City Council Agenda Report
June 2, 2026
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Alex Hamilton, Deputy City Manager
Jana Stuard, Director of Finance
SUBJECT: PUBLIC HEARING – RESOLUTION NO. 26-28 APPROVING A JOINT
EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY AND RESOLUTION NO. 26-29
AUTHORIZING USE OF THE BOND OPPORTUNITIES FOR LAND
DEVELOPMENT PROGRAM AND AUTHORIZING THE CALIFORNIA
MUNICIPAL FINANCE AUTHORITY TO ACCEPT APPLICATIONS FROM
PROPERTY OWNERS
Background:
The California Municipal Finance Authority (CMFA) recently shared information with staff regarding a Bond Opportunities For Land Development Program (BOLD Program) that is available to help finance public infrastructure projects for new development within the City.
In order to take advantage of this program, the City would need to become a member of the CMFA, a State-wide joint powers authority (“JPA”) which is comprised of numerous cities, counties, and other public agencies throughout the State of California (the “State”). CMFA has the authority to act on behalf of its members to provide a variety of services to its member agencies, including formation of community facilities districts and issuance of bonds to meet its mission of supporting economic development, job creation and social programs throughout the State, while giving back to California communities. By supporting member communities and their local charities with a portion of the revenue generated through the issuance of tax-exempt bonds for public, private and non-profit entities, CMFA is able to directly contribute to building strong communities to support the health and welfare of the residents of California.
The CMFA recognizes that new residential development often challenges the mission of municipalities to provide infrastructure and schools, since new development triggers the need to construct, acquire, or otherwise provide additional public facilities to accommodate that growth.
City Council June 2, 2026
Resolution No. 26-28 Approving a Joint Exercise of
Powers Authority Agreement and Resolution No. 26-
29 Authorizing a Bond Opportunities for Land
Development Program
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The BOLD Program offers a means to finance new or continuing construction of infrastructure and public facilities through bonds the CMFA issues as an alternative to issuance of land- secured bonds directly by a public entity. Similarly, the CMFA can facilitate the levy of special taxes for payment of increased public service levels required by new development. The BOLD Program is designed to help local government municipalities, schools, and land developers throughout the State and work together to cost effectively finance public infrastructure projects and development fees needed for and attributable to new development.
Under the BOLD Program, bonds are issued by a community facilities district (“CFD”) formed by CMFA under the Mello-Roos Community Facilities Act of 1982 (California Government Code Section 53311 et seq.) (the “Act”). The bonds are payable from special taxes to be levied on new development. The Act offers great financing flexibility and is commonly used by cities, schools and other local agencies throughout the State to generate funds for the payment of public facilities, including development fees for facilities. CFDs can also be structured to pay for maintenance of public facilities and other services costs of the City.
The BOLD Program is handled by a team of bond industry professionals with significant experience in CFDs in the State. All have highly specialized expertise in CFD bond issuance and sales and are consistently ranked among the top firms in the field. In addition, if the City desires to use a municipal advisor of its own choosing to review the BOLD Program application and/or other program documents it may do so, with all related costs payable from bond proceeds or developer deposits to CMFA. Specifically, the BOLD Program utilizes Jones Hall for bond counsel services, Koppel & Gruber Public Finance for special tax consulting services, and Piper Sandler & Co. for underwriting services.
Although the CFD would be formed within the City’s jurisdiction, little involvement is required. The City Council is only required to take a single action to approve participation in the BOLD Program, and CMFA thereafter works with staff to ensure the program is meeting the City’s objectives. CMFA and its consultant team will form and approve each CFD, CMFA will issue bonds on behalf of the CFD and levy and collect the special taxes each year. By working directly with developers, the BOLD Program facilitates financing for infrastructure and fee obligations of developers, covering a broad range of development cost obligations necessary for new development imposed by municipalities, including both facilities and/or impact fees. Using the BOLD Program alleviates local agency staff time constraints and allows staff to focus on other aspects of processing land development projects. It is important to note that Kosmont Financial Services will serve as the City’s financial advisor on all transactions related to this matter as-needed at no cost to the City.
Formation of each CFD requires the establishment of the annual special tax rates. The formula for computing special tax rates will be included in the resolutions to be adopted by the CMFA Board as part of the CFD formation proceedings. Typically, the formula will include a basic, undeveloped land tax with an increase in rate and shifting of the tax to developed lands at City Council June 2, 2026
Resolution No. 26-28 Approving a Joint Exercise of
Powers Authority Agreement and Resolution No. 26-
29 Authorizing a Bond Opportunities for Land
Development Program
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building permit stage. The total amount of taxes on developed land generally will not exceed 2% of its projected market value in its completed state, per industry standards.
Bonds are issued through the CMFA, with little involvement from local agencies needed for the issuance process. The City will need to approve the use of a CFD to acquire public facilities and the financing thereof, and enter into a joint community facilities agreement, acquisition agreement or similar agreement to receive the bond proceeds, and to meet the general requirements to maintain the tax exemption of interest on the bonds. CMFA adopts the resolutions needed to authorize and issue the special tax bonds and awards the sale to the bond underwriter.
Once the bond issuance occurs, bond proceeds are available to be disbursed. The proceeds are held by a bond trustee and available, as directed by the developer and approved by the local agency, to be used to meet obligations to the City and other local agencies according to the structure and timing required for development approvals. Pursuant to an acquisition agreement or similar document, the City will determine and agree to its role in inspecting and accepting infrastructure and/or payment of financed impact fees.
The CFD may be formed early in the development process, with issuance of bonds at a later time or in multiple series. The following are the typical criteria for bond issuance. •Minimum 4:1 value-to-debt ratio overlapping (assessed or appraised) •No discretionary approvals required for build-out of the portion of the CFD directly relating to the bond security
•Entitlements received that are necessary for phase a to be bonded •Financing plan for backbone infrastructure complete or imminent and/or performance bond in place
Credit criteria will be reviewed by the underwriting team on a case-by-case basis to ensure reasonable interest rates at the time of issuance. Additionally, similar credits can be pooled together into a single bond issue with pooling flexibility assuring the most cost-effective bond issuance for each project.
Administration of all aspects of the BOLD Program is handled by CMFA, without cost to or burden on the City. City staff time can and will be reimbursed by the participating developers upfront and by CMFA once bonds are issued.
CMFA shares a portion of its issuance fees directly with its member communities. In addition, a grant from a portion of the issuance fee is made to the California Foundation for Stronger Communities (“CFSC”) to fund charities designated by the member communities. A portion of the annual fees received by CMFA are in turn directed to charitable activities within California communities, particularly those of members and participating local government agencies. This unique commitment to give back directly to the communities in which they operate sets CMFA City Council June 2, 2026
Resolution No. 26-28 Approving a Joint Exercise of
Powers Authority Agreement and Resolution No. 26-
29 Authorizing a Bond Opportunities for Land
Development Program
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apart from other JPA conduit issuers.
Tax-exempt municipal bonds are sold through an offering document known as an Official Statement, which describes to potential purchasers of the bonds the terms, security, and repayment of the bonds and details about the property securing the bonds. Since, prior to home sales, the land is owned by the developer entity(ies), relevant information for the Official Statement needs to describe the developer and the development plan. The financing team will work with the developer to provide the required information and approve the final language to be provided to prospective bond buyers.
California law requires developers to disclose to home buyers the lien of any CFD special tax which will be present on the purchased property. The form of disclosure is simple and becomes part of the various sale documents presented to buyers for signature prior to a home sale.
The BOLD Program is a cost-effective form of land-secured financing, and the more cost effective a bond financing is, the greater overall public benefit there is, as more bond proceeds are available for the acquisition of public infrastructure. The BOLD Program provides a vehicle for development to meet its obligation to pay its own way as a result of new development. Utilization of the BOLD Program is a partial solution to the significant understaffing, deficiencies and inefficiencies the City may experience as it attempts to balance the workload of a multiplicity of large land development projects and other staffing obligations.
The development community has expressed a desire for the City to adopt and implement the BOLD Program and it is an offering of CMFA that the City, upon becoming a member of CMFA, is entitled to utilize. It is recommended that the City hold a public hearing on the BOLD Program, adopt a resolution joining CMFA as a member, and adopt a resolution authorizing the BOLD Program within the City’s boundaries.
Environmental:
The adoption of the attached Resolutions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3) – Common Sense Exemption because it can be seen with certainty that there is no possibility that the Resolutions may have a significant effect on the environment.
Fiscal Impact:
There is no cost for the City to join CMFA as a member. In addition, all the costs and expenses related to the formation, issuance of bonds, and ongoing administration for any CFD formed by the BOLD Program is the responsibility of CMFA and there is no liability or fiscal impact on the City. The City can be reimbursed for any staff time expended on the program.
Citizens Advised:
City Council June 2, 2026
Resolution No. 26-28 Approving a Joint Exercise of
Powers Authority Agreement and Resolution No. 26-
29 Authorizing a Bond Opportunities for Land
Development Program
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Notice of this public hearing was published in The Norwalk Patriot, posted to the City’s three designated posting sites, and the City website.
Strategic Plan 2023 Implementation:
The BOLD Program is a tool to help both developers and local public agencies in California finance public infrastructure needed for new development using municipal bonds issued by the CMFA, which would contribute to Objective 4 – maintain the City’s financial resiliency.
Recommended Action:
Staff recommend City Council:
a. find the proposed action is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3) – Common Sense Exemption because it can be seen with certainty that there is no possibility that the Resolution may have a significant effect on the environment; and b. adopt Resolution No, 26-28, A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NORWALK APPROVING, AUTHORIZING, AND DIRECTING EXECUTION OF A
JOINT EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY; and
c. adopt Resolution No. 26-29, A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NORWALK AUTHORIZING USE OF THE BOND OPPORTUNITIES FOR LAND
DEVELOPMENT PROGRAM AND AUTHORIZING THE CALIFORNIA MUNICIPAL
FINANCE AUTHORITY TO ACCEPT APPLICATIONS FROM PROPERTY OWNERS,
CONDUCT PROCEEDINGS AND LEVY SPECIAL TAXES WITHIN THE TERRITORY
OF CITY OF NORWALK PURSUANT TO THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982, AS AMENDED; AND AUTHORIZING RELATED ACTION; and
d. authorize the City Manager to execute the agreement and any documents necessary to effectuate the intent of Resolution Nos. 26-28 and 26-29, on behalf of the City, in a form approved by the City Attorney.
Attachments:
1. Resolution No. 26-28
2. Resolution No. 26-29
3. Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority