Summary:
The City has received an application for the formation of a new Community Facilities District (CFD). The applicant, Saddleback Peoria Partners, LLC (the "Applicant"), has worked with City staff and the City's consultants to submit an application in accordance with the City's policies and procedures relating to formation of community facilities districts. The Applicant is requesting the formation of the Saddleback CFD No. 1 (District) for the purpose of asking the District to issue bonds, the proceeds of which would be used to acquire from the applicant eligible public infrastructure.
Staff has reviewed the application and will present relevant information, in a public meeting, on the proposed District and address any questions or concerns from Council.
Council is not obligated to create the District. If Council chooses not to adopt the resolution to form the District during this public meeting, as per A.R.S 48-702, Council shall provide a written basis for not adopting the resolution and shall identify the specific changes needed for the application to be approved.
The development is generally bound by Vistancia North Point to the south, Mystic at Lake Pleasant Heights to the east, Arizona Highway 74 to the north and the Peoria city limits to the west.
If the proposed District is formed, some public infrastructure that directly benefits the proposed District will be acquired by the District, while other elements may be paid by the Applicant or through other approved reimbursement agreements and impact fees.
On April 22, 2025, Council took the first formal action relating to formation of this District by authorizing a District Development, Financing Participation and Intergovernmental Agreement (the "CFD Agreement") concerning matters related to, among other things, conditions, terms, restrictions and requirements for public infrastructure and the financing of public infrastructure and subsequent reimbursements or repayments over time from funds derived from the District’s bond sales.
The resolution to be considered at this meeting by the City Council orders and declares the formation of Saddleback Community Facilities District No. 1, authorizes the taking of certain actions with respect to such formation and establishes or acknowledges several components related to formation required in accordance with the Community Facilities District Act in Arizona law.
The Mayor and Council of the City of Peoria will serve as the Board of Directors of the Saddleback CFD No. 1 (the “District Board”), the City Manager will serve as the District Manager, the City Clerk will act the District Clerk, the City Attorney will act as the District Attorney, and other City officials will act in the same capacity for the District.
At this meeting, the City Council will recess from the City Council meeting and reconvene as the District Board to adopt a resolution relating to various organizational matters, including ordering a bond and operation and maintenance tax election. The bond election for each District would authorize a total of $300,000,000 in bonds for the Districts ($35,000,000 for District No. 1, $75,000,000 for District No. 2, $70,000,000 for District No. 3, $75,000,000 for District No. 4 and $45,000,000 for District No. 5). Issuance of any bonds would be at the sole discretion of the CFD Board.
The CFD Agreement for each District includes a target secondary tax rate of $2.65 per $100 of limited assessed valuation. The actual rate for payment of debt service on bonds could go higher, if for some reason the total assessed valuation within a District falls or some other unforeseen event makes it necessary to raise the tax rate to cover the bond obligations, though staff will continue to recommend issuance of bonds conservatively in an effort to avoid such result. To address such contingency, the CFD Agreement for each District includes a requirement that the Applicant execute a Standby Contribution Agreement in connection with each bond issuance pursuant to which the Applicant will be required to contribute amounts for payment of debt service if collections generated by the target secondary tax rate of $2.65 per $100 of limited assessed valuation are not sufficient for payment of debt service on bonds. Such obligation will be further supported by a cash deposit or letter of credit provided by the Applicant that can be accessed in the event the Applicant does not make a payment pursuant to the any Standby Contribution Agreement.
The CFD Agreement for each District provides for the levy of a $0.30 per $100 of limited assessed valuation operation and maintenance tax under certain circumstances. Notwithstanding the foregoing, under no circumstances will the target tax rate exceed $2.65 per $100 of limited assessed valuation. It is not expected that the operation and maintenance tax will be levied by any of the Districts in the near term.
The Applicant’s financial obligations under this document include: (a) a letter of credit in the amount of $350,000, with limited release provisions, the purpose of which is to collateralize the Applicant's obligations to the District to provide indemnification and payment of expenses of the Districts; (b) a deposit of $50,000, due upon formation, to cover initial costs of the CFD which is to be replenished to $25,000 when such deposit is expended. The letter of credit for District No. 1 will be provided within 60 days of formation of District No. 1. The letter of credit for Districts No. 2-5 will be provided upon the earlier of (i) the date of submission by the Applicant (or a related entity) to the City of a preliminary plat application with respect to any of the property within the applicable District, or (ii) the date of submission by the Applicant (or a related entity) to the City of a grading at owner’s risk permit application with respect to any of the property within the applicable District.
A link to the application can be found here:
Community Facilities District | City of Peoria