HomeMy WebLinkAbout10 Foreclosures in Gray's Crossing and Old Greenwood CFD'sMEETING DATE
TO:
FROM:
SUBJECT:
RECOMMENDATION:
AGENDA ITEM # 10
September 2, 2020
Board of Directors
Michael Salmon, Chief Financial Officer
Annual Community Facilities District Foreclosures in Grays
Crossing and Old Greenwood
APPROVED BY
Michael Salmon, Chief Financial Officer
1) Adopt foreclosure Resolution 2020-22 authorizing staff and special counsel to proceed
with the foreclosure process on all parcels with delinquent assessments within the CFDs
as required by Bond covenant; and
2) Authorize the General Manager to execute a contract for legal services with Stradling,
Yocca, Carlson, & Rauth for their work relating to the foreclosure on delinquent parcels.
BACKGROUND:
This matter concerns the annual update to the Board on the Gray's Crossing and Old
Greenwood Communities Facilities Districts (CFD's) delinquencies and consideration of
adopting a foreclosure resolution and contracting with a foreclosure attorney in order to
facilitate the collection of delinquent CFD assessments.
In 2003, the Board formed a CFD for the Old Greenwood development. In 2004, the
Board formed a CFD for the Gray's Crossing development. Both CFDs were formed for
the purpose of selling bonds to finance infrastructure for the developments. The property
owners in each CFD have been annually assessed through their property tax bill to pay
the principal and interest on the bonds.
Each year since 2010, and consistent with the bond covenant requirements, the Board
has adopted a foreclosure resolution authorizing staff and special counsel to proceed with
the foreclosure process on all parcels with delinquent assessments in both CFDs.
Last year, there were 11 delinquent parcels in Gray's Crossing and 4 delinquent parcels
in Old Greenwood. Three of those Gray's Crossing parcels were large undeveloped multi -
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family parcels. March 2020 Nevada County sheriff's sale sold the three parcels, and a
portion of the proceeds ($152,000) was applied to 19/20 Mello Roos tax levy, however,
there remains a shortage for that levy year of $214,507.
FORECLOSURE CRITERIA
The bond covenant defines when the foreclosure proceedings apply. The criteria for when
the Board must proceed with foreclosure are:
A) A parcel or property owner is past due more than $7,500; or B) If more than 5% of the
amount billed is past due, all past due parcels are subject to foreclosure.
There are 14 property owners in Gray's Crossing that are delinquent. The delinquent
assessments totaling $249,523 exceeds 5% of the amount billed. The Board must
proceed with foreclosure on all the parcels, per bond covenant.
There is 1 property owner in Old Greenwood that is delinquent. The delinquent
assessments totaling $3,674 does not exceed 5% of the amount billed. The Board has
routinely proceeded with foreclosure on all of the parcels, but is not required by covenant
to do so.
All of the property owners have received reminder letters and demand letters prepared
by Willdan Financial, the District's third party firm that administers the collection of the
assessments.
Foreclosure services have been performed for several years for the CFDs by Stradling,
Yocca, Carlson, & Rauth (SYCR). SYCR has offices throughout California and have done
an excellent job in collecting the delinquencies each year. The District contracts with
SYCR for these judicial foreclosure services on behalf of the CFD on an annual basis as
authorized in Attachment 1 draft Resolution 2020-##.
The remaining parcels were single family residential lots.
FISCAL IMPACT:
There is no fiscal impact to the Truckee Donner Public Utility District with this action item.
All charges incurred related to the judicial foreclosure process are the responsibility of the
property owners within the respective CFD's.
Approximately $133,000 was drawn from the Gray's Crossing Reserve Fund to make the
$1.6 million bond payment because of the accumulated delinquencies.
Most of the total assessment delinquencies, as mentioned above, are due to the three
large undeveloped multi -family parcels. Drawing from the Reserve Fund is a reportable
event to the bond holders and a report was completed by the District.
ATTACHMENTS: Attachment 1 — Draft Resolution
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