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Home My WebLink About7/2/2003 - STAFF REPORTS (23) DATE: July 2, 2003 TO: City Council FROM: Director of Public Works/City Engineer APPROVE ENGINEERS REPORTAND RESOLUTION FORMING PARKWAYS MAINTENANCE DISTRICT NO. 10 FOR "MOUNTAIN GATE" TRACT 30963 RECOMMENDATION: That City Council approve an Engineer's Report regarding annual maintenance costs for off-site landscaped parkways and approve a Resolution authorizing the formation of Parkways Maintenance District No. 10 for a new 308 home subdivision at Highway 111 & Gateway Drive called"Mountain Gate"Tract 30963.The development is by Century Crowell Communities(Century Vintage Homes). This formation is being done under the Landscaping and Lighting Act of 1972 & Proposition 218 legal procedures. SUMMARY: Century Vintage Homes, the property owner, has submitted a signed petition"Ballot" and a written "Waiver of Notice of Hearing", waiving the 45-day notice requirement as a sole-owner developer to form the referenced parkways maintenance district for Tract 30963. This will enable the annual maintenance costs of the landscaped parkways to be placed on the Riverside County Tax Assessors assessment rolls forfiscal year 2003/04 and on-going future years for the 308 proposed single family homes within proposed Parkways Maintenance District No. 10 (PMD#10). BACKGROUND: On February 26, 2003 the City Council approved the Planned Development District (PDD) for "Mountain Gate"Tract 30963 for a 308 unit single family home subdivision located at the northeast corner of Highway 111 &Gateway Drive. The developer is Century Crowell Communities(Century Vintage Homes) based in San Bernardino. The principals of Century have signed a petition requesting the proposed Parkways District#10 formation referenced above. The project will be built in fourteen phases on 83 acres over a period of 2 years or less, but the off-site parkways landscaping will be installed in the first year of construction. The proposed landscaping will include: palm trees,turfed areas with mow strips,desert indigenous -trees & ground cover, annual flowers, a sprinkler irrigation & emitter drip system, walkways, and retention basin at the following locations: Highway 111; Two entryway gates at 1. Gateway Drive entry&2. Tramview Rd. entry; Hwy. 111 Retention Basin; end of street landscape at: Pamela Dr.; Video Rd.; Lawrence Circle; Alberto Cir.; Jiminez Circle. The developer will install the referenced landscaped parkways and gated entrys, including the irrigation system and all related landscape &streetscape work at their own expense and the on-going maintenance costs will be placed on the tax rolls to be paid annually by the property owners within the tract. The firm proposed to maintain the landscaping will be"Pac West Land Care, Inc.",which currently maintains all of the City's other parkways maintenance districts,as well as City Facilities,City parks and center medians. Pac West provided the maintenance costs referenced in the Engineer's Report for PMD No. 10. On April 2nd City Council approved the hiring of Albert A. Webb Associates as the Assessment Engineer for the project and on June 11th City Council approved the resolution of intention for Assessment District 161 forthe construction of streets,sewer,storm drains,water and other public improvements for Tract 30963. The AD 161 Public Hearing is scheduled for July 30, 2003. PMD No. 10 will include an annual "Consumers Price All Items Index" (All Urban Consumers) automatic adjustment based on the greater Los Angeles- Riverside- Orange Counties regional Consumers Price Index(CPI) to cover expected annual inflationary increases for labor, materials, c2aA PMD#10 Mountain Gate Tract 30963-page 2 water usage and SCE energy cost increases anticipated over future years. The Engineer's Report for PMD#10 is on file in the City Clerk's office. The City Council will not be required to conduct a Public Hearing, due to the attached Waiver, signed by the developer's representative as current sole owner of the 83 acre subdivision. City Council will be asked to consider approval of a Resolution approving the Engineer's Report and ordering improvements forming Parkways Maintenance District No. 10. The developer previously deposited$10,000 with the City to coverthe City's formation costs for the proposed 1913/1915 Acts District and new Parkways Maintenance District#10. Those funds have been established in account number 261-4492-43200, which will be used as the expenditure account for this initial formation phase of the two proposed districts. This proposed parkways maintenance district is being formed under the"Landscaping and Lighting Act of 1972" (Division 15, Part 2 of the California Streets and Highways Code) and Article X111 D, Section 4, of the California Constitution (Proposition 218). There is no cost to the City for this maintenance district since all costs are either paid for by the developer or assessed to the property owners on the annual assessors tax rolls since it has been determined that all 308 properties within the subdivision receive special benefit from the proposed landscaped parkways. / �a-..+.mow yw�✓,� .d'� ems' ROBERT L. MOHLER DAVID J. BARAKIAN Grants & Government Affairs Manager Director of Public Works/City Engineer APPROVED: City Manager ATTACHMENTS: 1. Signed petition "Ballot" from project Developer (as sole-landowner Century Homes) 2. "Waiver of Notice of Hearing" (waiving 45-day notice requirement as sole-landowner) 3. Engineer's Report dated June 5, 2003 4. District Boundary Map 5. Resolution approving Engineer's Report (FY 03/04 Assessment) and authorizing the improvements, forming Parkways Maintenance District No.10 REVIEWED BY DEPT.OF FINANCE H,\BobM\Data\Document\PMD10.Mounta in Gate.Formation.Res.7-2-03 IG+ aa�4 a- DATE: June 5, 2003 AGENCY: City of Palm Springs PROJECT: Parkways Maintenance District No. 10 "Mountain Gate Tract 30963" (Northeast corner of Highway I I I (N. Palm Canyon) & Gateway Drive) FISCAL YEAR: July 1, 2003 through June 30, 2004 .FROM: David J. Barakian, Director of Public Works/City Engineer (Prepared by Robert L. Mohler, Grants and Government Affairs Manager) PRELIMINARY ENGINEER'S REPORT A. PARKWAY MAINTENANCE ANNUAL COSTS 1. Hwy. I I I & Gateway Dr. & certain public areas of Tr.30963 (Maintenance Cost Est. by Pac West Land Care, Inc.)* $42,234.00 2. a. Electrical for Sprinkler Controllers & Ground Lighting (RGA Landscape Architects- Cost,Estimate)** 4,500.00 b. Desert Water Agency Provided Water (for Irrigation)** (Estimated Water Costs) 36,500.00 SUBTOTAL 1 & 2 83,234.00 3. a. Maintenance, Parts and Repairs (Estimated 5%) _ _ 4,162.00 b. City Administration Costs (Est. 10%) 8,323.00 TOTAL COSTS ESTIMATED FOR 2003/04 $95,719.00 B. NUMBER OF PARCELS IN DISTRICT - One (1) currently- (308 lots in future) C. AMOUNT TO ASSESSMENT IN 2003/04 $959719.00 (To be assessed to Assessors Parcel No. 669-340-001-9 to Century Vintage Homes as sole current land owner) D. ANNUAL COSTS PER EACH PARCEL (FUTURE AMOUNTS TO ASSESSMENT) Lots 1 thru 308- Tract No. 30963 (Future proportionate share = $310.78 aver. per lot) E. See City Account No. 001-2451-43590 for budget detail This report has been prepared pursuant to the "Landscaping and Lighting Act of 1972" (DIVISION 15, PART 2 of the Streets & Highways' Code) and Article XIIID, Part 4 of the California Constitution (Proposition 218). Note: PMD#10 shall include an annual "Consumers Price All Items Index" (All Urban Consumers) based on the Los Angeles-Riverside-Orange County regional Consumers Price Index (CPI) to cover expected future labor, material, water & electrical costs anticipated for Parkways Maintenance District No. 10. Dated: David J. Barakian, PE RCE 28931 Director of Public Works/City Engineer * Exhibit "A"- Cost Est. from Pac West Land Care, Inc. dated June 3, 2003 (2 pgs. ** Exhibit "B"- Cost Est. from RGA Landscape Architects, Inc. dated May 21, 2003(2 pgs.)pCoZ/Q 3 — ___ �—. •--.._. .-� r_� .�� m .�� .�.� .yam ,a'� .� '� � � �� ,�' ASSESSMENT DIAGRAM FOR T ' OF ' aeT PARKWAYS MAINTENANCE DISTRICT NO. 10 "MOUNTAIN GATE"TRACT 30963 CITY OF PALM SPRNG.% COUNTY OF RIVERSEF, STATE OF CALAFORMA RIS—WY 0= 2W3 AT TE M%q W =72uc}DOVAMMY _OIILI%_M.➢!9]l(_ lli ff W}9[i A95E>9F]R A'O,YMWIiY FM➢.ii¢9 OLSIII]Ci$iN TIE"FIB ff"RE plHly AFL 4!TI£0IT'ff M1I\IISll£SLATE ff f 12 19 I , I !1 6i] I e 19 I f0 f2 11f i I2Y1211?212312,1012612J 12B 3,132911a�9� GMT 1.RSO NI14iSL£NAPY A5�]R-0.EA(-fEiIIQA L.��_ALTA MIW�—L_L.��( I yJ"fiyR_TI�r uJ_ `I IIII 1I1 I I293U I m"]rc J:� a�1f3 ez v�T1 r\.V---T-T-r T _LJ sumN Rxv�� y.Jr,% 2 � IItlI �— I I—I i �I �In 74 I j � � A� I�I�•I�I�I�I� �� raj<�— FIlEO SN TrE ffFL�6 TI£9f£R➢IIF]fF11T a sIIEEl9 OF LE II I L I —L I 192 14, 1 i I I I I �� i I` I I I -f r �y —iI w 1 A ilE cm n=PALR 6Pnws Tl�_MY of .2m3. 10 I �J�T7�ATxTAT-Li_fl `.L_L. �L—L_j__� 1 S L11�I LIB a snEE,s.cm PALM seH]wS -1 F— �rTTT�--,---.-� _'7 Nm] 2z srATE nnug"r+rA 1w ]02 1w 1W se m GG s! 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I-,m-I `�J_ LTA LOryT-J"1—�L_lJ V—LLALTAC4NA 1�_L_J�r I I I I I I I I y 1 I-- SAID ASSE9QII oiAERVI Aw T]E AS439ENi{¢L IEiE FEmnm �e�T—TT ➢1 TIE LFF]�6 TIE 91gA]NIEIff]R,r1 ff 2W3.]FFEfptE s WIE io liE ASgS4E}:F M ,w 1 ,a 11241 -1 f22 ,2f I 1 1 s�1p I�114104a4l TT—�� r,�_110 )SGE��"�''L »» P: -- y1 I 1>2G „s ,,. „) � � j �- -' al , ,),�—IW!� �NLA� i , 01,., 11\1 j„ nj6lll�I 1 ], FIlID III TF£6FL£6 TIE cm QFA(OF T1£CIFY 6 PILf !f� --r J �•A " 13 ST@l9.SFAM OF rAI W IA T _61Y fF 2W3 ` 1 / Tom\ \ y AL TA I >517, I y ) i'I�� ell ICI I i—IT�-,--T---, LTAn��-T"fZ —j W F— �-faoJ 7] 7L 62 I�InI$I=Iulasl. 15,IlGI,N.el„1,61,51,1 \Yip,` 14 SITE a , / 1 1 n AR%ZS6 PAF,M W.659-3I0-W1-9 ASS`E 9p W. CCtl01 Irb TRACT AV. 30963-1 7-LOTS 6.14 AO;ES VICINITY MAP �b � a' TRACT M7. 3O964-2 1W-Lars 60.E AGES N.T.S. x]1A otq '1ej�.O. tf ` h o I TRACT AtJ. 3O5Ci3-3 107-cars P735 Af1E5 'j A L! E R i A. THIS A`31YQIF pTAfAM 6F£L]LY`SAi9 E4H 9FPMITE LGF RJ TOTAL- ,:1'l4=L07S 83M ADZ" NOT 1D SCµE W PARtl OF L.VO IIIIFM MIMM TE PGlE1Mffi Cf TI£ lSS 06TPILT FW RTATLS mff3HLG TIE LIIEh AIO •� �1�. OLE,SIlMI"S 6 LOIS 01 PAHIIv FEFFA To T!E OANFy A53Ev$S pl� M. �jjt'OY-6 5 5 011 C A i E$ AR£5II' i5 WPS FLP FIYN.YEM 2KQ4[03, A54'.SET/T ID, Oq'Nl3 W.O. Oa-0410 CITY OF PALM SPRINGS PARKWAYS MAINTENANCE DISTRICT NO. 10 MOUNTAIN GATE, TRACT NO. 30963 WAIVER OF NOTICE OF HEARING TO: The Honorable City Council of the City of Palm Springs: The undersigned, being an authorized representative of the legal owner of Tract No. 30963 in the City of Palm Springs, does hereby represent the following: 1) The City Council of the City of Palm Springs ("Council' and "City", respectively) is taking proceedings to: a) Subdivided Tract No. 30963 into 308 residential lots; and b) Form Parkways Maintenance District No. 10 wider the Landscaping and Lighting District Act of 1972 and in accordance with the legal requirements of Article XIIIC of the Constitution of the State of California (Proposition No. 218). 2) Proceedings wider lb) above must be completed prior to August 10, 2003, in order that maintenance assessments on the property in Tract No. 30963 may be placed thereon by the Riverside County Recorder for Fiscal Year 2003-2004 as required by the City. 3) The undersigned does hereby waive for itself and its assigns all notices and other communications with respect to such proceedings described in Section 1)b) hereof and consents to the completion of such proceedings at the earliest possible time, but in no event later than August 7, 2003, in order that such assessments may be levied and collected in Fiscal Year 2003-2004. Dated this " 3 _day of Ate, 2003. CENTURY CROWELL COMMUNITIES (CENTURY VINTAGE HOMES) Mountain Gate Palm Springs Ventures,LLC By: l - & Title: A A Kel 1003/008/24700 vl a /� BALLOT PARKWAYS MAINTENANCE DISTRICT NO. 10 Parcel Number: Tract 30963 (APN 669-340-001-9) Record Owner: Century Crowell Communities (Century Vintage Homes) Mountain Gate Palm Springs Ventures, LLC Address: 1535 South"D" Street, Suite 200 San Bernardino, CA 92408 Phone: (909) 381-6007 FAX: (909) 381-0041 YES, I APPROVE the proposed annual assessment of$95,719.00, adjusted annually for inflation, on the parcel identified on this ballot. (308 parcels x $310:78 per parcel= $95,719.00 total) NO, I DO NOT APPROVE the proposed assessment on this parcel. Signature of Record Order, or Authorized Representative if the parcel is owned by other than an individual. RETURN THIS BALLOT TO: City of Palm Springs Parkways Maintenance District No. 10 Assessment District P. 0. Box 2743 322 E. Tahquitz Canyon Way Palm Springs, CA 92263 Your completed ballot may be mailed or personally delivered, but it must be received prior to the end of the public hearing on August 10, 2003. Incomplete, late or unsigned ballots will not be considered in the tabulation. 1003/008/24723 vl �� t City of Palm Springs FAX TRANSMITTAL DATE: JUKE 24,2003 FROM: Robert L. Mohler Grants & Government Affairs Manager CITY OF PALM SPRINGS Public Works & Engineering Department 3200 E. Tahquitz Canyon Way (P.O. Box 2743) Palm Springs, CA. 92263-2743 Phone: (760) 323-8250/ Fax 322-8360 BobM@ci.palm-springs.ca.us TO: "Mountain Gate" SPECIAL DISTRICTS FORMATION TEAM: 1. Suzanne Harrell- Harrell & Co. (Financial Advisor)- Orange. (Fax 714-939-1462) 2. Paul Thompson &Merle Schulze-Webb Associates- Riverside (Fax 909-788-4139) 3. Sara Oberlies, Stone & Youngberg(Bond Underwriters)-LA (Fax 213-443-5023) 4. Carlos Cueva/Marty Butler- Century Vintage Homes- San Bern. (Fax 909-381-2617) 5. Urb Schreiner,Bond Counsel-Aleshire & Wynder- Irvine (Fax 949-223-1180) SUBJECT: "MOUNTAIN GATE" Tract 30963 by Century Vintage Homes Assessment District No. 161 (formation approved June 11, 2003) REGARDING: PROPOSAL from EMPIRE ECONOMICS (Joseph T. Janczyk, PH.D) MARKET ABSORPTION STUDY This morning I received a written proposal from Joe Janczyk(at my request)to perform the Market Absorption Study for the newly formed AD 161. Mr. Janczyk has operated as the City's Market Absorption Analyst on 3 previous proposed Special Districts(in the mid-1990s) and this would be his 4' assignment for the City. (See attached proposal- 11 pgs.) Mr. Janczyk will need to work closely with the proposed Real Estate Appraiser,who is to be selected by the Bond Underwriter and City hopefully this week.Both separate contracts should be well under the amount requiring City Council approval, so their separate agreements (Appraiser &Market Analyst) can be approved by the City Manager via Harold Good,Dir. of Procurement & Contracting. The costs of the 2 consultants will be paid for by Century Crowell Communities (Century Vintage Homes) as part of the AD 161 formation process. NOTE: Please respond ASAP if you wish to provide comments. Thanks, cc: Harold Good, Director of Procurement & Contracting Dave Barakian, Director of Public Works/City Engineer Trisha Sanders, City Clerk c/o Barbara White,Asst. City Clerk - Tom Kanarr, Director of Finance/City Engineer Troy Butzlaff,Assistant City Manager PAGE 1 OF 12 PAGES I a SCOPE OF SERVICES MARKET ABSORPTION STUDY CITY OF PALM SPRINGS ASSESSMENT DISTRICT NO. 161 (MOUNTAIN GATE) f� 1pp3 LP\NGl SP Prepared for City of Palm Springs Attention: Mr. Robert L. Mohler Prepared by Joseph T. Janczyk, Ph.D. Empire Economics, Inc. 35505 Camino Capistrano, Suite 200 Capistrano Beach, CA 92624 June 19, 2003 Page 1 EMPIRE ECONOMICS, INC Economic-Real Estate Consultants Joseph T. Janczyk, Ph.D. _ 35505 Camino Capistrano, Suite 200 Capistrano Beach, CA 92624 Phone: (949) 661-7012 Fax: (949) 661-8763 June 19,2003 Mr. Robert L. Mohler Grants and Government Affairs Manager City of Palm Springs Public Works &Engineering Department 3200 E. Tahquitz Canyon Way (P.O. Box 2743) Palm Springs, 92263-2743 Re: Market Absorption Study—Statement of Qualifications and Scope of Services Assessment District No. 161 (Mountain Gate) Dear Bob, Empire Economics is pleased to provide you with a Statement of Qualifications and Scope of Services for the Market Absorption Study for the City of Palm Springs Assessment District No.161; this is hereafter referred to as AD No.161 (Mountain Gate). The Market Absorption Study will provide the Bond Issue with a strong credit foundation, and also protect the Issuer, based upon the following factors: ➢ A comprehensive analysis of the economic environment within which the AD No.161 (Mountain Gate Residential Project) will be marketing their residential products. Although the United States economy is currently experiencing a slowdown, Southern California's and Riverside County's economic prospects are more favorable, for a variety of reasons which will be discussed in the Study. Consequently, an understanding of the economic conditions for Southern California and Riverside County should prove to be beneficial to the AD No.161 (Mountain Gate)Bond Issue. ➢ The Market Absorption Study will utilize the Empire Economics' 2003 Economic Model which incorporates the actual annualized full data for 2002 on employment, construction activity and prices as well as the new economic forecasts for 2003-2010+ time period, based upon the most recent forecasts by UCLA, DRI and Chapman University, among others. Furthermore, comprehensive surveys of the prices, sales rates and other characteristics of the currently active projects in the competitive Housing Market Area will be conducted. Page 2 ➢ The Market Absorption Study, Summary and Delivery Letter will be distributed via E-Mail in PDF format to facilitate its distribution and also its use in the Official Statement. ➢ Empire Economics will arrive at an estimate of the competitive market prices for the forthcoming residential products in AD No.161 (Mountain Gate), and then confirm that the Special Assessments and ad valorem property taxes for AD No.161 residential projects are within the City of Palm Springs's policy guidelines. ➢ Empire Economics will arrive at the following market demand and absorption schedules for AD No.161 (Mountain Gate): Aggregate Absorption Schedule—Entire Project Absorption Schedules for Each Product Type ➢ Empire Economics will provide the appraiser with the absorption schedule for the discounted cash flow analysis, a critical factor in arriving at the appraised value of AD No.161 (Mountain Gate). As the Statement of Qualifications and Scope of Services will demonstrate, Empire Economics is well suited to perform the Market Absorption Study for AD No.161 (Mountain Gate),based upon the following: ➢ Strong professional credentials. ➢ Extensive experience with land-secured financings. ➢ Credibility with rating agencies/bond funds. ➢ Competitive fee structure. ➢ Capability of completing the Study in a timely manner. ➢ Protecting the Issuer from potential market study liability. Accordingly, the combination of these factors results in a Market Absorption Study which has a high degree of credibility in the municipal marketplace, and, as such, strengthens the demand for the bonds (resulting in a more competitive interest rate). Furthermore, Empire Economics' policies of conducting thorough research as well as being fully insured protects the Issuer, the City of Palm Springs, from potential liability associated with the Market Absorption Study. If you have any additional comments or considerations, please contact me as I would be pleased to respond to them. I am looking forward to assisting you with the Bond Financing for AD No.161 (Mountain Gate)Bond Issue. Sincerely, o e anczyk,Ph.D. E is Consultant JTJ:rm Page 3 SYNOPSIS OF EMPIRE ECONOMICS' STATEMENT OF QUALIFICATIONS AND SCOPE OF SERVICES 1. Credentials/Qualifications and Bond Financing Experience Market Studies for Municipal Bond Issues: 1980-2002 $8+Billion (Market Studies Conducted on behalf of Public Entities Only) Mello-Roos/Assessment District Bond Issues: 200+Bond Issues for $4+Billion Riverside County Mortgage Revenue Bond Program: Market Studies for Bond Issues Amounting to $500+million "Local" Bond Issues for Planned Communities/Business Parks in Riverside County Cities of Palm Springs, Beaumont, and Indio Presentations to Rating Agencies/Bond Funds in New York/Boston/Chicago: 25+times Featured Speaker at UCLA and Municipal Bond Analysts Seminars: 5+times Foothill/Eastern Toll Road: $1.8 Billion: Municipal Bond Issue of the Year for 1999 2. Approach to Performing the Market Absorption Study Market Study Performed by Joseph T. Janczyk, Ph.D. (Staff assists with compilation of data and market surveys.) 3. Consulting Services to be Performed Contact with Property Owner to obtain proposed product mix characteristics and market-entry. Utilize a Consensus Economic Forecast Perform Comprehensive Competitive Market Analysis for Each Residential Product Type Estimate Absorption Schedule: For Each Product Ttype Absorption by Year, Market-Entry to Build-Out 4. Presentation/Dissemination of Absorption Schedules Competitive Market Prices for Special Assessment Burden Appraiser: Estimated Absorption Schedule for Discounted Cash Flow Underwriter: Summary of Market Study for Official Statement Page 4 5. Time Schedule for Conducting the Market Absorption Study Preliminary Estimated Absorption Schedules: Week#4 Complete Comprehensive Market Study: Week# 5 6. Factors Underlying the Estimation of the Consulting Fee Comprehensive Market Study—Approximately 90-100 Pages Summary of Market Study for Official Statement—About 20 Pages Certification to Use Market Study Srunmary for Bond Offering Discussion of Prices/Absorption with the Special Assessment Analyst Discussion of Absorption with Appraiser Discussion of Market Study with the Underwriter to Facilitate Marketing Bonds Promptly Respond to Queries firom Prospective Bond Purchasers Consulting Fee: Includes all of the above Reports/Services 7. Protect Issuer from Potential Market Study Liability Diligent and Thorough Research of Economy, Local Market, and Proposed Project Comprehensive Insurance Policies; Empire Economics (EE) is fully insured: * Workmen's Compensation * Commercial Liability * Professional Errors/Omissions Avoid Conflict of Interest (EE is not providing consulting services to the Property Owner/Builder.) Please refer to the following pages for a detailed description of Empire Economics' Statement of Qualifications and Scope of Services. Page 5 STATEMENT OF QUALIFICATIONS AND SCOPE OF SERVICES: DETAILED DESCRIPTION 1. Credentials/Oualifications and Bond Financing Experience Empire Economics is an economic and real estate consulting firm that specializes in conducting market absorption studies on behalf of public entities for residential, commercial-retail, and industrial/office projects located throughout California, with an emphasis on Master Planned Communities and Business Parks in Southern California, including the County of Riverside. Empire Economics conducts market absorption studies only for governmental entities, and this has provided numerous public entities with a high level of comfort. By comparison, other firms that provide services to developers/builders may encounter "conflicts of interest" in trying to represent both the private and public sectors. Empire Economics' approach of representing the public sector also enhances the credibility of the study in the municipal marketplace. With respect to the City of Palm Springs's AD No.161 (Mountain Gate)'s Property Owner (Century Homes), Empire Economics is not providing any consulting services nor does it contemplate providing such services to the Property Owner during the foreseeable future. Empire Economics' experience includes more than $8 billion in municipal tax-exempt issues during the past twenty years: EMPIRE ECONOMICS' MUNICIPAL FINANCINGS OVER $8+ BILLION IN BONDS ED$4,150,000,000 o$z,T 5 0,0 g 0,0 Og ■$1,700,000,000 - Fm m Irtg,91 Revenue Bonds MMello Roos/Assessment Districts ❑Transportation Corridors Page 6 * Mortgage Revenue Bond Financings: Over fifty issues with bonds amounting to over $1,700,000,000. * Mello-Roos/Assessment District Financings: More than two-hundred issues with bonds amounting to more than $4,150,000,000. * Socioeconomic Forecast/Market Study for the $2,750,000,000+ of the San Joaquin Hills and Foothill/Eastern Transportation Corridors' Toll Roads located in southern Orange County; designated as the Municipal Bond Issue of the Year for 1999. Furthermore, Empire Economics actively participates in numerous municipal bond industry events, including the following: ➢ UCLA Municipal Bond Financing Seminars: Featured Luncheon Speaker ➢ Municipal Bond Industry Association - Speaker ➢ Best Practices for Continuing Disclosure —Panelist ➢ Rating Agency and Bond Insurer Presentations * More than 25+Trips to New York/Boston/Chicago ➢ Meetings with Municipal Bond Funds: * County of Riverside Investor Bond Site Tours * Mello-Roos Bond Issues—Site Tours: Ladera, Aliso Viejo, and many others * San Joaquin Hills and Foothill Eastern Corridors: + Ten Presentations in New York, Boston, and Chicago to Fifty+Bond Funds With respect to the County of Riverside, in particular, Empire Economics (EE) has conducted Market Studies for several of its CFDs and ADs. Consequently, the Municipal Bond Funds are familiar with Empire Economics and also the Market Studies that it has conducted for Planned Communities and Business Parks in Southern California, in general, and Riverside County, in particular. This is beneficial to the forthcoming Bond Issue for the AD No.161 (Mountain Gate), since these Market Studies have enabled EE to establish a high degree of credibility with the municipal Bond Funds and Rating Agencies. Finally, the Bond Funds are also familiar with EE's Monitoring Reports for Riverside County and Orange County for its Mello- Roos and Assessment Bond Issues, which provide them with timely information on the development status of Planned Communities and Business Parks. Page 7 2. Approach to Performing the Market Absorption Study Empire Economics' Market Absorption Studies are conducted by Joseph T. Janczyk with assistance from his staff. The principal consultant for the Market Absorption Study is Dr. Joseph T. Janczyk. He will design the economic real estate model for AD No.161 (Mountain Gate) and present the conclusions to the City of Palm Springs and the Financing Team. Additionally, he will be assisted by his staff, which will be responsible for the compilation of the economic and real estate data required for the research and also conduct market surveys of the comparable/competitive residential projects in the Market Area. Copies of the Market Absorption Study will be provided in PDF format to the appropriate parties and discussed with them; additionally, a "Summary and Conclusions" of the Study will be provided in PDF format for the Official Statement along with a Closing Certificate upon the Closing of the Bond Issue. The Market Absorption Study, Summary and Delivery Letter will be distributed via E-Mail in PDF format to facilitate its distribution and also its use in the Official Statement. 3. Consulting Services to be Performed The purpose of this section is to provide an overview of the methodology underlying the Market Absorption Study for AD No.161 (Mountain Gate); accordingly, the primary components are as follows: ➢ Identification of the Development Status and Proposed Product Mix The expected number of future housing units in AD No.161 (Mountain Gate) will be identified based upon the planning approvals for the properties as well as the development/marketing strategy of Century Homes. Specifically, AD No. 161 is expected to offer 308 single-family detached homes on some 83 acres, some 4 units per acre. ➢ Macroeconomics Components Based upon Empire Economics' experience in conducting more than two hundred Market Studies, these macroeconomic factors are regarded as being the most significant determinants of the actual performance of Planned Communities and Business Parks in the marketplace, and, as such, they represent a critical component of the Market Absorption Study. * To arrive at long-term employment forecasts, Empire Economics compiles information from economic forecasts that are available for the Southern California Market Region and its counties by University of California Los Angeles (UCLA), Data Resources Institute (DRI), California State University Fullerton (CSUF) and Chapman University (CU). The use of a Consensus Employment Forecast for the Market Region is substantiated by a comprehensive study of forecasts that was conducted by the Federal Reserve Bank of New York which concluded that Consensus Forecasts, defined as combining the forecasts of several firms or agencies, were found to have a consistently Page 8 , higher degree of accuracy and reliability than any particular forecaster. Empire Economics then uses these employment forecasts to derive estimates of the Southern California's future demand for housing during the foreseeable future. * Next the proportion of Southern California's future employment, residential, commercial-retail and industrial/office growth that is expected to be captured by the County of Riverside and the Market Area for AD No.161 (Mountain Gate) is estimated. Southern California (SC), as a whole, essentially represents a self-contained equilibrium with respect to employment and housing because the vast majority of households employed in SC also have their primary residences in SC. Within Riverside Comity, special consideration is given to the Coachella Valley and the City of Palm Springs, with regards to their attractiveness for second-homes, primarily from households that reside in Southern California. ➢ Microeconomics Components * The microeconomic analysis focuses upon the competitiveness of the forthcoming projects/products in AD No.161 (Mountain Gate), as compared to the competing Planned Communities and other residential projects within the Market Area. The analysis deals with various regional factors as well as the specific features/attributes of the District's forthcoming projects. * The competitiveness of AD No.161 (Mountain Gate)'s housing products is evaluated by performing a systematic analysis of the expected characteristics of the forthcoming projects/product types in the District with the comparable/competing projects in the Competitive Market Area. Specifically, this involves a consideration of their respective locations, prices, lot sizes, living areas, Special Taxes/Assessments, amenities, and other factors. The result of this analysis is the competitiveness, and hence the capture rate, for AD No.161 (Mountain Gate)'s products in the marketplace. ➢ Absorption Schedules The market absorption schedules for the forthcoming residential single-family homes in AD No.161 (Mountain Gate) are presented in the following manner: ♦ Absorption Schedule for AD No.161 (Mountain Gate): This analyzes the market demand and supply conditions for AD No.161 (Mountain Gate) as a whole. ♦ Specific Absorption Schedules for AD No.161 Product Types: This analyzes the market demand and supply conditions for each of the residential product types in AD No.161 (Mountain Gate). Therefore, the Market Absorption Study systematically proceeds from the macroeconomic analysis of AD No.161 (Mountain Gate) Southern California Market Region's future employment, population, and housing growth to the microeconomic analysis of the competitiveness of its projects, and then arrives at the absorption schedules for the residential products, including absorption schedules for each of the product types in AD No.161 (Mountain Gate). Page 9 4. Presentation/Dissemination of Absorption Schedules Based upon Empire Economics' previous experience in conducting Market Absorption Studies, Empire Economics will provide the key results in a convenient form (PDF forinat) for the other professionals. * Special Assessment Analyst: Empire Economics will review the prices that are being utilized in the Special Assessment Analysis for purposes of estimating the Total Tax Burden placed upon the fixture homeowners. Additionally, Empire Economics will also provide the Special Assessment Analyst with the estimated absorption schedules by various product types so that the amounts of Special Assessments that are expected to be paid by the developer/builder (as compared to the final-users/homeowners) can be calculated. * Appraiser: Empire Economics will provide the Appraiser with absorption schedules for each of the product types, with respect to the number of units absorbed each year, from market-entry to build-out. * Underwriter: Empire Economics will provide copies of the Market Absorption Study to the members of the finance team in the Bond Issue and furnish a "Summary and Conclusions" of the Market Absorption Study for use in the Official Statement. 5. Time Schedule for Conducting the Market Absorption Study Since Empire Economics has a background in performing Market Absorption Studies for Assessment Districts, the proposed time schedule allows for an interaction with the financing team, so that the final study is utilized in a timely and effective manner. Preliminary Estimated Absorption Schedule. . . . . . . . . . . Week #4 Comprehensive Market Absorption Study. . . . . . . . . . . . Week # 5 Therefore, Empire Economics will provide the Special Assessment Analyst and also the Appraiser with the information that they need in a timely manner so that they can proceed with their analysis, and Empire Economics will deliver the Market Absorption Study five weeks after receiving authorization from the City of Palm Springs to proceed. Page 10 6. Factors Underlying the Estimation of the Consulting Fee Empire Economics' fee schedule is based upon the costs of providing consulting services for a Market Absorption Study that is appropriate for a Municipal Bond Financing. Specifically, the comprehensiveness and scope of these consulting services are obtained from discussions with prospective bond purchasers, the Bond Funds. Empire Economics maintains contact with the Bond Funds through seminars, meetings, and telephone conversations. Accordingly, the services are as follows: ➢ Comprehensive Market Study(PDF Format) ➢ Summary of Market Study(PDF Format) for Official Statement ➢ Certification to Use the Market Study Summary for the Bond Offering ➢ Discussion of Prices/Absorption with Special Assessment Analyst ➢ Discussion of Absorption with Appraiser ➢ Discussion of Market Study with the Underwriter to Facilitate Marketing Bonds ➢ Prompt Responsiveness to Queries from Prospective Bond Purchasers The financial consideration for conducting the Market Absorption Study for AD No.161 (Mountain Gate) is as follows: Comprehensive Market Absorption Study: Fee: $12,750 The Market Study fee of$12,750 includes all the services designated above. The consulting fee will be billed as a retainer upon commencing research and then a final fee payable within thirty days of the completion of the Market Study. 7. Protect Issuer from Potential Market Study Liability ➢ Diligent and Thorough Research of Economy, Local Market, and Proposed Project ➢ Comprehensive Insurance Policies; Empire Economics is fully insured: * Workmen's Compensation * Commercial Liability * Professional Errors/Omissions ➢ Avoid Conflict of Interest (Empire Economics is not providing consulting services to the Property Owner/Builder.) Page 11 RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA APPROVING THE SPREAD OF ANNUAL ASSESSMENTS AND CONFIRMING THE ENGINEER'S REPORT, DIAGRAM AND ASSESSMENT SPREAD FOR FORMATION OF PARKWAYS MAINTENANCE DISTRICT NO. 10 ("MOUNTAIN GATE" TRACT NO. 30963) AT NORTH PALM CANYON DRIVE (HIGHWAY 111) &GATEWAY DRIVE AND ASSOCIATED TRACT PARKWAYS&OFF-SITE LANDSCAPE FOR FISCAL YEAR 2003- 04. (MOUNTAIN GATE PMD-10) WHEREAS in accordance with the provisions of the Landscaping and Lighting Act of 1972 that the Engineer of Work has determined the estimated maintenance costs for the first year in order to prepare the annual spread of assessment for Parkways Maintenance District No. 10, requested by Century Crowell Communities (Century Vintage Homes) for"Mountain Gate" Tract 30963; and WHEREAS Public Hearing notice was waived by,Century Crowell Communities as sole-owner developer of Tract 30963 who filed a signed petition "Ballot" and "Waiver of Notice of Hearing" (waiving the 45-day notice provision and the Public Hearing); and WHEREAS the spread of assessment shall be forwarded to the County Tax Collectorwho, in turn, shall place this assessment on the County Tax Roll. The City Council of the City of Palm Springs, California, does hereby resolve as follows: Section 1. The City Council does hereby declare its intent to levy and collect assessments within Parkway Maintenance District No. 10 for the Fiscal Year 2003-04 for "Mountain Gate", at the request of Century Crowell Communities, the developer. Section 2. Description of Work-The public interest, convenience and necessity require, and it is the intention of the City Council to order the following work to be done, to wit: Plant, replace or repair, trim, water and generally maintain off-site trees, shrubs, groundcover, grass, etc. within Parkway Maintenance District No. 10 (Mountain Gate Tract 30963), along perimeter of a new 308 home subdivision located at the northeast corner of North Palm Canyon Drive (Hwy. 111) and Gateway Drive. Section 3. Description of Assessment District The City Council hereby makes the expenses of said maintenance chargeable upon the District hereby declared to be the areas benefitted by said maintenance and to be assessed to pay the costs and expenses thereof, said assessments to be collected as a part of the property tax assessment by the County Tax Collector's Office in the same manner and subject to the same penalties for non-payment. (There are 308 single family lots within PMD No. 10). Section 4. Engineer's Report - All of the said.work to be done shall be as shown on the Boundary Maps of the Districts, on file in the office of the City Engineer, and in accordance with the Engineer's Report on file in the office of the City Clerk. The City Council hereby approves the Engineer's Report and reference is hereby made to same for a more particular description of said work; and the same is incorporated herein and made a part hereof. (Assessment in FY 03-04= $96,719, assessed to Century Vintage homes as sole landowner in 03-04). Eventually the costs will be assessed to all 308 landowners'as`homes sell in 03-04 & 04-05, which would average $310.78 per parcel based'on 03-04 cost estimates. Section 5. The City Clerk is hereby directed to file a certified copy of the diagram and assessment roll with the County Taz Collector, together with a certifiied copy of this Resolution upon its adoption and the auditor is requested to collect such assessments on the tax roll in the manner and subject to the same penalties for non-payment as are county property taxes. Page 1 of 2 2VO Parkways Maintenance District No. 10 Resolution-page 2 Section 6. This project is statutorily exempt from CEQA under Section 15273 of the guidelines as an ongoing maintenance charge. Section 7. Improvement Act - all of the work herein proposed shall be accomplished pursuant to the "Landscaping and Lighting Act of 1972", being Division 15, Part 2 of the California Streets & Highways Code, beginning with Section 22500; and Article XIIID, Section 4 of the California Constitution (Proposition 218). Section 8. Designation of the Person to Receive Inquiries-The following person is designated as the official to receive any inquiries concerning these improvements: David J. Barakian Director of Public Works/ City Engineer City of Palm Springs- City Hall 3200 E. Tahquitz Canyon Way Palm Springs, California 92262 Telephone: (760) 323-8253 (Ext. 8732) ADOPTED this day of 2003 AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By City Clerk City Manager REVIEWED &APPROVED: Page 2 of 2 H:\USERS\BobM\DATA\D0CUMENi1PMD 10.MountainGate.Formation Res.7-2-03.res.wpd aaBa.