CITY OF MENIFEE
SUBJECT: Proposed Formation of Community Facilities District No. 2026-1, Coastline
MEETING DATE: September 16, 2026
TO: Mayor and City Council
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. Adopt a resolution declaring intent to establish Community Facilities District (CFD) No. 2026- 1, Coastline, located at the northwest corner of Coastline Avenue and Menifee Road; and
2. Adopt a resolution declaring intent to incur bonded indebtedness for CFD No. 2026-1, Coastline.
DISCUSSION
Menifee 50, LLC, a California limited liability company (Developer) is proposing to develop a residential community of 45 homes on approximately 5.92 net acres within the City. The property is located at the northwest corner of Menifee Road and Coastline Avenue, as shown in the attached Location Map. The Developer has requested that the City form a Community Facilities District (CFD No. 2026-1) in accordance with the Mello-Roos Community Facilities Act of 1982, as amended, to finance the costs of certain public improvements through the levy of a special tax and the issuance of bonds in an amount not-to exceed $5 million. The Developer has requested that the boundaries of CFD 2026-1 include the area described in Attachment A of the Resolution of Intention to Establish CFD 2026-1 (Resolution of Intention) and that special taxes be levied within the boundaries of CFD 2026-1 in accordance with the Rate and Method of Apportionment (RMA) as described in Attachment C to the Resolution of Intention.
The Resolution of Intention includes approval of the proposed reimbursement agreement between the City of Menifee and the Developer. The reimbursement agreement outlines that the Developer would advance funds to cover the City’s costs associated with the formation of Community Facilities District 2026-1, Coastline. If the District is formed and bonds are issued, the Developer would be reimbursed from bond proceeds (excluding a nonrefundable $5,000); otherwise, the City would reimburse the Developer any of the deposit that had not been spent on District formation costs.
City of Menifee Staff Report
Proposed Formation of Community Facilities District 2026-1, Coastline September 16, 2026
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The proposed CFD 2026-1 was presented to the Finance Committee in September 2025 and was recommended for submittal to the City Council for approval.
The Resolution of Intention is the first step in the process to form CFD 2026-1. The attached Resolutions declare the City’s intention to establish CFD 2026-1, the intention to incur bonded indebtedness by CFD 2026-1 and call for a public hearing. A public hearing on the matter will take place on November 4, 2026, and at that time the Council would formally consider approval to form CFD 2026-1 and hold an election on the approval of the special taxes and the incurring of bonded indebtedness within CFD 2026-1.
The Developer may request that the City enter into joint community facilities agreements (JCFAs) with the Developer and each of Eastern Municipal Water District, Romoland School District and Perris Union High School District relating to certain facilities proposed to be financed by CFD No. 2026-1 and owned and operated by such entities. If the decision is made to finance facilities of such entities, the JCFAs will be entered into prior to the approval of the issuance of bonds pursuant to the Act.
The Developer is proposing that CFD 2026-1 include 45 residential units. The home sizes are planned to range from approximately 2,300 to 2,800 square feet. The total tax effective tax rate is estimated to be at or below 2.00% of projected home prices, which is the allowable tax rate limit in the City’s Financing Goals and Policies.
Under the RMA, the estimated assigned annual tax rates range from $4,354 for home sizes less than 2,400 square feet to $4,920 for home sizes greater than 2,700 square feet. Such rates will escalate at 1.80% per year.
The anticipated bond issuance amount based on current rates would be approximately $3.1 million, which would cover a reserve fund, financing costs, and generate approximately $2.4 million in net bond proceeds for facilities. The proposed facilities, which may be funded with proceeds of the bonds include:
•$256,059 – City Priority Facilities (20% premium to Project Specific Priorities, per City’s CFD Goals & Policies)
•$1,280,295 – City Development Impact Fees
•$858,420 – Eastern Municipal Water District Fees
•$589,950 – Romoland School District Fees
In addition to the costs of the foregoing facilities, proceeds of the special tax may be expended to pay Perris Union High School District facilities/fees and District administrative costs. The amount of the foregoing facilities costs that exceed available bond proceeds would be funded by the Developer.
STRATEGIC PLAN OBJECTIVE
Regular City Business
City of Menifee Staff Report
Proposed Formation of Community Facilities District 2026-1, Coastline September 16, 2026
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FISCAL IMPACT
The Developer made a deposit to pay for the costs of the formation proceedings which may be reimbursed to the Developer in accordance with the acquisition agreement to be entered into by the City with the Developer. CFD No. 2026-1 will annually levy special taxes on all of the taxable property within CFD No. 2026-1 in accordance with the RMA in order to pay for the costs of facilities, debt service on bonds and administration of CFD No. 2026-1. Any bonds issued by CFD No. 2026-1 would not be obligations of the City and would be secured solely by the Special Taxes levied in CFD No. 2026-1.
ATTACHMENTS
1. Location Map
2. Resolution of Intention to Establish CFD 2026-1
3. Resolution of Intention to Incur Debt
4. Landowner Petition
5. Reimbursement Agreement CFD 2026-1