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:August 26, 2025
Subject:Change Proceedings for Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)
Recommendation
1. Conduct a public hearing;
2. 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),
APPROVING AN AMENDED AND RESTATED 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 AND CALLING ELECTIONS THEREIN;
3. Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST), CERTIFYING THE RESULTS OF THE AUGUST 26, 2025, SPECIAL ELECTIONS; and
4. Introduce by title only and waive further reading of AN ORDINANCE 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) AUTHORIZING THE LEVY OF SPECIAL TAXES WITHIN IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2 OF THE DISTRICT.
CFD 2021-1 (Tuscany Valley/Crest)
2 0
5 8
Background
The City of Lake Elsinore (the “City”) formed 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”) according to the Mello-Roos Community Facilities District Act of 1982 (the “Mello-Roos Act”). The District is located to the south of Highway 74 at 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 Intention (as defined below) (each a “Second Amended RMA”).
Discussion
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 Second Amended RMA 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 Second Amended RMA 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.
On July 22, 2025, the City Council adopted Resolution No. 2025-51 stating its intention to consider approval of each Second Amended RMA and called for a public hearing to be held on the approval of such matters. In connection with the public hearing, Spicer Consulting Group has prepared a CFD Public Hearing Report, which describes and analyzes the facilities to be financed by the CFD and the estimated costs of such facilities.
Following the close of the public hearing, the City Council will be asked to adopt a resolution approving each Second Amended RMA which approves the levy of the special taxes in each Improvement Area per the applicable Second Amended RMA and increases the authorized bonded indebtedness in Improvement Area No. 1 from $14,000,000 to $16,000,000 and in in Improvement Area No. 2 from $10,000,000 to $12,000,000. Such resolution calls for elections to submit to the qualified voters in Improvement Area No. 1 and Improvement Area No. 2 ballot measures on the approval of the special taxes in accordance with the applicable Second Amended RMA.
CFD 2021-1 (Tuscany Valley/Crest)
2 0
5 8
On file with the City Clerk are Certificates of the Registrar of Voters of Riverside County certifying that no registered voters are residing within the boundaries of the CFD. Accordingly, under the Mello-Roos Act, only property owners owning land in each Improvement Area are eligible to vote at the election for such Improvement Area, with each owner having one vote for each acre (or portion thereof) that they own within such Improvement Area. The Developer has executed a consent and waiver of certain election procedures to the election for each Improvement Area, including certain timing requirements with respect to the elections, all under the Mello-Roos Act.
Accordingly, if the City Council approves the resolution approving each Second Amended RMA, the City Clerk will conduct the elections. The City Clerk will announce the election results, and the City Council will be asked to adopt the Resolution Certifying the Election Results. Based on certification that 2/3rds of the votes cast are in favor of the propositions voted upon in each Improvement Area, the Resolution Certifying the Election Results directs the City Clerk to record an amended and restated notice of special tax lien on the property within each Improvement Area.
The City Council will then be asked to introduce the Ordinance authorizing the levy of the special tax within each Improvement Area per the applicable Second Amended RMA.
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 per 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.
The Funding Agreement provides the terms under which KB HOME Cal Management Services LLC may be reimbursed for these costs if and when bonds are issued for CFD.
Attachments
Attachment 1 - Resolution Approving each Second Amended RMA Attachment 2 - Resolution Certifying the Election Results Attachment 3 - Ordinance Authorizing the Levy of Special Tax Attachment 4 - Certificates of the Registrar of Voters
Attachment 5 - Landowner Waivers for Improvement Area 1 Attachment 6 - Landowner Waivers for Improvement Area 2 Attachment 7 - Public Hearing Report
Attachment 8 – Acquisition, Construction, and Funding Agreement Attachment 9 – Joint Community Facilities Agreement (EVMWD) Attachment 10- Affidavit of Posting
Administrative Services