CITY OF MENIFEE
SUBJECT: Public Safety Community Facilities District
MEETING DATE: June 17, 2026
TO: Mayor and City Council
PREPARED BY: Margarita Cornejo, Director of Strategic Programs and Initiatives
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION
1. Adopt a resolution authorizing staff to proceed with the formation of a Public Safety Community Facilities District (CFD); and
2. Adopt the amended City Council Policy CC-20 Special Assessment and Community Facilities District Goals and Policies.
DISCUSSION
From 2015 to 2025, the City of Menifee has seen its population grow from 85,385 to 115,315, including the additional approval of 9,938 residential units, with an approximate 6,410 developed, during the last decade. The quality of life the community offers, integral of which is providing responsive public safety services, is a driving reason why more families continuously elect to make Menifee their hometown; and maintaining the same level of public safety, without adversely impacting other city services, for current and future residents is an important focus for the City.
As the City welcomes new residents, it will continue to prioritize supporting both a thriving economy and safe and vibrant community as strategic priorities by incorporating and fostering smart growth, from all aspects including, physical and fiscally sustainable perspectives.
As an option to support these areas of strategic priority, the City Council discussed and provided feedback on the City moving forward with establishing a Public Safety CFD at a special workshop held on January 21, 2026. The purpose of the CFD is to help fund essential City services for residential development, and more specifically help ensure new residential development provides the necessary long-term revenue to support increased public safety needs.
At the workshop, the City Council received a presentation on the legal requirements for establishing a CFD under the Mello-Roos Community Facilities Act of 1982 (Government Code
City of Menifee Staff Report
Public Safety Community Facilities District (CFD)
June 17, 2026
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§53311 et seq.), the Fiscal Impact Analysis completed to determine recommended annual rates for single family residential, and multi-family residential projects, annual adjustments to the rates, and information on implementation steps that would be required to move forward. The City Council expressed support for moving forward with the formation of a Public Safety CFD to provide the funding needed for increasing costs of public safety resulting from new developments within the City.
Following the January 2026 workshop, a discussion item was presented at the May 20, 2026 regular council meeting, delineating the role of a Public Safety CFD on ensuring future residential development would fiscally support the additional impact to public safety services, and requesting formal approval from City Council to move forward with next steps to formation of such CFD.
If implemented, the Public Safety CFD will not increase the effective tax rate above 2%. Instead, it will be a component of the various special assessments levied against new residential properties (single and multi-family unit). By holding the tax rate constant, this in turn will impact the funding amount of facilities that could be financed by a developer through a Facilities CFD. Facilities CFD, which generally are levied at a larger amount than the Public Safety CFD, would eventually fall off the tax bill, estimated at 30 years or so, while the Public Safety CFD will be an on-going special tax used to support on-going public safety needs.
Building Industry Association (BIA) Feedback
At the May 20 th meeting, the City Council received a request from the Building Industry Association (BIA) of Southern California, Riverside County Chapter, to have more time to review the City’s proposed Public Safety CFD and the underlying FIA used to develop the proposed CFD rates. The City Council provided direction to continue the item to the June 17, 2026 meeting, to allow the BIA time to review and provide input. The City received a more detailed letter from the BIA on June 1, 2026, and met virtually with the group on June 8, 2026.
The feedback received from the BIA was generally focused on:
•Follow-up questions/feedback on assumptions used in the FIA completed, ranging from Assessed Valuations used, revenue and/or expenditures assumptions, and; •Other item requests, such as bond premiums, administrative expenses, and pay-go payment options associated with Facilities CFDs, as options where the City would by policy elect to waive, reduce, and/or make available as ways to mitigate the impact to the developer of participation in the Public Safety CFD.
The objective of the FIA was to evaluate whether future residential growth generates sufficient recurring revenue to support future public safety service needs, and to assess the long-term sustainability of future growth using reasonable and consistent revenue and expenditure assumptions. It was prepared utilizing a similar approach and assumptions to those used by other cities in the establishment of Public Safety CFDs. In reviewing the feedback received by the BIA and the FIA analysis, the City’s assessment is that the FIA was prepared on a fair and reasonable based on available data, and while alternative assumptions can certainly be modeled, those used provide a reasonable, internally consistent, and conservative basis for evaluating future public safety funding needs.
City of Menifee Staff Report
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June 17, 2026
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Other discussion items brought forth by the BIA do not directly impact the FIA and the proposed Public Safety CFD rates, but focus on other available options, through Facilities CFDs, where the City could consider policy updates that would lessen the fiscal impact created by the Public Safety CFD assuming a share of the property tax special assessments distribution. •CFD Premium: In Facilities CFDs where a development elects to finance eligible City fees (DIF etc), the city applies a 20% premium for the portion of fees financed. The purpose and use of the one-time premium funds is to support infrastructure needs. The request from the BIA was to consider the waiving/reduction of the CFD premium as a policy update.
•Administrative Expenses: Another policy request received was for the City to consider reducing the designated annual administrative expenses from $30k to $15k, understanding that the City could recover additional administrative expenses beyond the $15k, through available surplus funds at the end of each year. This would create additional administrative processes and presumes the availability of surplus funds each year. •Pay-Go Funding Option: An additional policy request was for the City to consider allowing for the levy of the full Assigned Tax Rates (as disclosed to homebuyers) after bonds are issued. Historically, once bonds have been issued, the City is able to apply reduced CFD rates, instead of the full Assigned Tax Rates. With this approach, and the application of the full Assigned Tax Rates, additional funding would become available each year to cover eligible expenses.
Both the BIA and the City are committed to the importance of public safety to the Menifee community, as well as collaborating to continue to see Menifee develop into a safe, thriving, inclusive and premier place to be. At the virtual workshop with the BIA, staff delineated its’ approach and evaluation of the FIA and opened the meeting up for discussion of the items received. Additionally, a request for a written response memorializing the City’s position was requested. Staff recognize the other items, such as the CFD premiums, administrative expenses, and pay-go funding options, provide an opportunity to lessen the impact to the development community. However, understanding that there would also be an impact to other City priorities such as infrastructure or lessening the tax burden on residents, wherever possible, it is recommended the approach on using these be on a case-by-case basis, and not as broad policy updates.
Proposed Resolution and Updated CFD Policy Updates
The resolution presented for City Council consideration would formalize authorization for staff to proceed with the necessary steps to establish a Public Safety CFD. A summary of the formation process is outlined on the following page.
City of Menifee Staff Report
Public Safety Community Facilities District (CFD)
June 17, 2026
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TABLE 1: FORMATION PROCESS
Step Description Council Action
Cornerstone residential
project identified
An initial residential project
identified as eligible for
participation into the Public
Safety CFD will go through
the formation process.
Public Hearing,
Ordinance/Resolution(s)
adopted establishing/forming
CFD with initial boundary.
Future residential project
annexations
Future residential projects will
be annexed into the Public
Safety CFD as they are
either:- Conditioned by
Conditions of Approval (non-
entitled projects)-
Agreed/negotiated with
respective development
(entitled projects)
Individual Public Hearing(s)
annexations similar to
Maintenance Services CFD.
Summary of Proposed Public Safety CFD Rates & Annual Adjustment Based on the FIA completed and presented at the January workshop and follow up May 20, 2026 discussion item, the proposed Public Safety CFD would include the following parameters:
•Applicable to future residential developments (single family residential: $525 per unit, and multi-family residential: $411 per unit)
•Annual maximum rate adjustment of: Greater of CPI or 4% (City would retain the discretion each year to determine how long and whether to levy at the maximum rates) •Proposed rates would be applied at the indicated amounts, including affordable housing units.
Amendments to CC-20 Special Assessment and CFD Goals and Policies Staff also recommend amending existing Policy No. CC-20 Special Assessment and Community Facilities District Goals and Policies to revise existing language within Section 5, Procedure, as follows:
“The City will condition the financing of city facilities through a facilities CFD or through participation in a Joint Community Facilities Agreement on the applicant’s agreement to provide funding or a funding mechanism to cover on-going public safety costs associated with the respective residential project, an option for such funding is participation in a public safety CFD.
This requirement will apply to any residential project that is already participating in a facilities CFD or a Joint Community Facilities Agreement if that residential project requires further discretionary approvals at the time this policy and procedure is approved.” Participation in a City Facilities CFD or Joint Community Facilities District (JCFA) is optional, and at the request of the developer. Through a Facilities CFD or JCFA CFD, the developer can finance infrastructure improvements through the issuance of bonds which are repaid through special City of Menifee Staff Report
Public Safety Community Facilities District (CFD)
June 17, 2026
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taxes levied on units within the development, generally over 30 years. Including participation in the City’s Public Safety CFD as a requirement for Facilities CFDs will provide the City with a mechanism to negotiate and prioritize the Public Safety CFD as a component of new residential projects.
Next Steps
If approved, the next steps would include the following actions:
1. Public Hearing for Public Safety CFD formation with the first residential project to be included in the CFD;
2. Subsequent residential projects would be annexed through respective public hearings to annex into the CFD;
3. Annual levy, maximum and applied tax rates would be calculated and presented for the City Council adoption and submittal to the County of Riverside Tax Collector’s office.
It is staff’s recommendation that the Public Safety CFD move forward effective immediately, with all residential projects without finalized conditions of approval, conditioned to join the Public Safety CFD and/or all residential projects seeking to form a Facilities CFD and/or requiring additional discretionary approvals for previously formed Facilities CFDs. Requests for consideration of premium and/or administrative expense waivers/reductions or pay-go funding options will be reviewed and considered on a case-by-case basis.
STRATEGIC PLAN OBJECTIVE
Safe and Vibrant Community & Thriving Economy
FISCAL IMPACT
If approved to move forward, there would be various one-time initial CFD formation costs including staff time required for the various ordinance(s), resolution(s), and CFD set-up steps. While the residential project identified as the cornerstone CFD development would cover some of the formation costs, the City would share some of the associated costs. Future annexations into the Public Safety CFD would cover all associated annexation costs. The Public Safety CFD would provide the City with an ongoing and dedicated restricted revenue stream to help support public safety needs year over year.
ATTACHMENTS
1. Resolution
2. Redlined Policy
3. Policy (Clean)
3. CFD 2026-S (Safety Services) - RMA