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HomeMy WebLinkAbout24822RESOLUTION NO. 24822 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 Resolution No. 24822 Page 2 public 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, Resolution No. 24822 Page 3 (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 (g) 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 Resolution No. 24822 Page 4 such bonds, secured by the recordation 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 Resolution No. 24822 Page 5 assessor'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 Votinq 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 Resolution No. 24822 Page 6 the community facilities district is established 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 Resolution No. 24822 Page 7 waivers 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. Resolution No. 24822 Page 8 PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS 12TH DAY OF NOVEMBER, 2020. DAVID H. READY, C NAGER ATTEST: ANTHONY JIA, M TY 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. 24822 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: Councilmembers and Mayor Kors NOES: None ABSENT: None ABSTAIN: None RECUSED: None Garner, Middleton, Woods, Mayor Pro Tern Holstege, IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this day of ~�e��� P,r , ec'2A.) Jhon vE'1" L.E� y J. M1-p!i"nMggs, i�Iifornia rk City of Palm t ■ � — �. � III � ,— I L � = a: � �—� ,� ■ ■ c ■ `I C ■ 1— 1 J IL ■ p — ■— — ■ — I !— f I 1 fl L ■ IL �■ t ■— ■ ■—■— ■ ■ 1 _ ■ ■ ■_ ■ In _ ■ :i 7I 11 1 If � —� — ll� I �I Jf ,� ■ ■ I it _ — --1 1 I ■ _ ■ — tl III I ■ ■ � 1 ■ ■ It I I II _ I — — — — I ■ ot I ■ II ■ 7 ■ II _ � ■ _ _ _ 1 1 ■ ■ - 71 ■ ■ ■ — — — ■ � I I _ _ - ■ ' 11 y ■ � — 1 a ! ■ 1t I +w I If �I o I 1 � • 1 - - If — Al I IL mm - ■ ■ — ME ■ ■ ■ ■ ■ ■ [ ■ It - - 0 - I ■ Resolution No. 24822 Page 9 EXHIBIT "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 Resolution No. 24822 Page 10 City'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. "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. "CFD 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. "CFD 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. "CFD No. 2020-1 Bonds" means any bonds or other debt (as defined in Section 53317(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. "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 Resolution No. 24822 Page 11 July 1, 2021, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2020-1 under the authorized bonding program for CFD 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 CFD 2020-1 pursuant to the Settlement Agreement to hold funds which are currently available for expenditure to acquire or construct CFD 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 Year" means the period starting July 1 and ending on the following June 30. "Future Facilities Costs" means the CFD 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 CFD Public Facilities. "Indenture" means the indenture, fiscal agent agreement, resolution, or other instrument pursuant to which CFD No. 2020-1 Bonds are issued, as modified, amended, and/or supplemented from time to time, and any instrument replacing or supplementing the same. Resolution No. 24822 Page 12 "Improvement Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct CFD 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 CFD 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 CFD 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 CFD 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 CFD 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. Resolution No. 24822 Page 13 "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. Resolution No. 24822 Page 14 C Maximum Special Tax Rate CA 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 Year 2020-2021) Land Use Category Land Use Assigned Special Tax 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 Resolution No. 24822 Page 15 (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. Resolution No. 24822 Page 16 F Appeals and Interpretations Any landowner or resident may file a written appeal of the Special Tax on his/her property with the CFD, 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 CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax on the appellant's property for the current Fiscal Year and all future years. If the CFD 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 CFD Administrator's determination. The CFD 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 valorem 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 CFD 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 Resolution No. 24822 Page 17 Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. The CFD 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 CFD Administrator as follows: Paragraph No. 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 CFD 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 CFD 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 CFD 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'). Resolution No. 24822 Page 18 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 Amount". 11. Verify the administrative fees and expenses of CFD 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 CFD No. 2020-1. Resolution No. 24822 Page 19 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 CFD No. 2020-1 Bonds as possible, and, if amounts are less than $5,000, to make debt service payments on the CFD 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 CFD 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 CFD 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 CFD 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 CFD 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 CFD 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.