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Florence approves bond plan to reimburse Merrill Ranch developer, schedules phased tax increase
Summary
The Florence council and Merrill Ranch Community Facilities District board approved a feasibility report and resolution to issue general obligation bonds to reimburse Pulte for built public infrastructure and to stair-step the CFD tax rate toward the $3.25 cap set in the development agreement.
The Florence town council, sitting as the Merrill Ranch Community Facilities District (CFD) board, adopted a resolution May 20 approving a feasibility report and authorizing the next steps to issue general obligation bonds to reimburse the developer for completed public infrastructure.
The bonds will reimburse Pulte for public infrastructure already constructed in Merrill Ranch. Town financial adviser Mark Reeder told the board the issuance planned over the next weeks is expected to be in the neighborhood of $4 million, with about $3.6 million of public infrastructure identified for immediate reimbursement. The district currently has roughly $1.5 million outstanding in debt, Reeder said, and the proposed transactions would be amortized on a relatively short schedule.
Why it matters: The district’s development agreement established a limited secondary property tax that funds bond debt service (a $3.25 maximum) and an annual maintenance-and-operations levy (30 cents). Reimbursement bond sales will restore developer capital spent on streets and boulevards to public ownership, and the plans include a managed “stair‑step” of the CFD tax rate over coming years to reach, but not exceed, the $3.25 cap in the agreement.
Details: Reeder outlined the statutory feasibility report requirements and described the public infrastructure to be reimbursed, including Constitution National Way and Sun City Boulevard phases. He said about 2,500 homes are complete in District 1 and about 1,600 in District 2—about 4,100 homes total across both districts—providing the growing tax base that will repay the bonds. The county’s current assessed net limited value for the CFD was reported at about $48.6 million for the current year; Reeder said county estimates show roughly 15% growth for CFD No. 1 on the latest update.
Tax-rate plan: Reeder presented a tax-rate management approach that would incrementally raise the CFD levy from current low levels (previous years saw rates well under the $3.25 cap) toward $1.50 in the near term, $2.25 in the next budget year (FY 2025–26), and eventually up to $3.00–$3.25 as additional bond sales for reimbursement occur. He said the board anticipates a second sale in roughly a year for about $3.4 million depending on new growth east of Felix.
Board action: The board opened and closed the statutorily required public hearing with no public comment and then voted to adopt resolution MRCFD1153-25, authorizing the feasibility report and proceeding with the planned bond sale. The motion passed with the council voting in favor.
Background and next steps: Reeder said the bonds are expected to be sold within about 10 days to two weeks with a closing targeted by June. He and bond counsel Paul Giles remained available to answer questions as staff prepares final sale documents. The board noted the development agreement’s $3.25 cap and said the district will return for any further sales or changes in schedule.
