CITY OF MENIFEE
SUBJECT: Formation of Community Facilities District 2025-6 (Coastline) MEETING DATE: September 9, 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 Community Facilities District 2025-6 to finance certain costs of public improvements for the development of 45 single-family homes located at the northwest corner of Menifee Road and Coastline Avenue, and recommend submittal to the City Council for consideration.
DISCUSSION
Global Investment & Development, LLC (the “Developer”) is requesting the formation of a new Community Facilities District (“CFD”) to finance public improvements and infrastructure necessary to support the development of 45 single-family homes at the northwest corner of Menifee Road and Coastline Avenue.
The average home size within the project would be roughly 2,533 square feet, with an average estimated home price of $623,333.
The proposed CFD would fund a portion of the costs associated with City facilities, Eastern Municipal Water District (“EMWD”) infrastructure, and Romoland School District facilities. The cost of these public improvements would be financed through the levy of a special tax and the issuance of approximately $2.95 million in bonds.
Special tax rates would vary by home size, ranging from $4,298 for homes under 2,400 square feet to $4,851 for homes over 2,700 square feet. The total annual property tax burden, including ad valorem and fixed charges, is estimated at 2% of the home price.
City of Menifee Staff Report
Formation of Community Facilities District 2025-6 (Coastline) September 9, 2025
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There are two unique circumstances related to the Coastline development: the size of the development and the terms associated with one of the Joint Community Facilities Agreements.
If approved, this CFD would represent the smallest district in the City of Menifee to issue bonds. Previously, the smallest CFDs to issue bonds were Meadow Run, at 65 homes, and Del Oro, at 68 homes. A smaller number of homes creates a risk associated with ownership concentration, as each homeowner is responsible for a larger share of the special taxes used to make debt service payments. There are several tactics the City could consider to mitigate this risk:
Establishing an additional reserve fund requirement beyond the standard coverage;
Delaying bond issuance until the project reaches a defined threshold, such as 90% of homes closed; or
Requiring developer guarantees or credit enhancement during the early years.
Additionally, EMWD has recently revised its CFD policy and now requires that any escalator applied to special taxes does not apply to EMWD’s share of the bond proceeds.
This policy change would be reflected in the Joint Community Facilities Agreement executed with the water district for this CFD. The change would lead to lower special tax rates for homeowners and result in diminished bond proceeds available to reimburse the developer for public improvements.
ATTACHMENTS
1. CFD 2025-6 Proforma Summary
2. CFD 2025-6 Project Map
3. CFD 2025-6 Proforma
4. CFD 2025-6 Boundary Map
5. CFD 2017-1 Annexation 20 Maintenance Exhibit
6. CFD 2025-6 Facilities CFD Application