[This transcript was generated automatically from audio using AI and hasn't been reviewed by a person -- it can contain mistakes, including plausible-sounding sentences that were never actually said. Treat it as a starting point, not a verbatim record.]

[0:00] I suspend our Town Council meeting and commence with our Rancho Cerrita Community Facilities District meeting.
[0:06] Hereby call this meeting to order, and Madam Clerk may have a roll.
[0:10] Board Member Braco.
[0:13] Here.
[0:14] Board Member Davis.
[0:15] Here.
[0:16] Board Member Hicks.
[0:17] Here.
[0:18] Board Member Luss.
[0:19] Here.
[0:20] Board Member Morales.
[0:21] Here.
[0:22] Vice Chairperson Egber.
[0:23] Here.
[0:24] Chairperson Murphy.
[0:25] Here.
[0:26] Quorum present.
[0:27] Thank you.
[0:28] The public is invited to address the District Board on any issue which tonight's consent agenda
[0:33] or any issue which the District Board can lawfully act upon at a future meeting pursuant to Arizona Open Meeting Laws.
[0:39] The District Board may not discuss items, but individual members of the District Board may respond to criticism
[0:44] made by those who have addressed the District Board, may ask staff to review the matter,
[0:48] and may ask the matter to be placed on a future agenda.
[0:51] I don't have any call to the public cards for the Rancho Cerrita Community Facilities District.
[0:56] If I'd like to address the Board, this would be the time.
[0:59] Seeing no movement, I will close the call to the public and move to item number four,
[1:04] which is the Consent Agenda and their chain of motion at this time.
[1:07] So moved.
[1:08] Second.
[1:09] All those in favor signify by aye.
[1:11] Aye.
[1:12] Aye.
[1:13] Any opposed?
[1:14] Motion carries.
[1:16] Now we move to item number five.
[1:18] Madam Clerk.
[1:19] Discussion and possible action to direct staff to prepare a study of the feasibility
[1:23] and benefits of issuing general obligation bonds to acquire public infrastructure.
[1:28] Thank you.
[1:29] Mr. Marriotti, our District Treasurer will present this,
[1:32] and Mr. Rossi, on behalf of Rancho Cerrita, is here if you want to say a few words
[1:37] or clarify any questions, but this time I'll turn it over to our District Treasurer.
[1:42] Thank you, Mr. Chairman, members of the Board.
[1:44] We recently received an application from the CFD developer that requested
[1:49] that the district would issue general obligation bonds
[1:52] in the amount of $18.158 million for the acquisition of public infrastructure.
[1:59] The map's a little hard to see up on the screen there.
[2:02] Your handouts are going to be a little bit easier for you,
[2:04] but you'll notice that most of the infrastructure that we're talking about
[2:07] and the $18 million issuance would pay for roadways as well as sewer lines,
[2:12] and all of this is located within the CFD boundaries.
[2:16] Most of this infrastructure that we're talking about
[2:18] has already been contemplated within the development agreement.
[2:22] We have nearly $51 million of bonding capacity that's available out of the original $60 million
[2:28] that was authorized back in the 2014 bond election,
[2:33] which took place in August of 2014.
[2:36] But before bonds are issued, the state statutes require that the CFD board
[2:40] cause a study of the feasibility and benefits of the project
[2:43] to be studied and analyzed in a report to be produced
[2:46] and presented in a public meeting.
[2:48] And that's why we're here today to seek your authorization
[2:50] to move forward with a feasibility report.
[2:53] And if you approve, staff will retain the services of our financial team
[2:56] and bond consultants to go ahead and put that study together for you,
[3:00] and then we would plan to bring that back to you,
[3:02] hopefully at our next meeting in January.
[3:05] So with that, if you have any questions,
[3:07] Mr. Orassi representing the developers here
[3:09] to answer any questions you may have and may have a short presentation.
[3:12] Yeah, I'll turn it over.
[3:16] What's the color of the gift?
[3:18] Rising to the occasion.
[3:20] Mr. Mayor, members of the Council, Michael Orassi
[3:26] appearing on behalf of the Rancher Solity to Development Company.
[3:30] And very brief presentation tonight.
[3:34] This is really just kicking off the feasibility study.
[3:38] This is the third one of these you will have done
[3:41] for the Rancher Solity to Community Facilities District.
[3:45] The first bond issuance was approximately 5.5 million.
[3:54] Last one we did.
[3:56] March of 18 months ago was only 3.75 million,
[4:01] much smaller right at the beginning of the COVID pandemic.
[4:06] I remember being on the phone with your town council
[4:11] and financial advisors and being asked,
[4:14] are you guys sure you still want to go forward?
[4:17] We said, yeah, we're going to go forward.
[4:19] We'll take the risk.
[4:21] Well, had we known, that issuance should have been double the size it was
[4:27] because the market has just really taken off,
[4:31] especially in the last six or eight months.
[4:34] I had had a number of discussions with your staff
[4:38] talking about the size of the last issuance, 3.7 million.
[4:42] It's not very efficient.
[4:44] There are a lot of fixed costs in doing these
[4:47] that are the same if you do 3 million or 30 million almost.
[4:52] And at that time, and this was a year ago,
[4:55] I said, yeah, yeah, we'll be in with at least 6 or 8 million.
[4:58] Well, the 6 turned to 12, turned to now 18.
[5:03] And we almost came in at closer to 26,
[5:07] but we couldn't get the engineering done for Region 8.
[5:11] In fact, we were hoping to have this application into you four to six months ago,
[5:16] but the engineers are so backed up,
[5:19] the cost estimates and the other base information
[5:23] your consultants have to have to do the study.
[5:26] We couldn't get done, but we are here now.
[5:29] This is all the remaining Region 7 and Region 9 infrastructure.
[5:34] It's exactly like the prior two issuances.
[5:37] It includes essentially the roads and sewers,
[5:41] and we've already accelerated the construction
[5:46] of part of Rancho Soliti to Boulevard.
[5:48] So we bid and are moving to construction on a phase
[5:51] that wasn't even in the last CFD.
[5:54] That'll get reimbursed from this.
[5:58] And we're just excited about it.
[6:00] We haven't seen this level of builder interest, home sales and pricing
[6:05] since before the Great Recession.
[6:07] We have builders signed up, not closed,
[6:10] but either a letter of intent on every portion of Region 7 and 9
[6:16] all the way down to the southern end of the project.
[6:19] So trying to move as quickly as we can.
[6:22] The town staff has been outstanding to work with all of them
[6:26] because we've had a lot of activity on the project,
[6:29] and I really want to thank all of them.
[6:32] I won't try to name everyone, but we've had a lot,
[6:35] and it's been going great.
[6:36] And with that, I'd be happy to answer any questions if you have any.
[6:40] Council, have any questions?
[6:41] Yes, Mr. Mayor.
[6:42] Yes.
[6:43] Do your cost estimates and planning not to bring the future forward too much,
[6:49] but do they account for the Sonoran Corridor,
[6:52] which will be going through about 89 up there?
[6:55] The cost estimates don't account for that.
[6:59] We don't even know what's happened on that,
[7:03] but it's certainly something we're paying a lot of attention to,
[7:07] and I've been involved in the Tier 1 study.
[7:09] Funding is being sought for the Tier 2 study now.
[7:14] Hopefully, I'm not sure the infrastructure bill will be able to fund that project,
[7:19] but progress is being made,
[7:21] and we'll just, with respect to the Rancho project,
[7:24] have to see what develops.
[7:26] It's still many, many, many years down the road.
[7:31] I sometimes wonder about that,
[7:33] given the amount of money that's being printed.
[7:36] The infrastructure could certainly come much more quickly,
[7:40] especially since this is getting support at a regional level to a fair degree.
[7:44] I'm not worried about A11.
[7:45] That's for the grandchildren of our grandchildren to worry about.
[7:49] But again, just so that you're in tune with it,
[7:52] because obviously it's going to have a big impact
[7:55] cutting through that property at some point with your sewers and other things.
[8:00] In Gil, I just had a meeting, a PAG RTA meeting,
[8:03] and we had a presentation on that particular project.
[8:07] They think it'll probably be in three phases,
[8:10] coming from the east to the west,
[8:12] from I-10 to the airport,
[8:14] airport down to Salvarita Road.
[8:17] I'm using the airport, I'm saying that's exactly it.
[8:19] And then the third phase would be what you're discussing,
[8:24] and the cost estimate today is a billion dollars to do it.
[8:29] Never mind, like you said, I-11, what that's going to cost,
[8:32] but just the Sonoran Corridor portion in total is about a billion dollars.
[8:37] I think it goes to your point on what's in there
[8:40] and how much can one project get.
[8:42] I think the airport's getting 300 million,
[8:44] and that's a huge win to get 300 million,
[8:48] but that's as far as we've been briefed.
[8:51] No, I just like to make sure that we're contemplating
[8:54] because that type of future obstruction going through a major development
[9:00] can be rather upsetting. That's all.
[9:03] And thank you.
[9:04] Mr. Mayor.
[9:05] Yes.
[9:06] Council Member Lusk.
[9:07] My firm is the lead lobbyists on getting money for that project,
[9:10] so I am intimately familiar with it.
[9:12] Did I state anything incorrectly?
[9:13] You did not.
[9:14] Okay, good.
[9:15] Now I'm confident that it will be in Phase 3 in no time at all.
[9:20] Mr. Mayor, everyone's question.
[9:21] Yes.
[9:22] I actually have it for staff.
[9:23] Whenever I'm voting to-
[9:26] I know we're not increasing anybody's taxes on this bond or whatever,
[9:29] but we are extending the time that they will be paying for it.
[9:32] What is the process-
[9:34] can you remind me again,
[9:35] it's allowing the residents to know that this is coming,
[9:37] that this vote is going to occur?
[9:39] Because I know this affects only a small portion of our residents currently.
[9:44] Mr. Chairman, members of the board,
[9:46] that action isn't what we're taking today.
[9:49] Right now we're just looking for the authorization to move forward
[9:51] with the feasibility report.
[9:53] So the way the process would work is get the authorization today,
[9:56] come back in January,
[9:58] actually take a look at the results of the feasibility report,
[10:01] which includes all the financing and what have you.
[10:03] And then after that,
[10:05] we had scheduled another meeting for a month later in February,
[10:08] and that would be the one that would be the public hearing
[10:10] and an opportunity for the public to come and give you feedback.
[10:13] Okay. Thank you.
[10:15] Any other questions?
[10:17] I'll entertain the motion.
[10:19] Council members, thank you very much.
[10:20] Mr. Mayor. Yes.
[10:21] I move to direct district staff to prepare a feasibility study
[10:24] for the insurance issuance of general obligation bonds
[10:27] to acquire public infrastructure.
[10:29] Second.
[10:30] Any further discussion?
[10:31] All those in favor, signify by aye.
[10:33] Aye.
[10:34] Any opposed?
[10:35] Aye.
[10:36] Moving forward.
[10:37] Thank you.
[10:39] Having no more further business for the CFD,
[10:42] we'll adjourn.