City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: OCTOBER 20, 2026 FROM: FINANCE DEPARTMENT WARDS: 4, 5, 7
SUBJECT: PUBLIC HEARING – CONDUCT FORMATION PROCEEDINGS FOR PROPOSED COMMUNITY FACILITIES DISTRICT NO. 2026-1 (VICTORIA GROVE/ PINNACLE POINTE/ THE RANCH), CONSIDER RESOLUTIONS ESTABLISHING THE DISTRICT, AUTHORIZING THE LEVY OF SPECIAL TAXES, INCURRING BONDED INDEBTEDNESS IN AN AMOUNT NOT TO EXCEED $10,000,000, CALLING A LANDOWNER ELECTION, AND CERTIFYING THE ELECTION RESULTS; AND CONSIDER AN ORDINANCE AUTHORIZING THE ANNUAL LEVY OF SPECIAL TAXES.
ISSUES:
Conduct the Public Hearing for the proposed formation of Community Facilities District No. 2026-1 (Victoria Grove/Pinnacle Pointe/The Ranch) and consider the actions necessary to complete formation, including establishment of the CFD, authorization of the levy of special taxes and bonded indebtedness in an amount not to exceed $10,000,000, calling a landowner election, certifying the election results, and introducing an Ordinance authorizing the levy of special taxes. In addition, approve the Funding Agreements between the City of Riverside, Century Communities, Far-West and Meritage Homes; and the Joint Community Facilities Agreements among the City of Riverside, Alvord Unified School District, Century Communities and Meritage Homes.
RECOMMENDATIONS:
That the City Council:
Conduct the Public hearing for the proposed formation of Community Facilities District No. 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch); Adopt the Resolution establishing Community Facilities District 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch), authorizing the levy of special taxes, and calling a landowner election therein; Adopt the Resolution determining necessity to Incur Bonded Indebtedness within Community Facilities District No. 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch) in an amount not to exceed $10,000,000; Following the landowner election, adopt a Resolution certifying the results of the Special Tax and bond election; Introduce an Ordinance authorizing the levy of Special Taxes within CFD 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch); Approve the funding agreements between the City of Riverside, Century Communities, Far-West Industries and Meritage Homes; and Approve the Joint Communities Facilities Agreements with the City of Riverside, Alvord Unified School District, Century Communities and Meritage Homes.
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). The petitions requested that the City initiate proceedings under the Mello-Roos Community Facilities Act of 1982 to establish the district and levy special taxes to finance eligible public facilities, ongoing maintenance services, public safety services and associated expenses.
On September 15, 2026 the City Council adopted the Resolution No. 24423 declaring its intention to establish CFD No. 2026-1, and Resolution No. 24424 declaring its intention to incur bonded indebtedness, thereby initiating the formation proceedings under the Mello-Roos Act of 1982. The resolutions identify the three proposed zones, eligible facilities and services, and Special Tax A (Facilities), Special Tax B (Maintenance Services) and Special Tax C (Public Safety Services). They also initiate proceedings to authorize potential future bonded indebtedness in an amount not to exceed $10,000,000. Authorization of bonded indebtedness does not obligate the City to issue bonds; any future bond issuance would be subject to separate City Council consideration and approval.
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, 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.
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. If bonds are subsequently authorized and issued, Special Tax A revenues from the applicable taxable property would secure the bonds. Formation of the CFD does not obligate the City to issue bonds.
The Public Hearing on the proposed formation and bonded indebtedness is scheduled for October 20, 2026. Interested persons, including landowners and registered voters within the proposed district boundaries, may appear and be heard regarding the proposed formation, special taxes, and bonded indebtedness. If there is no sufficient protest and the formation proceedings are ready to proceed, the City Council may consider the resolutions necessary to establish the CFD and call the landowner election. Due to certain complexities associated with the proposed formation, additional time may be necessary to finalize the formation documents and proposed structure. If additional time is needed, staff may recommend continuing the Public Hearing to November 10, 2026, before the City Council considers the remaining formation actions. In particular, the most recent information from the County indicates there are individuals registered to vote within Zone 3 (The Ranch) of the CFD; however, City staff understands those individuals no longer reside in the District and therefore there should not be any registered voters within the CFD. The property owner and the City’s consultants are working with the County to obtain updated voter information prior to the November 10, 2026 date if necessary.
The actions before the City Council represent Step 2 of the CFD formation process. If the Public Hearing is concluded and the City Council elects to proceed, the Council may establish CFD No. 2026-1, authorize the levy of special taxes, determine the necessity to incur bonded indebtedness, and call the required landowner election. Alternatively, the City Council may open the Public Hearing on October 20, 2026 and continue the Public Hearing to November 10, 2026, and defer the remaining formation actions until the continued hearing. Completion of the formation process and authorization of bonded indebtedness would not obligate the City to issue bonds; any future financing would require separate City Council consideration and approval.
FISCAL IMPACT:
There is no direct fiscal impact to the City of Riverside associated with the proposed formation proceedings. Formation of CFD No. 2026-1 and authorization to incur bonded indebtedness in an amount not to exceed $10,000,000 would establish the legal authority for a potential 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 Establishing Proposed CFD 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch) and Location Maps (Zones 1, 2, & 3) Resolution of Necessity to Incur Bonded Indebtedness CFD 2026-1 (Victoria Grove/ Pinnacle Pointe/ The Ranch) Resolution Certifying the Election
Ordinance
Joint Community Facilities Agreement Alvord Unified (Century Communities) Joint Community Facilities Agreement Alvord Unified (Meritage) Funding Agreement (Century Communities)
Funding Agreement (Meritage)
Funding Agreement (Far West)
CFD Report
Notice of Public Hearing
Formation Proceedings Step 2, CFD 2026-1(Victoria, Pinnacle Pointe, The Ranch) ● Page 2