CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: June 17, 2026
To: Honorable Mayor and City Council Members
From: Tarik Rahmani, Director of Finance
Department: Finance & Management Services
Subject: Community Facilities District No. 2022-2 (Palm) 2026 Special Tax Bonds (Ward 4)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2026-080,
1. Authorizing the issuance of, not to exceed $3,200,000 aggregate principal amount of Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino 2026 Special Tax Bonds; and
2. Approving a form of Preliminary Official Statement, a form of the Fiscal Agent Agreement, a form of Bond Purchase Agreement, and a form of Continuing Disclosure Agreement, which is attached to the Preliminary Official Statement as Appendix E; and
3. Making certain determinations relating thereto; and
4. Authorizing certain other actions in connection therewith.
City Manager's Comments
The City Manager recommends approval.
Executive Summary
CFD No. 2022-2 now intends to issue its 2026 Special Tax Bonds (the “Series 2026 Bonds”) in the approximate amount of $3,200,000, secured by the Special Taxes levied on 14.7 gross acres, which upon build out will consist of 133 single family homes within the boundaries of CFD No. 2022 2. The proposed City Council action approves the sale and issuance of up to $3,200,000 in CFD No. 2022-2 Special Tax Bonds and approves forms of related documents including the Preliminary Official Statement, Fiscal Agent Agreement, Bond Purchase Agreement, and other related documents.
The bond sale is proposed for the week of June 22, 2026, and a bond closing in early July. The Series 2026 Bonds will be sold by the City to finance the Facilities. The Series 2026 Bonds will be repaid over a term of 30 years. In addition to bond debt service, Special Taxes will be levied to pay for annual administration of the Series 2026 Bonds by CFD No. 2022-2.
Background
The City Council formed the Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California” (“CFD No. 2022-2”) on October 5, 2022, under the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”), which authorizes community facilities districts (“CFDs”) to levy special taxes (the “Special Taxes”) to pay for the costs of certain public facilities, including the construction, purchase, modification, expansion, rehabilitation and/or improvement of drainage, water, sewer, library, park, roadway and roadway improvements, aquatic facilities, and other public facilities of the City (the “Facilities”), and to issue bonds payable from the Special Taxes. In 2022, the City Council authorized the sale of up to $4,000,000 in bonds.
In accordance with that authorization, CFD No. 2022-2 now intends to issue its 2026 Special Tax Bonds (the “Series 2026 Bonds”) in the approximate amount of $3,200,000, secured by the Special Taxes levied on 14.7 gross acres, which upon build out will consist of 133 single family homes within the boundaries of CFD No. 2022 2.
The proposed City Council action approves the sale and issuance of up to $3,200,000 in CFD No. 2022-2 Special Tax Bonds and approves forms of related documents including the Preliminary Official Statement, Fiscal Agent Agreement, Bond Purchase Agreement, and other related documents. The bond sale is proposed for the week of June 22, 2026, and a bond closing in early July. The Series 2026 Bonds will be sold by the City to finance the Facilities. The Series 2026 Bonds will be repaid over a term of 30 years. In addition to bond debt service, Special Taxes will be levied to pay for annual administration of the Series 2026 Bonds by CFD No. 2022-2.
Richmond American Homes of Maryland, Inc.,(Developer) acquired the property in Tract No. 20495. As of the April 15, 2026 date of value (the “Date of Value”) of the Appraisal Report, 61 of the 133 planned single family residential homes had been completed and conveyed to individual homeowners. Of the remaining 72 residential lots, 67 lots were completed, including 6 model homes (not released for sale) and 5 were under construction. The Developer expects to complete home construction by October 2026 and expects to close escrow on the remaining homes by June 2027.
CFD 2022-2 contains approximately 14.7 gross acres located in the City, north of E.
Highland Avenue and west of N. Palm Avenue. The District encompasses Tract Map No. 20495 (the “Property”) and is planned for 133 single family residential homes at buildout in a neighborhood being marketed as “Summit Park” (the “Project”). Richmond American Homes of Maryland, Inc. (“Developer”) is actively developing the Project into two product lines, “Aurora” and “Paloma.” Discussion
For CFD No. 2022-2, it is proposed that bonds be sold to generate approximately $2,885,000 in bond proceeds, depending on bond market conditions at time of sale.
The bond sale is expected to occur the week of June 22, 2026, with a closing the week of July 8, 2026. Bond proceeds will be used to fund reimbursements for public improvements and public facilities fees paid by the Developer, fund a reserve fund, and fund costs of bond issuance, including a fee to cover City staff time spent towards issuing the Series 2026 Bonds. The term of the Series 2026 Bonds will be 30 years.
The bond true interest rate, depending on bond market condition at time of sale, is expected to be approximately 5.12%.
The Series 2026 Bonds will be sold by CFD No. 2022-2 through a negotiated sale.
Hilltop Securities is the proposed bond underwriter procured by the City. The Series 2026 Bonds will be non-rated as development related CFD bonds like the Series 2026 Bonds do not qualify for investment grade bond ratings from Standard and Poor’s, Moody’s or any major bond rating agencies even though sufficient CFD special taxes can now be levied against developed property to cover annual debt service.
In March of 2026, the City retained Integra Realty Resources, Inc., a qualified appraiser of CFD projects, which has valued the property subject to the CFD No. 2022-2 Special Taxes. The appraised value of the properties in CFD No. 2022-2 totals $66,487,772 and will in aggregate exceed the amount of Series 2026 Bonds issued by a factor of
23.05 (the appraised value exceeds the amount of the bonds by 23.05 times). This is known as the value to lien ratio. Annual special taxes are expected to range between $1,552 and $1,849 per home depending on home size. Current base pricing have ranged from $507,748 to $656,126. In accordance with the Local Goals and Policies for all Community Facilities Districts of the City of San Bernardino, the total tax burden on the homes will be under 2% of assessed value.
Property values become significant in the event a property owner fails to pay special taxes and it becomes necessary to initiate foreclosure proceedings in order to obtain payment of special taxes to pay bond debt service. In the Fiscal Agent Agreement, the City has covenanted to initiate property foreclosure proceedings in the event of a failure to pay the special taxes by the following October 1st of each year. This covenant is required in order for investors to buy the bonds. The Special Tax lien is co-equal in priority to general property taxes and is senior to any mortgages. Property owners can prepay their respective share of CFD No. 2022-2 Special Taxes on any interest payment date. The Series 2026 Bonds will also be subject to early redemption for refinancing or special tax prepayment. The Series 2026 Bonds will have a maximum allowable funded bond reserve fund equal to maximum annual bond debt service to help cover delinquencies. The CFD law allows the City to raise CFD taxes on each home by up to 10% to cover delinquencies. Buyers of homes in CFD No. 2022-2 have, and will, receive detailed disclosure notices related to CFD No. 2022-2 regarding the terms of the special taxes levied on their homes and its impact on their property tax bill.
The City will be required to annually calculate the special taxes necessary to pay bond debt service and pay annual administrative costs. The City CFD Administrator, Spicer Consulting Group LLC, will place the Special Tax amounts on the County property tax roll annually. Once the City collects the taxes, the funds will be sent to the U.S. Bank Trust Company, National Association, the fiscal agent (“Fiscal Agent’), to make interest and principal payments on the bonds. The City together with the Fiscal Agent will also manage the bond reserve fund to apply any investment earnings to the related bond debt service. If there are property owners who are delinquent in their payment, as referenced above, the City will be required to initiate foreclosure actions. The City CFD Administrator will monitor and take any required actions. Any costs associated with administering the CFD No. 2022-2 will come from the Administrative Expense Fund funded by the Special Taxes set up for such purposes under the Fiscal Agent Agreement.
CFD No. 2022-2 disclosure counsel, Best Best & Krieger (who also serves as City Attorney and bond counsel), has prepared a Preliminary Official Statement, which includes the form of the Continuing Disclosure Certificate, to be approved by the City and provided to investors. A substantially final draft is attached as part of this Staff Report together with the Fiscal Agent Agreement, Bond Purchase Contract, and other legal documents related to the sale and issuance of the Bonds. The Preliminary Official Statement will disclose information about the CFD No. 2022-2 and will describe the risks associated with the bonds to investors. The final Official Statement will be available after the bond sale and will be delivered to investors. Neither the City nor CFD No. 2022-2 has any obligation to pay debt service on the bonds in the event of default or non-payment of CFD No. 2022-2 Special Taxes by property owners. 2021-2025 Strategic Targets and Goals
The issuance of Series 2026 Bonds will meet Key Target No.1: Improved Operational and Financial Capacity by securing a long-term revenue source, and No. 3.d. Improve the City’s appearance, cleanliness and attractiveness. This project will contribute to ensure that the City is clean and attractive and provide infrastructure designed for long term economic growth.
Fiscal Impact
There is no impact to the General Fund. The Series 2026 Bonds issued by CFD No. 2022-2 will be secured solely by the Special Taxes levied in CFD No. 2022-2.
Administrative costs associated with administering CFD No. 2022-2 will be funded through CFD revenues.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2026-080,
1. Authorizing the issuance of, not to exceed $3,200,000 aggregate principal amount of Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino 2026 Special Tax Bonds; and
2. Approving a form of Preliminary Official Statement, a form of the Fiscal Agent Agreement, a form of Bond Purchase Agreement, and a form of Continuing Disclosure Agreement, which is attached to the Preliminary Official Statement as Appendix E; and
3. Making certain determinations relating thereto; and
4. Authorizing certain other actions in connection therewith.
Attachments
Attachment 1 Resolution No. 2026-080
Attachment 2 Exhibit A - Resolution 2026-080
Attachment 3 Fiscal Agent Agreement
Attachment 4 Preliminary Official Statement Attachment (includes the Continuing Disclosure Certificate)
Attachment 5 Bond Purchase Agreement Attachment
Ward:
Fourth Ward
Synopsis of Previous Council Actions:
July 20, 2022 Mayor and City Council adopted Resolution No. 2022-143 declaring intention to establish proposed Community
Facilities District No, 2022-2 (Palm) of the City of San Bernardino;
Mayor and City Council adopted Resolution No. 2022-144
declaring the necessity to incur bonded indebtedness of proposed Community Facility District No. 2022-2 (Plam) City of San Bernardino
August 17, 2022 Mayor and City Council adopted Resolution No. 2022-177 amending and supplementing the resolution declaring
intention to establish reposed Community Facilities District No 2022-2 (Palm) of the City of San Bernardino;
Mayor and City Council adopted resolution 2022-178
amending and supplementing the resolution of necessity to incur a bonded indebtedness of proposed Community
Facilities District 2022-2 (Palm) of the City of San
Bernardino.
October 5, 2022 Mayor and City Council adopted Resolution No. 2022-213 establishing Community Facilities District No. 2022-2 (Palm) (CFD 2022-2) of the City of San Bernardino, authorizing the levy of a special tax to pay the cost of acquiring or
constructing certain facilities, and to pay debt service on bonded indebtedness within the proposed CFD No. 2022-2
of the City of San Bernardino;
Mayor and City Council and adopted Resolution No. 2022- 213 determining the necessity to incur bonded indebtedness in an amount not to exceed $4,000,000 within the proposed CFD No. 2022-2 of the City of San Bernardino;
Mayor and City Council adopted Resolution No. 2022-213
acting as the legislative body of CFD 2022-2 of the City of San Bernardino certifying election results; and
Mayor and City Council introduced Ordinance No. MC-1598 acting in its capacity as the legislative body of CFD 2022-2 of the City of San Bernardino authorizing the levy of special taxes.
November 2, 2022, Mayor and City Council conducted Second Reading of and approved Ordinance No. MC-1598 acting in its capacity as the legislative body of CFD 2022-2 of the City of San
Bernardino authorizing the levy of special taxes.
CC: Eric Levitt, City Manager