BUSD approves contract for assistance with CFD for The Havens

Joe Naiman

Village News Reporter

The development which had originally been called the Polo Club and was later renamed Bonsall Oaks is now known as The Havens, and the Jan. 19 Bonsall Unified School District board meeting discussed a potential community facilities district for The Havens.

A 5-0 BUSD board vote approved a professional services agreement with Fieldman, Rolapp & Associates, Inc., for financial services, advice, negotiations, and assistance with the potential formation of the CFD. The non-voting items during the Jan. 19 board meeting included a presentation by representatives of Bonsall Oaks, LLC, which owns the land, and Neighborhood 1 at The Havens, LLC, which will be constructing the first phase.

“We want to make sure that as the community grows our schools are prepared,” said BUSD superintendent Joseph Clevenger.

A community facilities district allows bonds for infrastructure to be repaid through assessments on property (these are sometimes known as Mello-Roos taxes due to the state legislators who authored the option for services on new development to be funded by an annual assessment).

An assessment must be approved by a majority of property owners, although a developer who owns an undeveloped parcel may vote in favor of the CFD and once the property is subdivided those property owners are responsible for the assessments.

The CFD financing can cover capacity and connection fees paid to acquire capacity into the existing system as well as infrastructure expenses themselves including new facilities and expansion, modification, rehabilitation, or other improvements to existing facilities. The proposed CFD for The Havens will also include financing for Rainbow Municipal Water District infrastructure and capacity fees.

The California Statewide Communities Development Authority was created to provide local governments, non-profit public benefit corporations, and private entities with access to low-cost, tax-exempt financing for projects which create jobs, help communities prosper, and improve the quality of life for local residents.

The CSCDA is a joint powers authority whose members consist of 540 cities, counties, special districts, and other agencies. The CSCDA has the statutory authority to issue bonds, notes, or other financing documents in order to promote economic development and has issued more than $65 billion of tax-exempt bonds since its inception in 1988.

The CSCDA facilitates the creation of CFDs and also created the Statewide Community Infrastructure Program to help finance development projects. The tax-exempt bond financing program pools the sale of bonds from different jurisdictions into a single issuance, so the CSCDA utilizes a larger bond issuance for multiple SCIP projects throughout the state.

The Havens was called the Polo Club in 1999 when the San Diego County Board of Supervisors approved a final map to subdivide the 449.54-acre parcel on the north side of Gopher Canyon Road at Vista Valley Road into up to 165 dwelling units with two open space lots. The development was conditioned to obtain permits from the U.S. Army Corps of Engineers, the U.S. Fish and Wildlife Service, the California Fish and Wildlife Service, and the Regional Water Quality Control Board before construction could begin.

The ownership negotiated with the regulatory agencies, and the project has undergone multiple design changes so that the required permits could be obtained. The subdivision was renamed Bonsall Oaks when Bonsall Oaks, LLC, agreed to purchase the project from Vista Villas Development, L.P.

Corman Leigh Communities will be constructing at least the first residential phase of The Havens. Phase 1 consists of a winery, a tasting room, and a bed and breakfast off of Oak Bridge Drive. The tasting room and bed and breakfast will be across Gopher Canyon Road from the entrance to the Vista Valley Country Club. Phase 2 will include 59 residential lots, Phase 3 will provide 57 residential lots, Phase 4 will build 41 residential lots, and Phase 5 will construct seven custom homes.

Construction on the first residential phase is expected to begin in March 2022. The 59 homes will have an average size of approximately 2,300 square feet. The Bonsall Unified School District charges a developer fee of $4.08 per square foot for residential development (the fee for commercial and industrial development is $0.66 per square foot), so the average fee for each home in Phase 2 would be $9,400 and the total school fee amount would be $553,656. When Rainbow Municipal Water District and other impact fees are included the total fees for the first 59 homes would be approximately $2.6 million.

Neighborhood 1 at The Havens desires to finance the fees through a CFD. “It’s really being proposed by our builder,” said Bonsall Oaks, LLC, managing partner David Pallinger.

If the 1% property tax does not cover county, San Diego County Flood Control District, or fire district services needed to serve the development a CFD may be created with a perpetual assessment. A CFD for infrastructure or capacity fees will be dissolved after the long-term payments for those are completed.

Pallinger doesn’t anticipate any perpetual CFD fees for The Havens. “It will get paid off,” he said.

The CFD would allow the other phases of The Havens to finance infrastructure, capacity fees, and BUSD developer fees through bonded indebtedness. “This is just the first phase, but it will ultimately apply to all the phases,” Pallinger said.

The property tax assessment would be paid to the San Diego County Treasurer-Tax Collector before being disbursed, so Board of Supervisors approval will be required due to the county’s involvement. The county will be the lead agency for the Stateside Community Infrastructure Program bond issuance, and the school district as well as the water district would approve a Joint Community Facilities Agreement with the county which would stipulate the collection and distribution process for the taxes.

Fieldman, Rolapp & Associates is headquartered in Irvine. That company will review the proposed development plan, assist the school district with an approach to mitigate the impact of the school facilities development, develop the legal documentation for the CFD finances, develop a term sheet for the mitigation agreement, assist with the CFD process and the review of the CFD formation documents, provide relevant municipal market data, participate in meetings and conference calls with the school district and landowners, and prepare land secured goals and policies for the BUSD board’s consideration.

Neighborhood 1 at The Havens will fund the cost of the school district’s contract with Fieldman, Rolapp & Associates. The fee is based on hourly rates but is not to exceed $4,000 for assisting the district with developing the CFD local goals and policies. A fee not to exceed $15,000 will be for services associated with the mitigation agreement and CFD formation.

The SCIP bonds are expected to be sold in September 2022.