GALT, CA (MPG) - The Galt City Council devoted much of its July 15 meeting to financial matters, including unanimously approving a resolution authorizing the issuance of special tax parity bonds for a subdivision development known as Liberty Ranch.

The documents approved by the council authorize the issuance of $14.295 million of 2025 Special Tax Bonds, Series B. That’s to help pay for additional public facilities within Liberty Ranch under what was designated by council in 2020 as “Improvement Area No. 1” when it voted to form Community Facilities District (CFD) No. 2020-2. An “Improvement Area No. 2” was also created.

It’s the second bond issuance for Area No. 1, which includes phases one to three of Liberty Ranch and includes 699 single-family residential lots and proposed 250 multifamily units. The first bond issuance was for $11.005 million in Special Tax Bonds, Series A in 2023.

The 150-acre Liberty Ranch is projected upon final build-out to include 1,393 residential units, an elementary school, 41.4 acres of open space/landscaped areas, 16.3 acres of rights of way and 11.1 acres of parks.

The city reached a development agreement with the developer, 510 LR Development, LLC, in 2016 whereby the developer agreed to construct all needed infrastructure and public facilities for the subdivision, with the Community Facilities District providing for infrastructure financing along with operation and maintenance costs. In an October 2020 election, Area No. 1 landowners approved a bonding maximum not to exceed $83 million.

In his presentation to council at the July 15 meeting, the city’s bond consultant, NHA Advisors principal Eric Scriven, said that repayment of the 30-year 2025 bonds would by through a “Special Tax A” levied on property owners, initially the developer but eventually the homeowners. Special Tax A pays debt service on Community Facilities District bonds or annually funds infrastructure costs.

Debt service on the 2025 bonds is estimated at $812,382 in 2026 and escalates to $2,447,063 at maturity in 2055.

Scriven said in approving issuance of the bonds that the city assumes no liability for their payments. All the city has to do is levy, collect and enforce the special tax.

Councilmembers had a number of questions about the bonds, including if there was any incentive to pay them off early. Hypothetically, Scriven said, the landowners could pursue such a course if they chose to do so.

“There’s no reason for the city to do it. It’s not the city’s debt,” he added.

After some public comment questioning the issuance, Galt Mayor Shawn Farmer explained that whether people agree or not, the bond issuance is part of the original developer agreement.

“This is formality, more or less,” Farmer said. “We are legally bound by the original development agreement.”

In May 2024, the project developer entered into a purchase and sale agreement with homebuilder Meritage Homes of California whereby Meritage purchased 173 single-family residential lots in Area No. 1. Meritage is currently constructing those homes on lots in three separate “villages.”

Council also approved the annual assessments for residents in three Landscaping and Lighting Districts, two of which were formed in 1990 and one, City of Galt LLD No. 3, in 2005. The districts were formed to provide for public facility needs within their respective areas, including landscaping of medians and corridors, street lighting and park and open space improvements.

Assessments for two districts, Westside and Northeast, are fixed and have not changed since 1990. Assessments for the 1,075 parcels in Westside run from $36.62 to $221.80 while assessments for the 3.283 parcels in Northside range from $51.70 to $301.85. Assessment amounts are determined by which of the several benefit zones in each district the parcel lies in and whether improvements have been made in that zone.

The staff report noted that because assessments are fixed, both districts’ expenses are exceeding revenues and require subsidies from Measure Q in order to maintain service levels: $393,494 for Westside and more than $1.494 million for Northeast.

LLD No. 3 was formed to serve parcels in the city west of State Highway 99, excluding Westside LLD, with maximum assessments able to be adjusted for annual inflation based upon the greater of 1.5% or the change in the Consumer Price Index, CPI. The assessment for the 307 parcels in LLD No. 3 is $427.04 for each single-family dwelling, a $10.01 increase over the previous assessment and based upon a Consumer Price Index of 2.4% between January 2024 and January 2025.

Finally, council approved annexation of 57.29 acres of land within the Summerfield territory into Community Facilities District 2020-1 for the purpose of collecting special taxes needed to pay for required services such as fire protection from Consumnes Community Services District and other services required of the city.

There was no public comment during the hearing held on the annexation. Deputy Public Works Director Trung Trinh told council they had received no protests and there were no registered voters living in the area to vote in a special election.