (the “City Facilities”). A draft of the JCFA is attached hereto.
The School District formed the CFD and is responsible to administer the CFD and the issuance of CFD bonds. The city is not part of the administration of the CFD, the issuance of CFD bonds or administration of the CFD bonds. The CFD will issue tax-exempt or taxable bonds to finance the City fees and other capital improvements and fees of the School District.
If CFD bond proceeds are not available prior to the time payment is due of all or a portion of the City Fees, the Owner shall pay those fees to the City, and the Owner will be reimbursed from CFD bond proceeds. Once CFD bond proceeds are available, the remaining unpaid City Fees will be advanced to the City from bond proceeds.
ENVIRONMENTAL IMPACT
The proposed action does not constitute a “project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(b) of the State CEQA Guidelines, a project does not include organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
The City identified several goals and objectives within the City’s General Plan through which the City looks to improve the community. The proposed action is consistent with the following goals and objectives:
Goal 3-1: Strengthen and diversify the economic base and employment opportunities and maintain a positive business climate.
Goal 3-6: Require that all developed areas within Rialto Sphere of Influence are adequately served with essential public services and infrastructure.
Policy 3-6.1: Coordinate all development proposals with other affected public entities to ensure the provision of adequate public facilities and infrastructure services.
Goal 3-7: Upgrade public infrastructure as an inducement to promote private investment.
LEGAL REVIEW
The City Attorney has reviewed and recommends approval of this staff report.
FINANCIAL IMPACT
There is no financial impact to the City with this action.
ATTACHMENTS
1. Resolution Authorizing Execution and Delivery of Joint Community Facilities Agreement in connection with CFD No. 2024-1 of the Colton Joint Unified School District; and
2. Joint Community Facilities Agreement.