MEETING DATE:
MAY 26, 2026
SUBJECT:
Title
RESOLUTION NO. 2026-9598 - APPROVING AMENDMENT 01 TO THE COMMUNITY FACILITIES DISTRICT FUNDING AGREEMENT WITH URBAN VILLAGES SAN MARCOS, LLC (AGREEMENT 6999)
Body
Recommendation
Recommendation
ADOPT a resolution approving an amendment to the Community Facilities District Funding Agreement with Urban Villages San Marcos, LLC (“UVSM”).
Body
Board or Commission Action
Not Applicable
Relevant Council Strategic Theme
Good Governance
Relevant Department Goal
Not Applicable
Executive Summary
In 2022, pursuant to Resolution 2022-9066, the City entered into a Community Facilities District (“CFD”) Funding Agreement (“Agreement”) with UVSM providing for reimbursement of eligible bridge construction costs using CFD 2011-01 Congestion Management special tax revenues generated within the University District Specific Plan area. The agreement was approved via Resolution 2022-9066.
The proposed amendment seeks to clarify the applicable reimbursement area and the parcels from which CFD special tax revenues may be utilized for reimbursement purposes. The pedestrian bridge serves and benefits the entire University District Specific Plan area by improving pedestrian circulation and reducing congestion impacts throughout the area. The Agreement and proposed Amendment are consistent with the intent and authorized use of the CFD, which was established to fund congestion management improvements associated with new development.
The proposed amendment does not modify the overall reimbursement obligation, repayment terms, or eligible project costs established in the original agreement.
Discussion
In 2011, the City established Community Facilities District 2011-01, referred to as the Congestion Management Fund (“CFD”). The CFD imposes a special tax on new development throughout the City occurring after 2011. Special tax revenues generated by the CFD are to be used for equipment, services, and facilities that reduce traffic congestion associated with new development.
In 2019, Urban Villages San Marcos, LLC (“UVSM”) constructed a pedestrian bridge connecting the University District Specific Plan Area directly to the campus of California State University San Marcos (“CSUSM”). The bridge is part of the planned infrastructure contained within the University District Specific Plan, spans Barham Road, and provides a safe and convenient pedestrian crossing for students, faculty, residents, and visitors traveling between the University District area and the university campus.
The project was determined to be eligible for CFD 2011-01 Congestion Management funds and in 2022, the City and UVSM entered into a CFD Funding Agreement providing for reimbursement of project costs through CFD special tax revenues generated within the University District Specific Plan area. The Agreement was approved via Resolution 2022-9066.
Since execution of the Agreement, the parties have reviewed the language concerning the reimbursement area and the applicable parcels generating CFD special tax revenue toward the reimbursement of the bridge costs and seek to clarify the parcels to be utilized for reimbursement. The proposed Amendment is intended to clarify that CFD 2011-01 special tax revenues generated from parcels throughout the applicable University District Specific Plan area identified in the Amendment may be utilized for reimbursement purposes because the bridge provides congestion management and circulation benefits to North City, CSUSM, and the travelling public, in general, rather than to only funds that UVSM pays into the CFD.
The amendment does not increase the reimbursement obligation of the City, which includes the project cost eligible for reimbursement, or the repayment schedule, nor does it modify any substantive financing terms established under the original agreement. Rather, it clarifies the properties from which congestion management special tax proceeds will be applied towards the reimbursement obligation. The Amendment is financially beneficial to both the City and UVSM and its partners because it allows for faster repayment of the reimbursable amount, which reduces the City’s interest costs associated with the Agreement. Faster repayment would also benefit UVSM and its partners by returning funds more expeditiously to be utilized for other purposes.
Staff recommends City Council approve the proposed amendment to the Agreement between the City of San Marcos and Urban Villages San Marcos, LLC, and authorizes the City Manager to negotiate, finalize, and execute the amendment documents.
Environmental Review
The proposed Amendment does not constitute a “project” as defined under Section 15378 of the California Environmental Quality Act Guidelines (California Code of Regulations, Title 14, Division 6, Chapter 3, Sections 15000 - 15387), and is therefore not subject to environmental review pursuant to Guidelines Section 15060(c)(3).
Fiscal Impact
The proposed amendment does not increase the City’s reimbursement obligation or create any additional financial commitment beyond that established in the original CFD Funding Agreement. Reimbursements will be limited to CFD 2011-01 special tax revenues generated within the applicable University District Specific Plan area identified in the amendment. Approval of the proposed Amendment would reduce the City’s interest costs under the Agreement.
Attachment(s)
Resolution
Amendment 01 to CFD Funding Agreement
Prepared by: Jeffrey Jorgenson, Accounting and Treasury Manager
Submitted by: Donna Apar, Finance Director
Reviewed by: Donna Apar, Finance Director
Approved by: Michelle Bender, City Manager