CITY OF MENIFEE
SUBJECT: Proposed Bond Issuance for Community Facilities District No. 2022-2, McLaughlin Village
MEETING DATE: February 25, 2025
TO: Finance Committee
PREPARED BY: Lauri Lockwood, Financial Analyst
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION
1. Review the proposed bond issuance request for Community Facilities District (“CFD”) No. 2022-2, McLaughlin Village by Century Communities, to finance the costs of certain public improvements in connection with the development of 126 homes in a community located south of McLaughlin Road, between Sun City Boulevard and Interstate 215 within the City of Menifee (“City”); and
2. Recommend the Finance Department proceed with the preparation of the Official Statement and other legal documents related to the transaction for presentation to the City Council.
DISCUSSION
Century Communities (“Developer”) owns a residential tract approved for a total of 126 homes within the City. Last month, the City received a request from the Developer to move forward with the issuance of bonds for CFD No. 2022-2, McLaughlin Village (“Development”) , which is situated south of McLaughlin Road between Sun City Boulevard and Interstate 215, to fund eligible facilities.
As of late January, of the 110 homes for which building permits have been issued, 79 homes (72%) have sold and closed, and 7 homes (6%) have sold and are in escrow. Based on the Development’s status, the City’s tax consultant, Spicer Consulting Group, estimates that $5.1 million in bonds could be issued.
A preliminary bond analysis prepared by Spicer Consulting evaluated the viability of the bond issuance, estimating the valuation, delinquency history, and effective tax rate. The Development has a strong value-to-lien ratio of 13.75:1, greater than the City’s policy of 4:1 and an estimated average tax rate of 1.93%, which is less than the City’s 2% limit. The first year the CFD taxes
City of Menifee Staff Report
Proposed Bond Issuance for Community Facilities District No. 2022-2, McLaughlin Village February 25, 2025
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were levied was Fiscal Year 2024/2025 and the district has a 3.4% delinquency rate, which is below the 5% limit established in bond covenants.
Based on current interest rates, it is anticipated that the Series 1 bonds would finance approximately $3.9 million in eligible City of Menifee facilities and fees.
Table 1: Summary of CFD 2022-2, McLaughlin Village, Activity:
Description Date
Finance Committee CFD Formation Review April 27, 2022
Resolution of Intention August 3, 2022
Resolutions of CFD Formation (City Council
Approval)
September 21, 2022 /
October 5, 2022
FISCAL IMPACT
There is no fiscal impact associated with the recommended action.
ATTACHMENTS
1. CFD 2022-2 Proforma Summary
2. CFD 2022-2 Project Map
3. CFD 2022-2 Preliminary Bond Sale Analysis
4. CFD 2022-2 Boundary Map
5. CFD 2017-1 Annexation 27 Boundary Map
6. CFD 2022-2 Public Hearing Report
7. Bond Issue Request