City Council and Concurrent Authorities
May 21, 2024

City of StocktonCommunity Facilities District 2019-1 (Cannery Park II)Special Tax Bonds, Series 2024City Council MeetingMay 21, 2024Agenda Item 15.4 History of the DistrictDistrict:North Stockton, South of Eight Mile Road and West of Highway 99District Master Plan:Originally formed in 2005 with 450 Acre Cannery ParkDistrict Split / Formation:2019 (278+/- Remaining Acres)Current Status:CFD 2019-1 originally planned for 515 residential units and fourparcels for non-residential useIssued first series of bonds in 2022 in the amount of $9,915,000 but limited the size ofthe issuance due to COVID-19 and housing market concernsCurrent sale planned as a limited public offering since small amount of bonds to beissued and limited amortization. Will be marketed to a limited number of institutionalinvestors.Holman Investors, LLC (“Developer”) recently completed rezoning efforts convertingthree of the four non-residential properties to residential adding an additional 331single-family and an additional 250-300 multi-family units. The developer retained19.7 acres of non-residential for future business park / commercial uses.Future bond issues are plannedCurrent Development Status:2Completed Homes (Individuals): 213Remaining Lots (LGI Homes): 196Remaining Lots (KB Homes): 106Total Homes : 515 Boundaries of CFD 2019-1
3 Tax Assessment & Debt Issuance: CFD 2019-1Special Tax A (Capital Infrastructure):The new development will beassessed the Special Tax A to finance the public infrastructure. A portionof Special Tax A converts to a maintenance tax upon final maturity of anybonds. The maintenance tax will then escalate at up to 4.00% per yearand remain in perpetuity.$1,600 per unit, Single-family residential$7,500 per acre multi-family,$4,500 per acre commercial$4,145 per acre light industrialSpecial Tax B (Services):$520 per year for single-family homes and$343.20 per unit for multi-family units beginning in FY 2019/20. SpecialTax B Escalates at up to 4.00% per year and will remain in perpetuity.Debt Issuance: The current debt capacity is set at“not-to-exceed” $25million with the term of the indebtedness through July 1, 2059 4 Financing Estimates (VTL 10.4:1)
5“Not-To-Exceed” Parameters: _Maximum Issue Size: $2,000,000Maximum True Interest Cost: 6.25% EstimateItem$1,590,000Estimated Par Amount of Bonds(1)$1,308,949Estimated Proceeds Available for Construction (1)$3,893,954Estimated Total Debt Service (1)$89,613Reserve Fund Deposit (Maximum Annual Debt Service)(1)(2)$805,239Estimated Average Annual Debt Service(3)$150,000Total Estimated Costs to Issue the Bonds6.08%“All-In” True Interest Cost(4)(1) Assumes market interest rates as of March 12, 2022(2) Deposited into the reserve fund on parity with the reserve fund for Series 2022 Bonds(3) Solved around the 2022 Bonds for combined level debt service on both series(4) Includes all the estimated costs to issue the bonds 6Proposed Financing TimelineItemTimelineCity Council ConsiderationTuesday May 21stDue Diligence CallWeek of May 27thPrint and Post Preliminary OfficialStatementWeek of June 17thPre-Pricing and PricingJune 25thand June 26th•Print and Post Final OfficialStatement•Finalize all DocumentsWeeks of July 1stJuly 8thClose the TransactionJuly 17th 6 Documents for ConsiderationSupplemental Agreement No. 1 to Fiscal Agent Agreement:Thisagreement governs the terms and conditions of the bonds and the roleand responsibilities of the Fiscal AgentLimited Offering Memorandum (Including Continuing DisclosureAgreement):Will be distributed as the primary marketing document toprospective bond purchasers. The agenda packet includes the LimitedOffering Memorandum deemed to be essentially final. A final version ofthis document, called the Final Offering Memorandum, is estimated tobe made available shortly after the bonds are sold and will reflect all thefinal bond sale information.Bond Purchase Agreement:Is a contract between the City and theUnderwriter that provides the terms and conditions under which theunderwriter will purchase the Series 2024 Bonds7 Staff RecommendationApprove resolution authorizing a second issuance of SpecialTax Bonds to be issued for and on behalf of the City ofStockton Community Facilities District No. 2019-1 (CanneryPark II), approving and directing the execution of a supplementto fiscal agent agreement, approving the form of limited offeringmemorandum, approving sale of such bonds, and approvingother related documents and actions8 8