TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Evan Crockett, Management Analyst - Finance
SUBJECT:
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Agreement with Spicer Consulting Group for Community Facilities Districts Formation, Annual Administration, and Other Special Services
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RECOMMENDATION
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Approve an agreement with Spicer Consulting Group for Community Facilities Districts formation, annual administration, and other special services not to exceed $74,999;
Authorize the exemption from bidding requirements; and
Authorize the City Manager to execute the agreement.
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PRIOR ACTION/VOTE
On September 7, 2022, the City Manager approved an agreement between the City of Murrieta and Spicer Consulting Group, a California Limited Liability Company (Consultant), to conduct a long-term General Fund analysis related to the fiscal impact of new development on Public Safety Services and the formation of a Safety Services Community Facilities District.
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
DISCUSSION
On September 7, 2022, the City of Murrieta (City) approved an agreement with Spicer Consulting Group (SCG) to conduct a long-term General Fund analysis related to the fiscal impact of new development on Public Safety Services and the formation of a Safety Services Community Facilities District (CFD). The engagement necessitated a two-phase approach to evaluating the fiscal impacts of new development on public safety services and supporting the formation of a Public Safety CFD.
Phase I involved conducting an analysis to understand the impact on public safety services and a comprehensive fiscal analysis to determine impacts on the City's General Fund. Phase I included a revenue analysis of new residential development, specifically evaluating sources such as property tax, sales tax, and franchise fees. Their analysis incorporated information from various documents, such as the General Plan, biennial budget, and the long-term financial plan, to identify the funding gap and estimated costs associated with adding public safety personnel and operating resources needed to maintain the current service level.
Phase II focused on establishing a Public Safety CFD to mitigate increased demands on police, fire, ambulance, and paramedic services resulting from new development. The CFD rate structure is guided by the fiscal impact findings from Phase I, ensuring new development contributes equitably to the cost of maintaining public safety services.
As a result of the engagement with SCG, the City has established a citywide annexable CFD for public safety services (CFD 2025-S), maintenance services (CFD 2025-2), and development-specific facilities CFDs for infrastructure financing. The table below summarizes the established CFDs and annexations.
Now that these CFD formations are complete, the City desires and is in need of annual administration services. The objective of this new engagement with SCG is to provide administrative support to the City’s recently formed CFDs for infrastructure financing, maintenance services, and public safety services. As these newly formed CFDs begin to realize new development, SCG will evaluate the development status of each parcel and determine how much to levy on the property tax bill to cover the expected costs for the upcoming fiscal year in time for the annual enrollment of property taxes to the County. SCG will prepare the budgets for City review and approval, determining the appropriate amount to levy. The proposed annual levy will be brought to the City Council for approval, as currently occurs for existing districts.
Murrieta Municipal Code Section 3.08.280(D) permits exceptions to the competitive bidding process. Since SCG established the referenced CFDs, has in-depth knowledge of the City’s financial condition and future plans, and can ensure continuity of services with minimal disruption, City staff recommends entering into a new agreement with SCG for CFD formation, annual administration, and other special services. Staff plans to issue a Request for Proposal for CFD services prior to June 2026.
FISCAL IMPACT
The fiscal impact associated with the annual administration for CFD 2025-S (Safety Services), CFD 2025-2 (Maintenance Services), Annexation No. 1, and CFD 2025-4 (Rustic Meadows) is $9,000. The annual administration services are paid for by the special district administrative funds; therefore, there is no impact on the City's general fund.
The Consultant proposes a fixed fee schedule below for CFD Formation, Annexation, and Bond Issuance Services, should they be needed during Fiscal Year 2025/26. The costs for the services may be recovered through developer deposits and bond issuances.
ATTACHMENTS
1. Agreement with Spicer Consulting Group for Community Facilities Districts Formation, Annual Administration, and Other Special Services