CFD2004-3_petition for Review

8/13/2019 CFD2004-3_petition for Review

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THIS PETITION TO AMEND THE RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAXFOR THE COMMUNITY FACILITIES DEVELOPMENT (CFD) 2004-3.

NOTICE TO THE PUBLIC

THIS PETITION MAY BE CIRCULATED BY A PAID SIGNATURE GATHERER OR A VOLUNTEER. YOUHAVE THE RIGHT TO ASK. REGISTERED VOTERS ONLY.

1.Print Yow. esidenceName: tlre-54. --S- fi ..W C. ddress ONLY: (-4 :,c 't 'T7 -e..41 Ity --. This column forofficial use. onlySign AsRegisfeTo Vote: -2 ity: a t ip: :k. c _-....x)32.Print Your esidenceName: 11 . eJ43cAi ddress ONLY: --/i-ffc) '$f i1 Iwo Gliz..Sign AsRegisterdTo Vote: ity: 110(0ip: ___,9Z1C733.Print Your2._ esidence . . . . .Name: I - dress ONLY:L_ . -1 3 V i e_rti6,1;Si n AsRegistere. 5o AD - d. Cty: Oip:jrPrint Your Residence -5\rintName. 53F-Zilf\O_ ddress ONLY: LICSt.0Se- 1 :erv 0Sign AssRegisteredTo Vote: X ity: -1,--v-s) i =. ip: -2. 6-Z.;5.Print Yous esidenceName: gr--e-P1( /(7& PJA - d igss ONLY: 431'1106Sr?.--v-s-:4,A, .0Sign AsRegistered Ali fifeTo Vote: 01,. ity: uk ip: .--- --Z C P6 wi iPrint Youq ) esidence--. twit ; Ai ddress ONLY: .ge? 5 : M y -h?ame: r t t i 2,3Sign AsRegistered .7To Vote: ,. 4fial dP li h tY: p121133

DECLARATION OF C I I C ATOR (TO BE COMPLETED AFTER ABOVE SIGNATURES HAVE BEEN OBTAINED)am registered to vote in the County of Riverside. My residence address iscirculated this section of the petition and witnessed

each of the appended signatures being written. Each signature on this petition is, to the best of my information and belief, the genuinesignature of the person whose name it purports to be. All signatures on this document were obtained between the dates of

nd I declare under penalty of perjury under the laws of theState of Cal i fornia that the foregoing is true and correct. Lxecu ted on at

(month and day) year) place of s igning)

(complete signature indicating ful l name of circulator)


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PETITION TO AMEND THE RATE AND METHOD OF APPORTIONMENT OF THESPECIAL TAX FOR THE COMM UNITY FACILITIES DEVEOPM ENT CFD) 2004-3.

The Registered Voters residing in the Indio Sponsored Community FacilitiesDevelopment ( CFD ) 2004-3 District ( District ), hereby, petition the City to amend theRate and Method of Apportionment of Special Tax ( RMA ) of the CFD 2004-3. TheRegistrar of Voters in Riverside, California has provided a list that includes 505Registered Voters in the District. We have enough votes to have the City institutionformal resolution and amendm ents to the 2004-3 CFD RMA ,

The 2004-3 District includes Improvement Area 1, which proffered a $26.3 millionoffering, and Improvement Area 2, which is approved for over a $30 million bondoffering. improvement Area 1 bond monies include backbone structures whichImprovement Area 2 has received benefit.

California Government Code Section 53332 (a) describes the method by which apetition signed by 25% or more of the registered voters residing in the district maypetition the City for a resolution to change the RMA. That a minimum of 126 registeredvoters signatures are necessary for the present 2004-3 CFD amendment. This petitionfar exceeds that number. Therefore the City must undertake the process ofamendment. The Petitioners request that any fees be waived or presented within 45days.

California Government Code Section 53333 requests the petition to direct the legislativebody to make specified changes to the CFD 2004-3. California Government CodeSection 53334 Requests that the resolution of consideration to alter the types of publicfacilities and services financed by an established community facilities district, or to levya new special tax or special taxes, or to alter the rate or method of apportionment of anexisting special tax, shall do all of the following: (a) State the name of the Area. (b)Generally describe the territory included in the area. (d) Specify any new special taxeswhich would be levied to pay for new or existing facilities and services and any


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proposed alteration to the rate or method of apportionment of an existing special tax. (e)Fix a time and place for a hearing upon the resolution which shall not be less than 30 ormore than 60 days after the adoption of the resolution of consideration.

Improvement Area I Specific Requests

This petition requests that the RMA within Improvement Area 1 of the District beamended so that undeveloped property pays into the tax. The present RMA hasbenefited the undeveloped property unequally. In fact the 100 lot undeveloped propertyowner RB Terra Lago has paid no special taxes for the last 2 years despite owningproperties that should make up 25% of the debt service. The debt service is nowapproximately $1.6 million per year. 25% is $400,000.

Improvement Area 2 Specific Requests

This petition further requests that Improvement Area 2 of the CFD 2004-3 District [whichhas benefited from numerous structures and development] either directly or indirectlypay an amount, [including the time value of money and interest], to compensate theImprovement Area 1 special tax burden going forward.'

The special tax, debt service for Improvement Area 1 was reduced by $220,000 peryear for the remaining 24 years left on the bond by the City defeasing the $3.0 millionSpecial Escrow 2036 -$3 million bond. This reduction was possible as the

requirements to use the special escrow money, including two appraisals of the propertyfell short, and it was used to defease such bond. The petition requests that suchinequity be considered in the re calculation of the new RMA.2

The Improvement Area 2 property is part of the CFD 2004-1 District, and CFD 2004-3District. This area has an approved bond amount of $30-33 million for the 831 homesites. There is an approved RMA for the properties. It appears as though the


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responsible landowners wish to simply ignore such tax responsibility and simply pretendthat they are not awa re of such burden required by law

Such benefits include upsizing of water, sewer, roads, traffic signals, landscape, dryconduit, payments for the fire station, engineering, sidewalks, fees, and other eligiblepayments made directly [or indirectly by payment methods through a variety ofaccounts], whose real intents were specific for Improvement Area 2. A simple approachis to note when the improvements were completed and when monies were procuredfrom the construction fund

This petition further requests a Special Tax Consultant , Webb and Associates,( WEB ) who understands the complicated nature of this unusual [and expedited] CFD2004-3 Special Tax take the lead, Allow Webb and Associates to determine the parties,they feel are necessary to proceed with the amendm ent

California Government Code Section 53333 (e) That the City make the resolution toamend the RMA, and set the Vote for no later than 90 days from the date of saidresolution

Wherefore the undersigned representative voter within the CFD 2004-3 District andthose registered voters attached hereby petition the City to Amend the RMA for the2004-3 District including Area 1 and Area 2. That the City institute the proceedings andwaive any asso ciated fees or notify Petitioners of the am ount to be paid

August 14, 2013

Gracie Nilson, along with over 125 concerned Terra Lago Registered Voters herebysubmit this Petition (exhibit 1) to City of Indio. CFD 2004-3 Voter Registration list


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July 21, 2013

Madame MayorEmail:

I sincerely appreciate the opportunity to present my issues with the CFD 2004-3 MelloRoos District on July 17, 2013 in front of the City Council. I addressed the burden to theindividual homeowners in Area 1, who are forced to pay over 3,600 each per year for30 years. Over 7 million appears to have been used for backbone structures outsideof Area 1. Those structures benefited Area 2, the Timeshare and golf course who wereadded to the CFD 2004-3 District. They have yet to pay anything. The Timesharewhich was formed receive millions of dollars which frankly were not needed to supportmy Area 1. It is certainly unclear how a formed development would be able to receivebenefits from Area 1 money. Further despite a vote of the original land owners to formthe Area 2 bond, the successor in interest to Suncal or Indio Land Ventures does notwant to pay anything. This is simply inequitable.

In addition I presented data that was incorporated into the minutes, which demonstratesthat the homeowners pay all the debt service to the Area 1 bonds. RB Terra Lago, whoforeclosed on the original builder, Ashbrook has not started a new home since2008. Yes they finish out a few, but no new home starts. In light of RB Terra Lagoproperty in Area 1 being ultimately responsible for 25% of the total 1.6 million annualdebt service at build out, today pays nothing. That is also inequitable. I feel that councilalong with the voters in Area 1 resolve to amend the methodology of payments to theundeveloped property to equal that of the developed. This process is fairly simple toaccomplish. RB Terra Lago has absolutely no incentives to build in Area 1. They cansit and wait. If reapportioned the incentives may change.

Now I have reviewed many of the records and have determined that CouncilmanMichael Wilson, and Councilwoman Lupe Watson were involved in the 2004-3 process


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during previous service. That any audit vote to have an audit or any other mattersinvolving the 2004-3 and equitable decision by this Council should be done without theirinput. They should recuse themself from the process. It is possible they could block theaudit or vote in a manner that may be biased for a variety of reasons. I feel this shouldnot occur.

If in fact the Council determines that both of these 2004-3 council participants are to beincluded I feel we should be notified so that I may determine a better approach. I havediscussed this with my fellow neighbors and we all agree. We request that the councilnotify us in writing if the 2004-3 council members will recuse themselves. If they refuseto recuse themselves, please let us know so we may explore our other alternatives.

In addition I have found that Area 2 Tract Map approval and eligibility was contingent onapproval of the Second Amendment to the Development Agreement of Project MasterPlan 96-8-10 Amendment No. 2[Tract Map No. 32287 Case No. 04-11-414] [Tentative Tract Map No. 32288 Case No04-11- 415] [Tentative Tract Map No. 32241 Case No. 04-11-416] and [Tentative TractMap 32462Case No. 04-11-417]. This amendment failed. I ask how would Area 2 be timely placedinto such 2004-3 Mello Roos Tax District?

Thank you in advance

Sincerely, Gracie Nilson and concerned Hom eowner s of Terra Lago Area 1.

5Zii kik 422-02

2


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Members of the Indio City Council and guests. My name is Gracie Nilson, I'm a realestate broker and one of the few original homeowner's in Terra Lago. There are manyplaces I'd rather be right now... but enough is enough, I felt compelled to action at thethought of developers, and other's benefiting at the expense of TL 1 homeowner's.Our homes have been burdened by the excessive costs of the Mello Roos Tax District2004-3. This tax was petitioned and formed February 2005 by a vote of the landowners.By the way none of those voters are around today. It's unclear as to why it would becalled 2004-3 instead of 2005-3?My fellow neighbor's and I have paid dearly into this Mello Roos. Yes, we knew aboutthe Bonds as this was disclosed to us at the time of purchase. myself pay $360.00 permonth for this tax, amounting to a grand total of $28,800 thus far. This 30 year bond,frankly benefits all the others in the 2004-3 District, including the City. It is excessiveand has affected the sales price of many homes, some have lost their home directly dueto the impact of this mello roos. Approximately 70% of the homes suffered foreclosureor endured a short sale. Even as our real estate markets in the area have rebounded,many homes are still severely underwater.The 2004-3 tax district was petitioned by the original developer Suncal in February 2005and voted on by all the land owners in the district which happened to be the buildersand the developer. The City facilitated the process by using its rightfully granted powersand said tax was passed. A total of $26.3 million was funded and monies weredispersed by September 12, 2005. The City passed the 2004-3 CFD in the shortestpossible time frame allowed by law as the City chose to waive an additional 4 monthwait.The CDF 2004-3 tax district includes 1) Terra Lago (Area 1) with 635 homes ; TheWyndham Time Shares; 3) The Terra Lago Golf Course; and 4) The Rabobankdevelopment with its 831 homes [Area 2 The idea behind funding the CFD 2004-3district was to facilitate the infrastructure development for all of the CFD 2004-3 District.So, the money raised in the Area 1 bond offering was eligible to build infrastructure inthe District. All others benefited with the money raised from our Area 1. No others havepaid a pennyl


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Our present tax has other flaws. The Area 1 payment rate for unfinished lots [or unbuiltproperties] pay far less that the finished lots. By the City of lndio's own records thereare 20% unfinished lots in Area 1 which are owned by a different Rabobank entity.Since they are unfinished lots, the formula for the Mello Roos Tax allows that 20% topay only 7.2% of the taxes. The Homeowners in 2010 paid $1,460,000 and Rabobankpaid $ 112,000. I am sure it is less for Rabobank for 2012... Please refer to handout-7 Page 3 of the Willdan reportshows Undevelped land (Rabobank, entity) Paidf \ZERO Special Assessment TAX Well no wonder all those lots on the lake remainundeveloped...what incentive do they have to build. This has further burdened TLhomeowner's

tArve pay, but Rabobank does not ? I honestly, hope they are not trying to

live up to their nameThere was some previous research, on CFD 2004-3 and the City agreed to not turnover $3 millionvkiriChe riistecl,to the developer. The City agreed and such money wasused to pay down the debt and thereby did lower the present tax burden. However, thisdecrease of $200,000 per year has gone entirely to the benefit of the Rabobank Area 1(rabo bank entity). I will never see any benefit from that $3 Million, neither will most ofmy past nor present IL homeowner's.I ask this Council to call in an independent auditor to evaluate the Mello Roos offeringand identify what monies were paid for Public Structures inside and outside of Area 1.That any inequities be corrected to the benefit of Area 1 homeowners. Determine andexplain how any developer may change the Mello Roos District, so they do not have topay? CFD 2004-3 tax on Area 1 is excessive and burdensome, Area 2 -the time sharewho received the benefits from Area 1 tax money should pay their own way, it's time toonce and for all "alleviate" the burden which TL homeowner's have been burdened forsince day one. We are NOT everybody's Piggy Bank.I ask the City to work with the registered voters in Area 1 to reapportion the way theMello Roos Tax is paid for Area 1 undeveloped properties. These roperties have noincentives to build. They should at least pay the full ax. This alone, would lower ourtax by approximately 25% per home... and how oting participants in the area2004- 3 D istrict m)kt-y work to correct this Mello Roos Fiasco.


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Normally if both Area 1 and Area 2 bonds are funded the bonds would benefit eachdevelopment Areas equally. Unfortunately, this is not the case. All development needsfor the District benefited mostly other areas within the district...this is so "unjust" thatthose that had anything to do with this, should be as nervous as a long tailed cat in aroomful of rocking chairsIf Area 1 had only funded area 1, there would be no need for CFD 2004-3.The CFD 2004-3 tax was approved for bond offerings of $30 million for each Area 1 andArea 2. Such a lien was recorded as Riverside Doc No. 2005-0603064. This wouldallow Area 2 to benefit from the Area 1 taxes to support their infrastructure costs... 4 5just "not" right. To allow the Timeshare, Golf Course and Area 2 to benefit from thetaxes paid by Area 1 residents iAs as "offensive as it is "unconscionable". Ms. Mayor Irespectfully request the city perform it's fiduciary duty and hire an outside "unbiased"firm for a com plete and independent accoun ting of these m attersI would like to discuss the actual $26.3 million Bond Offering for the 635 Terra Lago,Area 1 residents. There are several initial steps to determine the size of a Mello RoosBond Offering. The most critical is the appraised values of the unfinished land. This issince no homes have been built as of the time of formation. The typical bond must havecollateral to ensure the bondholders and/or investors can get their money back if themoney is not paid back. (Irroher words the foreclos landvalue must be at least 300%higher that the bond offering. That is a 3:1 land to offering ratio. Most want 500% or5:1, since the land may not be worth much. The investor's money may be lost if theland is only worth 10% of the appraised value. However, the point here is that if theappraised value were artificially elevated, this would allow for more money raised fromthe bond offering.

Typically a Mello Roos offering ratio is important because the appraised value is dividedby the ratio number to get the size of the offering. Once the offering amount isktra keydetermined then a financial consultant, in this case Wildan Financial, determines theamount each hom e would be responsible for over a 30 year offering


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Being the first large Mello Roos offering it is easy to search it in the public records. Inthe March 3, 2004 City Notes Councilmember Fesmire did not know the differencebetween an assessment district and a Mello Roos tax and the city was to adopt goaland policy related to such offerening.The city has completed only 3 formal bond offerings to date. These are Terra Lago,Talvera, and Sonora Wells. None of these are close to the size of Terra Lago Area 1.All had loan to value ratios greater. No offering since

,----Now, it is unclear to me why the Wyndham Time Share would not pay the CFD 2004-3tax, while benefiting from many millions in Mello Roos water money. This council mayrecall while building the Timeshare the City could not supply enough water and wasrequired to get a large bladder costing over 1mm to supply enough money so that theconstruction would be completed. -f+member all the problems associated with thewater and subsequent lawsuits that were settled? See Agenda Package Indio Water February 2005 page 4 of 23.When the CFD 2004-3 funding occurred 19,497,174.37 went to the Acquisition andConstruction Fund. The funding, construction, and acquisition agreement further setthe formal requirements for funding, coverage, and allowed construction. Strictcompliance is necessary. It appears t hat such compliance was notfollowed.In summary I feel that the CFD 2004-3 tax on Area 1 is burdensome, excessive, basedon a faulty appraised value, and used too high of a land to value ratio. The total tax isover 3% for a home owner in Area 1. I believe that Area 2 and the Time Share whoreceived the benefits from the Area 1 tax money should alleviate such burden by payingtheir fair share.Further Area 2 is encumbered by the 2004-3 Mello Roos Tax by a vote of the originalland owners. It is unclear how they may walk from such vote, receive the benefits fromthe CFD 2004-3 tax, and build properties that would compete with the 100 unfinishedlots in Area 1. Anyone who reads a newspaper report on this would be shocked. The


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The size of the Area 1 CFD 2004-3 offering was based on the appraised lot value of$137,000 per home site. The CitAndio website states now these same completed lotsare worth a mere $49,000. It seems to me the values were 300% over inflated, by theconsultant? his possibly indicates the bond offering should have actually been$26.313 or $8.7 m ill ion and would cost $120 per m onthThe lowest debt to value ratio of 3 was used to figure out the total allowed tax of $26.3million for the 635 homes. In other words the formation of the Mello Roos tax for Area 1was the "highest" possible using appraisal values of the lots aft,300% of today's value.The history of the Mello Roos formation may be found in the City of Indio's public

cords. I have reviewed them, including the Indio Water District Notes. The councilsown lW i or Water notes on April 28, 2005 demonstrates that $8.1 million in waterprojects needed to be completed by Spring 2006 and that '`no was available.(Refer to handout The September 19, 2005 Water notes states that there werewater restrictions placed on the city. The Timeshare has difficulties with waterpressures. In fact as the City knows there was far more than water problems. Therewere law suits from the delay of construction due to these promised water pressures.The CFD 2004-3 funded in September 12, 2005. The CFD 2004-3 District constructionfund received $19.4 million, and from there the monies were dispersed. Ironically thewater rates increased in July 2005 to include the new construction impact fees to bepaid per house. The total was $3,025.00 per new house construction. This coincidenceis so timely for the Cities needs of water money. The increase was figured into theamount the City received from water impact fees. In fact the City received an additional$2.6 million for the 831 impact fees for Area 2. ~Interesting this_yvould be repaid to ISuncal when the bonds for Area 2 funded.The CFD 2004-3 was the first of its kind in Indio Meaning a large bond offering to bepaid back over 30 years. The City formed its first CFD 2004-1 for police and fire. It wasa flat amount that is paid yearly per house :Vet . CFD 2004-2 is similar. CFD2004-3 was the first formal bond offering. Again petitio -d in 2005, but called 2004-3.

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CFD2004-3_petition for Review

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