Yucaipa-Calimesa Joint Unified School District Community Facilities

Yucaipa-Calimesa Joint Unified School District
Community Facilities District No. 3
June 14, 2011
Community Facilities District Overview
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In 1978 the voters of California enacted Proposition 13,
which limited the ability of local public agencies to
increase property taxes based on a property's assessed
value.
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As a result, from 1978-1982 public agencies had a difficult
time obtaining funds for public improvements and
services.
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In 1982, the Mello-Roos Community Facilities Act of
1982 was created to provide an alternate method of
financing needed improvements and services.
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The Act allows any county, city, special district, school district or joint powers authority to establish a
Community Facilities District ("CFD") which allows for financing of public improvements and
services.
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CFDs are now widely used in communities across California to provide the infrastructure needed to
facilitate rapid and large scale residential growth.
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CFDs allow Developers/Builders to finance the mitigation amounts through bond issuance. School
districts receive higher school fees, and homeowners pay annual CFD special tax in lieu of a higher
home purchase price.
Yucaipa-Calimesa Joint Unified School District │Community Facilities District No. 3 Presentation
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Community Facilities District No. 3 Financing Agreement
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On February 20, 2007, the School District entered into a Finance Agreement with KB Home,
Fidelity Homes, Ivano Stamegna, Yucaipa Park, LLC, Yucaipa Villas, LLC and Yucaipa
Landholdings LLC.
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This Agreement allows the School District to collect more than Level 2 Fees from a developer
located within CFD No. 3 and provides a greater ability to mitigate the impact such development will
have on the School District.
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Current mitigation fee for CFD No. 3 equals $16,714.23 per unit (assumes 1,843 square feet).
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Formed in 2007, CFD No. 3 encompasses 264 planned units within 6 Planning Areas comprised of
2 Zones.
Yucaipa-Calimesa Joint Unified School District │Community Facilities District No. 3 Presentation
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Community Facilities Districts No. 3 Planning Areas and Ownership
Zone B
Owned by KM
Investments
,LLC
Zone A
Planning Area 2
Owned by Yucaipa Estates
8, LLC
Zone A
Planning Area 3
Owned by RE
Property Investors &
Dion Patrick Reed
Zone A
Planning Area 1
Iris Gardens
Community
Zone A
Planning Area 4
Owned by
JJJCCS, LLC
Zone A
Planning Area 5
Owned by Kuan
Jin Yee
Zone A
Planning Area 6
Owned by Calimesa Bluffs
Yucaipa-Calimesa Joint Unified School District │Community Facilities District No. 3 Presentation
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Community Facilities District No. 3 Obligation to Repay Developer
Yucaipa-Calimesa Joint Unified School District │Community Facilities District No. 3 Presentation
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Of the 6 Planning Areas within the CFD, only
Iris Gardens (KB Home Planning Area 1) has
been developed.
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Fiscal Year 2010-2011 Special Tax Levy was
$202,000.00.
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All 110 homes in this Planning Area have been
constructed.
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KB Homes has paid $1,556,130.37 in
Mitigation Payments to the School District to
date as a result of development.
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School District is obligated, pursuant to
Financing Agreement, to repay as much of the
$1,556,130.37 as possible through a bond
issuance.
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Projected Bond Issuance Amount and Proceeds
Item
Funding of First Year CFD Administrative Expenses
Amount
Percentage
$15,000.00
0.70%
$338,370.00
16.10%
$28,750.00
1.40%
$1,365,952.10
65.00%
Funding of CFD Reserve Fund
$169,562.50
8.10%
Cost of Issuance [1]
$140,000.00
6.70%
$42,800.00
2.00%
$2,100,434.60
100.00%
CFD School Facilities Fund
Reimbursement to KB Home for Formation Deposit
Reimbursement to KB Home for School Fees Paid
Underwriter’s Discount
Total Projected Issuance
[1] Cost of Issuance includes fees for Bond Counsel, Disclosure Counsel, Special Tax Consultant, Financial Advisor,
Appraiser, Fiscal Agent and Printer at reduced fee amounts
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The School District’s General Fund is always protected and never required to make principal and
interest payments on the bonds. Additionally, a cash reserve is funded out of the bond proceeds
adding an additional layer of security.
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Principal and interest payments are met through the collection of annual Special Taxes. Such
collections are supported by delinquency and foreclosure covenants.
Yucaipa-Calimesa Joint Unified School District │Community Facilities District No. 3 Presentation
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Community Facilities District No. 2 Comparison
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CFD No. 2 (Wildwood Canyon II) issued special tax bonds in September of 2005 in the amount of
$1,380,000.
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Formed on August 17, 2004, all 71 Units have been constructed within CFD No. 2. The Fiscal Year
2010/2011 Special Tax Levy was $152,048.70.
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This bond issuance paid for School Facilities.
Item
Amount
Percentage
Funding of First Year CFD Administrative Expenses
$20,000.00
1.45%
Acquisition and Construction Accounts were Funded
$1,014,884.00
73.54%
$0.00
0.00%
Funding of CFD Reserve Fund and an Interest Account
$154,501.39
11.20%
Cost of Issuance [1]
$163,014.61
11.81%
$27,600.00
2.00%
$1,380,000.00
100.00%
Developer Reimbursements
Underwriter’s Discount
Total Issuance
[1] Cost of Issuance included fees for Bond Counsel, Disclosure Counsel, Special Tax Consultant, Financial Advisor, Fiscal Agent
and Printer
Yucaipa-Calimesa Joint Unified School District │Community Facilities District No. 3 Presentation
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Projected Bond Issuance Timeline
Date
Activity
June 14, 2011
CFD Presentation to the Board. Approval of
Remaining Contracts (Appraiser and Fiscal Agent)
Necessary for Bond Issuance.
June 20, 2011
through
July 21, 2011
Legal Documents are Drafted, Reviewed, Revised
and Finalized by the Bond Finance Team Retained by
the School District.
August 9, 2011
Board Adopts Resolution of Issuance, Approves
Preliminary Official Statement and other Legal and
Financing Documents.
Week of
September
12, 2011
Target Bond Closing and Bond Proceeds delivered to
the School District.
Yucaipa-Calimesa Joint Unified School District │Community Facilities District No. 3 Presentation
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Remaining Undeveloped Planning Areas Can be Dissolved
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Bonds will only be issued on the KB Home
portion (Iris Gardens).
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Remaining 5 Planning Areas within CFD No. 3
are undeveloped. 154 units are planned.
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School District staff has proposed legally
dissolving the remaining areas in conjunction
with the bond issuance for Iris Gardens in order
to spur development.
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In order to dissolve the CFD, notification letters to
undeveloped property owners will be sent in July;
Board adopts resolution to dissolve remaining
Planning Areas on August 9, 2011.
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By dissolving Planning Areas, School District will
instead collect level 2 fees; CFD No. 1 will be
back in place.
Yucaipa-Calimesa Joint Unified School District │Community Facilities District No. 3 Presentation
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Questions
Yucaipa-Calimesa Joint Unified School District │Community Facilities District No. 3 Presentation
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