CITY OF MENIFEE
SUBJECT: Proposed Bond Issuance for Community Facilities District No. 2022-3, Improvement Area 1, Legado
MEETING DATE: January 13, 2026
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. 2022-3, Improvement Area 1, Legado by Lennar Homes of California, LLC, to finance the costs of certain public improvements in connection with the development of 1,022 homes in a community located northwest of Antelope Road and Chambers Avenue and south of Rouse Road within the City of Menifee (the “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
Lennar Homes of California, LLC, (the “Developer”) is developing a residential tract located northwest of Antelope Road and Chambers Avenue and south of Rouse Road within the City. In December 2025, the Developer requested that the City initiate the process to issue bonds for CFD No. 2022-3, Improvement Area 1 (“IA1”) Legado, (the “Development”) to finance eligible public facilities. The overall development includes 1,022 homes, with 491 homes in IA1.
As of mid-December 2025, permits have been issued for 234 homes. Of these, 99 homes have closed escrow, and 23 homes are sold and currently in escrow. The proposed Series 1 bond issuance for CFD No. 2023-2 IA1 is based on 226 homes. According to the City’s tax consultant, Spicer Consulting Group, approximately $13 million in bonds could be issued.
Spicer Consulting conducted a preliminary bond analysis that reviewed delinquency history, valuation and effective tax rate to evaluate the feasibility of the issuance. Because CFD taxes were first levied in Fiscal Year 2025/2026, no delinquencies were reported at the time of the analysis. The Development demonstrates a strong value-to-lien ratio of 10.72:1 – well above the
City of Menifee Staff Report
Proposed Bond Issuance for Community Facilities District No. 2022-3, Improvement Area 1, Legado
January 13, 2026
3 1
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City’s policy threshold of 4:1 – and an estimated average tax rate ranging from 1.92% to 2.03%.
This indicates that some homes in IA1 exceed the 2% maximum tax rate allowed under City policy. To ensure compliance with that policy, an updated analysis will be completed prior to the bond issuance. For any homes exceeding the limit, the tax rate will be reduced to 2%, and the Developer will be responsible for paying the difference owed for the term of the bonds. This obligation would be handled as a prepayment and follow the rules established for prepayments in the Rate and Method of Apportionment (“RMA”) for CFD 2022-3, IA1.
Based on current interest rates, the Series 1 bond issuance is expected to finance approximately $10.1 million in eligible City facilities and fees. The Developer anticipates requesting a final bond issuance when the remaining 265 homes in Improvement Area 1 are nearing completion.
The intention is to engage Stifel, Nicolaus and Company, Inc., for this bond issuance.
Table 1 - Summary of CFD 2022-3, IA1, Legado, 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
Lennar later initiated change proceedings to amend the
RMA to adjust home sizes/anticipated home pricing
Finance Committee CFD Formation Review February 25, 2025 Resolution of Intention June 4, 2025
Resolutions of CFD Formation (City Council
Approval)
July 16, 2025 / August 6, 2025
FISCAL IMPACT
There is no fiscal impact associated with the recommended action.
ATTACHMENTS
1. CFD 2022-3 IA1 Proforma Summary
2. CFD 2022-3 IA1 Project Map
3. CFD 2022-3 IA1 Preliminary Bond Sale Analysis
4. CFD 2022-3 IA1 Amended Boundary Map
5. CFD 2017-1 Annex 12 Maintenance Exhibit
6. CFD 2022-3 IA1 CFD Report
7. CFD 2022-3 IA1 Bond Issuance Request