November 2014 Ballot Measure: City of Berkeley Community Facilities District No. 3 (Berkeley Public Parks)

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1 Office of the City Manager ACTION CALENDAR June 24, 2014 To: From: Honorable Mayor and Members of the City Council Christine Daniel, City Manager Submitted by: William Rogers, Deputy City Manager Subject: November 2014 Ballot Measure: City of Berkeley Community Facilities District No. 3 (Berkeley Public Parks) RECOMMENDATION Conduct Public Hearing and upon conclusion, adopt three Resolutions and pass one motion: 1. Resolution of formation, establishing Community Facilities District No. 3 (the District), authorizing the levy of a special tax within the District, preliminarily establishing an annual appropriations limit for the District, adopting amended rate and method of apportionment of special tax. 2. Resolution determining the necessity to incur bonded and other indebtedness within the District; establishing a maximum aggregate amount of bonded indebtedness. 3. Resolution calling election and requesting consolidation for the purposes of submitting to the qualified electors (the registered voters) of the District: the levy of the special tax, the incurring of bonded indebtedness and the establishment of the appropriations limit. 4. Designate, by motion, specific members of the Council to file ballot measure arguments on this measure as provided for in Elections Code Section FISCAL IMPACTS OF RECOMMENDATION The cost of placing a measure on the ballot varies depending on the total number of measures and whether it is placed on the June or November ballot. The following graphic shows the costs associated with past elections. ELECTION COSTS, INCLUDING NUMBER OF MEASURES AND CANDIDATES Nov Nov Jun-10 Nov Nov. 2012** Total Cost* $272, $224, $191, $164, $367, No. of Measures No. of Candidates * Excludes RCV-specific costs (RCV costs are candidate specific only) **The high number of measures on the 2012 election required an additional ballot card Milvia Street, Berkeley, CA Tel: (510) TDD: (510) Fax: (510) manager@cityofberkeley.info Website:

2 November 2014 Ballot Measure: City of Berkeley Community ACTION CALENDAR Facilities District No. 3 (Berkeley Public Parks) June 24, 2014 Council has already directed staff to begin preparing a Mello-Roos CFD, which has a cost of approximately $20,000, not including staff time. CURRENT SITUATION AND ITS EFFECTS The actions before the Council tonight are to conduct a public hearing on the formation of the City of Berkeley Community Facilities District (CFD) No. 3 (Berkeley Public Parks) and, upon conclusion, adopt three resolutions that create the District, and, subject to voter approval, approves a special tax and establish an appropriations limit for the financing of facilities and services (Attachment 1); determine the necessity to incur and, subject to voter approval, authorize bonded and other indebtedness within the District (Attachment 2) and call the election and request consolidation of the election (Attachment 3). In addition, Council will need to pass a motion that designates specific Councilmembers to file ballot measure arguments on this measure. There have been some minor revisions to the Rate and Method of Apportionment (RMA) that was presented to Council on the May 20, 2014 agenda. An Amended and Restated RMA is Exhibit B to Attachment 1, the Resolution of Formation. A requirement of the formation of the CFD is the filing of a report titled Community Facilities District Report Community Facilities District No. 3 (Berkeley Public Parks), which can be found as Attachment 4 and is dated June, , as submitted to the Council and filed as part of the record of the public hearing. Concurrent with the public hearing, any protests on the formation of the District, the proposed facilities and services or the RMA will be heard. Protests may be made orally or in writing with certain protests required in writing to the City Clerk at the meeting or before the hearing. If fifty percent (50%) or more of the registered voters residing within the territory proposed to be included in the District (City limits) file written protests against the establishment of the District, no action to form the District will be taken by the Council. The City Clerk will report at the meeting on the number of protests. The District will finance public facilities and ongoing services. On May 20, 2014, the Council determined the configuration and operations budget for the proposed District to be placed on the ballot in November The parks and recreation facilities for construction, renovation and/or repair are the Berkeley Rose Garden, Basketball Courts city-wide, Tennis Courts city-wide, Ballfields city-wide, Aquatic Park, San Pablo Park, Willard Park, Ohlone Dog Park, James Kenney Community Center, King Pool, West Campus Pool, Santa Fe Right of Way Gardens and Willard Pool, resulting in a total facilities project of $25 million. The Council further determined that a special tax of $2 million annually would meet the existing shortfall and future additional needs of the operations and maintenance budget. Upon conclusion of the public hearing, Council is requested to take action on the resolutions. The levy of taxes, the incurrence of debt and the establishment of an appropriations limit will not be implemented unless approved by two-thirds of the votes received in the November election. Page 2

3 November 2014 Ballot Measure: City of Berkeley Community ACTION CALENDAR Facilities District No. 3 (Berkeley Public Parks) June 24, 2014 The proposed ballot language is as follows: Proposed Ballot Language Shall City of Berkeley Community Facilities District No. 3: incur bonded indebtedness not exceeding $25,000,000; levy a special tax not exceeding $0.0236/square foot of building area through FY to renovate citywide park facilities, including pools, fields, courts, playgrounds, recreation centers, dog use areas, and pathways; levy a special tax not exceeding $0.0248/square foot, indexed for inflation, to support citywide park and playground operations; and establish an appropriations limit of $6,700,000? Additionally, with respect to measures placed on the ballot by the legislative body, Elections Code Section 9282(b) provides that the legislative body, or any member or members of the legislative body authorized by that body may submit an argument for the measure. The table below indicates the annual cost to homeowner for a 1,900 square-foot home for Community Facilities District that has $25 million for capital costs and $2 million annually for operations costs. The total cost to the homeowner for the Mello-Roos assessment is the sum of the capital cost assessment plus the operational cost assessment. Mello Roos CFD (Capital and Operations Costs) Special Tax (Parcel) Bond Size $25,000,000 Square Footage Tax Requirement $ Projected Maximum Tax for 1,900 Sq. Ft. Home $44.85 Operational Costs $2,000,000 Cost Per Square Foot $ Projected Cost for 1,900 Sq. Ft. Home $47.04 Total Projected Cost for a 1,900 Sq. Ft. Home $91.89 BACKGROUND As stated in November 12, 2013 and February 11, 2014 reports, current revenues for the City s parks are not keeping pace with increasing costs of operations, and the Parks Tax Fund has been operating in a deficit since FY In FY 2013, the Department decreased spending by $350,000 by holding certain operational positions vacant for over a year and reducing capital expenditures. The Department decreased spending in the FY 2014 and FY 2015 budget by $366,000 each year by reorganizing the Page 3

4 November 2014 Ballot Measure: City of Berkeley Community ACTION CALENDAR Facilities District No. 3 (Berkeley Public Parks) June 24, 2014 Landscape and Building Maintenance units of the Parks Division and eliminating three FTE landscape maintenance positions. These one-time strategies, however, are not a feasible solution over the long term, and the Parks Tax will continue to operate in a structural deficit of approximately $500,000 per year, drawing down on reserves for the next three years. Without new revenue, the fund balance for the Parks Fund is exhausted by FY 2017 and expenditure reductions will become necessary. ENVIRONMENTAL SUSTAINABILITY There are no identifiable environmental effects or opportunities associated with the subject of this report. RATIONALE FOR RECOMMENDATION Overcoming the budget shortfall in PRW requires capital and operational funding. One option for funding is through a Mello-Roos Community Facilities District. The implementation of a special tax by a Community Facilities District requires two-thirds approval by voters. ALTERNATIVE ACTIONS CONSIDERED The budget shortfall could be addressed by additional, recurring expenditure reductions. These would have an impact on Parks facilities and service delivery. CONTACT PERSON Matthai Chakko, Assistant to the City Manager, Attachments: 1: Resolution of Formation of CFD 2: Resolution Determining Necessity to Incur Bonded and Other Indebtedness 3: Resolution Calling Election and Requesting Consolidation 4: Community Facilities District Report 5: Map of the District 6: Public Hearing Notice Page 4

5 Attachment 1 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BERKELEY OF FORMATION OF COMMUNITY FACILITIES DISTRICT WHEREAS, on May 20, 2014, this Council adopted a resolution entitled Resolution of the City Council of the City of Berkeley of Intention to Establish Community Facilities District (the Resolution of Intention ), stating its intention to form "City of Berkeley Community Facilities District No. 3 (Berkeley Public Parks)" (the CFD ), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the Act ); and WHEREAS, the Resolution of Intention, incorporating a map of the proposed boundaries of the CFD and stating the facilities and the services to be provided (as set forth in the list attached hereto as Exhibit A) and the rate and method of apportionment of the proposed special tax to be levied within the CFD to pay the principal and interest on bonds proposed to be issued with respect to the CFD (the Special Tax ), is on file with the City Clerk and the provisions thereof are incorporated herein by this reference as if fully set forth herein; and WHEREAS, subsequent to the adoption of the Resolution of Intention by the Council, staff proposed that the Council approve an amended and restated rate and method of apportionment of the Special Tax to be levied within the CFD (the Amended Rate and Method ), which Amended Rate and Method lowers the maximum annual special tax rate for Facilities (as defined below); and WHEREAS, on this date, this Council held a noticed public hearing as required by the Act and the Resolution of Intention relative to the proposed formation of the CFD; and WHEREAS, at the hearing, all interested persons desiring to be heard on all matters pertaining to the formation of the CFD, the facilities to be provided therein, the services to be provided therein and the levy of the Special Tax were heard and a full and fair hearing was held; and WHEREAS, at the hearing, evidence was presented to this Council on said matters before it, including a report caused to be prepared by the Public Works Director of the City (the Report ) as to the facilities and the services to be provided through the CFD and the estimated costs thereof, a copy of which is on file with the City Clerk, and this Council at the conclusion of said hearing is fully advised in the premises; and WHEREAS, written protests with respect to the formation of the CFD, the furnishing of specified types of facilities and services and the Amended Rate and Method have not been filed with the City Clerk by fifty percent (50%) or more of the registered voters residing within the territory of the CFD or property owners of one-half (1/2) or more of the area of land within the CFD and not exempt from the Special Tax.

6 NOW, THEREFORE, BE IT RESOLVED, that the foregoing recitals are true and correct, and BE IT FURTHER RESOLVED, that the Special Tax to be levied within the CFD has not been precluded by majority protest pursuant to section of the Act, and BE IT FURTHER RESOLVED, that all prior proceedings taken by this Council in connection with the establishment of the CFD and the levy of the Special Tax have been duly considered and are hereby found and determined to be valid and in conformity with the Act, and BE IT FURTHER RESOLVED, that the community facilities district designated City of Berkeley Community Facilities District No. 3 (Berkeley Public Parks)" is hereby established pursuant to the Act, and BE IT FURTHER RESOLVED, that the boundaries of the CFD, as set forth in the map of the CFD heretofore recorded in the Alameda County Recorder s Office on May 29, 2014, at 2:09 p.m. in Book 18 at Page 48, as Document of Maps of Assessment and Community Facilities Districts, are hereby approved, are incorporated herein by reference and shall be the boundaries of the CFD, and BE IT FURTHER RESOLVED, that the type of public facilities proposed to be financed by the CFD and pursuant to the Act shall consist of those items listed as facilities in Exhibit A hereto and by this reference incorporated herein (the Facilities ), and BE IT FURTHER RESOLVED, that the type of public services proposed to be financed by the CFD and pursuant to the Act shall consist of those items shown in Exhibit A hereto and by this reference incorporated herein (the Services ), and BE IT FURTHER RESOLVED, that a. Except to the extent that funds are otherwise available to the CFD to pay for the Facilities, the Services and/or the principal and interest as it becomes due on bonds of the CFD issued to finance the Facilities, a Special Tax sufficient to pay the costs thereof, secured by the recordation of a continuing lien against all non-exempt real property in the CFD, is intended to be levied annually within the CFD, and collected in the same manner as ordinary ad valorem property taxes or in such other manner as may be prescribed by this Council. b. The proposed rate and method of apportionment of the Special Tax among the parcels of real property within the CFD, in sufficient detail to allow each landowner within the proposed CFD to estimate the maximum amount such owner will have to pay, are shown in Exhibit B attached hereto and hereby incorporated herein. 2

7 The Special Tax levied to pay for Facilities shall not be levied in the CFD after fiscal year , except that a Special Tax levied to pay for Facilities that was lawfully levied in or before the final tax year and that remains delinquent may be collected in subsequent years. Under no circumstances shall the Special Tax levied in any fiscal year to be used for private residential purposes against any parcel to pay for Facilities in the CFD be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the CFD by more than 10% above the amount that would have been levied in that fiscal year ha there never been any such delinquencies or defaults, and BE IT FURTHER RESOLVED, that the Finance Director of the City of Berkeley, 2180 Milvia Street, Berkeley, California 94704, is the officer of the City who will be responsible for preparing annually a current roll of special tax levy obligations by assessor s parcel number and who will be responsible for estimating future special tax levies pursuant to the Act, and BE IT FURTHER RESOLVED, that upon recordation of a notice of special tax lien pursuant to Section of the Streets and Highways Code of California, a continuing lien to secure each levy of the special tax shall attach to all nonexempt real property in the CFD and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the City ceases, and BE IT FURTHER RESOLVED, that in accordance with the Act, the annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, of the CFD is hereby preliminarily established at $6,700,000, and said appropriations limit shall be submitted to the voters of the CFD as hereafter provided. The proposition establishing said annual appropriations limit shall become effective if approved by the qualified electors voting thereon and shall be adjusted in accordance with the applicable provisions of the Act, and BE IT FURTHER RESOLVED, that pursuant to the provisions of the Act, the proposition of the levy of the special tax and the proposition of the establishment of the appropriations limit specified above shall be submitted to the qualified electors of the CFD at an election. The time, place and conditions of the election shall be as specified by a separate resolution of this Council, and BE IT FURTHER RESOLVED, that this resolution shall take effect upon its adoption. Exhibit A: Exhibit B: Description of Facilities and Services to Be Financed by the CFD Amended and Restated Rate and Method of Apportionment of Special Tax 3

8 EXHIBIT A CITY OF BERKELEY Community Facilities District No. 3 (Berkeley Public Parks) DESCRIPTION OF FACILITIES AND SERVICES TO BE FINANCED BY THE CFD FACILITIES The Facilities shown below include, but are not limited to, those proposed to be financed in whole or in part by the CFD. The Facilities shall be constructed, whether or not acquired in their completed states, pursuant to the plans and specifications approved by the City of Berkeley (the "City") and the officials thereof. 1. Berkeley Rose Garden Repair, renovation or replacement of existing structures, retaining walls, pathways, lighting, irrigation, drainage, utilities, plantings, user amenities, and safety and access improvements, such as: Entrance plaza Historic trellis Flagstone and other pathways Retaining walls Drainage and irrigation system Electrical system and lighting Picnic tables, benches and other seating Safety and accessibility 2. Basketball Courts (City-wide) Re-surface or renovate the courts; install new hoops, nets and backstops; renovate or replace lighting, fencing, and signage; upgrade safety and accessibility, landscape and irrigation; replace or add seating and other user amenities at the following parks: Strawberry Creek Park James Kenney Park Greg Brown Park Cedar Rose Park Codornices Park Glendale La Loma Park EXHIBIT 1

9 3. Tennis Courts (City-wide) Re-surface or renovate the courts; repair or replace nets, benches and bleachers, retaining walls, lighting, fencing, and signage, safety and access improvements, landscape and irrigation; and other user amenities at the following parks: Rose Garden Cedar Rose Park James Kenney Park San Pablo Park Strawberry Creek Park 4. Ballfields (City-wide) Repair, renovate or replace the playing surfaces, turf and infields, fencing, signage planting and irrigation, backstops, dugout area, spectator seating, lighting, landscape and irrigation, accessible pathways and other user amenities related to the ballfields at the following parks: San Pablo Park Grove Park Ohlone Park Codornices Park James Kenney Park Glendale-La Loma Park 5. Aquatic Park Clean and repair tide tubes, weirs and related structures Implement other physical improvements to increase tidal circulation to improve the water quality and provide better habitat Reduce the amount of paving Improve pedestrian pathways around the lagoons Repair, replace or install new seating, picnic areas, lighting, fencing, signage and other user amenities 6. San Pablo Park Renovate or replace play area structures and safety surfaces, Improve accessibility Repair, renovate or replace fencing, signage, lighting, benches, picnic tables and related user amenities Renovate grading and drainage systems Renovate the landscape plantings and irrigation system Install new roof for the Restroom Improve accessibility to and within the Restroom Page 2 of 4

10 7. Willard Park Renovate or replace play area Renovate existing tennis practice area Renovate pathways, lighting and accessibility Repair, renovate or retrofit planting and irrigation system to increase water efficiency 8. Ohlone Dog Park Add new small dog area Renovate and add site amenities, such as picnic tables, benches, seating areas, signage, lighting and fencing Improve accessibility Repair, replace or retrofit planting and irrigation system to improve water efficiency 9. James Kenney Community Center Repair or renovate building entrances and lobby Renovate the Inclusion Program room Renovate the Kiln Room Renovate the restroom Install or update seismic features Install or update utility systems Install new fire sprinkler system and other safety equipment Replace exterior siding Repair or renovate locker room Add new fire sprinkler system and utility piping Improve accessibility Repair or replace related user amenities 10. King Pool piping replacement Renovation of locker room New sprinkler system 11. West Campus pool Renovation of locker room New sprinkler system 12. Santa Fe Right of Way Gardens Master Plan Development Construction of block from Ward to Derby Construction of block from Derby to Carleton Property title research Page 3 of 4

11 13. Willard Pool Reconstruction and reopening, renovation of pool house The facilities to be financed shall include the costs of the acquisition of right-of-way the costs of design, engineering and planning, the costs of any environmental or traffic studies, (including right-of-way that is intended to be dedicated by the recording of a final map), surveys or other reports, costs related to landscaping and irrigation, soils testing, permits, plan check and inspection fees, insurance, legal and related overhead costs, coordination and supervision and any other costs or appurtenances related to any of the foregoing. The CFD may also finance any of the following: 1. Expenses related to bonds and other debt, including underwriters discount, reserve fund, capitalized interest, letter of credit fees and expenses, financial advisor, bond and disclosure counsel fees and expenses, bond remarketing costs, and all other incidental expenses. 2. Administrative fees of the City and the bond trustee or fiscal agent related to the CFD and the bonds and other debt. 3. Reimbursement of costs related to the formation of the CFD advanced by the City, the landowner(s) in the CFD, or any party related to any of the foregoing, as well as reimbursement of any costs advanced by the City, the landowner(s) in the CFD or any party related to any of the foregoing, for facilities, fees or other purposes or costs of the CFD. SERVICES The Services shown below ("services" shall have the meaning given that term in the Mello-Roos Community Facilities Act of 1982) are proposed to be financed by the CFD, including all related administrative costs, expenses and related reserves for replacement of vehicles, equipment and facilities: Parks and pools operations, contracting services and associated administrative services needed for the maintenance, repair, renovation and replacement of the City s parks, pools and marina, and associated facilities, together with incidental expenses related thereto, as authorized by the Mello-Roos Community Facilities Act of The Special Taxes may be collected and set-aside in designated funds, collected over several years, that may be used by the City to fund future repairs, services and facilities described above as determined by the City. Page 4 of 4

12 EXHIBIT B CITY OF BERKELEY Community Facilities District No. 3 (Berkeley Public Parks) AMENDED AND RESTATED RATE, METHOD OF APPORTIONMENT AND MANNER OF COLLECTION OF SPECIAL TAX BASIS OF SPECIAL TAX LEVY The annual Special Taxes described below shall be levied on each separate parcel within City of Berkeley Community Facilities District No. 3 (Berkeley Public Parks) ( CFD No. 3 ) as shown on the Alameda County Assessor s records, subject to the rates specified below as established by the City of Berkeley ( City ). DEFINITIONS Act means the Mello-Roos Community Facilities Act of 1982, as amended. Area means the total gross horizontal areas of all floors, including usable basements and cellars, below the roof and within the outer surface of the main walls of buildings (or the center lines of party walls separating such buildings or portions thereof) or within lines drawn parallel to and two feet within the roof line of any building or portion thereof without walls (which includes, notwithstanding subsection III of this definition, the area of all porches), and including pedestrian access walkways or corridors, but excluding the following: I. Areas used for off-street parking spaces or loading berths, and driveways and maneuvering aisles relating thereto; II. Areas which are outdoor or semi-outdoor areas included as part of the Building to provide a pleasant and healthful environment for the occupants thereof and the neighborhood in which the building is located. This exempted area is limited to stoops, balconies and to natural ground areas, terraces, pools and patios which are landscaped and developed for active or passive recreational use, and which are accessible for us by occupants of the building; and III. Arcades, porticoes and similar open areas which are located at or near street level, are accessible to the general public, and are not designed or used as sales, display, storage, service or production areas. Authorized Facilities means the public facilities authorized to be financed, in whole or in part, by CFD No. 3.

13 Authorized Services means those services that are authorized to be funded by CFD No. 3. Bonds means bonds or other debt (as defined in the Act), whether in one or more series, issued or assumed by CFD No. 3 to fund Authorized Facilities. Building means any Structure having a roof supported by columns or by walls and designated for the shelter or housing of any person, chattel or property of any kind. Building Area means the Area of a Building. Exempt Property means Public Property, except as otherwise provided in the Act and in the final sentence of CALCULATION OF ANNUAL SPECIAL TAXES - Facilities Special Tax below with respect to Taxable Public Property, and Very Low Income Property. Facilities Special Tax means the special tax authorized to be levied to pay the Facilities Special Tax Requirement. Facilities Special Tax Requirement means the amount necessary in any fiscal year (i) to pay principal and interest on Bonds which are due in the calendar year which begins in such fiscal year, (ii) to create or replenish reserve funds, (iii) to cure any delinquencies in the payment of principal or interest on Bonds which have occurred in any prior fiscal year or (based on delinquencies in the payment of Special Taxes which have already taken place) are expected to occur in the fiscal year in which the tax will be collected, (iv) to pay the costs of administering CFD No. 3, and (v) to pay the costs of Authorized Facilities to be funded directly from Facilities Special Tax proceeds. Public Property means any parcel within the boundaries of CFD No. 3 that is owned by the federal government, State of California or other local governments or public agencies. Services Special Tax means the special tax authorized to pay the Services Special Tax Requirement. Services Special Tax Requirement means the amount of revenue needed in any fiscal year to pay for: (i) Authorized Services, (ii) costs of administering CFD No. 3, and (iii) amounts needed to cure any delinquencies in the payment of Services Special Taxes which have occurred or (based on delinquency rates in prior years) may be expected to occur in the Fiscal Year in which the tax will be collected. Special Taxes means the Facilities Special Tax and the Services Special Tax. Structure means anything constructed or erected, the use of which requires location on the ground or attachment to something having location on the ground. Taxable Public Property means any parcel of Public Property that had in its entirety been subject to the Facilities Special Tax levy in previous fiscal years and for which the Exhibit B Page 2

14 Facilities Special Tax was not prepaid when the public agency took ownership of the Parcel. Very Low Income Property means any property owned by any person or persons whose combined total personal income, from all sources, for the previous calendar year, does not exceed that level which shall constitute very low income, as may be established by resolution of the City Council, and that has satisfied the requirements described in VERY LOW INCOME PROPERTY EXEMPTION below. DETERMINATION OF PARCELS SUBJECT TO SPECIAL TAXES The City shall annually review the County Assessor s Secured Property Tax Roll ( Roll ) as of March 1 of each year. Using the Roll, the City shall annually determine the parcels subject to the Special Taxes. All parcels lying within the boundaries of CFD No. 3 shall be subject to the Special Taxes, except Exempt Property. The City shall make all reasonable efforts to correctly identify the parcels subject to the Special Taxes. However, it shall be the responsibility of each individual parcel owner to bring to the City s attention any errors in such identification of which he/she becomes aware. MAXIMUM ANNUAL SPECIAL TAX RATES Facilities Special Tax: In any fiscal year the maximum annual Facilities Special Tax rate shall be $ per square foot of Building Area. Services Special Tax: In fiscal year , the maximum annual Services Special Tax rate shall be $ per square foot of Building Area. Beginning February 2015 and each February thereafter, the maximum Services Special Tax rate shall increase by 3% annually. Each annual adjustment of the maximum Services Special Tax rate shall become effective on the subsequent July 1, without additional action by the City Council. CALCULATION OF ANNUAL SPECIAL TAXES Facilities Special Tax. The Facilities Special Tax shall be levied for each fiscal year in an amount sufficient to pay the Facilities Special Tax Requirement. The following formula shall be used to determine the special tax for each taxable parcel: a) Determine the Facilities Special Tax Requirement for the fiscal year; b) Determine the total square footage of building area for all taxable parcels in CFD No. 3; and c) Divide the Facilities Special Tax Requirement determined in a) above by the total square footage of Building Area determined in b) above. The rate so Exhibit B Page 3

15 calculated, or the maximum Facilities Special Tax rate specified above, whichever is smaller, shall be multiplied by the square footage of Building Area calculated for each taxable parcel to obtain the Facilities Special Tax for each such taxable parcel for the fiscal year; provided, however, that under no circumstances may the Facilities Special Tax on a parcel in residential use be increased in any fiscal year as a consequence of delinquency or default in payment of the Facilities Special Tax levied on another parcel or parcels by more than ten percent (10%) above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. The Facilities Special Tax shall be levied on Taxable Public Property only to the extent necessary to pay the costs described in clauses (i), (ii) and (iii) of the definition of Facilities Special Tax Requirement. Services Special Tax. The Services Special Tax shall be levied for each fiscal year in an amount sufficient to pay the Services Special Tax Requirement. The following formula shall be used to determine the special tax for each taxable parcel: a) Determine the Services Special Tax Requirement for the fiscal year; b) Determine the total square footage of Building Area for all taxable parcels in CFD No. 3; and c) Divide the Services Special Tax Requirement determined in a) above by the total square footage of Building Area determined in b) above. The rate so calculated, or the maximum Services Special Tax rate specified above, whichever is smaller, shall be multiplied by the square footage of Building Area calculated for each taxable parcel to obtain the Services Special Tax for each such taxable parcel for the fiscal year. TERM OF SPECIAL TAX The Facilities Special Tax shall be levied and collected until principal and interest on Bonds have been repaid, costs of constructing or acquiring Authorized Facilities from Facilities Special Tax proceeds have been paid, and all Administrative Expenses have been paid or reimbursed. However, in no event shall the Facilities Special Taxes be levied after fiscal year The Services Special Tax may be levied and collected in perpetuity. PREPAYMENT A parcel owner may prepay the Facilities Special Tax on his/her parcel by satisfying the following formula: Amount of Prepayment = Maximum Special Tax Rate x Building Area x Remaining Years Exhibit B Page 4

16 (Where Remaining Years = fiscal year less the most recent tax year for which the special tax has been paid) Exhibit B Page 5

17 MANNER OF COLLECTION The special tax will be collected in the same manner and at the same time as ad valorem property taxes. VERY LOW INCOME PROPERTY EXEMPTION Any taxpayer claiming the exemption under this section shall be required to demonstrate his or her entitlement thereto annually by submitting an application and supporting documentation to the City Manager or his or her designee in the manner and at the time established in regulations and/or guidelines hereafter promulgated by the City Manager subject to review by the city council in its discretion. Such applications shall be on forms provided by the city manager, or his or her designee, and shall provide and/or be accompanied by such information as the city manager shall require, including but not limited to, federal income tax returns and W-2 forms. Exhibit B Page 6

18 Attachment 2 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY BERKELEY DETERMINING NECESSITY TO INCUR BONDED AND OTHER INDEBTEDNESS WHEREAS, on May 20, 2014, this Council adopted a resolution entitled Resolution of the City Council of the City of Berkeley of Intention to Establish Community Facilities District (the Resolution of Intention ) stating its intention to form "City of Berkeley Community Facilities District No. 3 (Berkeley Public Parks)" (the CFD ), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the Act ); and WHEREAS, on May 20, 2014, this Council also adopted a resolution entitled Resolution of the City Council of the City of Berkeley of Intention to Incur Bonded and Other Indebtedness" (the Resolution of Intention to Incur Indebtedness ) stating its intention to incur bonded indebtedness and other debt (as defined in the Act) within the boundaries of the CFD for the purpose of financing the costs of certain facilities specified in the Resolution of Intention; and WHEREAS, this Council has held a noticed public hearing as required by the Act about the determination to proceed with the formation of the CFD, the provision of certain public facilities and public services by the CFD and the rate and method of apportionment of the special tax to be levied within the CFD to pay the cost of the facilities and the services, the principal and interest on the proposed bonded indebtedness in the CFD and the administrative costs of the City relative to the CFD; and WHEREAS, subsequent to the public hearing, this Council adopted a resolution entitled Resolution of the City Council of the City of Berkeley of Formation of Community Facilities District (the Resolution of Formation ); and WHEREAS, this Council has also held a noticed public hearing as required by the Act relative to the matters material to the questions set forth in the Resolution of Intention to Incur Indebtedness; and WHEREAS, no written protests with respect to the matters material to the questions set forth in the Resolution of Intention to Incur Indebtedness have been filed with the City Clerk. NOW, THEREFORE, BE IT RESOLVED, that the foregoing recitals are true and correct, and BE IT FURTHER RESOLVED, that this Council deems it necessary to incur bonded indebtedness and other debt (as defined in the Act) in the maximum aggregate principal amount of $25,000,000 within the boundaries of the CFD for the purpose of financing

19 the costs of all or a portion of the facilities defined in the Resolution of Formation (the "Facilities"), including, but not limited to, the costs of issuing and selling bonds and other debt to finance all or a portion of the Facilities and the costs of the City in establishing and administering the CFD, and BE IT FURTHER RESOLVED, that the whole of the CFD shall pay for the bonded indebtedness and other debt through the levy of the special tax. The tax is to be apportioned in accordance with the formula set forth in Exhibit B to the Resolution of Formation, and BE IT FURTHER RESOLVED, that bonds and other debt in the maximum amount of $25,000,000 are hereby authorized subject to voter approval. The bonds may be issued in one or more series, and the bonds and other debt may mature and bear interest at such rate or rates, payable semiannually or in such other manner, all as this Council or its designee shall determine, at the time or times of sale of such bonds and other debt; provided, however, that the interest rate or rates shall not to exceed the maximum interest rate permitted by applicable law at the time of sale of the bonds and other debt and the bonds and other debt or any series thereof shall have a maximum term of not to exceed forty years, and BE IT FURTHER RESOLVED, that the proposition of incurring the bonded and other indebtedness herein authorized shall be submitted to the qualified electors of the CFD and shall be consolidated with elections on the proposition of levying special taxes within the CFD and the establishment of an appropriations limit for the CFD pursuant to Section of the Act. The time, place and further particulars and conditions of such election shall be as specified by separate resolution of this Council, and BE IT FURTHER RESOLVED, that this Resolution shall take effect upon its adoption. 2

20 Attachment 3 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BERKELEY CALLING ELECTION AND REQUESTING CONSOLIDATION OF SUCH ELECTION WHEREAS, this Council has adopted a resolution entitled Resolution of the City Council of the City of Berkeley of Formation of Community Facilities District (the Resolution of Formation ), ordering the formation of the City of Berkeley Community Facilities District No. 3 (Berkeley Public Parks) (the CFD ), authorizing the levy of a special tax on property within the CFD and preliminarily establishing an appropriations limit for the CFD, all pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the Act ); and WHEREAS, this Council has also adopted a resolution entitled Resolution of the City Council of the City of Berkeley Determining Necessity to Incur Bonded and Other Indebtedness (the Resolution Determining Necessity ), determining the necessity to incur bonded indebtedness and other debt (as defined in the Act) in the maximum aggregate principal amount of $25,000,000 upon the security of the special tax to be levied within the CFD pursuant to the Act; and WHEREAS, pursuant to the provisions of the Resolution of Formation and the Resolution Determining Necessity, the propositions of the levy of the special tax, the establishment of the appropriations limit and the incurring of the bonded indebtedness and other debt (as defined in the Act) shall be submitted to the qualified electors of the CFD as required by the provisions of the Act. NOW, THEREFORE, BE IT RESOLVED, that pursuant to Sections 53326, and of the Act, the issues of the levy of the special tax, the incurring of bonded indebtedness and the establishment of the appropriations limit shall be submitted to the qualified electors (as defined below) of the CFD at an election as provided below, and BE IT FURTHER RESOLVED, that this Council hereby finds that 12 or more persons have been registered to vote within the territory of the CFD for each of the 90 days preceding the close of the public hearings heretofore conducted and concluded by this Council for the purposes of these proceedings. Accordingly, and pursuant to Section of the Act, this Council finds that, for these proceedings, the qualified electors are the registered voters within the CFD, with each voter having one vote, and BE IT FURTHER RESOLVED, that this Council hereby calls an election to consider the measures described above, which election shall be held on November 4, 2014 (the Election Day ). The official of Alameda County (the County ) responsible for the conduct of elections is hereby designated as the official to conduct said election (the Election Official ). Pursuant to Section of the California Elections Code (the Elections Code ), the Board of Supervisors of the County and the Election Official are hereby requested to provide such services as may be necessary to properly and 3

21 lawfully hold and conduct the election pursuant to the provisions hereof and applicable provisions of the Elections Code, including coordination with all appropriate election officials in the County. BE IT FURTHER RESOLVED, that pursuant to Part 3 (commencing with Section 10400) of Division 10 of the Elections Code, the District hereby requests the County of Alameda to order consolidation of the election with such other election or elections as may be held on the Election Day in the same territory or in territory that is in part the same, and BE IT FURTHER RESOLVED, that the consolidated election will be held and conducted in the manner prescribed in Section 10418, and BE IT FURTHER RESOLVED, that as authorized by Section of the Act, the three propositions described above shall be combined into a single ballot measure, the form of which is attached hereto as Exhibit 1 and by this reference incorporated herein and the form of ballot measure is hereby approved. This Council hereby requests the Alameda County Registrar of Voters to (i) designate the measure on the ballot by a letter printed on the left margin of the square containing the abbreviated statement of the measure as provided in Elections Code Section and (ii) include the Resolution of Formation, the Resolution Determining Necessity and this Resolution be printed in the Voter Information Pamphlet mailed to all voters in the City of Berkeley, and BE IT FURTHER RESOLIVED, that pursuant to Section of the Act, the provisions of the Elections Code applicable to city elections shall govern the election, and BE IT FURTHER RESOLVED, that pursuant to Section of the Act and Section of the Elections Code, and within three (3) business days of the adoption of this Resolution, but in no event later than the date specified by the Election Official for receipt, the City Clerk shall cause to be provided to the Election Official certified copies of the Resolution of Formation, the Resolution Determining Necessity and this Resolution, together with a certified copy of the map of the boundaries of the CFD, as filed in the Office of the Recorder of the County. The City Manager and the Finance Director (each an Authorized Representative ) are hereby authorized and directed to enter into an agreement with the Election Official for the services of such official and to provide for the reimbursement by the City of the costs of the Election Official in conducting the election. The Authorized Representatives are hereby authorized and directed to execute and deliver any documents and to perform all acts necessary to place the measure on the ballot including making any revisions, corrections or alternations to the language of the ballot measure to comply with requirements of law and the Election Official and to ensure that the applicable requirements of the Elections Code are met, including, but not limited to the preparation and provision to the voters of all documents and instructions required by and specified in the Elections Code, and 4

22 BE IT FURTHER RESOLVED, that the Election Official is authorized to canvass the returns of the election pursuant to Section of the Elections Code, and BE IT FURTHER RESOLVED that the above enumerated measure requires a twothirds (2/3) vote threshold for passage, and BE IT FURTHER RESOLVED that Pursuant to Elections Code Section 9285 (b), the City Council hereby adopts the provisions of Elections Code Section 9285 (a) providing for the filing of rebuttal arguments for city ballot measures, and BE IT FURTHER RESOLVED, that pursuant to Section of the California Government Code, the following accountability provisions shall apply to the special tax: (a) the facilities and services that may be financed with the special tax and the incidental costs thereof, all as defined in the Resolution of Formation, shall constitute the specific single purpose; (b) the proceeds shall be applied only to the specific purposes identified in (a) above; (c) there shall be created special account(s) or funds(s) into which the proceeds shall be deposited; and (d) there shall be caused to be prepared an annual report if pursuant to Section of the California Government Code, and BE IT FURTHER RESOLVED, that the Council hereby finds that the proposed debt issuance constitutes a local bond measure within the meaning of Sections 53410, et seq. of the California Government Code. As a result, the bond measure shall include the propositions set forth above and the following: (a) the specific purpose of the bonds shall be as set forth in the propositions; (b) any proceeds received from the sale of any bonds shall be applied only to the purposes set forth in the propositions; (c) the proceeds of any bonds shall be deposited into special accounts to be created therefore as part of the issuance of the bonds; and (d) the City shall cause a report to be prepared annually under Section of the California Government Code, and BE IT FURTHER RESOLVED, that this Resolution shall take effect upon its adoption. 5

23 EXHIBIT 1 CITY OF BERKELEY Community Facilities District No. 3 (Berkeley Public Parks) FORM OF BALLOT MEASURE Shall City of Berkeley Community Facilities District No. 3: incur bonded indebtedness not exceeding $25,000,000; levy a special tax not exceeding $0.0236/square foot of building area through FY to renovate citywide park facilities, including pools, fields, courts, playgrounds, recreation centers, dog use areas, and pathways; levy a special tax not exceeding $0.0248/square foot, indexed for inflation, to support citywide park and playground operations; and establish an appropriations limit of $6,700,000? YES: NO: 6

24 CITY OF BERKELEY Community Facilities District No. 3 (Berkeley Public Parks) ATTACHMENT 4 COMMUNITY FACILITIES DISTRICT REPORT CONTENTS Introduction A. Description of Facilities and Services B. Proposed Boundaries of the Community Facilities District C. Cost Estimate * * * * * * * * * * * * EXHIBIT A - Description of the Proposed Facilities and the Proposed Services EXHIBIT B - Cost Estimate

25 CITY OF BERKELEY Community Facilities District No. 3 (Berkeley Public Parks) INTRODUCTION The City Council (the Council ) of the City of Berkeley (the City ) did, pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (the Act ), on May 20, 2014, adopt a resolution entitled Resolution of the City Council of the City of Berkeley of Intention to Establish Community Facilities District (the Resolution of Intention ). In the Resolution of Intention, the Council expressly ordered the preparation of a written Community Facilities District Report (the Report ), for the proposed "City of Berkeley Community Facilities District No. 3 (Berkeley Public Parks)" (the CFD ). The Resolution of Intention ordering the Report directed that the Report generally contain the following: (a) A description of the facilities (the Facilities ) and the services (the Services ) by type which will be required to adequately meet the needs of the CFD. (b) An estimate of the fair and reasonable cost of the Facilities including the cost of acquisition of lands, rights-of-way and easements, any physical facilities required in conjunction therewith and incidental expenses in connection therewith, including the costs of the proposed bond financing and all other related costs as provided in Section of the Act. (c) An estimate of the fair and reasonable cost of the Services and incidental expenses in connection therewith, and all other related costs. For particulars, reference is made to the Resolution of Intention for the CFD, as previously approved and adopted by the Council. NOW, THEREFORE, I, the City s Public Works Director, do hereby submit the following data: A. DESCRIPTION OF FACILITIES AND SERVICES. A general description of the proposed Facilities and the proposed Services is as shown in Exhibit A attached hereto and hereby made a part hereof. B. PROPOSED BOUNDARIES OF THE COMMUNITY FACILITIES DISTRICT. The proposed boundaries of the CFD are those properties and parcels in which special taxes may be levied to pay for the costs and expenses of the Facilities. The proposed boundaries of the CFD are described on the map of the CFD on file with the Council, to which reference is hereby made.

26 C. COST ESTIMATE. The cost estimate for the Facilities and the Services for the CFD is set forth in Exhibit B attached hereto and hereby made a part hereof. Dated as of June 24, 2014 By: Public Works Director 2

27 EXHIBIT A CITY OF BERKELEY Community Facilities District No. 3 (Berkeley Public Parks) DESCRIPTION OF FACILITIES AND SERVICES TO BE FINANCED BY THE CFD FACILITIES The Facilities shown below include, but are not limited to, those proposed to be financed in whole or in part by the CFD. The Facilities shall be constructed, whether or not acquired in their completed states, pursuant to the plans and specifications approved by the City of Berkeley (the "City") and the officials thereof. 14. Berkeley Rose Garden Repair, renovation or replacement of existing structures, retaining walls, pathways, lighting, irrigation, drainage, utilities, plantings, user amenities, and safety and access improvements, such as: Entrance plaza Historic trellis Flagstone and other pathways Retaining walls Drainage and irrigation system Electrical system and lighting Picnic tables, benches and other seating Safety and accessibility 15. Basketball Courts (City-wide) Re-surface or renovate the courts; install new hoops, nets and backstops; renovate or replace lighting, fencing, and signage; upgrade safety and accessibility, landscape and irrigation; replace or add seating and other user amenities at the following parks: Strawberry Creek Park James Kenney Park Greg Brown Park Cedar Rose Park Codornices Park Glendale La Loma Park A-1

28 16. Tennis Courts (City-wide) Re-surface or renovate the courts; repair or replace nets, benches and bleachers, retaining walls, lighting, fencing, and signage, safety and access improvements, landscape and irrigation; and other user amenities at the following parks: Rose Garden Cedar Rose Park James Kenney Park San Pablo Park Strawberry Creek Park 17. Ballfields (City-wide) Repair, renovate or replace the playing surfaces, turf and infields, fencing, signage planting and irrigation, backstops, dugout area, spectator seating, lighting, landscape and irrigation, accessible pathways and other user amenities related to the ballfields at the following parks: San Pablo Park Grove Park Ohlone Park Codornices Park James Kenney Park Glendale-La Loma Park 18. Aquatic Park Clean and repair tide tubes, weirs and related structures Implement other physical improvements to increase tidal circulation to improve the water quality and provide better habitat Reduce the amount of paving Improve pedestrian pathways around the lagoons Repair, replace or install new seating, picnic areas, lighting, fencing, signage and other user amenities 19. San Pablo Park Renovate or replace play area structures and safety surfaces, Improve accessibility Repair, renovate or replace fencing, signage, lighting, benches, picnic tables and related user amenities Renovate grading and drainage systems Renovate the landscape plantings and irrigation system Install new roof for the Restroom Improve accessibility to and within the Restroom 20. Willard Park A-2

29 Renovate or replace play area Renovate existing tennis practice area Renovate pathways, lighting and accessibility Repair, renovate or retrofit planting and irrigation system to increase water efficiency 21. Ohlone Dog Park Add new small dog area Renovate and add site amenities, such as picnic tables, benches, seating areas, signage, lighting and fencing Improve accessibility Repair, replace or retrofit planting and irrigation system to improve water efficiency 22. James Kenney Community Center Repair or renovate building entrances and lobby Renovate the Inclusion Program room Renovate the Kiln Room Renovate the restroom Install or update seismic features Install or update utility systems Install new fire sprinkler system and other safety equipment Replace exterior siding Repair or renovate locker room Add new fire sprinkler system and utility piping Improve accessibility Repair or replace related user amenities 23. King Pool Piping replacement Renovation of locker room New sprinkler system 24. West Campus pool Renovation of locker room New sprinkler system 25. Santa Fe Right of Way Gardens Master Plan Development Construction of block from Ward to Derby Construction of block from Derby to Carleton Property title research 26. Willard Pool Reconstruction and reopening, renovation of pool house A-3

30 The facilities to be financed shall include the costs of the acquisition of right-of-way the costs of design, engineering and planning, the costs of any environmental or traffic studies, (including right-of-way that is intended to be dedicated by the recording of a final map), surveys or other reports, costs related to landscaping and irrigation, soils testing, permits, plan check and inspection fees, insurance, legal and related overhead costs, coordination and supervision and any other costs or appurtenances related to any of the foregoing. The CFD may also finance any of the following: 1. Expenses related to bonds and other debt, including underwriters discount, reserve fund, capitalized interest, letter of credit fees and expenses, bond and disclosure counsel fees and expenses, bond remarketing costs, and all other incidental expenses. 2. Administrative fees of the City and the bond trustee or fiscal agent related to the CFD and the bonds and other debt. 3. Reimbursement of costs related to the formation of the CFD advanced by the City, the landowner(s) in the CFD, or any party related to any of the foregoing, as well as reimbursement of any costs advanced by the City, the landowner(s) in the CFD or any party related to any of the foregoing, for facilities, fees or other purposes or costs of the CFD. SERVICES The Services shown below ("services" shall have the meaning given that term in the Mello-Roos Community Facilities Act of 1982) are proposed to be financed by the CFD, including all related administrative costs, expenses and related reserves for replacement of vehicles, equipment and facilities: Parks and pools operations, contracting services and associated administrative services needed for the maintenance, repair, renovation and replacement of the City s parks, pools and marina, and associated facilities, together with incidental expenses related thereto, as authorized by the Mello-Roos Community Facilities Act of The Special Taxes may be collected and set-aside in designated funds, collected over several years, that may be used by the City to fund future repairs, services and facilities described above as determined by the City. A-4

31 EXHIBIT B CITY OF BERKELEY Community Facilities District No. 3 (Berkeley Public Parks) Facilities The following is a summary of the estimated costs of acquisition and construction of the Facilities. In addition to the acquisition and construction costs of the Facilities, the City will finance bond issuance costs, capitalized interest, a debt service reserve fund and other costs associated with the sale of bonds and annual administration of the CFD. Facility Estimated Cost Current Parks Projects unfunded total $4,627, High Use Parks unfunded total 10,665, High Use Park Buildings unfunded total 9,900, Total $25,192, Services It is estimated that the cost of providing the Services to the territory in the CFD will be the following, with the cost escalating annually thereafter. Service Estimated Cost Operating Hours, Programs and Maintenance of Parks $2,000,000 B-1

32 Attachment 5