REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Jason Simpson, City Manager
Prepared by:Shannon Buckley, Assistant City Manager
Date:May 27, 2025
Subject:Annexation No. 25 Into Community Facilities District No. 2015-2 (Maintenance Services) for TTM 33725 and 25475 (Tuscany Valley & Tuscany Crest)
Recommendation
Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, DECLARING ITS INTENTION TO ANNEX TERRITORY INTO COMMUNITY FACILITIES DISTRICT NO. 2015-2 (MAINTENANCE SERVICES) OF THE CITY OF LAKE ELSINORE, ADOPTING A MAP OF THE AREA TO BE PROPOSED (ANNEXATION NO. 25)
AND AUTHORIZING THE LEVY OF SPECIAL TAXES THEREIN
Background
On September 22, 2015, the City Council approved Resolution No. 2015-078 establishing Community Facilities District No. 2015-2 (Maintenance Services) of the City of Lake Elsinore (the "CFD No. 2015-2" or "District") to levy special taxes on parcels of taxable property to provide certain services which are necessary to meet increased demands placed upon the City.
KB Home Cal Management Services, LLC (the "Owner"), owns 83.95 gross acres of vacant residential lots proposed to include 335 detached single-family residential properties within the City (TTM 33725 and 35475) known as Tuscany Valley and Tuscany Crest. The project area encompassing these tracts, was previously annexed into Community Facilities District No. 2015- 2 (Maintenance Services) as Annexation No. 12. However, subsequent modifications to the development plan by the Owner, have resulted in revised public improvement obligations and corresponding adjustments in maintenance responsibilities. These changes necessitate a new annexation, designated as Annexation No. 25, to reflect the updated configuration of services to be provided through CFD No. 2015-2.
CFD 2015-2 (Maintenance Services) Annexation 25
The Owner has requested that the City assist them in annexing territory into CFD No. 2015-2 (Maintenance Services) to cover the costs of maintaining public improvements. The improvements proposed to be maintained include items such as streetlights, streets, drainage, parks, trails, and graffiti abatement.
Discussion
The landowner has advised the City that the area described in Exhibit "B" of the Resolution of Intention is to be annexed into CFD No. 2015-2 and that a Rate and Method of Apportionment of the special taxes to be levied as described in Exhibit "C." The area proposed within Annexation No. 25 will encompass 335 single-family residential lots.
The territory proposed to be annexed into CFD No. 2015-2 will be included in Tax Zone 28 for 204 residential properties and Tax Zone 29 for 131 residential properties. The proposed maximum tax rate for Tax Zone 28 is $821 per unit per year for Special Tax A and $221 per unit per year for Special Tax B. The Special Tax A for Tax Zone 29 is $604 per unit per year for Special Tax A and $157 per unit per year for Special Tax B. The maximum annual tax rates are proposed to escalate yearly at the greater of the Consumer Price Index (CPI) or 2%. See attachment 3 for a maintenance exhibit illustrating which services are being maintained by the CFD.
The Owner has agreed to the annexation into the CFD and submitted a "Consent and Waiver" form on file in the City Clerk's Office to initiate and conduct proceedings under the Mello-Roos Act of 1982, requesting the annexation of property to CFD No. 2015-2 (Maintenance Services) and consenting to the shortening of election time requirements, waiving analysis and arguments, and waiving all notice requirements relating to the conduct of the election.
The next step in annexing the property to CFD No. 2015-2 is to publish a notification of the proposed district along with the "Resolution of Intention" and Boundary Map of the proposed Annexation area. A public hearing on the matter will take place on July 8, 2025, and at that time, the Council will formally consider approval of Annexation No. 25.
Upon completion and formal approval of Annexation No. 25, the existing special tax liens associated with Tax Zones 14 and 15, established under Annexation No. 12, will be terminated, and a Notice of Cessation of Special Tax will be recorded accordingly.
Fiscal Impact
On March 1 of each year, every taxable property for which a building permit has been issued will be subject to special taxes in the ensuing Fiscal Year. If the anticipated costs of maintaining the facilities in any given fiscal year before the project buildout exceed the special tax revenues available from parcels for which building permits have been issued, then the special tax may also be applied to undeveloped property within the tax zones.
Once developed, the Special Tax A for Tax Zone 28 will generate $167,441, and Tax Zone 29 will generate $79,109 for maintenance services.
CFD 2015-2 (Maintenance Services) Annexation 25
Attachments
Attachment 1- Project Map
Attachment 2 - Resolution of Intention
Exhibit A - Resolution Exhibits A-G
Attachment 3 - Maintenance Exhibit
Administrative Services