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2022-05-18 City Council Item No. 11.1 Proposed Formation of CFD 2022-1: Quartz Ranch Presentation Regular MEETING - Additional Meeting MaterialsProposed Formation of CFD 2022-1: Quartz Ranch ITEM 11.1 (05/18/22) SPECIAL DISTRICTS Jizelle Sandoval, Financial Analyst Rochelle Clayton, Assistant City Manager Public Hearing Item 11.1 Consideration of Formation: Lennar Homes of California, LLC. Tracts 28786, 28791, 28792, 28793, and 28794 to Community Facilities District (CFD) No. 2022-1 Quartz Ranch •This item was presented to the Finance Committee on February 22, 2022. •On April 6, 2022, the City Council approved Resolution No. 22-1133, declaring its intent to form CFD No. 2022-1. •The Developer, Lennar Homes of California, LLC., has requested the City assist them in forming a facilities Community Facilities District (CFD) to finance certain development costs of the project related to the City, Eastern Municipal Water District (EMWD), Menifee Union School District (MUSD), and Perris Union High School District (PUHSD). The creation of CFD 2022-1 would levy a special tax within the boundaries of the CFD and issue bonds in an amount not to exceed $27,000,000. Discussion •The area proposed within CFD No.2022-1 is included in Attachment A of the Resolution of Intention (ROI).The proposed development to be included into the CFD No.2022-1 includes the 379 detached single family residential properties known as Quartz Ranch on 80.37 gross acres within Tentative Tract Map Nos.28786,28791,28792,28793,and 28794. •As required by the Resolution of Intention the proposed boundary map for CFD 2022-1 was recorded April 12,2022 in Book 88,Page 65-68 Document No.2022- 0173403. Discussion (Cont.) LOCATION MAP A Public Hearing Report was prepared by Spicer Consulting Group which describes and analyzes the facilities to be financed by the CFD and the estimated costs of such facilities. •The anticipated issuance amount based on current rates would be approximately $21,725,000 which would cover a reserve fund, financing costs, and generate approximately $18,773,629 in net bond proceeds for facilities. •The proposed facilities, which may be funded with proceeds of the bonds include: •$573,503 –City Priority Facilities (20%premium to Project Specific Priorities,per City’s CFD Goals &Policies) •$2,867,514 –City Development Impact Fees &Quimby Fees •$5,654,550 –City Facilities •$6,398,657 –EMWD Facilities •$3,276,405 –MUSD Facilities In addition to the costs of the forgoing facilities,proceeds of the special tax may be expended to pay administrative. Discussion (Cont.) •The proposed development is proposing to build 379 detached residential units with home sizesrangingfrom1,823 to 4,134 square feet. •The project previously annexed into CFD 2015-2 (Maintenance Services)to cover landscaping, lighting,street sweeping and pavement management,drainage,parks and trails,and graffiti abatement service costs. •The total tax effective tax rate is estimated at 1.95%of projected home prices.This is within the2%allowable tax rate limit in the City’s Financing Goals and Policies. •The estimated assigned annual tax rates range from $2,781 for home sizes less than 1,823squarefeetto$3,882 for home sizes greater than 4,134 square feet,which rates will escalate at 2%per year. Discussion (Cont.) Fiscal Impact •The Special Tax will be levied annually on taxable properties in CFD No.2022-1 in accordance with the Rate and Method of Apportionment (RMA)to pay for the cost of facilities,debt service on bonds,and administration of the CFD.Any bondsissuedbyCFDNo.2022-1 are NOT obligations of the City and will be secured solely by the Special Taxes levied in CFD No.2022-1. •All costs associated with the formation is borne by the Developer.The ROI included Section 13 approved a form of a Reimbursement Agreement to reimburse the developer for these costs if and when bonds are issued for the CFD. •There is no fiscal impact to the City’s General Fund RECOMMENDED ACTION 1.City Council initiate formation of Community Facilities District No.2022-1 (Quartz Ranch)by taking the following actions: a.Hold public hearing, b.Adopt a Resolution Determining Necessity to incur bonded indebtedness C.Adopt a Resolution calling the election, d.Hold a special landowner election and canvass the election, e.Adopt a Resolution declaring results of special landowner election;and 2.Upon approval of the preceding resolutions,Introduce an Ordinance authorizing the levy of special taxes within CFD No.2022-1;and 3.Approve Joint Community Facilities Agreements with Eastern Municipal Water District and Menifee Union School District Questions?Thank you.