For City Council Meeting February 10, 2026
TO: Honorable Mayor and City Council
FROM: Tanya Williams, City Manager
AUTHOR: Scott Williams, Director of Finance
Title
Request City Council to Adopt Resolution No. 8467 Authorizing the Issuance of Special Tax Bonds for and on Behalf of Community Facilities District No. 2024-1 (Renaissance), Approving and Directing the Execution of a Fiscal Agent Agreement and Bond Purchase Agreement, Approving the Form of Preliminary Official Statement, Approving the Sale of Such Bonds, and Approving Other Related Documents and Actions.
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council adopt a Resolution authorizing the issuance of Special Tax Bonds for and on behalf of Community Facilities District No. 2024-1 (Renaissance), approving and directing the execution of a Fiscal Agent Agreement and Bond Purchase Agreement, approving the Form of Preliminary Official Statement, approving the sale of such bonds, and approving Other related documents and actions.
BACKGROUND
The Project and the Development Agreement
In 2016, the City entered into a Development Agreement (Development Agreement) with Lewis-Hillwood Rialto Company, LLC (Lewis) that provides for the development of the Renaissance master planned development in accordance with the objectives set forth in the General Plan and in the Renaissance Specific Plan. At build-out, land within the Renaissance Specific Plan is anticipated to consist of up to 1,300 rental and for-sale housing units, 800 acres of industrial and commercial land uses, neighborhood parks, paseos and greenbelts, trails and walkways, public streets and other amenities.
Community Facilities Districts
Community Facilities Districts (CFDs) are established pursuant to the provisions of the California Government Code Section 53311 et seq. (commonly known as the “Mello-Roos Community Facilities Act of 1982”) (Act). CFDs raise money through special taxes that must be approved by 2/3 of the qualified electors within a CFD, and are most often formed by a landowner-developer prior to subdivision. CFDs can finance a wide list of improvements, including roads, water, sewer and storm drain facilities, and schools. They are also used to finance ongoing services and maintenance costs, such as landscaping, streets, lighting and drainage facilities. The special taxes are secured by a continuing lien and are levied against property within the CFD on an annual basis. The revenue stream is used to pay debt service on bonds, and to pay for services, or a combination thereof, including administrative costs of the CFD.
ANALYSIS/DISCUSSION
In 2024, at the request of Lewis, the City formed its City of Rialto Community Facilities District No. 2024-1 (Renaissance) (CFD 2024-1) to provide a portion of the financing for public improvements and to mitigate costs of public services associated with the construction of 429 single-family residential units within the Renaissance Specific Plan. CFD 2024-1 is authorized to issue up to $25,000,000 of bonds secured by the special tax levied for facilities (Special Tax A) within CFD 2024-1 to pay for eligible improvements, including improvements constructed by the City through the payment of impact fees.
Lewis, as the master developer of the project, sold the land within CFD 2024-1 to Lennar Homes, as merchant builder, and a land-bank for Lennar Homes. Lennar Homes is making progress with the construction of the 429 planned homes within CFD 2024-1, and so it is appropriate to issue the first series of special tax bonds at this time. A second series of bonds is contemplated to be issued at a later time, once additional development has occurred.
Proposed Bond Issuance
Based on the current status of the property within CFD 2024-1, the appraisal estimates the value of the taxable property at approximately $127.9 million. Based on the expected par amount of bonds of approximately $10.5 million, the property value compared to bonded debt lien would be approximately 12 to 1, which is well in excess of the required minimum value to lien required by the Act and the City’s policies governing CFD bond issuances.
The proposed Resolution (Attachment 1) approves: (i) the sale of the bonds in an amount not to exceed $15.0 million, a true interest cost (TIC) of not to exceed 6.00% and an underwriter’s discount of not to exceed 1.50%; (ii) a form of Fiscal Agent Agreement; (iii) the Preliminary Official Statement; (iv) a form of Bond Purchase Agreement; and (v) the appointment of Piper Sandler & Co. as underwriter and Jones Hall LLP, as bond counsel and disclosure counsel to the City for the bonds. The Resolution also authorizes City staff to finalize the foregoing documents, and such other documents and actions as are required to issue the bonds. Descriptions of the documents approved by the Resolution are as follows:
• Fiscal Agent Agreement: The Fiscal Agent Agreement (Attachment 2) allows U.S. Bank to act on behalf of the City to provide for the issuance of the bonds, the disbursement of proceeds of the bonds, the disposition of the special taxes securing the bonds, and the administration and payment of the bonds.
• Bond Purchase Agreement: The Bond Purchase Agreement (Attachment 3) is a legally binding contract between the City, for and on behalf of CFD 2024-1, and Piper Sandler & Co., as underwriter, wherein the City agrees to sell the bonds to the underwriter for further sale and distribution to the ultimate investors in the bonds. At the bond closing, the City delivers the bonds to the underwriter, and the underwriter pays the City for them and simultaneously completes the sale to investors, all at the price and yield established on the date of the pricing of the bonds, and reflected in the Bond Purchase Agreement at the time it is signed.
• Preliminary Official Statement; Continuing Disclosure Agreement: The preliminary Official Statement (Attachment 4) serves as the offering prospectus for the bonds. It is the disclosure document relied on by bond investors to make an investment decision, detailing the underlying security for the bonds and associated investment risks. The Official Statement sets forth the security for the bonds and other important details about CFD 2024-1 and is used by the underwriter to market the bonds to investors. An exhibit to the Preliminary Official Statement is the Issuer Continuing Disclosure Agreement, pursuant to which the City, on behalf of CFD 2024-1, will provide ongoing information concerning CFD 2024-1, and the development therein, to investors in the bonds.
Schedule
If this item is approved, City staff will work with the bond finance team to determine the final bond sizing, and the preliminary Official Statement will be finalized and posted electronically for potential investors to review. It is anticipated that the preliminary Official Statement would be finalized and posted for investors on or around February 11, with bond pricing to follow on February 25 and bond closing/funding occurring on or around March 11.
ENVIRONMENTAL IMPACT
The proposed action does not constitute a “project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(b) of the State CEQA Guidelines, a project does not include organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
The City identified several goals and objectives within the City’s recently adopted General Plan through which the City looks to improve the community. The proposed action is consistent with the following goals and objectives:
Goal 3-1: Strengthen and diversify the economic base and employment opportunities and maintain a positive business climate.
Policy 3-1.2: Encourage a variety of businesses to locate in Rialto, including retail, high technology, professional services, clean industries, logistics-based businesses, and restaurants/entertainment uses to promote the development of a diversified local economy.
Goal 3-3: Attract, expand, and retain commercial and industrial businesses to reduce blighted conditions and encourage job growth.
Goal 3-6: Require that all developed areas within Rialto are adequately served with essential public services and infrastructure.
Policy 3-6.1: Coordinate all development proposals with other affected public entities to ensure the provision of adequate public facilities and infrastructure services.
Goal 3-7: Upgrade public infrastructure as an inducement to promote private investment.
LEGAL REVIEW
The City Attorney's Office has reviewed the agreement and resolution and approved it as to form.
FINANCIAL IMPACTS
Operating Budget Impact
There is no impact on the Operating Budget. The bonds are secured solely by the Special Tax A levied within CFD 2024-1 and are not a debt of the City’s General Fund. Costs of issuance for the bonds are payable solely from bond proceeds.
In accordance with Government Code 5852.1, the following information consists of estimates of certain costs and charges for the bonds that have been provided by Fieldman Rolapp & Associates, Inc., the City’s municipal advisor, which has been represented by such party to have been provided in good faith: (1) estimated true interest cost of the bonds: 5.20%; (2) estimated finance charge of the bonds (sum of all fees and charges paid to third parties): $504,350; (3) estimated amount of proceeds of the bonds received by the City (net of finance charges, reserves and capitalized interest, if any): $8,896,029; and (4) estimated total payment amount (sum total of all payments to pay debt service on the bonds plus the finance charge not paid with proceeds of the bonds) calculated to the final maturity of the bonds: $21,735,216.
Capital Improvement Budget Impact
There is no impact on the Capital Improvement Budget.
Licensing
This action does not require a business license.
ATTACHMENTS
1. Resolution Authorizing the Issuance of Special Tax Bonds for Community Facilities District No. 2024-1 (Renaissance)
2. Form of Fiscal Agent Agreement
3. Form of Bond Purchase Agreement
4. Preliminary Official Statement