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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Fiscal Year 2026/27 Tax Rates for the Community Facilities Districts
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ABSTRACT
This report presents the proposed Fiscal Year 2026/27 special tax rates for the City’s Community Facilities Districts (CFDs). It requests City Council adoption of the required resolutions to approve the annual levies. The recommended tax rates ensure each district generates sufficient revenue to meet debt service obligations, administrative costs, and authorized public services in accordance with the Mello-Roos Act and each district’s Rate and Method of Apportionment. For FY 2026/27, the combined levy totals $9,310,450 for seventeen bonded CFDs and $129,984.84 for the Safety and Maintenance CFDs. Adoption of these resolutions maintains compliance with County requirements and supports the City’s commitment to fiscal sustainability and transparency.
RECOMMENDATION
recommendation
Adopt the Resolutions approving the Fiscal Year 2026/27 Tax Rates for the Community Facilities Districts:
Resolution No. 26-4958 entitled: A Resolution of the City Council of the City of Murrieta, County of Riverside, State of California, Ordering the Levy and Collection of Special Taxes Within Each Community Facilities District Listed Below for Fiscal Year 2026/2027:
Community Facilities District No. 2000-1 (Greer Ranch),
Community Facilities District No. 2000-2 IA A (The Oaks),
Community Facilities District No. 2000-2 IA B (The Oaks),
Community Facilities District No. 2001-1 IA A (Bluestone Communities/Murrieta Highlands),
Community Facilities District No. 2001-1 IA B (Bluestone Communities/Murrieta Highlands),
Community Facilities District No. 2003-1 (Murrieta Springs),
Community Facilities District No. 2003-2 (Blackmore Ranch),
Community Facilities District No. 2003-3 (Creekside Village),
Community Facilities District No. 2003-4 (Bluestone Communities II/Mapleton),
Community Facilities District No. 2004-1 (Bremerton),
Community Facilities District No. 2004-2 (Murrieta Fields),
Community Facilities District No. 2004-3 (Meadowlane/Amberwalk I & II),
Community Facilities District No. 2005-1 (Springbrook),
Community Facilities District No. 2005-5 IA A (Golden City),
Community Facilities District No. 2005-5 IA B (Golden City),
Community Facilities District No. 2025-3 (Discovery Village), and
Community Facilities District No. 2025-4 (Rustic Meadows)
Resolution No. 26-4959 entitled: A Resolution of the City Council of the City of Murrieta, County of Riverside, State of California, Ordering the Levy and Collection of Special Taxes Within Community Facilities District No. 2025-S and No. 2025-2 Fiscal Year 2026/2027.
This item includes:
Community Facilities District No. 2025-S (Safety Services - original and all annexations) and
Community Facilities District No. 2025-2 (Maintenance Services - original and all annexations).
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PRIOR ACTION/VOTE
On July 1, 2025, the City Council approved the levy for Fiscal Year 2025/26 for the districts contained herein.
On July 15, 2025, the City Council approved the levy for Fiscal Year 2025/26 for the districts contained herein.
STRATEGIC ALIGNMENT
This item aligns with the City Council goal of maintaining a high performing organization that values fiscal sustainability, transparency, accountability, and organizational efficiency. The item is consistent with the City’s Debt Policy (Policy No. 400-03), which establishes guidelines for the issuance and administration of debt and land-based financings, including Community Facilities Districts. The item also advances the City Departments’ Top Projects List related to the implementation of public safety and maintenance services through Community Facilities Districts (CFDs).
DISCUSSION
The Fiscal Year (FY) 2026/27 budget for each Bonded Community Facilities District (CFD) is designed to cover principal and interest payments, construction of future facilities, administrative costs, and/or service costs. These CFDs have existed since at least the year 2000, at the request of the corresponding developer, to finance certain public improvements through the levy of special taxes and the issuance of bonds. The County of Riverside requires the resolution as confirmation for the special tax amounts to be added to the assessment rolls. The special taxes were previously approved and established at the time of each CFD's formation, with the adoption of the ordinance associated with each CFD.
From 2000 to 2005, the City of Murrieta (City) formed and issued bonds for thirteen CFDs to fund improvements related to the development of residential subdivisions. Additionally, in FY 2016/17, the City issued bonds for a fourteenth district, CFD 2005-5 Improvement A, formed in 2006, that had been dormant for ten years. In 2012 and 2016, the City completed refunding all outstanding bonds for the thirteen districts that previously issued bonds to take advantage of lower interest rates than when the districts were formed. On October 2, 2018, on behalf of the CFDs, the City issued bonds for the fifteenth district, CFD 2005-5 Improvement Area B (Golden City) Special Tax Bonds Series 2018, in the amount of $11,505,000. These fifteen CFDs formed from 2000 to 2005 are referred to as the legacy CFDs.
In June 2022, on behalf of the CFDs, the City took advantage of historic low-interest rates to refinance five CFDs that were previously refinanced (2012 Reassessment District). This refinancing reduced the annual levy for property owners in the five (5) districts and changed the debt service schedule for one of the districts from an annually increasing schedule to a level debt service payment, while maintaining the original payoff dates for each district (2022 Local Agency Revenue Refunding).
In December 2023, the City evaluated the fiscal impact of significant development activity that had occurred in recent years on essential municipal services, particularly public safety and maintenance services. The analysis determined that existing revenue sources were insufficient to support the staffing levels necessary to maintain the City's desired level of service as development continued to increase service demands.
In response, the City established a Public Safety Community Facilities District (CFD) and a Maintenance Services CFD to provide an equitable funding mechanism based on the principle that "growth pays for growth." Since that time, the City has established CFD 2025-S (Safety Services) and CFD 2025-2 (Maintenance Services).
Only new residential developments are annexed into the Public Safety and Maintenance Services CFDs. As a result, these assessments do not apply to existing residential properties and have no financial impact on current homeowners.
A summary of the FY 2026/27 annual levy assessments for the “New CFDs”, including bonded facilities, public safety services, and maintenance services, is provided in the tables contained within this report. A description of services funded by the new CFDs is also listed below.
Regarding bonded CFDs, bonds are generally issued for a period of 30 years, and the annual debt service payments and costs to administer the districts are the responsibility of the owners of property within each CFD. While the City facilitates the formation and administration of the districts, ultimately, the City of Murrieta has no financial responsibility for the repayment of the debt. The actual tax amount levied per property will vary by district and usually depends on the size of the home, the number of homes in the district, and the total cost of facilities acquired with bond proceeds.
The City contracts with Willdan Financial Services to administer the legacy CFDs. The legacy CFDs were formed between 2000 and 2005. The City also contracts with Spicer Consulting Group to form and administer new CFDs. The consultants determine tax rates based on the Rate and Method of Apportionment adopted for each district at the time of formation. The tax rate applied to the property tax bill may not exceed the rate approved by the qualified electors in each district and should generate enough revenue to cover debt service payments and administrative costs.
The table below summarizes the annual levy amounts needed for each district to cover district obligations for FY 2026/27. The total levy for all seventeen districts for FY 2026/27 is $9,310,450.
CFD - Maintenance Services
Under the Mello-Roos Act, the City may establish CFDs to finance certain public services through the levy of a special tax. These services includes landscape maintenance and lighting of parks, parkways, streets, roads and open space, maintenance (including irrigation and replacement) of landscaping vegetation situated on or adjacent to parks, parkways, streets, roads and open space; maintenance and repair of irrigation facilities; maintenance of public signage; graffiti removal from and maintenance and repair of public structures situated on parks, parkways, streets, roads and open space; maintenance and repair of playground or recreation program equipment or facilities situated on any park; and maintenance and operation of water quality improvements which include storm drainage and flood protection facilities and public street sweeping.
CFD - Safety Services
Under the Mello-Roos Act, the City may also establish CFDs to finance certain public services through the levy of a special tax. Eligible services include police protection services, including criminal justice functions related to jails, detention facilities, and juvenile halls; fire protection and suppression services; and ambulance and paramedic services.
The table below shows the annual levy amounts needed for safety services and maintenance CFDs to cover district obligations for FY 2026/27. The total levy for the safety services CFDs is $64,896.00, and the total levy for the maintenance services CFDs is $65,088.84.
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).
CEQA AND REGULATORY OVERVIEW
This action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly.
FISCAL IMPACT
There is no fiscal impact to the City’s General Fund associated with this report. All revenue collected from Bonded CFD levies is considered fiduciary funds, i.e., not directly spendable by the City. The FY 2026/27 budget for each CFD is designed to cover principal and interest payments, construction of future facilities, administrative costs, and/or service costs.
Each district's maintenance and safety services are funded by special tax assessments on parcels within the district and may be used only for administrative costs and maintenance services provided therein. The proposed revenues and expenditures were included in the adopted FY 2026/27. Staff will include any budgetary adjustments in the quarterly budget update report.
ATTACHMENTS
ATT 1 - Resolution No. 26-4958
ATT 2 - Resolution No. 26-4959