Facilities District Process FAQs

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Citizen’s Guide to the Community Facilities District (CFD)
Process and the Headlands Reserve LLC Development

On February 12, 2002 the City Council adopted Ordinance No. 02-02 approving the Headlands Development Agreement (DA 01-01) between the City of Dana Point and Headlands Reserve LLC. The agreement contains provisions which state that upon the request of the Headlands, both parties shall cooperate in establishing one or more “Financing Districts” (CFD) for the purpose of financing the Headlands’ obligations to construct public facilities and public park and open space facilities in conjunction with the Headlands development.

A CFD is a method of financing and funding facilities and certain services by imposing special taxes against real property located within a specific geographic area. In this case, the special tax would only be imposed upon real property owners within the Headlands development project site, which consists of approximately 121.3 acres located at the southwest corner of Pacific Coast Highway and Street of the Green Lantern.

The types of facilities eligible to be financed include streets, sewer, water, storm drain, park, landscaping and dry utility improvements and appurtenances and appurtenant work, as well as sewer fees and/or connection charges. The types of services eligible to be financed include the maintenance and operation of park facilities consisting of a public funicular (inclined elevator) and appurtenances, landscaped slopes and appurtenances, the revetment walkway and revetment, and certain storm drain water quality improvements located on adjoining County of Orange property.

April 26, 2006 City Council Meeting

In response to a petition filed on February 28, 2006 by the developer to form the CFD, the Dana Point City Council took several actions by a 3-2 vote (Harkey and Lacy voted no) at its April 26, 2006 Council Meeting to initiate proceedings under the Mello-Roos Act (Government Codes Section 53311 et seq.) as follows

  • Approved and adopted the City of Dana Point Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982.
  • Approved and adopted a resolution entitled:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DANA POINT, CALIFORNIA DECLARING ITS INTENTION TO ESTABLISH COMMUNITY FACILITIES DISTRICT NO. 2006-1 OF THE CITY OF DANA POINT AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES THEREIN.

  • Approved and adopted a resolution entitled:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DANA POINT, CALIFORNIA DECLARING ITS INTENTION TO INCUR BONDED INDEBTEDNESS FOR PROPOSED COMMUNITY FACILITIES DISTRICT NO. 2006-1 OF THE CITY OF DANA POINT.

June 14, 2006 City Council Meeting

In accordance with the Mello-Roos Act and the aforementioned resolutions, a public hearing was held on June 14, 2006 at 6:00 p.m. in the City Council Chambers to consider the establishment of the CFD and to determine whether the public interest, convenience and necessity require formation of the CFD and the levy of special taxes.

At the conclusion of the public hearing and City Council deliberations, the following actions were taken by a 3-1-1 vote (Lacy abstained; Harkey voted no):

Approved and adopted:

A. Acquisition Agreement by and between City of Dana Point and Headlands Reserve LLC Relating to CFD 2006-1; and authorize City Manager to execute agreement

The Acquisition Agreement provides the requirements for Headlands’ construction of the public facilities and the procedures for the City‘s acquisition of same and payment to Headlands of the construction cost.

B. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DANA POINT APPROVING A JOINT COMMUNITY FACILITIES AGREEMENT WITH THE COUNTY OF ORANGE AND HEADLANDS RESERVE LLC; and authorize City Manager to execute agreement

The Mello-Roos Act requires the agency forming the CFD to enter into a JCFA with each entity which will acquire facilities financed by the CFD. The JCFA is required to be approved by resolution.

C. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DANA POINT APPROVING A JOINT COMMUNITY FACILITIES AGREEMENT WITH THE SOUTH COAST WATER DISTRICT AND HEADLANDS RESERVE LLC; and authorize City Manager to execute agreement

The Mello-Roos Act requires the agency forming the CFD to enter into a JCFA with each entity which will acquire facilities financed by the CFD. The JCFA is required to be approved by resolution.

D. City of Dana Point Community Facilities District Report for CFD No. 2006-1

A CFD Report is required by the Mello-Roos Act and is intended to provide the particulars of the CFD, the facilities and the special tax.

E. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DANA POINT AUTHORIZING FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 2006-1 OF THE CITY OF DANA POINT, AUTHORIZING THE LEVY OF SPECIAL TAXES THEREIN, PRELIMINARILY ESTAB­LISHING AN APPROPRIATIONS LIMIT THEREFOR AND SUBMITTING LEVY OF THE SPECIAL TAXES AND THE ESTABLISHMENT OF THE APPROPRIATIONS LIMIT TO THE QUALIFIED ELECTORS THEREOF

This resolution is required by the Mello-Roos Act and formally establishes the CFD.

F. A RESOLUTION OF COMMUNITY FACILITIES DISTRICT NO. 2006-1 OF THE CITY OF DANA POINT DETERMINING THE NECESSITY TO INCUR BONDED INDEBTEDNESS AND SUBMITTING A PROPOSITION TO THE QUALIFIED ELECTORS THEREOF

The Resolution is required by the Mello-Roos Act for issuance of bonds.

G. A RESOLUTION OF COMMUNITY FACILITIES DISTRICT NO. 2006-1 OF THE CITY OF DANA POINT CALLING A SPECIAL ELECTION FOR THE PURPOSE OF APPROVING SPECIAL TAXES THEREIN, THE ISSUANCE OF BONDS BY SAID DISTRICT AND ESTABLISHMENT OF AN APPROPRIATIONS LIMIT;

This resolution is required by the Mello-Roos Act and calls the election to approve the levy of special taxes and bond authorization, but not their actual issuance.

The City Clerk conducted the election and opened the ballot of the qualified electors of the CFD (the current landowner of record) and read the ballot aloud. The qualified electors of the CFD voted in favor of the levy of the special tax, incurring of bonded indebtedness and the establishment of an appropriation limit.

H. Notice of Special Taxes Lien:

A RESOLUTION OF COMMUNITY FACILITIES DISTRICT NO. 2006-1 OF THE CITY OF DANA POINT DECLARING THE RESULTS OF A SPECIAL ELECTION THEREIN AND DIRECTING RECORDING OF A NOTICE OF SPECIAL TAXES LIEN

This resolution simply declares the result of the election. The Notice of Special Taxes Lien is required by the Mello-Roos Act and places a lien on all properties in the CFD for the special taxes to be levied.

I. Introduced and held first reading:

AN ORDINANCE OF COMMUNITY FACILITIES DISTRICT NO. 2006-1 OF THE CITY OF DANA POINT LEVYING SPECIAL TAXES WITHIN COMMUNITY FACILITIES DISTRICT NO. 2006-1 OF THE CITY OF DANA POINT

The ordinance is required by the Mello-Roos Act and formally authorizes the levy of special taxes in future years.

Copies of the documents described above are available for public review in the City Clerk’s Office.

Future City Council Meeting

The issuance of the bonds will occur, if at all, only after the structure of the bond issuance is finalized to the satisfaction of the bond financing team, City staff and the Investment Review Committee recommends to the City Council adoption of a “bond resolution” at some point in the future. It is not unusual for this process to occur until some months after formation and, in some rare instances, a year or more after formation due to a variety of factors, including the completion of improvements to the land being developed. All matters related to the issuance of bonds will require City Council approval. At this publicly noticed meeting, the City Council will consider approval of the following bond issuance documents:

  • A resolution of issuance authorizing the sale of bonds

A Fiscal Agent Agreement (that establishes the terms and conditions under which the bonds will be issued) and the preliminary official statement/the bond prospectus (which contains the terms, conditions, structure and disclosure information related to the sale of bonds).