A May 1 San Diego County Board of Supervisors hearing approved the formation of a Community Facilities District for KB Homes’ Sweetwater Place development.
The supervisors’ 5-0 vote also adopted a resolution calling for an election, approved the results of that single-voter election, and approved the first reading and introduction of the ordinance authorizing the special tax.
A May 22 hearing will approve the second reading and adoption of the ordinance to levy the special tax.
On Dec. 6, 2017, the Board of Supervisors approved the 18-acre Sweetwater Place development which includes 122 detached residences and a two-acre public park on the north side of Jamacha Boulevard at Sweetwater Springs Boulevard.
The one percent property tax will not be sufficient to cover the maintenance costs of the park, so the supervisors’ conditions of approval included the creation of a Community Facilities District or other financing mechanism for the maintenance of the park.
In 2007 the county supervisors adopted Board Policy I-136 which outlines how potential Community Facilities District projects will be evaluated, ensures that the CFDs are created for the public good, and stipulates disclosure requirements which notify prospective property owners of the assessment. Policy I-136 also defines credit requirements to protect bondholders from default for CFDs which issue bonds for reimbursement of constructed infrastructure, although Sweetwater Place will fund services only and will not use long-term bonds.
Policy I-136 also limits the tax rate for a CFD to 1.86 percent of the estimated sales price of the residential homes. The first CFD in unincorporated San Diego County was established for a Harmony Grove development, and in 2014 a CFD on the eastern outskirts of Fallbrook became the unincorporated county’s second CFD.
The CFD has an initial maximum tax of $983.89 per residential unit while the 2019-20 tax for uninhabited land will be $8,595 per acre.
An annual escalation factor will be based on the consumer price index for urban San Diego County although the increases will be no less than 2 percent and no greater than 6 percent.
The estimated annual cost for park maintenance and CFD administration is $122,718 for the first year.
The first step required to form a CFD is a petition from the developer, which has been received along with the proposed boundary map.
The Board of Supervisors then adopts an resolution of intention to form a CFD; that occurred March 13.
Because the proposed CFD area is uninhabited and KB Homes is the sole property owner, a consent and waiver allowed for a waiver of the normal election procedure to form a CFD and for the ballot to form the CFD to be returned immediately upon the adoption of the resolution forming the assessment district.
KB Homes will also cover the estimated $50,000 cost for the county to process the formation of the CFD.
The property is also part of Zone A of the San Diego County Street Lighting District, and property owners will also pay that annual assessment which is currently $13.50 per benefit unit.
