HomeMy WebLinkAbout14 Foreclosures in Gray's Crossing and Old Greenwood CFDs TRUCKEE - AGENDA ITEM #14
Public District
MEETING DATE: September 7, 2022
TO: Board of Directors
FROM: Michael Salmon, Chief Financial Officer
SUBJECT: Consideration of the Annual Community Facilities District
Foreclosures in Grays Crossing and Old Greenwood
APPROVED BY
Bright C. Wright, General Manager
RECOMMENDATION:
a) Adopt foreclosure Resolution 2022-18 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
b) 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.
DISCUSSION:
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.
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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 7 property owners in Gray's Crossing that are delinquent (last year 7). The
delinquent assessments totaling $354,705 ($353,018 last year) exceeds 5% of the
amount billed. The majority (97%) of the total assessment delinquency amount for 21/22
tax year is due to the three large undeveloped multi-family parcels. The Board must
proceed with foreclosure on all the parcels, per bond covenant.
There are no property owners in Old Greenwood that are delinquent (last year 2). The
delinquent assessments totaling $0 ($3,481 last year) 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 2022-18.
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.
In August 2022, $167,960 ($214,815 last year) was drawn from the Gray's Crossing
Reserve Fund to make whole the $1.8 million bond payments 9/1/2022, due to the
accumulated delinquencies. Post-draw, the reserve balance is $2.224M, whereas the
covenant stipulated reserve balance is $3.3M.
Drawing from the Reserve Fund is a reportable event to the bond holders and a report
was completed by the District.
ATTACHMENTS:
1 — Resolution 2022-18
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