TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Javier Carcamo, Finance Director
SUBJECT:
title
Community Facilities District No. 2025-S (Safety Services) of the City of Murrieta
end
RECOMMENDATION
recommendation
Hold a public hearing regarding the formation of Community Facilities District No. 2025-S (Safety Services) of the City of Murrieta;
Adopt Resolution No. 25-4874 entitled: A Resolution of the City Council of the City of Murrieta, California, Establishing Community Facilities District No. 2025-S (Safety Services) of the City of Murrieta, Authorizing the Levy of a Special Tax Therein, Calling an Election and Approving and Authorizing Certain Actions Related Thereto;
Direct the City Clerk to hold an election within CFD No. 2025-S;
Adopt Resolution No. 25-4875 entitled: A Resolution of the City Council of the City of Murrieta, California, Acting in its Capacity as the Legislative Body of Community Facilities District No. 2025-S (Safety Services) of the City of Murrieta Certifying Election Results; and
Introduce Ordinance No. 621-25 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. 2025-S (Safety Services) of the City of Murrieta Authorizing the Levy of Special Taxes.
body
PRIOR ACTION/VOTE
On April 5, 2016, the City Council adopted Resolution No. 16-3536 amending the Land Secured Financing Policy (Vote: 5-0).
On October 3, 2023, the City Council considered an Amendment to the Community Facilities District Goals and Policies and directed staff to present the recommendations in a workshop (Vote: 3-2).
On December 5, 2023, the City Council held a workshop on Community Facilities District Goals and Policies and adopted Resolution No. 23-4717 (Vote: 5-0).
On May 6, 2025, the City formed Community Facilities District No. 2025-1 (Safety Services), Community Facilities District No. 2025-2 (Maintenance Services) and Community Facilities District No. 2025-3 (Discovery Village) (Vote:5-0).
On June 3, 2025, the City Council adopted a Resolution of Intention (Resolution Np. 25-4838) to establish Community Facilities District No. 2025-S (Safety Services) and set a public hearing for the formation of Community Facilities District No. 2025-S (Safety Services) for July 15, 2025 (Vote: 5-0).
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
DISCUSSION
Community Facilities Districts
Community Facility Districts (CFDs) are formed pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Mello-Roos Act”) and are a widely used financing mechanism, frequently used to fund infrastructure associated with new significant (large) development projects, such as water and sewer facilities, storm drain facilities, roads, and parks and to finance the provision of certain municipal services.
A simplified example of CFD implementation is as follows:
• A developer submits a petition to form the CFD to the City or Special District (water districts frequently form CFDs) to start formation proceedings.
• In the City’s case, staff presents the petition to the City Council for approval.
• The District is formed by a vote of the property owners.
• Once approved, the city approves the issuance of bonds, which are sold to investors.
• Proceeds from the sale of the bonds are used to build the infrastructure associated with the project.
• The bonds are paid off over time (typically 30 years) by the buyers of homes within the project as a part of their property tax bill.
On December 5, 2023, the City Council adopted amendments to the Community Facilities District Goals and Policies. In addition to changes related to state law, other changes contained in the amended policy include:
• A list of eligible facilities that can be financed;
• Adding an escalator of up to two percent (2%) per year for facilities;
• Adding an escalator for service or maintenance CFDs to cover increases in the cost of providing services;
• Allowing Development Impact Fees (DIF) to be financed; and
• Increasing the maximum cap on the assessed value of a property from 1.8% to 2.0%.
Additional Authorized Services
The Mello-Roos Act also authorizes the City to establish a CFD to finance certain public services through the levy of a special tax. The services that can be funded include the following:
• Police protection services, including, but not limited to, criminal justice (limited to providing services for jails, detention facilities, and juvenile halls).
• Fire protection and suppression services, and ambulance and paramedic services.
• Recreation program services, library services, maintenance services for elementary and secondary school sites and structures, and the operation and maintenance of museums and cultural facilities
• Maintenance and lighting of parks, parkways, streets, roads, and open spaces.
• Flood and storm protection services, including, but not limited to, the operation and maintenance of storm drainage systems, plowing and removal of snow, and sandstorm protection systems.
• Maintenance and operation of any real property or other tangible property with an estimated useful life of five or more years that is owned by the local agency or by another local agency (by agreement).
Community Facilities District No. 2025-1 (Safety Services)
On May 6, 2025, the City Council and the landowner for the Discovery Village project approved the formation of Community Facilities District No. 2025-1 (Safety Services) in order to finance public safety services. CFD No. 2025-1 currently consists only of the property within the Discovery Village development project and designated the remainder of the City as a “Potential Annexation Area,” whereby new development projects meeting certain design criteria will be required by the City to annex to CFD No. 2025-1. However, the Rate and Method of Apportionment of Special Tax for CFD No. 2025-1, as approved by the City Council and the landowner within CFD No. 2025-1 on May 6, 2025, includes special tax rates for multi-family residential property and single-family residential property, and the special taxes for each category of property will increase annually each July 1 by four percent (4%), commencing July 1, 2026, but does not include a special tax for affordable housing residential property. When approving the Rate and Method of Apportionment of Special Tax for CFD No. 2025-1, the City Council directed the formation of a new public safety services CFD to apply to future development projects within the City. This new public safety will impose a special tax on affordable housing residential property, multi-family residential property, and single-family residential property, which includes an annual escalation of the special tax for each category of property. Therefore, it is not expected that future development projects within the City will be annexed into CFD No. 2025-1.
The Rustic Meadows Project, the Kensington Apartments Project and Community Facilities District No. 2025-S (Safety Services)
The owner of property within the proposed Rustic Meadows development project and the owner of property within the proposed Kensington Apartments development project (collectively, the “Property Owners”) are required by the City’s Community Facilities District Goals and Policies, as amended in December 2023, to either annex to or request the formation of a Public Safety Services CFD. Accordingly, the Property Owners have submitted petitions requesting that the City form a new public safety services CFD which includes a special tax on affordable housing residential property, multi-family residential property, and single-family residential property which includes an annual escalation of the special tax for each category of property. The new public safety CFD is expected to be called Community Facilities District No. 2025-S (Safety Services) of the City of Murrieta.
Similar to CFD No. 2025-1, CFD No. 2025-S will initially consist only of the property within the Rustic Meadows development project and the Kensington Apartments development project; however, the remainder of the City will be designated as a “Potential Annexation Area” and new development projects meeting certain design criteria will be required to annex to CFD No. 2025-S.
CFD No. 2025-S would levy a special tax in accordance with the Mello-Roos Act on parcels of residential property to finance public safety services. Services eligible to be financed by CFD No. 2025-S include police protection services (including but not limited to criminal justice services), fire protection and suppression services, and paramedic services. The special taxes within CFD No. 2025-S are $150 per unit of affordable housing residential property, $468 per unit of multi-family residential property and $580 per unit of single-family property and the special taxes for each category of property will increase annually each July 1 by four percent (4%), commencing July 1, 2026.
The Resolution of Intention adopted on June 3, 2025, was the first step in the process of forming CFD No. 2025-S and declared the City’s intention to establish CFD No. 2025-S and called for a public hearing on the matter of the formation of CFD No. 2025-S to take place on July 15, 2025.
In connection with the public hearing, Spicer Consulting Group has prepared a Public Hearing Report, which describes and analyzes the services to be financed by CFD No. 2025-S and the estimated costs of such services. Following the closure of the public hearing for CFD No. 2025-S, the City Council will be asked to adopt a Resolution of Formation which approves the formation of CFD No. 2025-S and the levy of the special taxes in CFD No. 2025-S in accordance with the Rate and Method of Apportionment for CFD No. 2025-S. The Resolution of Formation calls for an election to submit to the qualified voters of CFD No. 2025-S ballot measures on the approval of the special taxes and appropriations limits for CFD No. 2025-S.
On file with the City Clerk is a Certificate of the Registrar of Voters of Riverside County for CFD No. 2025-S certifying that there are no registered voters residing within the boundaries of CFD No. 2025-S. Accordingly, under the Mello-Roos Act, only property owners owning land are eligible to vote at the election, with each owner having one vote for each acre (or portion thereof) that they own within CFD No. 2025-S. The Property Owners have each executed a consent and waiver of certain election procedures for CFD No. 2025-S with respect to the election, including certain timing requirements with respect to the election, in accordance with the Mello-Roos Act. Accordingly, if the City Council approves the Resolution of Formation, the City Clerk will conduct the election. The Property Owners will have delivered their ballots to the City Clerk in advance of the public hearing, and the City Clerk will announce the election results, and the City Council will be asked to adopt Resolutions Certifying the Election Results for CFD No. 2025-S. Upon certification that 2/3rds of the votes cast are in favor of the propositions voted upon, the Resolution Certifying the Election Results will direct the City Clerk to record a notice of special tax lien on the property within CFD No. 2025-S. The City Council will then be asked to introduce an ordinance authorizing the levy of the special tax within CFD No. 2025-S in accordance with the Rate and Method of Apportionment.
The owner of the property within the proposed Rustic Meadows project within the City is Whitewood-Murrieta, L.P. The Rustic Meadows project is located at the Southeast corner of the intersection of Clinton Keith Road and Whitewood Road. At full buildout, the project is proposed to include approximately 153 single-family homes and will be developed by Century Communities of California, LLC.
The owner of property within the proposed Kensington Apartments project is Murrieta Pacific Associates, Inc. The Kensington Apartments project is a proposed affordable housing project located near the corner of Washington Avenue and Magnolia Street.
FISCAL IMPACT
The Property Owners have made deposits to pay for the costs of the formation proceedings of CFD No. 2025-S. The deposit made by Century Communities may be reimbursed to Century Communities from proceeds of a future bond issuance by the separate facilities CFD being formed in connection with the Rustic Meadows development. If established and subject to necessary Council and voter approvals, CFD No. 2025-S will annually levy special taxes on all of the taxable property within the CFD No. 2025-S in accordance with the RMA (as attached to the Resolution of Intention). Such special taxes will be used to pay for the costs of safety services and administration of the CFD No. 2025-S. 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. At full build-out, special tax revenues are projected to total $88,740 for the Rustic Meadows project and $18,900 for the Kensington Apartments project.
ATTACHMENTS
1. Landowner Waiver (Whitewood Murrieta) (CFD 2025-S)
2. Landowner Waiver (Murrieta Pacific Associates) (CFD 2025-S)
3. Public Hearing Report (CFD 2025-S)
4. Resolution No. 25-4874
5. Resolution No. 25-4875
6. Ordinance No. 621-25
7. Certificate of the Registrar of Voters - Location 1 (CFD 2025-S)
8. Certificate of the Registrar of Voters - Location 2 (CFD 2025-S)