For Economic Development Committee January 29, 2020
TO: Honorable Economic Development Committee Members
APPROVAL: Rod Foster, City Administrator
FROM: Matt Schneider, Community Development Director
Title
Lytle Development, El Rancho Verde - CFD Services Tax
Body
BACKGROUND:
The City entered into a Development Agreement with Lytle Development on August 14, 2012 that among other things established a service tax for the El Rancho Verde project at $104.00 per unit as a component of the project's overall facilities tax. City staff have been working with Lytle Development the last several months to develop options to increase the project's service fee to $302.90 per unit to better align with the service taxes currently realized in the City. Lytle Development has proposed two options for the City's consideration which are detailed in the attached letter.
ANALYSIS/DISCUSSION:
In order to accommodate the City's request for an increased service tax and maintain the same level of desired facilities tax funding, the project Developer has proposed two options. Under option one, the term of the CFD Bond would increase from 30 years to 35 years. Additionally, the term of collecting Pay-Go special taxes would increase from 20 years to 30 years. Under option two, the term of the CFD bond would again increase from 30 years to 35 years but instead of increasing the term of the Pay-Go special taxes, the Developer is requesting the City agree to waiving the Development Agreement Fee of $1,030 per lot. A cost comparison of the two options is provided in Table 2, page 2 of the attached letter.
Both options presented would increase the term of the CFD Bond from 30 years to 35 years. While bond terms of this nature are more commonly set at 30 years, many agencies have set bonds for longer terms and the proposed 35 year term would be permissible under the current terms of the draft Rate and Method of Apportionment of Special Tax (RMA) for the project. It should also be noted ...
Click here for full text