HomeMy WebLinkAbout2C OCRCity Council Staff Report
DATE: November 12, 2020 PUBLIC HEARING
SUBJECT: ACTIONS RELATED TO THE ESTABLISHMENT OF COMMUNITY
FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW), INCLUDING A
LANDOWNER ELECTION, AUTHORIZATION TO INCUR BONDED
INDEBTEDNESS OF UP TO $4,000,000 AND AN ORDINANCE
AUTHORIZING THE LEVY OF A SPECIAL TAX
FROM: David H. Ready, City Manager
BY: Marcus L. Fuller, Assistant City Manager
SUMMARY
The City entered into a Settlement Agreement with EHOF Canyon View, LLC, a Delaware
limited liability company, ("Developer''), that provides for the formation of a Community
Facilities District for the Canyon View development (the "Canyon View CFD"). The
Canyon View CFD is being formed to provide funding for certain public improvements
required by the development that are being deferred by City Council and may not be
constructed for many years.
On May 22, 2019, the City Council approved a Deposit Agreement with the Developer to
fund the City's use of professional consultants required to assist in the formation of the
Canyon View CFD.
On September 24, 2020, the City Council adopted a resolution of intention to form the
Canyon View CFD and a resolution declaring the necessity to incur bonded indebtedness
of up to $4,000,000 for the Canyon View CFD.
This item is the second action required for the City Council's formation of the Canyon
ViewCFD.
RECOMMENDATION:
1) Open the public hearing to accept public testimony on the proposed formation of
the Community Facilities District No. 2020-1 (Canyon View) of the City of Palm
Springs and consider and finally determine whether the public interest,
ITEf:11 NO. JC
2City Council November 12, 2020 --Page 2 Canyon View CFO convenience and necessity require the formation of the Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs and the levy of said special tax therein; 2) Adopt Resolution No. __ , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND ESTABLISHING THE BOUNDARIES THEREOF;" 3) Adopt Resolution No. _, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DETERMINING THE NECESSITY FOR COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS TO INCUR A BONDED INDEBTEDNESS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $4,000,000 FOR PROVIDING PUBLIC FACILITIES AND CALLING A SPECIAL ELECTION OF THE COMMUNITY FACILITIES DISTRICT ON THE PROPOSITION FOR INCURRING SUCH BONDED INDEBTEDNESS;" 4) Adopt Resolution No. _, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CALLING A SPECIAL ELECTION AND SUBMITTING TO THE VOTERS OF COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS PROPOSITIONS WITH RESPECT TO THE ANNUAL LEVY OF SPECIAL TAXES WITHIN SAID COMMUNITY FACILITIES DISTRICT AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR SAID COMMUNITY FACILITIES DISTRICT;" 5) Conduct special election of voters within Community Facilities District No 2020-1 (Canyon View) and canvass election results; 6) Adopt Resolution No. __ , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DECLARING THE RESULTS OF CONSOLIDATED SPECIAL ELECTIONS WITHIN COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS ON PROPOSITIONS REGARDING (i) INCURRING A BONDED INDEBTEDNESS IN AN AMOUNT NOT TO EXCEED $4,000,000, (ii) THE ANNUAL LEVY OF SPECIAL TAXES TO PAY PRINCIPAL AND INTEREST ON BONDS AND (iii) ESTABLISHING AN APPROPRIATIONS LIMIT;" and 7) Waive the first reading of the ordinance text in its entirety and introduce Ordinance No. ___ , "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE
3City Council November12,2020-Page3 Canyon View CFO CITY OF PALM SPRINGS, AUTHORIZING THE LEVY OF SPECIAL TAXES IN SUCH COMMUNITY FACILITIES DISTRICT." BUSINESS PRINCIPAL DISCLOSURE: The Public Integrity Disclosure Form of EHOF Canyon View, LLC, a Delaware limited liability company, is included as Attachment 1. BACKGROUND: SCIP Program: On October 1, 2014, the City Council adopted Resolution No. 23671 authorizing the City to join the Statewide Community Infrastructure Program ("SCIP"), and to accept applications from property owners, conduct special assessment proceedings, and levy assessments within the City. The SCIP is coordinated by the California Statewide Communities Development Authority ("CSCDA"), a joint powers authority sponsored by the League of California cities and the California State Association of Counties. The SCIP was instituted by CSCDA in 2002 to allow private property owners in participating cities and counties to finance the construction of public improvements or payment of development impact fees as a special assessment to be levied on the property tax roll. A private property owner developing a project in a participating agency has the ability to request approval from that agency to pay for public improvements and development impact fees through the SCIP, which is financed by the issuance of tax-exempt bonds by the CSCDA. Subsequently, in those cases, CSCDA will impose a special assessment on the property owner's tax bill to repay the portion of the bonds issued to finance the cost of the public improvements and/or development impact fees. In its action from 2014, the City Council authorized the City to be a participating agency in the SCIP through CSCDA. The SCIP is an alternative public financing tool to a Special District formed and approved by the City Council for a specific property. The advantage of the SCIP is that the City avoids all of the administration responsibility in establishing a Special District, and avoids any liability for the tax-exempt bonds used to finance the public improvements or development impact fees through that Special District. CSCDA assumes all responsibility for the tax-exempt bonds and annual debt payments levied on the tax roll. Since the City Council's authorizing actions taken in 2014, only one commercial project -the Arrive Hotel -has taken advantage of the SCIP. In that case, certain public improvements (utility undergrounding, water lines, and street improvements) and development impact fees (sewer connection and storm drainage fees) were financed through the SCIP. The Dream Hotel was also in the process of forming a community facilities district to be administered by the CSCDA as part of the SCIP to pay its City
4City Council November 12, 2020 --Page 4 Canyon View CFO parking development impact fee, sewer fees, street improvements, public art and Desert Water Agency fees and improvements. Canyon View Project: On July 5, 2017, the City Council approved the Canyon View project, a development of 80 single family homes is located on E. Palm Canyon Dr. at Matthew Dr. A vicinity map is provided in the following Figure 1, and a Site Plan of the Canyon View project is provided as Figure 2 on the following page. RGA8 PD C2 S&MINOl!ERO C2 R3 ~ ~ z Ill 0 z ::I • Rl_i I ,, -RUHP-.,.__....,_ __________ ,..~ .I •.DR..., _______ __ R1A Legend msite D500· Radius •zoning -Parcels R2 020 Figure 1 RGM
5LC) Q) C) m a.. 0 C\I Cl Ou. C\I(_) t\i~ = T"" Q) 0 "-·-c: Q) > :J .c C: 0 E o 0 Q) >->-> C: ~om ozo 0 I I I I I I? I i II i" f / I I I I I I e
6In its approval of the Canyon View project, the City Council agreed to defer the obligation to construct off-site street improvements (widening of E. Palm Canyon Drive, and construction of a landscaped median in E. Palm Canyon Drive), and deferred overhead utility undergrounding along E. Palm Canyon Drive. The obligation to construct the improvements in the future (the "Deferred Improvements") would become an obligation of the future property owners within the Canyon View project. On February 13, 2018, the Developer of Canyon View submitted a formal request for the City's approval to allow public financing of the Canyon View project using the SCIP for its residential project. The fees and improvements to be financed included City sewer, park and drainage fees, public improvements to East Palm Canyon Drive, Matthew Drive and Linden Way as well as Desert Water Agency fees and water line improvements. The Developer's plan to use the SCIP funding did not adequately address the funding mechanism or funding sufficiency for the Deferred Improvements. Staff asked the Developer to address the deficiency but no agreement was reached on the funding mechanism. In July 2018, the City Council considered the use of SCIP funding for residential projects, since in the past, it had only been used for commercial projects. The Developer objected to the City's delay of SCIP financing approval for its project, even though the Deferred Improvements issue was unresolved. The Developer ultimately filed litigation to resolve the dispute, claiming a vested right to the City Council's SCIP policy adopted in 2014 at the time its project was approved by City Council in 2017. The City and Developer negotiated in good faith a Settlement Agreement to resolve the litigation. Under the terms of a Settlement Agreement approved by the City Council on January 23, 2019, and dated as of January 31, 2019, the City approved the use of SCIP financing for the Canyon View project and the Developer agreed to the City's establishment of an overlay CFO to fund the Deferred Improvements. Unlike the SCIP Assessment District (which is administered by the CSCDA), the City will administer the Canyon View CFO and levy an annual special tax. On May 22, 2019, the City Council approved a Deposit Agreement with the Developer to fund the City's use of professional consultants required to assist in the formation of the Canyon View CFO. Accordingly, the City received a deposit of $36,000 that has funded special legal and tax consulting services that are required in the formation of the Canyon View CFO.
7City Council November 12, 2020 --Page 7 Canyon View CFO STAFF ANALYSIS: In accordance with the Settlement Agreement, the City has administratively approved the SCIP Assessment District request of the Developer, and the CSCDA is processing that request. This action continues the process for the City's establishment of the overlay Canyon View CFO for the Deferred Improvements. The special tax levied on property in Canyon View will be accumulated in a "Facilities Fund" held by the City. When the funding for the Deferred Improvements is needed, the City can issue Special Tax Bonds against the remaining tax to be collected, and the bond proceeds together with the accumulated taxes in the Facilities Fund should be sufficient to fund the Deferred Improvements. If at some future date the City determines that the Deferred Improvements will not be constructed, pursuant to the Settlement Agreement, any special taxes collected and accumulated at that time would be applied to prepay of the SCIP bonds issued for Canyon View or returned to the homeowners. CFD Policy: As part of the Settlement Agreement, the City has already negotiated the estimated taxes to be levied on property in the Canyon View project under both the SCIP and the CFO. The proposed special tax levy formula for the CFO allows for the special tax amount to increase annually by the Engineering News Record Construction Cost Index until the certificate of occupancy for a home is issued, and then 2% thereafter. This formula is meant to keep pace with inflation in the construction cost for the Deferred Improvements and to mirror the 2% inflationary increase in assessed value under Prop 13. The City's current CFO Policy does not provide for an escalating tax on residential property. An exception to this limitation is required before the CFO formation proceedings can be undertaken. The City's CFO policy states that the City may find in limited and exceptional instances that a waiver to any of the policies is reasonable given identified special City benefits to be derived from such waiver. Such waivers are granted only by action of the City Council and based on specific public purpose and/or health and safety findings. As proposed, the special tax formula significantly mitigates the City's risk that insufficient funding will be available when needed in the future given the escalating cost of construction. In the Settlement Agreement, the City Council made the finding that a waiver of the policy prohibiting escalation in the tax rate is reasonable given the City's inclination to make provisions for the public safety benefit of utility undergrounding and the public purpose of landscaped medians.
8City Council November 12, 2020 --Page 8 Canyon View CFD Formation Proceedings: There are several actions required to complete the formation of the Canyon View CFO. The first actions were taken on September 24, 2020 and included: • Adoption of resolution declaring the City's intention to form the Canyon View CFO, • Adoption of resolution declaring the necessity of the Canyon View CFO to incur bondedindebtedness,and • Set public hearing for November 12, 2020 to consider the remaining actions required for formation. In addition to declaring the intention to form the Canyon View CFO and the necessity to incur bonded indebtedness, the resolutions adopted in September also (1) approved a boundary map, to be recorded on property within the Canyon View CFO, (2) described the types of facilities and incidental expenses to be funded with proceeds of the special taxes to be levied in the Canyon View CFO, (3) established the rate and method of apportionment ("RMA") of special taxes to property within the Canyon View CFO, (4) directed the preparation of a report ("Report") containing a brief description of the public facilities by type which will be required to adequately meet the needs of the proposed community facilities district and the estimate of the fair and reasonable cost of providing those public facilities and the incidental expenses and (5) established voting procedures. The Report containing a brief description of the Deferred Improvements, that is, the public facilities by type which will be required to adequately meet the needs of the proposed community facilities district and the estimate of the fair and reasonable cost of providing those public facilities and the incidental expenses, has been prepared and is included as Attachment 7. The boundary map has been recorded with the Riverside County Recorder. It is now time to take the actions needed to conclude the formation process. This process requires that the City Council hold a public hearing regarding the formation and the necessity to incur bonded indebtedness, approve the resolution establishing the Canyon View CFO, adopt the resolution calling for a special election (submitted to the owner of the property) and approve a resolution declaring the results of the election. Staff recommends that the City Council hold the public hearing to accept public testimony on the proposed formation of the Canyon View CFO and consider and finally determine whether the public interest, convenience and necessity require its formation and the levy of special taxes therein. After conducting the public hearing, staff recommends that the City Council adopt the first three resolutions presented, to: • form the Canyon View CFO, • authorize the levy of special taxes therein,
9City Council November 12, 2020 --Page 9 Canyon View CFO • determine the necessity to incur bonded indebtedness, • determine the validity of the prior proceedings, and • submit the levy of special taxes to the qualified elector of the territory within the Canyon View CFO. After adoption of these resolutions, the City Clerk will conduct the special election during the Council meeting and open the ballot submitted by the Developer, who is the sole qualified landowner elector. If the ballot is cast in the affirmative, staff recommends that the City Council adopt the final resolution presented, to: • declare the results of the special election, and • direct recording of the Notice of Special Tax Lien. After the adoption of this resolution, the formation proceedings will be complete. Staff recommends that following the completion of the formation proceeds, the City Council introduce the Ordinance that authorizes levy of special taxes within the Canyon View CFO. This will authorize staff to levy the annual special tax in the future. ENVIRONMENTAL IMPACT: The Canyon View project is considered a "project" pursuant to the terms of the California Environmental Quality Act ("CEQA"), and a Mitigated Negative Declaration for Case No. 5.1384-PD 381 and 3.3902-MAJ / VTTM 36969 was previously approved by the City Council on July 19, 2017, for the Canyon View project. The preparation of additional environmental documentation is not necessary because there are no changed circumstances related to the project that will result in any new significant environment effects or a substantial increase in the severity of previously identified significant effects. FISCAL IMPACT: The Developer requested SCIP Assessment District funding of up to $2.65 million of fees and infrastructure relating to the construction of 80 single family homes in the Canyon View development. Additionally, the Canyon View CFO will establish funding for the City's future construction of the Deferred Improvements at an estimated cost of $2.4 million. The Canyon View CFO will be an additional taxing layer on properties within Canyon View, allowing the City to accumulate funds over time, with the expectation that special tax bonds could be issued in the future to pay for the excess of the Deferred Improvement costs not funded with the accumulated taxes. A third layer of financing for Canyon View will be created with the City's public safety CFO that is a mandatory requirement of the City to generate supplemental revenues for
10City Council November12,2020-Page10 Canyon View CFD increased public safety costs through a special tax on new residential property. The City previously established the public safety CFO in 2005 (CFO 2005-1), with a maximum tax levy of $500 annually on residential properties in subdivisions created after 2005. A future action will be scheduled to annex the Canyon View project into CFO 2005-1 . The list and amount of Deferred Improvements are included in the Report. These are shown in 2018 dollars in the table on the next page. East Palm Canyon Widening Sawcut & Remove Existing Cross Gutter Sawcut & Remove Existing AC (Grind) 611 Curb & Gutter 611 PCC Cross Gutter 4"AC/12"AB/24" Compacted Native 4" PCC Colored Sidewalk, W=8' Access Ramp Enhancement w/Truncated Domes Traffic Control Dirt Balance Parkway,± 0.10', W=12'-14' Dirt Balance Flood Control Channel Easement, W=60' Additional Lanes on East Palm Canyon -Allowance Relocate Traffic Signal at East Palm Canyon/Gene Autry Misc. Signing & Striping Parkway Landscaping, W=4', E. Palm Canyon Drive Street Trees, E. Palm Canyon Drive, 24" Box Landscaped Median Mobilization Sawcut & Remove Existing AC (Grind) Cut-to-Subgrade Construct 811 Median Curb Balance Median Install 2" PVC Irrigation Lateral Including 4" Sleeving Sawcut, Remove & Replace Existing AC Irrigation System Controller 4" Colored Concrete at Left-Turn Pocket Patch AC at Median Curb Landscape Median Traffic Control Signing & Striping Underground Overhead Utilities Construction Management and Contingency $ 4,150 1,738 18,821 6,660 87,036 34,103 2,200 20,000 2,531 10,242 37,026 200,000 2,596 14,278 10.750 452,130 8,622 61,724 28,125 51,645 48,750 2,500 130,955 10,000 2,720 16,902 65,492 9,811 2.500 439,746 1,131,237 364,160
11City Council November 12, 2020 --Page 11 Canyon View CFO TOTAL-CFO Eligible Deferred Improvements $2,387,273 Pursuant to the RMA, these costs are inflated by 2% each year and are $2,482,685 in 2020 dollars. The inflated amount is used for the purpose of calculating any special tax prepayment of a proportionate share of the Deferred Improvements. As part of the Settlement Agreement negotiation, the City identified maximum special tax rates and maximum assessment district levies for the properties in the Canyon View CFO, and those rates were set forth in the Settlement Agreement. The combined taxes for the Canyon View CFO and the SCIP Assessment District, when added to other ad valorem taxes and other tax levies for the property (including the City's public safety CFO 2005-1) cannot exceed 2% of the projected price of the homes. The table below shows the estimates prepared for purposes of the Settlement Agreement. U itType Product Ptrocfuct 2 Product 3 ~ u:ct 4 Product 5 Total Av;. Sq. ft. Av;. P ·ce $697,000 $727,000 2.,422 $742,000 2#669 $ 95,000 2.,122 $660,000 O~Of Units 19 19 21 1 3 0 aKi wm SC AD An11,U1a~ vy 2~630 2.630 2.630 2,630 2,630 Ad Vaforem Ta H c1.2,&0 of AV S,685 9,05 9~ 45 9,906 8,224 Ot e Ta es 6 5 675 6 S Ca on View CFD Special Tax 1.,843 211 7 2.,307 2.,669 1.,544 77,.691 • of V.aue 14, 57 ~ 15 so 2~ ~ 13,073 1 .. 9'S$ To take into account the escalation in the cost of the Deferred Improvements over time, until a certificate of occupancy is issued for a particular unit, the special tax for that unit will escalate annually at the greater of (a) 2% or (b) the percentage change in the Engineering New Record Construction Cost Index (ENR CCI) or such other index as the City Council shall determine if the ENR CCI ceases publication. The first increase occurred March 1, 2020. The increase in the ENR CCI to be in effect for Tax Year 2020-21 shall be based upon the last available data as of March 1, 2020. Once a certificate of occupancy has been issued as of any May 1, the special tax for such unit will escalate at 2% per year thereafter. The City will accumulate the special taxes in a "Facilities Fund" until the City is prepared to construct the Deferred Improvements. The longer the time before the construction, the greater the amount special taxes that will be collected and the lower the amount of bonds that will need to be issued in the future to fund the total costs of the Deferred Improvements. It is not possible to predict when the Deferred Improvements will be installed or what they will actually cost. However, enough contingency and escalation has
12City Council November 12, 2020 --Page 12 Canyon View CFD The formation of the Canyon View CFO provides funding to the City for the Deferred Improvements. The City will also receive its sewer, park and drainage fees from the SCIP Assessment District when SCIP issues bonds for that purpose, expected in late 2020 or early 2021. Any buyer of a new home in the Canyon View project will receive legal notices and be required to execute documents acknowledging the existence of the Canyon View CFO and SCIP Assessment District prior to purchasing a home. Buyers will be made fully aware of these additional special taxes imposed on these homes in accordance with state law. Marcus L. Fuller, M. iA, P.E., P.L.S. Assistant City Manager/City Engineer David H. Ready, Esq., Ph City Manager Attachments: 1. Disclosure Form 2. Resolution Establishing Canyon View CFO Suzanne Harrell Financial Advisor City Attorney 3. Resolution Determining Necessity to Incur Bonded Indebtedness 4. Resolution Calling for Special Election 5. Resolution Declaring Results of Election 6. Ordinance Authorizing Levy of Special Tax 7. Report required by Section 53321.5 of the Government Code
13ATTACHMENT 1
14PUBLIC INTEGRITY DISCLOSURE APPLICANT DISCLOSURE FORM 1. Name of Entity EHOF CANYON VIEW, LLC 2. Address of Entity (Principle Place of Business) 4. ONE LETTERMAN DRIVE, BLDG C, SUITE 3800, SAN FRANCISCO, CA 94129 7-ocal or California Address (if different than #2) State where Entity is Registered with Secretary of State DELAWARE If other than California, is the Entity also registered in California? f)Q Yes n No 5. Type of Entity D Corporation [i] Limited Liability Company D Partnership D Trust D Other (please specify) ' I I I 6. Officers, Directors, Members, Managers, Trustees, Other Fiauciaries (please specifyr Note: If any response is not a natural person, please identify all officers, directors, members, managers and other fiduciaries for the member, manager, trust or other entity ENCORE HOUSING OPPORTUNITY FUND II GENERALPARTNER,LLC __________________ D Officer D Director D Member i] Manager [1.1ame] Av~~ 'Q k~ ~o~, ,A\ii ~, \NI!,\ \letm • General Partner D limited Partner t1>JJ,,f,\C;, Jo\,n .d\,£-lt I CXtl»' ~aY:iutt • Other ______ ____, I __________________ D Officer D Director D Member D Manager [na D General Partner O Limited Partner •Other ___________ _ ______________________ D Officer D Director D Member D Manager (Revised 09 13 18) [name] O General Partner O Limited Partner 0 Other ______________ _ CITY OF PALM SPRINGS -PUBLIC INTEGRITY DISCLOSURE APPLICANT DISCLOSURE FORM Page 1 of 2
15' 7. Owners/Investors with a 5% beneficial interest in the Applicant Entity or a related entity EXAMPLE JANE DOE 50%, ABC COMPANY, Inc. I J • [name of owner/investor] [percentage of beneficial interest in entity -I I and name of entity] I -__ ! A. \Jf f Tuw~ 11\iLll,I ~eroni \~Si, [name of owner/investor] [percentage of beneficial interest in entity and name of entity] --B. ?~ j; (J\ ~~eSJ[ U~1L'P -[name of owner/investor] [percentage of beneficial interest in entity and name of entity] c. . S ~i 'B~e ~IASin8 ~~;J wor'J( &? ~ · t.nd :rr: aenev~ :.~4hw · ,/ ' [name of owner/investor] . [percentage of beneficial interest in entity --and name of entity] D. I I [name of owner/investor] [percentage of beneficial interest 1n entity I -and name of entity] E. I [name of owner/investor] I [percentage of beneficial interest in entity and name of entity] I DECLARE UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING IS TRUE AND CORRECT. (Revised 09 13.18) Date CITY OF PALM SPRINGS -PUBLIC INTEGRITY DISCLOSURE FORM APPLICANT DISCLOSURE FORM Page 2 of 2 ~
16ATTACHMENT 2
17RESOLUTION NO. __ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND ESTABLISHING THE BOUNDARIES THEREOF WHEREAS, the City Council (the "City Council") of the City of Palm Springs (the "City") has heretofore adopted Resolution No. 24803 stating that a proposed community facilities district to be known as "Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California" (the "District"), is proposed to be established pursuant to Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code, commonly known as the "Mello-Roos Community Facilities Act of 1982" (the "Act"), and fixing the time and place for a public hearing on the formation of the District; and WHEREAS, the District is proposed to be established for the purpose of constructing, acquiring and financing through the sale of bonds or the levy of special taxes the construction and acquisition of public facilities which are necessary to meet increased demands placed upon the City as a result of the development of the property within the District (the "City Facilities"), and financing through the sale of such bonds or the levy of special taxes the construction and acquisition of public facilities of the City, and it is proposed that the District will be authorized to issue bonds and incur a bonded indebtedness for the purpose of financing such facilities in the aggregate principal amount of $4,000,000; and WHEREAS, notice was published and mailed to the owner of the property in the District as required by law relative to the intention of the City Council to establish the District, the levy of special taxes therein, the provision of public facilities therein and the incurring of a bonded indebtedness by the District, and of the time and place of the public hearing; and WHEREAS, on November 12, 2020, the City Council conducted a public hearing as required by law relative to the formation of the District, the levy of special taxes therein, the provision of public facilities therein, and the incurring of a bonded indebtedness by the District; and WHEREAS, prior to the commencement of the hearing there was filed with the City Council a report (the "Report") containing a description of the public facilities required to meet the needs of the District, and an estimate of the cost of such facilities, as required by Section 53321.5 of the California Government Code; and WHEREAS, at the public hearing all persons desiring to be heard on all matters pertaining to the formation of the District, the levy of the special taxes, the provision of 55575.70002\33351872.l
18public facilities therein, and the incurring of the bonded indebtedness thereby were heard, and a full and fair hearing was held; and WHEREAS, at the public hearing evidence was presented to the City Council on the matters before it, and the City Council, at the conclusion of the hearing, was fully advised as to all matters relating to the formation of the District, the levy of the special taxes, the provision of public facilities therein and the incurring of the bonded indebtedness therefor; and WHEREAS, the City Council may, therefore, proceed to establish the District; and WHEREAS, the City Clerk has received a statement from the Registrar of Voters of the County of Riverside that there are no persons registered to vote in the territory of the District; THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, HEREBY RESOLVES, DETERMINES AND APPROVES AS FOLLOWS: Section 1. Findings. The City Council finds as follows: (a) All of the preceding recitals are true and correct; (b) On November 12, 2020, pursuant to notice thereof duly given as provided by law, the City Council conducted a public hearing with respect to the formation of the District, the incurring of bonded indebtedness by and for the District, the annual levying of specified special taxes on the taxable property within the District pay or accumulate funds for paying the costs of the design, construction and acquisition of such public facilities which are described in Section 3 hereof, to pay principal of and interest on bonds to be issued by and for the District to finance the public facilities and other obligations which are described in Section 3 hereof; (c) The boundary map of the District was recorded on October 22, 2020, pursuant to Sections 3111 and 3113 of the California Streets and Highways Code, at page 89 in Book 85 of Maps of Assessment and Community Facilities Districts, and as Instrument No. 2020-0510669, in the official records of the County of Riverside; ( d) All prior proceedings with respect to the formation of the District prior to and during the hearing with respect to the formation of the District which was conducted by the City Council on November 12, 2020, were valid and in conformity with the requirements of the Act; (e) No written protests were received, at or prior to the time of the hearing, against the formation of the District, or the levying of the special taxes, or the incurring of a bonded indebtedness by the District, and the special taxes have, therefore, not been eliminated by majority protest pursuant to Section 53324 of the California Government Code; --2 --55575.70002\3335 l 872. l
19(f) The City Council is, therefore, authorized to adopt a resolution of formation pursuant to Section 53325.1 of the California Government Code for the formation of Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California, and the District should be established; and (h) Twelve (12) persons have not been registered to vote within the territory of the District for each of the 90 days preceding the close of the public hearing on November 12, 2020, and pursuant to Section 53326 of the California Government Code, the vote in the consolidated special elections provided for in Section 11 hereof shall, therefore, be by the landowners of the District whose property would be subject to the special taxes if they were levied at the time of the election, and each landowner shall have one vote for each acre, or portion thereof, which he or she owns within the District which would be subject to the proposed special taxes if they were levied at the time of the election. Section 2. Formation of the District. Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California, is hereby established. The boundaries of the District are set forth and shown on the map entitled "Boundaries of the City of Palm Springs Community Facilities District No. 2020-1 (Canyon View), County of Riverside, State of California," which is on file with the City Clerk, and those boundaries are hereby established. Section 3. Types of Facilities; Incidental Expenses. (a) The types of public facilities proposed to be provided for and financed by the proposed community facilities district are City Facilities, including street and road facilities, traffic control devices, landscape medians and undergrounding of existing overhead utilities as described in that Settlement Agreement and General Release dated January 31, 2019, between the City and EHOF Canyon View, LLC, a Delaware limited liability company. (b) The incidental expenses which will be incurred are: (i) the cost of planning and designing such facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the formation of the proposed community facilities district, issuance of the bonds thereof, the determination of the amount of and collection of taxes, and costs otherwise incurred in order to carry out the authorized purposes of the community facilities district, and (iii) any other expenses incidental to the construction, completion, acquisition and inspection of such facilities. Section 4. Special Taxes. Except where funds are otherwise available, special taxes sufficient to pay for all such facilities, to pay for debt service on other obligations of the City relating to such facilities, and to pay the principal of and interest on the bonds of the proposed community facilities district and the annual administrative expenses of the City and the proposed community facilities district in determining, apportioning, levying and collecting such special taxes, and in paying the principal of and interest on such bonds and the costs of registering, exchanging and transferring such bonds, secured by the --3 --55575.70002\33351872.1
20recordation of a continuing lien against all taxable or nonexempt property in the proposed community facilities district, shall be annually levied within the proposed community facilities district. All Parcels of taxable property in the territory of the District shall be subject to the annual levy of special taxes to pay the principal of and interest on the aggregate principal amount of the bonds of the District that may be issued and sold to finance the design, construction and acquisition of the City Facilities or to pay or accumulate funds for paying the costs of the design, construction and acquisition of such facilities. The rates and method of apportionment of special taxes to be levied on parcels of taxable property in the District to pay the principal of and interest on the bonds of the District that may be issued and sold to finance the City Facilities or to pay or accumulate funds for paying the costs of the design, construction and acquisition of such facilities, or to pay other debt obligations of the City relating to such facilities are set forth in Exhibit "A" attached hereto. The maximum amounts of special taxes that may be levied in any fiscal year on parcels within the District that are used for private residential purposes ("Residential Parcels") are specified in dollar amounts in Exhibit "A" attached hereto. Special taxes shall not be levied as to each Residential Parcel to pay the capital cost of the facilities or the principal of and interest on the outstanding bonds of the community facilities district 35 years after the tax is first levied on such Residential Parcel and that fiscal year shall be the last tax year in which special taxes shall be levied on such Residential Parcel for such purpose. Under no circumstances shall the special taxes levied in any Fiscal Year against any Assessor's Parcel of Residential Property as a result of a delinquency or default in the payment of the Special Tax applicable to any other Assessor's Parcel by more than ten percent (10%) above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default. The conditions under which the obligation to pay the special taxes may be prepaid and permanently satisfied are as set forth in Exhibit "A" attached hereto. Pursuant to Section 53340 of the California Government Code, said special taxes shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the California Streets and Highways Code, a continuing lien to secure each levy of the special taxes shall attach to all non-exempt real property in the District, and that lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the special taxes ceases. The Finance Department of the City, 3200 Tahquitz Canyon Way, Palm Springs, CA 92262, telephone number (760) 323-8229, is designated as the office responsible for preparing annually a current roll of special tax levy obligations by --4 --55575.70002\33351872.1
21assessor's parcel numbers, and for estimating future special tax levies pursuant to Section 53340.2 of the California Government Code. Section 5. Exempt Properties. Pursuant to Section 53340 of the California Government Code, and except as provided in Section 53317.3 of said Code, properties of entities of the state, federal, and local governments shall be exempt from the levy of special taxes. Section 6. Necessity. The City Facilities are necessary to meet increased demands placed upon the City as a result of new development occurring within the boundaries of the District. Section 7. Report. The Report is hereby approved and is made a part of the record of the public hearing regarding the formation of the District, and is ordered to be kept on file with the City Clerk as part of the transcript of these proceedings. Section 8. Repayment of Funds Advanced or Work-in-Kind. Pursuant to Section 53314.9 of the California Government Code, the City Council proposes to accept advances of funds or work-in-kind from private persons or private entities and to provide, by resolution, for the use of those funds or that work-in-kind for any authorized purpose, including but not limited to, paying any costs incurred by the City in creating the District, and to enter into an agreement, by resolution, with the person or entity advancing the funds or work-in-kind to repay funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council. Section 10. Prohibition of Owner Contracts. Pursuant to Section 53329.5 of the California Government Code, the City Council finds that the public interest will not be served by allowing the owners of property within the District to enter into a contract in accordance with subdivision (a) of that section, and that such owners shall not be permitted to elect to perform the work and enter into a written contract with the City for the construction of the public facilities pursuant to said Section 53329.5. Section 11. Description of Voting Procedures. Except as otherwise provided in this section, the consolidated special elections on the propositions identified below shall be conducted by the City Clerk in accordance with the provisions of the California Elections Code governing mail ballot elections of cities, insofar as they may be applicable. The voting procedures to be followed in conducting the consolidated special elections on (i) the proposition of the proposed community facilities district incurring a bonded indebtedness in an amount not to exceed $4,000,000, (ii) the proposition with respect to the levy of special taxes on parcels of taxable property within the community facilities district to pay the principal of and interest on the bonds thereof or to pay or accumulate funds for paying the costs of the design, construction and acquisition of public facilities, or to pay debt service on other obligations of the City with respect to such facilities and (iii) the proposition with respect to establishing an appropriations limit for the community facilities district in the amount of $4,000,000, if the community facilities district is --5 --55575.70002\33351872.1
22established and such consolidated special elections (the "consolidated special elections") are held, shall be as follows: (a) The consolidated special elections shall be held on the earliest date, following the adoption by the City Council of the resolution determining the necessity for the community facilities district to incur a bonded indebtedness pursuant to Section 53351 of the California Government Code, the resolution of formation establishing the community facilities district pursuant to Section 53325.1 of said Code, and a resolution pursuant to Section 53326 of said Code submitting the propositions with respect to (i) the levy of special taxes to pay the principal of and interest on the bonds of the community facilities district, or to pay or accumulate funds for paying the costs of the design, construction and acquisition of public facilities, or to pay debt service on other obligations of the City with respect to such facilities, and (ii) establishing an appropriations limit for the community facilities district to the qualified electors of the community facilities district, upon which such elections can be held pursuant to said Section 53326 that may be selected by the City Council, or such earlier date as the owners of the land within the community facilities district and the City Clerk agree and concur is acceptable. (b) Pursuant to said Section 53326, the consolidated special elections may be held earlier than 90 days following the close of the public hearing if the qualified electors of the community facilities district waive the time limits for conducting the elections set forth in said Section 53326 by unanimous written consent and the City Clerk concurs in such earlier election date as shall be consented to by the qualified electors. (c) Pursuant to said Section 53326, ballots for the consolidated special elections shall be distributed to the qualified electors by the City Clerk by mail with return postage prepaid, or by personal service. ( d) Pursuant to applicable sections of the California Elections Code governing the conduct of mail ballot elections of the City, and specifically Division 4 (commencing with Section 4000) of the California Elections Code with respect to elections conducted by mail, the City Clerk shall mail or deliver to each qualified elector an official ballot in a form specified by the City Council in the resolutions calling and consolidating the consolidated special elections, and shall also mail or deliver to all such qualified electors a ballot pamphlet and instructions to voter, including a sample ballot identical in form to the official ballot but identified as a sample ballot, a statement pursuant to Section 9401 of said Code, an impartial analysis by the City Attorney pursuant to Section 9280 of said Code with respect to the ballot propositions contained in the official ballot, arguments and rebuttals, if any, pursuant to Sections 9281 to 9287, inclusive, and 9295 of said Code, a return identification envelope with prepaid postage thereon addressed to the City Clerk for returning voted official ballots, and a copy of this resolution, or the resolution of formation establishing the community facilities district adopted by the City Council pursuant to Section 53325.1 of the California Government Code; provided, however, that such statement, analysis and arguments may be waived with the unanimous consent of all the landowners, and in such event a finding regarding such --6 --55575.70002\33351872.1
23waivers shall be made in the resolution adopted by the City Council calling the consolidated special elections. ( e) The official ballot to be mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the name of the landowner-voter and the number of votes to be voted by the landowner-voter and shall have appended to it a certification to be signed by the person voting the official ballot which shall certify that the person signing the certification is the person who voted the official ballot, and if the landowner-voter is other than a natural person, that he or she is an officer of or other person affiliated with the landowner-voter entitled to vote such official ballot, that he or she has been authorized to vote such official ballot on behalf of the landowner-voter, that in voting such official ballot it was his or her intent, as well as the intent of the landowner-voter, to vote all votes to which the landowner-voter is entitled, based on its land ownership, on the propositions set forth in the official ballot as marked thereon in the voting square opposite each such proposition, and further certifying as to the acreage of the landowner-voter's land ownership within the community facilities district. (f) The return identification envelope mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the following: (i) the name of the landowner, (ii) the address of the landowner, (iii) a declaration under penalty of perjury stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, (iv) the printed name and signature of the voter, (v) the address of the voter, (vi) the date of signing and place of execution of said declaration, and (vii) a notice that the envelope contains an official ballot and is to be opened only by the City Clerk. (g) The instruction to voter form to be mailed or delivered by the City Clerk to the landowner-voters shall inform them that the official ballots shall be returned to the City Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon properly inserted by the hour on the date of the elections which is specified by the City Council for the receipt of ballots; provided that if all qualified voters have voted, the election may be closed by the City Clerk. (h) Upon receipt of the return identification envelopes which are returned prior to the voting deadline on the date of the elections, the City Clerk shall canvass the votes cast in the consolidated special elections, and shall file a statement with the City Council as to the results of such canvass and the election on each proposition set forth in the official ballot. The procedures set forth in this section for conducting the consolidated special elections, if they are held, may be modified as the City Council may determine to be necessary or desirable by a resolution subsequently adopted by the City Council. --7 --55575. 70002\33351872.1
24PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS 12TH DAV OF NOVEMBER, 2020. DAVID H. READY, CITY MANAGER ATTEST: ANTHONY J. MEJIA, MMC, CITY CLERK CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, ANTHONY J. MEJIA, MMC, City Clerk of the City of Palm Springs, hereby certify that Resolution No. __ is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on November 12, 2020, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ANTHONY J. MEJIA, MMC, CITY CLERK --8 --55575.70002\33351872.1
25EXHIBIT "A" RATE AND METHOD OF APPORTIONMENT FOR THE CITY OF PALM SPRINGS COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in City of Palm Springs Community Facilities District No. 2020-1 (Canyon View), City of Palm Springs, County of Riverside, State of California ("CFD No. 2020-1") and collected each Fiscal Year commencing in Fiscal Year 2020-2021, in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," as described below. All of the real property in CFD No. 2020-1, unless exempted by law or by the provisions hereof, shall be taxed for these purposes, to the extent and in the manner herein provided. A Definitions The terms hereinafter set forth have the following meanings: "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the actual or reasonably estimated costs directly related to the administration of CFD No. 2020-1 including, but not limited to, the following: the costs of computing the Special Taxes and preparing the annual Special Tax Levy collection schedules (whether by the CFD Administrator or designee thereof or both); the costs of collecting the Special Tax Levies (whether by the County or otherwise); the costs of remitting the Special Tax Levies to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to City, CFD No. 2020-1, or any designee thereof of complying with arbitrage rebate requirements, or responding to questions from the Securities and Exchange Commission or Internal Revenue Service pertaining to any CFD No. 2020-1 Bonds or any audit of any CFD No. 2020-1 Bonds by the Securities and Exchange Commission or Internal Revenue Service; the costs to City, CFD No. 2020-1, the Trustee or any designee thereof of complying with City, CFD No. 2020-1, or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax Levy disclosure statements and responding to public inquiries regarding the Special Tax Levies; the costs to City, CFD No. 2020-1, or any designee thereof related to an appeal of the levy or application of the Special Tax; the costs associated with the release of funds from an escrow account; and A-1 55575.70002\32140660.3
26City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by City or CFD No. 2020-1 for any other administrative purposes of CFD No. 2020-1, including, but not limited to, attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Tax. "Assessor's Parcel" or "Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax as determined in accordance with Section C.1.b, below. "Authorized Facilities" means those facilities eligible to be funded by CFD No. 2020-1, as defined in the Resolution of Formation and authorized to be financed by CFD No. 2020-1 pursuant to the Act. "Backup Special Tax" means the Backup Special Tax applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.c, below. "Building Permit" means a permit issued by the City or other governmental agency for the construction of a residential building on an Assessor's Parcel. 11 Buildout" means, for CFD No. 2020-1, that all expected Certificates of Occupancy have been issued. "Certificate of Occupancy" means a certificate issued by the City pursuant to Section 93.10.00 of the City's Municipal Code, upon inspection of a completed Dwelling Unit, that permits the use or occupancy by end users of such Dwelling Unit. "CFO Administrator" means an official of CFD No. 2020-1, or any designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFO No. 2020-1" means City of Palm Springs Community Facilities District No. 2020-1 (Canyon View), City of Palm Springs, County of Riverside, State of California. "CFO No. 2020-1 Bonds" means any bonds or other debt (as defined in Section 5331 ?(d) of the Act), whether in one (1) or more series, authorized by CFD No. 2020-1 under the Act and issued by City and secured by the Special Taxes. "CFO Public Facilities11 means either $2,482,685 in 2020 dollars, which shall increase by the Construction Cost Index, and on each July 1 thereafter beginning A-2 55575.70002\32140660.3
27July 1, 2021, or such lower number as (i) shall be determined by the CFO Administrator as sufficient to provide the public facilities to be provided by CFO No. 2020-1 under the authorized bonding program for CFO No. 2020-1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds (except refunding bonds) to be supported by the Special Tax levied under this Rate and Method of Apportionment as described in Section C. "City" means the City of Palm Springs, California. "City Council" means the City Council of the City. "Construction Cost Index" means, for Fiscal Year 2021-2022, the Engineering New Record Construction Cost Index ("ENR CCI") as of March 1, 2021; and for each Fiscal Year, the ENR CCI as of March 1 of the Fiscal Year preceding the current Fiscal Year. In the event the Construction Cost Index ceases to be published, the index used shall be based on a comparable index determined by City Council. "County" means the County of Riverside. "Deferred Improvements Fund" means an account established by the City or CFO 2020-1 pursuant to the Settlement Agreement to hold funds which are currently available for expenditure to acquire or construct CFO Public Facilities eligible under the Act. "Developed Property" means, for each Fiscal Year, all Assessor's Parcels for which a Certificate of Occupancy was issued after January 1, 2020 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied. "Dwelling Unit" means a building or portion thereof designed for and occupied in whole or part as a residence by one (1) family and its guests, with sanitary facilities and one (1) kitchen provided within the unit. "Fiscal Vear" means the period starting July 1 and ending on the following June 30. 11Future Facilities Costs" means the CFO Public Facilities minus (i) public facility costs previously paid from the Improvement Fund or the Deferred Improvements Fund, (ii) moneys currently on deposit in the Improvement Fund or Deferred Improvements Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance the cost of CFO Public Facilities. "Indenture" means the indenture, fiscal agent agreement, resolution, or other instrument pursuant to which CFO No. 2020-1 Bonds are issued, as modified, amended, and/or supplemented from time to time, and any instrument replacing or supplementing the same. A-3 55575. 70002\32140660.3
28"Improvement Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct CFO Public Facilities eligible under the Act. "Land Use Category" means any of the categories listed in Section C and for Developed Property as listed in Table 1. "Maximum Special Tax" means, for each Fiscal Year, the maximum Special Tax, determined in accordance with Section C.1.a, below, that can be levied on any Assessor's Parcel. "Outstanding Bonds" means all CFO No. 2020-1 Bonds which remain outstanding under the Indenture. "Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are deemed to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year. "Property Owner Association Property" means, for each Fiscal Year, any Assessor's Parcel within the boundaries of CFO No. 2020-1 that is owned by or irrevocably offered for dedication to a property owner association, including any master or sub-association, not including any such property that is located directly under a residential or non-residential structure. "Proportionately" means that the ratio of the actual Special Tax Levy to the Assigned Special Tax is equal for all Assessor's Parcels of Developed Property. "Public Property" means, for each Fiscal Year, all property within the boundaries of CFO No. 2020-1 that (i) is owned by, irrevocably offered or dedicated to, or leased to, the federal government, the State, the County, the City, or any local government or other public agency, provided that any property leased or with respect to which a possessory interest has been granted to a non-exempt person or entity by any of the foregoing entities, then pursuant to Section 53340.1 of the Act, such leasehold or possessory interest shall be taxed and classified according to its use, or (ii) is encumbered by a public easement making impractical its use for any purpose other than that set forth in the easement. "Rate and Method of Apportionment" or "RMA" means this Rate and Method of Apportionment of Special Tax. "Resolution of Formation" means the resolution forming CFO No. 2020-1. "Residential Floor Area" or "SF" means the building square footage of a Dwelling Unit as determined by reference to the building permit issued by the City for the Dwelling Unit. A-4 55575. 70002\32140660.3
29"Residential Property" means any and each Assessor's Parcel of Developed Property for which a Certificate of Occupancy has been issued by the City for one or more residential Dwelling Units. "Special Tax" or "Special Taxes" means the special tax or special taxes to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property to fund the Special Tax Requirement. "Special Tax Levy" or "Special Tax Levies" means the Special Tax to be levied in each Fiscal Year on Assessor's Parcel of Taxable Property to fund the Special Tax Requirement. "Special Tax Requirement" means that amount of Special Taxes required, if any, in any Fiscal Year for CFD No. 2020-1 to: (i) pay debt service on all Outstanding Bonds; (ii) pay periodic costs on the CFD No. 2020-1 Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No. 2020-1 Bonds; (iii) pay all or a portion of the Administrative Expenses as determined by the CFD Administrator; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) prior to the earlier of the issuance of CFD No. 2020-1 Bonds or the completion of all Authorized Facilities as determined by the CFD Administrator, accumulate funds for the acquisition or construction of Authorized Facilities to the extent that the inclusion of such amounts does not result in a levy of special tax beyond Step 1 pursuant to Section D; and (vi) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (vii) a credit for funds available to reduce the annual Special Tax, as determined by the CFD Administrator pursuant to the Indenture. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2020-1 which are not exempt from the Special Tax pursuant to law or Section E below. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all property not classified as Developed Property, Property Owner Association Property, or Public Property. B Assignment to Land USe Categories Each Fiscal Year, all Assessor's Parcels within CFD No. 2020-1 shall be classified by the CFD Administrator as Developed Property, Undeveloped Property, Property Owner Association Property, or Public Property. Only Assessor's Parcels classified as Residential Property shall be subject to Special Taxes in accordance with this Rate and Method of Apportionment as determined by the CFD Administrator pursuant to Section C and D below. The CFD Administrator's allocation of property to each type of Land Use Category shall be conclusive and binding. A-5 55575. 70002\32140660.3
30C Maximum Special Tax Rate C.1 Developed Property C.1.a Maximum Special Tax The Maximum Special Tax for each Assessor's Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax and (ii) the amount derived by application of the Backup Special Tax. C.1.b Assigned Special Tax The Assigned Special Tax for Developed Property is shown below in Table 1. Under no circumstances shall a Special Tax be levied on additions to existing Dwelling Units. Table 1: Assigned Special Taxes for Developed Property in CFD No. 2020-1 (Fiscal Vear 2020-2021) Land Use Land Use Assigned Special Tax Category 1 RESIDENTIAL PROPERTY(>= 2,500 SF) $2,722 PER DWELLING UNIT 2 RESIDENTIAL PROPERTY (2,410 -2,499 SF) $2,353 PER DWELLING UNIT 3 RESIDENTIAL PROPERTY (2,320 -2,409 SF) $2,231 PER DWELLING UNIT 4 RESIDENTIAL PROPERTY (2,230 -2,319 SF) $1,880 PER DWELLING UNIT 5 RESIDENTIAL PROPERTY(< 2,230 SF) $1,575 PER DWELLING UNIT C.1.c Backup Special Tax The Backup Special Tax for an Assessor's Parcel of Residential Property shall equal $16,093 per Acre of the Assessor's Parcel. The Backup Special Tax shall not apply to Public Property or Property Owners' Association Property. C.1.d Increase in the Assigned Special Tax and Backup Special Tax For each Assessor's Parcel, the Fiscal Year 2020-2021 Assigned Special Tax identified in Table 1 and Backup Special Tax in Section C.1.c, shall increase (i) commencing on July 1, 2021 and on July 1 of each Fiscal Year thereafter through the Fiscal Year in which the first Certificate of Occupancy for a Dwelling Unit is issued on such Assessor's Parcel, by the greater of 2% or the percentage change in the Construction Cost index; and (ii) commencing in the Fiscal Year following the Fiscal Year in which the first Certificate of Occupancy for a Dwelling Unit is issued on the Assessor's Parcel, by an amount equal to two percent (2%) of the Assigned Special Tax and Backup Special Tax applicable in the Fiscal Year in which the first Certificate of Occupancy for a Dwelling Unit is issued; and A-6 55575. 70002\32140660.3
31(iii) on July 1 of each Fiscal Year thereafter by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. C.1.e Multiple Land Use Categories In some instances, an Assessor's Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax that can be levied on such an Assessor's Parcel shall be the sum of the Maximum Special Taxes that can be levied for all Land Use Categories located on that Assessor's Parcel. C.2 Undeveloped Property, Property Owner Association Property and Public Property No Special Tax shall be levied on Undeveloped Property, Property Owner Association Property, or Public Property. D Method of Apportionment of the Special Tax Commencing with Fiscal Year 2020-21 and for each following Fiscal Year, the City Council shall levy the annual Special Tax Proportionately for each Assessor's Parcel as follows: Step 1: The Special Tax shall be levied on each Assessor's Parcel of Residential Property in an amount up to 100% of the applicable Assigned Special Tax for Residential Property to satisfy the Special Tax Requirement. Step 2: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, then the levy of the Special Tax on each Assessor's Parcel of Developed Property for which the Maximum Special Tax is determined through the application of the Backup Special Tax shall be increased in equal percentages from the Assigned Special Tax up to 100% of the Maximum Special Tax for each such Assessor's Parcel of Developed Property until (i) the total Special Tax levied under the first two steps listed in this Section D equals the Special Tax Requirement, or (ii) the Special Tax levied on all Developed Property equals 100% of the Maximum Special Tax for Developed Property, whichever occurs first. E Exemptions No Special Tax shall be levied on Public Property or Property Owner Association Property in CFD No. 2020-1. However, should an Assessor's Parcel no longer be classified as Public Property or Property Owner Association Property, such Assessor's Parcel may, upon each reclassification, no longer be exempt from Special Taxes. A-7 55575. 70002\32140660.3
32F Appeals and Interpretations Any landowner or resident may file a written appeal of the Special Tax on his/her property with the CFO Administrator, provided that the appellant is current in his/her payments of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFO Administrator shall review the appeal, meet with the appellant if the CFO Administrator deems necessary, and advise the appellant of its determination. If the CFO Administrator agrees with the appellant, the CFO Administrator shall eliminate or reduce the Special Tax on the appellant's property for the current Fiscal Year and all future years. If the CFO Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has 30 days in which to appeal to the City Council by filing a written notice of appeal with the clerk of the City, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for the appellant's disagreement with the CFO Administrator's determination. The CFO Administrator may charge the appellant a reasonable fee for processing the appeal. The City may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals. Any decision of the City will be final and binding as to all persons. G Manner of Collection The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad va/orem property taxes; provided, however, that the City may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary or otherwise advisable to meet its financial obligations for CFO No. 2020-1, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. H PREPAYMENT OF SPECIAL TAX H.1 Prepayment of Special Tax The Maximum Special Tax obligation may only be prepaid and permanently satisfied for an Assessor's Parcel of Developed Property or Undeveloped Property for which a Building Permit has been issued. The Prepayment Amount for an Assessor's Parcel of Undeveloped Property for which a Building Permit has been issued shall be based on the Assigned Special Tax for the applicable Land Use Category shown in Table 1 based on the Building Permit issued for such Assessor's Parcel and the then current Special Tax rates. The Maximum Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor's Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's A-8 55575. 70002\32140660.3
33Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax obligation shall provide the CFO Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFO Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. The CFO Administrator may charge a reasonable fee for providing this service. The Special Tax Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Special Tax Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated by the CFO Administrator as follows: Paragraph No. 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. Compute the Assigned Special Tax and Backup Special Tax for the Assessor's Parcel to be prepaid based on the Special Tax which is, or could be, charged in the current Fiscal Year for Developed Property. For Assessor's Parcels of Undeveloped Property (for which a Building Permit has been issued but which is not yet classified as Developed Property) to be prepaid, compute the Assigned Special Tax and Backup Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the Building Permit which has already been issued for that Assessor's Parcel. 3. (a) Divide the Assigned Special Tax computed pursuant to Paragraph 2 by the total estimated Assigned Special Tax for CFO No. 2020-1 based on the Developed Property Special Tax which could be charged in the current Fiscal Year on all expected development through buildout of CFO No. 2020-1, excluding any Assessor's Parcels which have been prepaid, and (b) Divide the Backup Special Tax computed pursuant to Paragraph 2 by the estimated total Backup Special Tax at buildout of CFO No. 2020-1, excluding any Assessor's Parcels which have been prepaid. 4. Multiply the larger quotient computed pursuant to Paragraph 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount'). A-9 55575. 70002\32140660.3
345. Multiply the Bond Redemption Amount computed pursuant to Paragraph 4 by the applicable redemption premium (e.g., the redemption price minus 100%), if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium'). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to Paragraph 3(a) or 3(b) by the amount determined pursuant to Paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount'). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 9. Determine the Special Tax levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 10. Add the amounts computed pursuant to Paragraphs 8 and 9 to determine the "Defeasance Amount". 11. Verify the administrative fees and expenses of CFO No. 2020-1, including the costs to compute the prepayment, the costs to invest the prepayment proceeds, the costs to redeem Bonds, and the costs to record any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses'). 12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the reserve requirement (as defined in the Indenture) on the prepayment date, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the "Reserve Fund Credit'). No Reserve Fund Credit shall be granted if reserve funds are below 100% of the reserve requirement on the prepayment date or the redemption date. 13. The amount due to fully prepay the Special Tax is equal to the sum of the amounts computed pursuant to Paragraphs 4, 5, 7, 10, and 11, less the amount computed pursuant to Paragraph 12 (the "Prepayment Amount'). 14. From the Prepayment Amount, the amounts computed pursuant to Paragraphs 4, 5, 10, and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to Paragraph 7 shall be deposited into the Improvement Fund, or if Bonds have not yet been issued, the Deferred Improvement Fund. The amount computed pursuant to Paragraph 11 shall be retained by CFO No. 2020-1. A-10 55575.70002\32140660.3
35H.2 General Provisions Applicable to the Prepayment of Special Tax H.2.a Use of the Special Tax Prepayment Amount The Prepayment Amount of the Special Tax shall be applied in the following order of priority: (i) to be deposited into specific funds established under the Indenture, to fully or partially retire as many CFO No. 2020-1 Bonds as possible, and, if amounts are less than $5,000, to make debt service payments on the CFO No. 2020-1 Bonds, and (ii) be remitted to the City for deposit in the Deferred Improvements Fund and used for any Authorized Facilities. Prior to the issuance of the first series of CFO No. 2020-1 Bonds, the Prepayment Amount of the Special Tax shall be remitted to the City for deposit in the Deferred Improvements Fund and used for any Authorized Facilities. H.2.b Prepayment of Special Tax Upon confirmation of the payment of the current Fiscal Year's entire Special Tax obligation, the CFO Administrator may remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid in accordance with Section H.1, the CFO Administrator shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax and the release of the Special Tax lien on such Assessor's Parcel, and the obligation to pay the Special Tax for such Assessor's Parcel shall cease. H.2.c Debt Service Coverage Notwithstanding the foregoing, no prepayment of the Special Tax shall be allowed unless the amount of Special Tax that may be levied on Taxable Property within CFO No. 2020-1 in each future Fiscal Year, after the proposed prepayment, is at least equal to the sum of (i) 1.1 O times the debt service necessary to support the remaining Outstanding Bonds in each corresponding Fiscal Year, and (ii) the Administrative Expenses as defined in Section A herein. Similarly, no prepayment of the Special Tax shall be allowed if the amount of Special Tax that may be levied on Taxable Property within CFO No. 2020-1 in each future Fiscal Year, after the proposed prepayment, does not at least equal to 1 .10 times the debt service on all Outstanding Bonds. Term of Special Tax For each Assessor's Parcel of Developed Property, the Special Tax shall terminate and no longer be levied or collected pursuant to this Rate and Method of Apportionment on the date that is the later of the Fiscal Year immediately following (i) the thirty-fifth anniversary of the date on which such Special Tax is first levied or collected, or (ii) Fiscal Year 2052-2053. A-11 55575. 70002\32140660.3
36ATTACHMENT 3
37RESOLUTION NO. --A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DETERMINING THE NECESSITY FOR COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS TO INCUR A BONDED INDEBTEDNESS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $4,000,000 FOR PROVIDING PUBLIC FACILITIES AND CALLING A SPECIAL ELECTION OF THE COMMUNITY FACILITIES DISTRICT ON THE PROPOSITION FOR INCURRING SUCH BONDED INDEBTEDNESS WHEREAS, on September 24, 2020, the City Council (the 11City Council11) of the City of Palm Springs (the 11City11), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the 11Act11), adopted Resolution No. 24804 declaring the necessity for Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California (the 11District11), to incur a bonded indebtedness for the purpose of providing and financing public facilities that are necessary to meet increased demands placed upon the City (the "City Facilities") and as a result of development of the property therein; and WHEREAS, on November 12, 2020, at the time and place of the hearing, as set forth in Resolution No. 24804 and the notice thereof, the City Council conducted the hearing and afforded all persons interested, including persons owning property within the District, an opportunity to be heard on the proposed authorization to incur bonded indebtedness, and no protests were received; and WHEREAS, on November 12, 2020, at the conclusion of the hearing, the City Council adopted the resolution of formation pursuant to Section 53325.1 (a) of the California Government Code (the "Resolution of Formation"), establishing Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California; and WHEREAS, the City Council has determined that it is necessary for the District to incur a bonded indebtedness for the purpose of providing and financing the public facilities which are necessary to the development of the property therein; and WHEREAS, the City Clerk has received a statement from the Registrar of Voters of the County of Riverside that there are no persons registered to vote in the territory of the District; THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, HEREBY RESOLVES AS FOLLOWS: Section 1. Necessity. It is necessary for the District to incur a bonded indebtedness in an aggregate principal amount not to exceed $4,000,000 for the purpose of financing 55575.70002\3335253 l. l
38the design, construction and acquisition of the City Facilities as described in the Resolution of Formation. Section 2. Costs Included. The amount of the proposed bonded indebtedness shall include all costs and estimated costs incidental to, or connected with, the accomplishment of the purposes for which the proposed bonded indebtedness is to be incurred, including, but not limited to, the estimated costs of construction and acquisition of the public facilities which are proposed to be provided within and for the District, acquisition of land and rights-of-way, satisfaction of contractual obligations relating to expenses or the advancement of funds for expenses existing at the time the bonds are issued, architectural, engineering, inspection, legal, fiscal and financial consultant fees, bond and other reserve funds and interest on any bonds of the District estimated to be due and payable within two years from the date of the issuance of such bonds, election costs, and all costs of issuance of the bonds, including, but not limited to, underwriter's discount, fees for bond counsel, disclosure counsel, appraisers, municipal advisors, market absorption consultants and other consultants, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other credit enhancement costs, and printing costs. Section 3. Amount of Debt; Terms of Bonds. The aggregate principal amount of the bonded indebtedness to be incurred by the District shall not exceed $4,000,000. The maximum term of the bonds shall not exceed 30 years. The maximum annual rate of interest to be paid semiannually on the bonds shall not exceed 12 percent per annum or such other rate as may be the maximum interest rate permitted by law. Section 4. Proposition to be Submitted to Voters. (a) The proposition to be submitted to the voters within the Community Facilities District with respect to the proposed bonded indebtedness shall be as follows: Shall a bonded indebtedness in an aggregate principal amount not to exceed $4,000,000 be incurred by and for Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California, for a maximum term of not more than 30 years and with interest at a rate or rates not to exceed the maximum interest rate permitted by law, for the purposes of providing public facilities for the community facilities district, including the design, construction and acquisition of street and road facilities, traffic control devices, landscape medians and undergrounding of existing overhead utilities, of the City of Palm Springs, as provided in the Resolution of Formation adopted by the City Council of the City of Palm Springs on November12,2020? Section 5. Election. The date of the special election with respect to the incurring of the aforementioned bonded indebtedness by the District, at which time the proposition -2-55575.70002\33352531.1
39set forth in Section 4 hereof shall be submitted to the voters of the District, is November 12, 2020, and that special election is hereby called for that date. Pursuant to Section 53326 of the California Government Code, since at the time of the close of the public hearing, and for at least the preceding 90 days, less than 12 persons have been registered to vote within the territory of the District, the vote in the special election will be by the landowners of the District whose property would be subject to the special taxes if they were levied at the time of the election, with each landowner of record at the close of the public hearing having one vote for each acre or portion of an acre of land that he or she owns within the District, and the special election shall be conducted by the City Clerk (the "City Clerk"). The special election shall be consolidated with the special election with respect to the proposition regarding the levy of special taxes for the payment of the principal of and interest on the bonds of the District and establishing an appropriations limit for the District which has also been called for November 12, 2020. The consolidated special elections shall be conducted by the City Clerk pursuant to applicable provisions of the California Elections Code with respect to mail-ballot elections of cities and specifically Division 4 (commencing with Section 4000) of that Code, insofar as they may be applicable. Pursuant to Section 53326 of the California Government Code, the official ballot shall be delivered by the City Clerk to the qualified electors by personal service. The voted official ballot shall be received by the City Clerk by 5:30 p.m. on the date of the election; provided that if all qualified electors have voted, the election shall be closed with the concurrence of the City Clerk. Section 6. Accountability Measures. Pursuant to Section 53410 of the California Government Code, if the voters approve the proposition contained in the official ballot for the consolidated special elections with respect to the District incurring bonded indebtedness for the purposes for which such indebtedness is to be incurred and bonds of the District are to be issued (the 'Hond Proposition"), the incurring of such bonded indebtedness and the issuance of bonds of the District shall be subject to the following accountability measures: (a) The Bond Proposition shall identify the specific purposes for which the bonds are to be issued; (b) The proceeds of the bonds shall be applied only for the specific purposes identified in the Bond Proposition; (c) An account or accounts shall be created pursuant to the fiscal agent agreement for such bonds into which the proceeds of the sale of such bonds shall be deposited; and (d) The City Manager, or his designee(s), shall file a report with the City Council no later than January 2 of the calendar year beginning after the year in which the bonds are issued and annually thereafter, which shall contain the information required by Section 53411 of the California Government Code. The City Council finds that the Bond Proposition which will be set forth in the official ballot for the consolidated special elections, and which are set forth in Section 4 -3-5557 5. 70002\3335253 l. l
40hereof, identifies the specific purposes for which the District will incur bonded indebtedness and issue bonds. PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS 12TH DAY OF NOVEMBER, 2020. DAVID H. READY, CITY MANAGER ATTEST: ANTHONY J. MEJIA, MMC, CITY CLERK CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, ANTHONY J. MEJIA, MMC, City Clerk of the City of Palm Springs, hereby certify that Resolution No. __ is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on November 12, 2020 AYES: NOES: ABSENT: ABSTAIN: ANTHONY J. MEJIA, MMC, CITY CLERK -4-55575. 70002\33352531.1
41ATTACHMENT 4
42RESOLUTION NO. __ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CALLING A SPECIAL ELECTION AND SUBMITTING TO THE VOTERS OF COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS PROPOSITIONS WITH RESPECT TO THE ANNUAL LEVY OF SPECIAL TAXES WITHIN SAID COMMUNITY FACILITIES DISTRICT AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR SAID COMMUNITY FACILITIES DISTRICT WHEREAS, pursuant to Section 53325.1 of the California Government Code, the City Council (the "City Council") of the City of Palm Springs ("the City") has adopted a resolution establishing Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California (the "District") and the boundaries thereof (the "Resolution of Formation"); and WHEREAS, pursuant to Section 53351 of the California Government Code, the City Council has also adopted a resolution determining that it is necessary that the District incur a bonded indebtedness in an amount not to exceed $4,000,000 for the purposes of financing the design, construction, and acquisition of certain public facilities for the District (the "Bond Resolution"); and WHEREAS, by the Bond Resolution, the City Council called a special election on the proposition to be submitted to the voters of the District with respect to the District incurring a bonded indebtedness for the purpose of financing such public facilities for the District; and WHEREAS, pursuant to Sections 53326 and 53350 of the California Government Code, it is necessary that the City Council also submit to the voters of the District the proposition relating to the annual levy of special taxes on the property within the District to pay the principal of and interest on the bonds of the District which may be issued and sold to finance the design, construction and acquisition of the public facilities for the District, if such bonds are authorized and issued, or to pay or accumulate funds for paying the costs of public facilities; and WHEREAS, pursuant to Section 53325.7 of said Code, the City Council may also submit to the voters of the District a proposition with respect to establishing an appropriations limit for the District; THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, HEREBY RESOLVES, DETERMINES AND APPROVES AS FOLLOWS: Section 1. Findings. The City Council finds that: (i) the foregoing recitals are correct; (ii) less than 12 persons have been registered to vote within the territory of the District 5557 5. 70002\33354643 .1
43during the 90 days preceding the close of the public hearing on November 12, 2020; (iii) pursuant to Section 53326 of the California Government Code, as a result of the findings set forth in clause (ii) above, the vote in the special election called by this resolution shall be by the landowners of the District whose property would be subject to the special taxes if they were levied at the time of the elections, and each landowner shall have one vote for each acre, or portion thereof, which he or she owns within the District which would be subject to the proposed special taxes if they were levied at the time of the elections; (iv) EHOF Canyon View, LLC., the owner of all of the land in the District has by written consent (a) waived the time limits set forth in said Section 53326 for holding the elections called by this resolution, (b) consented to the holding of said elections on November 12, 2020, (c) waived notice and mailed notice of the time and date of said elections, and ( d) waived an impartial analysis by the City Attorney of the ballot propositions pursuant to Section 9280 of the California Elections Code and arguments and rebuttals pursuant to Sections 9281 to 9287, inclusive, of said Code; and (v) the City Clerk of the City has consented to the holding of said elections on November 12, 2020. Section 2. Call of Election. The City Council hereby calls and schedules special elections for November 12, 2020 within and for the District on (i) the proposition with respect to the annual levy of special taxes within the District for the payment of principal of and interest on the bonds of the District, or to pay or accumulate funds for paying the costs of the design, construction and acquisition of public facilities, and (ii) the proposition with respect to establishing an appropriations limit for the District. Section 3. Propositions. (a) The propositions to be submitted to the voters of the District at such special elections shall be as follows: Proposition A: Shall a bonded indebtedness in an aggregate principal amount not to exceed $4,000,000 be incurred by and for Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California, for a maximum term of not more than 30 years and with interest at a rate or rates not to exceed the maximum interest rate permitted by law, for the purposes of providing public facilities for the community facilities district, including the design, construction and acquisition of street and road facilities, traffic control devices, landscape medians and undergrounding of existing overhead utilities, of the City of Palm Springs, as provided in the Resolution of Formation adopted by the City Council of the City of Palm Springs on November12,2020? Proposition B: Shall special taxes be levied annually on taxable property within Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of - 2 -5557 5. 70002\33354643 .1
44Riverside, State of California, to pay the principal of and interest on the bonds of the community facilities district which may be issued and sold to finance the design, construction and acquisition of the public facilities described in Proposition A of this ballot, pay the principal of and interest on bonds or other obligations of the City relating to such facilities, and costs incidental thereto, to replenish the reserve fund for the bonds, or to accumulate funds for future bond payments, including any amount required by federal law to be rebated to the United States with regard to the bonds, to pay or accumulate funds for paying the costs of the design, construction and acquisition of such facilities, and to pay expenses incidental thereto and to the levy and collection of the special taxes, so long as the special taxes are needed to pay the principal of and interest on the bonds and for such other purposes, at the special tax rates and pursuant to the method of apportioning the special taxes set forth in Exhibit "A" to the Resolution of Formation adopted by the City Council of the City of Palm Springs on November 12,2020? Proposition C: Shall an appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, be established for Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California, in the amount of $4,000,000? Section 4. Conduct of Elections. Except as otherwise provided in Section 5 hereof, said elections shall be conducted by the City Clerk of the City pursuant to the California Elections Code governing mail ballot elections of cities, and in particular, the provisions of Division 4 (commencing with Section 4000) of said Code, insofar as they may be applicable. Section 5. Election Procedures. The procedures to be followed in conducting the special elections on (i) the proposition with respect to the District incurring a bonded indebtedness in an amount not to exceed $4,000,000, (ii) the proposition with respect to the levy of special taxes on the land within the District to pay the principal of and interest on the bonds of the District or to pay or accumulate funds for paying the costs of the design, construction and acquisition of public facilities, and (iii) the proposition with respect to establishing an appropriations limit for the District in the amount of $4,000,000 (the "special elections") shall be as follows: (a) Pursuant to said Section 53326 of the California Government Code, ballots for the special elections shall be distributed to the qualified electors by the City Clerk by mail with return postage prepaid, or by personal service. - 3 -55575.70002\33354643.l
45(b) Pursuant to applicable sections of the California Elections Code governing the conduct of mail ballot elections of cities, and specifically Division 4 (commencing with Section 4000) of the California Elections Code with respect to elections conducted by mail, the City Clerk shall mail or deliver to each qualified elector an official ballot in the form attached hereto as Exhibit "A", as appropriate, and shall also mail or deliver to all such qualified electors a ballot pamphlet and instructions to voter, including a sample ballot identical in form to the official ballot but identified as a sample ballot, a return identification envelope with prepaid postage thereon addressed to the City Clerk for the return of voted official ballots, and a copy of the Resolution of Formation; provided, however, that such statement, analysis and arguments may be waived with the unanimous consent of all the landowners. (c) The official ballot to be mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the name of the landowner-voter and the number of votes to be voted by the landowner-voter and shall have appended to it a certification to be signed by the person voting the official ballot which shall certify that the person signing the certification is the person who voted the official ballot, and if the landowner-voter is other than a natural person, that he or she is an officer of or other person affiliated with the landowner-voter entitled to vote such official ballot, that he or she has been authorized to vote such official ballot on behalf of the landowner-voter, that in voting such official ballot it was his or her intent, as well as the intent of the landowner-voter, to vote all votes to which the landowner-voter is entitled based on its land ownership on the propositions set forth in the official ballot as marked thereon in the voting square opposite each such proposition, and further certifying as to the acreage of the landowner-voter's land ownership within the District. (d) The return identification envelope mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the following: (i) the name of the landowner, (ii) the address of the landowner, (iii) a declaration under penalty of perjury stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, (iv) the printed name and signature of the voter, (v) the address of the voter, (vi) the date of signing and place of execution of said declaration, and (vii) a notice that the envelope contains an official ballot and is to be opened only by the City Clerk. ( e) The instruction to voter form to be mailed or delivered by the City Clerk to the landowner-voters shall inform them that the official ballots shall be returned to the City Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon properly inserted by 5:30 p.m. on November 12, 2020. (f) Upon receipt of the return identification envelope which is returned prior to the voting deadline on the date of the election, the City Clerk shall canvass the votes cast in the special election, and shall file a statement with the City Council as to the - 4 -55575.70002\33354643.1
46results of such canvass and the election on each proposition set forth in the official ballot. Section 6. Accountability Measures. Pursuant to Section 5341 O of the California Government Code, if the voters approve the proposition contained in the official ballot for the consolidated special elections with respect to the District incurring bonded indebtedness for the purposes for which such indebtedness is to be incurred and bonds of the District are to be issued (the "Bond Proposition"), the incurring of such bonded indebtedness and the issuance of bonds of the District shall be subject to the following accountability measures: (a) The Bond Proposition shall identify the specific purposes for which the bonds are to be issued; (b) The proceeds of the bonds shall be applied only for the specific purposes identified in the Bond Proposition; (c) An account or accounts shall be created pursuant to the fiscal agent agreement for such bonds into which the proceeds of the sale of such bonds shall be deposited; and (d) The City Manager, or his designee(s), shall file a report with the City Council no later than January 2 of the calendar year beginning after the year in which the bonds are issued and annually thereafter, which shall contain the information required by Section 53411 of the California Government Code. The City Council finds that the Bond Proposition as set forth in the official ballot for the consolidated special elections attached hereto as Exhibit "A," identifies the specific purposes for which the District will incur bonded indebtedness and issue bonds. PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS 12TH DAV OF NOVEMBER, 2020. DAVID H. READY, CITY MANAGER ATTEST: ANTHONY J. MEJIA, MMC, CITY CLERK - 5 -55575.70002\33354643.1
47CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, ANTHONY J. MEJIA, MMC, City Clerk of the City of Palm Springs, hereby certify that Resolution No. __ is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on November 12, 2020 AYES: NOES: ABSENT: ABSTAIN: ANTHONY J. MEJIA, MMC, CITY CLERK - 6 -55575.70002\33354643.1
48EXHIBIT "A" OFFICIAL BALLOT CONSOLIDATED SPECIAL ELECTIONS FOR COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS COUNTY OF RIVERSIDE STATE OF CALIFORNIA November 12, 2020 To vote, mark a cross(+) in the voting square after the word "YES" or after the word "NO". All marks otherwise made are forbidden. If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Palm Springs and obtain another. PROPOSITION A: Shall a bonded indebtedness in an aggregate principal amount not to exceed $4,000,000 be incurred by and for Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California, for a maximum term of not more than 30 years and with interest at a rate or rates not to exceed the maximum interest rate permitted by law, for the purposes of providing public facilities for the community facilities district, including the design, construction and acquisition of street and road facilities, traffic control devices, landscape medians and undergrounding of existing overhead utilities, of the City of Palm Springs, as provided in the Resolution of Formation adopted by the City Council of the City of Palm Springs on November 12, 2020? A-1 55575.70002\33354643.1
49PROPOSITION B Shall special taxes be levied annually on taxable property within Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California, to pay the principal of and interest on the bonds of the community facilities district which may be issued and sold to finance the design, construction and acquisition of the public facilities described in Proposition A of this ballot, pay the principal of and interest on bonds or other obligations of the City relating to such facilities, and costs incidental thereto, to replenish the reserve fund for the bonds, or to accumulate funds for future bond payments, including any amount required by federal law to be rebated to the United States with regard to the bonds, to pay or accumulate funds for paying the costs of the design, construction and acquisition of such facilities, and to pay expenses incidental thereto and to the levy and collection of the special taxes, so long as the special taxes are needed to pay the principal of and interest on the bonds and for such other purposes, at the special tax rates and pursuant to the method of apportioning the special taxes set forth in Exhibit "A" to the Resolution of Formation adopted by the City Council of the City of Palm Springs on November12,2020? PROPOSITION C Shall an appropriations limit, as defined by subdivision (h) of Section 8 of Article XI 11 B of the California Constitution, be established for Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California, in the amount of $4,000,000? ~ ~ ~ ~ PROPOSITION A IS SUBJECT TO THE ACCOUNTABILITY MEASURES PRESCRIBED IN SECTION 53410 OF THE GOVERNMENT CODE OF THE STATE OF CALIFORNIA. 5557 5. 70002\33354643 .1 A-2
50ATTACHMENT 5
51RESOLUTION NO. __ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DECLARING THE RESULTS OF CONSOLIDATED SPECIAL ELECTIONS WITHIN COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS ON PROPOSITIONS REGARDING (i) INCURRING A BONDED INDEBTEDNESS IN AN AMOUNT NOT TO EXCEED $4,000,000, (ii) THE ANNUAL LEVY OF SPECIAL TAXES TO PAY PRINCIPAL AND INTEREST ON BONDS AND (iii) ESTABLISHING AN APPROPRIATIONS LIMIT WHEREAS, on November 12, 2020, the City Council (the "City Council") of the City of Palm Springs (the "City") adopted a resolution determining the necessity for Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California (the "District"), to incur a bonded indebtedness in an amount not to exceed $4,000,000 and calling a special election within the District on propositions with respect to incurring such a bonded indebtedness for November 12, 2020, and providing for the consolidation of said election with the election on the propositions with respect to (i) the annual levy of special taxes on taxable property within the District to pay principal of and interest on such bonds or to pay or accumulate funds for paying the costs of the design, construction and acquisition of such facilities,, and (ii) establishing an appropriations limit for the District; and WHEREAS, on November 12, 2020, the City Council also adopted a resolution calling a special election for November 12, 2020, for submitting to the qualified electors of the District the propositions with respect to the annual levy of special taxes on taxable property within the District to pay the principal of and interest on the bonds of the District or to pay or accumulate funds for paying the costs of the design, construction and acquisition of such facilities and the proposition with respect to establishing an appropriations limit for the District, and providing for the consolidation of that election with the election on the proposition of the District incurring a bonded indebtedness (the "Election Resolution"); and WHEREAS, the City Council has received a statement from the City Clerk (the "City Clerk"), who pursuant to the Election Resolution was authorized to conduct the consolidated special elections and act as the election official therefor, with respect to the canvass of the ballots returned in and the results of the consolidated special elections, certifying that more than two-thirds of the votes cast upon the propositions submitted to the voters in the consolidated special elections in the District were cast in favor of all such propositions; THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, HEREBY RESOLVES, DETERMINES AND APPROVES AS FOLLOWS: 5557 5. 70002\33355867 .1
52Section 1. Findings. The City Council finds that: (i) there were no persons registered to vote within the boundaries of the District at the time of the close of the protest hearing on November 12, 2020, and pursuant to Section 53326 of the California Government Code ("Section 53326") the vote in the consolidated special elections was, therefore, to be by the landowners owning land within the District, with each landowner having one vote for each acre or portion of an acre of land that he or she owned within the District which would have been subject to the special tax if levied at the time of the consolidated special elections; (ii) pursuant to Section 53326 and the Election Resolution, the City Clerk distributed the ballot for the consolidated special election to EHOF Canyon View, LLC, the owner of all of the taxable property included within the boundaries of the District (the "Property Owner'') by overnight mail; (iii) the Property Owner waived the time limits for holding the consolidated special elections and the election dates specified in Section 53326, and consented to the calling and holding of the consolidated special elections on November 12, 2020; (iv) the consolidated special elections have been properly conducted in accordance with all statutory requirements and the provisions of the Election Resolution; (v) pursuant to Section 53326, the Property Owner, which owned approximately 13.28 acres in the District, was entitled to a total of 14 votes in the consolidated special election; (vi) the ballot was returned by the Property Owner to the City Clerk prior to the hour on the date of the election specified by the City Council for the return of voted ballots; (vii) the ballot returned to the City Clerk by the Property Owner voted all votes to which it was entitled in favor of all propositions set forth therein; (viii) more than two-thirds of the votes cast in the consolidated special election on each such proposition were cast in favor thereof, and pursuant to Sections 53328, 53329 and 53355 of the California Government Code, all such propositions carried; (ix) the City Council, as the legislative body of the District, is therefore authorized to take the necessary action to have the District incur a bonded indebtedness in an amount not to exceed $4,000,000, to annually levy special taxes on taxable property within the District in amounts sufficient to pay the principal of and interest on the bonds of the District or to pay or accumulate funds for paying the costs of the design, construction and acquisition of public facilities; and (x) an appropriations limit for the District has been established in the amount of $4,000,000. Section 2. Declaration of Results. All votes voted in the consolidated special elections on the propositions with respect to (i) the District incurring a bonded indebtedness in an amount not to exceed $4,000,000, (ii) the annual levy of special taxes on taxable property within the District to pay the principal of and interest on the bonds of the District or of the City, or to pay or accumulate funds for paying the costs of the design, construction and acquisition of public facilities, and (iii) establishing an appropriations limit for the District in the amount of $4,000,000 were voted in favor thereof, and all such propositions carried. Section 3. Effect of Elections. The effect of the results of the consolidated special elections, as specified in Section 2 hereof, is that the City Council, as the legislative body of the District, is authorized (i) to have the District incur a bonded indebtedness in an amount not to exceed $4,000,000 for the purposes set forth in Proposition A of the Official Ballot for the consolidated special elections for the District and, (ii) after the District has incurred a bonded indebtedness and issued bonds therefor, to annually levy -2-55575. 70002\33355867 .1
53special taxes on taxable property within the District in an amount sufficient to pay the principal of and interest on such bonds or to pay or accumulate funds for paying the costs of the design, construction and acquisition of public facilities at the special tax rates and pursuant to the methodology for determining and apportioning such special taxes which are set forth in Exhibit "A" to the Resolution of Formation adopted by the City Council on November 12, 2020, and an appropriations limit has been established for the District in the amount of $4,000,000. Section 4. Notice of Special Tax Lien. The City Clerk shall record a notice of special tax lien pursuant to Section 53328.3 of the California Government Code and Section 3114.5 of the California Streets and Highways Code. PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS 12TH DAV OF NOVEMBER, 2020. DAVID H. READY, CITY MANAGER ATTEST: ANTHONY J. MEJIA, MMC, CITY CLERK CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, ANTHONY J. MEJIA, MMC, City Clerk of the City of Palm Springs, hereby certify that Resolution No. __ is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on November 12, 2020 AYES: NOES: ABSENT: ABSTAIN: ANTHONY J. MEJIA, MMC, CITY CLERK -3-55575.70002\33355867 .1
54ATTACHMENT 6
55ORDINANCE NO. __ _ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2020-1 {CANYON VIEW) OF THE CITY OF PALM SPRINGS, AUTHORIZING THE LEVY OF SPECIAL TAXES IN SUCH COMMUNITY FACILITIES DISTRICT WHEREAS, the City Council of the City of Palm Springs, California (the "City Council"), has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors authorizing the levy of special taxes in the community facilities district, all as authorized pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1. Division 2, Title 5 of the Government Code of the State of California (the "Act"). This community facilities district shall hereinafter be referred to as Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs (the "District") . THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2020-1 {CANYON VIEW), DOES HEREBY ORDAIN AS FOLLOWS: Section 1. This City Council does, by the passage of this ordinance, authorize the levy of special taxes on all parcels of taxable property located in the District which are identified in Exhibit "A" attached hereto. Section 2. This City Council, acting as the legislative body of the District, is hereby further authorized, by resolution, to annually determine the special tax to be levied within the District for the then current tax year or future tax years; provided, however, the special tax to be levied shall not exceed the maximum special tax authorized to be levied pursuant to the Rate and Method. Section 3. The special taxes herein authorized to be levied, to the extent possible, shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes. Section 4. The special taxes authorized to be levied shall be secured by the lien imposed pursuant to Section 3114.5 and 3115.5 of the California Streets and Highways Code, which lien shall be a continuing lien and shall secure each levy of the special taxes. The lien of Special Taxes (as defined in the Rate and Method) shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the special taxes ceases to be levied by the City Council. Section 5. This Ordinance shall be effective thirty (30) days after its adoption. Within fifteen (15) days after its adoption, the City Clerk shall cause this Ordinance to be published in a newspaper of general circulation in the City. 55575. 70002\33356022.1
56PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS __ DAV OF ________ 2020. DAVID H. READY, CITY MANAGER ATTEST: ANTHONY J. MEJIA, MMC, CITY CLERK CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, ANTHONY J. MEJIA, MMC, City Clerk of the City of Palm Springs, California, hereby certify that the foregoing Ordinance No. __ was regularly introduced at a regular meeting of the City Council of the City of Palm Springs, duly held on the 12th day of November, 2020 and was adopted by the City Council of the City of Palm Springs at a regular meeting held on the ___ day of _______ , 2020, by the following vote. AYES: NOES: ABSENT: ABSTAIN: ANTHONY J. MEJIA, MMC, CITY CLERK 55575.70002\33356022.1 2
5717286.00029\ 11922914.1 EXHIBIT "A" PARCELS OF TAXABLE PROPERTY ASSESSOR'S PARCEL NOS. APN 681-170-038 681-170-039 A-1
58ATTACHMENT 7
59Public Finance Public Private Partnerships Development Economics Clean Energy Bonds COMMUNITY FACILITIES DISTRICT REPORT COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA OCTOBER 23, 2020
60d www. Finance OT A.com 5000 Birch Street, Suite 3000 Newport Beach, CA 92660 COMMUNITY FACILITIES DISTRICT REPORT MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) OF THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA PREPARED FOR CITY OF PALM SPRINGS 3200 E. TAHQUITZ CANYON WAY PALM SPRINGS, CA 92262 PREPARED BY OTA 5000 BIRCH STREET, SUITE 3000 NEWPORT BEACH, CA 92660
61TABLE OF CONTENTS SECTION I. INTRODUCTION ....................................................... 1 II. PROJECT DESCRIPTION ......................................... 2 Ill. DESCRIPTION AND ESTIMATED COST OF PUBLIC FACILITIES .................................................. 3 A. DESCRIPTION OF PUBLIC FACILITIES ...................... 3 B. ESTIMATED COST OF PUBLIC FACILITIES ............... 4 IV. BONDED INDEBTEDNESS AND INCIDENTAL EXPENSES ................................................................... 6 A. PROJECTED BOND SALES ...................................... 6 B. INCIDENTAL BOND ISSUANCE EXPENSES TO BE INCLUDED IN THE PROPOSED BONDED INDEBTEDNESS ...................................................... 6 C. INCIDENTAL EXPENSES TO BE INCLUDED IN THE ANNUAL LEVY OF SPECIAL TAXES .......................... 6 V. RATE AND METHOD OF APPORTIONMENT ....... 8 A. EXPLANATION FOR SPECIAL TAX APPORTIONMENT .................................................. 8 B. MAXIMUM SPECIAL TAX ......................................... 8 C. ACCURACY OF INFORMATION ................................ 9 VI. BOUNDARIES OF THE DISTRICT ........................ 10 VII. GENERAL TERMS AND CONDITIONS ................. 11 A. APPEALS AND INTERPRETATIONS ......................... 11 B. PREPAYMENT OF SPECIAL TAX ........................... 11 APPENDICES Appendix A: Rate and Method of Apportionment Appendix B: Boundary Map
62d www.FinanceDTA.com SECTION I INTRODUCTION WHEREAS, the City Council (the "City Council") of the City of Palm Springs (the "City") has heretofore adopted Resolution No. 24803 stating that a proposed community facilities district to be known as "Community Facilities District No. 2020-1 (Canyon View) of the City of Palm Springs, County of Riverside, State of California" (the "District"), is proposed to be established pursuant to Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code, commonly known as the "Mello-Roos Community Facilities Act of 1982" (the "Act"), and fixing the time and place for a public hearing on the formation of the District; and WHEREAS, Resolution 24803, in its Section 11, directs: The City Manager, or his designee(s), being the officer(s) of the City who will be responsible for providing the proposed types of public facilities to be provided within and financed by the proposed community facilities district, if it is established, shall study the proposed district, and, at or before the time of said hearing, file a report or reports with the City Council containing a brief description of the public facilities by type which will in their opinion be required to adequately meet the needs of the proposed community facilities district and their estimate of the fair and reasonable cost of providing those public facilities and the incidental expenses to be incurred in connection therewith (the "Report"). NOW, THEREFORE, OTA does hereby submit the Report. Community Facilities District Report CFD No. 2020-1 (Canyon View) of the City of Palm Springs October 23, 27 1
63d www.FinanceDTA.com SECTION II PROJECT DESCRPTION The District encompasses approximately 13.2 gross acres of land in the City of Palm Springs, and the project site is located east of Linden Way, and bordered by East Palm Canyon Drive to the northeast and Matthew Drive to the south and southeast. At buildout, it is currently expected that the District, in its entirety, will consist of eighty (80) single family homes ranging in size from 2,122 square feet to 2,761 square feet. Community Facilities District Report CFD No. 2020-1 (Canyon View) of the City of Palm Springs October 23, 27 2
64d SECTION III DESCRIPTION AND ESTIMATED COST OF PUBLIC FACILITIES www.FinanceDTA.com A community facilities district may provide for the purchase, construction, expansion, or rehabilitation of any real or tangible property, including public facilities and infrastructure improvements, with an estimated useful life of five (5) years or longer, which is necessary to meet increased demands placed upon local agencies as a result of development or rehabilitation occurring within the community facilities district. In addition, a community facilities district may pay in full all amounts necessary to eliminate any fixed special assessment liens or to pay, repay, or defease any obligation to pay for any indebtedness secured by any tax, fee, charge, or assessment levied within the area of the community facilities district. A community facilities district may also provide for financing of certain public services to meet these demands. A. Description of Public Facilities The type of public facilities proposed to be eligible for funding by the District, as identified in the Resolution of Intention, shall consist of those items listed below, as described in the Settlement Agreement and General Release dated January 31, 2019, between the City and EHOF Canyon View, LLC, a Delaware limited liability company (the "Settlement Agreement"). It is intended that the District will be authorized to finance all or a portion of the costs of any of the following Facilities to be owned by the City: 1. Public Facilities a. Widening of East Palm Canyon Drive, including access ramp enhancements, curb and gutter improvements, traffic control and flood control improvements, relocation of traffic signals, signage and striping, parkway medians, and street trees; b. Construction of landscaped median on East Palm Canyon Drive, including curb improvements, irrigation systems, traffic control, and signage and striping; c. Undergrounding of the existing overhead utilities within East Palm Canyon Drive abutting or transecting the development. 2. Incidental Expenses It is anticipated that the incidental expenses on the following page may be incurred in the proposed legal proceedings for formation of the District, construction and environmental remediation and related bond financing and will be payable from proceeds of the bonds or directly Community Facilities District Report October 23, 213 CFD No. 2020-1 (Canyon View) of the City of Palm Springs
65d SECTION III DESCRIPTION AND ESTIMATED COST OF PUBLIC FACILITIES www.FinanceDTA.com from the proceeds of the Special Tax within the District: a. Special tax consultant services b. City Council, City staff review, oversight and administrative services c. Bond Counsel and Disclosure Counsel services d. Financial advisor services e. Special tax administrator services f. Appraiser/Market absorption consultant services g. Initial bond transfer agent, fiscal agent, registrar and paying agent services, and rebate calculation service set up charge h. Bond printing and Preliminary Official Statement and Official Statement printing and mailing i. Publishing, mailing, and posting of notices j. Recording fees k. Underwriter's discount l. Bond reserve fund m. Capitalized interest n. Governmental notification and filing fees o. Credit enhancement costs p. Rating agency fees q. Continuing disclosure services r. Arbitrage rebate services s. Other post-issuance tax compliance services The expenses of certain recurring services pertaining to the District may be included in each annual special tax levy, and these expenses are described in the definition of the term "Administrative Expenses" as set forth in the Rate and Method of Apportionment for the District attached hereafter as Attachment A. The foregoing enumeration shall not be regarded as exclusive and shall be deemed to include any other incidental expenses of a like nature which may be incurred from time to time with respect to the District. B. Estimated Costs of Public Facilities The District is expected to accumulate special taxes and if needed, to issue one (1) series of bonds for the construction, acquisition, expansion, Community Facilities District Report October 23, 2020 I 4 CFD No. 2020-1 (Canyon View) of the City of Palm Springs I
66d www.FinanceDTA.com SECTION III DESCRIPTION AND ESTIMATED COST OF PUBLIC FACILITIES improvement, or rehabilitation of the public facilities described above. The total amount of special taxes accumulated, together with construction proceeds generated from bonds is projected to be approximately $2.5 million in 2020 dollars. This amount is an estimate and subject to change, depending on the interest rates of the bonds, the costs of issuance of the bonds, and other factors to be determined at the time the bonds are issued and the amount of special taxes accumulated at the time of issuance. Community Facilities District Report CFD No. 2020-1 (Canyon View) of the City of Palm Springs October 2S, 27 s
67d www.FinanceDTA.com A. Projected Bond Sales SECTION IV BOND INDEBTEDNESS AND INCIDENT AL EXPENSES The maximum authorized bonded indebtedness for the District is $4,000,000. It is anticipated that the City will sell one (1) series of bonds authorized by the District. B. Incidental Bond Issuance Expenses to be Included in the Proposed Bonded Indebtedness Pursuant to Section 53345.3 of the Act, bonded indebtedness may include all costs and estimated costs incidental to, or connected with, the accomplishment of the purpose for which the proposed debt is to be incurred, including, but not limited to, the estimated costs of construction or acquisition of buildings, or both; acquisition of land, rights-of-way, water, sewer, or other capacity or connection fees, satisfaction of contractual obligations relating to expenses or the advancement of funds for expenses existing at the time the bonds are issued, architectural, engineering, structural, geotechnical, inspection, legal, fiscal, and financial consultant fees; bond and other reserve funds; discount fees; interest on any bonds of the district estimated to be due and payable within two (2) years of issuance of the bonds; election costs; and all costs of issuance of the bonds, including, but not limited to, fees for Bond Counsel and Special Tax Consultant, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other credit enhancement costs, and printing costs. For the future bonds proposed to be issued by the District, the reserve fund is estimated at approximately ten percent (10.00%) of the principal amount of the bonds, and all other incidental bond issuance expenses are estimated at approximately ten percent (8.00%) of the principal amount of the bonds. Actual bond issue assumptions will vary from the above estimates. C. Incidental Expenses to be Included in the Annual Levy of Special Taxes Pursuant to Section 53340 of the Act, the proceeds of any special tax may only be used to pay, in whole or part, the cost of constructing or providing public facilities, services and incidental expenses. As defined by the Act, incidental expenses include, the cost of planning and designing public facilities to be financed; the costs associated with the creation of the district, issuance of bonds, determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of the district; any other expenses incidental to the construction, completion, and inspection of the authorized work; and the costs associated October 23, 27 6 Community Facilities District Report CFD No. 2020-1 (Canyon View) of the City of Palm Springs
68d www.FinanceDTA.com SECTION IV BOND INDEBTEDNESS AND INCIDENT AL EXPENSES with the retirement of existing bonded indebtedness. While the actual cost of administering the District may vary, it is anticipated that the amount of Special Taxes which can be collected will be sufficient to fund at least $22,000 in annual administrative expenses, which shall increase over time with bond issuance and inflation, to $43,000. Community Facilities District Report CFD No. 2020-1 (Canyon View) of the City of Palm Springs October 23, 27 7
69d SECTIONV RATE AND METHOD OF APPORTIONMENT www.FinanceDTA.com All of the property located within the District, unless exempted by law or by the Rate and Method of Apportionment, shall be taxed for the purpose of providing necessary public facilities to serve the District. Pursuant to Section 53325.3 of the Act, the tax imposed "is a special tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property." The special tax "may be based on benefit received by parcels of real property, the costs of making authorized facilities available to each parcel, or other reasonable basis as determined by the legislative body," although the special tax may not be apportioned on an ad valorem basis pursuant to Article XIIIA of the California Constitution. As shown in Attachment A, the Rate and Method of Apportionment provides information sufficient to allow each property owner within the District to estimate the maximum annual Special Tax he or she will be required to pay. Sections A and B, below, provide additional information on the Rate and Method of Apportionment for the District. A. B. Explanation for Special Tax Apportionment When a community facilities district is formed, a special tax may be levied on each parcel of taxable property within the community facilities district to pay for the construction, acquisition, and rehabilitation of public facilities, to pay for authorized services or to repay bonded indebtedness, or other related expenses incurred by a community facilities district. This special tax must be apportioned in a reasonable manner; however, the tax may not be apportioned on an ad valorem basis. The Act does not require that special taxes be apportioned to individual parcels based on benefit received. However, in order to ensure fairness and equity, benefit principles have been incorporated in establishing the Special Tax rates for the District. Based on the types of public facilities to be financed for the District and the factors described above, the Special Taxes assigned to Developed Property are generally proportionate to the relative benefits received by them, and, accordingly, the Special Taxes in the District can be considered fair and reasonable. Maximum Special Tax Table 1 of the Rate and Method of Apportionment (Attachment A) lists the Fiscal Year 2020-2021 Maximum Special Taxes that may be levied against Community Facilities District Report October 23, 21 a CFD No. 2020-1 (Canyon View) of the City of Palm Springs
70d www.FinanceDTA.com SECTIONV RATE AND METHOD OF APPORTIONMENT Developed Property within the District to fund the Special Tax Requirements. The Maximum Special Taxes for Developed Property are subject to annual escalation. No Special Tax shall be levied on Undeveloped Property, Public Property, and Property Owner Association Property in the District. C. Accuracy of Information In order to establish the Maximum Special Tax rates for the District as set forth in the Rate and Method of Apportionment, OTA has relied on information regarding land-use types, geographic location, and Taxable Property provided to it by others. OTA has not independently verified such data and disclaims responsibility for the impact of inaccurate data, if any, on the Rate and Method of Apportionment for the District, including the inability to meet the financial obligations within the District. Community Facilities District Report CFD No. 2020-1 (Canyon View) of the City of Palm Springs October :U 27 g
71d www.FinanceDTA.com SECTION VI BOUNDARIES OF THE DISTRICT The boundaries of the District include all land on which the Special Taxes may be levied. A reduced scale map showing the boundaries of the District is provided as Attachment B. The full-scale map is on file with the Riverside County Recorder's Office and was recorded on October 22, 2020 at 3:42 pm in the Riverside County Recorder's Office at Book 85 of Maps of Assessment and Community Facilities Districts at Page 89 (Instrument No. 2020-0510069), and there has been no change in the boundaries of the District since its formation, nor is any contemplated here. City of Palm Springs Community Facilities District Report for CFD No. 2020-1 (Canyon View) October 23, 20211 Q
72d www.FinanceDTA.com A. Appeals and Interpretations SECTION VII GENERAL TERMS AND CONDITIONS Pursuant to Section F of the Rate and Method of Apportionment for the District, any landowner or resident who feels that the amount of the Special Tax levied on his Assessor's Parcel is in error may submit a written appeal to the District's Administrator (the "Administrator"). The Administrator shall review the appeal, meet with the appellant if the Administrator deems necessary, and advise the appellant of its determination. If the Administrator agrees with the appellant, the Administrator shall eliminate or reduce the Special Tax on the appellant's property for the current Fiscal Year and all future years. The City may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals. B. Prepayment of Special Tax The Special Tax applicable to an Assessor's Parcel in the District may be prepaid according to the prepayment provisions identified in Section H of the Rate and Method of Apportionment for the District. City of Palm Springs Community Facilities District Report for CFD No. 2020-1 (Canyon View) October 23, 202111
73ATTACHMENT A Community Facilities District No. 2020-1 (Canyon View) Rate and Method Of Apportionment
74RA TE AND METHOD OF APPORTIONMENT FOR THE CITY OF PALM SPRINGS COMMUNITY FACILITIES DISTRICT NO. 2020-1 (CANYON VIEW) CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in City of Palm Springs Community Facilities District No. 2020-1 (Canyon View), City of Palm Springs, County of Riverside, State of California ("CFO No. 2020-1") and collected each Fiscal Year commencing in Fiscal Year 2020-2021, in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," as described below. AH of the real property in CFO No. 2020-1, unless exempted by law or by the provisions hereof, shall be taxed for these purposes, to the extent and in the manner herein provided. A DEFINITIONS The terms hereinafter set forth have the following meanings: "Actn means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expensesn means the actual or reasonably estimated costs directly related to the administration of CFO No. 2020-1 including, but not limited to, the following: the costs of computing the Special Taxes and preparing the annual Special Tax Levy collection schedules (whether by the CFO Administrator or designee thereof or both); the costs of collecting the Special Tax Levies (whether by the County or otherwise); the costs of remitting the Special Tax Levies to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to City, CFO No. 2020-1, or any designee thereof of complying with arbitrage rebate requirements, or responding to questions from the Securities and Exchange Commission or Internal Revenue Service pertaining to any CFO No. 2020-1 Bonds or any audit of any CFO No. 2020-1 Bonds by the Securities and Exchange Commission or Internal Revenue Service; the costs to City, CFO No. 2020-1, the Trustee or any designee thereof of complying with City, CFO No. 2020-1, or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax Levy disclosure statements and responding to public inquiries regarding the Special Tax Levies; the costs to City, CFO No. 2020-1, or any designee thereof related to an appeal of the levy or application of the Special Tax; the costs associated with the release of funds from an escrow account; and City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by City or CFO No. 2020-1 for any other administrative purposes of CFO No. 2020-1, including, but not limited to, attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Tax. City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View)
75•Assessor's Parcer or ·Parcer means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Mapa means an official map of the Assessor of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax as determined in accordance with Section C.1.b, below. "Authorized Facilitiesn means those facilities eligible to be funded by CFO No. 2020-1, as defined in the Resolution of Formation and authorized to be financed by CFO No. 2020-1 pursuant to the Act. "Backup Special Taxn means the Backup Special Tax applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.c, below. "Building Permitn means a permit issued by the City or other governmental agency for the construction of a residential building on an Assessor's Parcel. "Buildoutn means, for CFO No. 2020-1, that all expected Certificates of Occupancy have been issued. ·certificate of Occupancyn means a certificate issued by the City pursuant to Section 93.10.00 of the City's Municipal Code, upon inspection of a completed Dwelling Unit, that permits the use or occupancy by end users of such Dwelling Unit. ·cFD Administratorn means an official of CFO No. 2020-1, or any designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. ·cFD No. 2020-ln means City of Palm Springs Community Facilities District No. 2020-1 (Canyon View), City of Palm Springs, County of Riverside, State of California. ·cFD No. 2020-1 Bondsn means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one (1) or more series, authorized by CFO No. 2020-1 under the Act and issued by City and secured by the Special Taxes. ·cFD Public Facilities" means either $2,482,685 in 2020 dollars, which shall increase by the Construction Cost Index, and on each July 1 thereafter beginning July 1, 2021, or such lower number as m shall be determined by the CFO Administrator as sufficient to provide the public facilities to be provided by CFO No. 2020-1 under the authorized bonding program for CFO No. 2020-1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds (except refunding bonds) to be supported by the Special Tax levied under this Rate and Method of Apportionment as described in Section C. ·city" means the City of Palm Springs, California. ·city Councir means the City Council of the City. City of Palm Springs Rate and .Method of Apportionment for CFD No. 2020-1 (Canyon View)
76"Construction Cost lndexn means, for Fiscal Year 2021-2022, the Engineering New Record Construction Cost Index ("ENR CCI") as of March 1, 2021; and for each Fiscal Year, the ENR CCI as of March 1 of the Fiscal Year preceding the current Fiscal Year. In the event the Construction Cost Index ceases to be published, the index used shall be based on a comparable index determined by City Council. "Countyn means the County of Riverside. "Deferred Improvements Fundn means an account established by the City or CFO 2020-1 pursuant to the Settlement Agreement to hold funds which are currently available for expenditure to acquire or construct CFO Public Facilities eligible under the Act. "Developed Propertyn means, for each Fiscal Year, au Assessor's Parcels for which a Certificate of Occupancy was issued after January 1, 2020 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied. "Dwelling Unitn means a building or portion thereof designed for and occupied in whole or part as a residence by one (1) family and its guests, with sanitary facilities and one (1) kitchen provided within the unit. "Fiscal Yearn means the period starting July 1 and ending on the following June 30. "Future Facilities Costsn means the CFO Public Facilities minus (i) public facility costs previously paid from the Improvement Fund or the Deferred Improvements Fund, (ii) moneys currently on deposit in the Improvement Fund or Deferred Improvements Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance the cost of CFO Public Facilities. "lndenturen means the indenture, fiscal agent agreement, resolution, or other instrument pursuant to which CFO No. 2020-1 Bonds are issued, as modified, amended, and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Improvement Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct CFO Public Facilities eligible under the Act. "land Use Categoryn means any of the categories listed in Section C and for Developed Property as listed in Table 1. "Maximum Special Taxn means, for each Fiscal Year, the maximum Special Tax, determined in accordance with Section C.1.a, below, that can be levied on any Assessor's Parcel. 11Outstanding Bondsn means au CFO No. 2020-1 Bonds which remain outstanding under the Indenture. City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View)
77"Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are deemed to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year. UProperty Owner Association Property• means, for each Fiscal Year, any Assessor's Parcel within the boundaries of CFO No. 2020-1 that is owned by or irrevocably offered for dedication to a property owner association, including any master or sub-association, not including any such property that is located directly under a residential or non-residential structure. UProportionately• means that the ratio of the actual Special Tax Levy to the Assigned Special Tax is equal for all Assessor's Parcels of Developed Property. UPublic Property· means, for each Fiscal Year, all property within the boundaries of CFO No. 2020-1 that (i) is owned by, irrevocably offered or dedicated to, or leased to, the federal government, the State, the County, the City, or any local government or other public agency, provided that any property leased or with respect to which a possessory interest has been granted to a non-exempt person or entity by any of the foregoing entities, then pursuant to Section 53340.1 of the Act, such leasehold or possessory interest shall be taxed and classified according to its use, or (ii) is encumbered by a public easement making impractical its use for any purpose other than that set forth in the easement. URate and Method of Apportionment• or URMA • means this Rate and Method of Apportionment of Special Tax. UResolution of Formation· means the resolution forming CFO No. 2020-1. UResidential Floor Area· or usF· means the building square footage of a DweUing Unit as determined by reference to the building permit issued by the City for the Dwelling Unit. UResidential Property• means any and each Assessor's Parcel of Developed Property for which a Certificate of Occupancy has been issued by the City for one or more residential Dwelling Units. USpecial Tax· or USpecial Taxes· means the special tax or special taxes to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property to fund the Special Tax Requirement. USpecial Tax Levy• or USpecial Tax Levies• means the Special Tax to be levied in each Fiscal Year on Assessor's Parcel of Taxable Property to fund the Special Tax Requirement. USpecial Tax Requirement• means that amount of Special Taxes required, if any, in any Fiscal Year for CFO No. 2020-1 to: (i) pay debt service on all Outstanding Bonds; (ii) pay periodic costs on the CFO No. 2020-1 Bonds, including but not limited to, credit enhancement and rebate payments on the CFO No. 2020-1 Bonds; (iii) pay all or a portion of the Administrative Expenses as determined by the CFO Administrator; City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View)
78(iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) prior to the earlier of the issuance of CFO No. 2020-1 Bonds or the completion of all Authorized Facilities as determined by the CFD Administrator, accumulate funds for the acquisition or construction of Authorized Facilities to the extent that the inclusion of such amounts does not result in a levy of special tax beyond Step 1 pursuant to Section D; and (vi) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (vii) a credit for funds available to reduce the annual Special Tax, as determined by the CFO Administrator pursuant to the Indenture. UState0 means the State of California. UTaxable Property0 means all of the Assessor's Parcels within the boundaries of CFO No. 2020-1 which are not exempt from the Special Tax pursuant to law or Section E below. UTrustee0 means the trustee or fiscal agent under the Indenture. uUndeveloped Property0 means, for each Fiscal Year, all property not classified as Developed Property, Property Owner Association Property, or Public Property. B ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Assessor's Parcels within CFO No. 2020-1 shall be classified by the CFD Administrator as Developed Property, Undeveloped Property, Property Owner Association Property, or Public Property. Only Assessor's Parcels classified as Residential Property shall be subject to Special Taxes in accordance with this Rate and Method of Apportionment as determined by the CFO Administrator pursuant to Section C and D below. The CFD Administrator's allocation of property to each type of Land Use Category shall be conclusive and binding. C MAXIMUM SPECIAL TAX RATE C.1 Developed Property C.1.a Maximum Special Tax The Maximum Special Tax for each Assessor's Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax and (ii) the amount derived by application of the Backup Special Tax. C.1.b Assigned Special Tax The Assigned Special Tax for Developed Property is shown below in Table 1. Under no circumstances shall a Special Tax be levied on additions to existing Dwelling Units. City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View) /s
79Table 1: Assigned Special Taxes for Developed Property in CFO No. 2020-1 (Fiscal Year 2020-2021) Land Use Land Use Assigned Special Tax Category 1 RESIDENTIAL PROPERTY (>= 2,500 SF) $2,722 PER DWELLING UNIT 2 RESIDENTIAL PROPERTY (2,410 -2,499 SF) $2,353 PER DWELLING UNIT 3 RESIDENTIAL PROPERTY (2,320 -2,409 SF) $2,231 PER DWELLING UNIT 4 RESIDENTIAL PROPERTY (2,230 -2,319 SF) $1,880 PER DWELLING UNIT 5 RESIDENTIAL PROPERTY ( < 2,230 SF) $1,575 PER DWELLING UNIT C.1.c Backup Special Tax The Backup Special Tax for an Assessor's Parcel of Residential Property shall equal $16,093 per Acre of the Assessor's Parcel. The Backup Special Tax shall not apply to Public Property or Property Owners' Association Property. C.1.d Increase in the Assigned Special Tax and Backup Special Tax For each Assessor's Parcel, the Fiscal Year 2020-2021 Assigned Special Tax identified in Table 1 and Backup Special Tax in Section C.1.c, shall increase (i} commencing on July 1, 2021 and on July 1 of each Fiscal Year thereafter through the Fiscal Year in which the first Certificate of Occupancy for a Dwelling Unit is issued on such Assessor's Parcel, by the greater of 2% or the percentage change in the Construction Cost index; and (ii) commencing in the Fiscal Year following the Fiscal Year in which the first Certificate of Occupancy for a Dwelling Unit is issued on the Assessor's Parcel, by an amount equal to two percent (2%) of the Assigned Special Tax and Backup Special Tax applicable in the Fiscal Year in which the first Certificate of Occupancy for a Dwelling Unit is issued; and (iii) on July 1 of each Fiscal Year thereafter by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. C.1.e Multiple Land Use Categories In some instances, an Assessor's Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax that can be levied on such an Assessor's Parcel shall be the sum of the Maximum Special Taxes that can be levied for all Land Use Categories located on that Assessor's Parcel. C.2 Undeveloped Property, Property Owner Association Property and Public Property No Special Tax shall be levied on Undeveloped Property, Property Owner Association Property, or Public Property. City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View)
80D METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2020-21 and for each following Fiscal Year, the City Council shall levy the annual Special Tax Proportionately for each Assessor's Parcel as follows: Step 1: The Special Tax shall be levied on each Assessor's Parcel of Residential Property in an amount up to 100% of the applicable Assigned Special Tax for Residential Property to satisfy the Special Tax Requirement. Step 2: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, then the levy of the Special Tax on each Assessor's Parcel of Developed Property for which the Maximum Special Tax is determined through the application of the Backup Special Tax shall be increased in equal percentages from the Assigned Special Tax up to 100% of the Maximum Special Tax for each such Assessor's Parcel of Developed Property until (i) the total Special Tax levied under the first two steps listed in this Section D equals the Special Tax Requirement, or (ii) the Special Tax levied on all Developed Property equals 100% of the Maximum Special Tax for Developed Property, whichever occurs first. E EXEMPTIONS No Special Tax shall be levied on Public Property or Property Owner Association Property in CFO No. 2020-1. However, should an Assessor's Parcel no longer be classified as Public Property or Property Owner Association Property, such Assessor's Parcel may, upon each reclassification, no longer be exempt from Special Taxes. F APPEALS AND INTERPRETATIONS Any landowner or resident may file a written appeal of the Special Tax on his/her property with the CFO Administrator, provided that the appellant is current in his/her payments of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFO Administrator shall review the appeal, meet with the appellant if the CFO Administrator deems necessary, and advise the appellant of its determination. If the CFO Administrator agrees with the appellant, the CFO Administrator shall eliminate or reduce the Special Tax on the appellant's property for the current Fiscal Year and all future years. If the CFO Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has 30 days in which to appeal to the City Council by filing a written notice of appeal with the clerk of the City, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for the appellant's disagreement with the CFO Administrator's determinatfon. The CFO Administrator may charge the appellant a reasonable fee for processing the appeal. The City may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals. Any decision of the City will be final and binding as to all persons. City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View)
81G MANNER OF COLLECTION The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the City may directly bHl the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary or otherwise advisable to meet its financial obligations for CFO No. 2020-1, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. H PREPAYMENT OF SPECIAL TAX H .1 Prepayment of Special Tax The Maximum Special Tax obligation may only be prepaid and permanently satisfied for an Assessor's Parcel of Developed Property or Undeveloped Property for which a Building Permit has been issued. The Prepayment Amount for an Assessor's Parcel of Undeveloped Property for which a Building Permit has been issued shall be based on the Assigned Special Tax for the applicable Land Use Category shown in Table 1 based on the Building Permit issued for such Assessor's Parcel and the then current Special Tax rates. The Maximum Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor's Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax obligation shall provide the CFO Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFO Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. The CFO Administrator may charge a reasonable fee for providing this service. The Special Tax Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Special Tax Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated by the CFO Administrator as follows: Paragraph No. 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. Compute the Assigned Special Tax and Backup Special Tax for the Assessor's Parcel to be prepaid based on the Special Tax which is, or could be, charged in the City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View) /a
82current Fiscal Year for Developed Property. For Assessor's Parcels of Undeveloped Property (for which a Building Permit has been issued but which is not yet classified as Developed Property) to be prepaid, compute the Assigned Special Tax and Backup Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the Building Permit which has already been issued for that Assessor's Parcel. 3. (a) Divide the Assigned Special Tax computed pursuant to Paragraph 2 by the total estimated Assigned Special Tax for CFO No. 2020-1 based on the Developed Property Special Tax which could be charged in the current Fiscal Year on all expected development through buildout of CFO No. 2020-1, excluding any Assessor's Parcels which have been prepaid, and (b) Divide the Backup Special Tax computed pursuant to Paragraph 2 by the estimated total Backup Special Tax at buUdout of CFO No. 2020-1, excluding any Assessor's Parcels which have been prepaid. 4. Multiply the larger quotient computed pursuant to Paragraph 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount'). 5. Multiply the Bond Redemption Amount computed pursuant to Paragraph 4 by the applicable redemption premium (e.g., the redemption price minus 100%), if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to Paragraph 3(a) or 3(b) by the amount determined pursuant to Paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the" Future Facilities Amount'). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 9. Determine the Special Tax levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 10. Add the amounts computed pursuant to Paragraphs 8 and 9 to determine the "Defeasance Amounr 11. Verify the administrative fees and expenses of CFO No. 2020-1, including the costs to compute the prepayment, the costs to invest the prepayment proceeds, the costs to redeem Bonds, and the costs to record any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses'). 12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the reserve requirement (as defined in the Indenture) on the prepayment date, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the "Reserve Fund Credit'). No Reserve Fund Credit shall be granted if reserve funds City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View) /9
83are below 100% of the reserve requirement on the prepayment date or the redemption date. 13. The amount due to fully prepay the Special Tax is equal to the sum of the amounts computed pursuant to Paragraphs 4, 5, 7, 10, and 11, less the amount computed pursuant to Paragraph 12 (the "Prepayment Amount'). 14. From the Prepayment Amount, the amounts computed pursuant to Paragraphs 4, 5, 10, and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to Paragraph 7 shall be deposited into the Improvement Fund, or if Bonds have not yet been issued, the Deferred Improvement Fund. The amount computed pursuant to Paragraph 11 shall be retained by CFO No. 2020-1. H .2 General Provisions Applicable to the Prepayment of Special Tax H.2.a Use of the Special Tax Prepayment Amount The Prepayment Amount of the Special Tax shall be applied in the following order of priority: (i) to be deposited into specific funds established under the Indenture, to fully or partially retire as many CFO No. 2020-1 Bonds as possible, and, if amounts are less than $5,000, to make debt service payments on the CFO No. 2020-1 Bonds, and (ii) be remitted to the City for deposit in the Deferred Improvements Fund and used for any Authorized Facilities. Prior to the issuance of the first series of CFO No. 2020-1 Bonds, the Prepayment Amount of the Special Tax shall be remitted to the City for deposit in the Deferred Improvements Fund and used for any Authorized Facilities. H.2.b Prepayment of Special Tax Upon confirmation of the payment of the current Fiscal Year's entire Special Tax obligation, the CFO Administrator may remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid in accordance with Section H.1, the CFO Administrator shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax and the release of the Special Tax lien on such Assessor's Parcel, and the obligation to pay the Special Tax for such Assessor's Parcel shall cease. H.2.c Debt Service Coverage Notwithstanding the foregoing, no prepayment of the Special Tax shall be allowed unless the amount of Special Tax that may be levied on Taxable Property within CFO No. 2020-1 in each future Fiscal Year, after the proposed prepayment, is at least equal to the sum of (i) 1.10 times the debt service necessary to support the remaining Outstanding Bonds in each corresponding Fiscal Year, and (ii) the Administrative Expenses as defined in Section A herein. Similarly, no prepayment of the Special Tax shall be allowed if the amount of Special Tax that may be levied on Taxable Property within CFO No. 2020-1 in each future Fiscal Year, after the proposed prepayment, does not at least equal to 1.10 times the debt service on all Outstanding Bonds. City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View)
84I TERM OF SPECIAL TAX For each Assessor's Parcel of Developed Property, the Special Tax shall terminate and no longer be levied or collected pursuant to this Rate and Method of Apportionment on the date that is the later of the Fiscal Year immediately following (i) the thirty-fifth anniversary of the date on which such Special Tax is first levied or collected, or (ii) Fiscal Year 2052-2053. City of Palm Springs Rate and Method of Apportionment for CFD No. 2020-1 (Canyon View) I 11
85ATTACHMENT B Community Facilities District No. 2020-1 (Canyon View) Boundary Map
86
87Public Finance Public Private Partnerships Development Economics Clean Energy Bonds 5000 Birch Street, Suite 3000 Newport Beach, CA 92660 Phone(800)969-4DTA