City Council Agenda
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Memo to: |
Manteca City Council |
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From: |
Matthew Boring, Finance Director |
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Prepared by: |
Melissa Munoz, Interim Assistant Finance Director |
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Date: |
April 7, 2026 |
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Subject: |
Issuance of Special Tax Bonds for and on behalf of the City of Manteca Community Facilities District No. 2025-1 (Indelicato Facilities and Services) |
Recommendation:
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Adopt a Resolution authorizing the issuance of Special Tax Bonds for and on behalf of the City of Manteca Community Facilities District No. 2025-1 (Indelicato Facilities and Services); approving and directing the execution of a Fiscal Agent Agreement and Bond Purchase Agreement; approving the form of Preliminary Official Statement; approving sale of such bonds; and approving other related documents and actions.
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Background:
The City of Manteca Community Facilities District No. 2025-1 (Indelicato Facilities and Services) (the “District”) was formed and established by the City on September 2, 2025, following a public hearing by the City Council, as legislative body of the District, and a landowner election which authorized the incurrence of bonded indebtedness in an aggregate principal amount of not to exceed $7,000,000 and approved the levy of special taxes.
The City of Manteca Community Facilities District No. 2025-1 (Indelicato Facilities and Services) Special Tax Bonds, Series 2026 (the “Bonds”) will be issued to finance a portion of costs of acquiring and constructing certain public infrastructure improvements necessary for development in the District, such as roadway, storm drain, water, sewer, and park improvements associated with the project and to fund a debt service reserve fund, capitalized interest, and costs of issuance.
The Bonds will have a 31-year term with a total estimated principal amount of approximately $5,805,000 and an initial debt service payment of approximately $294,500, increasing over time to approximately $541,394 in the final Bond Year. A Capitalized Interest Fund will be structured to make an estimated interest payment of $98,985 on September 1, 2026, since the first year of the special tax levy will occur in Fiscal Year 2026-27. Thereafter, debt service on the Bonds is paid from annual special taxes levied on property in the District only. The Bonds will be structured so that the annual special taxes from the District (less an amount for the City’s priority annual administrative expenses) are projected to provide at least 110% debt service coverage for the Bonds in all years. The final repayment schedule will be determined when the Bonds are priced and final interest rates are determined, which is expected to occur the week of April 13, 2026. The estimated closing date and distribution of proceeds is expected to occur on or about April 30, 2026.
The special taxes will be levied by the City on behalf of the District and collected by the San Joaquin County Treasurer-Tax Collector on taxable parcels within the District in the same manner and at the same time as ad valorem property taxes. The repayment of principal and interest on the Bonds will be secured solely by the special taxes levied within the District, and the Bonds will not be a debt of the City’s general fund.
Summary of Documents
1. Preliminary Official Statement: Bond offering document that will be presented to potential investors of the Bonds and includes information about the City and the existing and expected development in the District. The document also includes a summary of the terms and payment obligations for the Bonds, as well as disclosure to investors about the risks of investing in the Bonds. The City’s Continuing Disclosure Certificate, included as an appendix within the Preliminary Official Statement, sets forth the information required to be disclosed to Bondholders after issuance. The final interest rates and terms will be inserted after the Bonds are priced and the document will be reissued as a final Official Statement.
2. Fiscal Agent Agreement: This document defines the payment terms and conditions, and funds and accounts of the Bonds which will be administered by the Fiscal Agent, U.S. Bank Trust Company, National Association, on behalf of the District, including the Debt Service Reserve Account. The Fiscal Agent Agreement also sets forth covenants such as a covenant for the City to commence and diligently pursue foreclosure actions regarding delinquent installments of special taxes levied for the payment of debt service on the Bonds, on the terms described therein.
3. Bond Purchase Agreement: This document provides the terms and conditions by which the Underwriter, Samuel A. Ramirez & Co., Inc., will purchase the Bonds from the City for resale to ultimate investors, provided, however, that the aggregate principal amount of Bonds shall not exceed $7,000,000, nor shall the Bonds result in an Underwriter’s discount in excess of 1.75% of the principal amount of bonds issued, nor result in a true interest cost in excess of 5.75% (“Not-to-Exceed Parameters”). The final interest rates and terms will be inserted after the Bonds are priced.
Fiscal Impact:
The proposed Bonds will be special limited obligations of the City payable solely from special tax revenues levied and collected within the District - not the General Fund. Neither the faith and credit, nor the taxing power of the City, County, State, or any political subdivision thereof will be pledged to the repayment of the Bonds, except to the extent of the special taxes levied by the City. All costs of issuance of the proposed Bonds will be paid from bond proceeds.
The following are the good faith estimates from the City’s underwriter and financial advisor, required pursuant to Government Code Section 5852.1:
(A) The true interest cost of the Bonds is estimated to be 5.38%.
(B) The finance charge of the Bonds (i.e., the sum of all fees and charges paid to third parties) is estimated to be $430,783.
(C) Proceeds from the sale of the Bonds, less the finance charge of the Bonds described in item (B) and any reserves or capitalized interest paid or funded with proceeds of the Bonds, are estimated to be $4,646,653.
(D) The total payment amount (i.e., the sum total of all debt service payments on the Bonds, net of debt service paid from the Capitalized Interest Fund) is estimated to be $12,604,838.
These are good faith estimates only and are based on market rates as of March 18, 2026. Final results will likely differ based on market conditions as of the actual sale date and other factors. However, for the financing to proceed, the Not-to-Exceed Parameters must be met.
Documents Attached:
Attachment 1 - Resolution
Attachment 2 - Form of Preliminary Official Statement
Attachment 3 - Form of Fiscal Agent Agreement
Attachment 4 - Form of Bond Purchase Agreement