Eastern Municipal Water District
California

Action/Info Item
4643
Received and Filed
Nov 18, 2020 9:00 AM

Third Quarter Report on Activities Related to Program Management of Community Facilities Districts and Assessment District

Information

Department:FinanceSponsors:
Category:Action/Info ItemMeeting Workflows:Board Admin Committee Workflow

Background

In the third quarter of Calendar Year 2020, Eastern Municipal Water District (EMWD) was responsible for activities related to seven Assessment Districts (ADs), and 62 Community Facilities Districts (CFDs), which include 109 separate financing areas; i.e., Improvement Areas (IAs) or Tax Zones, as detailed in the Quarterly Report (Exhibit A) and Quarterly Status Report (Exhibit C).

 

CFD Formations:

 

The program management team completed the formation of CFD No. 201985 (Winchester Meadows) in the third quarter.  The team continues to evaluate the applications to form CFD No. 201986 (Benton), CFD No. 201987 (Copper Skye), and CFD No. 202088 (French Valley 154), as well as a new request for the formation of CFD No. 202089 (Saddle Point).  The team is waiting on additional information from each prospective developer before scheduling the Resolutions of Intention for consideration by the Board.  Recent and upcoming CFD activity is listed in the Action Item Summary (Exhibit B).  The attached location maps (Exhibit F) show the location of each current, new, and proposed CFD formation.

 

Bond Sales:

 

During the third quarter, the team completed a new money bond issuance for CFD No. 201676 (Conestoga) and a parity bond issuance for CFD No. 201364 (Atherton and Terracina).  In addition, bond sales are currently in progress for CFD No. 201261 (Autumn Winds) and CFD No. 2016-72 (Hidden Hills).  These are scheduled to go before the Board on November 18, 2020.  There are three additional bond issuances which are under evaluation.  DR Horton requested bond issuances for CFD No. 200435 IA D (Mountain Gate) and CFD No. 2018-82 (Aspen Pointe), and KB Home has requested a bond issuance for CFD No. 2016-75 (Camberly Place).  All refunding and new money issuances must substantially comply with the District’s Comprehensive Debt Policy.  The team is currently evaluating each request in order to determine the order of priority to issue bonds. 

 

Change Proceedings:

 

During the third quarter, a change proceeding is in progress for CFD No. 2016-74 IA D (Menifee Town Center).  The public hearing for this change proceeding is scheduled for the October 21, 2020 board meeting.  In addition, the team continues to evaluate petitions received from developers for change proceedings within CFD No. 200651 (Nuevo Meadows) and CFD No. 201362 (Eucalyptus Grove/McLaughlin South).  The request for CFD No. 2006-51 (Nuevo Meadows) intends to amend the Rate and Method of Apportionment (RMA) to increase the Special Tax rates, extend the term of the tax, and enter into a Joint Agreement with Nuview Union School District.  The request for CFD No. 201362 intends to amend the RMA.  All requested change proceedings will comply with the Special Funding Land Secured Guidelines as incorporated in the District’s Comprehensive Debt Policy.

 

Joint Community Facilities Agreements:

 

JCFAs with the following CFDs were completed during the third quarter: Romoland School District CFD No. 20201, Romoland School District CFD No. 20202, Hemet Unified School District CFD No. 20203, and City of Menifee CFD No. 2020-2.  JCFAs with Hemet Unified School District CFD No. 20204 and Moreno Valley USD CFD No. 2020-1 were in progress.  In addition, proposed JCFAs with Hemet Unified School District CFD No. 20201, Hemet Unified School District CFD No. 20202, and San Jacinto USD CFD No. 20201 were under evaluation.  The District reviews each JCFA against the Land Secured Guidelines to ensure it is within the two percent effective tax rate at formation.  Additionally, each agency entering into a JCFA with EMWD must covenant that they will not place EMWD’s name on the property tax bills referencing a CFD where EMWD is not the lead agency.

 

Administration and Consulting:

 

The annual administration for the ADs and CFDs includes budget preparation, annual levy calculation and submittal, delinquency monitoring, bond call preparation, disclosure reporting, and property owner services.

 

The detailed quarterly call log (Exhibit D) includes 30 calls received within the third quarter.  Approximately 50 percent of the callers inquired about the maturity of the bonds in their district.  Callers also requested information including:  the purpose of the charge, the back-up tax and maximum tax amounts, and prepayment calculations.

 

The Delinquency Summary Report (Exhibit E), dated as of August 20, 2020, reflects an overall delinquency percentage of 0.82 percent, a decrease of 0.84 percent from last quarter and .10 percent from July 30, 2019.  Although the delinquency rates for Assessment Districts 5, 7, and 8 remain above 5 percent, they have dropped 3.07 percent, 2.30 percent, and 7.81 percent respectively from last quarter.  The Program Management team will continue to monitor the delinquency rates in these Assessment Districts.

 

During the third quarter, the team completed the calculation and submittal of the annual AD assessments and CFD Special Tax enrollments for Fiscal Year 2020-21.  Over 22,000 parcels were levied for a total of $21.37 million.  Four CFDs, No. 2012-61, No. 201674 IA A, No. 201674 IA B, and No. 201779, are included in the levy for the first time.  In addition, the EMWD Program Management team reviewed and analyzed surplus funds and was able to apply sustainable surplus credits to various CFD special tax requirements. This resulted in a reduction to the amount collected from property owners while also ensuring that sufficient amounts were levied to meet all debt service and administrative requirements.

 

The team has also begun preparation for the required annual SB 165, AB 2109, SB 1029, CDIAC, and Annual Continuing Disclosure reports to submit by the appropriate deadlines.  These reports include information regarding each CFD’s revenues, expenses, improvement fund balances, bond proceed expenditures, use of proceeds, and project status.

Financial/Strat Plan/Enviro

FINANCIAL IMPACT:

None

 

STRATEGIC PLANNING GOAL/OBJECTIVE:

Financial Stability: Enhance and maintain EMWD’s strong financial position and credit quality by identifying and implementing specific opportunities to improve underlying financial metrics.

 

ENVIRONMENTAL IMPACT:

None

Recommendation

Receive and file this report.

 

Meeting History

Nov 5, 2020 4:00 PM  Board Administrative Committee Regular Meeting
draft Draft
RESULT:REVIEWED AT COMMITTEE
Nov 18, 2020 9:00 AM  Board of Directors Regular Meeting
draft Draft
RESULT:RECEIVED AND FILED