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Supervisors approve new CFD agreement for Meadowood

A community facilities district assessment for Pardee Homes’ Meadowood development to cover the cost of county, flood control district and North County Fire Protection District services had been approved in 2019. On March 17, the San Diego County Board of Supervisors approved a new community facilities district agreement to cover Rainbow Municipal Water District connection fees and infrastructure and county road and park infrastructure.

The supervisors’ 5-0 vote approved the agreement between the county, the California Statewide Communities Development Authority which will issue the bonds and administer the community facilities district, and Tri Pointe Homes, which is the parent company of Pardee Homes. A previous agreement between Pardee, the Rainbow district and the CSCDA covers the Rainbow connection fees and facilities.

In January 2012, the board of supervisors approved the 384-acre Meadowood development. The original approved map included 397 single-family homes, 447 multi-family homes, 13 acres for an elementary school which will be built by the Bonsall Unified School District, four acres of park land, 128 acres of biological open space, 47 acres of agricultural open space, 5.9 miles of trails and a wastewater treatment plant.

Avoiding impacts to sensitive environmental resources, a public park was relocated and the residential component is now expected to consist of 473 single-family and 352 multi-family homes while the public park size has increased to 9.1 acres with the trail length reduced to 5.6 acres.

The 1% property tax will not be sufficient to cover county, San Diego County Flood Control District or North County Fire Protection District services which will be needed to serve Meadowood. The county and Pardee worked to create a community facilities district which includes a special tax, which is sometimes known as mello-roos taxes due to the state legislators who created the option for services on new development to be funded by an annual assessment, to fund the services.

A Joint Communities Facilities Agreement stipulated the collection and distribution process for the taxes. Meadowood has six different tax zones which correspond to the residential planning areas of the development, and a modification of boundaries of specific tax zones to correlate with the phasing of the development and an increase in the maintenance cost of stormwater facilities led to a modification of the assessment last year.

In 2007, the board of supervisors adopted Policy I-136 which outlines how potential community facilities district projects will be evaluated, ensures that the CFDs are created for the public good, and stipulates disclosure requirements which notify prospective property owners of the assessment. Policy I-136 also limits the tax rate for a CFD to 1.86% of the estimated sales price of the residential homes.

Policy I-136 also defines credit requirements to protect bondholders from default for CFDs which issue bonds for reimbursement of constructed infrastructure.

When the board of supervisors approved Meadowood, the land was within the San Luis Rey Municipal Water District, which is not part of the San Diego County Water Authority. The board of supervisors’ conditions included annexing the property into the SDCWA.

Pardee Homes had entered into a pre-annexation agreement with the Rainbow Municipal Water District in 2004, but in April 2005 the Rainbow board instructed the district’s legal counsel to work with Pardee on terminating the agreement and in December 2008 Rainbow’s board voted to terminate that agreement.

In January 2011, the Valley Center Municipal Water District board voted to support the annexation of Meadowood into that district, and San Diego County’s Local Agency Formation Commission approved the annexation of Meadowood into the Valley Center district in 2014.

Meadowood is not adjacent to the rest of the Valley Center boundaries. The plan when the property was annexed was for Pardee to construct water and sewer lines to Meadowood at the developer’s expense. The nearest Valley Center facility is across Couser Canyon multiple miles away from Meadowood, and over time both the Valley Center district and Pardee realized that the lack of facilities in the area would make Meadowood difficult for the Valley Center district to serve.

Meadowood is adjacent to Rainbow facilities, and last year Pardee and the Valley Center and Rainbow districts approved an out-of-area service agreement for Rainbow to provide water and sewer service to Meadowood.

Pardee and the districts are also working with LAFCO to annex the Meadowood area into Rainbow and detach that area from the Valley Center district.

The 2020 agreement had a provision that Pardee will pay for certain water and sewer infrastructure to serve the project. Pardee will also pay all applicable water capacity fees which are charged to developers to cover the new development’s share of infrastructure while the agreement set sewer capacity fees at $10.5 million.

When the agreement was approved, the plan was to form a community facilities district to allow the capacity fee costs to be repaid by an assessment on the properties.

The community facilities district and assessment levy for the county, flood control district, and fire district services will be perpetual. A CFD to pay for infrastructure and connection fees, and therefore the assessment, will be terminated when the bonds are paid off.

The CSCDA will issue the bonds and will handle administrative activity for the CFD although the assessment payments will be part of the property tax payments sent to the county treasurer-tax collector.

Rainbow's board voted to join the CSCDA in December 2016. The CSCDA is a joint powers authority whose members consist of more than 500 cities, counties and special districts and it has the statutory authority to issue bonds, notes or other financing documents. The CSCDA has a Statewide Community Infrastructure Program to help finance development projects; the SCIP pools bonds throughout the state into a single issuance.

The bond sales for the new CFD for Meadowood are expected to generate approximately $36.13 million. Approximately 60% of the total, or $21.66 million, will fund Rainbow connection fees and infrastructure while the other 40% equating to $14.47 million will fund county road and park infrastructure.

The additional CFD assessments will bring the total estimated tax amount to approximately 1.80% of the estimated sales price of the residential homes, which does not exceed the maximum allowable amount.

Joe Naiman can be reached by email at [email protected].

Author Bio

Joe Naiman, Writer

Joe Naiman has been writing for the Village News since 2001

 

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