City Council Agenda
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Memo to: |
Manteca City Council |
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From: |
Matthew Boring, Interim Director of Finance |
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Date: |
July 30, 2025 |
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Subject: |
Community Facilities District No. 2025-1 (Indelicato Facilities and Services) Special Tax Bonds, Series 2025 |
Recommendation:
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Adopt a resolution of Intention of the City Council of the City of Manteca to form the City of Manteca Community Facilities District No. 2025-1 (Indelicato Facilities and Services), and to levy special taxes therein to finance certain public services and the acquisition and construction of certain public facilities and; Adopt a resolution of the City Council of the City of Manteca, State of California, declaring its intention to incur a bonded indebtedness in and for City of Manteca Community Facilities District No. 2025-1 (Indelicato Facilities and Services) in a maximum aggregate principal amount not to exceed $7 million to finance the acquisition and construction of certain public facilities.
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Background:
The City of Manteca has been asked by K. Hovnanian California Region, Inc. (the “Developer”) of the proposed Indelicato development to form a new District and levy special taxes to form the City of Manteca Community Facilities District No. 2025-1 (Indelicato Facilities and Services). The Project contains 40 acres adjacent to Airport Way and is comprised of 173 single family homes along with parks and trails. The District is being formed to finance the acquisition and construction of certain public facilities and ongoing public services related to the development. Formation of the District is consistent with the City’s goals and policies governing the use of community facilities districts.
By forming the District, the City will consider financing the public capital facilities and incidental expenses through the sale of bonded indebtedness in an amount not to exceed principal amount of $7,000,000. The bonds would be paid from special taxes levied on homes in the development. The formation will also provide for a portion of the special tax to be dedicated to providing public services to the homes in the development.
The RESOLUTION OF INTENTION declares the intention of the City to establish the CFD, designates the name of the district, identifies the facilities to be acquired and financed, the services to be provided, and states the City's intention to levy a special tax to pay for the acquisition, construction, and associated costs of the public facilities and services. Exhibit A (Special Tax Formula) provides detail on the special tax and Exhibit B (List of Facilities) provides detail on the facilities and services. The taxes levied for facilities are the security for the bonds of the District; the bonds are not an obligation of the City and are payable only from the collected special taxes. Since the special tax is payable by the owner of the property in the CFD in the same manner general taxes are payable, as the property develops, the special tax shifts from the developer to the homeowner upon sale of the home.
The List of Authorized Facilities provides the detail of the scope of facilities that are permitted to be financed by the CFD. The listing is the “menu” of items that can be financed, but the amount available from the bonds may not necessarily be enough to cover all the items.
The resolution sets September 2, 2025 as the date for the required hearing on the matters set forth therein. At the public hearing the City Council will hear a presentation on the proposed CFD to fund the major infrastructure requirements and associated planning and design costs for the project. At the same time, the election of the property owners is expected to be completed. The election results is expected to unanimously favor the CFD formation, as only property owners in favor of the District are within the District boundaries and will be voting. We are expecting that the property owners will waive a number of notice and election procedures that make it possible for the District to proceed at this pace.
At the public hearing on the CFD, protests against the establishment of the District, the extent of the District, or the furnishing of specified types of public facilities or services within the District and the issuance of bonds may be made orally or in writing by any interested persons or taxpayers. Any protests pertaining to the regularity or sufficiency of the proceedings shall be made in writing and shall clearly set forth the irregularities and defects to which objection is made. All written protests shall be filed with the City Clerk on or before the time fixed for the hearing. The City Council may waive any irregularities in the form or content of any written protest and at the hearing may correct minor defects in the proceedings. Written protests may be withdrawn in writing at any time before the conclusion of the hearing. Objections of the non-owner public will be heard but are not determinative to the formation process. If the City Council determines at the conclusion of the hearings on September 2nd to proceed with the establishment of the CFD, the voting results are reported, and the process is concluded by adoption of additional resolutions and an ordinance.
The RESOLUTION OF INTENTION TO INCUR BONDED INDEBTEDNESS declares the intention of the City to provide for the issuance of bonds in an amount not to exceed $7,000,000 to finance the authorized improvements of the CFD. The bonds are expected to be tax-exempt since they finance public improvements which will be acquired by the City or another public entity.
These resolutions are simply an expression of intent, the Council is not bound to actually form the CFD, which will be decided on September 2nd.
As noted in the resolutions, notice of the Public Hearings will need to be published in a newspaper of general circulation at least seven days prior to the hearing date.
Fiscal Impact:
The proposed Community Facilities District No. 2025-1 special tax bonds will not be a direct obligation of the City of Manteca. Neither the faith and credit, nor the taxing power of the City or any other political subdivision will be pledged to the repayment of the bonds. The bonds will be limited obligations of the District payable solely from special taxes levied on taxable property within the District. All costs of issuance of the proposed bonds will come from bond proceeds, although certain fees are not contingent on the closing of bonds.
Documents Attached:
1. Attachment 1 - Resolution of Intent to Form
2. Attachment 2 - CFD 2025-1 Map
3. Attachment 3 - Resolution of Intent to Incur Indebtedness