28202 CABOT RD | SUITE 620 | LAGUNA NIGUEL, CA 92677
PHONE: (949) 542-7070 | FAX: (949) 542-7076
www.zimmermangroup.com
October 8, 2024
Margarita Cornejo
Deputy Finance Director
City of Menifee
29844 Haun Road
Menifee, CA 92586
T. (951) 723-3716
E. [email protected]
RE: Series 1 Bond Issuance Request, CFD No. 2023-2 (Cimarron Ridge) Dear Ms. Cornejo,
On behalf of Pulte Homes (“Developer”), we are requesting the City of Menifee (“City”) move forward with the issuance of a series of bonds (“Bonds”) for Improvement Area No. 1 of CFD No. 2023-2 (Cimarron Ridge) (“CFD”). Improvement Area No. 1 includes 424 lots within Tract Map Nos. 36658-1, -2, -3 and a portion of -4 (the “IA No. 1”). We would like to issue a series of bonds secured by 288 of the 424 lots within IA No. 1 (“Series 1 Bonds”). A summary of the development status in IA No. 1 for the proposed Series 1 Bonds is included in the table below.
CFD No. 2023-2 (Cimarron Ridge) – IA No. 1 (as of 10/7/24) Development Status Units % of Total Series 1
Units
Closed Homes 190 44.8% 190
Completed Homes (7 Models) 7 1.7% 7
Under Construction (51 Sold) 93 21.9% 91
Finished Lots (58 Permitted) 134 31.6% 0
Series 1 Bonds - Total Units 424 100% 288
The attached Exhibit A shows the estimated bond sizing and debt service schedule for the Series 1 Bonds, which results in approximately $4.3M in construction proceeds. The construction proceeds would fund City impact fees and facilities and EMWD facilities. The purpose of issuing two series of bond is to limit the special taxes to be levied on property owned by the Developer. Given that interest rates have remained low and the City’s recent success in selling bonds, w e believe it's on optimal time to move forward with the Series 1 Bonds.
We appreciate your consideration of this request and look forward to working with the City team to issue bonds for the Project. If you have any questions, please contact me at (949) 542-7072.
Sincerely,
John Zimmerman
Principal
CC: Shane Spicer, Spicer Consulting Group
Patric Lynam, Pulte Homes – Director of Planning
Darren Warren, Pulte Homes – Vice President of Land
EXHIBIT A
Pulte Homes - Cimarron Ridge (Tract No. 36658)
City of Menifee CFD No. 2023-2 (Cimarron Ridge) - Improvement Area No. 1 Series 1 - Estimated Debt Service & Bond Sizing Schedule October 8, 2024
ISSUANCE ASSUMPTIONS ESTIMATED SOURCES AND USES
Closing Date 3/1/2025 Sources
Special Tax Revenue Escalation 2.000% Par Bond Amount 5,080,000$ Annual Administration Expense 30,000$
Administration Expense Escalation 2.000% Uses
Debt Service Coverage Ratio 110% Reserve Fund 440,657$
Underwriter Discount Estimate 2.000% Capitalized Interest - Issuance Costs Estimate 225,000$ Underwriter Discount 101,600 Months of Capitalized Interest - Costs Of Issuance 225,000 Gross Special Tax Revenues 304,866$ Construction Fund 4,312,743 Total Uses 5,080,000$
BOND DEBT SERVICE
Period Gross Priority Capitalized Net Debt Debt Service Ending Revenues Admin Principal Yield Interest Interest Service Coverage 9/1/2025 304,866$ 30,000$ -$ 1.688% 117,151$ -$ 117,151$ N/A 9/1/2026 310,963 30,600 20,000 1.688% 234,301 - 254,301 110.25% 9/1/2027 317,182 31,212 25,000 1.938% 233,964 - 258,964 110.43% 9/1/2028 323,526 31,836 30,000 2.288% 233,479 - 263,479 110.71% 9/1/2029 329,997 32,473 35,000 2.688% 232,793 - 267,793 111.10% 9/1/2030 336,596 33,122 40,000 2.988% 231,852 - 271,852 111.63% 9/1/2031 343,328 33,785 50,000 3.188% 230,657 - 280,657 110.29% 9/1/2032 350,195 34,461 55,000 3.438% 229,063 - 284,063 111.15% 9/1/2033 357,199 35,150 65,000 3.688% 227,172 - 292,172 110.23% 9/1/2034 364,343 35,853 70,000 3.888% 224,775 - 294,775 111.44% 9/1/2035 371,630 36,570 80,000 4.038% 222,053 - 302,053 110.93% 9/1/2036 379,062 37,301 90,000 4.138% 218,823 - 308,823 110.67% 9/1/2037 386,643 38,047 100,000 4.188% 215,099 - 315,099 110.63% 9/1/2038 394,376 38,808 110,000 4.268% 210,911 - 320,911 110.80% 9/1/2039 402,264 39,584 120,000 4.338% 206,216 - 326,216 111.18% 9/1/2040 410,309 40,376 135,000 4.408% 201,010 - 336,010 110.10% 9/1/2041 418,515 41,184 145,000 4.468% 195,059 - 340,059 110.96% 9/1/2042 426,886 42,007 160,000 4.538% 188,581 - 348,581 110.41% 9/1/2043 435,423 42,847 175,000 4.588% 181,320 - 356,320 110.18% 9/1/2044 444,132 43,704 190,000 4.638% 173,291 - 363,291 110.22% 9/1/2045 453,014 44,578 205,000 4.688% 164,479 - 369,479 110.54% 9/1/2046 462,075 45,470 220,000 4.738% 154,868 - 374,868 111.13% 9/1/2047 471,316 46,379 240,000 4.788% 144,445 - 384,445 110.53% 9/1/2048 480,743 47,307 260,000 4.888% 132,954 - 392,954 110.30% 9/1/2049 490,357 48,253 280,000 4.888% 120,245 - 400,245 110.46% 9/1/2050 500,165 49,218 300,000 4.888% 106,558 - 406,558 110.92% 9/1/2051 510,168 50,203 325,000 4.888% 91,894 - 416,894 110.33% 9/1/2052 520,371 51,207 350,000 4.888% 76,008 - 426,008 110.13% 9/1/2053 530,779 52,231 375,000 4.888% 58,900 - 433,900 110.29% 9/1/2054 541,394 53,275 400,000 4.888% 40,570 - 440,570 110.79% 9/1/2055 552,222 54,341 430,000 4.888% 21,018 - 451,018 110.39% Total 12,920,040 1,271,383 5,080,000 4.75% 5,319,510 - 10,399,510 110.10%