FROM:
Finance
SUBJECT:
Title
Public Hearing on Formation of Community Facilities District No. 111 (Monterado)
End
RECOMMENDATION:
Recommendation
End
COUNCIL GOALS:
• Practice sound fiscal management by developing long-term funding and debt management plans.
DISCUSSION:
Lennar Homes of California, Inc. has initiated the process to form a Community Facilities District for the purpose of financing the acquisition of certain public facilities that are eligible under the City financing goals and policies, namely sewer, storm drain, street improvements, landscaping, and development impact fees. The formation of the district will benefit the City by funding the infrastructure projects outside of the typical improvements that would be required for the project including a contribution for a project of community benefit. CFD bond funding will allow for infrastructure to be built at one time reducing construction inconvenience for earlier residents and enhancing the overall community aesthetics.
The project consists of approximately 21.67 gross (11.55 net taxable) acres (198 residential lots), is located on the west side of Citrus Avenue north of Duncan Canyon Road.
On July 26, 2022, the City Council adopted a resolution of intent to establish Community Facilities District No. 111 (Monterado) and to incur bonded indebtedness of the district.
The proposed Rate and Method of Apportionment (RMA) includes rates to pay for bonded indebtedness and maintenance of street lighting, landscaping and parks. Initial assigned residential rates are proposed as follows:
|
Land Use Class |
|
Residential Floor Area |
|
Bond Debt |
|
Maint |
|
Total |
|
1 |
|
2,250 sf or Greater |
|
$3,258 |
|
$366 |
|
$3,624 |
|
2 |
|
2,050 sf to less than 2,250 sf |
|
$3,218 |
|
$366 |
|
$3,584 |
|
3 |
|
1,850 sf to less than 2,050 sf |
|
$3,031 |
|
$366 |
|
$3,397 |
|
4 |
|
1,650 sf to less than 1,850 sf |
|
$2,940 |
|
$366 |
|
$3,306 |
|
5 |
|
Less than 1,650 sf |
|
$2,907 |
|
$366 |
|
$3,273 |
Sales prices for the homes have been estimated at $580,000 to $642,000. The proposed rates have been established to provide a total tax rate of less than 1.95% of the home value per City Policy.
The proposed rates for bonded indebtedness will support $7.3 million of bonds, providing funds to finance $6.0 million of facilities and/or fees. The proposed annual rate for maintenance of $366 will be sufficient to fund the annual maintenance costs for street lighting, landscaping and parks within and surrounding the area of the CFD. The rate also includes the maintenance costs related to the water quality system required by the State of California. The maximum annual tax rate for maintenance have been set at $510 per unit with a 2% escalator per City Policy.
This action will form the District, authorize the levy of the special tax and authorize bonded indebtedness. The recommended action complies with the City Council’s debt management objectives.
FISCAL IMPACT:
This District will provide annual funding for maintenance costs, administration and debt service costs once bonds are issued.
MOTION:
Approve staff recommendation.