Background Information About the Development Agreement: On August 16, 2011, the council entered into a Development Agreement (DA) with Canon Station LLC regarding approximately 1,570 acres within the TSSP Area. Canon Station LLC is the master developer of the One Lake neighborhood, known as Planning Area 4 and Planning Area 5 in the TSSP. The Development Agreement was subsequently amended in 2012, and then amended and restated on December 16, 2014. Since then, it has been further amended.
Proposed 5th Amendment: As a separate matter on tonight’s agenda, the council will consider adopting an ordinance approving the 5th Amendment. Canon Station LLC seeks to amend one section of the DA addressing Infrastructure CFDs (as defined in the DA). Canon Station LLC is seeking the 5th Amendment to raise the maximum combined tax rate, which includes the State's 1% property tax base and all community facilities district special taxes. Canon Station LLC seeks to raise the combined tax rate from 1.65% to 1.75%.
Background Information about the CFD and Improvement Area No. 1: The council previously conducted proceedings under the Mello-Roos Community Facilities Act of 1982, (Mello-Roos Act), to form (i) “City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5)” (“CFD”), (ii) “Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5)” (Improvement Area No. 1), and (iii) “City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) (Future Annexation Area)” (Future Annexation Area).
The City established the CFD pursuant to Resolution No. 2023-31 adopted on February 21, 2023 (Resolution of Formation), and, among other things, provided for the levy of special taxes upon the land within the CFD and the improvement areas therein to finance certain public facilities and services described in Exhibit A to the Resolution of Formation and approved a rate and method of apportionment of special taxes for Improvement Area No. 1(Improvement Area No. 1 Rate and Method). In its Resolution No. 2023-32 adopted on February 21, 2023 (Resolution Determining Necessity), the council determined the necessity for the City to incur bonded indebtedness in one or more series (i) on behalf of Improvement Area No. 1 in an aggregate amount not to exceed $90,000,000 (Improvement Area No. 1 Bonded Indebtedness Limit) and (ii) on behalf of those portions of the CFD that are not included in Improvement Area No. 1 in an aggregate amount of not to exceed $15,000,000 (Non-Improvement Area No. 1 Bonded Indebtedness Limit); and at an election of the qualified electors in Improvement Area No. 1 held on February 21, 2023, the qualified electors approved, among other things, the levy of special taxes according to the Improvement Area No. 1 Rate and Method and the Improvement Area No. 1 Bonded Indebtedness Limit.
Pursuant to Ordinance No. 2023-05, introduced by the council on February 21, 2023, and adopted on March 21, 2023, the council levied special taxes in Improvement Area No. 1 according to the Improvement Area No. 1 Rate and Method.
All of the territory in the CFD as of the date hereof is located in Improvement Area No. 1.
Proposed CFD Change Proceedings: Pursuant to a petition received by the City from One Lake Holdings LLC, which is the owner of 25% or more of the land within Improvement Area No. 1 that is not exempt from the special taxes, the City has been asked to (i) amend the Improvement Area No. 1 Rate and Method to increase the rate of the special taxes, (ii) increase the Improvement Area No. 1 Bonded Indebtedness Limit from $90,000,000 to $100,000,000, and (iii) increase the Non-Improvement Area No. 1 Bonded Indebtedness Limit from $15,000,000 to $20,000,000.
This “change proceeding” for the CFD and Improvement Area No. 1 requires a handful of steps:
1. Adoption by the council of a “resolution of consideration” to make the proposed changes and calling a public hearing on the proposed changes for October 15, 2024.
2. On October 15, 2024, the council will:
a. Hold the public hearing and call an election of the qualified landowner electors in Improvement Area No. 1,
b. If the landowner electors in Improvement Area No. 1 have waived otherwise applicable time periods for the election, as permitted by the Mello-Roos Act, hold the election and declare the results of the election,
c. If two-thirds of the votes cast on the proposition are in favor of the proposed changes, adopt a resolution of change determining that the amendment of the Improvement Area No. 1 Rate and Method and the increase in the Improvement Area No. 1 Bonded Indebtedness Limit are lawfully authorized, and
d. Introduce an ordinance levying the special taxes in Improvement Area No. 1 in accordance with the amended Improvement Area No. 1 Rate and Method.
3. The city clerk will record an amendment to the Notice of Special Tax Lien for Improvement Area No. 1 to reflect the amended Improvement Area No. 1 Rate and Method.
4. On November 19, 2024, the council will consider adoption of the ordinance levying the special taxes in Improvement Area No. 1 in accordance with the amended Improvement Area No. 1 Rate and Method.
In addition, the proposed resolution approves an Amended and Restated Deposit Agreement between the City and One Lake Holding LLC. The purpose of the amendment is to provide for a deposit to be given by One Lake Holding LLC to the City pay the City’s costs of the change proceedings and non-contingent costs of a proposed bond financing for the CFD, including the fees and expenses of third-party consultants.
Staff expects to recommend that the City issue the initial series of bonds for the CFD with respect to Improvement Area No. 1 later in the calendar year, upon completion of the change proceedings.
General Plan and Specific Plan Consistency: The proposed change proceedings are consistent with the 5th Amendment and will only be completed if the 5th Amendment is approved, executed and delivered by the City and Canon Station LLC.
Government Code Section 65868.5 requires that a Development Agreement be consistent with the General Plan and any Specific Plan. The General Plan designates land within the TSSP as the Train Station Specific Plan “Special Study Area.” The Specific Plan identifies the land subject to the Development Agreement as Planning Areas 4, 5, 6, 7, and 8. Of the Planning Areas listed, 4 and 5 are slated for residential development and are subject to the proposed 1.75% tax maximum. The council previously found the existing Development Agreement to be consistent with the General Plan and Specific Plan. The General Plan includes policies that require new residential development to fund the cost of its infrastructure needs. Policy 14-45 of the TSSP authorizes the use of community facilities district to fund infrastructure that is not otherwise funded by a Development Impact Fee. The 5th Amendment increases the maximum assessment to 1.75% of combined ad valorem property tax and community facilities district costs, ensuring that the new development within the district will be able to pay the anticipated infrastructure costs.
Environmental Review: An Environmental Impact Report (EIR) was previously prepared and certified by the City for the TSSP in 2011. The City previously found that the impacts of development under the existing Development Agreement are within the scope of the EIR certified by the Council in 2011 for the TSSP. The proposed changes are consistent with the TSSP and do not pose environmental impacts greater than those found to be within the scope of the TSSP’s EIR.