Report Prepared by: Francisco Mendoza-Gonzalez, Senior Planner, Development Services Department
Title
SUBJECT: Adoption of a Resolution of Intent Regarding Annexations No. 28 and No. 29 into Community Facilities District (CFD) No. 2003-2 (Services); Acceptance of Two Petition, Consent and Waivers from Developers for Annexation in the CFD No. 2003-2 (Services) for Annexations No. 28 and No. 29; Approving Two Deposit and Reimbursement Agreements for Annexations No. 28 and No. 29; and Setting a Public Hearing for May 19, 2025, for Both Annexations. Annexation No. 28 Consists of Approximately 4.59 Acres of Land Generally Located at the Northeast Corner of Yosemite Avenue and El Redondo Drive and Annexation No. 29 Consists of Approximately 14.02 Acres of Land Generally Located at the Northwest Corner of El Redondo Drive and Pettinotti Road
REPORT IN BRIEF
Considers adopting a Resolution of Intent to annex a portion of the Yosemite Village development (“Annexation No. 28”) and the Royal Woods Estates development (“Annexation No. 29”) into Community Facilities District (CFD) No. 2003-2; including the approval of a Deposit and Reimbursement Agreement and accepting the Petition, Consent, and Waiver for the annexations; designation of future annexation areas to the CFD and set a Public Hearing for May 19, 2025.
RECOMMENDATION
City Council - Adopt a motion:
A. Adopting Resolution 2025-22, A Resolution of Intention of the City Council of the City of Merced, acting as the legislative body of the City of Merced Community Facilities District No. 2003-2 (Services), declaring its intention to Annex Two Areas to said District and authorize the Levy of a Special Tax within said Annexations, Designating Certain Property for Future Annexation to Said District, and Approving Certain Agreements Related Thereto; and,
B. Setting the Public Hearing for May 19, 2025; and,
C. Accepting the Petition, Consent and Waiver from Yosemite Village Holdings, LLC, CB 1285 Yosemite Starbucks, LLC and Camelback & 59th Ave Inc. (“Annexation No. 28”); and,
D. Accepting the Petition, Consent and Waiver from Redondo and Cardella, LLC (Annexation No. 29”); and,
E. Accepting the deposit amount of $30,000 in Fund 4500 (CFD Formation Fund), increasing the revenue and appropriating the same to cover the cost of Community Facilities District formation and related expenditures for Annexation No. 28; and,
F. Accepting the deposit amount of $25,000 in Fund 4500 (CFD Formation Fund), increasing the revenue and appropriating the same to cover the cost of Community Facilities District formation and related expenditures for Annexation No. 29; and,
G. Authorizing the City Manager to execute the Deposit and Reimbursement Agreement for Annexation No. 28; and,
H. Authorizing the City Manager to execute the Deposit and Reimbursement Agreement for Annexation No. 29; and,
I. Authorizing the Finance Officer to make the necessary budget adjustments.
Body
ALTERNATIVES
1. Approve the actions as recommended by staff; or,
2. Requesting modification or amendment to the documents and provide direction to City staff regarding the same; or,
3. Decline to authorize action as recommended; or,
4. Continue to a future City Council meeting (time and date to be specified in motion).
AUTHORITY
Annexation of property into the City’s existing CFD No. 2003-2 (Services) pursuant to Merced City Charter, Section 200; Chapter 2.5 (commencing with Section 53311 of Part 1 of Division 2 of Title 5 of California Government Code (the “Act”), commonly known as the “Mello-Roos Community Facilities Act of 1982;” Chapter 13 of Division XIII of Title 13 of the City of Merced Municipal Code; and the City’s Policy on new development.
DISCUSSION
The City approved a policy requiring all new development with the City to annex to a community facilities district pursuant to the Mello-Roos Community Facilities Act of 1982, for the provision of certain services to new development. The services to be provided may include all or a portion of the following: police and fire protection services, maintenance of parks, landscaping, parkways, open space and storm drain maintenance, and other services authorized or to be authorized by the City’s Municipal Code. The formation or annexation to the community facilities district is a condition of approval for new developments.
In order to determine the special tax for these developments, an amended Rate and Method of Apportionment (RMA) was prepared (Exhibit A of the Draft Resolution at Attachment 10). The landowner(s) have reviewed the RMA and been notified of the amount of the annual levy as shown on the Maximum Tax Rates Schedule for Fiscal Year 2024-25 at Attachment 5.
CFD Annexation No. 28
The property for Annexation No. 28, known as the Yosemite Village (West) development, has been approved for approximately 16,800 square feet of commercial space on three parcels totaling approximately 3.54 acres. The subject site is located at the northeast corner of Yosemite Avenue and El Redondo Drive (see Attachments 1 and 3). The developer, Yosemite Village Holdings, LLC, and affiliates has petitioned the City to annex the property into the City’s CFD for Services (CFD No. 2003-2), and to designate other property as Future Annexation Area.
The Rate and Method of Apportionment (RMA) has been calculated for Annexation No. 28 based on approximate 16,800 square feet of commercial space approved for this site.
CFD Annexation No. 29
The property for Annexation No. 29, known as the Royal Woods Estates development, has been approved for 111 single-family homes on approximately 14.02 acres. The subject site is located at the at the northwest corner of El Redondo Drive and Pettinotti Road (see Attachments 2 and 4). The developer, Redondo and Cardella, LLC has petitioned the City to annex the property into the City’s CFD for Services (CFD No. 2003-2), and to designate other property as Future Annexation Area.
The Rate and Method of Apportionment (RMA) has been calculated for Annexation No. 29 based on 111 single family homes.
Future Annexation Designations
The maps for both Annexation No. 28 and No. 29 have land adjacent designated as Future Annexation (Improvement Areas No. 52 and No. 53 shown on Attachments 3 and 4). The Future Annexation Area for the CFD allows for a streamlined annexation process when ready to annex to the CFD upon the unanimous consent of the property owner. The Future Annexation Areas will require their own deposit and reimbursement agreements when they are ready to be developed and annexed into the CFD.
Petition, Consent, and Waiver
In addition to the adoption of the Resolution of Intent, City Council is being asked to accept the Petition, Consent and Waiver from the owners of property for the proposed Annexations No. 28 and No. 29 (Attachments 6 and 7). These documents are the petitions from Developers for property that they own to be annexed into the CFD and to designate future annexation areas, and are the consent and waivers to allow the public hearing and election to be held concurrently and waive the requirement of at least 30 days between the adoption of the Resolution of Intent and the public hearing.
Deposit and Reimbursement Agreement
The Deposit and Reimbursement Agreement for Annexation No. 28 with Yosemite Village Holding, LLC, CB 1285 Yosemite Starbucks, LLC, and Camelback & 59th Ave., Inc. is shown at Attachment 8. The agreement provides for reimbursement to the City for costs incurred with the annexation process. The developer has submitted a deposit of $30,000 to cover the costs of the CFD annexation process.
This Deposit and Reimbursement Agreement for Annexation No. 29 with Redondo and Cardella, LLC, is shown at Attachment 9. The agreement provides for reimbursement to the City for costs incurred with the annexation process. The developer has submitted a deposit of $25,000 to cover the costs of the CFD annexation process.
However, the Agreement would also authorize the City to request additional funds as needed to complete the annexation process, if necessary. Additionally, this agreement states that the developer would be responsible for maintaining any landscaping and other district costs included in the CFD until such time as the CFD has sufficient funds to take over the maintenance.
City Council Action
Staff is recommending the City Council accept the Petition, Consent and Waivers from the developers for Annexations No. 28 and No. 29, adopt the Resolution of Intent at Attachment 10, and set the public hearing for May 19, 2025.
Provided there is no majority protest at the public hearing on May 19, 2025, a special election shall be called and held for each annexation. Should the proposition pass with a two-thirds vote from the qualified voters for each annexation, the property would be annexed into the CFD and the City may levy the special tax pursuant to the amended rate and method of apportionment (Exhibit A of the Draft Resolution of Intent at Attachment 10).
IMPACT ON CITY RESOURCES
The annexation of this property into CFD No. 2003-2 (Services) would allow a special tax to be levied on these properties to cover the costs of landscape, park and storm drain maintenance and a portion of the costs for Police and Fire services to the project area.
Recommendations E & F require 5 affirmative votes from Council.
ATTACHMENTS
1. Location Map - Annexation No. 28
2. Location Map - Annexation No. 29
3. Boundary Map for Annexation No. 28 and Future Annexation
4. Boundary Map for Annexation No. 29 and Future Annexation
5. Maximum Special Tax Rates
6. Petition, Consent and Waiver for Annexation No. 28
7. Petition, Consent and Waiver for Annexation No. 29
8. Deposit and Reimbursement Agreement for Annexation No. 28
9. Deposit and Reimbursement Agreement for Annexation No. 29
10. Draft Resolution of Intent with RMA at Exhibit A