CITY OF MENIFEE
SUBJECT: Community Facilities District Bond Maturity and First Call Dates
MEETING DATE: July 8, 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. Receive and file a report on the maturity dates and first call dates for the City’s Community Facilities District bonds.
DISCUSSION
In 1982, the Mello-Roos Community Facilities Act of 1982 (Government Code §53311-53368.3) was created to provide an alternate method of financing needed for improvements and services.
The Act allows any county, city, special district, school district or joint powers authority to establish a Community Facilities District (CFD) which allows for financing of public improvements and services. CFDs are normally formed in undeveloped areas and are used to build necessary infrastructure improvements and/or provide essential services for incoming development.
The City of Menifee formed its first facilities CFD (Bonded CFD) in late 2019 and issued its first bonds more than two years later in January 2022 for CFD 2019-1, Meadow Run, and CFD 2020- 1, McCall Mesa. To date, the City has formed a total of 16 facilities CFDs and authorized 12 bond issuances.
Prior to a bond issuance, numerous characteristics of the bond are determined, including the bond term, the debt service schedule and any applicable call provisions. Each of the City’s CFD bonds has a 30-year term, meaning taxes will be levied for roughly 30 years after the bond issuance to generate revenue that would be used to pay debt service on the bonds. The City’s existing CFD bonds will mature between September 2051 and September 2055 as shown in Table 1. Assuming there are no delinquencies, the bonds would be paid off at that time. The City does not intend to issue any additional bonds that would extend the stated maturity dates shown.
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TABLE 1: BOND MATURITY DATES
CFD Bond Maturity Bond Amount
CFD 2019-1 Meadow Run 9/1/2051 $ 2,750,000
CFD 2020-1 McCall Mesa Series 2022A 9/1/2051 $ 11,330,000 CFD 2021-1 Banner Park Series 2022A 9/1/2052 $ 5,375,000 CFD 2020-2 Del Oro 9/1/2052 $ 2,640,000
CFD 2020-1 McCall Mesa Series 2023A 9/1/2053 $ 3,580,000 CFD 2021-1 Banner Park Series 2023A 9/1/2053 $ 6,435,000 CFD 2021-2 Sumac Ridge 9/1/2053 $ 10,050,000
CFD 2022-1 Quartz Ranch Series 2023A 9/1/2053 $ 11,525,000 CFD 2022-1 Quartz Ranch Series 2024A 9/1/2054 $ 9,465,000 CFD 2023-1 Rockport Ranch 9/1/2055 $ 17,275,000
CFD 2023-2 Cimarron Ridge IA1 9/1/2055 $ 4,625,000 Although the bonds do not mature for 30 years, there are still opportunities to reduce residents’ property tax burden by taking advantage of the bonds’ call provisions, which are unique to each issuance and typically begin five or more years after debt service begins. A call premium typically applies for several years after the first call date.
The Finance Department monitors each bond’s call provisions as well as the current interest rate environment to determine when it could be beneficial to taxpayers to issue refunding bonds, which would allow the City to refinance the bonds in order to take advantage of lower interest rates. The first opportunity for refunding existing bonds is September 1, 2028, as shown in Table 2. There are more than $30 million in bonds that would be eligible to be called at 103% of the face value of the bonds on that date. As we approach the call provision date, the Finance Department in collaboration with Urban Futures Inc., the City’s municipal advisor, will evaluate whether the potential savings from refunding would outweigh the associated costs.
Table 2: EARLIEST CALL DATES
CFD Earliest
Call Date
Coupon
Rate
Amount Callable at
103%
CFD 2019-1 Meadow Run 9/1/2028 3.00-4.00% $ 2,565,000 CFD 2020-1 McCall Mesa Series 2022A 9/1/2028 3.00-4.00% $ 10,570,000 CFD 2020-1 McCall Mesa Series 2023A 9/1/2028 5.00% $ 3,550,000 CFD 2020-2 Del Oro 9/1/2028 4.75-5.125% $ 2,555,000 CFD 2021-1 Banner Park Series 2022A 9/1/2028 5.00-5.50% $ 5,220,000 CFD 2021-1 Banner Park Series 2023A 9/1/2028 5.00% $ 6,350,000 CFD 2021-2 Sumac Ridge 9/1/2029 5.00% $ 9,785,000 CFD 2022-1 Quartz Ranch Series 2023A 9/1/2030 5.00% $ 11,095,000 CFD 2022-1 Quartz Ranch Series 2024A 9/1/2030 5.00% $ 9,280,000 CFD 2023-1 Rockport Ranch 9/1/2031 5.00% $ 16,795,000 CFD 2023-2 Cimarron Ridge IA1 9/1/2032 5.00% $ 4,455,000 2 7
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FISCAL IMPACT
There is no fiscal impact associated with the recommended action.
ATTACHMENTS
None.