CFD No. 2018-1
(Villages of Patterson)
Special Tax Bonds, Series 2024
City Council of the City of Patterson
West Patterson Financing Authority
January 16, 2024
The Mello-Roos Community Facilities Act of 1982
• The Mello-Roos Community Facilities Act of 1982 (Gov. Code § 53311 et seq, the “CFD Act”) was adopted by the State of California as a method for financing infrastructure
improvements, public services and fees associated with new development
• Special taxes provide an additional funding source for the construction and acquisition of public infrastructure, funding for the ongoing provision of public services, funding for the ongoing maintenance of public infrastructure and may be used to accelerate the payment of fees
• Since its adoption, local jurisdictions throughout California have utilized the CFD Act to issue bonds, the repayment of which comes from the special taxes paid by property owners on the property tax bill each year
2 Mello-Roos Bonds
• The CFD may issue bonds secured by the levy of special taxes • Bonds are payable from and secured by special taxes,
which are levied upon property located within the CFD
according to the Rate and Method of Apportionment
(“RMA”)
• Special taxes are levied upon real property and are not a personal debt of the property owners
• The remedy for delinquencies is foreclosure
• Generally, a bond covenant to commence foreclosure
is faster than the standard County process
• The bond is not a debt of the City
• A bond reserve fund is permitted and required by the
market
3 Parcel Map
4 Current Development Status
5 Under
Construction
Individual
Developer Homeowners
KB Home North Bay LLC 165 67 (1)
K. Hovnanian 160 44 (2)
Trivo LLC ______0 ____36 (3)
Total Residential Units 325 147
Notes
(1) Includes the Turnleaf Neighborhood, the Acacia Neighborhood and the Sycamore Neighborhood
(1) Aspire at Apricot Grove
(2) Villages of Patterson Triplex
Proposed 2024 Bonds
• Estimated amount of bonds (1): $10.645 million
• Estimated project fund (1): $9.352 million
• “Not-to-exceed” amount: $12.00 million
• Estimated True Interest cost (1): 5.08%
• “Not-to-exceed” interest cost: 6.00%
• Annual debt service (2): $291k (2024) to $1.334mm (2054) • Debt service coverage: 1.10x
• Bond reserve fund (3): Cash funded @ $836k
6 Notes
(1) True Interest Cost based on preliminary estimates assuming market interest rates as of December 12, 2023, subject to change based on market conditions at the time of the sale (2) Special taxes escalate at 2.00% per year
(3) Funded on parity with reserve fund from the 2021 Bonds, when combined, equals 1.25 times average annual debt service
Estimated Tax Bills
7 Estimated Sources and Uses of Funds
8 Estimated Costs of Issuance
9 Role Party Total
Bond Counsel Jones Hall 131,740.00
Bond Counsel Expenses Jones Hall 1,500.00
Disclosure Counsel Jones Hall 50,000.00
City Administration Fee City of Patterson 15,000.00
Municipal Advisor Del Rio Advisors LLC 52,500.00
Municipal Advisor Expenses Del Rio Advisors LLC 750.00
Special Tax Consultant Goodwin Consulting Group 50,000.00 Appraiser Integra Realty Resources 17,000.00
Research Services (Overlapping Debt) Calmuni 700.00
Fiscal Agent Annual Administration U.S. Bank National Association 2,500.00 Fiscal Agent Acceptance U.S. Bank National Association 2,000.00 Fiscal Agent Bank Counsel U.S. Bank National Association 3,000.00 Fiscal Agent Successor U.S. Bank National Association 4,500.00 Fiscal Agent Costs of Issuance U.S. Bank National Association 500.00 Printing of Official Statement TBD 5,000.00
Contingency / Miscellaneous Misc. 8,310.00
Total Estimated Costs 345,000.00
Estimated Parity Debt Service and Coverage
10 Proposed Remaining Financing Schedule
11 Date Item
Approve Financing and Related
Documents
Tuesday January 16th City
Council/ Authority Meeting
Wednesday January 17 Due Diligence Meeting th
Post Preliminary Official
Statement
Thursday January 18th
Tuesday January 30 Pre-Pricing and Pricing th and
Wednesday January 31st
• Print and Post Final Official
Statement
• Documents Finalized and
Executed
Week of February 5th
Wednesday February 14 Closing and Transfer of Funds th
Documents for Consideration
12 Supplement No. 1 to Fiscal Agent Agreement: Supplement No. 1 to Fiscal Agent Agreement provides the terms of the 2024 Bonds, including provisions for security and payment of the 2024 Bonds and works in conjunction with the Fiscal Agent Agreement. The Fiscal Agent Agreement provided the terms of the 2021 Bonds, including provisions for security and payment of the 2021 Bonds.
Bond Purchase Agreement: An agreement between the Authority and the Underwriter, when executed, will reflect the final interest rates, yields and prices of the various maturities of the 2024 Bonds sold to investors.
Official Statement: The official statement is the primary document used by the Underwriter to market the 2024 Bonds to investors. The official statement describes the 2024 Bonds in detail and all the information about CFD 2018-1 used by investors to make an informed purchase decision. The official statement is deemed final pursuant to Rule 15c-2-12 under the Securities Exchange Act of 1934. The only permitted items to be excluded from the draft are data and tables related to the final sale of the 2024 Bonds.
Continuing Disclosure Agreement: Included as an attachment to the Official Statement, describes covenants of the Authority to provide ongoing disclosure to investors in the form of an annual report due by the end of March each year and posted to the electronic platform known as the Electronic Municipal Market Access system (“EMMA”). In addition, and from time-totime, the Authority covenants to provide notices of material events as listed as they occur.
Resolution for Consideration
13 Resolution Authorizing the Issuance of Special Tax Bonds for and on behalf of the West Patterson Financing Authority Community Facilities District No. 2018-1 (Villages of
Patterson), approving and directing the execution of
Supplement No. 1 to Fiscal Agent Agreement, approving the form of Preliminary Official Statement, approving sale of such bonds, and approving other related documents and actions Questions and Discussion
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Questions and Discussion