Codorniz HOA - 2020 Settlement Agrmt re: Mitigation Fees LQSETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (hereinafter the "Agreement") is entered by and
between the CITY OF LA QUINTA, a California municipal corporation ("City") and CODORNIZ
MAINTENANCE ASSOCIATION ( "HOA"), and is binding and effective as of the Effective
Date (defined below). The City and HOA are referred to jointly hereinafter individually as a
"Party" and collectively as the "Parties." The Parties enter into this Agreement with reference to
the following:
RECITALS
A. WHEREAS the HOA seeks to recalculate the annual mitigation fee ("Mitigation
Fee") on a going forward basis;
B. WHEREAS the City finds that it is in interest of the public to recalculate the HOA's
Mitigation Fee on a going forward basis;
C. WHEREAS the Consumer Price Index ("CPI") — All Urban Consumers, not
seasonally adjusted, for the index formerly known as LA -Riverside -Orange County increase from
2015 to 2017 was 243.434 to 256.210 or 5.68%;
D. WHEREAS the CPI increase over 2018 for the All Urban Consumers, not
seasonally adjusted, for the newly formed index known as Riverside -San Bernardino -Ontario is
100.000 to 102.732 or 2.73%; and
E. WHEREAS the Parties have come to a consensus regarding the calculation of the
HOA's Mitigation Fee on a going forward basis;
NOW THEREFORE, in consideration of the Recitals above, which are a substantive part
of this Agreement and incorporated by this reference, and the mutual covenants set forth herein,
the Parties agree as follows:
1. Obligations of the City.
A. City shall calculate the baseline rate of the HOA Mitigation Fee for 2015 as $250.00
per lot sold by HOA on a pro rata basis.
B. City shall calculate the new baseline rate of the HOA Mitigation Fee for 2018 as
$264.21 per lot, because $250 x 5.68% = $14.21 and $14.21 + $250 = $264.21.
C. City shall calculate the 2018 HOA Mitigation Fee to be $271.43 per lot sold by
HOA, pro rata, because $264.21 x 2.73% = $7.22 and $7.22 + $264.21 = $271.43.
D. City calculates the total amount owed by the HOA for the Mitigation Fee for 2018
as $32,991.02.
-1-
E. The City therefore calculates the total amount due and owing by HOA for the
Mitigation Fee to be $149,588.97, which adds the 2018 amount ($32,991.02) to the previously
agreed -upon amounts for 2012-2016 ($89,195.90) and year 2017 ($27,402.05).
F. Commencing January 1, 2018, the City shall adjust the annual payment every year
rather than every three years. Adjustments (whether an increase or decrease) in the annual payment
shall be based upon the 12-month average of the Consumer Price Index — All Urban Consumers,
not seasonally adjusted, for Riverside -San Bernardino -Ontario (or successor Index) for the prior
calendar year. Adjustments shall be calculated to three decimal points, rounding to the nearest
hundredth.
G. The City shall only assess the annual payment against Lots that have been sold by
Declarant to a private third -party purchaser. The City shall calculate the annual payment pro rata
from the date of sale of a Lot by Declarant through build out.
H. The City shall bill Association for the prior calendar year no later than March 1 of
the following year.
I. If the HOA obtains the requisite number of votes from the homeowners with voting
authority to approve the First Amendment (defined below), then the City Manager, no later than
thirty (30) days after the HOA delivers written notice of the results of the homeowner vote pursuant
to Section 2.A below, will schedule an agenda item for the City Council to approve a resolution
exactly in the form attached to this Agreement (the "Resolution"), which Resolution will, among
other provisions therein, adopt that certain First Amendment to Declaration of Covenants,
Conditions, and Restrictions, and Reservation of Easements for Codorniz Maintenance
Association exactly in the form attached to this Agreement (the "First Amendment"), wherein the
Resolution and First Amendment reflect the total amount due and owing by HOA for the
Mitigation Fee from 2012 to 2018, inclusive.
2. Obligations of HOA.
A. Until all Lots have been sold by the Declarant, no later than January 31 of each
year, the Association shall provide the City with the dates that any Lots were sold by Declarant
during the prior calendar year.
B. The Association shall pay the annual mitigation fee no later than March 30 of each
year.
C. Upon the complete execution of this Agreement, the HOA shall commence and
diligently pursue to completion, pursuant to the HOA's voting process and approval requirements
and California law, a vote of the homeowners on whether to approve the First Amendment. Upon
completing the voting process, the HOA shall notify the City in writing of the results of the vote.
D. No later than thirty (30) days after the City Council adopts the Resolution described
in Section 11 above, the HOA agrees to pay in one lump sum the total amount of $149,588.97 for
the HOA Mitigation Fee for years 2012 to 2018, inclusive, as negotiated and approved by the
Parties.
-2-
3. No Admission of Fault.
Upon full performance by the Parties to this Agreement of their respective obligations set
forth in Sections 1 and 2 above, this Agreement is intended to be and is a compromise between the
Parties, and nothing in this Agreement shall be interpreted, used, or construed as an admission of
fault or wrongful conduct of any kind by any of the Parties.
4. Release.
a. Full and General Release. In consideration for the agreements as set forth
herein, the HOA and City, on behalf of themselves and their respective successors, assigns,
officials, directors, officers, employees, insurers, lenders, lien holders, attorneys, agents, and other
representatives, do hereby release the other Party from any and all claims, actions and causes of
action, obligations, liabilities, indebtedness, breaches of duty, claims for injunctive and other
equitable relief, suits, liens, losses, costs or expenses, including attorney's fees, of any nature
whatsoever, known or unknown, fixed or contingent as of the date of execution of this Agreement
(the "Release").
b. Waiver of Civil Code Section 1542: By releasing and forever discharging
claims both known and unknown as above provided, the Parties expressly waive any rights under
California Civil Code section 1542, which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR."
The HOA and City waive and relinquish any rights and benefits that they have or may have under
section 1542 of the Civil Code of the State of California. The HOA and City have performed a
full and complete investigation of the facts pertaining to this Agreement, and the HOA and City
acknowledge and agree that they are aware that they may hereafter discover facts in addition to or
different from those which they now know or believe to be true with respect to the subject matter
of this Release, but it is their intention hereby to fully and finally forever settle and release any and
all matters, disputes and differences, known or unknown, suspected and unsuspected, which now
exist, may exist or heretofore have existed, as against each other, arising out of that certain
Declaration of Covenants, Conditions, Restrictions, and Reservation of Easements (the
"CC&Rs").
5. Effective Date of Agreement.
This Agreement shall be binding and effective as of the latest date on the signature page of
this Agreement, which date shall be the "Effective Date" of this Agreement.
-3-
6. Entire Agreement.
This Agreement (along with the CC&Rs and First Amendment) form the entire agreement
of the Parties and supersedes any and all prior agreements or understandings, if any, between them
pertaining to the subject matter hereof, and shall not be modified or altered except by a subsequent
written agreement signed pursuant to Section 13 below. This Agreement shall be binding upon
and shall inure to the benefit of the Parties, their respective successors, assigns, officials, directors,
officers, employees, insurers, lenders, lien holders, attorneys, agents, and other representatives.
7. Representations and Warranties.
The HOA hereby expressly represents and warrants that they have not transferred or
assigned or attempted to transfer or assign any of the released claims that are subject to this
Agreement. No claim of subrogation may be brought against the City under any of the other
released claims, and the HOA expressly agree to waive any subrogation rights against the City
related to any of the other released claims. The persons signing this Agreement hereby represent
and warrant that they have the power and authority to bind any Party on whose behalf this
Agreement is signed. The HOA acknowledges and agrees that the City is materially relying upon
the representations and warranties of the HOA set forth in this Agreement. If any of the HOA's
representations and warranties as set forth herein are found to be untrue or inaccurate either at the
signing of this Agreement or with the passage of time, or both, then such untrue or inaccurate
representation and warranty shall be a material default and the basis for a breach of this Agreement.
8. Controlling Law.
This Agreement shall be interpreted and construed in accordance with the laws of the State
of California without regard to conflict of law principles.
9. Attorneys' Fees and Costs.
The Parties shall bear all of their own respective costs and attorneys' fees incurred relating
to this Agreement. In the event that a Party is required to initiate or defend any litigation relating
to or arising out of this Agreement, the prevailing Party shall be entitled to recover from the other
Party(ies) its actual attorneys' fees, expert witness fees, costs of investigation and preparation, and
other costs and expenses related thereto.
10. Severability
If any provision or part of this Agreement is held, determined, or adjudicated to be invalid,
unenforceable or void for any reason, each such provision shall be severed from the remaining
provisions of the Agreement and shall not affect the validity and enforceability of such remaining
provisions.
11. Review of Agreement.
The Parties each acknowledge and represent that they have read this Agreement, that they
have had the opportunity to consult with their respective attorneys concerning its contents, that the
Agreement is being executed solely in reliance on their respective judgment, belief, and knowledge
13
of the matters set forth herein and on the advice of their respective attorneys, and that they enter
this Agreement freely and voluntarily.
12. Neutral Interpretation.
The Parties agree that all parts of this Agreement shall in all cases be construed as a whole
according to their fair meaning and shall not be construed strictly for or against any Party hereto.
13. Modification.
This Agreement shall not be modified, amended or supplemented unless such
modifications, amendments or supplements are in writing and signed by the Party to be charged.
14. Counterparts.
This Agreement may be executed in counterparts and by facsimile or other electronic
delivery, each of which shall be deemed an original and all of which together shall constitute one
and the same instrument.
[signatures on next page]
-5-
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date set forth
below.
Date : !November 21. 20 19
Date: 11 Z 20
ATTEST:
Monika RadA a
City Clerk
APPROVED AS TO FORM
By:
William H. Ihrke
City Attorney
CODORNIZ HOMEOWNERS
ASSOCIATION
By: Jeff Pshbei'�J/ P, 51,
Its:
Title: President
CITY OF LA QUINTA
G-: Jon McMillen
Its: City Manager
10
EXHIBITS
RESOLUTION AND FIRST AMENDMENT
(Attached)
-7-
*A:11.) 6 W_1
RESOLUTION NO. 2020 - 026
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF LA QUINTA, CALIFORNIA, APPROVING
MODIFICATIONS TO CODORNIZ MAINTENANCE
ASSOCIATION FEE AND FIRST AMENDMENT TO
DECLARATION OF COVENANTS, CONDITIONS,
RESTRICTIONS, AND RESERVATION OF
EASEMENTS
WHEREAS, on 3,d day of August, 2004, the City Council held a duly -
noticed public hearing to consider a request of RJT Homes, LLC for a Specific
Plan 2004-070 establishing design guidelines and development standards for
the property located at the southeast corner of Avenue 52 and Jefferson
Street, more particularly described as:
APNs 772-410-021 and 772-410-022; and
WHEREAS, upon hearing and considering all testimony and arguments,
if any, of all interested person desiring to be heard, the City Council adopted
Resolution No. 2004-085 approving Specific Plan 2004-070 for the reasons set
forth in the resolution, subject to the attached Conditions of Approval; and
WHEREAS, Condition of Approval No. 75 of said resolution sets certain
requirements for the Declaration of Covenants, Conditions, and Restrictions
and Reservation of Easements (CC&Rs) for the project, including the
requirement that the CC&Rs shall be subject to the review and approval of the
City Attorney.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of La Quinta, California, as follows:
SECTION 1. As of January 1, 2018, the baseline amount of the annual
payment owing by the Codorniz Maintenance Association to the City is
$264.21.
SECTION 2. Commencing January 1, 2018, the annual payment shall be
adjusted every year rather than every three years.
SECTION 3. Adjustments (whether an increase or decrease) in the
annual payment shall be based upon the 12-month average of the Consumer
Price Index - All Urban Consumers, not seasonally adjusted, for Riverside -San
Bernardino -Ontario (or successor Index) for the prior calendar year.
Resolution No. 2020 - 026
Modification to Codorniz Maintenance Association Fee & First Amendment to Declaration of CC&Rs
Adopted: July 21, 2020
Page 2 of 5
SECTION 4. Adjustments shall be calculated to three decimal points,
rounding to the nearest hundredth.
SECTION 5. The annual payment shall only accrue against Lots that have
been sold by Declarant to a private third -party purchaser. The City shall
calculate the annual payment pro rats from the date of sale of a Lot by
Declarant through build out. Until all Lots have been sold by the Declarant,
no later than January 31 of each year, the Codorniz Maintenance Association
shall provide the City with the dates that any Lots were sold by Declarant
during the prior calendar year.
SECTION 6. Payment for the prior calendar year shall be billed by the
City no later than March 1 of the following year. Payment by the Association
shall be due no later than March 30.
SECTION 7. The First Amendment to the CC&Rs for Codorniz
Maintenance Association attached hereto as "Exhibit A" and incorporated by
this reference, is hereby approved.
SECTION 8. This Resolution and incorporated First Amendment to the
CC&Rs shall go into effect upon adoption.
SECTION 9. The City Manager is hereby authorized to execute, on behalf
of the City of La Quinta, any agreements, amendments, or other implementing
documents to effectuate the approval of this Resolution and the subject matter
herein.
PASSED, APPROVED, and ADOPTED at a regular meeting of the La
Quinta City Council held on this 21st day of July 2020, by the following vote:
AYES: Council Members Fitzpatrick, Pena, Radi, Sanchez, Mayor Evans
NOES: None
ABSENT: None
ABSTAIN: None
Resolution No. 2020 - 026
Modification to Codorniz Maintenance Association Fee & First Amendment to Declaration of CC&Rs
Adopted: July 21, 2020
Page 3 of 5
C
LI DA EVANS, Mayor
City of La Quinta, California
ATTEST:
MONIKA RA EV ity Clerk
City of La Quinta, California
(CITY SEAL)
APPROVED AS TO FORM:
r —
WILLIAM H. IH KE, City Attorney
City of La Quinta, California
Resolution No. 2020 - 026
Modification to Codorniz Maintenance Association Fee & First Amendment to Declaration of CC&Rs
Adopted: July 21, 2020
Page 4 of 5
EXHIBIT A
FIRST AMENDMENT TO
DECLARATION OF COVENANTS, CONDITIONS
AND RESTRICTION, AND RESERVATION OF EASEMENTS
CODORNIZ MAINTENANCE ASSOCIATION
1. Article I, Section 5(a) of the Declaration of Covenants,
Conditions and Restrictions, and Reservation of Easements
(""Declaration") is proposed to be amended as follows:
Section 5. 'Assessments" shall be used as a generic term which shall
mean and refer to the following:
(a) "Regular Assessment" shall mean and refer to an annual
charge against each Owner and his respective Lot
representing a portion of the Common Expenses of the
Association. This Regular Assessment shall also include an
annual mitigation payment to the City of for each Lot. The
annual mitigation fee was imposed by the City as a condition
of approval for the re -zoning of the development from
commercial to medium -high density residential.
Notwithstanding anything to the contrary herein, this
payment shall not accrue until a Lot has been sold by the
Declarant. As of January 1, 2018, the baseline amount of
the mitigation fee is $264.21. Commencing January 1,
2018, the annual payment shall be adjusted every year
based upon the 12-month average of the Consumer Price
Index - All Urban Consumers, not seasonally adjusted, for
Riverside -San Bernardino -Ontario (or successor Index) for
the prior calendar year. Payment for the prior calendar
year shall be billed by the City no later than March 1 of the
following year. Payment by the Association shall be due no
later than March 30.
Resolution No. 2020 - 026
Modification to Codorniz Maintenance Association Fee & First Amendment to Declaration of CC&Rs
Adopted: July 21, 2020
Page 5 of 5
2. Article XIX, Section 7(b) of the Declaration is proposed to be
amended as follows:
Section 7. Amendments.
(b) Amendments by Association. Except as otherwise provided
herein and all applicable provisions of law (e.g., the
provisions of California Civil Code Section 1363.03 regarding
secret ballots), this Declaration may be amended only by an
affirmative vote of Owners representing not less than a
majority of the Class A voting power and the Class b voting
power of the Association. At such time when the Class B
membership shall cease and be converted to Class A
membership, any and all amendments to this Declaration
shall be enacted by requiring the vote or written assent of
Owners representing both: (a) a majority of the total voting
power of the Association, and (b) a majority of the total
votes of Members, other than the Declarant; provided,
however, that the percentage of the voting power necessary
to amend a specific provision shall not be less than the
percentage of affirmative votes prescribed for action to be
taken under said provision, and no amendment of a
provision of this Declaration which requires the approval or
consent of Declarant may be made without the written
approval of Declarant (e.g., provisions pertaining to the
resolution of Disputes, Maintenance Guidelines,
Maintenance Manual, Maintenance Recommendations, etc.).
Any Owner or the Association may petition the Superior
Court of the County where the Project is located for an order
reducing the necessary percentage required under this
Section to amend this Declaration; provided, however, that
under no circumstances shall any provision requiring the
consent of the Declarant be amended without such consent.
The procedure for effecting this petition is set forth in
Section 1356 of the California Civil Code, as the same may
be amended, from time to time.
3. The remaining portions of the Declaration shall remain in full
force and effect.
CONFIRMATION OF AGENDA
City Clerk Radeva said Greg Beaver, Applicant with Lundin Development
Company requested that Council continue Public Hearing Item No. 1 related
to the Pavilion Palms Shopping Center. Council concurred.
CLOSED SESSION
1. THREAT TO PUBLIC SERVICES OR FACILITIES, PURSUANT TO
SUBDIVISION (a) OF GOVERNMENT CODE SECTION 54957.
CONSULTATION WITH: ALEXANDER JOHNSTON, SENIOR
EMERGENCY MANAGEMENT COORDINATOR; WILLIAM H. IHRKE,
CITY ATTORNEY
2. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED
LITIGATION; SIGNIFICANT EXPOSURE TO LITIGATION
PURSUANT TO PARAGRAPH (2) OR (3) OF SUBDIVISION (d) OF
GOVERNMENT CODE SECTION 54956.9
(NUMBER OF POTENTIAL CASES: 1)
COUNCIL RECESSED THE OPEN SESSION PORTION OF THE MEETING
AND MOVED INTO CLOSED SESSION AT 3: 06 P.M.
MAYOR EVANS RECONVENED THE OPEN SESSION PORTION OF THE
CITY COUNCIL MEETING AT 4: 03 P.M. WITH ALL MEMBERS PRESENT
REPORT ON ACTION(S) TAKEN IN CLOSED SESSION:
City Attorney Ihrke reported the following pursuant to Government Code
§54950 et seq. (Brown Act).
• CLOSED SESSION ITEM NO. 1 - The City Council continued the
discussion of the status of state and local emergencies caused by the
threat of the spread of novel coronavirus disease 2019 (COVID-19)
including state and county orders that re -imposed limitations on certain
industries; and the potential for Round IV COVID-19 Small Business
Emergency Economic Relief Program, which Council will consider as
Business Session Item No. 2 on tonight's Agenda.
• CLOSED SESSION ITEM NO. 2 - At its closed session discussion at the
September 17, 2019 meeting, the City Council authorized the City
Manager, City Staff, and City Attorney to complete negotiations and, if
successful, enter into a proposed settlement agreement with the Codorniz
Maintenance Association to resolve unpaid mitigation fees owed to the
City pursuant to a condition of approval and Declaration of Covenants,
CITY COUNCIL MINUTES Page 2 of 12 JULY 7, 2020
Conditions, Restrictions, and Reservation of Easements applicable to the
development; on November 21, 2019 the Maintenance Association signed
the proposed agreement.
The Substance of the settlement agreement is summarized as follows:
A lump -sum back payment totaling $149,588.97 for unpaid years
2012-2018 will be remitted to the City; and
Consumer Price Index (CPI) adjustments starting with 2018 would
be based on the Riverside -San Bernardino -Ontario CPI, which did
not exist at the time of the original condition of approval; and
The invoicing and payment process is clarified, such that the City
would calculate the fee and submit and invoice by March 1, and the
Maintenance Association would pay the fee by March 30 every year.
The settlement agreement required the Maintenance Association to
obtain member approval of a proposed First Amendment to Declaration
of Covenants, Conditions, Restrictions, and Reservation of Easements to
implement the settlement agreement's terms; after the Maintenance
Association member voting period had been extended several times, the
Maintenance Association notified City staff that the members voted and
approved the amendment; and pursuant to the settlement agreement,
and by unanimous consent of the City Council, a resolution approving
modifications to Codorniz maintenance association fee and First
Amendment to Declaration of Covenants, Conditions, Restrictions, and
Reservation of Easements will be brought back before the City Council
at its next regular meeting for adoption.
PLEDGE OF ALLEGIANCE
City Attorney Ihrke led the audience in the Pledge of Allegiance.
PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA
PUBLIC SPEAKER: Maria Puente, La Quinta - spoke in opposition of short-
term vacation rentals (STVR) being allowed in the City; said STVR are
disruptive to full-time residents; and expressed concerns about her safety,
and the effectiveness of the STVR compliance processes and responses to
complaints.
Council said the City formed a STVR Program Ad -Hoc Committee to review the
STVR program and make recommendations to Council on how it can be
improved; it is a priority to find a balance and provide quality of life for full-
time residents and to effectively manage STVR compliance; and requested
that Ms. Puente's written comments be provided to the Committee.
CITY COUNCIL MINUTES Page 3 of 12 JULY 7, 2020
W
Planner Fernandez with the American Planning Association Inland Empire
Chapter 2020 Comprehensive Plan -Small Jurisdiction award; and commended
Staff and the community for their collaboration, engagement, and efforts
throughout the development process of the Highway 111 Corridor Plan.
PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA - Continued
PUBLIC SPEAKER VIA TELEPHONIC ACCESSIBILITY: David Dinnel, La Quinta
- said 90% of guests fully comply and follow the guidelines provided by STVR
owners and operators, and 10% try to deviate and require interference and
monitoring by the owners and operators; expressed concerns about the
adverse financial effects of the COVID-19 pandemic, and the lack of any
financial assistance to STVR business -owners; and spoke in opposition of the
City imposing a moratorium on STVR.
CONSENT CALENDAR
1. APPROVE MINUTES DATED JUNE 16, 2020
2. APPROVE MINUTES DATED JULY 7, 2020
3. ADOPT RESOLUTION TO APPROVE MODIFICATIONS TO
CODORNIZ MAINTENANCE ASSOCIATION FEE AND FIRST
AMENDMENT TO DECLARATION OF COVENANTS, CONDITIONS,
RESTRICTIONS, AND RESERVATION OF EASEMENTS
[RESOLUTION NO. 2020-026]
4. AWARD CONTRACT TO URBAN HABITAT FOR CONSTRUCTION OF
THE LA QUINTA LANDSCAPE RENOVATION IMPROVEMENTS
PROJECT LOCATED AT LA QUINTA RANCHO OCOTILLO
DEVELOPMENT, ON THE SOUTH SIDE OF FRED WARING DRIVE
AND EAST SIDE OF ADAMS STREET (PROJECT NO. 2016-03E)
5. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED
MAY 31, 2020
6. APPROVE DEMAND REGISTERS DATED JULY 3 AND 10, 2020
MOTION - A motion was made and seconded by Councilmembers
Radi/Fitzpatrick to approve the Consent Calendar as recommended, with Item
No. 3 adopting Resolution No. 2020-026, respectively. Motion passed
unanimously.
CITY COUNCIL MINUTES Page 5 of 10 JULY 21, 2020
13
CONSENT CALENDAR ITEM NO. 3
City of La Quints
CITY COUNCIL MEETING- July 21, 2020
STAFF REPORT
AGENDA TITLE: ADOPT RESOLUTION TO APPROVE MODIFICATIONS TO
CODORNIZ MAINTENANCE ASSOCIATION FEE AND FIRST AMENDMENT TO
DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS, AND
RESERVATION OF EASEMENTS
RECOMMENDATION,
Adopt a resolution to approve modifications to Codorniz maintenance
association fee and First Amendment to Declaration of Covenants, Conditions,
Restrictions, and Reservation of Easements; and authorize the City Manager
to execute the Amendment.
EXECUTIVE SUMMARY
• Staff reviewed outstanding development agreements with fiscal
mitigation fees in late 2016.
• Staff and representatives from the Codorniz HOA have discussed
modifications to the annual Codorniz maintenance association fee.
• Proposed changes are detailed in the resolution and were approved by
the Codorniz Homeowners Association (HOA) in late May 2020.
• Upon Council approval of the First Amendment, the proposed changes
would be implemented going forward, past due fees would be paid, and
2019 and 2020 fees would be recalculated and billed under the new
terms.
FISCAL IMPACT
Upon formal adoption of the Resolution and First Amendment, the HOA shall
remit $149,588.97 and the City shall recalculate fees due for 2019 and 2020
based on the new terms (estimated at $55,000). Funds would be deposited to
the General Fund in Account No. 101-0000-41410, Zoning Change Mitigation
Fee.
BACKGROUND/ANALYSIS
Finance Staff reviewed outstanding development agreements with fiscal
mitigation fees in late 2016. Mitigation fees include various estimates of
General Fund impacts regarding a residential use of land with a commercial
land use requiring rezoning. The fees are designed to replace ongoing revenue
that the City would have received had the land use designation not been
W
changed. After extensive research, it was discovered that some annual billings
for mitigation fees were overlooked due to organizational restructure and staff
turnover.
After confirming received payments, new invoices were sent to organizations
owing funds to the City; in the case of Codorniz, this billing went out in
February 2017. After receipt of the invoice, the City received communication
from the management company, requesting a meeting to discuss the fee.
Since this time, City Staff and representatives from the Codorniz HOA have
discussed modifications to the annual Codorniz maintenance association fee.
In summary the proposed changes are as follows:
• $89,195.90 payment for "back years" (from 2012 to 2016)
• Base year reset of $250 per residential unit as of 2015
• For 2015-2017, the CIP will be L.A. based index for increases
• Starting in 2018, the Inland Empire/Riverside County (I.E./Riv. Co.)
index will be used for adjustments
• Instead of a 3-year CPI adjustment calculation, the CPI shall be adjusted
annually according to the I.E./Riv. Co. CPI index
• By January 31st of each calendar year, the HOA shall notify the City of
the number of units sold in the prior calendar year and their sale date,
until such time that all units are sold. The sale date shall determine the
pro -rated annual fee.
• The City shall issue an invoice for the prior calendar year by March 1st
and payment by the HOA to be remitted by March 30t" of each year
These terms were approved by the City Council on September 17, 2019.
Subsequently in November 2019, the HOA presented the proposed changes
to their homeowners for voter approval prior to presenting a resolution for
adoption by the City of La Quinta.
To obtain the necessary HOA votes, the voting period was extended four times
(January, February, March, April 2020). The City was notified on May 28, 2020
that the ballots were tabulated which approved the Resolution and First
Amendment.
If approved, proposed changes would be implemented going forward, past
due fees would be paid, and 2019 and 2020 fees would be recalculated and
billed under the new terms.
ALTERNATIVES
Council may elect to decline this request.
Prepared by: Karla Romero, Finance Director
Approved by: Jon McMillen, City Manager
30