CITY OF MENIFEE
SUBJECT: Annual Update on Community Facilities District Bond Premiums
MEETING DATE: October 14, 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 annual report with updated details on Community Facility District (CFD) bond premiums.
DISCUSSION
In 1982, the Mello-Roos Community Facilities Act of 1982 (Government Code §53311- 53368.3) was enacted to provide an alternative method for financing needed public improvements and services. The Act allows any county, city, special district, school district or joint powers authority to establish CFDs to fund infrastructure and services. CFDs are typically formed in undeveloped areas to support the construction of essential infrastructure and/or the provision of services for new development.
Roughly six years ago, the City Council decided to allow developers to issue bonds to finance public facilities within CFDs. At that time, the City Council also amended the “City’s Special Assessment and Community Facilities District Goals and Policy,” and clarified, among other things, which costs could be funded with bond proceeds.
As part of that policy, the City established a provision for collecting an additional fee – referred to as the City Premium – when developers use bond proceeds to pay City fees. According to the policy, “when it is determined by the City that fees are to be financed, the City may collect a premium in connection with the total fees to be financed. Such premium shall not exceed twenty percent (20%) of the total fees to be financed. The City may use the premium to finance public facilities and improvements directly benefiting and identified by the City as the most necessary to serve the specific needs of the portion of the City in which the CFD will be located.”
City of Menifee Staff Report
Annual Update on Community Facility District Related Bond Premiums October 14, 2025
Shortly after the closing date of a bond issuance, City staff submits a disbursement request to claim the amount of the City Premium and that amount is set aside for capital projects. During the development and review of the City’s five-year Capital Improvement Program (CIP), staff regularly evaluates opportunities to allocate these funds to high-priority projects.
The City closed on its first CFD bonds for CFD 2019- 1 (Meadow Run) and CFD 2020-1 (McCall Mesa) on January 26, 2022. Since then, seven additional CFDs have issued bonds to finance public facilities. To date, the City has collected $3,700,895 in bond premiums, as summarized in Table 1, and has allocated nearly $2.8 million toward projects. The remainder is expected to be formally allocated during the mid-year budget presentation.
TABLE 1 - City of Menifee CFD Bond Premiums Received
City of Menifee Staff Report
Annual Update on Community Facility District Related Bond Premiums October 14, 2025
Looking forward, seven other CFDs have been formed and are authorized for 13 bond issuances (some CFDs include multiple improvement areas, resulting in multiple bond issuances and premiums). Three more CFDs are expected to be formed after public hearings currently scheduled for a City Council meeting early next year. The exact amount of City Premiums associated with these 16 future issuances will be determined closer to the respective bond issuances.
This report serves as the Finance Committee’s annual update on bond premiums collected after CFD bond issuances.
FISCAL IMPACT
This is a receive and file staff report. There is no fiscal impact associated with the recommended actions.
ATTACHMENTS
1. Project Location Maps