City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: SEPTEMBER 15, 2026 FROM: FINANCE DEPARTMENT WARDS: 4, 5, 7
SUBJECT: RESOLUTIONS DECLARING THE CITY’S INTENTION TO ESTABLISH PROPOSED COMMUNITY FACILITIES DISTRICT NO. 2026-1 (VICTORIA GROVE/ PINNACLE POINTE/ THE RANCH), AND TO AUTHORIZE A LEVY OF SPECIAL TAXES TO PAY DEBT SERVICE ON BONDED INDEBTEDNESS IN AN AMOUNT NOT TO EXCEED $10,000,000 WITHIN PROPOSED COMMUNITY FACILITIES DISTRICT ISSUES:
Adopt a resolution declaring the City’s intention to establish the proposed Community Facilities District 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch), to authorize a levy of special taxes to pay the costs of acquiring or constructing certain facilities, providing certain services, and to pay debt service on bonded indebtedness; and adopt a resolution of intention for the City to incur bonded indebtedness in an amount not to exceed $10,000,000 and set a Public Hearing for October 20, 2026, on the matter. Together these actions will initiate the formation proceedings for the City of Riverside Community Facilities District 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch).
RECOMMENDATIONS:
That the City Council:
Adopt the Resolution of Intention to Establish Proposed Community Facilities District 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch) in substantially the same form as attached, to authorize a levy of special taxes to pay the costs of acquiring or constructing certain facilities, providing certain services, and to pay debt service on bonded indebtedness; Adopt the Resolution of Intention to Incur Bonded Indebtedness in substantially the same form as attached, within the proposed Community Facilities District No. 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch) in an amount not to exceed $10,000,000; and Set a Public Hearing for October 20, 2026, at 3 p.m. in the City Council Chambers to vote on the establishment of the proposed Community Facilities District, and if established, to hold a special election to authorize the proposed rate and method of apportionment of the special taxes (A, B and C) and the proposed issuance of bonds to finance the improvements and incidental expenses.
BACKGROUND:
The City of Riverside has received three landowner petitions representing 100% consent from all owners of property proposed for inclusion in Community Facilities District No. 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch). These petitions formally request that the City initiate proceeds under the Mello-Roos Community Facilities Act of 1982 to establish the district and levy special taxes necessary to finance public facilities, ongoing maintenance services, public safety services and associated expenses.
Upon receipt of the petitions, the City Council can choose to adopt a Resolution of Intention to Establish CFD No. 2026-1, initiating the first step of the three-step formation process. This resolution describes the location of the proposed three zones that make up the district, includes boundary maps, identifies the public facilities to be financed (including some facilities of the Alvord Unified School District) and authorizes the levy of Special Tax A (Facilities), Special Tax B (Maintenance Services) and Special Tax C (Public Safety Services). Along with the Resolution of Intention, the City Council may also adopt the Resolution of Intention to Incur Bonded Indebtedness, authorizing the future issuance of bonds in a maximum principal amount of up to $10,000,000, secured by Special Tax A, for the purpose of financing facilities and allowable incidental expenses. The Term of such bonds may not exceed policy limitations.
Bond proceeds may be used for eligible public facilities and other costs authorized under the Mello-Roos Act and may not be used to directly reimburse a Developer for City development impact or capacity fees. Under the proposed reimbursement structure, the City may reimburse the developers for certain eligible development impact and capacity fees using legally available City revenues. CFD bond proceeds may subsequently be used to finance or reimburse the City for eligible public facilities and capital improvements otherwise authorized under the Mello-Roos Act. The reimbursement structure is intended to result in a net zero impact to the City. To account for the additional financial administration, accounting, and bond-compliance activities, associated with this structure, the City shall require a reimbursement premium of at least twenty percent of the City’s fees reimbursed to the Developer. The proposed facilities eligible for CFD bond financing include, but are not limited to: streets, traffic signals, water, wastewater, drainage, flood control, parks, street lighting, and police and fire infrastructure. Additionally, certain school facilities with a useful life of five years or longer may be financed through Joint Community Facilities Agreements (JCFAs) with Alvord USD, consistent with Exhibit B of the Resolution. Alvord USD may also authorize a similar structure with a reimbursement of various school fees to the developer with an added premium.
Maintenance services eligible for Special Tax B funding include the upkeep of parks, parkways, public lighting, landscaping, sidewalks, storm drains, graffiti and debris abatement, and other Cityprovided services described in Exhibit C of the resolutions of intention to establish the CFDs. Public Safety Services eligible for Special Tax C funding include police and fire protection, emergency response, and related facility maintenance as defined in Exhibit D of the resolutions of intention to establish the CFDs.
All parcels included in CFD 20261 will be subject to the annual levy of special taxes as provided in the Rate and Method of Apportionment (RMA), except where exempt by law. A continuing lien securing each levy of special tax will be recorded on all nonexempt property within the district following formation. Special Tax A may be prepaid under the conditions specified in the RMA; Special Taxes B and C may not be prepaid.
CFD No. 2026-1 is proposed in response to unanimous landowner petitions requesting formation of a Mello-Roos district to fund public facilities, maintenance services, and public safety services authorized under Government code §§53313 and 53313.5. The CFD will support infrastructure and services necessary for the planned development and will operate in accordance with the Rate and Method of Apportionment included in the Resolution of Intention.
The district will consist of 152 total residential units within three development zones as detailed below:
Detail
Zone 1
Zone 2
Zone 3
Development Name
Victoria Grove
Pinnacle Pointe
The Ranch
Developer
Century Communities
Far-West
Meritage Homes
Tract No.
38921
38074
39008
APNS:
136-220-016
276-040-012 276-040-011 276-050-029
149-052-004
149-052-009
149-052-011
149-052-012
149-052-013
149-052-014
Ward No.
5 4
7 Residential Units
46 53
53 Joint Community Agreement with Alvord USD
Yes
Not applicable
Yes
The CFD will finance facilities, ongoing services and public safety required for the Tract Numbers listed above. The proposed structure aligns with the City land-secured financing guidelines and maintains an effective tax rate below 2%.
Preliminary Formation Compliance Table
Criteria
Recommended
CFD#
Number of Lots
At least 100
152
Effective Tax Rate
NTE 2.0%
1.83%
Estimated Par Amount
NTE $10 million
$10 million
Maintenance Services and Safety Requirement Funded
Yes
Yes
DISCUSSION:
CFD No. 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch) includes three special taxes that apply to developed parcels only. Special Tax A finances public facilities and bonded indebtedness.
Special Tax B funds maintenance services including parks, parkways, landscaped areas, street lighting, storm drain systems, and graffiti and debris removal, escalating by the greater of CPI (12-month March) or 3%.
Special Tax C funds police protection, fire suppression, emergency response, and public safety facility upkeep, escalating by the greater of CPI (12-month March) or 5%.
Category of Tax
Zone 1
Zone 2
Zone 3
Special Tax A – Facilities, Bond Debt Service (range per Residential Property) $3,760-$4,530 per Dwelling unit
$1,285-$1,935 per Dwelling unit
$4,265-$6,155 per Dwelling unit
Special Tax A – Facilities, Bond Debt Service (range per Non-Residential Property) $47,426 per acre
$10,979 per acre
$42,772 per acre
Special Tax B – Municipal Services (per Residential Property) 1 $150 per Dwelling unit
$73 per Dwelling unit
$335 per Dwelling unit
Special Tax B – Municipal Services (per Non-Residential Property) 1 $1,721 per acre
$515 per acre
$3,049 per acre
Special Tax C – Public Safety (per Residential Property) 2 $924 per Dwelling unit
$897 per Dwelling unit
$772 per Dwelling unit
Special Tax C – Public Safety (per Non-Residential Property) 2 $10,868 per acre
$6,453 per acre
$7,448 per acre
_______________
1 Escalated annually by the greater of CPI for a 12-month period ending in March of the Prior FY or 3% 2 Escalated annually by the greater of CPI for a 12-month period ending in March of the Prior FY or 5% Zone 1 (Victoria Grove) and Zone 3 (The Ranch) will participate in separate Joint Community Facilities Districts with Alvord USD consistent with developer obligations and school district facility needs.
Zone 2 (Pinnacle Pointe) will participate only within the City CFD and does not require a JCFA. Despite three development zones with differing tax obligations and JCFA participation, the district will issue a single series of bonds, supported by unified Special Tax A revenues.
The Public Hearing on the proposed formation and bonded indebtedness is scheduled for October 20, 2026, at which time interested persons including landowners and registered voters within the proposed district boundaries may appear and be heard. Following the hearing, and assuming insufficient protest, the City Council may adopt the Resolution of Formation and call the landowner election required by statute.
Together, these actions will complete Step 1 of the formation process, establishing the City’s legislative intent to form CFD 20261, authorizing the levy of special taxes, and proceeding toward the issuance of bonds to fund critical public improvements and services needed to support new development.
FISCAL IMPACT:
There is no direct fiscal impact to the City of Riverside associated with the proposed formation proceeds.
Formation of CFD No. 2026-1 and authorization to incur bonded indebtedness in an amount not to exceed $10,000,000 establishes the legal authority for a future bond issuance but does not obligate the City to issue bonds. Any future issuance of bonds would be subject to satisfaction of applicable City financing policies and requirements and separate City Council consideration and approval.
Costs associated with formation of the CFD, including consultant and City administrative costs, are funded through landowner deposits. Following formation, annual administrative costs will be recovered through special taxes levied within the CFD.
If bonds are subsequently issued, there would be no direct fiscal impact to the City. The cost of financing, staff administration and debt service on the bonds would be paid from Special Tax A revenues levied on taxable property within CFD No. 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch). Bond proceeds would be used solely for eligible facilities and related expenditures authorized under the financing documents and applicable law. The bonds would be limited to obligations payable from CFD special tax revenues and would not constitute a legal obligation of the City’s General Fund.
Special Taxes B and C are separate from any future bond financing and will fund eligible municipal maintenance and public safety services, respectively, and in accordance with the Rate and Method of apportionment.
Prepared by: Meline Carranza, Debt and Treasury Manager Approved by: Sergio Aguilar, Deputy Finance Director
Certified as to
availability of funds: Julie Nemes, Finance Director
Approved by: Edward Enriquez, Assistant City Manager/Chief Financial Officer/City Treasurer
Approved as to form: James Johnson, City Attorney
Attachments:
Resolution of Intention to Establish Proposed CFD 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch) and Location Maps (Zones 1, 2, & 3) Resolution of Intention to Incur Bonded Indebtedness CFD 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch) Deposit and Reimbursement Agreement (Century Communities) Deposit and Reimbursement Agreement (Far West)
Deposit and Reimbursement Agreement (Meritage)
Landowner Petition (Century Communities)
Landowner Petition (Far West)
Landowner Petition (Meritage)
Resolution of Intention to Form CFD 2026-1(Victoria, Pinnacle Pointe, The Ranch) ● Page 2