Riverside moved forward Tuesday with plans to establish a special tax district covering 152 planned homes across three developments, beginning a process that could finance up to $10 million in public improvements.
The City Council approved the item on its consent calendar, adopting resolutions declaring its intent to form Community Facilities District No. 2026-1 and incur up to $10 million in bonded debt. The district would encompass Victoria Grove in Ward 5, Pinnacle Pointe in Ward 4 and The Ranch in Ward 7.
The proposal would not impose a citywide tax for residents; the annual special taxes would apply only to developed properties within the three projects. City officials said the district would have no direct fiscal impact on Riverside's general fund.
Tuesday's action completes the first of three steps in the district's formation process and does not obligate the city to issue bonds. A public hearing is scheduled for 3 p.m. Oct. 20 at City Hall, when landowners, registered voters and other interested people may comment on the proposal.
If the council moves forward after the hearing and there is insufficient protest, it may formally establish the district and call a landowner election on the proposed special taxes and bond authorization.
Property owners petitioned the city to form the district, which would consist of 46 homes in Victoria Grove, developed by Century Communities; 53 homes in Pinnacle Pointe, developed by Far-West; and 53 homes in The Ranch, developed by Meritage Homes.
Properties within the district would be subject to three annual special taxes once they are developed. Special Tax A would finance public facilities and bond debt service. Eligible improvements include streets, traffic signals, water and wastewater systems, drainage, flood control, parks, streetlights and police and fire infrastructure.
The proposed annual Special Tax A for residential properties ranges from $3,760 to $4,530 per home in Victoria Grove, $1,285 to $1,935 per home in Pinnacle Pointe and $4,265 to $6,155 per home in The Ranch.
Special Tax B would pay for municipal maintenance, including parks, parkways, landscaping, sidewalks, streetlights, storm drains and graffiti and debris removal. The initial annual rates would be $150 per home in Victoria Grove, $73 in Pinnacle Pointe and $335 in The Ranch. Those rates would increase annually by either 3% or the applicable 12-month change in the Consumer Price Index, whichever is greater.
Special Tax C would support police protection, fire suppression, emergency response and the maintenance of public safety facilities. The initial rates would be $924 per home in Victoria Grove, $897 in Pinnacle Pointe and $772 in The Ranch, increasing annually by either 5% or the applicable change in the Consumer Price Index, whichever is greater.
Special Tax A may be prepaid under conditions established in the district's rate and method of apportionment. The maintenance and public safety taxes could not be prepaid and would continue as long as the city determines the services are needed.
A continuing lien securing the special taxes would be recorded against nonexempt properties within the district after its formation.
Victoria Grove and The Ranch would also participate in separate joint community facilities agreements with the Alvord Unified School District, allowing certain school facilities with a useful life of at least five years to be financed. Pinnacle Pointe would participate only in the city district.
Although the three developments would have different tax obligations, the city anticipates issuing a single series of bonds backed by Special Tax A revenue. The bonds could carry terms of up to 35 years.
The district's estimated effective tax rate is 1.83%, below the city's guideline of no more than 2%, according to the staff report.
Landowner deposits are covering formation costs; the district's special taxes would fund administrative expenses going forward.
If bonds are later issued, financing costs, administration and debt payments would be covered by Special Tax A rather than the city's general fund. Any bond sale would require the district to meet city financing policies and return to the council for separate consideration and approval.
