ITEM #: 2.
DATE: 11/17/2025
AI #:2938
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COMMUNITY FACILITIES DISTRICT REPORT
| SUBJECT: |
PUBLIC HEARING FOR THE FINAL ASSESSMENT FOR THE MONTECITO #4 ASSESSMENT DISTRICT WITHIN THE ESTRELLA MOUNTAIN RANCH CFD
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| STAFF PRESENTER(S): |
Kevin Custer, Deputy Finance Director |
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| SUMMARY |
| The District Engineer has determined the public infrastructure benefiting the assessed residential lots is complete. No objections to the assessment or to the project's Feasibility Report, as defined in EMRCFD RES 2025-168, have been submitted to the District. The Board will hold a public hearing regarding the assessment. Following the public hearing, the Board will consider Resolution EMRCFD RES 2025-172, which is the final step in the procedures necessary to form the Montecito No. 4 Assessment District and to provide for assessments to pay the debt service on special assessment revenue bonds. |
| Recommendation |
| Final Assessment Hearing for the Montecito #4 Assessment District within the Estrella Mountain Ranch CFD. No Board action is required for this item. (Kevin Custer, Deputy Finance Director) |
| FISCAL IMPACT |
| There is no direct fiscal impact of this action. However, it is a required step for the special assessment district to potentially issue revenue bonds in the principal amount of up to $10,668,000. These bonds will acquire the infrastructure, pay appropriate capitalized interest, establish a reserve fund, and pay for the costs of issuance of the bonds. Property owners within the Assessment District will pay the annual debt service payments for the special assessment revenue bonds. The annual debt service payment will be collected by the Maricopa County Treasurer by adding the amount due from each property owner to their annual property tax bill. The assessments on the 508 individual lots will not exceed $21,000. |
| BACKGROUND AND PREVIOUS ACTIONS |
The Estrella Mountain Ranch Community Facilities District (CFD) and Estrella North, LLC, as the Owner, with TPG AG EHC III (LEN) Multi State 5, LLC; Lennar Arizona, LLC; and Richmond American Homes of Arizona, Inc., as Interested Parties, of the property within the District’s Montecito Assessment District No. 4, have executed and delivered to the District, a Waiver and Development Agreement wherein the parties thereto, including any party executing an Interested Party Consent (as defined therein), have: (i) waived any and all requirements for notice and time for protests and objections relating to, among other things, the Project (as defined herein) and the extent of the Assessment District; (ii) acknowledged that the District shall levy an assessment pursuant to Title 48, Arizona Revised Statutes, as amended; and (iii) waived certain procedural requirements.
The Developer has requested the District issue special assessment revenue bonds to finance the acquisition of the project comprising various public infrastructure improvements including engineering, design, survey, review fees, construction permits, testing, grading, installation of wet utilities, dry utilities, storm drain, curb and gutter, asphalt pavement, landscaping and street lights within the Assessment District.
The Board of Directors of the District (the “Board”) previously (i) conducted a public hearing on October 6, 2025 on the feasibility report relating to the District; (ii) adopted EMRCFD RES 2025-168, accepting the feasibility report, ordering the acquisition of public infrastructure and public infrastructure purposes, and indicating its intent to form the Assessment District; (iii) adopted EMRCFD RES 2025-169, ordering the work related to the Project; and (iv) adopted EMRCFD RES 2025-170, approving the assessment and form of assessment diagram based upon the estimated costs, and levying the assessment.
The District Engineer completed a review of the work related to the public infrastructure and public infrastructure purposes to be financed by the special assessment revenue bonds and determined (i) the work is complete for the purposes of confirming and approving the assessment amounts; (ii) the work benefits the residential lots subject to the assessment; and (iii) the amount of the assessment for each lot is in proportion to the benefit received. All owners of land in the Assessment District received notice of the public hearing regarding the confirmation and approval of the assessment. No land owners objected to the formation of the Assessment District, the work or the assessment. |
| STAFF ANALYSIS |
| District staff has reviewed the District Engineer’s Assessment Methodology and Estimated Costs, included here as Attachment A and Attachment B, regarding the work and has determined that it is proper for the District Board to hold a hearing on the assessment, and thereafter to consider EMRCFD RES 2025-172, completing the final step in the procedures necessary to form the Assessment District and to provide for assessments to pay the debt service on special assessment revenue bonds. In accordance with state statutes, the District Clerk has published a Notice of the Public Hearing on the Assessment included here as Attachment C. |
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