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Home My WebLink About10 CFDs ACTION ITEM #10Updatesthe CFDs and CFD Delinquency Consideration of Foreclosures in Updatesthe CFDs and CFD Delinquency Consideration of Foreclosures in October 05, 2016 BACKGROUND / HISTORY CFDs parcels with delinquent assessments in both proceed with the foreclosure process on all to staff Authorizing •resolutionBoard has adopted a foreclosure Since 2010 the •bonds pay the principal and interest on the through their property tax bill to Property owners are annually assessed •finance infrastructure to CFDs were formed Both •developmentGray’s Crossing for 2004, the Board formed a CFD In •developmentOld Greenwood for In 2003, the Board formed a CFD •Community Facilities Districts UpdateCommunity Facilities Districts Update Community Facilities Districts Update 4 delinquent parcels in Old Greenwood •family parcels-again the three largest multiare delinquent assessments argest L•Crossing18 delinquent parcels in Gray’s •This year•the remaining 15 parcels, 11 parcels have since paid Of •lotsremaining parcels were single family residential The •Each failed to obtain minimum bids at the last Sheriff's sale •family parcels -of those parcels were large undeveloped multiThree •delinquencies in Gray’s Crossingparcels with 18 •yearLast •BACKGROUND / HISTORY Community Facilities Districts Update Community Facilities Districts Update NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update 7,500billed and no owner is past due more than $not exceed 5% of the amount and do $9,346 total assessments Delinquent •delinquentare Greenwood property owners in Old 4 •parcelsproceed with foreclosure on all the mustBoard The •billed5% of the amount and exceed $523,900 total assessments Delinquent •delinquent are Crossing property owners in Gray’s 18 •foreclosureare subject to more than 5% of the amount billed is past due, all past due parcels If B)A parcel or property owner is past due more than $7,500, or)Aforeclosure: proceed with mustBoard •applydefines when the foreclosure proceedings Bond covenant •NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update excellent job in collecting most of the delinquencies from last yearDid an •RauthCarlson & YoccaStradlingUsing •Counsel District has contracted with Special foreclosure the with To proceed •lettersand demand reminder All of the property owners have received •NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update parcels, remains largely undevelopedfamily and commercial -Gray’s Crossing development, specifically the multi•of the bonds ending in 2032 Greenwood CFD, saving the property owners over $3 million over the term In 2014, the Board authorized the District to refinance the bonds of the Old •payments overall risk of insufficient funds to make debt service Low •mostly completeGreenwood development is Old •NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update$2.8M current reserve balance; $3.4M reserve requirement •paymentdebt the recent make to reserve funds CFD drew from •year 2009/2010 tax since unpaid Tax assessments remain •Results in a 20% annual special tax delinquency •tax delinquency (97%)CFD total the Majority of •undeveloped remain family parcels -three large multiThe •bankruptcy agreement and filed for developer, East West Partners, defaulted on their development The initial •a challengeremains the Gray’s Crossing CFD of dministration A•NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update Many concerned and involved parties •Value to Lien considerations •parcels7 years of unpaid assessments on several Over •development and 20% annual delinquencylack of Ongoing •bankruptcydeveloper Initial •CFD is a very complex taskthe Gray’s Crossing Stabilizing •responsibilitiesadministration basic efforts are above and beyond These •largethe benefit of the bond holders and for the community at For •solutions potential Staff is exploring •NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update median to moderate income rangein the additional housing inventory some "housing crisis" by providing relief to the community Completion of development would result in some •Reduce delinquency rate•promote completion of development Would •TaxesSpecial collection of Any solution(s) must stabilize the CFD and improve timely •Transactional in nature•CFD administration responsibilitiesDistrict’s he T•NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update six years been delinquent for more than Staff has identified the certain parcels of concern to be those which have •Tax addition to the delinquent amounts of the Special amounts of delinquency and redemption penalties are due in Substantial •period Several parcels •per month 1.50% penalties at the rate of accrue amounts Delinquent •amountof the delinquent 10% •penaltyin the application of a delinquency results Special Tax Unpaid •NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update edemption penalty interest and fees continue to accrue R•and worsens each year The problem compounds •to further delinquencies in the payment of the Special Tax Contributes •Tax the recovery of the past due Special Impedes •purchasersa disincentive to potential Creates •properties current all ring B•Acquire & develop the property •to:subject parcels of potential purchasers for it more expensive Makes •penaltiesof delinquency and redemption The accumulations •NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update Further impairing the ability of the District to make debt service payments•problemworsening of the Any resolution thereafter is unlikely, thus contributing to a continued •The financial burden respective to certain parcels will increase further•Without Board action•NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update 25 -2016Exhibit A of Resolution that the Board may find to qualify for determination are included as Parcels •interestany determination for waiver of redemption penalties and that those responsible for the delinquency do not benefit from Ensure •definedThe •interestwaiver of all or part of redemption penalties and accumulated Consider •Roos act provides that the Board may:-The Mello•NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update consideration of waiver of redemption penalties and interestfor Roos Act -the criteria of the MelloDo not reasonably meet •fewer than 6 years , those delinquencies existOther •NEW INFORMATION Community Facilities Districts Update FISCAL IMPACT special tax will be paidwaivers will increase the likelihood that The •”and redemption penalties are not part of the “Net RevenuesDelinquency •CFDnegative fiscal impact to the District or to the not have any do The waivers of delinquency and redemption penalties •Not legally or fiscally responsible for any losses •District is a separate legal entity from the CFDs The •CFD of the property owners within the responsibility the process are the foreclosure charges incurred related to All •itemwith this action There is no fiscal impact to the Truckee Donner Public Utility District •Community Facilities Districts UpdateCommunity Facilities Districts Update FISCAL IMPACT District in September 2016report was completed by the A •eventfrom the Reserve Fund is a reportable Drawing •paymentFund to make the $1.4 million bond $415,720 was drawn from the Gray’s Crossing Reserve Approximately •Community Facilities Districts UpdateCommunity Facilities Districts Update RECOMMENDATION Codeauthorized under Section 53340(f) of the California Government certain findings and determinations as and interest under penalties redemption the waiver of permitting 25 -2016Resolution c) Adopt parcelsthe foreclosure on delinquent for their work relating to RauthCarlson & YoccaStradlingservices with b) Authorize the General Manager to execute the agreement for legal CFDsdelinquent assessments within the counsel to proceed with the foreclosure process on all parcels with staff and special authorizing 23 -Resolution 2016a) Adopt foreclosure Community Facilities Districts UpdateCommunity Facilities Districts Update Backup Slides Community Facilities Districts UpdateCommunity Facilities Districts Update Backup Slides Community Facilities Districts UpdateCommunity Facilities Districts Update Backup Slides Community Facilities Districts UpdateCommunity Facilities Districts Update Community Facilities Districts Update” “housing crisishousing need is critical and has been covered widely by local media as a the on a very recent study completed by Bay Area Economics Based •limits 50% of our employees currently commute from outside Town in our local community is also a concern of the District, as over Housing •large community at of the Town of Truckee, Tahoe Truckee Community Foundation, and of the housing in the Truckee Tahoe community is a current top priority roviding P•goal:indirect but related community District has recognized an he CFD, tto the goal of stabilizing the addition In •NEW INFORMATION Community Facilities Districts Update Community Facilities Districts Update Moonshine Ink-potential rental opportunities sales and units were intended to meet different income levels for both market These •21 residential Lofts •units(or similar) Over 100 Townhome •unitssmaller footprint “Cottages” Up to 89 •included and inventory that was envisioned to be more affordable portion of housing provide a The Gray’s Crossing development was originally intended to •NEW INFORMATION Community Facilities Districts Update