Murrieta council starts formation of three CFDs for Discovery Village; most measures pass 4-1

The Murrieta City Council on Feb. 4 voted to begin proceedings to form three Community Facilities Districts (CFDs) tied to the Discovery Village residential development and approved a related reimbursement agreement and a measure to permit bond issuance.

Council action starts a public process that staff said would culminate in a property-owner election and public hearing on April 1, with a second reading of related ordinances tentatively scheduled for April 15. The petitions to form the CFDs were filed by the landowner for Discovery Village, a proposed residential project in northeast Murrieta.

City staff and outside consultants told the council the three proposed districts would fund different functions: CFD 2025-1 for public safety services (police, fire and paramedic services); CFD 2025-2 for public facilities maintenance (landscaping, lighting, street sweeping, pavement management, park and trail upkeep, drainage and graffiti abatement); and CFD 2025-3 to finance public improvements (streets, sidewalks, drainage, lighting, water/sewer facilities and related mitigation fees). The developer also requested authority for up to $27.5 million in bonded indebtedness under CFD 2025-3 to pay for roughly $20 million in infrastructure costs, staff said.

Shane Spicer, the city's CFD consultant, described estimated tax rates and escalation provisions. For the safety-services CFD, staff presented a three-tiered per-unit rate that would be $250 for affordable units (no escalator), $468 for multifamily units, and $580 for single-family units; the maintenance CFD estimate was about $274 per unit with a CPI or 2% escalator. Staff called the figures estimates and said the special taxes would be levied only on property within the districts; they would not be charged to existing city neighborhoods.

City bond counsel Brian Forbath said the bonds would be payable solely from special taxes levied within the CFD and that the city would not pledge general-fund backing or a general promise of the city to pay debt service. "Investors will be told to look only to the security of special taxes and properties within the district," Forbath said.

Staff confirmed the formation costs are being reimbursed by the developer and that the next formal steps, if council proceeds, are a resolution of intention tonight, a public hearing and property-owner election on April 1, and final actions to introduce and adopt an ordinance authorizing the special-tax levy. The city described the CFDs as annexable citywide, meaning future developments could request annexation, but no other properties are subject to these taxes until annexation is approved.

During the meeting councilmembers asked about disclosures to future homeowners, the timeline for potential bond issuance and whether issuing bonds would affect the city's own bond capacity. Forbath and staff said statutory escrow disclosures are required to be provided to buyers and that any bonds would be issued on a developer-backed basis and would not count against the city's general obligation capacity because they are payable only from special-tax revenues.

Developer supporters spoke during public comment. Wayne Dollarhide, speaking on behalf of developer Dan Lee, read a letter endorsing CFDs as a tool to fund growth-related infrastructure while protecting the city’s general fund.

Votes at a glance:

- Resolution 25-4805 (declare intent to form CFD 2025-1, Safety Services): motion by Dr. Lisa DeForest; second Ron Holliday; vote 5–0, approved. - Resolution 25-4806 (declare intent to form CFD 2025-2, Maintenance Services): motion Ron Holliday; second Mayor Pro Tem John Lavelle; vote 4–1, approved (Councilmember Lori Stone dissenting). - Resolution 25-4807 (declare intent to form CFD 2025-3, Public Improvements): motion Ron Holliday; second Mayor Pro Tem John Lavelle; vote 4–1, approved (Councilmember Lori Stone dissenting). - Resolution 25-4808 (incur bonded indebtedness not to exceed $27,500,000 for CFD 2025-3): motion Ron Holliday; second Dr. Lisa DeForest; vote 4–1, approved (Councilmember Lori Stone dissenting). - Reimbursement agreement for CFD 2025-3 (authorizing city manager to execute): motion Dr. Lisa DeForest; second Mayor Pro Tem John Lavelle; vote 4–1, approved (Councilmember Lori Stone dissenting).

Councilmembers emphasized that the special taxes and any bonds would apply only to the Discovery Village parcels (and to any properties that chose to annex later) and would not be billed to the rest of the city. Staff said the developer has deposited funds to reimburse the city for the administrative costs of formation and that additional details — the CFD report, proposed tax schedules, and final bond documents if bonds are pursued — will be posted before the April public hearing.

Next steps: staff will publish the CFD report, hold the April 1 public hearing and property-owner election, and return to council for certification and ordinance actions. If bonds are later issued they would be timed to match development phases and bond series issuance, not to exceed the authorized maximum indebtedness established by the council.