Service and Maintenance CFD

Background

In 2018, City staff analyzed the financial impact of potential residential development.  Based on the analysis, it was determined that the revenues generated by new residential development do not cover the City’s costs to provide services to those homes. Based on actual costs to provide services such as fire, police, parks, and streets, the shortfall ranged from $453 to $787 per residence/per year. 

Policy Formation

In July 2018, City Council adopted new policy that included the following requirements:

• New development will not proceed unless adequate resources are provided by that development, which will ensure the provision of maintenance to existing and proposed facilities and services impacted by that development.
• New single-family or multifamily residential development is included in a services and maintenance Community Facilities District.
• Infill development and development in disadvantaged areas is encouraged, by allowing the City Council to lower or waive the related special taxes.

Creation of the CFD

The Service and Maintenance Community Facilities District (CFD) was created with Council approval on April 2, 2019. The District includes the entire City, but only applies to new single-family or multifamily residential development. As the City approves new developments, the new area becomes part of the CFD.

The CFD authorizes the placement of an annual property tax assessment on each parcel in the District to provide ongoing revenue to pay for services and maintenance in the CFD and to pay for annual CFD administration costs. The tax is $500 annually per single-family residential unit or $330 per year for multifamily residential units from the base year of 2018/19 and will grow at a rate up to 4% per year in perpetuity.  The City Council retains the ability to assess an amount less than the maximum allowable amount.

The types of services and maintenance to be funded by the CFD include police and criminal justice, fire, ambulance and paramedic, parks, parkways, roads, streets, open space, and maintenance and operation of any city real property or other tangible property with an estimated useful life of five or more years.

Proceeds from the tax will be deposited and tracked in a separate subaccount in the General Fund and will be used to supplement City services upon City Council approval during the annual budget development process.

City Council Meeting Minutes

• March 6, 2018, City Council Meeting, discussion of forming a City-wide Service and Maintenance Community Facilities District for new development, Agenda Item 2.1
• July 16, 2018, City Council Meeting, District Formation and Financing Policy Changes, Agenda Item 5.1
• July 17, 2018, City Council Meeting, District Formation and Financing Policy Changes, Agenda Item 13.1
• February 5, 2019, City Council Meeting, announcing plans to form Service and Maintenance Community Facilities District, Agenda Item 14.2
• April 2, 2019, City Council Meeting, Service and Maintenance Community Facilities District Public Hearing, Agenda Item 15.2

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This City of Stockton web page last reviewed on --- 9/16/2020