Item 7 - Judicial Foreclosure of Delinquent Special Taxes AGENDA REPORT SUMMARY
TO: Honorable Mayor and Members of the City Council
Directors of Community Facilities District No. 1
FROM: James L. Bowersox, City Mar~
Stephen M. Eckis, City Attorn~-
INITIATED BY: John D. Fitch, Assistant City Manager
Peggy Stewart, Director of Administrative Services
DATE: January 31, 1995
SUBJECT: Judicial Foreclosure of Delinquent Special Taxes
For Communi _ty Facilities District No. 1
ABSTRACT: CF Poway, Ltd. is delinquent in the payment of the first installment of its
1994-5 special taxes in CFD No. 1. Bond covenants require the prompt initiation of
foreclosure proceedings.
ENVIRONMENTAL REVIEW: None required.
FISCAL IMPACT: The District will incur attorneys' fees and court costs in unknown
amounts in the pursuit of judicial foreclosure. All such expenses are recoverable from
the delinquent taxpayer.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE: CF Poway, L~:d.
RECOMMENDATION: It is recommended that the City Council adopt Resolution No.
95- ordering judicial foreclosure of delinquent special taxes pursuant to the Mello-
Roos Community Facilities Act of 1982 in Community Facilities District No. 1.
ACTION:
1 of 13 .]AN 3 1 1995 ITEM 7,1
- AGENDA REPOR"
CITY OF POWAY
TO: Honorable Mayor and Members of the City Council
Directors of Community Facilities District No. 1
FROM: James L. Bowersox, City Man~
Stephen M. Eckis, City Attom~
INITIATED BY: John D. Fitch, Assistant City Manager
Peggy Stewart, Director of Administrative Services
DATE: January 31, 1995
SUBJECT: Judicial Foreclosure of Delinquent Special Taxes
For Community Facilities District No. 1
The City has been notified by the County Assessor's Office that CF Poway, Ltd., a
property owner in Community Facilities District No. 1 (Pomerado Business Park) is
delinquent on its first installment of special taxes for Fiscal Year 1994-95 in the amount of
$893,635.52. These taxes were due December 10, 1994, and cover the debt service payment
of special tax bonds which is due to be paid to the Fiscal Agent on January 25, 1995. It is
recommended that the City Council, acting as Directors for the District, prepare to initiate
judicial foreclosure against the delinquent property owner.
BACKGROUND:
In December 1985, the City Council approved the formation of the Community
Facilities District No. 1 (Pomerado Business Park) to provide for the issuance of special tax
bonds to finance the construction and acquisition of certain public improvements within the
District. In March 1987, the District approved the issuance of $32,800,000.00 in special tax
refunding bonds, refunding the original issuance of $30,000,000.00 to finance the public
improvements.
The special taxes secure the debt service payment on those bonds. In the bonds there
is a covenant that in the event of a delinquency on the tax payment, the City will institute
judicial foreclosure proceedings within 120 days of the delinquency.
ACTION:
2 of 13
311995 IIII~M
AGENDA REPORT
January 31, 1995
Page Two
CF Poway, Ltd. did not pay the special tax installment as required in December,
1994 for fiscal year 1994-5. The delinquency is $893,635.52. The penalty due is
$89,363.55. The total now due is $982,999.07.
On January 17, 1995, the City Council authorized a draw on the bond reserve funds
of $726,379.40 to cover the shortfall for the January 25, 1995 debt service payment.
The bond covenants require that the District commence judicial foreclosure
proceedings within 120 days of the delinquency. Approximately one-half of that period has
now expired. On January 18, 1995 a letter demanding payment in full of the delinquent
taxes was sent by the City Attorney to CF Poway, Ltd. (copy attached). Payment has not
been received.
Prior to commencing judicial foreclosure, it is necessary for the District to adopt a
resolution ordering the foreclosure. The District has been represented in the foreclosure in
CFD No. 88-1 by McDougal, Love, Eckis & Grindle, general counsel to the District in
accordance with the City's contract for legal services with that firm. General counsel is
available and has the expertise to represent the District in a judicial foreclosure in CFD No.
1.
ENVIRONMENTAL REVIEW:
None required.
The District will incur attorneys' fees and court costs in unknown amounts in the
pursuit of judicial foreclosure. All such expenses are recoverable from the delinquent
taxpayer.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE:
CF Poway, Ltd.
3 of 13 JAN 1995 ITEM 7.1
AGENDA REPORT
lanuary 31, 1995
Page Three
REQQMMENDATION:
It is recommended that the City Council adopt Resolution No. 95- ordering
judicial foreclosure of delinquent special taxes pursuant to the Mello-Roos Community
Facilities Act of 1982 in Community Facilities District No, 1.
/attachments: 1) Resolution No. 95-__
2) Demand letter dated January 18, 1995
4 of 13 JAN 3 1 1995 ITEM 7,1
RESOLUTION NO. 95-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF SOUTH
POWAY COMMUNITY FACILITIES DISTRICT NO. 1 OF THE CITY OF
POWAY (POMERADO BUSINESS PARK) ORDERING JUDICIAL
FORECLOSURE OF DELINQUENT SPECIAL TAXES PURSUANT TO
THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982, AND
ORDERING THAT THE TAX COLLECTOR BE CREDITED WITH
THOSE SPECIAL TAXES
WHEREAS, South Poway Community Facilities District No. 1 of the City of Poway
(Pomerado Business Park) (hereinafter "CFD No. l") has incurred bonded indebtedness and
levied special taxes for the payment of bonds pursuant to the provisions of the Mello-Roos
Community Facilities Act of 1982 (commencing with Section 53311) of Par~ I of Division 2 of
Title 5 of the Government Code (the "Mello-Roos Act"); and
WHEREAS, pursuant to the Mello-Roos Act, CFD No. 1 has duly and regularly levied
and recorded the unpaid special taxes, which special taxes for each installment thereof and
interest and penalties thereon constitute liens against the lots and parcels of land against which
they are made, until the same are paid; and
WHEREAS, certain special tax installments have not been paid when due, and certain
installments of those special taxes may not be paid in the future; and
WHEREAS, under the provisions of Section 53356.1 of the Government Code of the
State of California, this City Council acting in its capacity as the legislative body of CFD No.
1 is authorized, not later than four (4) years after the due date of the last installment of
principal, to order the same to be collected by an action brought in the Superior Cou~ to
foreclose the lien of those special taxes; and
WHEREAS, pursuant to the provisions of Section 53356.1Co) of the Mello-Roos Act,
CFD No. 1 is required by covenant with the bondholders to institute judicial foreclosure
proceedings; and
WHEREAS, the City Council acting in its capacity as the legislative body of CFD No.
I has determined that the public convenience and necessity require prompt action, at the City
Manager's discretion, to initiate foreclosure proceedings; and
WHEREAS, under the provisions of Section 53356.2 of the Mello-Roos Act, when such
foreclosure action is ordered, the County Tax Collector shall be credited upon the current tax
roll with the amount charged on account of the delinquent special taxes to be sued on, including
applicable penalties, interest and costs and to be relieved of further duty in regard thereto.
5 of 13 ATTACHMENT 1 JAN 3 1 1995 ITEM 7.1
Resolution No. 95-
Page 2
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway
acting in its capacity as the legislative body of South Poway Community Facilities District No.
1 of the City of Poway (Pomerado Business Park) as follows:
Section 1. In the event and at such time, if any, as the City Manager of the City of
Poway determines that it is necessary and desirable to proceed with such foreclosure action, the
delinquent special taxes listed on Exhibit "A" attached hereto and incorporated herein, and all
future installments of those special taxes which are not paid when due, shall be collected by
action brought in the Superior Court of San Diego County to foreclose the liens thereof.
Section 2. Subject only to the City Manager's prior determination as set forth in
Section 1 hereof, CFD No. 1 is hereby authorized and directed to retain its General Counsel,
McDougal, Love, Eckis & Grindle, a Professional Corporation, E1 Cajon, California, as legal
counsel to institute such actions ~n the name of CFD No. 1 and the City of Poway to foreclose
the liens of all such delinquent special taxes.
Section 3. Subject only to the City Manager's prior determination as set forth in
Section 1 hereof, the Director of Administrative Services of the City of Poway, in cooperation
and in conjunction with legal counsel, is authorized and directed to transmit a certified copy of
this Resolution to the Auditor/Controller's Office of the County of San Diego with a letter that
shall state that:
a. The City Council has ordered that the delinquent special tax installments
be collected by action brought in the Superior Court of San Diego County to foreclose
the liens thereof;
b. Pursuant to Government Code Section 53356.2, the San Diego County Tax
collector is to be credited upon the current tax roll with the amount charged on account
of the delinquent special taxes to be sued on, including applicable penalties, interest and
costs and to be relieved of further duty in regard thereto; and
c. All inquiries regarding payment of the delinquent special taxes shall be
forwarded to the City of Poway's General Counsel, McDougai, Love, Eckis & Grindle,
E1 Cajon, California.
Section 4. This resolution shall take effect immediately upon its adoption.
6 of 13 JAN 3 1 1995 ITEM 7,1
Resolution No. 95-
Page 3
PASSED, ADOPTED AND APPROVED by the City Council for the City of Poway,
California, at a regular meeting thereof this day of , 1995.
Don Higginson, Mayor
A~EST:
Marjorie Wahlsten,
City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
I, Marjorie Wahlsten, City Clerk of the City of Poway, do hereby certify under penalty
of perjury that the foregoing Resolution No. 95- was duly adopted by the City Council at
a meeting of said City Council held on the day of , 1995, and it was so
adopted by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Majorie Wahlsten, City Clerk
City of Poway
7 of 13 JAN 3 1 1995 ITEM
EXHIBIT A
C. F, POWA¥
ASSESSED/TAX VALUATION
FY 199411995
1994.-95 1994-95
ASSESSED TAX
LOT NUMBER APN NUMBERS VALUATION ASSESSMENT OWNER~ 711194
39 317-223-04 $457 164.00 $37,217.38 CF POWAY LTD.
40 317-223-05 595 013.00 57,158.96 CF POWAY LTD.
41 ' ' 317-223-06 814 730.00 65,703.86 CF POWAY LTD.
32 317-223-14 210 000.00 16,097.90 CF POWAY LTD.
22 317-223-19 1,050 000.00 74,817.08 CF POWAY LTD.
25 317-223-20 320 000.08 25,428.08 CF POWAY LTD.
27 317-223-21 47C 000.00 37,919.98 CF POWAY LTD.
23 317-223-33 66C 000.00 40,854.38 CF POWAY LTD.
9-1 317-224-15 40,000.00 3,234.04 CF POWAY LTD.
3-1 317-225-01 136,597.00 21,078.14 CF POWAY LTD.
5 317-225-13 216,481.08 22,039.06 CF POWAY LTD.
52 317-270-07 356,000.00 26,967.62 CF POWAY LTD.
53 317-270-08 287 I)00.00 20,582.18 CF POWAY LTD.
64 317-270-09 262 D00.00 18,763.68 CF POWAY LTD.
55 317-270-10 290 D00.00 19,693.58 CF POWAY LTD.
56 317-270-11 31( 000.00 20,086.22 CF POWAY LTD.
57 317-270-12 515 000.00 34,634.28 CF POWAY LTD.
58 317-270-13 340 000.00 24,664.14 CF POWAY LTD.
59 317-270-14 275 000.00 19,445.62 CF POWAY LTD.
60 317-270-15 195 000.00 13,597.46 CF POWAY LTD.
61 317-270-16 150 000.08 10,239.44 CF POWAY LTD.
63 317-270-18 350 000.08 23,144.62 CF POWAY LTD.
64 317-270-19 275 000.00 18,918.66 CF POWAY LTD.
65 317-270-20 160 000.00 10,291.08 CF POWAY LTD.
66 / 317-270-21 105 000.00 6,747.08 CF POWAY LTD.
' 67 317-270-22 220 000.00 15,260.98 CF POWAY LTD.
68 317-270-23 122 000.08 7,780.30 CF POWAY LTD.
69 317-270-24 12~ 000.08 8,338.26 CF POWAY LTD.
70 317-270-25 15(: 000.08 6,612.74 CF POWAY LTD.
71 317-270-26 76(: 000.00 51,641.44 CF POWAY LTD.
72 317-270-27 64(: 000.00 48,293.74 CF POWAY LTD.
73 317-270-28 565 O00.00 40,234.44 CF POWAY LTD.
74 317-270-29 69C 000.08 42,383.58 CF POWAY LTD.
75 317-270-38 2~ IX)0.00 11,551.66 CF POWAY LTD.
76 317-270-31 172 I)00.00 10,60t.08 CF POWAY LTD.
78 317-270-33 64l~ D00.00 35,643.16 CF POWAY LTD.
79 317-270-34 682 I)00.08 51,424.46 CF POWAY LTD.
80 317-270-35 835,000.00 65,063.26 CF POWAY LTD.
81 317-270-36 942.000.08 65,249.22 CF POWAY LTD.
82 317-270-37 415.000.00 27,132.94 CF POWAY LTD.
83 317-270-38 452 000.00 28,569.14 CF POWAY LTD.
12/21/94 SOPWAY~ASSESSED/TAX VALUATION
8 of 13 JAN 3 1 1995 I'TE~ 7,1
2
C. F. POWAY
ASSESSED/TAX VALUATION
FY 199411995
1994-95 1994-95
ASSESSED TAX
LOT NUMBER APN NUMBERS VALUATION ASSESSMENT OWNER(~ ?11194
84 317-270-39 520,000.00 30,976.60 CF POWAY LTD.
85 317-270-40 465,000.00 31,245.24 CF POWAY LTD.
86 317-270-41 423,000.00 27,670.22 CF POWAY LTD.
87 ' ' 317-270-42 378,000.00 24,219.20 CF POWAY LTD.
88 317-270-43 352,000.00 22,214.70 CF POWAY LTD.
89 317-270-44 520,000.00 30,873.26 CF POWAY LTD.
102 317-270-45 58,000.00 4,566.92 CF POWAY LTD.
103 317-270-46 115,000.00 6,282.12 CF POWAY LTD.
104 317-270-47 50,000.00 3,234.06 CF POWAY LTD.
90 $17-281-07 500,000.00 32,195.82 CF POWAY LTD.
91 317-281-08 523,000.00 33,849.00 CF POWAY LTD.
92 317-281.09 475,000.00 31,234.92 CF POWAY LTD.
93 317-281-10 482,000.00 28,889.44 CF POWAY LTD.
94 317-281-11 563,000.00 35,543.54 CF POWAY LTD.
95 317-281-12 638,000.00 45,576.30 CF POWAY LTD.
96 317-281-13 618,000.00 44~9~JL76 CF POWAY LTD.
97 317-281-14 454,000.00 32,588.44 CF POWAY LTD.
98 317-281-15 906,000.00 61,694.88 CF POWAY LTD.
99 317-281-16 ~ Z~ CF POWAY LTD.
12/21/94 SOPWAY~SSESSED/TAX VALUATION
JAN 3 ]. 1995 ITEM ?,1
9 of 13
SUSAN CALLERY. Depuly Mayor
BOB EMERY. Councilre~mber
MICKEY CAFAGNA. CounciImember
BETTY REXFORD, Councilmember
January 18, 1995
CF POWAY, LTD.
C/O Samuel A. Craig, President
CF Pomerado, Inc.
13000 Gregg Street
Poway, CA 92064
Re: South Poway Community Facilities District No. 1 of the
City of Poway (Pomerado Business Park)
Delinquent Special Mello-Roos Taxes
Dear Mr. Craig:
This letter is to provide notice to CF POWAY LTD. that
unless the delinquent special Mello-Roos tax obligations
associated with those parcels owned by CF POWAY LTD. and
identified in the enclosed schedule of delinquencies are paid
within 10 days of the date of this letter, an action will be
commenced in the Superior Court to foreclose the liens which
secure payment of those special tax obligations.
The total principal amount currently due for all tax parcels
is $893,635.52, representing the first installment of special
taxes for fiscal year 1994-95 which was due on December 10, 1994.
A statutory penalty of 10% thereon, aggregating $89,363.55, is
also now due and payable.
DEMAND IS HEREBY MADE THAT YOU PAY THE TOTAL AMOUNT DUB OF
~982.999.~07 WITHIN T~ (10) DAYS OP TNB DATE OF THIS LBTT.~I~.
f t~is amount is/not paid within 10 days, judicial forecxosure
proceedings will be commenced for the collection of the amounts
due plus additional penalties, interest, administrative expenses
and litigation expenses, including attorneys fees and related
collection costs.
The first step in the legal proceedings will be to order a
litigation guarantee, the premium for which is estimated to be
$2500. You may avoid the foregoing consequences of having to pay
additional penalties, interest, fees and costs in connection with
the above delinquency by sending your CHECK PAYABLE TO THE ORDER
OF THE "CITY OF POWAY" IN THH AMOUNT OF $982/999.07 AT THE
ADDRESS ABOVH FOR RECEIPT WITHIN TEN (10) DAYS OF THE DATE OF
THIS LETTER.
City Hall Located at 13325 Civic Center Drive
/
~--Mailing Address: P.O. Box 789, Poway, California 92074-0789 * (619) 748-6600, 695-1400-'~
ATTACHMENT JAN B 1 1995 ]'fEN] 7.1
10 of 13
CF POWAY, LTD.
January 18, 1995
Page 2
Your immediate attention will be appreciated and is required
if Judicial intervention is to be avoided. If you have already
paid this delinquency directly to the City of Poway or to the Tax
Collector of the County of San Diego, please call this office so
that our records may be corrected.
?te~h~e~f_M.: Eck_i,, General Counsel
to ~e City of Poway and CFD No. 1
CC: James L. Bowersox, City Manager
Peggy Stewart, Director of Administrative Services
/ /
~ of 13 ,JAN 31 1995 [i'~.~] 7.1
SCHEDULE OF DELINQUENCIES
SOUTH POWAY COMe, UNITY FACILITIES DISTRICT NO. 1
(POMERADO BUSINESS P~RK)
OWNER: CF POWAY LTD.
1994-95 1st
Assessor's Installment
~ Lot No. ~ Penalty Total
317-223-04 39 $ 18,608.69 $ 1,860.87 $ 20 469.56
317-223-05 40 28,579.48 2,857.95 31 437.43
317-223-06 41 32,851.93 3,285.19 36 137.12
317-223-14 32 8,048.95 804.90 8 853.85
317-223-19 22 37,408.53 3,740.85 41149.38
317-223-20 25 12,714.04 1,271.40 13.985.44
317-223-21 27 18,959.99 1,896.00 20.855.99
317-223-33 23 20.427.19 2,042.72 22.469.91
317-224-15 9-1 i 617.02 161.70 1,778.72
317-225-01 3-1 10 539.07 1,0§3.91 11,592.98
317-225-13 5 11 019.53 1,101.95 12,121.48
317-270-07 52 13 483.81 1,348.38 14,832.19
317-270-08 53 10 291.09 1,029.11 11,320.20
317-270-09 54 9 381.84 938.18 10,320.02
317-270-10 55 9 846.79 984.68 10,831.47
317-270-11 56 10 043.11 1,004.31 11,047.42
317-270-12 57 17.317.14 1,731.71 19,048.85
317-270-13 58 12.342.07 1,234.21 13,576.28
317-270-14 59 9,722.81 972.28 10,695.09
317-270-15 60 6,798.73 679.87 7,478.60
317-270-16 61 5,119.72 511.97 5,631.69
317-270-18 63 11,572.31 1,157.23 12,729.54
317-270-19 64 9,459.33 945.93 10,405.26
317-270-20 65 5,145.54 514.55 5,660.09
317-270-21 66 3,373.54 337.35 3,710.89
317-270-22 67 7,630.49 763.05 8,393.54
317-270-23 68 / 3,890.15 389.02 4,279.17
317-270-24 69 4,169.13 416.91 4,586.04
317-270-25 70 3,306.37 330.64 3,637.01
317-270-26 71 25,820.72 2,582.07 28,402.79
317-270-27 72 24,146.87 2,414.69 26,561.56
317-270-28 73 20,117.22 2,011.72 22,128.94
317-270-29 74 21,191.79 2,119.18 23,310.97
317-270-30 75 5,775.83 577.58 6,353.41
317-270-31 76 5 300.53 530.05 5,830.58
317-270-33 78 17 921.58 1,792.16 19.713.74
317-270-34 79 25 712.23 2,571.22 28,283.45
317-270-35 80 32 531.63 3,253.16 35,784.79
317-270-36 81 '32 624.61' 3,262.46 35,887.07
317-270-37 82 13 566.47 1,356.65 14.,923.12
317-270-38 83 14 284.57 1,428.46 15,713.03
317-270-39 84 15488.30 1,548.83 17,037.13
317-270-40 85 15.622.62 1,562.26 17,184.88
317-270-41 86 13.835.11 1,383.51 15,218.62
12 of 13
1994-9§
Assessor's Installment
Parcel No. Lot ~o. Principal Penalty Total
317-270-42 87 $ 12,109.60 $ 1,210.96 $ 13,320.§6
317-270-43 88 11 107.35 1,110.74 12,218.09
317-270-44 89 15 436.63 1,543.66 16,980.29
317-270-45 102 2 283.46 228.35 2,511.81
317-270-46 103 3 141.06 314.11 3,455.17
317-270-47 104 I 671.03 161.70 1,778.73
317-281-07 90 16.097.91 1,609.79 17.707.70
317-281-08 91 16 924.50 1,692.45 18.616.95
317-281-09 92 15.617.46 1,561.75 17.179.21
317-281-10 93 14 444.72 1,444.47 15.889.19
317-281-11 94 17 771.77 1,777.18 19.548.95
317-281-12 95 22 788.15 2,278.82 25.066.97
317-281-13 96 22 111.38 2,211.15 24.322.53
317-281-14 97 16 294.22 1,629.42 17.923.64
317-281-15 98 30 847.44 3,084.74 33.932.18
317-281-16 99 37.434~37 3.743.44 41.177.81
TOTALt $893,635.52 $89,363.55 $982,999.07
13 of 13 JAN 3 1 1995 I'TE~1 7,1