HomeMy WebLinkAbout0016_1_CFD 2006-1 IA-FF - City Bond Approval - SRREPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Grant Yates, City Manager
Prepared by: Jason Simpson, Assistant City Manager
Date:October 25, 2016
Subject: Community Facilities District No. 2006-1 (Summerly) Authorizing the
Issuance of its Special Tax Bonds, Series 2016B (Improvement Area FF)
Recommendation
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2006-1 (SUMMERLY) AUTHORIZING THE
ISSUANCE OF ITS SPECIAL TAX BONDS, SERIES 2016B (IMPROVEMENT AREA FF) IN A
PRINCIPAL AMOUNT NOT TO EXCEED FIVE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($5,500,000) AND APPROVING CERTAIN DOCUMENTS AND TAKING CERTAIN
OTHER ACTIONS IN CONNECTION THEREWITH
Background
The City of Lake Elsinore (the “City”) formed the Community Facilities District No. 2006-1 (the
“District”) in 2006 pursuant to the Mello-Roos Community Facilities District Act of 1982. The
District comprises a portion of Summerly, a planned residential community located in the
southeast portion of the City. McMillin Summerly, LLC, acquired the partially-developed
Summerly project in 2010 and now serves as the Master Developer. At build-out, the Summerly
project is expected to include approximately 1,500 single-family detached homes, commercial
development, and recreational and open space. The Summerly project will be built in four
phases.
Improvement Area FF of the District is part of phase three of the Summerly project. On April 8,
2014, an election was held within Improvement Area FF in which the eligible electors within the
improvement area approved the issuance of bonds in an amount not to exceed $5,500,000.
The property within Improvement Area FF is planned for 187 residential units. Residential
construction is already underway by one merchant builder, Ryland, and two fee builders, Van
Daele and SeaCountry on behalf of McMillin. Of the total 187 planned residential units, 34 have
been sold and closed to homeowners, 15 are completed homes, 22 are under construction and
116 are in finished lots as of August 15, 2016. Based on projections provided by the developer
and fee builders, all units are expected to be sold and closed to homeowners by November
2017.
CFD2006-1 IA FF
October 25, 2016
Page 2
Discussion
The proposed Improvement Area FF Special Tax Bonds, Series 2016B (the “2016 Bonds”) are
expected to be issued in a par amount of $3,875,000 with a final maturity of 2047 (30-year
amortization). Proceeds from the 2016 Bonds will be primarily used to finance public facilities
within Improvement Area FF. Final interest rates will be determined when the 2016 Bonds are
priced and sold. The pricing date would be targeted for some time in early November, assuming
that interest rates remain attractive. The bond closing is expected to occur in mid-November.
The table below highlights a few estimated financing statistics of the 2016 Bonds.
Summary of Financing Statistics*
CFD Bonds
Par Amount $3,875,000
All-In True Interest Cost*3.90%
Estimated Cost to Home Owners
FY 2017-18 Assessment**$890
Average Annual Assessment**$1,210
*Preliminary; Subject to Change; Based on Current Market Conditions
**Annual Assigned Special Tax will increase at approximately 2% per year.
Documents to be Approved
Approval of the attached resolution will approve and authorize the execution of the following
financing documents:
Preliminary Official Statement;
Continuing Disclosure Agreement; and
Bond Purchase Agreement
Bond Counsel and the City Attorney have reviewed the attached financing documents on behalf
of the District.
Fiscal Impact
There is no cost to the City; however, the property owners are expected to pay approximately
$890 per parcel starting in FY 2017-18, increasing at 2% per year through 2047, as illustrated in
the table on the previous page. The average assessment over the life of the 2016 Bonds is
expected to be approximately $1,210.
Exhibits
A - City Resolution No. 2016-__
B - Preliminary Official Statement
C - Bond Purchase Agreement
D - Continuing Disclosure Certificate
E – Boundary Map
F – Bond Indenture
G – Appraisal Report
H - Supplemental Appraisal Report