Item 8.4 - Adopt Resolutions Authorizing the Issuance of Special Tax Bonds for Improvement Areas No. 6, 7 & 8 of Mountain House Community Facilities District No. 2024-1 May 14, 2025
RECOMMENDATION
It is recommended that the City Council adopt three (3) resolutions to:1. Authorize the issuance of special tax bonds for and on behalf of Improvement Areas No. 6, 7 and 8, respectively, of Mountain House Community Facilities District No. 2024-1 (Public Facilities and Services);
2. Approve and direct the execution of three (3) Fiscal Agent Agreements, one for each Improvement Area and three (3) Acquisition Agreements, one for each Improvement Area;
3. Approve the three (3) forms of the Preliminary Official Statements, one for each Improvement Area; and
4. Approve the sale of each series of bonds and related Bond Purchase Agreements.It is also recommended that the City Manager be authorized to take appropriate and necessaryactions to carry out the purpose and intent of these resolutions.
The CFD was established to achieve the following community benefits:
• Accelerates Improvements – Expedites funding and construction of public infrastructure in future neighborhoods, ensuring timely delivery of parks and other facilities before fullneighborhood buildout. • Sustainability – Provides a more secure financing model by establishing a revenue stream secured solely by a designated special tax.
• Stability – Enables more efficient and cost-effective maintenance compared to existing Landscape Maintenance Districts.
• Maintenance Funding – Provides ongoing maintenance funds at the end of the bond term.
BENEFITS
• California’s Community Facilities District (CFD) Law authorizes the financing of certain public infrastructure and on-going services within the boundary of a CFD, such as:
• Infrastructure funding availability in early construction phase instead of at building permit or property sale
• Revenues to be collected for maintenance services in a more efficient and cost-effective manner
• Last year, the City’s predecessor, the Mountain House Community Services District, authorized the formation of Mountain House Community Facilities District No. 2024-1 to facilitateexpedited funding for construction of public infrastructure
OVERVIEW AND REVIEW
• The CFD is only applicable to undeveloped neighborhoods • Now that the CFD is fully formed, the Resolutions and respective sets of documents before the Council tonight authorize the issuance of the Special Tax Bonds for each Improvement Area tohelp fund a portion of certain impact fees and infrastructure costs within the CFD andrespective Improvement Areas • On February 12, 2025, the City Council authorized the issuance of special tax bonds on behalf of Improvement Area No. 1.
OVERVIEW AND REVIEW
FINANCING TEAM
ADMINISTRATION
CITY OF MOUNTAIN HOUSE
MUNICIPAL ADVISOR
KOSMONT FINANCIAL SERVICES
BOND & DISCLOSURE COUNSEL
JONES HALL
UNDERWRITER
PIPER SANDLER & CO.
SPECIAL TAX CONSULTANT
GOODWIN CONSULTING GROUP, INC.
Steven J. Pinkerton, AICP, City Manager
Jodi Almassy, Deputy City Manager Sarah Ragsdale, Administrative Services Director Thomas Retchless, Finance Director
Dan Massiello, Sr. Managing Director Larry J. Kosmont, President Adria Stauber, Project Analyst
David Fama, Esq., Shareholder James A. Wawrzyniak, Jr., Esq., Shareholder Ralph J. Holmes, Managing Director
Dennis McGuire, Managing Director Susan Goodwin, President and Managing Principal Andrew Bavender, Senior Vice President IMPROVEMENT AREA 6
• Proceeds to be used to pay impact fees and
capital improvements associated with Improvement Area 6 (IA6) • It facilitates early funding of South
Community Park
• IA6 is part of the Avina development, which
includes the "Cypress," "Laurel," and "Sequoia" neighborhoods - On South side of W. Grant Line Road- 188 Units to be built • $17.6 million authorized in IA6; this issue
not to exceed $10 million
Homes
Sold
and
Closed
Homes
Under
Contract
Partially
Completed
Homes
Bldg.
Permits
Issued
No.
of
Community Lots
Cypress 31 17
9 5
3 Laurel 74
8 8
0 0
Sequoia 83
4 4
0 0
Total 188 29 21
5 3
PROPOSED
IA6 BONDS
• Special Tax Bonds• Not to exceed $10 million• Estimate bond size of approximately $8.6 million issue at current rates
• Price: 5/28; Close: 6/10• Bond payments funded with special taxes placed on regular property tax bill
• Per the Fiscal Agent Agreement, bonds are solely payable from special taxes on IA6 properties (ie: no City obligation).
IMPROVEMENT AREA 6 cont’d.
IMPROVEMENT AREA 7 • Proceeds to be used to pay impact fees and capital improvements associated with Improvement Area 7 (IA7) • It facilitates early funding of South Community
Park
• IA7 is part of the development known as "The
Knolls at Mountain House"
- Generally located on South of Grant Line
Road and West of Central Parkway
- 143 Units to be built
• $12.7 million authorized in IA7; this issue not to
exceed $7.5 million
Homes
Sold
and
Closed
Homes
Under
Contract
Homes
Under
Construction
Building
Permits
Issued
No.
of
Plan Lots
1 32
2 0
0 0
2 33
3 1
0 0
3 39
2 1
0 0
4 39
3 1
0 0
Total 143 10
3 0
0 PROPOSED
IA7 BONDS
• Special Tax Bonds• Not to exceed $7.5 million• Estimate bond size of approximately $5.94 million issue at current rates
• Price: 5/29; Close: 6/12• Bond payments funded with special taxes placed on regular property tax bill
• Per the Fiscal Agent Agreement, bonds are solely payable from special taxes on IA7 properties (ie: no City obligation).
IMPROVEMENT AREA 7 cont’d.
IMPROVEMENT AREA 8
• Proceeds to be used to pay impact fees
associated with Improvement Area 8 (IA8)
• IA8 is part of multiple developments: “Lugano,”
“Maggiore,” “Mezzano,” and “Turano“
- Generally located on the North side of Byron
Road at N. Central Parkway
- 503 Units to be built
• $29.4 million authorized in IA8; this issue not
to exceed $7.5 million
- Likely to be the only bonds issued for this
Improvement Area
Homes
Sold and
Closed
Homes
Under
Contract
Partially
Completed
Homes
Building
Permits
Issued
No.
of
Community Lots
Lugano 134 29 27
5 0
Maggiore 113 29 27
7 0
Mezzano 126 30 22
1 0
Turano 130 27 22 13
0 Total 503 115 98 26
0 PROPOSED
IA8 BONDS
• Special Tax Bonds• Not to exceed $7.5 million• Estimate bond size of approximately $5.92 million issue at current rates
• Price: 6/3; Close: 6/17• Bond payments funded with special taxes placed on regular property tax bill
• Per the Fiscal Agent Agreement, bonds are solely payable from special taxes on IA8 properties (ie: no City obligation).
IMPROVEMENT AREA 8 cont’d.
ALL
PROPOSED BONDS
• Rate and Method of Apportionment (RMA) of
the Special Taxes established when each improvement area annexed into the CFD • No City administration costs• Costs incurred to date being repaid with proposed bonds
• Annual costs to administer are built into
Special Taxes
Bonds to fund Authorized facilities
Facilities are approved public infrastructure components (IA6, IA7) Impact fees will be used to pay for parks and open space Meets Policy’s Special Tax Parameters
Reasonable basis of apportionment Rate and Method of Apportionment must: properly fund bond reserves and repayments; pay formation and administration costs; have a total tax rate less than 2% Estimated tax rates: IA6: 1.70%; IA7: 1.69%; IA8: 1.63% Meets Policy’s Credit Quality Standards
Debt service reserves to be funded; final maturity is less than 40 yrs.; no advance of any General Fund monies Aggregate Value to Debt Ratio in each IA exceeds 4:1 requirement IA6: 5.4:1; IA7: 5.1:1; IA8: 26.6:1
Proper notifications have taken place Appraisal of Project obtained from appraiser meeting Appraisal Standards for Land Secured Financings published by the California Debt Advisory Commission
PROPOSED BONDS COMPLY WITH CITY’S POLICIES
DOCUMENTS
FOR
COUNCIL
APPROVAL
• Three Authorizing Resolutions – one for each Improvement Area – each approving the following:
• Fiscal Agent Agreement (governs terms of bonds)• Acquisition Agreement – sets forth the terms for City to acquire the improvements from each developer
• Preliminary Official Statement – describes the respective bonds and the City for investors to use in determining whether to buy the bonds • Bond Purchase Agreement – contract between the
Underwriter and the City setting forth the terms for the Underwriter to buy the proposed respective Bonds
RECOMMENDATION
It is recommended that the City Council adopt three (3) resolutions to:1. Authorize the issuance of special tax bonds for and on behalf of Improvement Areas No. 6, 7 and 8, respectively, of Mountain House Community Facilities District No. 2024-1 (Public Facilities and Services);
2. Approve and direct the execution of three (3) Fiscal Agent Agreements, one for each Improvement Area and three (3) Acquisition Agreements, one for each Improvement Area;
3. Approve the three (3) forms of the Preliminary Official Statements, one for each Improvement Area; and
4. Approve the sale of each series of bonds and related Bond Purchase Agreements.It is also recommended that the City Manager be authorized to take appropriate and necessaryactions to carry out the purpose and intent of these resolutions.
Questions?