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:June 24, 2025
Subject:Intention to Establish Community Facilities District No. 2025-1 of the City of Lake Elsinore (Canyon Hills Heights)
Recommendation
1. Adopt A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, TO ESTABLISH COMMUNITY FACILITIES DISTRICT NO. 2025- 1 OF THE CITY OF LAKE ELSINORE (CANYON HILLS HEIGHTS), TO AUTHORIZE THE
LEVY OF A SPECIAL TAX TO PAY THE COSTS OF ACQUIRING OR CONSTRUCTING
CERTAIN FACILITIES AND TO PAY DEBT SERVICE ON BONDED INDEBTEDNESS
2. Adopt A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, TO INCUR BONDED INDEBTEDNESS IN AN AMOUNT NOT TO EXCEED $14,000,000 WITHIN PROPOSED COMMUNITY FACILITIES DISTRICT NO. 2025-1 OF THE CITY OF LAKE ELSINORE (CANYON HILLS HEIGHTS) Background
The Property to be included within the proposed Community Facilities District No. 2025-1 of the City of Lake Elsinore (Canyon Hills Heights) (“CFD No. 2025-1” or the “District”) is located on the northwest corner of Canyon Road and Craig Avenue (the “Property”) (see the attached project map). Collectively, the Property comprises approximately 81 gross acres, with plans to be entitled to 133 single-family residential lots. The Property is currently owned by Tri Pointe Homes Ie-Sd, Inc., a California Corporation (the “Property Owner”).
The Property Owner has requested that the City form CFD No. 2025-1 to encompass the Property under the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), to finance the costs of specific public improvements through the levy of a special tax and the issuance of bonds.
The maximum amount of bonded indebtedness proposed is $14 million.
Establishment of CFD 2025-1 (Canyon Hills Heights)
Discussion
On May 27, 2025, the City Council adopted resolutions 25-028 and 25-029, which declared the intention to form CFD No. 2025-1 and to incur bonded indebtedness for CFD No. 2025-1. The Property Owner requested to restart the formation of CFD 2025-1 due to a revised maintenance services tax, which impacted the special tax rates in CFD 2025-1. The resolutions presented at this meeting rescind the foregoing resolutions adopted on May 27, 2025, and call for a public hearing on the formation of CFD No. 2025-1 for July 8, 2025.
The Property Owner has requested that the boundaries of CFD No. 2025-1 include the area described in Attachment A of the Resolution of Intention to Establish CFD No. 2025-1 presented at this meeting (the “Resolution of Intention”) and that special taxes be levied within the boundaries of the District per the Rate and Method of Apportionment (the “RMA”) described in Attachment C to the Resolution of Intention. The Resolution of Intention is the first step in the process of forming CFD No. 2025-1. The attached Resolutions declare the City’s intention to establish CFD No. 2025-1, its intention to incur bonded indebtedness by CFD No. 2025-1, and call for a public hearing. A public hearing on this matter is scheduled for August 12, 2025. At that time, the Council will formally consider the establishment of CFD No. 2025-1 and hold elections on the approval of the special taxes and the need to incur bonded indebtedness within CFD No. 2025-1.
Fiscal Impact
The Property Owner has made a deposit to pay for the costs of the formation proceedings, which may be reimbursed to the Property Owner from proceeds of future bond issuance (if any) in accordance with a reimbursement agreement with the Property Owner. If established and subject to necessary Council and voter approvals, CFD No. 2025-1 will annually levy special taxes on all taxable Property within the District, as per the RMA (attached to the Resolution of Intention). Such special taxes will be used to cover the costs of facilities, debt service on bonds, and the administration of CFD No. 2025-1. Any bonds issued by CFD No. 2025-1 are not obligations of the City and will be secured solely by the Special Taxes levied within CFD No. 2025-1.
The RMA provides that the annual special tax rates will range from $4,437 for homes with sizes less than 1,900 square feet to $5,463 for homes with sizes greater than 2,300 square feet, which rates escalate at a rate of 2% per year.
Attachments
Attachment 1 - Resolution of Intention to Establish CFD 2025-1 Attachment 2 - Resolution of Intention to Incur Debt
Attachment 3 - Landowner Petition
Attachment 4 - Project Map
Attachment 5 - Reimbursement Agreement
Administrative Services