For City Council Meeting [June 9, 2020]
TO: Honorable City Council
APPROVAL: Rod Foster, City Manager
FROM: Matt Schneider, Community Development Director
Title
Request City Council Adopt (1) Resolution No. 7629 Stating Intention of the City Council of the City of Rialto to Establish City of Rialto Community Facilities District No. 2020-1 (El Rancho Verde) and to Authorize the Levy of Special Taxes within said District, and (2) Resolution No. 7630 of the City Council of the City of Rialto to Incur Bonded Indebtedness in the Amount of Not to Exceed $20,000,000 within Proposed Improvement Area No. 1, and $20,000,000 within Proposed Improvement Area No. 2, of City of Rialto Community Facilities District No. 2020-1 (El Rancho Verde), and (3) setting a Public Hearing for July 14, 2020.
(ACTION)
Body
BACKGROUND
Mello-Roos Districts
Community facilities district (CFD) financing is a commonly used method of financing public infrastructure costs associated with new development when requested by a developer. Commonly referred to as a "Mello-Roos District," this type of land-secured financing permits the City to issue bonds to pay for public infrastructure associated with a development. Debt service on the public infrastructure bonds is paid from special taxes levied on real property within the CFD boundary. The bonds are typically issued on a tax-exempt basis at the federal and state level, providing low cost financing for a portion of the overall project costs, with some or all of this benefit and cost passed along to the future homebuyers or property owners.
CFDs can also be formed so a development can contribute to public service costs to help mitigate any public service impacts that might be created by a development. Typically, bonds are not sold to pay for public service costs, rather a special tax is placed on the property and collected on an annual basis to pay for enhanced public services.
City Council Policy
The Mello-Roos Act provides that prior to i...
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