Item 11 - Tax Rate for Parkway Bus Center for FY 93-94
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- AGENDA REPORT SUMMARY -
.---TO: Honorable Mayor and Members of the City Council
FROM: James L. Bowersox, City Man~
INITIATED BY: John D. Fitch, Assistant City Manager
Peggy A. Stewart, Director of Administrative Servic~
Christine Tsung, Finance Manager
DATE: August 3, 1993
SUBJECT: Tax Rate for the Parkway Business Center (Community Facilities District
No. 88-1) for Fiscal Year 1993-94 -
ABSTRACT
It is recommended that the City Council adopt the attached resolution establishing the
tax rate on property within the Community Facilities District No. 88-1 (Parkway
Business Center) for fiscal year 1993-94.
ENVIRONMENTAL REVIEW
Environmental review is not required for this agenda item according to CEQA guidelines.
FISCAL IMPACT
The City of Poway has loaned the Community Facilities District $1,371,397 to cover the
February 8, 1993 debt service payment. Payment of the August 8, 1993 debt service
payment of $1,520,864 will have to be covered by either a further loan from the City or
a draw upon the reserve funds created for this purpose. The City of Poway has taken
steps to foreclose on the property for unpaid taxes.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
Published in the Poway News Chieftain on July 22 and 29, 1993.
RECOMMENDATION
It is recommended that the City Council adopt the attached resolution establishing
$12,587.72 per net usable acre as the amount of the special assessment for property
within the Community Facilities District No. 88-1 (Parkway Business Center) for fiscal
year 1993-1994.
ACTION
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AUG 3 1993 ITEM 11
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- AGENDA REPOR'i
CITY OF POW A Y
TO: Honorable Mayor and Members of the City Council
FROM: James L. Bowersox, City Mana~
INITIATED BY: John D. Fitch, Assistant City Manager
Peggy A. Stewart, Director of Administrative Services
Christine Tsung, Finance Manager
DATE: August 3, 1993
SUBJECT: Tax Rate for the Parkway Business Center (Community Facilities
District No. 88-1) for Fiscal Year 1993-1994
BACKGROUND
In October 1988, the City Council approved the formation of the Community Facilities
District No. 88-1 (Parkway Business Center) to provide for the issuance of special
tax bonds to finance the construction and acquisition of certain public improvements
within the District. In November 1988, the qualified electors of the District
authorized the District to incur bond indebtedness not to exceed $45,000,000.
These bonds were issued in the total principal amount of $30,000,000 to finance
portions of the construction, acquisition, modification and expansion of certain
public improvements including, but not limited to, storm drains, a fire station and
equipment, sewer and water facilities, and other public improvements. In January
1991, an additional $8,000,000 of Special Tax Bonds, Series 1990, were issued to
finance part of the costs of the acquisition and construction of these same types of
public improvements.
On August 4, 1992, the City Council established the tax rolls for Parkway Business
Center based on an assessed value of approximately $77 million. Parkway Business
Centre Partnership did not pay any of the special tax as required in fiscal year
1992-1993.
On February 9, 1993, the City Council authorized the commencement of judicial
foreclosure against the delinquent property owners in Community Facilities District
No. 88-1 and advanced a loan to pay for the February debt service payment. On or
about February 22, 1993, Parkway Business Centre Partners Ltd., the majority owners
of the District, filed a petition under Chapter 11 of the bankruptcy code. The
Chapter 11 Bankruptcy Code gives the debtor time needed to reorganize its financial
plan in order to payoff its debts according to the priority and secured status of
the debt. Therefore, no payment was made for the second installment of special
taxes which was due April 10, 1993.
ACTION:
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AUG 3 1993 ITEM 11
Agenda Report
August 3, 1993
Page 2
In order to proceed with our judicial foreclosure process against the delinquent
owners and for the Court to order the City relief from automatic stay of 11 U.S.C.
Sec. 362(a) of the bankruptcy code to foreclose our secured interest in debtor's
property to collect year-to-date delinquent special taxes, interest, penalties and
related administrative expenses, the City Attorney filed a motion with the court for
relief from automatic stay of bankruptcy on June 30, 1993. The hearing on this
matter has been continued to September 22, 1993.
A debt service payment in the amount of $1,520,863.59 is due to the Fiscal Agent on
the outstanding bonds by August 8, 1993. Since the special taxes will not be paid
by the property owners in time to make that debt service payment, it will be
necessary to either draw on the bond reserves or loan funds from the City to make
the debt service payment.
FINDINGS
Total funds required within Community Facilities District No. 88-1 in fiscal year
1993-94 are as follows:
Debt service payments in FY 1993-94 3,254,321
Trustee fees to be paid FY 1993-94 19,520
Less interest earnings on bond reserve
funds, if intact (298,520)
Cash reserve 300.000
Total funding requirements ,$3.275.051
A maximum tax rate of $14,408.26 per net usable acre was allowed under Community
Facilities District No. 88-1. If reserve funds are drawn upon, that maximum tax
rate increases to $16,561. With the approval of the final map for Unit #1 of the
Parkway Business Center, 52 taxable lots were created with a total of 120.7 net
usable acres. Unit #2 of the project has created an additional 39 taxable lots
totaling 139.5 net usable acres. Therefore, there is a total of 260.2 net usable
acres to be used in calculating the amount of tax per acre. Based on the funding
requirements above, the tax rate will be $12,587.72 per net usable acre.
If all FY 1993-94 taxes are paid when due, the financial position of Community
Facilities District No. 88-1 would be as follows:
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Agenda Report
August 3, 1993
Page 3
Debt service requirements in FY 1993-94 $ 2,975,051
Outstanding loans from City 2,892,261
LESS:
Projected tax revenues (3,275,051)
Fund balance projected for June 30, 1994 ,$(2.592.261)
ENVIRONMENTAL REVIEW
Environmental review is not required for this agenda item according to CEQA
guidelines.
FISCAL IMPACT
The City of Poway has loaned the Community Facilities District $1,371,397 to cover
the February 8, 1993 debt service payment. Payment of the August 8, 1993 debt
service payment of $1,520,864 will have to be covered by either a further loan from
the City or a draw upon the reserve funds created for this purpose. The City of
Poway has taken steps to foreclose on the property for unpaid taxes.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
Published in the Poway News Chieftain on July 22 and 29, 1993.
RECOMMENDATION
It is recommended that the City Council adopt the attached resolution establishing
$12,587.72 per net usable acre as the amount of the special assessment for property
within the Community Facilities District No. 88-1 (Parkway Business Center) for
fiscal year 1993-94.
JLB:PAS:CT:eg
Attachment:
Proposed Resolution Setting the Special Tax Rate for FY 1993-94
c:\wpfiles\taxrete.res
4 of 7 AUG 3 1993 ITEM 11
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RESOLUTION NO. 93-
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF POWAY, CALIFORNIA,
SETTING THE SPECIAL TAX RATE AND THE AMOUNT TO BE
LEVIED ON PROPERTY WITHIN THE
COMMUNITY FACILITIES DISTRICT NO. 88-1
(PARKWAY BUSINESS CENTER) FOR FISCAL YEAR 1993-94
WHEREAS, the City Council of the City of Poway, California has approved
the formation of the Community Facilities District No. 88-1 (Parkway Business
Center) pursuant to the terms and provisions of the Mello-Roos Community
Facilities District Act of 1982, and
WHEREAS, the City Council by following the provisions set forth and said
act authorized the issuance.of $30,000,000 in 1989 Special Tax Bonds and an
additional $8,000,000 in Series 1990 Special Tax Bonds, and
WHEREAS, Ordinance No. 289 provides for the annual setting of a special
tax rate amount to be levied on property within the District to service the
principal and interest due on the bonds.
NOW, THEREFORE, BE IT RESOLVED THAT the special tax necessary to be
collected on property within the District for fiscal year 1993-94 is set at
$12,587.72 per net usable acre on property within the District and that the
special tax shall be spread on the 260.2 net usable acres as follows:
Amount of
Lot Number APN Numbers Net Usable Acres Assessment
UNIT 1:
1 317-280-56 16.5 $ 207,697.34
2 317-280-57 5.3 66,714.92
Parcel 105 (Park) N/A N/A N/A
Parcel 106 317-280-47 3.7 46,574.56
Parcel 107 317-280-48 7.0 88,114.04
Parcel 108 317-280-51 4.6 57,903.52
Parcel 109 317 -280-52 1.6 20,140.34
Parcel 110 317-280-50 5.5 69,232.46
9 317-280-21 3.0 37,763.16
10 317-280-22 2.4 30,210.54
11 317 -280-23 2.1 26,434.20
12 317-280-53 3.0 37,763.16
13 317-280-54 1.6 20,140.36
14 317 -280-59 3.0 37,763.16
15 317-280-58 2.9 36,504.40
16 317-280-28 2.7 33,986.84
17 317-280-29 2.7 33,986.84
22 317-280-34 2.9 36,504.38
5 of 7 AUG 3 1993 ITEM 11
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Resolution No. 93-
Page 2
Amount of
Lot Number APN Numbers Net Usable Acres Assessment
23 317-280-35 3.0 $ 37,763.16
24 317-810-28 0.9 11,328.96
25 317-810-29 0.7 8,811.40
26 317-810-30 0.8 10,070.18
27 317-810-04 1.2 15,105.26
28 317-810-05 0.7 8,811.40
29 317-810-33 0.7 8,811.40
30 317-810-33 0.8 10,070.18
31 317-810-33 0.6 7,552.62
32 317-810-09 0.8 10,070.18
33 317-810-31 1.1 13,846.50
34 317 -810-32 1.2 15,105.26
35 317-810-12 0.8 10,070.18
36 317-810-13 0.7 8,811.40
37 317-810-14 0.7 8,811.40
38 317-810-15 0.8 10,070.18
39 317-810-16 0.8 10,070.18
40 317-810-17 0.8 10,070.18
41 317-810-18 0.8 10,070.18
42 317-810-19 0.7 8,811.40
43 317-280-36 2.6 32,728.06
44 317-280-37 3.0 37,763.16
45 317-280-38 3.1 39,021.94
46 317-280-39 2.9 36,504.38
47 317-810-20 0.9 11 ,328.96
48 317-810-21 1.0 12,587.72
49 317-810-22 1.3 16,364.04
50 317-810-23 1.0 12,587.72
51 317-810-24 1.2 15,105.26
52 317-810-25 0.9 11 ,328.94
53 317-810-26 0.8 10,070.18
54 317-810-27 1.0 12,587.72
55 323-090-62 5.4 67,973.70
56 323-090-63 3.3 41,539.48
57 323-090-64 3.2 40,280.70
UNIT 2:
1 323-090-17 9.4 118,324.56
2 323-090-17 6.8 85,596.50
3 323-091-02 2.3 28,951.76
4 323-091-02 2.4 30,210.54
5 323-091-03 3.1 39,021. 92
6 323-090-66 5.9 74,267.56
7 323-090-66 3.2 40,280.70
8 323-090-66 4.8 60,421.06
6 of 7 AUG 3 1993 II~M 11
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Resolution No. 93-
Page 3
Amount of
Lot Number APN Numbers Net Usable Acres Assessment
9 323-090-43 4.3 $ 54,127.20
10 323-090-65 4.0 50,350.88
11 323-090-65 3.7 46,574.56
12 323-090-17 3.4 42,798.26
13 323-090-17 3.7 46,574.56
14 323-090-17 4.3 54,127.20
15 323-090-65 3.0 37,763.16
16 323-090-65 2.5 31,469.30
17 323-090-65 2.9 36,504.38
18 323-090-65 2.8 35,245.62
19 323-090-65 2.3 28,951. 76
20 323-091-03 3.0 37,763.16
21 323-091-03 3.6 45,315.80
22 323-090-65 4.1 51,609.64
23 323-090-65 4.1 51,609.66
24 323-090-65 4.3 54,127.20
25 323-090-65 4.0 50,350.88
26 323-091-03 3.4 42,798.24
27 323-091-03 3.9 49,092.12
28 323-091-03 3.6 45,315.78
29 323-091-03 2.7 33,986.84
30 323-091-03 2.5 31,469.30
31 323-091-03 2.2 27,692.98
32 323-091-03 3.4 42,798.26
33 323-091-03 2.4 30,210.52
34 323-091-03 3.4 42,798.26
35 323-091-03 2.3 28,951. 76
36 323-091-03 2.2 27,692.98
37 323-091-03 2.2 27,692.98
38 323-091-03 2.4 30,210.52
39 323-091-03 5.0 62,938.60
Total 260.2 $3,275,324.74
7 of 7 AUG 3 1993 IIa:.M 11
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