[Music]
All right. Good afternoon. I'm going to
call this uh special meeting four
o'clock special meeting to order. Madame
clerk, would you please call role?
>> Council member Dinus
» Council member Dinus
>> here.
» here.
>> Council member Dedric
» Council member Dedric
>> here.
» here.
>> Council member Temple, acting mayor
» Council member Temple, acting mayor
Carwin
>> here.
» here.
>> And Mayor Estrada is absent.
» And Mayor Estrada is absent.
>> Thank you. Uh Council Member Dinus,
» Thank you. Uh Council Member Dinus,
would you please lead us in the flag
salute?
» Ready, begin.
>> I pledge allegiance to the flag of the
» I pledge allegiance to the flag of the
United States of America and to the for
which it stands, one nation under God,
indivisible, with liberty and justice
for all.
» You haven't lost your touch.
All right, we've got uh one discussion
item on our special agenda today, a
public safety services community
facilities district. Um, Director
Hickey, would you please introduce the
item?
Okay. Uh, good afternoon, acting mayor,
members of the city council, city staff.
I'm Travis Hiki, CFO of the city, and
it's my pleasure to be here today to
present the first portion of the
workshop for the consideration of a
public safety community
uh, facilities district or CFD.
I would like to thank the executive
office including the city manager for
their time and leadership in the overall
direction of this project. I also want
to thank Spicer Consulting Group, deputy
finance director Margarita Cornnejo and
financial analyst Lori Lockwood for
their tremendous efforts to bring this
all together.
Do we have the slides available?
Okay. Uh so in every uh project or
program the city initiates, the
foundation starts with the five
strategic goals and priorities of our
strategic plan. The proposal for the
public safety CFD really revolves around
the goals and priorities of the thriving
economy and the safe and safe and
vibrant community. Overriding principles
of the thriving economy involve planning
for long-term sustainability and
diversifying the city's revenue sources
for the safe and vibrant community. This
involves maintaining the city as one of
the safest cities where residents and
visitors are secure in their
neighborhoods and surrounding spaces.
So before we look closer at these
priorities, I wanted to go back to some
information that we provided to the city
council a month ago at the joint meeting
with the planning commission provided on
December 17th of last year. I know the
slides are a little bit small, but we
just it's just more kind of for context
and a reminder of what we talked about.
Here we see some of the slides from the
presentation provided by Urban 3 as part
of their revenue per acre analysis. In
the upper left, we see the graphical
representation of the city's general
fund and quality of life budgets
totaling hund00 million. On the left
side in green, we see the various
revenue streams with the two largest
unrestricted sources being sales tax and
property taxes totaling 15 $59 million.
Another $31 million is generated from
licenses, permits, and fees where much
of that is charges for services and
covers the cost of those services. So,
the vast majority of funding to pay for
things like public safety comes largely
from sales tax and property tax. On the
right side in red, we see the
expenditures with public safety
accounting for $56 million or nearly all
of the property tax and sales tax. In
that upper right quadrant, we see an
analysis analysis of the impact that
Prop 13 has on the value of property
taxes in California. Prop 13 protects
homeowners from property taxes not
escalating more than 2% per year.
However, that's regardless of how the
cost of city services increases.
Property tax values are reset every time
a property is sold, creating a major
variance in the property taxes one
homeowner pays for services relative to
other homeowners based on how long they
have owned the property. You can see an
example in the chart where the value per
acre is significantly different for
various homes in the same neighborhood
based on the year of purchase.
On the lower right, we see the impact
that CFD CFDs have made to diversify the
city's revenue streams and somewhat
counteract the impact of Prop 13 on the
base property taxes. Those neighborhoods
with service CFDs are represented with
green layers on their parcels and
provide ongoing revenue to provide
needed services to those developments,
including street maintenance, landscape
maintenance, traffic signal maintenance,
and more.
Shifting back to the city's strategic
plan objective of supporting long-term
sustainability, we see here the many
needs and challenges facing the city. We
have needs for new and existing
infrastructure, including ongoing
pavement management activities, a $1
billion five-year capital improvement
program, and new public facilities for
virtually all of our functional areas,
including city hall, police department
headquarters, public works, maintenance
operations center, and a community
center. In our parks and recreational
amenities and service areas, we have
expanded programming, including the
introduction of an aquatic program, the
acquisition of additional open space,
accepted new parks from ongoing
development, and are pursuing an
annexation process to transfer control
of the parks of parks and rideway
currently operated by the valleywide
park and recreation district.
In building a fiscally resilient and
strong city, the city remains committed
to proactively managing the unfunded
costs of the city's pension and OPED
liabilities and establishing healthy
reserves for both emergencies and
planned uses such as ongoing capital
outlay needs.
And with all of these competing
priorities, the city still holds public
safety within Meny as a top priority,
including supporting equipment and
everchanging technology to support
public safety needs.
So with all of these needs comes
pressure to build and diversify the
city's revenue base and provide the
funding to make Manif a premier, safe,
thriving, and inclusive city to live,
work, play, and stay.
So, the city has done a tremendous job
in diversifying our revenue streams.
Regular citywide user fees and
development impact fee updates keep
revenues up to date with changes in
development, costs of infrastructure and
services, and changes in the economy.
Negotiating various community benefit
agreements has been a welcome relief in
recent times with the economy leveling
off. The agreement with Nova Battery
Park generated a $5 million CBA along
with a $1 million contribution towards
the RBBD along with additional onetime
sales tax for the cost of materials used
in the construction of their site
totaling over $15 million in the past
two years. Had it not been for this
one-time sales tax money last fiscal
year, the city would have fallen short
of budget projections.
The city has also restructured its
investment portfolio to maximize
investment returns while also keeping
the city's treasury safe and liquid. We
are looking at multiple years in a row
with investment earnings outpacing
budget expectations. We also have a very
active economic development program
including the use of incentives to
attract new businesses to the community
which will drive growth in sales tax,
quality of life funds, property taxes,
transient occupancy taxes, and franchise
fees.
Since the voters approved the enactment
of the quality of life measure, the city
has remained committed to using the
funds exclusively for public safety and
infrastructure improvements. Regular
meetings with the quality of life
committee ensure that the public is
vetting the use of these funds before
they are presented to the city council
for use. However, with all of these
efforts, it is still necessary to
prioritize a strategy further to diver
further diversify revenue streams in
support of ongoing services and
infrastructure needs.
So, this brings us to our topic for
today, a public safety services CFD.
A public safety services CFD is a
legally defensible and sustainable
mechanism to ensure that new development
contributes its fair share towards the
increased cost of public safety. I think
the key here is to focus on the word
increased. This is not a CFD to pay for
existing service levels. This would be
to pay for increased levels of services
that are required because new
development is coming into the city. To
say it another way, it's a mechanism to
ensure that service levels do not
decline to existing residents and
business owners within the city.
Shane will cover more specifics in a
moment, but I want to mention that with
new development, most residential
parcels are paying property taxes at a
rate of nearly 2%. This CFD would not
change that rate. It would not add an
additional tax to those owners. If the
CFD does not move forward, the tax rate
would still be up to 2%, but more
funding would be made available to the
developer of the project to be reimburse
for the cost of facilities and fees
connected to the project. It is true
that the developer reimbursements would
be paid off after 30 years when the
bonds are paid off. However, we should
also keep in mind that the need for
those public safety services will not go
away and that the fees connected to
those properties only represent the
incremental cost of those services due
to the development coming into the city.
The city had started the process of
forming a public safety CFD back in
2015. However, the city council at the
time chose not to move forward with the
formation. Since 2015, many thousands of
housing units have come to the city,
representing several million dollars
that the city would otherwise be
receiving. Now, development continues,
and if we act now, we can at least
capture the remaining units yet to be
developed to recoup that incremental
cost for that growth. In June of 2025,
the city council asked about a public
safety CFD. At that time, the city
engaged Spicer Consulting Group to
perform a fiscal impact analysis for a
potential CFD. In September of 2025,
staff reviewed the results of the
analysis with the finance committee,
which recommended the item be brought
forward to the full city council for
review and discussion.
At this time, I'll turn it over to Shane
Spicer from Spicer Consulting Group to
cover the results of the fiscal impact
analysis and provide specifics of what a
potential public safety CFD would look
like.
Thank you very much, Travis.
So,
so I'll cover a high level overview of
the fiscal impact analysis and how does
that translate into a proposed CFD uh
structure. So, as was mentioned in 2015,
um actually I was here doing the initial
analysis and so it's funny 10 10 years
later here we are again having the same
conversation but much critical
conversation needed. So, as uh Travis
had mentioned, um you know, the city is
intending is expecting uh a consistent
level of development and consistent with
the city's development impact fee
analysis that was approved in 2022. Uh
that's estimated that at 2020 2045
population would grow up to 148,000. Uh
at the time of our study, that's an
increase of about 32,700
new residents to the city.
Using the city's current budget and
service levels as a baseline, the
analysis evaluates what it cost would be
for ongoing general fund services to
these new residents through development.
Through this analysis, it anticipated
that revenues for new development for
residential would be approximately $41.2
million.
The general fund service costs for that
same new development is estimated to be
at $47 million. That new gen cost
increase would consist of the addition
of additional public safety service
personnel to provide those additional
services to that community.
Between the revenues and the general
fund service costs, the estimated
negative general fund impact is $5.8
million a year. And that majority of
these service costs, as you as you well
know, is with public safety. Uh the
city's general fund estimates about 60%
of those uh expenditures for public
safety. That is consistent up and down
the state and uh with all the other uh
local communities that I do business
with. Um it is very common to have that
be a greater share of those costs. These
public safety costs include police,
fire, animal control.
uh of that 60% expenditure and the
shortfall that estimates to about $179
per resident which translates to the
rates I'll cover in a minute.
So with CFDs uh CFDs to provide public
safety services is not a new idea.
Obviously we talked about it uh in 10
years ago and they've been u implemented
I've seen any some as far back as 2005.
So for over 20 years, even though the
law has been around for longer than
that, they've been readily used for
public safety. So it's not a novel
concept. For this CFD, the proposed rate
would be $525 per unit for single family
residents and $411 per unit for
multifamily.
It's important to note that this is
similar to the maintenance services CFD.
So this is only on new development. So
the existing community is not and
expected to pay these CFD taxes.
It is also important to note that with
the CFD tax being established with the
CFD uh there would be an escalator
included. You know in the maintenance
services CFD 2017-1 we have the greater
of CPI or 2%. But public safety costs
increase at a much greater rate than CPI
does. And so the proposed CPI as with
other uh public safety CFDs are tend to
be greater. Proposed here is the greater
of CPI or 4%. Now that is the maximum
tax rate. It is up to the council of
what amount to be levied annually for
this public safety CFD or what percent
of increase up to the maximum allowable
can be applied each year.
And as Travis mentioned, this does not
change or modify the 2% effective tax
rate that's uh already been adopted
through the C city CFD goals and
policies. And again, that 2% just to
recap is based on the estimated home
price at the time the C the properties
are developed and up to 2% of that
effect of that home value.
with public safety CFDs they are an
order of highest priority when it comes
to determining that. So what that means
is that that you have the base 1% ad
valorum you have your maintenance or
public safety CFD and then the balance
is what would be eligible for facility
financing if so asked by the developer.
So how does that compare to the region?
So there are quite a few CFDs in
Riverside County. The proposed rate of
$525 is actually below the region uh
county average of $65 per single family.
There's a wide range of rates in the
county, ranging from $257 for city of
Hemet up through over $1,500 for the
city of Coachella. Each rate varies
dependent on when they were uh formed
and also based on the mechanics of the
general fund that the cities operate
under. I can't attest to some of these
uh CFD tax rates of how they were
determined, but I can tell you about a
number of them as I formed these with
these cities most recently just last
year with the city of Marietta.
So, one of the takeaways is that this
tax rate is not an outlier. It falls
well within the range of those CFDs that
are in the county and wholly acceptable
for the this type of CFD. With that,
I'll turn it back to Travis.
Okay, thank you Shane. Um, so if the
council would like to move forward, the
city would start communicating with
developers that there is an intention to
create a public safety CFD for new
projects. This would be a new condition
of approval for the project. We would
also communicate with existing projects
that have not finalized their conditions
and would negotiate with existing
projects on their conditions of devel
and with development agreements uh to
intemp attempt to incorporate the CFD.
The actual formation of the CFD would
happen concurrently with the cornerstone
development starting with the finance
committee before being brought to the
city council for formation. Once the CFD
is formed, future projects would be
annexed into the CFD much in the manner
projects are annexed into the existing
maintenance CFD.
The city would perform regular updates
to the fees based on updated growth
projections which could result in
establishing a newer or updated public
safety CFD in the future.
So, the recommended action is to discuss
and provide direction on establishing a
public safety CFD to help fund essential
city services for new development
projects. And with that, be happy to
take any questions.
>> Thank you, Director Hickeyi. Um, at this
» Thank you, Director Hickeyi. Um, at this
time, uh, the city council is welcome to
ask questions of staff. Again, this
isn't for discussion. It's just
technical questions of staff. So, do we
have any, uh, questions based on the
presentation?
Council member Dinus.
>> Thank you. Um,
» Thank you. Um,
so your projections for
full buildout
if every if if everything's built out
the the 500 whatever dollars it was for
the single family homes would continue
to go on
till the house is no longer there I
guess forever. Um,
so I guess the question is there's some
way will there ever be a time where our
as we grow in our
retail and you know we have a we have
toot taxes that you know with the hotels
coming in so all that's taken into
account and we would on an ongoing basis
we'd be short that much money
ongoing. Is that accurate?
>> Yeah. So this is based on the current
» Yeah. So this is based on the current
budget structure. Um so uh and both the
revenues and and uh expenditures were um
escalated consistent with what would be
conservative growth uh rec recognition.
Um you know this is not you know this
not something that is going to be the
answer forever. It may need to be
updated to be increased or it could be
evaluated that okay the city has t taken
on a lot more uh commercial development
and we don't have to levy as much which
has happened in other cities where you
don't levy the maximum amount you know
you're able to to cover more costs
because you had a better performance on
through your general fund activities. So
this is to protect the city's general
fund to the best of its ability with the
current uh structure of the general
fund. So this will this will not include
any of the construction that's going on
today.
The homes are being built now. Nothing
that's in in the pipeline mean for
approvals and everything.
>> Yeah. So the the typical approach is to
» Yeah. So the the typical approach is to
identify what would be the next project
to come in. We need one project to be
the cornerstone to form the project form
the CFD. Typically if projects are
already underway they're not likely to
you know opt in. um at that point it
would be voluntary because that project
is already you know through its
conditions and is not required to be
included. You may find a part property
that a project that may be already
entitled that would want to participate
you know and it be a negotiated
discussion with the property owner in
the city. So it's a business decision at
that point and then future development
would would automatically be conditioned
to participate along with all other
residential development.
And is it correct that then all the uh
special taxes collected for the CFD
would be restricted to public safety use
only?
>> Correct. It is only limited to the
» Correct. It is only limited to the
public safety services, not towards uh
capital improvements or anything of that
sort.
>> Okay, that's my questions. Thanks.
» Okay, that's my questions. Thanks.
>> All right, council members, any
» All right, council members, any
questions from down here? Council member
Dedric.
Council member Dinus took my first
question, but my second one, it's capped
at 2%, right? So, is that I know there's
the 4% increase that's allowed each
year. How does that how does that
balance?
>> So, the tax rate is going to be at 525
» So, the tax rate is going to be at 525
and then every year the maximum tax
would be the greater of CPI or 4%. So,
um that would just increase the ceiling
on that CFD tax. How does that play into
the 2% we were talking about? Again,
this is the difference between the tax
and the effective tax rate. So, the
effective tax rate is capped at 2%. Um,
and that's per the city's goals and
policies. So, what that means is that
when the home owner, the developer goes
to sell his home after he factors in all
the advalorum, the public safety, CFD,
the maintenance, then he can only go up
to that 2%. So, they're different. These
are two different um items to
>> that's at the initial sale.
» that's at the initial sale.
>> That's at the initial sale. And then
» That's at the initial sale. And then
after the initial sale, then the uh you
know, if there's bonds, those taxes
would be levied. Um and then the public
safety services and maintenance
services, all everything would be
levied. Um but established at that 2% at
the onset. Okay. Thank you.
» I I got a couple questions. So there was
you you had mentioned that uh developers
who are currently in the works could opt
in on a voluntary basis. Why would they
do that?
>> They might have some business incentive
» They might have some business incentive
to do so. Um typically though once
they're already in under construction,
they've already done all of their
proforma, they've already secured their
financing. It is highly unlikely that
any development. Now you may have phased
developments that you could have a later
phase be potentially eligible to come in
but then you know that's at it's not
typical that you would find somebody
that's already in process.
>> So one thing that you mentioned I didn't
» So one thing that you mentioned I didn't
see a slide for it here but you said if
we if we don't do this there's a
developer payment that gets done that
would sunset in 30 years. Explain that
language to me. What what is it that
would be paid out that would sunset in
30 years?
That would be the facilities tax. So
what what currently you is in existence
is that you have a 2% effective tax
rate. All right? And the developer forms
a facility CFD, one of our CFDs that we
formed those that facility CFD is
secured to pay off a 30-year bond. So in
reality, in 30 years, that CFD would go
away. Okay. The problem is is that once
in the current environment, the only
other revenue source the city actually
gets currently would be the maintenance
services for ongoing maintenance. No
public safety taxes to for above and
beyond. Having the public safety CFD
would cut into that 30-year tax that the
developer would be getting, but the city
would be able to continue to levy that
public safety tax for perpetuity to
provide those vital services once even
once the bonds are are paid off. So
>> So does this take the place of that bond
» So does this take the place of that bond
or does it pick up after the bond is
paid off?
>> It cuts into how much of the bond can be
» It cuts into how much of the bond can be
issued.
>> I see. So what we're going to see is
» I see. So what we're going to see is
over the next 30 years the impact of the
new development would be felt by the
city and after 30 years that impact
would continue but the payment for it
would not. Is that basically what's
going on here if we if we were to not
implic uh institute this?
>> Correct. If you did not institute this
» Correct. If you did not institute this
then you would not be recouping those
increased service costs for public
safety even after the bond is paid off.
>> I see. And then is there a
» I see. And then is there a
is there a definition in the law
surrounding this of new development? At
what point it it would begin? Is it on
occupancy? Is it on
>> Yeah. So similar to our our our
» Yeah. So similar to our our our
maintenance services CFDs, what we
typically do is based on only developed
property after building permits are
issued. So there would be a similar um
annual administration component of
reviewing new development and if there's
a building permit that it made the cut
off for that tax year then they would
end up paying towards that CFD. If the
building permit was after that cut off
whatever we define May 1st then it
wouldn't be picked up until the
following year. But it's only new
development. This would not be levied on
undeveloped property there. The
developers wouldn't be paying this. to
be new homeowners and and and develop
property that are pursuant to the rate
and method that we would be establishing
when we bring that back to the council
for approval.
>> And and who does the payment go to?
» And and who does the payment go to?
>> So, the payment would go to the county
» So, the payment would go to the county
and then remitt it to the city um as
other uh portion of funds for a specific
fund number that be designated for
public safety restricted from the
general fund. So in that path, do we end
up back with a 100% of the assessed
amount or does the county keep a portion
of it on the way through?
>> There there's a 30 cent charge for
» There there's a 30 cent charge for
putting it on the tax role. But um you
know if there's delinquencies obviously
that wouldn't come back to the city, but
it would be essentially 100% of what
gets enrolled comes back for public
safety.
>> So of the $525 the county would just
» So of the $525 the county would just
keep 25 30 cents of it and then the rest
would come here
>> pretty much. So they can't stop it along
» pretty much. So they can't stop it along
the way and divert it to their own
funds. It just they're just mainly a
pass through.
>> Absolutely not. And we bring in this
» Absolutely not. And we bring in this
back to the council like all the other
CFDs for annual review and approval and
the resolution that we would need in
order to submit to the tax role.
>> In all of the cities that you have seen
» In all of the cities that you have seen
institute one of these, have there been
any ever that have reduced or eliminated
it?
>> Well, reduced in the Okay. For example,
» Well, reduced in the Okay. For example,
um you know,
>> like for example, I'll tell you exactly
» like for example, I'll tell you exactly
what I'm talking about. Maybe it'll help
you answer your question. If in 15
years, Han Road is fully built out with
economic development and that's just
cranking tax revenue for something like
that and it would cover the cost of the
public services.
Do we just keep taking it anyway or is
there a way for us to go, hey, we got it
covered? Like the Coronado Bridge, hey,
we got it covered. We don't need to
charge you for it anymore.
>> Yeah. there. So when the through the the
» Yeah. there. So when the through the the
annual audit uh budget review process um
that's when you evaluate how much are
you getting from all your uh
discretionary funds or how much are you
getting from your restricted funds and
evaluate how much public safety costs
are. I can tell you that I have seen
instances where a city had froze the
maximum amount and didn't increase the
assessment for a couple years and and in
one instance because if you recall there
was a CPI at over 10%. Well, they didn't
go to the 10%. They said, "Okay, we're
good for we're levy the same amount we
did last year." And they did that for a
couple years and then they just started
in incrementally increasing just
recently. So, you could every three to
five years, I would recommend anytime
you update your development impact fee,
your general plan or what have you, that
we would re-evaluate the public safety
uh fiscal impact analysis, determine are
you right size on new development for
public safety services. And that can
also factor into how how you're
evaluating your annual levies for your
existing CFD tax rates for public
safety.
>> Would this payment be part of the
» Would this payment be part of the
impound on the mortgages or is it a
separate cash issuance? Like is just a
bill that the the homeowner would pay or
is it rolled into the mortgage?
>> It's an it's a it's part of the property
» It's an it's a it's part of the property
tax bill. So, it's a completely separate
line item, completely separate from any
uh you know, property tax line items and
not part it could be impounded just like
their other property taxes, but it just
funneled through the county like your
other assessments.
>> Okay. So, it would be possible to
» Okay. So, it would be possible to
include it in the impound with the other
taxes that are
>> it would be. Yeah, exactly. In fact,
» it would be. Yeah, exactly. In fact,
they would be if they're impounding,
>> right? That's what I was suspecting. All
» right? That's what I was suspecting. All
right. Uh those are all my questions.
Council members, any other questions
before we move on? All right. Um, madame
clerk, are there any requests to speak
on this item or has any correspondence
been received on this item?
>> There are none.
» There are none.
>> All right. Um, so at this time is when
» All right. Um, so at this time is when
we get to discuss our feelings and
thoughts on this stuff and analyze what
we've just been told. So, uh, who would
anybody like to chime in on it?
» I'll start.
>> Thank you.
» Thank you.
>> All eyes are on me here for a second
» All eyes are on me here for a second
here.
>> Well, you're the you're the finance guy,
» Well, you're the you're the finance guy,
so that's why we're all looking your
way.
>> A couple things. Yeah. Yeah. I
» A couple things. Yeah. Yeah. I
understand, you know, public safety is,
you know, our highest priority here and
we want to continue to make that so and,
you know, continue to be one of the
safest, uh, cities in the state. Um, so
I I I understand where we're going
there. I just I'm a little conflicted,
you know,
um, you know, we're putting the burden
on our new residents, but their new
residents are the ones that are going to
cause the increase. Um, you know, as we
add these things, it keeps shooting up
the price of homes. That's my that's one
of my part I'm I'm concerned on, but uh
for the greater good. I understand why
we need to do it. Um,
c can I ask you to that point, you were
here in 2015 when this was discussed,
right? You were on council in 2015,
>> No, you weren't here then.
» No, you weren't here then.
>> I was 2018.
» I was 2018.
>> 2018. Okay. Then I'll ask him when
» 2018. Okay. Then I'll ask him when
you're done. I I was going to ask you,
but
>> I can make up something.
» I can make up something.
Um, so I, you know, and
my concern is, you know, the greater of
of CPI or 4%. You know, your your
example was, well, it got to 10%, so
they decided not to do that. But there's
nothing saying that that a future
council can't say hey we're going to do
the whole 10% just you know irregardless
of what you know well benefits the
residents or not that that's that's my
largest concern doing that and um and if
there could be some mechanism in the in
this to say what you know I know it'll
be looked at annually and re-evaluated
but some way that you know that after
that each year it we need to be able to
either reduce it, eliminate it or pause
it or something like that and not just
continue on. I mean, I think it
shouldn't be left necessarily to the
discretion of, you know, oh, we don't
need 10% this year. I mean, that's a lot
for some homeowners to see, you know, a
10% increase in part of their property
tax. So, I I'm I'm concerned about that.
>> We we do have the option to include a
» We we do have the option to include a
cap if we would like to do that. We it's
kind of not the default position because
to protect the city in the event of
sustained uh high CPI increases, but we
could have it be 4% or CPI capped at 6%
or 7%. I mean there we could establish a
cap if we if the council would like to
do that.
>> You know, I just that's just my concern.
» You know, I just that's just my concern.
I'm think I'm putting myself in the
shoes of of the new resident that comes
in here after this has been approved and
and implemented that, you know, here's
just another line item on my tax bill
and now I've been paying, you know, $500
a month and all of a sudden there's a
10, you know, 10% 10%, you know,
inflation, all a sudden it jumps up. You
know, that would, you know, I hate to be
the city council that I get all those
phone calls when that happens. So, that
that's my concern. uh if you know some
way we can address that. I don't know
what the other council members uh their
concerns or if that's a concern at all.
But that's one thing I just other than
that I understand I I support it. Um it
certainly does not impact our existing
residents at all. So it's a it's a
benefit to those that are living here
now and it was just it is a a minimum
amount for the future residents that
would give them the enjoy the public
safety that we enjoy now. But but my
concern is then you know if it's if it
goes up to 11 12% you know here was you
know here what LA just you a couple
years ago was 9% inflation here in
Inland Empire that's that's a hard pill
to swallow when you're going to raise
everyone's you know uh rate by that
thank you council member Temple you're
next up
>> yeah if if you want I can add a little
» yeah if if you want I can add a little
bit of color to that if if you'd like.
So that's great. Um you know
it is it is a a decision that the
council gets to make. Um I know working
with city staff you know there is there
was a reluctance even to increase that
um on maintenance services which was
acceptable. It was a greater of CPI or
2% and we didn't go to the 10. So
there's prudence that's exercised
obviously but what that does is it just
allows for that maximum to increase.
doesn't mean that you levy that amount
that maximum amount. So that's where you
know even though the maximum could
increase and as Travis mentioned you
could have seven years in a row of 8%
public safety cost increases and then
how you you know you you can balance
that right but even though the max goes
up we're only increasing it by 4% each
year so you still have the capacity to
catch up in the future. So that's where
you know you give have the give and take
and then it becomes a decision of the
council every year.
>> There's be some analysis done each year
» There's be some analysis done each year
to saying you know here's what our
anticipated public safety costs are over
our baseline and this is how much
revenue we anticipate. So therefore this
is how much we should increase you
whether we stay at 2% 4% or whatever uh
to levy these taxes. I think that would
to me give a lot of comfort knowing that
we're just not doing it and you know,
and storing money away, uh, but actually
meeting the needs of the city without
overcharging our residents.
» Thank you, Council Member Temple.
>> Yeah. Um, Shane or Travis. So, first of
» Yeah. Um, Shane or Travis. So, first of
all, um,
where it does not increase the overall
maximum property tax rate of 2%. We're
just carving out a portion of that 2%
instead of for the developers. We're
taking that for this purpose. Correct.
>> That's correct.
» That's correct.
>> Okay. Um, so I I actually really
» Okay. Um, so I I actually really
appreciate what Dean said. Um, you know,
nothing's more permanent than a
temporary tax. And you know, I don't
want to be that city where we we vote
for something that uh we hope one day we
may either eliminate or lower or keep
the same and and you know, we we come to
accept the fact that we have this money
and we keep using it and one day we'll
ask for more. I don't I don't like that
and I don't accept it. I do I do
appreciate this very much and am in
favor of it. Um, but I would I would
appreciate um uh a regular reassessment
to see where we fall, how we're spending
the money, and you know, perhaps one day
as uh as we get the uh the economic
development corridors um producing and
doing what they ought to do. This is
something that we could either decrease
or eliminate, but I am in favor of it as
as you've written it. Thank you.
>> Thank you. Council member uh Dietrich,
» Thank you. Council member uh Dietrich,
do you have any comment?
>> I would just reiterate that again, I
» I would just reiterate that again, I
think we all agree public safety is one
of our highest concerns. Um I appreciate
the fact that it's not increasing the
property tax bill. I mean, aside from
the potential future increases, which
would happen even if it was the other
bond, right? Not necessarily as high.
So, I am definitely in favor of this
because I think it serves a dual benefit
that front. Um, I do agree that I think
there should it should be we should be
the future city council should be
presented the data to make anal an
educated analysis as to how to deal with
it any potential future increases or
reductions, but I'm not necessarily in
favor of instituting a cap that might
hamstring them if they needed it for
that.
>> Yes. U my question was I was I was going
» Yes. U my question was I was I was going
to ask council but he wasn't here. Why
did they say no in 2015?
Um, they initially said yes and then
they didn't vote on the second reading
of the ordinance. So, it got
>> they didn't vote at all or they voted no
» they didn't vote at all or they voted no
at the second reading.
>> They didn't vote at all. They didn't get
» They didn't vote at all. They didn't get
a second on the second reading of the
ordinance. It got through the public
hearing favorable and went to the second
reading of the ordinance and didn't get
a second.
>> Do we know why?
» Do we know why?
>> Above my pay grade.
» Above my pay grade.
>> Fair enough. Um,
» Fair enough. Um,
I wasn't here at the time, but I
understand there was pressure from
developers
that that's what it would sound like to
me. Um,
so is it
is it possible to have a like a a a
reviewable cap?
I mean, nothing's nothing's permanent
here, right? So, anything can be
reviewable.
What What is the ask that's being made
of staff right now? what is the what is
the preferred ask from staff on this as
far as percentages go and then caps and
all that kind of stuff.
>> So so the way the process is going to
» So so the way the process is going to
work is we'll um we'll get that project
that'll come in and then we'll be uh
preparing a formation documents for the
council consideration
in that as like the other CFDs that have
been formed in the past. There will be a
resolution of attention on consent and
then there will be a public hearing. Um
the staff report is going to outline
exactly what's being proposed. Um in
that rate and method of portionment I'm
presuming will go under the standard
practice as other agencies are
implementing this public safety CFD
single family multi- family with the
rates and an escalator. That escalator
can be um up for discussion and if if
acceptable gets approved as part of the
formation. Now that tax rate would be
only implemented to those properties
that annex into that CFD
in the future in the event that you know
three years down and there's another
development impact fee update uh
analysis and we push push the
development out to 2050 we re
re-evaluate and if at that time we said
well you know we're doing really well on
our general fund and that we we think
that $425 is a better rate so then we
can reestablish a new tax CFD public
safety with that reduced rate on new
development. There's an adjustment from
switching to a new CFD at those moments.
But the other ultimate um application is
that whatever you set the tax rate
doesn't mean you're levy at the full
amount. So what we're talking about is
we're saying the 525
will escalate the maximum tax. And if
it's at 600, but you say we only still
need 525, we only levied 525, but you
have the ability in the future to go up
to 600. So we're really not hand you
know restricting the opportunity in the
future. We're just saying you have a
ceiling and then annually we'll review
what's what the amount should be levied
and make that decision present it to
council for approval.
>> I maybe my question wasn't clear because
» I maybe my question wasn't clear because
your answer to me wasn't clear and
either I'm not getting it or I'm not
asking it right. So, if the staff were
to present us with a proposed ordinance
right now, what is the language in there
that staff is looking for? It says 525
per single family unit, 411 per unit,
and it says subject to annual escalator
greater of CPI or 4%. Is that the
language that staff is asking for or is
that one of several ideas that are being
presented to us
>> for council for for recommendation to
» for council for for recommendation to
come back?
I I right now it's proposed to include
uh CPI or 4% unless council directs
differently.
>> Okay. So that's the ask is these amounts
» Okay. So that's the ask is these amounts
increase at a rate of the greater of CPI
or 4%.
>> That's that's what would be proposed.
» That's that's what would be proposed.
>> Okay. That's what I want to make. I want
» Okay. That's what I want to make. I want
to make sure what it is that we're we're
either adjusting or looking at or
reviewing.
>> Um go ahead. And if I could just
» Um go ahead. And if I could just
clarify, you know, when the CFD is set
up, there's a document called the rate
and method of aortionment. And that's
where you establish these parameters,
and that's a one-time thing that's
adopted when the CFD is formed. And as
Shane has talked about, you have this
annual escalator. And every year when
you want to levy the amount for that CFD
for that year, you come back to the
council, you adopt the levy for that
year. And that's where you have the
option to go. Well, under the rate
method of aortionment, it says we could
our maximum rate is this, but we think
we're good at this level. We want to
keep it the same. And so, it's sort of
kind of concrete when you adopt the rate
method of aortionment, but your annual
levy each year can be modified as long
as it's below the maximum rate because
the RMA establishes the maximum rate for
each year going out into the
>> So, what did Moretta do as an escalator?
believe they did the same uh 4%
>> CPI or 4%
» CPI or 4%
>> CPI or 4%.
» CPI or 4%.
>> All right. Uh Council Dinus, you have a
» All right. Uh Council Dinus, you have a
question.
>> I I know Travis kind of answered it, but
» I I know Travis kind of answered it, but
I'll I'm digging back into my archive
memory here of CFDs. Usually when you
issue bonds that and Shane does the all
his calc runs his magic and calculates
everything for the annual the the
payments of it for the to put on special
tax roles that you take what the what
the debt service is and what kind of and
how much you collect
from the property owners
that um to meet that to meet that debt
service payment. It's only if you only
if you lack
If you're the levy is insufficient to
you, then you increase the go to the
special tax and increase that amount to
pay for the debt service. So, it sounds
like this is kind of what we're going to
do with this
CFD is you look at what the costs are.
you know, while you get the $525 on
whatever percent that is. And then if
it's not enough to cover the difference,
then you'll have to go above the 4% or
start approaching the the CPI then to to
to make sure you get levy enough to pay
for the the public service uh difference
that we need have. I mean, I don't make
it makes sense to me a lot, but
>> Well, from my standpoint, did did you
» Well, from my standpoint, did did you
want to respond to that or was there
anything that
>> I I I'm sorry. I had to look I clarify
» I I I'm sorry. I had to look I clarify
Marriott is at a flat 4%.
>> So they didn't do the CPI. They went
» So they didn't do the CPI. They went
flat 4%.
>> Flat 4%.
» Flat 4%.
>> Yeah, that's
» Yeah, that's
>> that's kind of what I was thinking as
» that's kind of what I was thinking as
well. You know, I something you said
resonated with me that, you know, we
don't want to impose a new tax on the
residents, but the new residents are
causing us an increase in the services.
I mean, we can't provide if we if we go
to 175,000 people without affording the
cost of it. we would have to hold off on
that development until economic
development catches up, but economic
development won't come in unless the
rooftops are there. So, it's kind of a
>> states,
» states,
>> right? We need more housing. So, um it
» right? We need more housing. So, um it
would seem like the the the new
development drives the need for more
public safety. We're going to need more
fire coverage. We're going to need all
those kinds of all those people with
pets, animal control, that kind of
thing. Um I do get scared about CPI as
well. would I would be inclined to to
implement this with a straight 4% like
mya did. I when I was thinking the
reason I asked I was I was thinking in
my head I want to make sure that I
wasn't being completely way off base
financially. Um I can't believe Lorie
Stone voted for this that had to have
gone 4-1 that way. No, it went 5. Crazy.
Um,
but I would like some sort of language
in it that makes it a prominent question
each time the budget comes in. Like just
it because this seems like the type of
thing that I would I wouldn't want
future city council members to just roll
it into the big giant stack of stuff to
consider. I would I wouldn't want at
least for the time being for people to
look at it individually and just go, "Oh
yeah, that's right. We're going to look
at this each time to see if we need to
keep doing it or not.
>> Well, I I mean, if you increase the the
» Well, I I mean, if you increase the the
rate over 4%
because CPI is higher, I think it the
way to help to ensure that the council
understands that it has to come back for
approval from the council before they
they make that increased.
>> You do have to go to council each year
» You do have to go to council each year
to have the council approved the levy
that we send to the county. So it could
be a part of that report when you adopt
that levy that there's an analysis that
that fee is justified and within the
maximum parameters.
>> Yeah.
» Yeah.
>> Okay, that makes sense. Um, do we have
» Okay, that makes sense. Um, do we have
any other questions or comments from
from council? Um, do you need a vote
from us or do we is there direction? It
seems like we're all in consensus here.
It seems like a pretty clear message.
>> Yeah, I think it's planning clear,
» Yeah, I think it's planning clear,
mayor.
>> Okay, then I think we've got it. Well
» Okay, then I think we've got it. Well
done. Thank you, gentlemen. Appreciate
it. Um well with that that was the only
thing on our special agenda item. So at
4:47 we are adjourned.