Santa Paula council advances East Area 1 changes, ties development agreement to CFD amendment

The Santa Paula City Council on Jan. 14 introduced an ordinance to approve Amendment No. 4 to the East Area 1 development agreement and adopted a resolution initiating changes to the Harvest Community Facilities District that would allow a portion of future CFD revenue to fund maintenance for a planned sports park and other city services.

Monica (staff planner) told the council the amendment and accompanying CFD changes would generate an initial payment of $250,000 a year, increasing 4% annually starting in fiscal year 2028–29 for park maintenance, and after a defined transition event the city would receive 50% of the services levy derived from former facilities levies. "There is a measurable net gain to the city," Monica said, describing a long-term, inflation‑adjusted revenue stream that staff expect will support parks and related services.

Why it matters: The two actions are linked. Vice Mayor Crosswhite and multiple council members emphasized that any change to the development agreement should not take effect unless the CFD amendments and the related Rate and Method of Apportionment (RMA) changes for Improvement Areas B and C are finalized. The council added a proposed Section 13 to the DA amendment making its effectiveness contingent on the CFD/RMA approvals, a condition the council supported before advancing the ordinance.

What the council approved tonight: Vice Mayor Crosswhite moved to introduce and waive the first reading of Ordinance No. 1351, with the city attorney’s read-in of a new Section 13 tying the DA to the CFD action; the motion was seconded by Council member Brunellis and passed on a roll‑call vote of 3‑0 (Council member Ornelas, Vice Mayor Crosswhite and Mayor Juarez voting yes). Later the council adopted Resolution No. 7599 to launch the formal two‑step change proceeding for the Harvest CFD, which sets a public hearing and landowner vote for Feb. 18.

How the CFD change works: Staff and outside consultants explained the legal and technical steps. The RMA amendments would convert part of the facilities component of the special tax in Areas B and C to a services levy when bonds are repaid; initially the city is guaranteed $250,000 per year (plus 4% annual increases), and after the transition the services levy would be set at 50% of the former facilities maximum (with CPI escalation), producing a perpetual, inflation‑adjusted revenue stream for city services including sports‑park maintenance. Consultants noted limits on homeowner prepayment to prevent unintended tax avoidance at transition.

Key infrastructure and reimbursements: The development agreement amendment also contemplates reimbursement agreements to compensate the developer (LLCB/Lewis) for oversized improvements, with specific projects cited including a bridge, the Hellick/Telegraph/State Route 126 intersection work, Palm Santa Paula/12th Street connections and a water line. Staff said reimbursement agreements, nexus studies and consultant work will follow and come back to council for approval.

Outstanding details and next steps: Staff said detailed reimbursement agreements, final RMA text and the February landowner hearing remain to be completed. The council set Feb. 18 as the public hearing and landowner vote date to authorize the RMA changes; per staff explanation, the landowners for the district must unanimously approve the change before the council can adopt the RMA revisions. The council also clarified the timing for return of a revenue shortfall deposit (a $2,000,000 deposit will be returned to Lewis after the thousandth certificate of occupancy, together with interest as applicable).

Council members asked about reclaimed water ("purple pipe"), timing of street and bike‑path work, and whether citywide services can be funded from the CFD change. Staff said reclaimed‑water infrastructure to the east side is not currently feasible without major capital investment and that the RMA authorizes services generally across the city (rather than legally binding funds to a single neighborhood), though staff and future councils will decide allocations.

The meeting closed with staff and council thanking the developer for negotiating the package; the DA introduction and the resolution to begin CFD changes now move toward the February hearing and subsequent landowner actions.