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HomeMy WebLinkAbout01/23/1995 BAKERSFIELD Patdcia J. DeMond, Chair Irma Carson Kevin McDermott Staff: Gall E. Waiters .AGENDA BUDGET AND FINANCE COMMI'~EE Monday, January 23, 1995 12:15 p.m. City Manager's Conference Room Second Floor - City Hall 1501 Truxtun Avenue Bakersfield, CA 1. ROLL CALL 2. APPROVAL OF DECEMBER.5, 1994 MINUTES 3. PRESENTATIONS 4. PUBLIC STATEMENTS 5. DEFERRED BUSINESS A. AMBULANCE SERVICE RATES - Stinson 6. NEW BUSINESS A. ASSESSMENT DISTRICT NOTICING PROCEDURE - Rojas B. AIRPARK GRANT - Roja$ C. POLICY ON SEWER LINE REPAIRS - Rojas D. FIREWORKS ORDINANCE. Descary E. PROPOSED 1995 MEETING SCHEDULE - Waiters 7. ADJOURNMENT GEW:jp FILE COPY NOTICE OF SPECIAL MEETING OF THE BUDGET AND FINANCE COMMITTEE OF THE COUNCIL OF THE CITY OF BAKERSFIELD NOTICE IS HEREBY GIVEN that the Budget and Finance Committee of the City Council will hold a Special Meeting for the purpose of a Committee Meeting on Monday, January 23, 1995, at 12:15 p.m., in the City Manager's Conference Room on the second floor of City Hall, 1501 Truxtun Avenue, Bakersfield, California, to consider: 1. ROLL CALL 2. APPROVAL OF DECEMBER 5, 1994 MINUTES 3. PRESENTATIONS 4. PUBLIC STATEMENTS 5. DEFERRED BUSINESS A. AMBULANCE SERVICE RATES - Stinson 6. NEW BUSINESS A. ASSESSMENT DISTRICT NOTICING PROCEDURE - Rojas B. AIRPARK GRANT - Rojas C. POLICY ON SEWER LINE REPAIRS - Rojas D. FIREWORKS ORDINANCE - Descary E. PROPOSED 1995 MEETING SCHEDULE - Waiters 7. ADJOURNMENT ./~'ail E. Waiters, Assistant City Manager January lg, 1995 FILE COPY BAKERSFIELD iters / Patdcia J. DeMond Randy Rowles AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMrl-FEE Monday, December 5, 1994 12:15 p.m. City Manager's Conference Room 1. ROLL CALL Call to Order 12:30 p.m. Present: Vice Mayor Kevin McDermott, Chair; Councilmember Patricia J. DeMond; and Councilmember Randy Rowles 2. APPROVAL OF NOVEMBER 14, 1994 MINUTES Approved as submitted. 3. PRESENTATIONS None 4. PUBLIC STATEMENTS None 5. DEFERRED BUSINESS A. ASSESSMENT DISTRICTS AND CERTIFICATES OF SUFFICIENCY Staff distributed a proposed written policy regarding the City assisting other individuals in setting up assessment districts to finance public improvements. APPROVED JANUARY 23, 1995 AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Monday, December 5, 1994 Page -2- Current policy sets a minimum of not less than $1 million to be financed under assessment district proceedings, with a 3 to I value to lien ratio for each individual property within a district. The staff time involved and the cost to let a $1 million bond for an assessment district, in staff's opinion, is not cost effective. The Finance Director proposed an increase in the minimum amount to $2 million, with a 3 to 1 value to lien ratio for each individual property; and a 4 to I value to lien ratio district-wide. The Committee, however, is recommending to Council that the current minimum of $1 million be retained, with a 3 to 1 value to lien ratio per parcel; and that a 4 to 1 value to lien ratio be established district-wide. The Committee stated that they support these policies as targets, but they are appealable to the full Council. 6. NEW BUSINESS A. AMBULANCE RATES Gene Tackett of Hall Ambulance and Peter Brandon of Golden Empire Ambulance spoke, to the Committee regarding changes to the City ordinance on ambulance service rates. Two memos were co-authored which appealed to the Committee to take into consideration the major changes happening in the health care industry. According to the representatives, the most important change they are requesting is to "Adopt the system for establishment of rates found in the taxi cab ordinance for emergency medical service." They put forth a "market-driven concept" because they believe there is a need to come up with a better system to set and/or deregulate the ambulance rates. It was understood that the City would still have oversight responsibility. The Committee asked staff to survey other cities to see what they do and how; draft an ordinance With proposed changes; and investigate whether the Kern County EMS requires paramedic (ALS) response to all emergency calls. Staff should bring their findings and a draft ordinance back to the Committee for further discussion. 7. ADJOURNMENT The meeting was adjourned at 1:50 p.m. cc: Honorable Mayor and City Council GEW:jp January 20, 1995 ORDINANCE NO. AN ORDINANCE ~ENDING SUBSECTIONS C AND F OF SECTION 5.10.010, SECTIONS 5.10.020, 5.10.030, 5.10.060, 5.10.070, 5.10.100, 5.10.110, 5.10.120, 5.10.Ii0 AND 5.10.150, AND REPEALING SECTIONS 5.10. 040 AND 5.10. 080 OF THE BAKERSFIELD MUNICIP~L CODE RELATING TO AMBUIJ~CES. BE IT ORDAINED by the Council of the City of Bakersfield as follows: SECTION 1. Subsections C and F of Section 5.10.010 of the Bakers- field Municipal Code are hereby amended to read as follows: 5.10.010 Definitions. C. "Ambulance service charges" means any charge, fare or other consideration for ambulance service, as set forth in Section 5.10.120. F. "E.M.S. director" means 'and refers to the public official in charge of emergency medical services for the County of Kern, State of California, or his duly authorized representative. SECTION 2. Section 5.10.020 of the Bakersfield Municipal Code is hereby amended to read as follows: 5.10.020 Certificate of public convenience and necessity - Required - Exceptions. A. Except as provided in subsect±on B of this section, no person shall engage in the ambulance business without first obtaining a certificate of public convenience and necessity from the city as provided in this chapter. This certificate shall be in addition to any business license required by Chapter 5.02 of this code. B. A provider without a certificate of public convenience and necessity may provide ambulance service within the city under the following circumstances: 1. Upon request by the city manager or his designee. 2. Upon request of a certificate holder and upon approval of the city manager or his designee, when no certificate holder has an ambulance or level of service immediately available within the city, and when ambulance service is immediately required. 3. To provide medically required specialized transportation services not immediately available for a patient within the city, if such specialized services have heretofore been approved by-the E.M.S. director, and if authorized by the city manager or his designee. SECTION 3. Section 5.10.030 of the Bakersfield Municipal Code is hereby amended to read as follows: 5.10.030 Certificate of public convenience and necessity - Required. Any person desiring to obtain a certificate of public convenience and necessity shall make application therefor upon forms available from the office of the city manager. Each application shall be accompanied by a policy of insurance in the amount provided for by this chapter. The application shall include the following information: A. The name of the applicant and trade name, if any, under which he or she intends to conduct the business; or if a corporation, its name, date and place of incorporation, address of its principal place of business, and the names of its principal officers, together with their respective residence addresses; or if a partnership, association or unincorporated company, the names of the partners, or of the persons comprising such association or company, and the business and residence address of each partner or person; B. A description of each ambulance or other vehicle used or proposed to be used by the applicant; C. The address and a description of the premises at which the applicant proposes to maintain and operate such ambulances. D. The applicant shall furnish any and all additional information as the city manager may, in his discretion, require. E. The applicant shall pay a fee not to exceed the cost of processing any such application and inspecting such business as set forth in section 3.70.040. - 2 - SECTION 4. Section 5.10.060 of the Bakersfield Municipal Code is hereby amended to read as follows: 5.10.060 Certificate of public convenience and necessity - Issuance. A. The city manager shall consult with the chief of police and the E.M.S. director to determine the ability of the applicant to conduct the business in accordance with laws of Kern County, the state and city ordinance. B. The city manager shall not issue a permit pursuant to this chapter unless he finds as follows: ' ~ ~ 1. That the application is complete and truthful; 2. The applicant is financially responsible; 3. The applicant will conduct said project in an orderly, proper and lawful manner; 4. The applicant has not had a permit, issued in the past three years under this chapter, revoked, unless the city manager finds that the reasons for such revocation are unrelated to this application; 5. Neither the applicant nor any listed partner, manager or principal of the business has been convicted of a Grime substantially related to the qualifications, functions or duties of the business for which application is made, unless he has obtained a certificate of rehabilitation; 6. That neither the applicant nor any manager of the business has done any act involving dishonesty, fraud or deceit with the intent to substantially benefit himself or another, or substantially injure another; 7. The applicant is adequately insured, as required by this chapter; 8. The applicant has satisfied the requirements of this chapter and has complied with all laws of the state and ordinances of the city applicable to the proposed business operation; 9. Each ambulance described in the application will be adequate and safe for the purposes for which it is to be used, is not more than five years old and it will be equipped as required by this chapter and the laws of the state; - 3 - 10. The public convenience and necessity require the operation of such private ambulance business within the limits of the city; and 11. That the applicant has a valid operational permit issued by Kern County. SECTION 5. Section 5.10.070 of the Bakersfield Municipal Code is hereby amended to read as follows: 5.10.070 Certificate of public convenience and necessity - Notice of decision by city manager. The city manager shall give the applicant written notice of his decision to grant or deny a certificate of public necessity and convenience within ten days of the hearing and shall state the reasons for his decision. SECTION 6. Section 5.10.100 of the Bakersfield Municipal Code is hereby amended to read as follows: 5.10.100 Certificate of public convenience and necessity - Suspension and revocation. Any certificate issued pursuant to this chapter may be revoked by the city manager whenever he finds: A. That misrepresentations were made on the application; or B. That the applicant has been convicted of a crime substantially related to the qualifications, functions or duties of the ambulance business, unless he has obtained a certificate of rehabilitation; or C. That the applicant has done any act involving dishonesty, fraud or deceit with the intent to substantially benefit himself or another, or substantially injure another; or D. That any. of the terms or conditions of said certificate have been violated, or that the business has been operated in violation of local, state or federal law; or E. The certificate holder has abandoned its operation of the ambulance business for a period of thirty days; acts of God, labor disputes and other acts beyond the control of the certificate holder which cause abandonment or limitation of service shall not be considered an abandonment within the meaning of this section; or - 4 - F. No suspension or revocation shall be made effective until a hearing has been held by the city manager. The certificate holder shall have not less than ten days' notice of the hearing by certified mail. SECTION 7. Section 5.10.030 of the Bakersfield Municipal Code is hereby amended to read as follows: 5.10.110 Compliance with state law require~. No certificate of public convenience or necessity shall be issued until satisfactory proof of compliance with laws of Kern County and the state in respect to ambulance operations is furnished to the city manager. SECTION 8. Section 5.10.120 of the Bakersfield Municipal Code is hereby amended to read as follows: 5.10.120 Ambulance service charges. Charges for ambulance services shall be set by the following procedure: A. Any certificate holder may file a proposed schedule of charges with the city prior to January 1 of the year it wishes the schedule to take effect. B. The city council must review charges at a noticed public hearing within sixty days of January 1 of the year in which the rates are proposed to change. The proposed charges shall be published as set forth in section 6062a of the Government Code. C. At the public hearing, the council may increase, decrease, or accept the charges as submitted. The charges, as increased, decreased or accepted by the city council, shall take effect the day following the public hearing. SECTION 9. Section 5.10.140 of the Bakersfield Municipal Code is hereby amended to read as follows: 5.10.140 Replacement of vehicle. Annually, each certificate holder shall file with the city manager a description of the vehicle abandoned and a description of the vehicle placed in use. - 5 - SECTION 10. Section 5.10.150 of the Bakersfield Municipal Code is hereby amended to read as follows: 5.10.150 Appeals. A. Should any applicant be dissatisfied with the decision of the city manager or his designee not to grant a certificate or for the revocation of a permit, then said applicant may, no later than ten days after notice of such decision is deposited in the United States mail, addressed to the applicant or permittee at the address provided on the application, make written objection to the city council setting forth the grounds for dissatisfaction, whereupon ~he council shall hear said objections at~.a regular meeting no late~ than three weeks following the filing of the objection with the city clerk. The applicant shall be given written notice no less than three days prior to said hearing. The council may, upon said hearing, sustain, suspend or overrule the decision of the city manager, which decision shall be final and conclusive. B. Pending the hearing before the council, the decision of the city manager shall remain in full force and effect and any reversal thereof by the city council shall not be retroactive but shall take effect as of the date of the council's decision. SECTION 11. Section 5.10.040 entitled "Certificate of Public Convenience and Necessity-Investigation of Applicant" and Section 5.10.080 entitled "Certificate of Public Convenience and Necessity- Existing Businesses-Presumption of Public Convenience and Neces- sity'' of the Bakersfield Municipal Code relating to Ambulances are hereby repealed. SECTION 12. This Ordinance shall be posted in accordance with provisions of the Bakersfield Municipal Code and shall become effective thirty (30) days from and after the date of its passage. -o0o - 6 - ! HEREBY CERTIFY that the foregoing Ordinance was passed and adopted by the Council of the City of Bakersfield at a regular meeting thereof held on , by the following vote: CITY CLERK and Ex Officio Clerk of the Council of the City of Bakersfield APPROVED BOB PRICE MAYOR of the City of Bakersfield APPROVED as to form: JUDY K. SKOUSEN City Attorney By: L~URA C. I~RINO Assistant City Attorney LCM/meg Ord-6%%MBULNCE.C~6 January 20, 1995 - 7 - BUDGET AND FINANCE COMMITi'EE - 1995 PROPOSED MEETING SCHEDULE MONDAYS @ 12:15 PM COMMITTEE MEETING COUNCIL MEETING January 23 January 25 February 6 February 8 None February 22 None March 8 None* March 22 March 27 April 5 None April 19 April 24 May 3 None* May 17 None* June 14 None* June 28 July 10 July 19 t None August 9 August 14 August 23 None September 13 September-18 September 27 None October 11 October 16 October 25 November 13 November 8 None November 29 December 4 December 13 *No meeting scheduled because of budget hearings/holidays. MEMORANDUM DECEMBER 2, 1994 TO: BUDGET AND FINANCE COMMITTEE FROM: GREGORY KLIMKO, FINANCE DIRECTOR SUBJECT: ASSESSMENT DISTRICT POLICY In 1993 the Staff presented to the Budget and Finance Committee a revised Assessment District Policy tha~ ,was intended to make our policy more specific and comprehensive. Within the revised policy the Finance Director recommended that the current minimum amount of public improvements to be financed increase from one million dollars to three million dollars and the current policy requiring a 3 to 1 value to lien ratio be made specific as a 3 to 1 value to lien ratio per parcel as well as adding a requirement of a 5 to 1 value to lien ratio district wide. The Budget and Finance Committee did not want to increase the minimum financing amount and agreed with the 3 to 1 value to lien ratio per parcel, but did not feel it necessary to require a higher ratio district wide. The Budget and Finance Committee requested that staff present the policy to the BIA for comment. Roger McIntosh, of the BIA Board, has responded to the policy and we have incorporated most of his suggestions. At this time the Finance Director is recommending that the minimum amount of public improvements to be financed be raised to 2 million dollars and the City establish an additional value to lien ratio district wide of 4 to 1' The current policy was adopted on March 19, 1986 and the proposed policy reflects the methodology staff currently uses to form a district. City staff is also revising the application form completed by developers requesting assessment district financing. The new form will require additional information regarding the developer's financial position and the ability to not °nly complete the improvements but successfully develop the district. krc MGR.74 Minimum Dollar Amount of Public Improvements to be Financed current Amount 3 Million Finance Director: Original Recommendation 3 Million Revised Recommendation 2 Million Budget and Finance 1 Million Value to Lien Ratio Current 3:1 (Assumes) Per Parcel Finance Director: Original Recommendation 3:1 Per Parcel 5:1 overall Revised Recommendation .3:1 Per Parcel 4:1 overall Budget and Finance 3:1 Per Parcel saj D:~rojas~pub-imp.sch CURRENT POLICY REPORT NO. 6-86 MARCH 19, 1986 TO: ~oNoRABLE MAYOR AND MEMBERS OF T~E CITY COUNCIL SUBJECT: USE OF ASSESSMENT BONDS OR OTHER PUBLIC FINANCING MEC~ANIS. MS TO FINANCE CONSTRUCTION OR ACQUISITION OF PUBLIC IMPROVEMENTS REQUIRED WIT~ SUBDIVISIONS On February 3, 1986, an experienced and knowledgeable assessment engineer addressed.%his Commit:se and reviewed assess- ment bond and Mello-Roos procedures, advantages and issues. Following that meeting, the Commit:es directed staff to discuss the matter wi=h the local development communi=y and to obtain its input. On February 27, 1986, staff met with representatives of the Building' Industry Association of Kern County; local engi- neers, surveyors and property developers and =-esented to the= group the major components of the policy set forth below., That qrou~ unanimously endorsed the proposed ~olicy and encouraged its implementa:ion. Many jurisdic:ions allow use of these funding mecha- nisms. As Richard Hargrove advised the Council during the work- shot held Feuruary 26th, the City and i:s credit fa:lng can be fully protected if use cf such proceedings are directed' by knowl- edceab!e suaf~ and consultants All ,: fron~ costs should he advanced by suUdividers and all City expenses can be recouped upon ccmpie=icn of proceedings. ~'! ailcwin= use of these fun~in: mechanisms, ~he Ci~? can. (!) betuer coordinane infraszrucuure ava~ianiliuy as the City expands, (2] ~e economies of scale availasle to s~ller develo- - · pets, and (3) insure that improvements meeting the City's requirements of design and quality are installed at no net increase in cost to. the eventual home-buyer. In fact, depending on the specific project involved, some potential savings result- ing from lower interest rates, may be achieved. RECOMMENDATION: The Committee recommends that the Council adopt the attached policy. Respectfully submitted, Chair~n Councilmen~er James Childs Councilme~er Patricia Smith AJS/bl =~ Umt5-86 2 FINANCING OF PUBLIC IMPROVEMENTS Subject to the criteria set forth in paragraphs 3. and 4. below, subdividers may elect to have all puDlic improvements required as conditions of approval of =heir subdivisions financed utilizing the Improvement Ac= of 1911 (Stree=s and Highways Code Section 5000-et seq.), the Municipal improvemen: Ac= of 1913 (Streets and Highways Code Section 10000 et seq.) and the Improvemen: Bond Ac= of 1915 (Streets and Highways Code Sec=ion 8500 et seq.) or the Mello-Roos Community Facilities Ac: of 1982 (Government Code Section 53311 et seq.). The City'shall, at its sole discretion, determine Which such improvements shall be constructed by a subdivider and acT=ired by City upon success- ful completion of such public financing proceedings, and which shall be constructed by'City upon completion of such proceedings. The subdivider shall advance all cos=s, including City's cos:s, associated with establishing and adminis=erin= assessment' dis- ~..c.s or other public :inancing mechanisms u:i!ized. Such payments, including advances thereon, shall be made by subdivider =o City u9on demand by ~he City Finance Direc:or. To the extent legally permit:ed, such costs shall be built into the to=al to be so financed and the subdivider reimbursed therefor u=on sales of bonds cr onher reaiizauion of proceeds. Land costs cr value snal! non be included in the amount financed ky any ~ssessmen= procedures pursuan: ~o this Agreement: i. The tc:ai cost of punlic improvements %= be financed "-~':-inc such urcceedin=s shcuid nc- ~e _ass nhan she mi!!icn dollars. A subdivider may combine more than one subdivision into one district to reac~ or exceed such amount, and subdividers may agree to commine their projects for the same purpose. 2. C~ - ..y shall, as it deems a~propria.e, seiec: and contrac: for the services of a financial consultant, an assess- ment engineer, and bond counsel, to work with City and subdivider · in developing a plan for ~he financing of =he public improvements required as conditions of approval of their subdivisions and to work with City in developing and concluding any anticipated bond sale(s). Subdivider shall, within five days of demand by the Finance Director of the City, deposit with the City such funds as the Finance Director may require as appropriate to cover such compensation as may be payable to such consuitan=s prior to real- ization of proceeds.upon c~mpletion of proceedings. 3. Assessment district proceediags may not be utilized in any case where the value-to-lien rs:l:, with improvements acquir=d or constructed under such proceedings, is less ~han 3:1, based uDon a~praisais ordered by the City from an appraiser it selec=~ and ccm9ensated by the subdivider in accordance with the procedure se= forth above for payment cf the financial consultant, assessmen~ engineer and hcnd counsel. ~.~ Mello-Roos Community Faclliuias 2is~ric= oroceedin:s. . may nc= be u:ilized in any case where ~ne resultin= tax, when added =o real =roper='; ~axes, assessments exlsning -~.d pro posed for mainnenance district(s), and assessments, would resui~ in a total r__i== (including all proposed real property taxes, whether or not ad valorem, but excluding users fees, such as sewer users fees, col- lected with such tax bill) on the property in its fully improved state in excess of two Percent (2%) of assessed value. Subdivider shall be responsible for the costs of any facilities required as conditions of approval of subdivision which may not · be financed utilizing public financing proceedings as a result of the limitation expressed in this paragraph and paragraph 3. 5. With respect to each improvement the City elects to acguire after construcnion by subdivider or his contractors, subdivider shall submit to City Engineer for his approval records satisfactory to the City Engineer showing that each item to be paid for through a public financing mechanism is properly inclu- dable as a public improvement (e.g., that charges for work on private proper:y, such as grading, are properly segregated from work done within rights-of-way). 6. Subdivider Shall, upon close of escrow on sale of any property within a subdivision which is subject to an' assessment resulting from assessment dis:rio: proceedings under this policy, deliver to City Engineer a notarized written ment signed by the purchaser that he has elected to take title subjec: to such assessment or has eiec~ed to have such assessment paid off. Where title is taken by husband and wife as joint =enanns, bonn shall so sign such a sta=ement. A subdivider's failure to sa:~sfy ~his requirement snail result in the sub- divider herin= =o co=~ieue =he public improvements required that and subsequent subdivisions withcun use cf puslic financin=. 7. Addi:ional requirements to pro=ec: ~h_~ Ci=y and =He public in:eres: may be imposed as appropriate upon advice of staff aad/or City's con=fac:ed consultants. %J$/bl FINANCE 4 PROPOSED POLICY CITY OF BAKERSFIELD ASSESSMENT DISTRICT POLICY I. PURPOSE The City of Bakersfield has established this policy to establish certain standards and to provide information on the formation process for assessment districts. Assessment districts are formed to finance public improvements, usually through the use of assessment bonds. The City has established tke minimum amount of public improvements to be financed under assessment district .proceedings to be not less than one million dollars. Through an assessment district, the cost of acquiring or constructing public improvements is assessed to property within the assessment district boundaries that would receive special benefit from the improvements. This policy establishes uniform criteria and rules for the use of assessment districts within the City of Bakersfield. This policy describes the assessment district process as provided by law and additional legal and administrative recuirements of the City. Applications for assessment districts mus~compiy with this policy. II. SCOPE This policy shall govern the application for and formation of an assessment district within the City when requested by an Applicant. This policy also provides guidance to City staff in connection with the formation of an assessment district initiated by the City. However, nothing in this policy binds the Council to approve any assessment district or authorize the issuance of assessment bonds in connection therewith;, the Council retains its discretion with respec~ to any assessment district, assessment bonds and public improvements and all related matters. III. DEFINITIONS The terms' used in this policy shall have the following meanings: "1913 Act" shall mean the Municipal improvement Act of 1913 (Streets and Highways Code Sections 10000 et seq.), which specifies a procedure for forming assessment districts' "1915 Acu" shall mean the Improvement Bond Act of 1915 (Streets and Highways Code Section 8500 et sec.), which authorizes the issuance of assessment bonds. "Acquisition District" shall mean an assessment district in which the City acquires public improvements constructed by one or more private developers in accordance with an accuisiuion acreement with zhe City. ' 1 "Applicant" shall mean any person, firm or corporation who submits an application for the formation of an assessment district. "Bond or Bonds" shall mean assessment bonds authorized and issued in accordance with the Improvement Bond Act of 1915 and Chapter 13.08 of the City's Municipal Code. "City" shall mean the City of Bakersfield. "ConstructiOn District" shall mean an assessment district in which the City enters into a contract for the construction ~of public improvements. "Council" shall mean t~e Council of the CitY. "District" shall mean a special assessment district formed in accordance with the Municipal Improvement Ac~ of 1913, Chapter 13.08 of the City's Municipal Code and this policy. "Public Improvements" shall mean the work and improvements to be either acquired or constructed in accordance with the 1913 Act, Chapter 13.08 of the City's Municipal Code and this policy. "Value" or "Fair Market Value" shall mean the amount of cash or a cash equivalent that a property would bring between a willing buyer and a willing seller on the open market as established by an MAI appraiser approved by the City. IV. ELIGIBLE PUBLIC IMPROVEMENTS Public Improvements to be financed with Bonds must provide a benefit to the public at large and a special benefit to proper=y in the District and serve a public purpose. The types of Public Improvements eligible to be financed include, but are not limited to the following: A. Streets and Roads Arterial highways, commuter or collector streets, as determined by the Public Works Director. (Minor s=reets within subdivisions or industrial parks/complexes are not eligible.) B. Utilities ant Drainage Facilities Storm drain collection systems, water mains and sewer trunk lines located within or adjacent to an eligible road, public .right-of-way or easement, or such other uni!ity-nype improvements found by =he City to provide suecial benefit to property in zhe Distric=. C. Streetlights and Traffic Signals Streetlights and traffic signals for arterial highways, commuter or collector streess. Developer may combine more than one subdivision into one district or developers may agree to combine their projects in order to meet the minimum financing amount. The Council has final approval in determining if a proposed project or improvement meets the eligibility requirement of special benefit. V. RIGHT-OF-WAY ACpUISITIONS Right-of'way needed for streets purposes will be acquired through the Districu or dedicated as a street easement by the property owner. If the right-of-way is acquired, the total cost of the acquisition shall be based upon an amount no greater than the Value of the property acquired, including any severance damages. The cost of a right-of-way acquisition for a specific property will be assessed back to such property in accordance with the assessment spread methodology described in the engineer's report prepared for the District. If a property owner dedicates in lieu of monetary payment, a property owner can do so only prior to the end of the cash collection period. This section will not apply to any property owner within the District reauired to dedicate street right-of-way as a condition of an approve~ development entitlement, since the property owner does not receive monetary payment for the dedication, unless the acquisition of right-of-way provides funding for a public purpose as approved by the Finance Director. VI. VALUE--TO--LIENAND APPRAISAL STANDARDS The value-to-lien ratio for each individual property within a District shall be at least 3:1. The value-uo-lien ratio is a calculation to measure the number of times the value of a property (gross retail value after improvements funded by the District) exceeds the sum of its assessment liens, including the proposed assessment and any existing assessments or other encumbrances. In order to .establish a value-to-lien ratio, the property must be appraised by an MAI appraiser selected by the Finance Department of the City. In most cases, the appraisal is based on comparable sales data for similar properuy in the area. The appraisal will also usually consider the status of the land, including the zoning, tenua=ive or final map approvals, deveiopmenu agreements and other matters peruinent to valuation of the land, including the value of the property with the proposed public improvements installed. All costs associated with the preparauion of ~he appraisal report shail be paid by the City from advanced deposits made by the Applicant. The City seiecss MAI appraisers based uDon a criteria of quaiifica~ions, appiicable experience, ant competitiveness of compensation. In lieu of requiring an appraisal report, the City 3 may accept, in its discretion, current assessed valuation of the County of Kern if such valuation either meets or exceeds the value- to-lien ratio standards of this policy. VIZ. CREDZT ENHANCEMENT During the application review process, an ADDiicant or property owner may be required to either prepare ~' financial plan to demonstrate an ability to pay the estimated assessments or provide credit enhancement. Upon review of all information available to the City, including a financial plan (if required), the appraisal report, the diversification of land ownership, and recommendations from the City's financial advisor, legal counsel or investment banker, the Cit~y shall determine whether credit enhancement will be required by considering the following criteria: A. Value-to-Lien Ratio of a Parcel The value-to-lien ratio of any parcel within the District does not meet the 3:1 value-to-lien ratio standard as determined by this policy. B. Concentration of Property Ownership The assessment lien(s) of a property owner within a District exceeds 25% of the assessment liens for the entire District. C. Historical Assessment Installment Delinquencies A property owner with a history of assessment installment delinquencies may be viewed by the City as an unreasonable risk. D. Other Financing The property owner fails to demonstrate the ability to secure conventional financing. Credit enhancement refers to either letters of credit, surety bonds, or cash deposits in a form and upon ~erms and conditions satisfactory to the Finance Director. Tke requirement for credit enhancement shall remain in place un~il ~he Finance Director has determined tkat the Applicant or proper~y owner, as applicable, has satisfied the credit enhancement criteria of tkis policy~ All fees payable to obtain or maintain the credit enhancement shall be the responsibility of the Applicant or proper~y o'~ner, as applicable, and shall no~ be reimbursable by the C±ty. VIII. TERMS AND CONDITIONS. OF BONDS Ail terms and conditions of the Bonds shall be established by the Finance Director, subject to Council approval. The Finance Director will control, manage and direct investment of all Bond proceeds. Each Bond transaction shall be structured to protect bond owners, and in a manner to not negatively impact the bonding capaci;y or credit rating of the City, through some'combination of credit enhancement, foreclosure covenant, special reserve fund or deposits. While the Bond terms and conditions will be based on the needs of each particular Bond transaction as determined by the Finance Director and/or the Council, such terms and conditions will normally include the following: !. A debt service reserve fund in an amount equivalen~ to 10% of the total amount of assessments to be levied or some lesser amount provided that such amount is the maximum allowable for federal income tax purposes. 2. The assessments shall be levied for the first fiscal year following sale of the Bonds for which they may be levied. Interest shall not be funded (capitalized) beyond the earliest interest payment date of the Bonds, unless recommended by the Financial Advisor or Underwriter and approved by the Finance Director. 3. The repayment of principal shall begin on the earliest principal payment date permitted by law and for which sufficient assessment revenues can be made available. 4. The term of the Bonds issued will be no more than 20 years (principal maturities). 5. Beginning with the commencement of the repayment of principal, the .annual debt service payments shall be structured on a level basis. 6. Bonds shall be callable on any interest payment da~e at · par plus a premium not exceeding three percent (3%). 7. All statements and documents related to the sale of Bonds shall emphasize and state that (i) the Bonds are limited obligations of the City and neither the faith, credit nor the taxing power of the City is pledged to security or repayment o= the Bonds, (ii) the sole source of revenues are assessments, the debt service reserve fund or proceeds raised by foreclosure 7roceedings, and (iii) the City shall not be obliga5ec to make paymen=s of " principal, interest or redemption premiums (if any) from any o~her source of funds. ' 5 IX. DEPOSITS AND REIMBURSEMENTS Each application for formation of a District shall be accompanied by a duly executed petition waiving the provisions of the Special Assessment Investigation Limitation and Majority Protest Act of 1931 Division A of the California Street's and Highways Code and an initial deposit as determined by the City's Public Works Department. All City and consultant costs incurred in the evaluation of District applications and tke establishment of Districts will be paid by the Applicant from advance deposit(s). At the City's discretion, deposits may be required in increments as such costs are incurred. In any event, ~he Applicant shall . reimburse the City for all expenses incurred in processing the formation of a District. The purpose of the deposit is to fund all incidental expenses and other District evaluation and formation expenses incurred by the City prior to the issuance of Bonds. If funds in addition to the initial deposit are needed~ to offset ex?enses of District evaluation and formation, the Public Works Director may make a written demand upon the Applicant for such funds, and the Applicant shall comply with each demand within seven calendar days after receipt of such notice. If the Applicant fails to make any initial or additional deposit of funds for the proceedings, the Public Works Director may suspend all proceedings until receipt of such deposit(s). The deposits shall be used by the City to pay for costs' and expenses incurred by the City incident to the District evaluation and formation proceedings, including, but not limited to, the following: 1. Consultant services, including but not limited to legal counsel (including disclosure counsel), assessment engineering, appraisal, special tax consultant, financial advisory, and miscellaneous tests and studies; 2. Administrative costs and expenses incurred by City staff; -and 3. Preparation, printing and publicauion of notices and various legal documents. The City shall refund any unexpended and uncommitted portion of the deposius only upon one of the conditions following: !. The proceedings for formation of the District or issuance of Bonds are not approved by the Ci~-;; or 2. The proceedings for formation of the Districu are abandoned in writing by the Appiicanu. 6 The Applicant or property owners shall not be reimbursed by the City or out of funds available in the District for any of the expenses following: 1. ' Administrative, overhead, legal, accounting, consulting expenses or similar expenses incurred by the AppliCant or any property owner; 2. Interest on funds advanced by the Applicant or any property owner during the proceedings and construction of the Public Improvements; and 3. Any other costs and expenses incurred by the Applicant which are not otherwise expressly auuhorized by the City for reimbursement. Amounts advanced by the applicant are subject to reimbursement by the City from the proceeds of the sale of bonds, but without interest or amounts to be reimbursed. The City shall not be required to reimburse the Applicant or any property owner from any funds other than the proceeds of Bonds. - X. USE OF CONSULTANTS Selection of consultants needed for the formation of a District and the issuance of Bonds, including but not limited to the investment bankers, bond counsel, disclosure counsel, financial advisor, design engineer, assessment engineer, appraiser, and the special tax consultant,.shall be by the City. XI. ACQUISITION PROVISIONS The City shall have final determination as to whether it will allow the financing of Public Improvements throuch an Acquisition District. In the event the acquisition provisions of the 1913 Act and Chapter 13.08 of the City's Municipal Co~e are utilized, an acquisition agreement in a form acceptable uu the City Attorney must be executed by the City and the Applicant or all property owner(s) having responsibiity for constructinc improvements prior to the construction of any Public Improvement %o be acquired. The acquisition agreement must specify the Public Improvements to be acquired, the method of determining reasonable acquisition costs, and such other terms and conditions as the City Attorney or the Public Works Director may require. The City may require an Applicant or all property owner(s) having responsibility for constructing improvements, as applicable, in connection with an Acquisition District to submit reports on a periodic basis detailing the status of the prc~ect. 7 XII. DISCLOSURE TO PURCHASERS The Applicant or property owner(s) will be reauired to demonstrate to the satisfaction of the City that there wi~l be full disclosure of any assessments established in accordance with this policy. Such disclosure must be made to the existing and future property owners, including interim purchasers and sales to merchant builders. In addition to all requirements of law, the Applicant shall provide disclosure of such information as the City deems appropriate to the purchasers of property within the District with respect to the existence of the District, Public Improvements to be constructed, the amount of the assessments, the foreclosure process and the terms and conditions of Bonds issued on behalf of the District. For residential property, such disclosure will include home buyer notification requiring signature prior to a home purchase, as well as methods to notify subsequent home buyers. XIII. PROPERTY OWNER SUPPORT If there are multiple property owners, the Applicant shall submit, as attachments to the Application, letters evidencing other property oWners. support for the scope and establishment of the District. The City will not proceed with the District unless the Applicant has the written concurrence of at least one-half of the other property owners to be included in the proposed District. XIV. EXCEPTIONS TO THESE POLICIES The City may find, in its discretion, that a waiver to any of the above policies should be granted in exceptional instances, provided there are given special public benefits to be derived from such waiver. XV. APPLICATION PROCESS The application process is as follows: I. PREAPPLICATION MEETING: Applicant meets with City staff · to discuss the application procedures and the conceptual plan of the District. 2. APPLICATION SUBMISSION: Applicant submits the application to the City's Public Wor~s Department with a deposit as determined by than same department. 2. STAFF REVIEW: City staff reviews =he application for completeness and prepares an estimane of the initial deposit to be made by the Applicant. PROJECT REVIEW: Applicant and City snaff meet to discuss the application, including any issues raised during staff review and any further informauhon that might be 8 required. If necessary, Applicant submits revised application and preliminary project schedule. 5. APPLICATION PROCESSING: Once City staff has determined that the application has been fully completed and the initial deposit has been received, staff will proceed with the preparation of the necessary documents to submit for Council approval. 6. DISTRICT INITIATION: Staff submits to the Council resolutions, consultant contracts, acquisition agreements and other items necessary to commence District proceedings. 7. COUNCIL CONSIDERATION: Upon recommendation by the Public Works Department, the Council decides whether to initiate the formation, approve consultants, approve or authorize staff to negotiate contracts, and approve various resolutions necessary to form a District. 8. PROJECT IMPLEMENTATION: Applicant, s~aff and consultants meet to determine project schedule. XVI. FORMATION PROCEEDINGS Distric~ proceedings under the 1913 Act and Chapter 13.08 of the Municipal Code normally provide for the construction of Public Improvements by the City and the financing of such Public Improvements with Bonds which are secured by a fixed lien on the benefitted properties. In certain instances, if authorized by the Council, a developer may construct the Public Improvements (or portion thereof) which would be acquired by the City. This procedure requires the ~developer to enter into an acquisition agreement with the City and to pay all administrative and consultant costs which may be incurred. The formation proceedings are suDject to, and contingent upon, satisfaction of all environmental laws and regulations. The proceedings for a District in accordance' with 1913 Act and Chapter 13.08 of the Municipal Code will be substantially as follows: ~. INITIATION OF PROCEEDINGS. The initial request to form a District can be made by an individual Applican~ or landowner petition. Upon initiation, ~he design engineer prepares plans, specifications and cost estimates of the proposed Public Improvements an~ related work and facilities. The assessment engineer begins preparing the · ~' engineer's report, including the assessment diagram, assessment roll, description of the Public Improvements and preliminary cost spread. City s~aff and the environmental consultant (if any) begins processing tke 9 appropriate environmental documentation. The Council conducts proceedings under the Special Investigation, Limitation and Majority Protest Act of 1931 and Chapter 13.08 of the City's Municipal Code. 2. PRESENTATION OF REPORT. Upon completion of the preliminary engineering work, the Council conducts proceedings to consider adopting a resolution of intention to form the District, preliminarily approving the engineer's report, calling for construction bids, setting the date, time and place for the public meeting and the public hearings and directing notices to be given as required by law, advising property owners of the time and place of~the public meeting and th~ protest~hearing, the estimated cost of the Public Improvements, the preliminary assessment.on each parcel, and other required information. 3. BID PROCESS. The City Purchasing Officer calls for and receives construction bids. The assessment engineer modifies the assessment roll and engineer's report based on the preliminary bid(s). 4. PUBLIC HEARINGS. The Council holds the information hearing and public protest hearing a~ which time written protests are presented and public testimony is taken. If no written protests have been received, or if the Council determines to overrule such protest, the Council approves District formation, confirms the assessments, and directs the Finance Director to coordinate the issuance of Bdnds. 5. CASH COLLECTION PERIOD. The City notifies property owners of the confirmed assessment amounts. Bonds will not be issued until 30 days after the confirmed assessments are recorded. During this 30-day period, ~roper~y owners may pay their assessments in cash without Incurring penalties or Bond interes5 cost and they will be given credit for capitalized interest and reserve fund, if any. All.property owners may petition the City to waive the thirty (30) day cash coilection period. 6. AUTHORIZED ISSUANCE OF BONDS. After the 30-day cash paymen~ period has expired, the CoUncil determines the balance of unpaid assessments and provides for the issuance of Bonds to be secured by tke assessments. 7. SALE OF BONDS. Bonds are issued and the cash proCeeds from ~he sale, are held by the City or its fiscal agent and utilized for the purposes described in the engineer's repor~ and the Bond issuance documents. 10 8. ACCEPTANCE OF BiD. After Bonds are sold, staff recommendation for award of construction contract is presented to City Council for approval or rejection. If approved then Contract is executed. 9. DISTRICT CLOSE-OUT. After the Public Improvements have been completed and all claims in connection therewith have been paid from the District improvement fund, the District improvement fund will be closed-out and any surplus in the fund will be distributed as determined by the Council in accordance with the 1913 Act and the resolution of intention. The Public Works Department will notify the Finance Department of the close out date. GR.14 11/28/94 11 ASSESSMENT DISTRICT POLICY SUMMARY CURRENT POLICY · Minimum bond issue $1,000,000 · 3 to 1 value to lien ratio · No criteria for reserve fund · Very little detail explanation of district proceedings PROPOSED POLICY · Minimum bond issue $1,000,000 · 3 to 1 value to lien ratio (retail value) · Credit enhancement criteria · Bond term 20 years maximum' · Clarifies City's role krc ' GR. 15 COMMENTS ON POLICY STAFF · 3 million dollar minimum bond amoun~ · 5 to 1 value-to-lien ratio for entire district · Credit enhancement criteria · Bond term maximum 15 years BOND COUNSEL · Allow for 30 day waiver of cash payment period · For acquisition district no sale of bonds until improvements completed UNDERWRITER · Keep 1 million dollar minimum bond amount · Allow Finance Director option of acquiring right-of-way · Keep value to lien ratio for entire district at 3:1 · Do not limit ownership to 25% of district · Allow longer bond term (possibly based on size) B.I.A. · $1 million dollar minimum bond amoun~ · Allow minor streets and industrial parks · Keep 3 to 1 value to lien ratio per parcel · Bond term maximum 20 to 25 years DISCLOSURE COUNSEL · Clarify language in policy regardinq special benefit · Change debt service maximum to legal limitation · List methodology of payoff amoun~ in 30 day cash payment " period · List that bonds will be callable · Delete market absorption consuitan~ (usually hired by applicant) °' · Increase bond term to 20 or 25 years GR.15 CITY OF BAKERSFIELD ASSESSMENT DISTRICT VALUE TO LIEN RATIOS ORIGINAL VALUE TO A.D.# TITLE BOND AMOUNT LIEN VALUE TYPE =31-1 FAIRVlEW 815,730.12 3.66:1 RETAIL ~ 82 - 1 STOCKDALE 6,189,877.00 6.17:1 RETAIL 86-1 PANORAMA HIGHLANDS 1,303,0(X).00 3.24:1 RETAIL 86-2A . BUENA VISTA TRUNKLINE 7,927,223.96 * 86-2B LABORDE ROADS 3,310,000.00 ...... ~' ~ 86-2C LABORDE UTILITIES 2,470,000.00 * 86-2D RANCHO LABORDE 4,568,000.00 * 86-5. ANNEXED SEWERS 889,944.00 26.00:1ASSESSED VALUE c37-1 SO JENKINS/BUENA VI STA 1,179,229.00 25.67:1 COMBI NATION BULK/RETAIL 87-2 GATEWAY INDUSTRIAL PARK 2,511,000.00 3.60:1RETAIL ~' 87-3 JEWE3-rA TRUNKLINE 2,883,537.22 10.75:1COMBINATION BULK/RETAIL 90-1 JEVVETTA TRUNKLINE EXT. 4,357,580.00 5.50:1 BULK 91 - 1 HOSKINGS ROAD TRUNK SEWER 3,350,000.00 11.22:1BULK 93-1 NORTHEAST SEVVER/GAS LI NE 10,580,000.00 7.95:1 ASSESSED VALUE 93-2 STINE/HARRIS 3,990,000.00 3.00:1 RETAIL ~' 93-3 CAL OAK * APPRAISED IN AGGREGATE AT 3.02:1 - RETAIL LEG 12/05/94 HAND-OUT BUDGET AND FI1C~NCE CO~TTTEE NRF. TING OF 12-5-94 [ RRICK, HERRINGTON & SUTCLIFFE November 29, 1994 Direct Dial (415) 773-5467 Gil Rojas Assistant Finance Director City of Bakersfield 1501 Truxtun Ave. Bakersfield, CA 93301 Re: Assessment District Policy; Timing of Bond Issuance in Acquisition Proceedinqs Dear Gil: Confirming our telephone conversation this morning, I strongly recommend that, in keeping with the language and legislative intent of Section 10010(a) of the California Streets and Highways Code, the City's policy for issuance of assessment bonds in developer/acquisition proceedings include a policy that, absent compelling circumstances to support earlier issuance,, assessment bonds to acquire developer-constructed improvements not be issued until the subject improvements are complete and deemed ready for acceptance by the City and each other agency, if any, which will become the owner of any portion of the improvments. There are two reasons for recommending this policy: 1. Section 10010(a), as amended in 1963,'defines the term "acquisition" to include "... improvements ·. . which are in existence and installed in place on or before the date of adoption of the resolution of intention .... ,, This provision, in my view, reflected legislative concern in 1963 that arose out of several "troubled" assessment districts in which the bonds were issued before the improvements were installed, bond proceeds were paid over to the developer prior to completion, and eventually bond proceeds were exhausted before the work was completed. By requiring that the work be completed before even the resolution of intention was adopted, the legislature sought to assure that no bonds would be issued and sold until after work was completed and costs known. 2. The second reason is more practical - namely, that delaying bond issuance until after project completion maintains an incentive for the developer to assure such completion, with Old Federal R~set~e Sank Building · 4~0 Sansome Street · San Francisco, California 94111-3143 [~ RRICK, HERRINGTON & SUTCLIFFE Gil Rojas November 29, 1994 Page 2 the City's representative clearly in charge of making the "completion" determination. Related to this is the advantage that the bonds are more secure once the improvement project has been completed, assuring the "value added" from the improvements as further seourity for bondholders.. If the City.has to foreclose: the City has a much stronger assurance of marketable title at a foreclosure auction once the improvements are in place, and the City does not run the risk of having to step in and complete improvements. I hope this provides a sufficient summary of and explanation for my recommendation. Don't hesitate to call if I can provide further assistance.  ely, Sperry cc: Alan Tandy Marian Shaw Bob Sherfy Ed Wilson