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:July 22, 2025
Subject:Resolution of Consideration of Change Proceedings for Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)
Recommendation
Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST), DECLARING ITS
INTENTION TO CONSIDER AMENDMENTS TO THE RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR EACH OF IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2 OF THE DISTRICT AND INCREASING THE AUTHORIZED BONDED INDEBTEDNESS FOR EACH OF IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2 OF THE DISTRICT.
Background
The City of Lake Elsinore (the “City”) formed the Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”) and designated two improvement areas therein (each an “Improvement Area” and together the “Improvement Areas”) pursuant to the Mello-Roos Community Facilities District Act of 1982. The District is located to the south of Highway 74, at the intersection of Greenwald Avenue and Little Valley Road, in the northeastern part of the City. KB HOME Cal Management Services LLC, a Delaware limited liability company, is the landowner within the District (the “Developer”). At build-out, development within Improvement Area No. 1 and Improvement Area No. 2 is expected to include 204 and 131 homes, respectively, for a total of 335 homes within the District.
Homebuilding within the District has not yet commenced. Based on updated expected product types and estimated home pricing to be developed in the District, the Developer has requested that the District undertake proceedings to amend the Rate and Method of Apportionment of Special Taxes for each Improvement Area with each Second Amended and Restated Rate and Method of Apportionment attached to the Resolution of Consideration presented at this meeting (each a “Second Amended RMA”).
The current annual Special Tax rates for a single-family home within Improvement Area No. 1 range from $2,936 to $3,441. If the current rate and method of apportionment of special tax for Improvement Area No. 1 is approved, the annual Special Tax rates for a single-family home within Improvement Area No. 1 will range from $3,457 to $4,719.
The current annual Special Tax rates for a single-family home within Improvement Area No. 2 range from $3,036 to $3,511. If the current rate and method of apportionment of special tax for Improvement Area No. 2 is approved, the annual Special Tax rates for a single-family home within Improvement Area No. 2 will range from $3,619 to $4,882.
The current authorized indebtedness for Improvement Area No. 1 is $14,000,000. If the amended authorized indebtedness for Improvement Area No. 1 is approved, the authorized indebtedness for Improvement Area No. 1 will be $16,000,000.
The current authorized indebtedness for Improvement Area No. 2 is $10,000,000. If the amended authorized indebtedness for Improvement Area No. 2 is approved, the authorized indebtedness for Improvement Area No. 2 will be $12,000,000.
On June 10, 2025, the City Council adopted Resolution No. 2025-30, which declared the intention of the City Council to amend the rate and method of apportionment of special taxes and increase the authorized indebtedness for each of Improvement Area No. 1 and Improvement Area No. 2 of the District. The resolution presented at this meeting rescinds the foregoing resolution adopted on June 10, 2025.
Discussion
Approval of the attached resolution is the first step in the process to effectuate the changes discussed above. The attached resolution declares the District’s intention to consider the proposed changes and calls a public hearing on the proposed changes.
Fiscal Impact
The Developer has made a deposit to pay for the costs of the change proceedings. The Developer will be reimbursed for such costs if and when bonds are issued for the District.
The District will annually levy special taxes on all of the taxable property within each Improvement Area of the District in accordance with the applicable Second Amended RMA in order to pay for the costs of facilities, debt service on bonds for the respective Improvement Area and administration of the District. Any bonds issued by the District for each Improvement Area are not obligations of the City and will be secured solely by the Special Taxes levied in the applicable Improvement Area.
Attachments
Attachment 1 - Resolution of Consideration
Attachment 2 - Landowner Petition
Administrative Services