CITY OF MENIFEE
SUBJECT: Proposed Parity Bond Issuance for Community Facilities District No. 2023-2 Improvement Area 1
MEETING DATE: March 16, 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 parity bond issuance request for Community Facilities District (“CFD”) No. 2023-2 Improvement Area 1, Cimarron Ridge, by Pulte Home Co., LLC, to finance the costs of certain public improvements in connection with the development of 424 homes in a community located south of Rouse Road and west of Byers 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
Pulte Home Co., LLC, (the “Developer”) owns a residential tract approved for 756 homes within the City. The development is divided into two Improvement Areas, known as Improvement Area 1 (“IA1”), with 424 homes, and Improvement Area 2 (“IA2”), with 332 homes.
This development is unique in that Invitation Homes, a real estate investment trust (a “REIT”), owns 127 of the 424 homes in IA1. The REIT intends to maintain ownership and rent out the homes. Spicer Consulting Group, the city’s tax consultant, conducted an analysis and determined those homes are responsible for less than 20% of the annual tax levy.
In May 2025, the first series of bonds was issued in connection with the initial 288 homes in IA1.
Earlier this month, the Developer requested that the City proceed with issuing parity bonds for the remaining homes in IA1 of Cimarron Ridge (the “Development”) to finance eligible public facilities.
City of Menifee Staff Report
Proposed Parity Bond Issuance for CFD 2023-2 Improvement Area 1 March 16, 2026
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As of early February, building permits have been issued for 412 homes. Of these, 407 homes have closed escrow, and two homes were sold and in escrow. The proposed parity bond issuance for CFD No. 2024-1 is based on all 424 homes in IA1. According to Spicer Consulting Group, approximately $2.2 million in bonds could be issued.
A preliminary bond analysis prepared by Spicer Consulting reviewed valuation, delinquency history and effective tax rate to assess the viability of the issuance. The Development demonstrates a strong value-to-lien ratio of 18.16:1 -- which is substantially higher than the City’s policy threshold of 4:1 -- and an estimated average tax rate of 1.87%, which is less than the City’s 2% limit. As of March 11, 2026, there was a delinquency rate of 0.46% for the development, which is below the 5% limit established in bond covenants.
Based on current interest rates, the parity bond issuance is expected to finance approximately $1.7 million in eligible City facilities and fees. This will be the final bond issuance for IA1. The intention is to engage Ramirez & Co., who was the underwriter for the first issuance, for this parity issuance.
Table 1: Summary of CFD 2023-2 IA1, Cimarron Ridge, Activity:
Description Date
Finance Committee CFD Formation Review December 13, 2022 Resolution of Intention March 15, 2023
Resolutions of CFD Formation (City Council Approval) April 19, 2023/May 3, 2023 Change Proceeding submitted to Finance Committee
splitting CFD into Improvement Areas
September 26, 2023
Resolution of Intention July 17, 2024
Resolutions of CFD Formation (City Council Approval) August 21, 2024/ September 4, 2024
Finance Committee Issuance Consideration November 12, 2024 Issuance Resolution (City Council Approval) April 16, 2025 Bond Issuance Series 1 May 13, 2025
Finance Committee Parity Issuance Review Today
FISCAL IMPACT
There is no fiscal impact associated with the recommended action.
City of Menifee Staff Report
Proposed Parity Bond Issuance for CFD 2023-2 Improvement Area 1 March 16, 2026
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ATTACHMENTS
1. CFD 2023-2 IA1 Proforma Summary
2. CFD 2023-2 IA1 Project Map
3. CFD 2023-2 IA1 Preliminary Bond Sale Analysis
4. CFD 2023-2 Boundary Map
5. CFD 2023-2 Public Hearing Report
6. CFD 2023-2 IA1 Series 2 Bond Issuance Request