TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Evan Crockett, Management Analyst - Finance
SUBJECT:
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Second Reading of Community Facilities District No. 2026-1 (Gierson Ranch) of the City of Murrieta
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ABSTRACT
Staff recommends that the City Council conduct a second reading of Ordinance No. 636 related to the public hearings held on April 21, 2026, and June 2, 2026, regarding the formation of Community Facilities District (CFD) No. 2026-1 (Gierson Ranch), authorizing up to $8 million in bonded indebtedness, and annexing the Gierson Ranch project into CFD No. 2025-2 (Maintenance Services) and CFD No. 2025-S (Safety Services).
The proposed 107-unit single-family residential development, located between Washington Avenue and Adams Avenue, would finance public infrastructure, Development Impact Fees (DIF), and eligible maintenance and safety services through the levy of special taxes under the Mello-Roos Act.
RECOMMENDATION
recommendation
Conduct the second reading and adopt Ordinance No. 636-26 entitled: An Ordinance of the City Council of the City of Murrieta, California, Acting in its Capacity as the Legislative Body of Community Facilities District No. 2026-1 (Gierson Ranch) of the City of Murrieta Authorizing the Levy of Special Taxes.
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PRIOR ACTION/VOTE
On March 17, 2026, the City Council adopted a Resolution of Intention to Annex Territory to Community Facilities District No. 2025-2 (Maintenance Services) of the City of Murrieta (Annexation No. 3-Gierson Ranch) and set a public hearing for April 21, 2026 (Vote: 4-0-1).
On March 17, 2026, the City Council adopted a Resolution of Intention to Annex Territory to Community Facilities District No. 2025-S (Safety Services) of the City of Murrieta (Annexation No. 1-Gierson Ranch) and set a public hearing for April 21, 2026 (Vote: 4-0-1).
On April 21, 2026, at the request of the Property Owner, and due to the complexity of the proposed CFD No. 2026-1, the City Council opened and voted to continue the public hearing on the formation of CFD No. 2026-1 and continued the public hearing to June 2, 2026 (Vote: 4-0-1).
On April 21, 2026, at the request of the Property Owner, and due to the complexity of the proposed annexations to CFD No. 2025-2 (Maintenance Services) and CFD No. 2025-S (Safety Services), the City Council opened and voted to continue each of the public hearings regarding the proposed annexations and continued the public hearings to June 2, 2026 (Vote: 4-0-1).
On June 2, 2026 the City Council held a public hearing and approved the first reading of the Community Facilities District Ordinance No. 636-26 (CFD No. 2026-1 Gierson Ranch) (Vote: 3-0-1-1).
STRATEGIC ALIGNMENT
This item aligns with the City Council to: maintaining a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency relating to an administrative priority.
DISCUSSION
Gierson Ranch Project and Community Facilities District No. 2026-1
The property owner of the proposed Gierson Ranch project within the City of Murrieta (City) is Century Communities of California, LLC, a Delaware limited liability company (Property Owner), and the Property Owner has submitted a petition requesting that the City form Community Facilities District No. 2026-1 (Gierson Ranch) of the City of Murrieta (CFD No. 2026-1). The property to be included in the proposed CFD No. 2026-1 (Property) is located between Washington Avenue and Adams Avenue, near the corner of Washington Avenue and Ivy Street. The Gierson Ranch project is proposed to include approximately 107 single-family homes at full buildout and will be developed by the Property Owner.
The Property Owner has requested that the City form CFD No. 2026-1 to encompass the Property, in accordance with the Mello-Roos Act, to finance the costs of certain public improvements through the levy of a special tax and the issuance of bonds. The proposed maximum bonded indebtedness is $8 million. The proceeds of bonds issued by CFD No. 2026-1 are expected to be used to finance public facilities to be owned and operated by the City, as well as financing the payment of Development Impact Fees owed by the Property Owner to the City, and to finance fees and public facilities to be owned and operated by the Murrieta Valley Unified School District and the Western Municipal Water District.
On March 17, 2026, the City Council adopted Resolution No. 26-4915 of Intention to Establish CFD No. 2026-1 and Resolution No. 4916 of Intention to Incur Bonded Indebtedness for CFD No. 2026-1 and called for a public hearing to be held on April 21, 2026, regarding the proposed formation of CFD No. 2026-1. On April 21, at the Property Owner’s request, the public hearing was continued until June 2, 2026.
The Property Owner has requested that the boundaries of CFD No. 2026-1 include the area described in Exhibit A of Resolution of Intention (No. 26-4915) adopted by City Council on March 17, 2026 City Council meeting, and that special taxes be levied within the boundaries of CFD No. 2026-1 in accordance with the Rate and Method of Apportionment for CFD No. 2026-1 (CFD No. 2026-1 RMA) described in Exhibit C to the Resolution of Intention (No. 26-4915). The proposed rates of the special tax range from $3,956 per unit for single-family homes less than 1,950 square feet to $4,179 per unit for single-family homes greater than 2,150 square feet. The special tax rates within CFD No. 2026-1 will increase two percent (2%) annually on July 1, of each year, commencing July 1, 2026.
The CFD No. 2026-1 Resolution No. 26-4915 of Intention was the first step in the process of forming CFD No. 2026-1 and, together with Resolution No. 26-4916 of Intention to Incur Bond Indebtedness by CFD No. 2026-1 adopted by the City Council on March 17, 2026, declared the City’s intention to establish CFD No. 2026-1, its intention to incur bonded indebtedness by CFD No. 2026-1, and called for a public hearing to take place on April 21, 2026. Notice of the public hearing was published in The Press Enterprise and mailed to the Property Owner.
At the request of the Property Owner, and due to the complexity of the proposed CFD No. 2026-1, the City Council opened the public hearing on the formation of CFD No. 2026-1 on April 21, 2026, and continued the public hearing to the June 2, 2026, City Council meeting.
In connection with the public hearing, Spicer Consulting Group prepared a Public Hearing Report that describes and analyzes the facilities to be financed by CFD No. 2026-1 and the estimated costs of such facilities. Following the close of the public hearing, the City Council was asked to adopt the Resolution of Formation for CFD No. 2026-1 and the Resolution Determining Necessity to Incur Bonded Indebtedness by CFD No. 2026-1 which, together, approve the formation of the CFD No. 2026-1, the levy of the special taxes in CFD No. 2026-1 in accordance with the CFD No. 2026-1 RMA and determines the necessity for the Facilities CFD to issue bonds in an amount not to exceed $8,000,000. Such resolutions called for an election to submit to the qualified voters of the CFD No. 2026-1 ballot measures on the approval of the special taxes, the issuance of bonds, and an appropriations limit for the CFD No. 2026-1.
The CFD No. 2026-1 Resolution of Formation also approved the execution and delivery of an Acquisition, Construction and Funding Agreement with the Property Owner (Acquisition Agreement). The Acquisition Agreement sets forth the terms pursuant to which CFD No. 2026-1 will acquire improvements constructed by the Property Owner from bond proceeds from CFD No. 2026-1 and how the Property Owner will be reimbursed for development impact fees from bond proceeds. In order to be eligible for acquisition, such facilities must be constructed in accordance with the terms and conditions of the Acquisition Agreement. The City and CFD No. 2026-1 are only required to pay for the acquisition of such facilities from the proceeds of bonds or special taxes levied in CFD No. 2026-1 and not from any other source.
The CFD No. 2026-1 Resolution of Formation also approved the execution and delivery of a Joint Community Facilities Agreement between the City and the Murrieta Valley Unified School District (School District JCFA) and the execution and delivery of a Joint Community Facilities Agreement between the City and the Western Municipal Water District (Water District JCFA). The School District JCFA and the Water District JCFA set forth the terms pursuant to which the Property Owner will be reimbursed from bond proceeds from CFD No. 2026-1 for certain school facility fees and certain water facility fees the Property Owner is required to pay to the Murrieta Valley Unified School District and the Western Municipal Water District. In order to be eligible for acquisition, such facilities must be constructed in accordance with the terms and conditions of the Acquisition Agreement. The City and CFD No. 2026-1 are only required to pay for the acquisition of such facilities from the proceeds of bonds or special taxes levied in CFD No. 2026-1 and not from any other source.
On file with the City Clerk is a Certificate of the Registrar of Voters of Riverside County certifying that there are no registered voters residing within the boundaries of the CFD No. 2026-1. Accordingly, under the Mello-Roos Act, only property owners who own land in CFD No. 2026-1 are eligible to vote at the election for CFD No. 2026-1, with each owner having one vote for each acre (or portion thereof) that they own within CFD No. 2026-1. The Property Owner executed a consent and waiver of certain election procedures with respect to the election, including certain timing requirements with respect to the election, in accordance with the Mello-Roos Act. On June 2, 2026, the City Council approved the Resolution of Formation and the Resolution Determining Necessity to Incur Bonded Indebtedness, the City Clerk conducted the election. The Property Owner delivered its ballot to the City Clerk in advance of the public hearing, and the City Clerk announced the election results. The City Council was asked to adopt the Resolution Certifying the Election Results. Upon certification that two-thirds of the votes cast were in favor of the propositions voted upon in CFD No. 2026-1, the Resolution Certifying the Election Results directed the City Clerk to record a notice of special tax lien on the property within CFD No. 2026-1. The City Council was then asked to introduce the ordinance authorizing the levy of the special tax within CFD No. 2026-1, in accordance with the CFD No. 2026-1 RMA.
The Gierson Ranch project was also required to annex to the public safety services, and maintenance services CFDs. Accordingly, the Property Owner requested the Gierson Ranch project be annexed to the Community Facilities District No. 2025-S (Safety Services) and Community Facilities District No. 2025-2 (Maintenance Services) and on March 17, 2026, the City Council adopted resolutions declaring its intention to annex CFD No. 2025-S (Safety Services) and CFD 2025-2 (Maintenance Services). The City Council approved the annexation of the Gierson Ranch project into CFD No. 2025-S (Safety Services) and CFD No. 2025-2 (Maintenance Services), and held public hearings on June 2, 2026.
PUBLIC NOTICING
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).
FISCAL IMPACT
The Property Owner has made a deposit of $65,000 to pay for the costs of the formation proceedings, which may be reimbursed to the Property Owner from proceeds of a future bond issuance in accordance with the reimbursement agreement with the Property Owner. If established and subject to necessary City Council and voter approvals, each of the CFDs will annually levy special taxes on all of the taxable property within the applicable district in accordance with the applicable rate and method of apportionment. Such special taxes will be used to pay for the costs of services or facilities, administration of the CFDs, including mandated annual disclosures, and, in the case of CFD No. 2026-1, debt service on bonds. Any bonds issued by CFD No. 2026-1 are not obligations of the City and will be secured solely by the Special Taxes levied within CFD No. 2026-1. The levying of the special taxes for services is expected to alleviate some of the financial impact of the new development on the costs of providing such services to the Property by the City.
Additionally, the Property Owner provided additional deposits of $30,000 to cover the annexation costs associated with the property annexing into CFD No. 2025-2 (Maintenance Services) and CFD No. 2025-S (Safety Services).
ATTACHMENTS
ATT 1 - Ordinance No. 636-26