Final Budget Board Report

1 
Cadence Community Facilities District 
 
Board Report 
 
 
Date:  
May 21, 2026 
To: 
 
Cadence Community Facilities District Board of Directors 
Through: 
Michael Kennington, District Treasurer 
 
From:  
Brian A. Ritschel, Office of Management & Budget Director 
 
 
  
Subject: 
FY 2026-27 Cadence Community Facilities District Budget 
 
 
Purpose  
 
This action approves the FY 2026-27 final budget for the Cadence Community 
Facilities District (City of Mesa, Arizona) (the “District”). This action is the final step in 
the approval process for the District’s FY 2026-27 budget (the “District Budget”).  
Arizona law (ARS 48-716 and ARS 48-723) requires that, on or before October 1 of 
each year, community facilities districts approve a final budget and call a public hearing 
on the budget for the upcoming fiscal year.   
 
Background 
 
On November 12, 2015, the Mesa City Council formed the District.  The District issued 
general obligation bonds to finance the cost of eligible public infrastructure (streets, 
water lines, wastewater lines, parks, etc.) benefiting the land within the geographical 
boundaries of the District. There are no current plans to issue future general obligation 
bonds.  The principal of and interest on these general obligation bonds is paid for with 
revenue generated by the levy of an annual ad valorem tax on all taxable property in 
the District.   
 
The District also issued special assessment bonds secured by special assessments 
on residential lots within certain designated Special Assessment Districts (“SADs”, and 
each a “SAD”) within the District. 
 
Discussion 
 
The FY 2026-27 District Budget includes spending for two purposes: (1) operations 
and (2) debt service.

2 
 
(1) Operations 
a. Expenditures 
The District pays for accounting, budget, clerk, engineering, legal, and 
treasurer services provided from City staff time.  In addition, the District 
pays for publishing costs, outside legal counsel, and software license 
costs incurred by the District.   
 
b. Funding Sources  
Upon initial formation of the District, property owners approved an ad 
valorem tax on all real and personal property in the District at a rate up 
to $0.30 per $100 of net assessed limited property valuation for all real 
and personal property in the District to fund the operation and 
maintenance expenses of the District (the “O&M tax”) per Arizona law 
(ARS 48-723).  Operation and maintenance expenses not funded by the 
O&M tax are reimbursed by the District’s master developer, PPGN 
Holdings, LLLP (“Harvard”), per an agreement among the City, the 
District, and Harvard.   
 
(2) Debt Service 
a. Expenditures 
The final FY 2026-27 District Budget includes debt service (principal, 
interest, and administrative costs) for the District bonds that have already 
been issued.   
 
b. Funding Sources 
There are two funding sources for District bond debt service, depending 
on the type of bond:  
 
(1) the District’s general obligation bonds are secured by the levy of a 
secondary ad valorem tax on all taxable property in the District, and the 
planned secondary tax rate for FY 2026-27 debt service on such general 
obligation bonds is $1.77 per $100 of net assessed limited property 
valuation of taxable property, and  
 
(2) the District’s special assessment bonds are secured by special 
assessments on residential lots within a designated SAD in an 
assessment amount not greater than $3,500 per residential lot.  The 
amount of the special assessment that may be levied on a residential lot 
is limited by the value of the property in each SAD.  Payment of the 
special assessments by the property owner can be made in annual 
installments over the life of the special assessment bonds, which is 
typically 25 years.  Owners of residential lots may prepay the special 
assessments at any time.

3 
 
Property Tax 
 
The valuation of real property in the District is determined annually by either Maricopa 
County or the State of Arizona.  Property is assigned a full cash value (“FCV”) and a 
limited property value (“LPV”).  The annual increase in LPV is restricted to 5%; FCV 
does not have an annual increase restriction.  A property’s LPV cannot exceed its FCV.  
The District’s property tax levy is a secondary property tax, which is levied against the 
net assessed LPV of a property. 
 
A combined tax rate of $2.07 per $100 of net assessed LPV ($1.77 for debt service 
and the $0.30 O&M tax) is targeted in FY 2026-27.   
 
Table 1.  Cadence CFD - FY 2026-27 Property Tax Rate and Levy  
 
Purpose 
Tax Rate 
Tax Levy 
(per $100 of NALPV) 
O&M 
$0.30  
$140,549 
Debt Service 
$1.77  
$829,241  
Total 
$2.07  
$969,790  
 
Impact to Property Owners 
 
The owner of the average (mean) value residential property in the District would pay 
$585 of District property taxes in FY 2026-27, in addition to $240 of City property taxes. 
 
Alternatives 
 
The District Board may also choose to postpone approval of the final District Budget 
until as late as September 30, 2026, to make any desired adjustments.