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Perris council approves resolutions to begin issuance of bonds for two CFDs, authorizes passive validation period
Summary
The City of Perris approved resolutions to begin issuance of bonds tied to two community facilities districts (CFDs) that will reimburse a developer for infrastructure; staff estimated roughly $15 million in bonds and set not-to-exceed parameters ahead of final sale.
The Perris City Council on Feb. 25 held a public hearing and approved resolutions authorizing documents to begin the issuance of bonds tied to two community facilities districts (CFD 2021‑1 and CFD 2022‑1), a financing step that would reimburse a developer for previously constructed infrastructure.
City finance staff and the city's municipal advisor told council members the proposed transaction would combine two CFDs into one series of bonds issued through the Perris Joint Powers Authority. Jim Fabian of Fieldman Rolapp & Associates said the bonds would be secured by special taxes levied on properties in the CFD boundaries and that the sale is planned for late April with a closing in mid‑May.
Fabian said the city expects to issue approximately $15,000,000 of bonds and receive roughly $14,000,000 after sale costs to reimburse D.R. Horton for infrastructure and fees under existing acquisition agreements. He said the staff resolution sets parameters not to exceed $17,000,000 in aggregate principal, a maximum interest rate of 6 percent and an underwriter's discount of 1.5 percent; the bonds would include a debt service reserve roughly equal to one year's debt service and 30‑year maturities.
The council opened and closed the public hearing with no speakers. Mayor Pro Tem Grama moved approval of the three related resolutions (two city council resolutions and one authority resolution); Councilwoman Nava seconded the motion. The vote was 5‑0 in favor.
Why it matters: the bond issuance reimburses a private developer for infrastructure that benefits new homes in the CFD boundaries and places a lien and repayment obligation on properties inside those districts. Fabian said the development is well advanced: one CFD contains 54 occupied homes that have been paying special taxes and the other encompasses roughly 279 homes more than 50 percent built out, with buildout estimated in early 2026.
Council members were briefed that the bonds are non‑rated and secured solely by the special taxes; if property owners fail to pay the special tax, foreclosure actions against the lien could be used to recover debt service. The resolutions also permit a 60‑day passive validation period that would allow for any legal challenge before the bonds are priced and sold.
The city's staff report and presentation said the item previously went to the Ways and Means Committee for review and that staff will return to council on March 25 with a preliminary official statement containing full details for prospective investors.
Council action and next steps: the council approved the resolutions to proceed with the financing and passive validation. Staff and the municipal advisor plan to price the bonds after the validation period ends and return with final sale documents for council consideration and closing.
