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Home My WebLink About11 Foreclosures in Gray's Crossing and Old Greenwood CFD'sAgendaItem#311TRUCKEEDONNERPublicUtilityDistrictACTIONTo:BoardofDirectorsFrom:ReginaWiseDate:September04,2019Subject:ConsiderationofResolution2019-21,inRegardstoForeclosuresintheCommunitiesFacilitiesDistricts1.WHYTHISMATTERISBEFORETHEBOARDThismatterconcernstheannualupdatetotheBoardontheGray’sCrossingandOldGreenwoodCommunitiesFacilitiesDistricts(CFD’s)delinquenciesandconsiderationofadoptingaforeclosureresolutionandcontractingwithaforeclosureattorneyinordertofacilitatethecollectionofdelinquentCFDassessments.2.HISTORYIn2003,theBoardformedaCFDfortheOldGreenwooddevelopment.In2004,theBoardformedaCFDfortheGray’sCrossingdevelopment.BothCFDswereformedforthepurposeofsellingbondstofinanceinfrastructureforthedevelopments.ThepropertyownersineachCFDhavebeenannuallyassessedthroughtheirpropertytaxbilltopaytheprincipalandinterestonthebonds.Eachyearsince2010,andconsistentwiththebondcovenantrequirements,theBoardhasadoptedaforeclosureresolutionauthorizingstaffandspecialcounseltoproceedwiththeforeclosureprocessonallparcelswithdelinquentassessmentsinbothCFDs.Lastyear,therewere10delinquentparcelsinGray’sCrossingand8delinquentparcelsinOldGreenwood.ThreeofthoseGray’sCrossingparcelswerelargeundevelopedmulti-familyparcels.Theprevioussheriff’ssalefailedtoobtaintheminimumbidonthoseparcels.Theremainingparcelsweresinglefamilyresidentiallots.3.NEWINFORMATIONSTATUSOFPRIORDELINQUENCIESAllofthedelinquentparcelsfromlastyearforOldGreenwoodhavepaidthierdelinquentassessments.OfthesevendevelopedGray’sCrossingparcels,allparcelshavesincepaidtheirdelinquentassessmentsaswell.NEWDELINQUENCIES Attachment1liststheparcelsthatdidnotpaytheirassessmentsthispastyear.Thereare11delinquentparcelsinGray’sCrossingand4delinquentparcelsinOldGreenwood.ThethreelargestdelinquentassessmentsfromGray’sCrossingareagainthethreelargemulti-familyparcelsmentionedabove.FORECLOSURECRITERIAThebondcovenantdefineswhentheforeclosureproceedingsapply.ThecriteriaforwhentheBoardmustproceedwithforeclosureare:A)Aparcelorpropertyownerispastduemorethan$7,500;orB)Ifmorethan5%oftheamountbilledispastdue,allpastdueparcelsaresubjecttoforeclosure.Thereare11propertyownersinGray’sCrossingthataredelinquent.Thedelinquentassessmentstotaling$351,525exceeds5%oftheamountbilled.TheBoardmustproceedwithforeclosureonalltheparcels,perbondcovenant.Thereare4propertyownersinOldGreenwoodthataredelinquent.Thedelinquentassessmentstotaling$12,001doesnotexceed5%oftheamountbilled.TheBoardhasroutinelyproceededwithforeclosureonalloftheparcels,butisnotrequiredbycovenanttodoso.AllofthepropertyownershavereceivedreminderlettersanddemandletterspreparedbyWilldanFinancial,theDistrict’sthirdpartyfirmthatadministersthecollectionoftheassessments.SPECIALCOUNSELStradling,Yocca,Carlson,&Rauth(SYCR)hasofficesthroughoutCaliforniaandhavedoneanexcellentjobincollectingthedelinquencieseachyear.TheDistrictcontractswithSYCRforthesejudicialforeclosureservicesonbehalfoftheCFDonanannualbasisasauthorizedinAttachment2draftResolution2019-21.4.FISCALIMPACTThereisnofiscalimpacttotheTruckeeDonnerPublicUtilityDistrictwiththisactionitem.AllchargesincurredrelatedtothejudicialforeclosureprocessaretheresponsibilityofthepropertyownerswithintherespectiveCFD’s.Approximately$239,000wasdrawnfromtheGray’sCrossingReserveFundtomakethe$1.6millionbondpaymentbecauseoftheaccumulateddelinquencies.Mostofthetotalassessmentdelinquencies,asmentionedabove,areduetothethreelargeundevelopedmulti-familyparcels.DrawingfromtheReserveFundisareportableeventtothebondholdersandareportwascompletedbytheDistrict. 5.RECOMMENDATION1)AdopttheattachedforeclosureResolution2019-21authorizingstaffandspecialcounseltoproceedwiththeforeclosureprocessonallparcelswithdelinquentassessmentswithintheCFDsasrequiredbyBondcovenant;and2)AuthorizetheGeneralManagertoexecuteacontractforlegalserviceswithStradling,Yocca,Carlson,&Rauthfortheirworkrelatingtotheforeclosureondelinquentparcels.ja):;zReginaWiseMichaelD.HolleyFinance&AccountingManagerGeneralManager CFDDelinquentAssessmentsasof8.27.19(Excludespenalty,interestandfees)ATTACHMENT111OldGreenwoodCFD351,5253,576,0703,927,59512,001-12,001Gray’sCrossingCFDAPN19-770-00219-800-00119-840-01819-840-02619-860-01019-870-02419-890-00419-900-00243-010-00543-010-00743-030-0072018/2019PriorYearsTotalPastDuePastDuePastDueNa142,3111,580,7971,723,108FailedAuction-Undeveloped2,045-2,045NewDelinquency2,392-2,392NewDelinquency4,948-4,948NewDelinquency4,783-4,783NewDelinquency4,948-4,948NewDelinquency2,474-2,474NewDelinquency2,556-2,556NewDelinquency66,142734,706800,848FailedAuction-Undeveloped113,4831,260,5671,374,050FailedAuction-Undeveloped5,443-5,443NewDelinquencyOwnerGray’sStationVulgaraTile,Hardwood&CarpeHeatherSchourupAndrewCrossRichard&AmyLawsonPhoenixCapitalNancy&PeterFlemingRainer&KatarinaNousiainenLDKGC81LLCLDKGC81LLCPatSetterETALOwnerJasonBurdETALTruckeeLahontanEquityGroupCharles&CynthiaAndersonTruckeeLahontanEquityGroupAPN19-740-04119-750-01419-750-04319-760-017PriorYearsPastDue2018/2019PastDue1,7143,4293,4293,429TotalPastDue1,7143,4293,4293,429NotesNewDelinquencyNewDelinquencyNewDelinquencyNewDelinquency4 Attachment2RESOLUTIONNO.2019-21“RESOLUTIONOFTHEBOARDOFDiRECTORSOFTHETRUCKEEDONNERPUBLICUTILITYDISTRICTACTINGONITSOWNBEHALFANDASTHEGOVERNINGBODYOFALLOFITSCOMMUNITYFACILITIESDISTRICTS(OLDGREENWOODNo.03-1ANDGRAYSCROSSINGNo.04-1)AUTHORIZINGRETENTIONOFSPECIALCOUNSELWHEREAS,theTruckeeDonnerPublicUtilityDistrict(the“TDPUD”)hasconductedproceedingsresultingintheformationofCommunityFacilitiesDistricts(“CFDs”;theDistrictandtheCFDsarecollectivelyreferredtoas“District”)andtheissuanceandsaleofbondsordebtpursuanttotheMello-RoosCommunityFacilitiesActof1982(Cal.Gov.CodeSection53311,etseq.;the“Act”);andWHEREAS,pursuanttotheAct,theDistricthasdulyrecordedNoticesofSpecialTaxLienandhasdulyandregularlyleviedCFDspecialtaxes,whichspecialtaxesandinterestandpenaltiesthereonconstitutealienagainsttheparcelofthelandagainstwhichitwaslevieduntilthesamearepaid,whichlienssecureinwholeorpartdebtissuedpursuanttotheAct;andWHEREAS,certaininstallmentsofthespecialtaxeshavenotbeenpaidwhendue,andcertainspecialtaxesmaynotbepaidwhendueinthefuture;andWHEREAS,pursuanttoSection53356.1(a)oftheAct,theDistrictisauthorizedtoorderthespecialtaxescollectedbyanactionbroughtintheSuperiorCourttoforeclosetheirliens;andWHEREAS,pursuanttoSection53356.1(b)oftheAct,theDistrictcovenantedforthebenefitofownersofthedebttofilesuchforeclosureactionsonbehalfofthedebtholdersandareauthorizedtoordertheCountyAuditortocreditthedelinquentspecialtaxesuponthesecuredtaxroll,thusrelievingtheCountyTaxCollectoroffurtherdutyandregardthereto;and,WHEREAS,theDistrictwishestoretainexperienced,qualifiedcounseltoprosecutesuchjudicialforeclosureactions,NOWTHEREFORE,BEITRESOLVEDbytheBoardofDirectorsoftheTDPUDactingonitsownbehalfandastheLegislativeBodyofalloftheDistrictCFDsthat:1.TheBoardfindsthattheActauthorizesthecommencementofjudicialforeclosureproceedingstocollectdelinquentspecialtaxes,andherebyordersthatthedelinquentspecialtaxesandallfuturedelinquentspecialtaxesastosuchproperty,becollectedbyactionbroughtintheappropriateSuperiorCourttoforeclosetheliensthereof.ResoIuton2019-21 2.TheGeneralManagerisauthorizedtoretainStradlingYoccaCarison&Rauth,alawfirm,asspecialcounselonthetermssetforthintheagreementpresentedtotheBoardtoprosecutetheforeclosureactionsandtocollectonbehalfoftheCFDsallamountsdueonaccountofthespecialtaxesandanysubsequentdelinquentspecialtaxes.3.TheBoardfindsthattheActprovidesforthepaymentofthecostsandattorneysfeesforprosecutionoftheforeclosuresauthorizedbytheDistrictandherebyauthorizesAttorneystorequirepaymentonitsbehalfofallcostsandallattorneysfeesincurredastoeachdelinquentparcelasaconditionofsuchredemptionasprovidedintheagreement.AdoptedbytheBoardofDirectorsoftheTruckeeDonnerPublicUtilityDistrictactingonitsownbehalfandastheLegislativeBodyofallofitsCommunityFacilitiesDistrictsataregularmeetingheldonSeptember4,2019,bythefollowingvote:AYES:NOES:ABSTAIN:ABSENT:TRUCKEEDONNERPUBLICUTILITYDISTRICTBobEllis,PresidentATTEST:ShannaD.Kuhlemier,CMC,DistrictClerkResolution2019-212