In a couple of separate actions, Beaumont took time to dissolve a couple of improvement areas to an existing Community Facilities District, and refinanced outstanding bonds to the benefit of property owners in another.
The city approved a debt refinancing of four series of outstanding bonds associated with five improvement areas of Community Facilities District 93-1 that, altogether, is estimated to save owners of 1,813 parcels more than $20 million during their terms.
The city also removed an “escalator” for Improvement Areas 7C and 20, which originally provided smaller savings at the beginning of the bond’s issuance, but would scale to larger savings towards their maturity.
Creating CFD 2021-1
The city cleared the way for the dissolution of two improvement areas of CFD 93-1.
Improvement Areas 19D and 19F now fall under the auspices of their own facilities district: CFD 2021-1, encompassing 529 proposed single family homes, which affect the three developers who own the land within the new district: SDC Fairway Canyon, LLC; D.R.Horton Los Angeles Holding Company, Inc.; and Woodside 05s, LP.
As part of its actions, Beaumont also approved bond indebtedness for CFD 2021-1 in the amount of $19,500,000.
The city also approved four separate “special taxes”: one ranging from $1,545 to $2,380 per unit of developed property to finance construction of facilities that will benefit the district; a special tax for maintenance services of $205 per unit of developed property for 2021-22; a contingent special tax for maintenance services of $624 for 2021-22, which would “only be imposed if the homeowner’s association owned property; and a special tax for public services of benefit to the district in the maount of $509 per unit of developed property in the 2021-22 fiscal year, with rates for each tax subject to increase at least 2 percent a year, reflecting 1.98 percent and 2 percent of estimated sales prices.
Bonds refinanced for CFD 93-1
Assuming that the refinancing bonds are sold, starting next year, it is estimated that property owners in Improvement Area 7B will realize average annual savings of $134.80; $100.72 in Improvement Area 7C; $232.07 in Improvement Area 17A; $109.28 in Improvement Area 19C and $716.28 in Improvement Area 20.
CFD bonds are issued by the city to help finance public improvements.
Property owners will pay off those bonds into the next decade: owners of 106 parcels in Area 20 will pay off their $2,870,000 2012B bonds in 2035; owners of 236 parcels in Area 7B will pay off their $1,740,000 2012C bonds in 2039, and the 318 parcels of $1,580,000 in Area 7C will conclude also in 2039; the $5,480,000 in 2013A bonds for the 668 parcels in Area 19C will be paid off in 2036; and for the 485 parcel owners in Area 17A, the $8,410,000 in 2013B bonds will end in 2034.
Under existing tax law, refinancing of outstanding bonds must be done on a taxable basis, though the city could reconsider at a later time to refinance on a tax-exempt basis.
According to the city’s staff report, “Given the opportunity to strengthen the underlying credit of the refunding bonds and achieve economies of scale, the refunding contemplates an issuance through the Beaumont Public Improvement Authority,” similar to one the city used last summer that saved homeowners $10 million over a 22-year period in local agency refunding bonds (Series 2020A).
Beaumont’s city council has insisted that it will not extend the original terms of the bonds, giving property owners assurances that they will not be paying off those bonds beyond the maturation dates.
Councilman Rey Santos recused himself from voting on the bond refinancing, since he lives within an affected CFD; and Mayor Mike Lara was absent from the June 1 council meeting.
Staff Writer David James Heiss may be reached at firstname.lastname@example.org , and messages may be left at (951) 849-4586 x114.