HomeMy WebLinkAboutResolution - 2221 RESOLUTION NO. 2221
RESOLUTION OF THE CITY OF SAN JACINTO ASSESSMENT DISTRICT NO. 87-1
ESTABLISHING THE ANNUAL SPECIAL TAX FOR PUBLIC FACILITIES FOR FISCAL
YEAR 1994/1995
WHEREAS, the City Council of the CITY OF SAN JACINTO, CALIFORNIA,
(hereinafter referred to as the "Legislative Body" ) , has initiated
proceeding, held a public hearing, conducted an election and received a
favorable vote from the qualified electors relating to the levy of a
special tax in an assessment district, and as authorized pursuant to the
terms and provisions of the "Municipal Improvemetns Act of 191311 , and for
the issurance of bonds under the "Improvement Bond Act of 191511 ,
hereinafter be referred to as "District" and,
WHEREAS, this legislative body, by Ordinance as authorized by Section
3114 of the Streets and Highway Code of the State of California, has
authorized the levy of a special tax to pay for costs and expenses related
to said Assessment District, and this legislative body is desirous to
establish the specific rate of the special tax to be collected for the next
fiscal year for Pubilc Facilities .
NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS:
SECTION 1 . That the above recitals are all true and correct .
SECTION 2 . That the specific rate and amount of the special tax to
be collected to pay for the costs and expenses for the next fiscal year
(1994/95) for the referenced District is hereby determined and established
as set forth in the attached, referenced and incorporated Exhibit "A" .
SECTION 3 . That the rate as set forth above does not exceed the
amount as previously authorized by Ordinance of this Legislative Body, and
is not in excess of that as previously approved by the qualified electors
of the District .
SECTION 4 . That the proceeds of the special tax shall be used to pay,
in whole or in part, the costs of the following, in the follwoing order of
priority:
A. Payment of principal and interest on any outstanding authorized
bonded indebtedness;
B . Necessary replenishment of bond reserve funds or other reserve
funds;
C. Payment of costs and expenses of authorized public facilities;
D . Repayment of advances and loans, if appropriate .
The proceeds of the special taxes shall be used as set forth and shall
not be used for any other purpose .
SECTION 5 . The special tax shall be collected in the same manner as
ordinary ad valorem property taxes are collected, and shall be subject to
the same penalties and same procedure and sale in cases of any delinquency
for ad valorem taxes, and the Tax Collector is hereby authorized to deduct
reasonable administrative costs incurred in collecting any said special
tax.
SECTION 6 . All monies above collected shall be paid into the
Assessment District 87-1 fund, including any bond fund and reserve funds .
SECTION 7 . The Auditor of the County is hereby directed to enter in
the next County assessment roll on which taxes will become due, opposite
each lot or parcel of land effected in a space marked "public improvement,
special tax" or by any other suitable designation, the installment of the
special tax, and for the exact rate and amount of said tax, reference is
made to the attached Exhibit "A" .
SECTION 8 . The County Auditor shall then, at the close of the tax
collection period, promptly render to the City a detail report showing the
amount and/or amounts of such special tax installments, interest, penalties
and percentages so collected and form what property collected, and also
provide a statement of any percentages retained for the expense of making
any such collection.
MOVED, PASSED and ADOPTED at a regular meeting of the City Council on
the 2nd day of August, 1994 by the following vote :
AYES : Councilmembers Leahy, Oaks , Mayor Pro Tem Williams
NOES : None
ABSTAIN None
ABSENT Councilmember Solorio, Mayor Hafliger
Henry Hafliger, Mayor
ATTEST:
David Anderson, City Clerk
Deputy City Clerk
City of San Jacinto
Assessment District No. 87-1
Annual Assessment Report
Prepared by
The Government Finance Group
July 1994
Table of Contents
Page
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
The Bonds
Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Early Redemption Provisions . . , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Assessment Payoffs . . . , , . . . . a .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
BondFunds . . . . . . . . . . . . . . . . . .. . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 4
The Assessments
Development Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Property Ownership . . . . . . . . . . . e . . . . . . . . . . . . . . . . . . . . . . . . a . . . . 5
Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Foreclosure Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Calculation of the Annual Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Appendices
Appendix A: Debt Service Schedule
Appendix B: Delinquency Report
Appendix C: Assessment Roll
Appendix D: Boundary Map
Introduction
The purpose of this report is to review the steps and calculations made in preparation for the
1994/95 annual assessment levy for assessment District No. 87-1 ("AD 87-1"). The report will
also provide the City of San Jacinto ("City") staff with an overview of the current status of the
assessment district.
The report is divided into the following sections:
■ Background
This section provides a brief overview and statistics on the formation of the assessment
district, sale of bonds, and the improvements financed.
■ The Bonds
This section presents general information on the bonds issued for AD 87-1. Included is a
discussion of repayment schedules, call provisions, and the bond funds.
• The Assessments
This section focuses on the assessment of property within AD 87-1. Here, property
subdivision activity, ownership and delinquent assessments will be discussed. Also included
is an explanation of the steps taken to calculate the 1994/95 annual assessments.
• Several Appendices to this report provide an original debt service schedule, delinquency
information, the 1994/95 assessment roll, and a boundary map.
AD 87-1. page 1
Background
Assessment District 87-1 was formed by the City of San Jacinto under the provisions of the
Municipal Improvement Act of 1913. Improvement bonds were then sold under the provisions
of the Improvement Bond Act of 1915 to finance public improvements needed within the
boundaries of the assessment district.
AD 87-1 is located on approximately 23 acres extending southwesterly from the intersection of
Main Street and the San Jacinto River along the Ramona Expressway. When fully developed,
AD 87-1 is expected to include the Scripps Clinic (FHP), a convalescent hospital, a medical
offices complex, and related service and retail shops.
The proceeds of the bond issue were used to acquire infrastructure improvements. The property
owners within AD 87-1 that receive the benefit of these improvements are responsible for paying
an annual special assessment to repay the bonded debt. The annual assessment appears on the
Riverside County property tax bill and is collected with it. At any time, property owners have
the option to prepay the assessment in part or in full to minimize the burden of annual payments.
The following information summarizes the terms of the bond issue.
Total amount of bonds authorized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,415,000
Total amount of bonds issued . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . $114151000
Average annual debt service payment . . . . . . . . . . . . . . . 1 $146,337.21
Date of the bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 19, 1987
Date of final maturity . . . . . . . . . . . . . . . . . . . . . . September 2, 2006
First annual assessment levy . . . . . . . . . . . . . . . . . . . . . . . . . . . Fiscal year 1987/88
Final annual assessment levy . . . . . . . . . . . . . . . . . . . . . . . . . . Fiscal year 2005106
Improvements Financed
The following improvements were acquired with proceeds from the sale of bonds:
® Construction of a portion of the Ramona Expressway, streets, curbs, gutters, sewers,
water lines, storm drains, and underground utilities, including gas, electric, telephone and
cable television.
AD 87-1 page 2
The Bonds
Bonds for AD 87-1 were issued on March 19, 1987 in the principal amount of$1,415,000. The
following pages provide basic information on key aspects of the bond issue.
Debt Service
The bonds issued for AD 87-1 have a term of 19 years, with a final maturity date of
September 2, 2006. AD 87-1 is now in its 8th year of repayment of the bonded debt.
The original repayment schedule, or debt service schedule, for the bonds appears in Appendix A
of this report. This schedule represents the payments due to bondowners over the life of the
bond issue based on the original amount of bonds issued.
Early Redemption Provisions
AD 87-1 contains a provision that the City may call any bond for redemption prior to maturity
on any March 2 or September 2. When bonds are called, a 5% premium is added to the
redemption amount paid to bondowners Money for early redemption may be generated from
any of three sources:
■ Property owners prepay their assessments.
■ Surplus monies remain after improvements are complete.
® A significant amount of interest is earned on the Reserve Fund balance over the Reserve
Requirement level (see page 4 for an explanation of the Reserve Fund).
Assessment Payoffs
When property owners pay off their assessments, they prepay the remaining principal balance
in full, plus interest due to bondowners until the date of the next bond call. They are also
responsible for the 5% premium associated with the bond call process
There have been no assessment payoffs in AD 87-1 to date.
AD 87-1 page 3
Bond Funds
The Bond Resolution requires that the City create and maintain several funds used to deposit
bond proceeds and process the revenues and payments of AD 87-1.
Due to persistent high delinquency rates within AD 87-1, all funds have been depleted for use
in meeting debt service. Additionally, the Flood Control agency has advanced money toward
AD 87-1 debt service payments. Because these bonds are limited obligation bonds secured only
by liens on the property within the assessment district, the City has no obligation to advance this
money. Ultimately this money will be recovered through proceeds from foreclosure sales and/or
payment of delinquent assessments and accrued penalties.
The purpose and use of each AD 87-1 bond fund is explained below.
Improvement Fund
The Improvement Fund was initially established with $1,213,362.50 of bond proceeds. The
purpose of this fund was to pay the costs of issuing the bonds and acquiring the authorized
improvements.
Redemption Fund
The Redemption Fund was established for the deposit of assessment revenue and is used to make
principal and interest payments to bondowners and to cover expenses incurred by the City in the
administration of AD 87-1. An amount of $60,137.50 was initially deposited into this account
which represented capitalized interest for the bonds. Currently, there is no balance in the
Redemption Fund since prior receipts have been used for debt service.
Reserve Fund
An amount of $141,500 was initially deposited in the Reserve Fund to be used as a back-up
source of funds for principal and interest payments. The Reserve Fund for AD 87-1 has been
depleted to meet debt service payments. The Reserve Fund will be replenished by the payment
of delinquent assessments or from revenue from foreclosure sales.
Rebate Fund
The Rebate Fund should be established for the deposit of excess investment earnings on bond
proceeds, if excess earnings exist. Excess earnings are defined as interest earnings above the
yield of the bonds, which is referred to as arbitrage.
AD 87-1 page 4
The Assessments
Each property within AD 87-1 is responsible for a portion of the total bonded amount. A special
assessment is levied on the properties each year and these revenues are used to repay the
bondowners.
To administer this repayment process, the City must track the subdivision of property within AD
87-1 to ensure that the assessments are apportioned to the new parcels. Each year, the City is
also responsible for calculating the amount of the following year's assessment levy, and for
monitoring the receipt of property owner payments.
Development Status
At the time of formation, AD 87-1 consisted of 12 assessed parcels. No subdivisions have
occurred within AD 87-1. Consequently, a total of 12 parcels will be assessed in the 1994/95
tax year.
Property Ownership
As property is subdivided, developed, and sold, the payment of annual assessments becomes
diversified among more property owners.
The chart below displays the change in property ownership within AD 87-1 that has occurred
since bonds were issued. The original ownership shown in the table below is based on a
percentage of the total original assessments. Current percentages are based on the total
remaining assessments, showing the distribution of responsibility for payment of AD 87-1 annual
assessments. Current ownership shown is based on the 1993/94 County secured tax roll.
Owner Original 96 Current %
Soboba Associates 100% 4%
Property Mortgage Co. 79%
F & B Associates 9%
Scripps Corner Associates (FHP) 8%
AD 87-1 page
Delinquencies
Assessments for AD 87-1 appear as a line item on the property owners' tax bills. The tax bill
is payable to the County in two installments, due December 10 and April 10 of each year.
Penalties for delinquent assessment installments are calculated at 10% of the installment amount
upon the date of delinquency. An additional penalty of 1.5% per month is applied if the
assessment remains delinquent beyond the end of the fiscal year.
Tax Year 1993/94 Delinquencies
The aggregate levy for the 1993/94 tax year was $155,717.96. As of June 30, 1994, 10 parcels
remain delinquent in payment of their 1993/94 assessment installments for AD 87-1, representing
$125,350.40 of the original levy.
Prior Tax Year Delinquencies
As of June 30, 1994, delinquencies totalling $450,186.76 remain outstanding for 1992/93 and
previous tax years. These delinquencies, with the exception of APN 433-160-036-2, are now
in foreclosure or pending foreclosure action by the City's foreclosure counsel, Robert A. Owen.
The aggregate levy amounts and delinquency rates for all tax years with delinquencies are
summarized in the table below.
Delinquent Amount As % of Annual
Tax Year Annual Levy Parcels Delinquent Levy
1993/94 $155,717.96 10 $ 125,350.40 80.5%
1992/93 $154,347.32 10 117,130.31 75.9%
1991/92 $156,764.48 9 116,212.62 74.1%
1990/91 n/a 9 109,050.03 n/a
1989/90 n/a 9 107,793.80 n/a
Totals 10 $ 575,537.16
Appendix B shows a detailed list of all delinquent parcels and the delinquency charges calculated
through July 31, 1994.
Foreclosure Covenant
Revenue from assessments is used to make semi-annual payments to bondowners. Consequently,
delinquent assessments can hinder the assessment district's ability to make those payments. The
City has covenanted with the bondowners to initiate foreclosure proceedings on property within
120 days following the date of delinquency.
The City has now initiated foreclosure on nine parcels with delinquencies since 1989/90. The
City has mailed a delinquency letter to the parcel owned by F & B Associates, which is
delinquent for the 1992/93 and 1993/94 tax years.
AD 87-1 page 6
Calculation of Annual Assessments
The annual assessment amount for each unpaid parcel within AD 87-1 is based on a repayment
schedule which shows the amounts to be collected each year to pay off the parcel's share of the
bonded debt. To determine net assessment amounts for each parcel, the following steps are
taken:
® The parcel's principal and interest payment for the year is taken from its original repayment
schedule.
■ Subtract a pro rata share of the interest earnings credited toward the assessments, if any.
■ Add the parcel's pro rata share of paying agent, City staff and other costs of managing the
assessment district per §8682.1 of the California Streets and Highways Code.
® Add the parcel's administration fee per §8682 of the California Streets and Highways Code,
which is equal to the lesser of $16.00 or 5% of principal plus interest.
The amount of installments for all parcels are totalled to arrive at the aggregate assessment levy,
Debt Service Requirements
The actual amounts due to bondowners during the 1994/95 tax year are shown below.
Interest due March 2, 1995 $46,705.00
Principal due September 2, 1995 55,000.00
Interest due September 2, 1995 46,705.00
Total Debt Service $1489410.00
Administrative Cost Recovery
1915 Act assessment districts are self-supporting and do not require the City to provide funds
for administration or management fees or expenses. Consequently, the fees for 1994/95
administration have been estimated and will be recovered through the annual levy in accordance
with §8682 and §8682.1 of the California Streets and Highways Code.
Paying Agent Fees $2,800.00
Administrative Consultant 1,578.00
City Staff Fees 1,000.00
Total City Costs $59378.00
County Fees (deducted from proceeds) $26.92
Total Fees for 1994/95 $5,404.92
Sources of Recovery:
Per Parcel Administration Fees $192.00
Pro Rata Debit 5,182.92
Per Parcel Delinquency Fees 30.00
Total Recovery $5,404.92
AD 87-1 page 7
Aggregate Assessment Levy
A summary of the aggregate assessment levy for 1994/95 is provided in the following table.
Following the table are additional notes pertaining to these calculations.
Calculation Principal interest Credit Debit Admir Total
Fee
Requirements 55,000.00 93,410.00 0.00 5,212.92 192.00 153,814.92
1994/95 Levy 55,000.00 93,409.99 0.00 5,212.92 192.05 153,814.96
Variance 0.00 (0.01) 0.00 0.00 0.05 0.04
Calculation Notes
• The Principal and Interest amounts listed as Requirements are taken from the original debt
service schedule.
■ There was no Credit for interest earnings spread to the assessment district for the 1994/95
fiscal year.
® The Debit represents bond registration, paying agent, county fees and other costs applied to
the assessment district, spread pro rata to each of the 12 parcels assessed for the 1994/95
fiscal year. Also included are fees for delinquency letters, which are charged only to the
parcel(s) receiving the letters.
■ The Admin Fee represents a per-parcel administration charge equal to the lesser of$16.00
or 5% of principal plus interest, placed on each of the 12 parcels assessed for fiscal year
1994/95.
■ The Variance is due to rounding.
The 1994/95 assessment roll is included in Appendix C of this report.
AD 87-1 page 8
Appendix A:
Debt Service Schedule
CITY OF SA0JACUNT3
ASSESSMENT DISTRICT 87~1
Original Debt Service Schedule
Payment Period Annual
Date Principal Coupon Interest Total Total
9/02/ 1987 0.00 6.75Y6 53.28177 53'261.77 53.261.77
3/02/ 1888 58.103.75 58.103.75
8/02/ 1888 35.0W00 6.7596 58,103.75 90,103.75 151.20750
3/02/ 1389 58.922.50 56,922.50
9/02/ 1988 35.000.00 7,00% 56,922.50 91.922�50 148.845.00
3V02/ 1990 55.097�50 55.897.50
9/02/ 1990 40.000.00 7.25% 55'897,50 95.607�50 151.335.00
3/021 1991 54,247.50 54,247.50
9/02/ 1891 45.000�00 7.50% 54.247�50 99,247.50 153.495.00
2V02/ 1992 52'560.00 52.560.00
9/02/ 1992 45,000.00 7�70% 52,560.00 97.560,00 150,120�80
3/02y 1993 50.827.50 50,827.50
9/02/ 1993 50,000m 7.80% 50.827.50 100.827.50 151,655�00
3/02/ 1994 48.877,50 48'877�50
9/02/ 1894 55.000�00 7.90Y6 48,877.50 100,877.50 152.755�00
3/02/ 1985 46.705.00 40,705,00
9/02/ 1995 55.000.00 &08% 46'705.00 101,705.00 148,410.00
3/02/ 1998 44.505.00 44,505�00
8/02/ 1886 60,000.00 8.10Y6 44.505.00 104.505.00 149.010.00
3/O3/ 1SS7 �� O7� OO 4� O7�
,�.. . � . .00
EV03/ 1987 85'000.00 8.2096 42.075.00 107.075.00 149.150.00
3/021 1998 39,410.00 39.410.00
9K02/ 1998 75.000.00 8.30Y6 39.410.00 114.410,00 153.820.00
3/02/ 1898 36.297.50 36.297�50
9/02/ 1939 80.000.00 &40Y6 36.297.50 115.287.50 152.595.00
2V02/ 2000 32,937.50 02,937.50
9/02/ 2000 85.000.00 850% 32'937.50 117'937�50 150.875�00
3/02/ 2001 29,325.00 29.325,00
9/02/ 2001 90,000m 8�50% 29.325,00 119,325.00 148,850.00
3J02/ 2002 25.500.00 25.500.00
9/02/ 2002 100.000.00 8,5096 25.500.00 125.500.00 151.000.00
3/02/ 2000 21.250�00 21.250.00
9/03/ 3003 110.000.00 8.50% 21.250.00 131.250�00 152'500.00
3/02/ 2004 16,575,00 10'575.00
9V02/ 2004 120.000.00 8.50% 16,575.00 130.575.00 153'150.00
3/02/ 2005 11.475.00 11.475.00
9/02/ 2005 130.000.00 8.5096 11.475.00 141.475.00 152'950.00
3/02/ 2006 5.950.00 5,950.00
9/02/ 2006 140,000.00 8.50% 5]}5}.0D0 145,950l00 151,9A00]00
1'415,000.00 1.511.744.27 2.928'744.27 2'928.744.27
. .
� `
Appendix B:
Delinquency Report
CITY OF SAN JACINTO
Assessment District 87-1
Delinquency Report
FY 1993/94 Prior Year Total Total Oldest
Assessor's Delinquent Delinquent Late Amount Delinquent
Parcel Number Owner's Name Installments Installments Charge* Due Installment
433-160-024 SOBOBAASSOC 6,424.84 25.496.18 15,089,01 47,010.03 1989/90
433-160-027 NEILSON R TODD/PMC 8,208.74 32,647.22 19,314.10 60,170.06 1989/90
433-160-028 NEILSON R TODD/PMC 6,424.84 25,920.48 15,290.55 47,635.87 1989/90
433-160-029 NEILSON R TODD/PMC 6,590.00 26,208.18 15,503.91 48.302.09 1989/90
433-160-032 NEILSON R TODD/PMC 8,208.74 33;186.38 19,570.20 60,965,32 1989/90
433-160-033 NEILSON R TODD/PMC 18,647,86 74,769.68 44,171.63 137,589.17 1989/90
433-160-034 NEILSON R TODD/PMC 6,590.00 26,07T86 15,441.69 48,109.55 1989190
433-160-035 NEILSON R TODD/PMC 23,439 06 93,96729 55,515.25 172,921.60 1989/90
433-160-036 F & B ASSOC 14,773.88 T334.75 3,862.75 25,971,38 1992/93
433-160-039 NEILSON R TODD/PMC 26,042.44 104,578.74 61,846.23 192,467.41 1989/90
Parcels: 10 Totals: 125,350.40 450,186.76 265,605.32 841,142A8
'Late Charges calculated through 07/31/94
1
Appendix C:
Assessment Roll
CITY OF SAN JCI T
Assessment District No. 87-1
Fund No. 68-2805
Direct Assessments For 1994-95
Assessor's Misc. Misc. Admin Total
Parcel Number Principal Interest Credit Debit Fee Assessment
433-160-024 2,266.41 3,849.19 0.00 213.58 16.00 6,345.18
433-160-027 2,897.27 4,920.62 0.00 273.02 16.01 8,106.92
433-160-028 2,266.41 3,849.19 0.00 213.58 16,00 6,345,18
433-160-029 2,324.82 3,948.40 0.00 219.08 16.00 6,508.30
433-160-032 2,897.27 4,920,61 0.00 273.02 16.00 8,106.90
433-160-033 6,588.95 117190.43 0,00 620.91 16.01 18,416.30
433-160-034 2,324,82 3,948.40 0,00 219.08 16.00 6,508.30
433-160-035 8,283.30 14,068.05 0.00 780.58 16.01 23,147.94
433-160-036 5,218.96 8,863.68 0.00 521.81 16.01 14,620.46
433-160-037 5,054.01 8,583.54 0.00 476.26 16.01 14,129.82
433-160-038 5,673.82 9,636.21 0.00 534.67 16.00 15,860.70
433-160-039 9,203.96 15,631,67 0,00 86T33 16.00 25,718.96
Total 12 55,000.00 93,409.99 0.00 5,212.92 192.05 153,814.96
1
Appendix D:
Boundary Map
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