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09-28-2010 CC Rpt A11 COUNCIL AGENDA STAFF REPORT R?0-EF U IDNLY 4, Meeting Date: September 28, 2010 2010 SEP 20 PM 12 49 Public Hearin ❑ OFFICE: CF CITY CLERK g. CHINO HILLS Discussion Item: ❑ / mor4we, : Consent Item: SEPTEMBER 21, 2010 TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: CITY MANAGER SUBJECT: RESOLUTION ORDERING THE FILING OF FORECLOSURE ACTIONS PURSUANT TO BOND COVENANTS RECOMMENDATION: Adopt a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, ORDERING THE FILING OF FORECLOSURE ACTIONS ON DELINQUENT ASSESSMENT DISTRICT ASSESSMENTS AND DELINQUENT COMMUNITY FACILITIES DISTRICT SPECIAL TAXES PURSUANT TO BOND COVENANTS." BACKGROUND/ANALYSIS: The City of Chino Hills administers the Assessment Districts and Community Facilities Districts within the City limits. These administration responsibilities include the levy and collection of assessments and special taxes, which are levied annually to pay debt service in the various districts. The debt was incurred through the issuance of bonds, the proceeds of which have been used to construct much of the City's infrastructure. Annually, pursuant to covenants contained in the bond documents for the various districts, the City is charged with the responsibility of reviewing the status of payments made in the various districts. If certain delinquency thresholds are reached, the City is charged with the task of commencing foreclosure actions to collect the delinquencies. The costs of pursuing such delinquencies are collected from the district funds or the delinquent property owner, depending upon the district. Last year, delinquencies existed with respect to the following Assessor's Parcel Numbers: 1028- 191-04 and 1028-192-01. As of September 3, 2010, the parcels were still delinquent. The property owner has been going through a loan modification and has asked for an extension based on the fact that payment of the delinquencies is a condition of the loan. The City Attorney's office has been in contact with the property owner and has agreed to postpone filing the foreclosure action to allow the delinquency to be cured. /9 !J AGENDA DATE: SEPTEMBER 28, 2010 SUBJECT: RESOLUTION ORDERING THE FILING OF FORECLOSURE ACTIONS PURSUANT TO BOND COVENANTS PAGE TWO In addition to the parcels mentioned above, delinquencies exist with respect to the following Assessor's Parcel Numbers: 1017-713-56; 1027-581-24; 1028-191-01; 1028-191-02; 1028-191-03; and 1028-351-47. Two of the parcels are below the foreclosure covenant but have been included because they are owned by the same person as Parcels 1028-191-04; and 1028-192-01. The City Attorney's office will send letters to the delinquent property owners advising them of the City's obligations in this regard and suggesting that the delinquencies be cured to avoid the necessity of commencing foreclosure proceedings. At this time, City staff is unable to determine whether we will have to foreclose on any property owners this fiscal year, but this Resolution is needed in the event that such action is necessary. It is now appropriate, pursuant to the bond documents, to commence foreclosure proceedings to collect such delinquencies. Pursuant to Streets and HighwaysCodesection 8834 and.Government._ .. Code section 53356,4, the City Council must satisfy the procedural requirement of ordering the foreclosure actions. The attached Resolution, if adopted, will authorize commencement of such actions as required by the bond documents and the covenants binding the City. REVIEW BY OTHERS: This agenda has been reviewed by the City Attorney. FISCAL IMPACT: No direct financial impact will result from the adoption of this Resolution. Any costs associated with the actions are recoverable from the delinquent properties. Respectfully submitted, Recommended by, --yid.ill in/ Michael n. Fleagef, City Manager Juc fI . LaOcaster, Finance Director 1 - V MSF:JRL:BS:AH:dk RESOLUTION NO. 10R- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, ORDERING THE FILING OF FORECLOSURE ACTIONS ON DELINQUENT ASSESSMENT DISTRICT ASSESSMENTS AND DELINQUENT COMMUNITY FACILITIES DISTRICT SPECIAL TAXES PURSUANT TO BOND COVENANTS. THE CITY COUNCIL OF THE CITY OF CHINO HILLS DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1. That the City Council of the City of Chino Hills does hereby find, determine and declare, as follows: (a) The assessment districts and the community facilities districts administered by the City exist-within the City of Chino-Hills-(the"Districts"); and -- -- -- (b) The City annually levies assessments and special taxes on properties located within those Districts; and (c) Annually, if certain thresholds are reached, the City is required by covenants contained in the bond documents for the Districts, to foreclose on properties that are delinquent in the payment of assessments or special taxes for the Districts; and (d) The City's Finance Department has determined that those thresholds have been reached in certain of the Districts; and (e) Letters will be sent by the City Attorney to the delinquent property owners advising them of the City's obligations in this regard and recommending that the delinquencies be cured to avoid the need to commence foreclosure proceedings, such delinquencies have still not been cured; and (f) Streets and Highways Code section 8834 and Government Code section 53356.4 require that the City Council order foreclosure actions prior to the filing of such actions. SECTION 2. The City Council hereby orders, in satisfaction of the City's obligations pursuant to covenants contained in the bond documents for the Districts, that foreclosure actions be commenced to collect delinquent assessments and special taxes owed for the Assessor's Parcel Numbers 1017-713-56; 1027-581-24; 1028-191- 01; 1028-191-02; 1028-191-03; 1028-191-04; 1028-192-01; and 1028-351-47. Said foreclosure actions are to proceed until such delinquencies are cured. 1 of 3 SECTION 3. The City Clerk shall certify as to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED this 28th day of September 2010. W.C. "BILL" KRUGER, MAYOR ATTEST: MARY M. McDUFFEE, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY 2 of 3