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HomeMy WebLinkAbout7/20/2005 - STAFF REPORTS (28) �O ppLMs � iy V N 4<IFORa�P City Council Staff Report CITY COUNCIL JULY 20, 2005 LEGISLATIVE ITEM SUBJECT: CONSIDERATION OF THE INTENTION OF THE FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) CITY OF PALM SPRINGS; AND THE INTENTION TO INCUR BONDED INDEBTEDNESS IN THE AMOUNT NOT TO EXCEED $21,000,000; AND APPROVAL OF A DEPOSIT AND REIMBURSEMENT AGREEMENT WITH PALM SPRINGS CLASSIC, LLC FROM: David H. Ready, City Manager BY: Finance Department and Public Works & Engineering Department SUMMARY On April 6, 2005, City Council approved further processing of an application submitted by Palm Springs Classic, LLC, Lennar Homes of California, Inc., its Manager, for formation of a Community Facilities District pursuant to the Mello-Roos Community Facilities Act of 1982 for the Palm Springs Classic project (now known as "Escena"). Subsequently, on June 1, 2005, City Council approved contract service agreements with Albert A. Webb Associates for the assessment engineering services, and with Harris Realty Appraisal for the appraisal consultant services, necessary to provide professional services related to the proposed formation of the Community Facilities District. The actions proposed with this item formally establish the City's intention to form the proposed Community Facilities District, as well as to incur bonded indebtedness in an amount not to exceed $21,000,000 associated with the financing of public improvements, fees, and incidental expenses within the proposed Community Facilities District. Approval of the proposed actions schedules a formal Public Hearing for September 7, 2005, and election of current landowners within the area subject to the proposed Community Facilities District. Item No. 3 . B . City Council Staff Report July 20, 2005— Page 2 Consideration of Formation of CFD 2005-2 RECOMMENDATION: 1. Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DECLARING ITS INTENTION TO ESTABLISH AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) OF THE CITY OF PALM SPRINGS." 2. Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DECLARING ITS INTENTION TO INCUR BONDED INDEBTEDNESS IN THE AMOUNT NOT TO EXCEED $21,000,000 WITHIN COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) OF THE CITY OF PALM SPRINGS." 3. Adopt Resolution No , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AND ORDERING THE EXECUTION OF THAT CERTAIN DEPOSIT AND REIMBURSEMENT AGREEMENT WITH PALM SPRINGS CLASSIC, LLC; AND MAKING CERTAIN FINDINGS AND DETERMINATIONS IN CONNECTION THEREWITH." 4. Authorize the City Manager to execute all necessary documents. STAFF ANALYSIS: On April 6, 2005, City Council approved further processing of an application submitted by Palm Springs Classic, LLC, Lennar Homes of California, Inc., its Manager, for formation of a Community Facilities District ("CFD") pursuant to the Mello-Roos Community Facilities Act of 1982 (the "Act") for the Palm Springs Classic project (now known as "Escena"). (see April 6, 2005, staff report). City staff had originally designated this proposed CFD as CFD 1; however, the City is currently processing formation of another CFD for financing of additional police and fire services for new development, which had already been designated as CFD 1 (formally identified as CFD 2005-1). As such, this proposed CFD has been formally identified as Community Facilities District 2005-2 of the City of Palm Springs ("CFD 2005-2"). On June 1, 2005, City Council approved a contract services agreement to perform special tax consulting with Albert A. Webb Associates, as well as a contract services agreement to perform appraisal services with Harris Realty Appraisal for professional services related to CFD 2005-2. These services were necessary to provide the City with information related to CFD 2005-2, namely, an special tax analysis, identified as the "Rate and Method of Apportionment for Community Facilities District No. 2005-2 (Escena Palm Springs) City of Palm Springs", and an appraisal to confirm that the appraised value of the development exceeds the City's minimum criteria of a 4 to 1 value to lien ratio. City Council Staff Report July 20, 2005— Page 3 Consideration of Formation of CFD 2005-2 Lennar Homes, Inc., the manager of Palm Springs Classic, LLC, developing the "Escena" project has requested that the City consider allowing formation of CFD 2005-2 to finance $14,887,048 of various public improvements, fees, and payoff of the existing assessment against this property related to Assessment District No. 155 ("AD 155"), in addition to all incidental costs related to the formation of CFD 2005-2 (see Attachment 2). The total amount to finance CFD 2005-2, including debt service and administrative costs is proposed as not to exceed $21,000,000; however, it is expected that the total arnount of bonds to be issued would not exceed $19,000,000. The bonds actually issued for CFD 2005-2 will only be for an amount sufficient to pay for the proposed facilities, fees, and existing assessment for AD 155. Lennar Homes, Inc., has planned on developing the "Escena" project in two phases, with the golf course having already been completed. The first phase encompasses approximately 542 single family detached homes, with a second phase encompassing approximately 616 attached multi-family units. By forming CFD 2005-2, a special tax in accordance with the "Rate and Method of Apportionment" (or "RMA") for CFD 2005-2, is levied against the properties within the development. The proposed tax rate varies depending upon the type of unit constructed (detached versus attached), as well as the size of the unit. The RMA proposed to exempt the golf course and hotel properties from CFD 2005-2, and as such, no special taxes will be levied on those portions of the development. In light of the fact that Lennar Homes, Inc., is developing the project in two phases, it has been proposed that the City consider issuance of the bonds for CFD 2005-2 in two phases, or series, so that the bonded indebtedness incurred keeps pace as the units are constructed. Until property is developed, the RMA establishes a tax rate for vacant land; however, once a building permit is issued the tax rate in accordance with the type and size of the unit being constructed is levied against that property for the subsequent fiscal year. As seen in Attachment 3, the special taxes vary from $1,650 to $1,950 per Year for detached units, and from $850 to $1,050 per year for attached multi-family units. It is anticipated that the overall effective tax rate will be no higher than 1.8% (including all other ad valorem taxes, special assessments and the City's CFD 2005-1 for police and fire services). The proposed actions to be taken by the City Council with regard to CFD 2005-2 follow the formal process outlined by the Act which allows the creation of CFD's. It is required that the City Council consider two separate actions related to the formation of CFD 2005-2: a Resolution of Intention to establish CFD 2005-2 which identifies the area of land encompassing CFD 2005-2 and incorporates and approves the RMA's special tax formula, and a Resolution of Intention to incur bonded indebtedness of CFD 2005-2 upon its formation. Each of these Resolutions call for the scheduling of a formal Public Hearing, and an election by the property owners within the proposed CFD 2005-2 (which in this case is Lennar Homes, Inc.), between 30 and 60 days after adoption of the resolutions; the Public Hearing for CFD 2005-2, if approved, has been scheduled for September 7, 2005. City Council Staff Report July 20, 2005—Page 4 Consideration of Formation of CFD 2005-2 A third action is recommended for the City Council's consideration which will approve a reimbursement agreement with the developer for receipt of funds deposited with the City related to the formation of CFD 2005-2 (namely, payment of the various contract service agreements) which would be reimbursed to the developer upon City receipt of bond proceeds following the issuance of bonds. Assuming City Council's approval of these actions, and the passage of the election to form CFD 2005-2 and the special taxes as proposed, it is expected that a first series of bonds will be issued for Phase 1 (542 detached homes) that will finance $3,060,000 of City development impact fees (sewer connection fees, TUMF and Quimby Act fees); $5,530,000 for public infrastructure costs (sewer and water system construction, and construction of 3 project traffic signals); $1,230,000 for Desert Water Agency (DWA) water connection and meter fees; and finally $331,000 to payoff the existing AD 155 assessment against the development. The second series of bonds issued for Phase 2 will be smaller, comprising the 616 attached multi-family units, and will include financing of another $3,300,000 of City development impact fees and $1,400,000 of DWA fees. The second series will be issued dependent upon the progress of the development, and only at such time tract maps for the multi-family units have been approved. FISCAL IMPACT: Approval of the recommended actions does not commit the City in any way to financial contribution or liability related to the proposed CFD 2005-2. Although ultimately the City is the issuer of the tax-exempt bonds for CFD 2005-2, the City does not incur any obligation to satisfy payment of the special taxes levied to secure payment of the bonds. Failure of payment of the special taxes levied against the properties within CFD 2005-2 constitute a foreclosable lien on such properties if unpaid, which is used to secure and satisfy the annual bond payments. No fiscal impact will result from the City's approval of'this action. Craig,.Graves David H. Ready D)r>sctor of Finance & Treasurer City Manager David J. Ba�akian Director of Public Works/City Engineer Attachments: 1. April 6, 2005 staff report 2. CFD 2005-2 Bond Financed Facilities Summary 3. CFD 2005-2 Financial Summary 4. Resolutions (3) ATTACHMENT APRIL 6, 2005, STAFF REPORT CITY COUNCIL April 6, 2005 LEGISLATIVE ITEM Subject: PALM SPRINGS CLASSIC COMMUNITY FACILITIES DISTRICT NO. 1 Initiated by: Public Works and Engineering Department SUMMARY: An application was filed with the City on February 13, 2004, for formation of a Communities Facilities District pursuant to the Mello-Roos Community Facilities Act of 1982 for the Palm Springs Classic project, previously approved as Case 5.0666B, PD- 231, and Tentative Parcel Map 30928 on July 16, 2003, and subsequently approved as Tentative Tract Map 32233 on November 17, 2004. This development is being constructed by Palm Springs Classic, LLC, Lennar Homes of California, Inc., its Manager. The project consists of an 18-hole golf course, hotel, vacation ownership units, single family homes, and multi-family homes (with a maximum total of 1,450 units), office and retail uses, and a fire station site The City has established Policies and Procedures for Special Assessment and Mello-Roos Community Facility District (CFD) Municipal Bond Financing for Public Improvement for Development Projects that outlines the minimum criteria for Special Assessment or Community Facility Districts formed in the City, as well as the guidelines and process for their formation. The Policy established a Special Districts Committee comprised of various staff members, and it is the Committee's responsibility to review the Community Facilities District application and render an opinion regarding the City Council's approval or denial of its formation. RECOMMENDATION: (1) That the City Council approve the application for further processing of the formation of Community Facilities District No. 1 ('CFD 1"), submitted by Palm Springs Classic, LLC, in accordance with the City's Policies and Procedures for Special Assessment and Mello-Roos Community Facility District (CFD) Municipal Bond Financing for Public Improvement for Development Projects (the "Policy"); (2) authorize staff to select and negotiate contracts with consultants for an assessment engineer's report, appraisal and market absorption study; and collect necessary deposits from the applicant to fund consultant contracts; and (3) approve, in a form acceptable to the City Attorney, a Memorandum of Understanding with Lennar Homes of California regarding certain developer contributions to be made to the City in conjunction with the formation of the Community Facilities District. STAFF ANALYSIS: Palm Springs Classic, LLC, by Lennar Homes of California, Inc., its Manager, is the developer of the Palm Springs Classic, now known as "Escena Palm Springs", Tentative Tract Map 32233, located on the east side of Gene Autry Trail south of Vista Chino, This development consists of an 18-hole golf course, hotel, vacation ownership units,' single family homes, and multi-family homes(with a maximum total of 1,450 units), office and retail uses, and a fire station site. Shayne Morgan of David Taussig &Associates, Inc., acting on behalf of Lennar Homes, submitted an application for formation of a Community Facilities District pursuant to the Mello-Roos Community Facilities Act of 1982 (the "Act"). In accordance with the Policy, a pre-application conference with staff was held and the applicant submitted a $10,000j* initial application fee. The original application and fee were submitted to the City for Palm Sprinys Classic Community Fact ALS District No. 1 April 0, 2005 Page 2 initial review on February 13, 2004, with a completed formal submittal received on November 9, 2004. On December 2, 2004, the applicant met with the City's Special Districts Committee to review the proposed application. Subsequent meetings with the applicant and the Committee to further refine the application and requested public financing were hold on January 20, 2005, and finally on March 4, 2005. The proposed application represents the first Mello-Roos Community Facilities District for the City of Palm Springs. The significant difference with a Mello-Roos CFD and a standard Special Assessment District is that a Mello-Roos CFD has a broader range of items that can be included in the District, and the improvements, fees, and other casts are considered of general benefit to the District, rather than "special benefit" that a standard Special Assessment District indicates. Further, a Mello-Roos CFD places a special tax on the properties within the District, while a standard Special Assessment District places a lien against the properties until the levy (special assessment) is paid. The applicant is proposing that CFD 1 fund public sewer improvements, water improvements, reclaimed waterline improvements, traffic signal improvements, sewer fees, water fees, pay-off of the existing Assessment District 155 assessments (AD 155 was established by the City for construction of the Gene Autry Trail and associated improvements), Quimby Act park fees, Traffic Uniform Mitigation Fees (TUMF), and all district formation and financing costs. The total estimated bond amount for CFD 1 is $15,552,808(see Attachment 1). The controlling criteria established in the Policy is outlined under Section 4, "Minimum Requirements," Section 1, "Benefit". This section indicates that the City should consider formation of Special Assessment or Community Facility Districts if the following minimum "benefit' criteria are met: 1. The proposed project shall provide major infrastructure improvements that significantly benefit the general public, and/or 2. The project shall provide significant financial benefit to the City. Determining whether the proposed Community Facilities District application meets these two general criteria is somewhat subjective, The Palm Springs Classic will, with or without public financing provided by CFD 1, be constructing significant public improvements along Gene Autry Trail and Vista Chino, including enhanced landscaped parkways, bikepafhs, new traffic signals, and other public improvements required of the development. Further, the project, with or without public financing provided by CFD 1, is likely to generate a significant financial benefit to the City through the generation of the sale of up to 1,450 single or multi-family homes, increased property tax revenues, and the associated revenues generated by additional residents of Palm Springs. It is important to note that the Palm Springs Classic development is obligated to provide the City with a dedication for a one acre fire station site, approved by the Fire Chief,that the residential units within the development be equipped with fire sprinklers due to the fact the area is beyond the 5-minute response time, and further, that the project agree to annex into the future Community Services District to be farmed by the City to assess a special fee to new development for increased police and fire services caused by the development. Following the Special Districts Committee's meeting of March 4, 2005, an opinion was rendered that the proposed application generally meets the controlling criteria as outlined in the Policy. This opinion was possible following the applicant's proposal to provide certain developer contributions in conjunction with the formation of the CFD. Palm Springs Classic Community Facilities District No.t April 6,2006 Page 3 The developer's contribution includes a one-time payment to the City of $1,100,000 and an agreement to provide and pay for services necessary to prepare construction drawings for the future fire station site located within the Palm Springs Classic development, at the north end of Bird Center Drive and off of its main entrance on Chia Road. These two contributions, which are outlined in the draft Memorandum of Understanding included as Attachment 2 (subject to further review and approval by the City Attorney), will allow the City to move forward with construction of the much needed fire station within the northeast,section of the City. On this basis, the Special Districts Committee determined that the developer's contribution outside of CFD 1 meets the general criteria of the Policy, and recommends that City Council authorize further processing of CFD 1 for Palm Springs Classic, LLC. SUBMITTED: a V1 _ DAVID J, BARAKIAN Director of Public Works, City Engineer APPROVED: ?-- ✓/c'�_�...�-�f DAVID H. READY — City Manager ATTACHMENTS: 1. Proposed Community Facilities District Bond Financed Facilities Summary 2. Draft Memorandum of Understanding ATTACHMENT 2 CFD 2005-2 BOND FINANCED FACILITIES SUMMARY � ayT2, David Taussig &Associates, Inc. 06/27/2005 PROPOSED COMMUNITY FACILITIES DISTRICT No. 2005-2 CITY OF PALM SPRINGS (ESCENA PALM SPRINGS) BOND FINANCED FACILITIES SUMMARY I � Number of Fee per Improvements Description Units Unit / Fees City of Palm Springs/ Public Improvements NA NA $2,037,935 West Spine Sewer Improvements[1] NA NA $1,069,744 East Spine SewerImprovements NA NA $186,700 Traffic Signalization Improvements NA NA $450,000 Assessment District No. 155 Payoff NA NA $331,491 City of Palm Springs/ Fees NA NA $6,383,479 Sewer Connection Fee 1,158 $2,406 $2,788,464 Quimby Park Fees 1,158 $2,440 $2,825,520 TUMF-Detached Units 542 $794 $430,516 TUMF-Attached Units 616 $550 $338,979 Desert Water Agency [2] NA NA $6,465,635 West Spine Water Improvements[1] NA NA $635,571 East Spine Water Improvements NA NA $1,394,634 Reclaimed Water Line Improvements NA NA $1,500,000 Water Connection Fee 1,158 $2,285 $2,646,030 Water Frontage Fee NA NA $289,400 Total CFD Eligible Public Improvements and Fees j NA NA $14,887,048 11] Project is 100% complete and has not been dedicated to the City of Palm Springs or Desert Water Agency. [2] Requires the execution of a Joint Community Facilities Agreement prior to CFD formation. C �� K\Chents2\LENNAR\PalmSpnngs\Budget\Budget_062405123 ATTACHMENT CFD 2005-2 FINANCIAL SUMMARY Community Facilities District No. 2005-2 (Escena) Phase I Financing Acquisition Fund $10,150,000 Reserve Fund 850,000 Capitalized Interest 820,000 Underwriting/OlD 300,000 Costs 250,000 Total Financing $12,370,000 Bond Term — 30 Years Effective Interest Rate — 5.5% Total Phase I & 11 Bonded Debt Not to Exceed $21 Million Phase 11 Financing Acquisition Fund $4,700,000 700'000 0 5.50 Bonded Debt Million Reserve Fund 400,000 Capitalized Interest 400,000 Underwriting/0113 150,000 Costs 150,000 Estimated Annual Special Taxes: Total Financing $5,80000,000000 Detached — 2,200 SqFt $1,650 Detached — 2,800 SqFt $1,950 Attached — 1,300 SqFt $ 850 'A Attached — 1,600 SqFt $1,050 Bonds Will Not Be Issued Until Overall Effective Tax Rate 1.8% Value to Lien Equals 4 to 1 Phase 1 $49,480,000 Phase 11 23,200,000 Value Needed $72,680,000 July 8, 2005 'MOM ATTACHMENT 4 RESOLUTIONS 6 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DECLARING ITS INTENTION TO ESTABLISH AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) OF THE CITY OF PALM SPRINGS WHEREAS, the City Council has received a petition (including consent and waiver), (the "Petition"), from Palm Springs Classic, LLC, by Lennar Homes of California, Inc., its Manager, requesting the institution of proceedings for formation of a Community Facilities District, pursuant to the Mello-Roos Community Facilities Act of 1982, commencing with Section 53311 of the Government Code of the State of California (the "Act'); and WHEREAS, the City Council has determined that the Petition complies with the requirements of Government Code Section 53318 and now intends to form Community Facilities District No. 2005-2 (Escena) of the City of Palm Springs; and WHEREAS, the Council desires to adopt this Resolution of Intention as provided in Section 53321 of the Act to establish a Community Facilities District consisting of the territory described in Exhibit "A" hereto and incorporated herein by this reference, which the City Council hereby determines shall be known as "Community Facilities District No. 2005-2 (Escena) of the City of Palm Springs", (the "Community Facilities District No. 2005-2" or the "District'), pursuant to the Act to finance (1) the purchase, construction, modification, expansion, improvement or rehabilitation of certain real or other tangible property described in Exhibit "B" attached hereto and incorporated herein by this reference, including all furnishings, equipment and supplies related thereto; (2) the payment of development and other fees (collectively, the "Facilities"), which Facilities have a useful life of five years or longer; (3) the incidental expenses to be incurred in connection with financing the Facilities and forming and administering the District (the "Incidental Expenses"); and (4) payment and retirement of assessments in Assessment District No. 155 of the City of Palm Springs, (the "AD 155 Payment'); and WHEREAS, it is the intention of the City Council to consider financing the Facilities, the Incidental Expenses, and the AD 155 Payment through the formation of the proposed District and the sale of bonded indebtedness in an amount not to exceed $21,000,000 within the District and the levy of a special tax within the District to pay for the Facilities and the Incidental Expenses and to pay debt service on the bonded indebtedness incurred by the District, provided that the bond sales and special tax levies are approved at an election to be held within the District; THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: Resolution No. Page 2 Section 1. The above recitals are all true and correct. Section 2. The City Council hereby determines to institute proceedings for the formation of a Community Facilities District under the terms of the Act pursuant to Section 53350 of the Act. The exterior boundaries of the proposed District are hereby specified and described to be as shown on that certain map, described in Exhibit "A", now on file in the office of the City Clerk entitled "Proposed Boundaries of Community Facilities District No. 2005-2 (Escena) of the City of Palm Springs," which map indicates by a boundary line the extent of the territory included in the proposed District and shall govern for all details as to the extent of the proposed District. On the original and one copy of the map of the proposed District on file in the City Clerk's office, the City Clerk shall endorse the certificate evidencing the date and adoption of this Resolution of Intention. The City Clerk shall file the original map in his office and, within fifteen (15) days after the adoption of this Resolution of Intention, the City Clerk shall cause to have recorded with the Riverside County Recorder a copy of the endorsed map. Section 3. The name of the proposed District shall be designated as "Community Facilities District No. 2005-2 (Escena) of the City of Palm Springs." Section 4. The Facilities to be financed by the proposed District and to be financed in part by the proposed District are public infrastructure facilities and other governmental facilities with an estimated useful life of five years or longer, which the City of Palm Springs or Desert Water Agency ("DWA") is authorized by law to construct, acquire, own, operate or contribute revenue to. The City Council hereby finds and determines that the description of the Facilities herein is sufficiently informative to allow taxpayers within the proposed District to understand what the funds of the proposed District may be used to finance. The Incidental Expenses expected to be incurred include the cost of planning and designing the Facilities, the costs of forming the District, issuing bonds and levying and collecting a special tax within the District. The City Council hereby finds that the proposed Facilities are necessary to meet increased demands placed upon the City of Palm Springs and DWA as a result of development occurring within the proposed District. Such Facilities need not be physically located within the District. Section 5. Except where funds are otherwise available, it is the intention of the City Council to levy annually, in accordance with procedures contained in the Act, a special tax within the proposed District (the "Special Tax") sufficient to pay for the costs of financing the acquisition and/or construction of the Facilities, Incidental Expenses and the AD 155 Payment, including the principal and interest and other periodic costs on bonds or other indebtedness proposed to be issued to finance the Facilities, Incidental Expenses and the AD 155 Payment, the establishment and replenishment of reserve funds, the credit enhancement fees, the costs of administering the levy and collection of the Special Tax and all other costs of the levy of the Special Tax and issuance of the bonds,* including any foreclosure proceedings, architectural, engineering, inspection, legal, fiscal, Resolution No. Page 3 and financial consultant fees, discount fees, interest on bonds due and payable prior to the expiration of one year from the date of completion of Facilities (but not to exceed two years), election costs and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel, disclosure counsel, financing consultants and printing costs, and all other administrative costs of the tax levy and bond issue. The Special Tax will be secured by recordation of a continuing lien against all non-exempt real property in the District. In the first year in which such a Special Tax is levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred to the District pursuant to Section 53314 of the Act and interest thereon. The schedule of the rate and method of apportionment and manner of collection of the Special Tax within the District is described in detail in Exhibit "C" attached hereto and incorporated herein by this reference. The Special Tax is based upon the cost of financing the Facilities, Incidental Expenses and the AD 155 Payment in the District, the demand that each parcel will place on the Facilities and the benefit (direct and/or indirect) received by each parcel from the Facilities. The Special Tax within the District is apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act. In the event that a portion of the property within the District shall become for any reason exempt, wholly or partially, from the levy of the Special Tax, the City Council shall, on behalf of the District, increase the levy to the extent necessary upon the remaining property within the District which is not delinquent or exempt in order to yield the required payments, subject to the maximum tax. If special taxes of the District are levied against any parcel used for private residential purposes, (i) the maximum special tax rate shall not be increased over time except that it may be increased by an amount not to exceed two percent (2%) per year to the extent permitted in the rate and method of apportionment; (ii) such tax shall be levied for a period not to exceed forty-five (45) years commencing with Fiscal Year 2005-2006, as further described in Exhibit "C" attached hereto; and (iii) under no circumstances will such special tax be increased as a consequence of delinquency or default by the owner of any other parcels within the District by more than ten percent (10%). Section 6. The special tax within the proposed District is based on the expected demand that each parcel of real property within the proposed District will place on the Facilities and on the benefit that each parcel derives from the right to access the Facilities. The City Council hereby determines that the proposed Facilities are necessary to meet the increased demand placed upon the City of Palm Springs and DWA and the existing infrastructure in the City as a result of the development of land proposed for inclusion in the District. The Council hereby determines the rate and method of apportionment of the special tax for the District set forth in Exhibit "C" attached hereto to be reasonable. Section 7. A public hearing (the "Hearing") on the establishment of Community Facilities District No. 2005-2, the proposed rate and method of apportionment of the Special Tax and the proposed issuance of bonds to finance the Facilities, the Incidental Expenses and the AD 155 Payment shall be held on September 7, prate Resolution No. Page 4 2005 at 6:00 p.m., or as soon thereafter as practicable, at the chambers of the City Council of the City of Palm Springs, 3200 East Tahquitz Canyon Way, Palm Springs, California 92262. Should the City Council determine to form the District, a special election will be held within the District to authorize the issuance of bonds and the levy of the Special Tax in accordance with the procedures contained in Government Code Section 53326. If held, the proposed voting procedure at the election will be a landowner vote with each landowner who is the owner of record of land within the District at the close of the Hearing, or the authorized representative thereof, having one vote for each acre or portion thereof owned within the District. Ballots for the special election may be distributed by mail or by personal service. Section 8. At the time and place set Forth above for the Hearing, any interested person, including all persons owning lands or registered to vote within the proposed District, may appear and be heard. Section 9. Each City officer who is or will be responsible for the Facilities to be financed by the District, if it is established, is hereby directed to study the proposed District and, at or before the time of the above-mentioned Hearing, file a report with the City Council, and which is to be made a part of the record of the Hearing, containing a brief description of the Facilities and services by type which will in his or her opinion be required to adequately meet the needs of the District and his or her estimate of the cost of providing the Facilities and services, including an estimate of the fair and reasonable cost of all Incidental Expenses, including the cost of planning and designing the Facilities to be financed pursuant to the Act, the cost of environmental evaluations of such Facilities, all costs associated with the creation of the District, issuance of bonds, determination of the amount of any special taxes, collection of any special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the City with respect to the District, and any other expenses incidental to the construction, completion and inspection of the authorized work to be paid through the proposed financing. Section 10. The City may accept advances of funds or work-in-kind from any sources, including private persons or private entities, and is authorized and directed to use such funds for any authorized purpose, including any cost incurred in creating the District. The District may enter into an agreement to repay all of such funds as are not expended or committed for any authorized purpose at the time of the election on the levy of the Special Tax, if the proposal to levy such tax should fail, and to repay all of such funds advanced if the levy of the Special Tax shall be approved by the qualified electors of the District. Section 11. The City Clerk is hereby directed to publish a notice ("Notice") of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the proposed District. Such Notice shall contain the text or a summary of this Resolution, state the time and place of the Hearing, a statement that the testimony of all interested persons or taxpayers Resolution No. Page 5 will be heard, a description of the protest rights of the registered voters and landowners in the proposed District as provided in Section 53324 of the Act and a description of the proposed voting procedure for the election required by the Act. Such publication shall be completed at least seven (7) days prior to the date of the Hearing. Section 12. The City Clerk may send a copy of the Notice of the Hearing by first-class mail, postage prepaid, to each registered voter and to each landowner within the proposed District as shown on the last equalized assessment roll. Said mailing shall be completed not less than fifteen (15) days prior to the date of the Hearing. Section 13. Pursuant to Section 53344.1 of the Act, the City Council hereby reserves to itself, in its sole discretion, the right and authority by subsequent Resolution to allow any owner of property within the District, subject to the provisions of Section 53344.1 of the Act and those conditions as it may impose, and any applicable prepayment penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the District treasurer in full payment or part payment of any installment of the special taxes or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bond or other obligation to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender. Section 14. The voting procedure with respect to the establishment of the District and the imposition of the special tax shall be by hand delivered ballot election. ADOPTED this 20th day of July 2005. David H. Ready, City Manager ATTEST: James Thompson, City Clerk CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on July 20, 2005, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California EXHIBIT "A" COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) BOUNDARY MAP [ATTACHED] �h a o m PROPOSED BOUNDARIES UNI s" COMMTY FACLITES DISTRICT NO. 2005-2 ( ESCENA OF PALM SPRINGS J CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA I HEREBY CERTIFY THAT THE WITHIN MAP SHOWING BOUNDARIES NUS-W AS OF COMMUNITY FACILITIES DISTRICT NO. 2005-2 ( ESCENA OF 150 pp' 1pp'OB492 FILED IN THE OFFICE OF THE SECRETARY OF THE BOARD PALM SPRINGS ) OF THE CITY OF PALM SPRINGS, COUNTY BE WELL 3382' OF DIRECTORS OF THE CITY OF PALM SPRINGS, COUNTY RIVERSIDE, STATE OF CALIFORNIA, WAS APPROVED BY THE ®� cu1TE A•M5'22'12' OF RIVERSIDE, STATE OF CALIFORNIA BOARD OF DIRECTORS OF THE CITY OF PALM SPRINGS AT A NAP H_I3 THIS DAY OF 20p5 REGULAR MEETING THEREOF. HELD ONIS THE_DAY OF 2005 A•2i'p5 33' BY RESOLUTION NO, .� R-fz2.o0' SECRETARY OF THE GUARD OF DIRECTORS, a!oi L"MA'S CITY OF PALM SPRINGS '9�, A•3]'0692' SECRETARYOF THE BOARD OF OIRECi0R5, R•15p p0' CITY OFFP PALM SPRINGS C•]R 00' RECORDED THIS DAY OF. 2005. AT THE HOUR OF_0 CLOCK _.M, IN BOOK OF PAGE_MAPS OF ASSESSMENT SEE DETAIL ABOVE AND COMMUNITY FACILITIES DISTRICTS IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF LOT ")P' S T A C H I N 09,50NG W IN 0J' RIVERSIDE. STATE OF CALIFORNIA. N00'04 21"W 50.02' N38'59 22'W ]0 92 FEE DOCUMENT NO, NB9150'46"W 1141,47' N99'51'11"W 59.70' (HARRY W. WARD. RIVERSIDE COUNTY ASSESSOR- NB9'S0'46 A 2133' NM N49.16 01"E 35 15' CLERK-RECOR]ER NOO'17 00"W 470.95' LOT 61 A=14'24 50" R-2B3.00' L-T1A9' BY. § DEPUTY A-li'55'25 NOO'09'4B"W 71.23' N54'2]Ofi"W 55116' R=950.Op' L=19)TO' N39'5922"W 7E 52' A=05'52'12" R=3940 Op' L-39350' LOT "C' N17pOl Ga"W 15603' A-25'27'48' R=277.00' L-123.10' NOD'04'21"W 49259' NAG'29'2TV BE 65' A=28'27'19" R=32700' L=152.4O A-11'5525" N70'56'45"W 11567' 950.00' L=197.70' 9 NCO'1700'W 226.04 '4aOo, N99'50'46'W 1097.46' LOT "ABr YJ]$ S !! iAs N54 -OD 13'12" 150.03' -p v R-3985 -39850.00 L=15292' N54'38 El E 150,03' A=00'20'22" N89*37'53"W 565 63' R=40D000O' L=236.99' N99'3753'H 413.15' NOD'22'07 E 334EOU m S NB1'58 24'E 415.90' vuJ LOT "If x 1) r N2 6"W 499.3 z 99.39' LOT "AB" N DO NB9.38 22"W 438 92UB 081 WB'0136"W 40000 PAGE 6I-27 x O N89'50'45"W 1097.46 0 C N ED m VISTA CHMo ui g m N89-375TW 55563' m c F 2 NOR'O1'36"W 584.30' A m'10" m R-950. R-9 0.00' SITE y L-139 BB' G 30TH AVE � 9 'fl NOO'IS Q N c� a 400.00' LOT "A" N LOT u, F sAN 4ps6 osne "AC, _ s "A LOT "M" MAID'09 56'E 316 03' H R.. Rpc WT A PART SLOT N89*285SW 1343.91' E _ n VICINITY MAP LEGEND Np0'1313W 224.92' ,'.„ NB9'2B55W 25.00' \ 4.d l4 EXHIBIT "B" TYPES OF FACILITIES TO BE FINANCED BY COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) The General Description of the Improvements is as follows: 1. Street facilities, including, but not limited to, major arterials, highways, intersections, access ramps, roadways, sidewalk, curb, gutters, striping, lighting, traffic signalization, signage, landscaping of public streets and rights- of-way and appurtenant facilities; 2. Storm control facilities, including, but not limited to, storm drains, channels, detention, headwalls, riprap pads, retention and/or catch basins and appurtenant facilities; 3. Sewer improvements, sanitary sewers, including, but not limited to, lift stations, force mains, pump stations, transmission and main lines, valves, and appurtenant facilities; 4. Domestic water facilities, including, but not limited to, reservoirs, pump stations, transmission lines, distribution facilities, lift stations, main lines, valves, fire hydrants and appurtenant facilities; 5. Park and recreational facilities and appurtenant facilities; 6. Impact and other fees, including but not limited to, TUMF, Quimby Act fees, water fees, drainage fees, sewer treatment and connection fees, water supply fees, water meter fees, water connection fees and frontage fees, storm drain fees, and other city fees; 7. Mitigation costs and incidental expenses. RESOLUTION N�BER _ Page 9 OTHER The District may also finance airy of the following: 1. Bond related expenses, including underwriters' discount, reserve fund, capitalized interest, financial advisor fees and expenses, bond and disclosure cormsel, special tax consultant fees and expenses, dissemination agent fees and all other incidental expenses. 2. Administrative fees of the City and the Bond trustee or fiscal agent related to the District and the Bonds. 3. Reimbursement of costs related to the formation of the District advanced by the City or any related entity, or any landowner or developer within the District, as well as reimbursement of any costs advanced by the City or any related entity, or any landowner or developer within the District, for facilities, fees or other purposes or costs of the District. 4. Payment and retirement of all outstanding unpaid assessments in Assessment District No. 155 of the City. This description of the public capital facilities is general in nature. The final nature and location of improvements and facilities will be determined upon the preparation of final plans and specifications. The final plans and specifications may show substitutes in lieu of, or modifications to, proposed work Any such substitution shall not be a change or modification in the proceedings as long as the facilities provide a service substantially similar to that as set forth in the Report. 01003/0090/40420.02 EXHIBIT `B" TYPES OF FACILITIES TO BE FINANCED BY COMMUNITY FACILITIES DISTRICT NO. 2005-2 (Eseena) The General Description of the Improvements is as follows: • Street facilities, including, but not limited to, major arterials, highways, intersections, access ramps, roadways, sidewalk, curb, gutters, striping, lighting, traffic signalization, signage, landscaping of public streets and rights-of-way and appurtenant facilities; • Storm control facilities, including, but not limited to, storm drains, channels, detention, headwalls, riprap pads, retention and/or catch basins and appurtenant facilities; • Sewer improvements, sanitary sewers, including, but not limited to, lift stations, force mains, pump stations, transmission and main lines, valves, and appurtenant facilities (including, but not limited to, the West Spine Sewer Improvements which have already been completed); • Domestic and reclaimed water facilities, including, but not limited to, reservoirs, puunp stations, transmission lines, distribution facilities, lift stations, main lines, valves, fire hydrants and appurtenant facilities (including, but not limited to, the West Spine Water Improvements which have already been completed); • Park and recreational facilities and appurtenant facilities; • Impact and other fees, including but not limited to, TUMF, Quimby Act fees, water fees, drainage fees, sewer treatment and connection fees, water supply fees, water meter fees, water connection fees and frontage fees, storm drain fees, and other city fees; • Mitigation costs and incidental expenses. c �EltaBT- 01003/0080/40,120.02 EXHIBIT "B" (CONTINUED) OTHER ITEMS TO BE FINANCED BY COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) The District may also finance any of the following: 1. Bond related expenses, including underwriters' discount, reserve fund, capitalized interest, financial advisor fees and expenses, bond and disclosure counsel, special tax consultant fees and expenses, dissemination agent fees and all other incidental expenses. 2. Administrative fees of the City and the Bond trustee or fiscal agent related to the District and the Bonds. 3. Reimbursement of costs related to the formation of the District advanced by the City or any related entity, or any landowner or developer within the District, as well as reimbursement of any costs advanced by the City or any related entity, or any landowner or developer within the District, for facilities, fees or other purposes or costs of the District. 4. Payment and retirement of all outstanding unpaid assessments in Assessment District No. 155 of the City of Palm Springs. This description of the public capital facilities is general in nature. The final nature and location of improvements and facilities will be determined upon the preparation of final plans and specifications. The final plans and specifications may show substitutions in lieu of, or modifications to, proposed work. Any such substitution shall not be a change or modification in the proceedings as long as the facilities provide a service substantially similar to that as set forth in the Report. EXHIBIT "C" RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX PRELIMINARY RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA PALM SPRINGS) CITY OF PALM SPRINGS A Special Tax shall be levied on all Assessor's Parcels in City of Palm Springs Community Facilities District No. 2005-2 (Eseena Palm Springs) ("CFD No. 2005-2") and collected each Fiscal Year commencing in Fiscal Year 2005-2006,in an amount determined through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 2005-2, unless exempted by law or by the provisions hereof, shall be taxed for the purposes,to the extent and in the marmer herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map,parcel map, condominium plan,or other recorded County parcel map. The square footage of an Assessor's Parcel is equal to the Acreage of such parcel multiplied by 43,560. "Act" means the Mello-Roos Community Facilities Act of 1982,being Chapter 2.5,Part 1, Division 2 of Title 5 of the California Goverment Code. "Administrative Expenses" means the following actual or reasonably estimated costs direetlyrelated to the administration of CFD No. 2005-2:the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both);the costs of collecting the Special Taxes(whether by the County or otherwise); the costs of remitting the Special Taxes 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 the City, CFD No. 2005-2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2005-2 or any designee thereof of complying with City, CFD No. 2005-2 or obligated persons disclosure requirements of applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No.2005-2 or any designee thereof related to an appeal of the Special Tax;the costs associated with the release of funds from any escrow account; and the City's annual administration fees and third parry expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2005-2 for any other administrative pin-poses of CFD No. 2005-2, including attorney's fees and other costs related to cornnnencing and pursuing to completion any foreclosure as a result of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's Parcel number. City of Pahn Springs(Eseena Palm Springs) July 8,2005 CjVD No. 2005-2 Page I PRELIMINARY "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Class of Developed Property, as determined in accordance with Section C.L(b) below. "Authorized Facilities" means those authorized improvements eligible under the Act and provided by CFD No. 2005-2 under the authorized bonding program for CFD No. 2005-2. "Backup Special Tax " means the Special Tax applicable to each Assessor's Parcel of Developed Property in each Zone, as determined in accordance with Section C.L(c)below. "Bonds" means anybonds or other debt(as defined in Section 53317(d)of the Act),whether in one or more series, issued by CFD No. 2005-2 under the Act. "Certificate of Occupancy" means a certificate issued by the City that authorizes the actual occupancy of a dwelling unit for habitation by one or more residents. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No.2005-2" means City of Palm Springs Community Facilities District No. 2005-2 (Escena Palm Springs). "City" means the City of Palm Springs, California. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2005-2. "County" means the County of Riverside, California. "Developed Property" means, for each Fiscal Year, all Taxable Property, exclusive of Taxable Public Property and Taxable Property Owner Association Property, for which the Final Subdivision was recorded on or before January 1 of the prior Fiscal Year and a building permit for new construction was issued after January 1, 2005 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied. "Final Mapped Property" means, for each Fiscal Year, all Taxable Property, exclusive of Developed Property, Taxable Property Owner Association Property or Taxable Public Properly, which as of January 1 of the previous Fiscal Year was located within a Final Subdivision. "Final Subdivision" means a subdivision of property by recordation of a final map,parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code Section 1352 that creates individual lots for which building permits issued without further subdivision. City of Palm Springs(Eseena Palm Springs) July 8,2005 CED No. 2005-2 Page 2 PRELIMINARY "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified,amended and/or supplemented from time to time. "Initial Maximum Special Tax" means the initial maximum Special Tax, determined in accordance with Section C.2.(a) below, that can be levied in any Fiscal Year on any Assessor's Parcel of Final Mapped Property and Undeveloped Property. "Land Use Class" means any of the classes listed in Table 1 below. "Maximum Special Tax" means the maximum Special Tax,determined in accordance with Section C below, that can be levied in any Fiscal Year on any Assessor's Parcel. Non-Residential Property" means all Assessor's Parcels of Developed Property for which a building permit permitting the construction of one ormore non-residential units or facilities has been issued by the City. "Outstanding Bonds" means all Bonds which are deemed to be outstanding under the Indenture. Property Owner Association Property" means, for each Fiscal Year, anyproperty within the boundaries of CFD No. 2005-2 that was owned by a property owner association, including any master or sub-association, as of January 1 of the prior Fiscal Year. "Proportionately" means, for Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is equal for all Assessor's Parcels of Developed Property. For Final Mapped Property, "Proportionately"means that the ratio of the actual Special Tax levy per Acre to the Initial Maximum Special Tax per Acre is equal for all Assessor's Parcels of Final Mapped Property. For Undeveloped Property, "Proportionately"means that the ratio of the actual Special Tax levy per Acre to the Initial Maximum Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property. The tern "Proportionately" may similarly be applied to other categories of Taxable Property as listed in Section D below. "Public Property" means, for each Fiscal Year, (i) any property within the boundaries of CFD No. 2005-2 owned by,irrevocably offered or dedicated to,or over, or through or under which an easement for purposes of public right-of-way has been granted, to the federal government,the State, the County, the City, or any local government or other public agency as of January 1 of the previous Fiscal Year, provided that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use; or(ii) any property within the boundaries of CFD No. 2005-2 that was encumbered, as of January 1 of the previous Fiscal Year, by an urunanned utility easement making impractical its utilization for other than the purpose set forth in the easement. City ofPahn Springs(Escena Patna Springs) Aly 8,2005 C.FD No. 2005-2 Page 3 PRELIMINARY "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area for an Assessor's Parcel shall be made by reference to the building peinlit(s) issued for such Assessor's Parcel. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit permitting the construction thereon of one or more residential dwelling units has been issued by the City. "Single Family Attached Property" means all Assessor's Parcels of Residential Property for which building permits have been issued for attached residential units. "Single Family Detached Property" means all Assessor's Parcels of Residential Property for which building permits have been issued for detached residential units. "Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property within CFD No. 2005-2 to fund the Special Tax Requirement. "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2005-2 to: (i) pay debt service on all Outstanding Bonds due in the calendar year commencing in such Fiscal Year; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds due in the calendar year commencing in such Fiscal Year; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay directly for acquisition or construction of Authorized Facilities to the extent that the inclusion of such amount does not increase the Special Tax levy on Undeveloped Property; (vi)pay for reasonably anticipated Special Tax delinquencies based on the delinquency rate For the Special Tax levy in the previous Fiscal Year; less (vii) a credit for funds available to reduce the annual Special Tax levy,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. 2005-2 that are not exempt from the Special Tax pursuant to law or Section E below. "Taxable Property Owner Association Property" means, for each Fiscal Year, all Assessor's Parcels of Property Owner Association Property that are not exempt from the Special Tax pursuant to Section E below. "Taxable Public Property" means, for each Fiscal Year, all Assessor's Parcels of Public Property that are not exempt from the Special Tax pursuant to Section E below. "Trustee" means the trustee or fiscal agent under the Indenture. Cry of'Palni Springs(Eseena Patin Springs) July 8,2005 CFD No. 2005-2 Page 4 PRELIMINARY "Undeveloped Property" means,for each Fiscal Year, all Taxable Property not classified as Developed Property,Final Mapped Property,Taxable Property Owner Association Property or Taxable Public Property. "Zone" means Zone 1 or Zone 2, as applicable. "Zone 1" means all property currently within CFD No. 2005-2 which is not located in Zone 2. "Zone 2" means the land area geographically identified as Lots 44 through 50 in Tract Map No. 32233-1 recorded with the County on May 23, 2005 as Document No. 2005-0409493. Zone 2 may be subject to amendment from time-to-time or modification pursuant to a final map or precise site plan for such property at the sole discretion of the CFD Administrator provided that such amendment or modification will not reduce the amount of Maximum Special Tax below the amount required to equal at least 1.1 times the maximum annual debt service on all Outstanding Bonds, plus the Administrative Expenses. B. ASSIGNMENT TO LAND USE CLASSES Each Fiscal Year, all Taxable Property within CFD No. 2005-2 shall be assigned to a Zone and further classified as Developed Property,Final Mapped Property,Undeveloped Property, Taxable Property Owner Association Property, or Taxable Public Property, and shall be subject to Special Taxes in accordance with this Rate and Method of Apportionment determined pursuant to Sections C and D below. C. MAXIMUM SPECIAL TAX RATE Residential Property shall be assigned to Land Use Classes 1 through 9 as listed in Table 1 below based on the type of use and the Residential Floor Area for each unit. Non-Residential Property shall be assigned to Land Use Class 10. With respect to Residential Property, the Residential Floor Area shall be determined from the most recent building permit issued prior to the issuance of a Certificate of Occupancy for such Assessor's Parcel. 1. Developed Property (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 or (ii) the amount derived by application of the Backup Special Tax. (b) Assigned Special Tax The Fiscal Year 2005-2006 Assigned Special Tax for each Land Use Class is shown below in Table 1. City ofPalne Springs(Escena Palm Springs) July 8,2005 CFD No. 2005-2 Page 5 PRELIMINARY TABLE 1 Fiscal Year 2005-2006 Assigned Special Taxes for Developed Property Laud Use Residential Assigned Description Class Floor Area Special Tax 1 Single Family Detached Property More than 3,200 sq. ft. $2,450 per unit 2 Single Family Detached Property 2,801 —3,200 sq. ft. $2,150 per unit 3 Single Family Detached Property 2,501 —2,800 sq. ft. $1,950 per unit 4 Single Family Detached Property 2,201 —2,500 sq. ft. $1,800 per unit 5 Single Family Detached Property Less than 2,201 sq. ft. $1,650 per unit 6 Single Family Attached Property More than 1,600 sq. ft. $1,450 per unit 7 Single Family Attached Property 1,401 — 1,600 sq. ft, $1,050 per unit 8 Single Family Attached Property 1,201 — 1,400 sq. ft. $850 per unit 9 Single Family Attached Property Less than 1,201 sq. ft. $550 per unit 10 Non-Residential Property NA $11,662 per Acre (c) Backup Special Tax The Fiscal Year 2005-2006 Backup Special Tax attributable to a Final Subdivision in Zone 1 or Zone 2 will equal the applicable Backup Special Tax for such Zone,identified in Table 2 below,multiplied by the Acreage of all Taxable Property, exclusive of any Taxable Property Owner Association Property and Taxable Public Property, therein. The Backup Special Tax for each Assessor's Parcel of Residential Property shall be computed by dividing the Backup Special Tax attributable to the applicable Final Subdivision by the number of Assessor's Parcels for which building permits for residential construction have or maybe issued(i.e.,the number of residential lots). The Backup Special Tax for each Assessor's Parcel of Non-Residential Property in Zone 1 or Zone 2 shall equal the applicable Backup Special Tax for such Zone, identified in Table 2 below, multiplied by the Acreage of such Assessor's Parcel. TABLE 2 Fiscal Year 2005-2006 Backup Special Tax for Developed Property Special Tax Classification Backup Special Tax Zone 1 $12,277 per Acre Zone 2 $16,907 per Acre City of Pabn Springs(Eseena Palm Springs) July 8,2005 CED No. 2005-2 Page 6 PRELIMINARY If a Final Subdivision includes Assessor's Parcels of Taxable Property for which building permits for both residential and non-residential construction may be issued, exclusive of Taxable Property Owner Association Property and Taxable Public Property, then the Backup Special Tax for each Assessor's Parcel of Residential Property shall be computed exclusive of the Acreage and Assessor's Parcels of property for which building permits for non-residential construction may be issued. Notwithstanding the foregoing, if all or any portion of the Final Subdivision(s)described in the preceding paragraphs is subsequently changed or modified by recordation of a lot line adjustment or similar instrument, and only if the CFD Administrator determines that such change or modification results in a decrease in the number of Assessor's Parcels of Taxable Property for which building permits for residential construction have or maybe issued within such Final Subdivision, then the Backup Special Tax for each Assessor's Parcel of Developed Property that is pant of the lot line adjustment or similar instrument for such Final Subdivision shall be a rate per Acre as calculated below. The Backup Special Tax previously determined for an Assessor's Parcel of Developed Property that is not part of the lot line adjustment or similar instrument for such Final Subdivision shall not be recalculated. 1. Determine the total Backup Special Tax anticipated to apply to the changed or modified portion of the Final Subdivision area prior to the change or modification. 2. The result of paragraph 1 above shall be divided by the Acreage of Taxable Property which is ultimately expected to exist in such changed or modified portion of the Final Subdivision area, as reasonably determined by the CFD Administrator. 3. The result of paragraph 2 above shall be the Backup Special Tax per Acre which shall be applicable to Assessor's Parcels of Developed Property in such changed or modified portion of the Final Subdivision area for all remaining Fiscal Years in which the Special Tax may be levied. ( rl City ofPabn Springs(Escena Pali Springs) July 8,2005 CFD No. 2005-2 Page 7 PRELIMINARY Furthermore, all Assessors' Parcels within CFD No. 2005-2 will be relieved simultaneously and permanently from the obligation to pay and disclose the Backup Special Tax if the CFD Administrator determines that(i)the annual debt service required for the Outstanding Bonds, when compared to the Assigned Special Taxes that may be levied against all Assessors' Parcels of Developed Property in CFD No.2005-2 result in 110%debt service coverage (i.e., the Assigned Special Taxes that may be levied against all Developed Property in CFD No. 2005-2 in each remaining Fiscal Year based on then existing development in CFD No. 2005-2 is at least equal to the sum of(a) the Administrative Expenses and (b) 1.10 times maximum annual debt service in each remaining Fiscal Year on the Outstanding Bonds), and(ii)all authorized Bonds have already been issued or the Council has covenanted that it will not issue any additional Bonds (except refunding bonds) to be supported by the Special Tax in CFD No. 2005-2. (d) Increase in the Assigned Special Tax and Backup Special Tax The Fiscal Year 2005-2006 Assigned Special Tax, identified in Table 1 above, and Backup Special Tax, identified in Table 2 above, shall not be subject to change and shall therefore remain the same in every Fiscal Year. (e) Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax for all Land Use Classes located on that Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. 2. Final Mapped Property, Undeveloped Property, Taxable Property Owner Association Property, and Taxable Public Property (a) Initial Maximum Special Tax The Fiscal Year 2005-2006 Initial Maximum Special Tax for Final Mapped Property and Undeveloped Property in Zone I or Zone 2 shall be$11,662 per Acre, and shall not be subject to change and shall therefore remain the sarne in every Fiscal Year. (b) Maximum Special Tax The Fiscal Year 2005-2006 Maximum Special Tax for Final Mapped Property, Undeveloped Property, Taxable Property Owner Association Property, and Taxable Public Property in Zone 1 or Zone 2 shall be$16,907 per Acre, and shall not be subject to change and shall therefore remain the same in every Fiscal Year. City of Palm Springs(Escena Palm Springs) July 8,2005 CFD No. 2005-2 Page 8 PRELIMINARY D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2005-2006 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the total Special Tax levy equals the Special Tax Requirement subject to the Maximum Special Tax. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied on each Assessor's Parcel of Developed Property in Zone 1 and Zone 2 in an amount equal to 100% of the applicable Assigned Special Tax; Second: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Final Mapped Property in Zone 1 at up to 100%of the Initial Maximum Special Tax for Final Mapped Property; Third: If additional monies are needed to satisfy the Special Tax Requirement after the second step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property in Zone I at up to 100°%of the Initial Maximum Special Tax for Undeveloped Property; Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the third step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Final Mapped Property in Zone 2 at up to 100%of the Initial Maximum Special Tax for Final Mapped Property; Fifth: If additional monies are needed to satisfy the Special Tax Requirement after the fourth step has been completed,the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property in Zone 2 at up to 100%of the Initial Maximum Special Tax for Undeveloped Property; Sixth: If additional monies are needed to satisfy the Special Tax Requirement after the fifth step has been completed,then the levy of the Special Tax on each Assessor's Parcel of Final Mapped Properly and Undeveloped Property in Zone 1 and Zone 2 shall be increased in equal percentages from the Initial Maximum Special Tax up to 100% of the Maximum Special Tax for Final Mapped Property and Undeveloped Property; Seventh: If additional monies are needed to satisfy the Special Tax Requirement after the sixth step has been completed,then the levy of the Special Tax on each Assessor's Parcel of Developed Property in Zone 1 and Zone 2 whose 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 the Maximum Special Tax for each such Assessor's Parcel; Eighth: If additional monies are needed to satisfy the Special Tax Requirement after the seventh step has been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to the 100% of Maximum Special Tax for Taxable Public Propelrty°an$ Taxable Property Owner Association Property. `" I "' -' City of Palni Springs(Escena Paint Springs) July 8,2005 CFD No. 2005-2 page 9 PRELIMINARY Notwithstanding the above the Council may, in any Fiscal year, levy Proportionately less than 100%of the Assigned Special Tax in step one(above),when(i)the Council is no longer required to levy the Special Tax pursuant to steps two through eight above in order to meet the Special Tax Requirement, ii) all authorized Bonds have already been issued or the Council has covenanted that it will not issue any additional Bonds (except refimding bonds) to be supported by the Special Tax, and(iii) all Authorized Facilities have been constructed and/or acquired. Further notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property for which a Certificate of Occupancy has been issued be increased by more than ten percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2005-2. E. EXEMPTIONS No Special Tax shall be levied on up to 59.9 Acres of Public Property and Property Owner Association Property in Zone 1 and up to 15.3 Acres of Public Property and Property Owner Association Property in Zone 2. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Public Property and/or Property Owner Association Property. However, should an Assessor's Parcel no longer be classified as Public Property or Property Owner Association Property, its tax-exempt status will be revoked. Public Property or Property Owner Association Property that is not exempt from the Special Tax under this section shall be subject to the levy of the Special Tax and shall be taxed Proportionately as part of the eighth step in Section D. F. APPEALS AND INTERPRETATIONS Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error may submit a written appeal to CFD No. 2005-2. The CFD Administrator shall review the appeal and if the CFD Administrator concurs,the amount of the Special Tax levied shall be appropriately modified. The Council 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 Council shall be final and binding as to all persons. G. MANNER OF COLLECTION The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2005-2 may directly bill the Special Tax, may collect Special Taxes at a different time or in a different mariner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. Y-,, City of Palm Springs(Eseena Palm Springs) July 8,2005 CFD No. 2005-2 Page 10 PRELIMINARY H. PREPAYMENT OF SPECIAL TAX The following additional definitions apply to this Section H: "Buildout" means, for CFD No. 2005-2, that all expected building permits have been issued. "CFD Public Facilities" means either$14,887,048 in 2005 dollars,which shall increase by the Construction Inflation Index on July 1,2006, and on each July 1 thereafter,or such lower number as (i) determined by the CFD Administrator as sufficient to provide the Authorized Facilities, or(ii)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 Taxes levied wider this Rate and Method of Apportionment as described in Section D. "Construction Inflation Index" means the annual percentage change in the Engineering News Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Engineering News Record Building Cost Index for the City of Los Angeles. "Future Facilities Costs" means the CFD Public Facilities minus (i) public facility costs previously paid from the Improvement Fund, (ii) moneys currently on deposit in the hnprovement Fund, and(iii)moneys currently on deposit in an escrow fluid that are expected to be available to finance the cost of CFD Public Facilities. "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. "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. 1. Prepayment in Full The obligation of an Assessor's Parcel to pay the Special Tax may be prepaid and permanently satisfied as described herein;provided that a prepayment maybe made only for Assessor's Parcels of Developed Property, or an Assessor's Parcel of Final Mapped Property or Undeveloped Property for which a building permit has been issued, and 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 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. Prepayment must be made not less than 45 days prior to the (City of of'Pahn Springs(Eseena Palm Springs) July,8,2005 CFD No. 2005-2 Page 11 PRELIMINARY next occurring date that notice of redemption of Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. The Special Tax Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terns 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 Prepayment Amount As of the proposed date of prepayment,the Special Tax Prepayment Amount shall be calculated as follows: Paragraph No.: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax and Backup Special Tax. For Assessor's Parcels of Final Mapped Property and Undeveloped Property for which a building permit has been issued, 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 Taxes for the entire CFD No. 2005-2 based on the Developed Property Special Taxes which could be levied in the current Fiscal Year on all expected development through Buildout of CFD No. 2005-2, excluding any Assessor's Parcels which have been prepaid, and (b) Divide the Backup Special Tax computed pursuant to paragraph 2 by the total estimated Backup Special Taxes at Buildout for the entire CFD No. 2005-2, 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 Previously Issued Bonds to compute the amount of Previously Issued 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-100%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. City a/'Palm Springs(Escena Patin Springs) July 8, 2005 CFD No. 2005-2 Page 12 PRELIMINARY 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 Previously Issued Bonds. 9. Determine the Special Tax levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Special Tax Prepayinent Amount less the Future Facilities Amount and the Administrative Fees and Expenses (defined below) from the date of prepayment until the redemption date for the Previously Issued Bonds to be redeemed with the prepayment. 11. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the amount computed pursuant to paragraph 10 (the "Defeasance Amount"). 12. The administrative fees and expenses of CFD No. 2005-2 are as calculated by the CFD Administrator and include the costs of computation of the prepayment,the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 13. The reserve fiord credit(the "Reserve Fund Credit") shall equal the lesser of: (a)the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Previously Issued Bonds as a result of the prepayment, or(b)the amount derived by subtracting the new reserve requirement(as defined in the Indenture)in effect after the redemption of Previously Issued Bonds as a result of the prepayment from the balance in the reserve find on the prepayment date, but in no event shall such amount be less than zero. No Reserve Fund Credit shall be granted if the amount then on deposit in the reserve fiord for the Previously Issued Bonds is below 100%of the reserve requirement(as defined in the Indenture). 14. If any capitalized interest for the Previously Issued Bonds will not have been expended as of the date immediately following the fast interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 3(a)or 3(b) by the expected balance in the capitalized interest fund or account under the Indenture after such first interest and/or principal payment(the"Capitalized Interest Credit"). 15. The Special Tax prepayment is equal to the sum of the arnounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Prepayment Amount"). ( , City of Palm Springs(Eseena Palm Springs) July 8,2005 CFD No. 2005-2 Page 13 PRELIMINARY From the Prepayment Amount, the amounts computed pursuant to paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as established under the hndenture and be used to retire Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the hnprovement Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2005-2. The Special Tax Prepayment Amount may be insufficient to redeem a full$5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under paragraph 9 (above), the CFD Administrator shall 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, the Council 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 of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless, at the time of such proposed prepayment, the amount of Maximum Special Taxes that may be levied on Taxable Property within CFD No. 2005-2 (after excluding 59.9 Acres of Public Property and Property Owner Association Property in Zone 1 and 15.3 Acres of Public Property and Property Owner Association Property in Zone 2 as set forth in Section E)both prior to and after the proposed prepayment is at least equal to the sum of (i) the Administrative Expenses and (ii) 1.10 times maximum annual debt service, in each remaining Fiscal Year on the Outstanding Bonds. 2. Prepayment in Part The Special Tax on an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Final Mapped Property or Undeveloped Property for which a building permit has been issued, may be partially prepaid. The amount of the prepayment shall be calculated as in Section H.1; except that a partial prepayment shall be calculated according to the following formula: PP= [(PE—A) x F] +A These terms have the following meaning: PP = the partial prepayment. PE= the Special Tax Prepayment Amount calculated according to Section H.1. F= the percentage, expressed as a decimal,by which the owner of the Assessor's Parcel is partially prepaying the Special Tax. A= the Administrative Fees and Expenses calculated according to Section H.1. City ofPalrn Springs(Eseena Palne Springs) July 8,2005 CPD No. 2005-2 Page 14 PRELIMINARY The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax and the percentage by which the Special Tax shall be prepaid. The CFD Administrator shall provide the owner . with a statement of the amount required for the partial prepayment of the Special Tax for an Assessor's Parcel within 30 days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the Council sliall(i)distribute the funds remitted to it according to Section H.1, and(ii)indicate in the records of CFD No.2005-2 that there has been a partial prepayment of the Special Tax and that a portion of the Special Tax with respect to such Assessor's Parcel, equal to the outstanding percentage(1.00-F) of the remaining Maxinnun Special Tax, shall continue to be levied on such Assessor's Parcel pursuant to Section D. I. TERM OF SPECIAL TAX The Special Tax shall be levied for a period not to exceed forty-five years commencing with Fiscal Year 2005-2006,provided however that the Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined(i)that all required interest and principal payments on the CFD No. 2005-2 Bonds have been paid; and (ii) all Authorized Facilities have been acquired and all reimbursements to the developer have been paid. City of Palm Springs(Eseena Pali:Springs) July 8,2005 CFD Ni. 2005-2 Page 15 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DECLARING ITS INTENTION TO INCUR BONDED INDEBTEDNESS IN THE AMOUNT NOT TO EXCEED $21,000,000 WITHIN COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) OF THE CITY OF PALM SPRINGS WHEREAS, the City Council upon receipt of a petition (including consent and waiver) (the "Petition") as provided in Section 53318 of the Government Code of the State of California instituted proceedings to form Community Facilities District No. 2005-2 (Escena) of the City of Palm Springs (the "Community Facilities District No. 2005-2" or the "District"), pursuant to the Mello-Roos Community Facilities Act of 1982, commencing with Section 53311 of the Government Code of the State of California (the "Act'), as amended, pursuant to a resolution adopted by the Council on the date hereof to finance (1) the purchase, construction, modification, expansion, improvement or rehabilitation of public facilities and the payment of development, impact and other fees required therefore, identified in Exhibit "A" attached hereto and incorporated herein by this reference, including all furnishings, equipment and supplies related thereto (collectively, the "Facilities"); (2) the incidental expenses to be incurred in financing the Facilities and forming and administering the District (the "Incidental Expenses"); and (3) payment and retirement of assessments in Assessment District No. 155 of the City of Palm Springs, (the "AD 155 Payment'); and WHEREAS, in order to finance the Facilities, Incidental Expenses and the AD 155 Payment, the Council intends to authorize the issuance of bonds for the proposed District in the maximum aggregate amount of not to exceed $21,000,000 within the District; and WHEREAS, the repayment of the bonds of the District is to be secured by special taxes levied in the proposed District in accordance with Section 53328 of the Act, other than those properties exempted from taxation in the rate and method of apportionment for the proposed District set forth in Exhibit "C", adopted by the City Council by previous Resolution. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The above recitals are all true and correct. Section 2. It is necessary to incur bonded indebtedness within the boundaries of the proposed District in an amount not to exceed $21,000,000, to finance the costs of the Facilities, Incidental Expenses and the AD 155 Payment, as permitted by the Act. Resolution No. Page 2 Section 3. The bonds for the proposed District will be issued for the purpose of financing the costs of the Facilities and the Incidental Expenses, including, but not limited to, the funding of reserve funds for the bonds, the financing of costs associated with the issuance of the bonds and all other costs and expenses necessary to finance the Facilities which are permitted to be financed pursuant to the Act, and the payment of all outstanding and unpaid assessments in Assessment District No. 155 of the City of Palm Springs. Section 4. It is the intent of the Council to authorize the sale of bonds for the proposed District in one or more series, in the maximum aggregate principal amount not to exceed $21,000,000 within the proposed District and at a maximum interest rate not in excess of 12 percent per annum or such rate not in excess of the maximum rate permitted by law at the time the bonds are issued. The term of the bonds of each series shall be determined pursuant to a Resolution of the City Council acting in its capacity as the legislative body of the District authorizing the issuance of the bonds of such series, but such term shall in no event exceed 40 years or such longer term as is then permitted by law. Section 5. The City Council hereby declares its intention to conduct a Public Hearing concerning the proposed debt issue in accordance with the Act. Any interested persons, including all persons owning land or registered to vote within the proposed District, may appear and be heard at the Hearing. Section 6. Notice is hereby given that a Public Hearing on these matters will be held by the City Council on Wednesday September 7, 2005 at 6:00 p.m., or as soon thereafter as feasible in the City Council Chambers at City Hall, located at 3200 E. Tahquitz Canyon Way, Palm Springs, California. Section 7. The proposition to incur bonded indebtedness in the maximum aggregate principal amount not to exceed $21,000,000 shall be submitted to the qualified electors of the District. A special community facilities district election shall be conducted on September 7, 2005, which shall be conducted by a hand delivered or mailed ballot election. The ballots shall be returned to the office of the election officer no later than 11:00 a.m. on September 7, 2005. Section 8. The City Clerk shall cause notice to be given of the time and place of the Public Hearing by causing the publishing of this Resolution once in the local paper not less than seven (7) days before the date of the hearing and by posting a copy of this Resolution on the official bulletin board customarily used by the City Council for the posting of such notices, pursuant to the Act. E 1 r^ Resolution No. Page 3 ADOPTED this 20th day of July 2005, David H. Ready, City Manager ATTEST: James Thom pson, City Clerk CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) 1, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on July 20, 2005, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California 0 • EXHIBIT A TYPES OF FACILITIES TO BE FINANCED BY COMMUNITY FACILITIES DISTRICT NO. 2005-2 (Eseena) The General Description of the Improvements is as follows: • Street facilities, including, but not limited to, major arterials, highways, intersections, access ramps, roadways, sidewalk, curb, gutters, striping, lighting, traffic signalization, signage, landscaping of public streets and rights-of-way and appurtenant facilities; • Stonn control facilities, including, but not limited to, storm drains, channels, detention, headwalls, riprap pads, retention and/or catch basins and appurtenant facilities; • Sewer improvements, sanitary sewers, including, but not limited to, lift stations, force mains, pump stations, transmission and main lines, valves, and appurtenant facilities (including, but not limited to, the West Spine Sewer Improvements which have already been completed); • Domestic and reclaimed water facilities, including, but not limited to, reservoirs, pump stations, transmission lines, distribution facilities, lift stations, main lines, valves, fire hydrants and appurtenant facilities (including, but not limited to, the West Spine Water Improvements which have already been completed); • Park and recreational facilities and appurtenant facilities; • Impact and other fees, including but not limited to, TUMF, Quimby Act ,fees, water fees, drainage fees, sewer treatment and connection fees, water supply fees, water meter fees, water connection fees and frontage fees, storm drain fees, and other city fees; • Mitigation costs and incidental expenses. 'y 01003/0080/4041902 EXHIBIT "A" TYPES OF FACILITIES TO BE FINANCED BY COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) The General Description of the Improvements is as follows: 1. Street facilities, including, but not limited to, major arterials, highways, intersections, access ramps, roadways, sidewalk, curb, gutters, striping, lighting, traffic signalization, signage, landscaping of public streets and rights- of-way and appurtenant facilities; 2. Storm control facilities, including, but not limited to, storm drains, channels, detention, headwalls, riprap pads, retention and/or catch basins and appurtenant facilities; 3. Sewer improvements, sanitary sewers, including, but not limited to, lift stations, force mains, pump stations, transmission and main lines, valves, and appurtenant facilities; 4. Domestic water facilities, including, but not limited to, reservoirs, pump stations, transmission lines, distribution facilities, lift stations, main lines, valves, fire hydrants and appurtenant facilities; 5. Park and recreational facilities and appurtenant facilities; 6. Impact and other fees, including but not limited to, TUMF, Quimby Act fees, water fees, drainage fees, sewer treatment and connection fees, water supply fees, water meter fees, water connection fees and frontage fees, storm drain fees, and other city fees; 7. Mitigation costs and incidental expenses. RESOL UTION NABER Page 2 OTHER The District may also finance any of the following: 1. Bond related expenses, including underwriters' discount, reserve fluid, capitalized interest, financial advisor fees and expenses, bond and disclosure counsel, special tax consultant fees and expenses, dissemination agent fees and all other incidental expenses. 2. Administrative fees of the City and the Bond trustee or fiscal agent related to the District and the Bonds. 3. Reimbursement of costs related to the formation of the District advanced by the City or any related entity, or any landowner or developer within the District, as well as reimbursement of any costs advanced by the City or any related entity, or any landowner or developer within the District, for facilities, fees or other purposes or costs of the District. 4. Payment and retirement of all outstanding unpaid assessments in Assessment District No. 155 of the City. This description of the public capital facilities is general in nature. The final nature and location of improvements and facilities will be determined upon the preparation of final plans and specifications. The final plans and specifications may show substitutes in lieu of, or modifications to, proposed work. Any such substitution shall not be a change or modification in the proceedings as long as the facilities provide a service substantially similar to that as set forth in the Report. 01003/0090/40419 02 EXHIBIT "A" (CONTINUED) OTHER ITEMS TO BE FINANCED BY COMMUNITY FACILITIES DISTRICT NO. 2005-2 (ESCENA) The District may also finance any of the following: 5. Bond related expenses, including underwriters' discount, reserve fund, capitalized interest, financial advisor fees and expenses, bond and disclosure counsel, special tax consultant fees and expenses, dissemination agent fees and all other incidental expenses. 6. Administrative fees of the City and the Bond trustee or fiscal agent related to the District and the Bonds. 7. Reimbursement of costs related to the formation of the District advanced by the City or any related entity, or any landowner or developer within the District, as well as reimbursement of any costs advanced by the City or any related entity, or any landowner or developer within the District, for facilities, fees or other purposes or costs of the District. 8. Payment and retirement of all outstanding unpaid assessments in Assessment District No. 155 of the City of Palm Springs. This description of the public capital facilities is general in nature. The final nature and location of improvements and facilities will be determined upon the preparation of final plans and specifications. The final plans and specifications may show substitutions in lieu of, or modifications to, proposed work. Any such substitution shall not be a change or modification in the proceedings as long as the facilities provide a service substantially similar to that as set forth in the Report. RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AND ORDERING THE EXECUTION OF THAT CERTAIN DEPOSIT AND REIMBURSEMENT AGREEMENT WITH PALM SPRINGS CLASSIC, LLC; AND MAKING CERTAIN FINDINGS AND DETERMINATIONS IN CONNECTION THEREWITH WHEREAS, there has been filed with the City Clerk that certain Deposit and Reimbursement Agreement (the "Deposit and Reimbursement Agreement'), by and between the City of Palm Springs (the "City') and Palm Springs Classic, LLC, a Delaware Limited Liability Company (the "Developer"), the developer of the real property (the "Property") described on Exhibit "A" attached hereto and incorporated herein by this reference; and WHEREAS, the Deposit and Reimbursement Agreement, the form of which is on file with the City Clerk and by this reference incorporated herein, provides for the deposit with City of certain funds to cover City expenses in connection with the formation of a Community Facilities District comprising said Property, and providing the means by which such deposit may be reimbursed to the Developer, such reimbursement to come from the proceeds from the sale of special tax bonds to be issued pursuant to the Mello-Roos Community Facilities Act of 1982 (the "Mello-Roos Act'); and WHEREAS, the City Council finds that the approval and execution of the Deposit and Reimbursement Agreement is in the best interest of the City and provides the means by which such property development may occur without putting general funds of the City at risk; and WHEREAS, City will hold and disburse such funds pursuant to the Deposit and Reimbursement Agreement; THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The above recitals are all true and correct. Section 2. That the Deposit and Reimbursement Agreement in the form on file with the City Clerk is hereby approved. Section 3. That the City Manager or Director of Finance is hereby authorized and directed to execute the Deposit and Reimbursement Agreement for and on behalf of the City. Resolution No. Page 2 Section 4. The City Manager or Director of Finance is hereby instructed to receive the cash deposit heretofore made by the Developer and deposit the same in a designated account to be used to pay the formation costs of the Community Facilities District and the proper costs related thereto. Upon receipt of bond proceeds, such funds advanced by the Developer shall be reimbursed to the Developer from bond proceeds pursuant to the Deposit and Reimbursement Agreement. ADOPTED this 20th day of July 2005, David H. Ready, City Manager ATTEST: James Thompson, City Clerk CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on July 20, 2005, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California EXHIBIT "A" PROPERTY DESCRIPTION Tract Map No. 32233-1 - Planning Area 8 Tract Map No. 32233-2 - Planning Areas 7B & 7C Tract Map No. 32233-3 - Planning Areas 9A & 913 Tract Map No. 32233-4 - Planning Area 6 ALESHIRE SZ 18881 Von Karm n Ave. WYNDER, LLP Suite 400 ATTORATTORNEYS AT LAW Irvine, CA 92612 NEYS a W a t t 0 rn eys.c 0 m Phone 949.223.1170 Fax 949.223.1180 July 12, 2005 SENDER'S E-MAIL: OSCIIREINER@AW ATTORNEYS.COM VIA OVERNIGHT EXPRESS James Thompson City Clerk 3200 E. Tahquitz Canyon Way =+ Palm Springs, CA 92262 r 07 r n Re: Escena — v0 �Wx � �: -r Dear Mr. Thompson: G Enclosed please the following with respect with the above project: 1. Petition, Consent and Waiver to be placed on file in your office; 2. Deposit and Reimbursement Agreement to be approved by the City Council at the July 20th Meeting a form of resolution approving this document has been provided; 3. Check for$76,500.00 to be placed in on account for the project I'm faxing you this material today with the original being sent overnight so they will arrive in your office tomorrow. Please call if you have any questions. Sincerely yours, ALESHIRE & WYNDER, LLP UJS:ct Urban J. Schreiner cc: Doug Holland Esq.- City Attorney Craig Graves - Director of Finance Suzanne Q. Harrell—Financial Advisor Robert M. Haight, Esq.—Developer Counsel 01003/0090/0.0 ,� DEPOSIT AND REIMBURSEMENT AGREEMENT THIS DEPOSIT AND REIMBURSEMENT AGREEMENT (this "Deposit Agreement'), dated as of July 11, 2005 for identification purposes only, is by and between the City of Palm Springs, California (the "City") and Palm Springs Classic, LLC, a Delaware limited liability company (the "Owner"). RECITALS WHEREAS, the City has determined to initiate proceedings to create a community facilities district designated "Community Facilities District No. 2005-1 (Escena) of the City of Palm Springs" (the "Community Facilities District") under the Mello-Roos Community Facilities Act of 1982 (the "Act"); and WHEREAS, Owner is the owner of the real property within the proposed Community Facilities District; and WHEREAS, in accordance with City's policy regarding use of the Act, the Owner is required to compensate the City for all costs incurred in the formation of the Community Facilities District and issuance of bonds for the Community Facilities District; and WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district (including the issuance of bonds thereby); and WHEREAS, Section 53314.9 of the Act fturther provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest under all of the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53321 of the Act and in the resolution of formation to establish the community facilities district pursuant to Section 53325.1 of the Act (including the issuance of bonds thereby), (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the finds; and 01003/0080/40169.01 WHEREAS, the City and the Owner desire to enter into this Deposit Agreement in accordance with Section 53314.9 of the Act in order to provide for the advancement of funds by the Owner to be used to pay costs incurred in connection with the formation of the Community Facilities District and issuance of special tax bonds for the Community Facilities District (the "Bonds"), and to provide for the reimbursement to the Owner of such finds advanced, without interest, from the proceeds of any Bonds: NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: Section 1. The Deposits and Application Thereof. (a) The Owner has deposited herewith the amount of $76 500 (the "Initial Deposit"). The City, by its execution hereof, acknowledges receipt of, and accepts, the Initial Deposit. (b) City hereby agrees and Owner hereby acknowledges that the City shall hold the Initial Deposit, and any subsequent deposits pursuant to (c)hereof. (c) The Initial Deposit and any subsequent deposit required to be made by the Owner pursuant to the terms hereof(collectively, the "Deposits"), are to be used to pay for any costs incurred for any authorized purpose in connection with the formation of the Community Facilities District and the issuance of the Bonds (other than costs, fees and expenses to be paid out of the proceeds of the Bonds), including, without limitation, (i) the fees and expenses of any consultants to the City employed in connection with the formation of the Community Facilities District and the issuance of the Bonds, including an engineer, special tax consultant, financial advisor, bond counsel and any other consultant deemed necessary or advisable by the City, (ii) the costs of appraisals, market absorption and feasibility studies and other reports deemed necessary or advisable by the City in connection with the formation of the Community Facilities District and issuance of the Bonds, (iii) the costs of publication of notices, preparation and mailing of ballots and other costs related to any hearing, election or other action or proceeding undertaken in connection with the formation of the Community Facilities District and issuance of the Bonds, (iv)reasonable charges for City staff time incurred in connection with the formation of the Community Facilities District and the issuance of the Bonds by the Commmunity Facilities District, including a reasonable allocation of City overhead expense related thereto, and (v) any and all other actual costs and expenses incurred by the City in connection with the formation of the Community Facilities District and the issuance of the Bonds (collectively, the "Initial Costs"). The City may as provided in subsection(f)hereof draw upon the Deposits from time to time to pay the Initial Costs. (d) If, at any time, the unexpended and unencumbered balance of the Deposits is less than $5,000, the City may request, in writing, that the Owner make an additional deposit in an amount estimated by the City to be sufficient, together with any such unexpended and unencumbered balance, to pay for all Initial Costs. The Owner shall make such additional deposit with the City within two weeks of the receipt by the Owner of the City's written request therefor. If the Owner fails to make any such 2 01003/008W40169.01 additional deposit within such two week period, the City may cease all work related to the issuance of the Bonds. (e) The Deposits shall be kept separately and may be invested in lawfid investments and the City shall at all times maintain records as to the expenditure of the Deposits. (f) The City shall draw upon the Deposits to pay the Initial Costs in accordance with a statement in the form attached hereto as Exhibit A and by this reference incorporated herein. The City shall pay such Initial Costs pursuant to such statement as approved by the Director of Finance and Treasurer of the City. (g) The City shall provide the Owner with a written monthly summary of expenditures made from the Deposits, and the unexpended balance thereof, within ten business days of receipt of the City of a written request therefor submitted by the Owner. The cost of providing any such summary shall be charged to the Deposits. Section 2. Return of Deposits; Reimbursement. (a) As provided in Section 53314.9 of the Act, the approval by the qualified electors of the Community Facilities District of the proposed special tax to be levied therein is a condition to the repayment to the Owner of the funds advanced by the Owner pursuant hereto. Therefore, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied thereon, the City shall have no obligation to repay the Owner any portion of the Deposits expended or encumbered to pay Initial Costs. In accordance with Section 53314.9 of the Act, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied therein, the City shall return to the Owner any portion of the Deposits which have not been expended or encumbered to pay Initial Costs by the time of the election on said proposed special tax. (b) If proceedings for the issuance of the Bonds are terminated, the City shall, within ten business days after official action by the City or the Community Facilities District to terminate said proceedings, the City shall return the then unexpended and unencumbered portion of the Deposits to the Owner, including interest. (c) If the Bonds are issued by the Community Facilities District, the City shall reimburse the Owner, without interest, for the portion of the Deposits that has been expended or encumbered, said reimbursement to be made within ten business days after the issuance of such Bonds, solely from the proceeds of such Bonds and only to the extent otherwise permitted under the Act. The City shall, within twenty (20) business days after the issuance of such Bonds, return the then unexpended and unencumbered portion of the Deposits to the Owner, including interest. Section 3. Abandonment of Proceedings. The Owner acknowledges and agrees that the issuance of the Bonds shall be in the sole discretion of the Community Facilities 3 01003/0080/40169.01 District. No provision of this Deposit Agreement shall be construed as an agreement, promise or warranty of the City to issue the Bonds. Section 4. Deposit Agreement Not Debt or Liability of City. As provided in Section 53314.9(b) of the Act, this Deposit Agreement does not constitute a debt or liability of the City, but shall constitute a debt and liability of the Community Facilities District upon its formation. The City shall not be obligated to advance any of its own funds to pay Initial Costs or any other costs incurred in connection with the issuance of the Bonds. No member of the City Council of the City and no officer, employee or agent of the City shall to any extent be personally liable hereunder. Section 5. Notices. Any notices, requests, demands, documents, approvals or disapprovals given or sent under this Deposit Agreement from one Party to another (collectively, "Notices") may be personally delivered, transmitted by facsimile (FAX) transmission, or deposit with the United States Postal Service for mailing, postage prepaid, to the address of the other Party as stated in this Section. Notices shall be sent as follows: If to City: City of Palm Springs Attn: City Manager 3200 Tahquitz Caynon Way Palm Springs, California 92262 Telephone: (760) 323-8229 Fax No. (760) 323-8267 With copies to: Aleshire & Wynder, LLP Attn: Urban J. Schreiner, Bond Counsel 18881 Von Karman Avenue, Ste. 400 Irvine, California 92612 Telephone: (949) 223-1170 Fax No. (949)223-1180 If to Owner: Pahn Springs Classic, LLC c/o Lennar Homes of California, Inc. Attn: Suzanne Johns 391 N. Main Street, Suite 301 Corona, CA 92880 Telephone: (951) 817-3649 Fax: (951) 817-3679 Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier upon the sender's receipt of an appropriate answerback or other written acknowledgement, (c) if given by registered or certified mail, return receipt requested, deposited with the United 4 01003/0080/40169.01 States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnght courier, or (e) if given by any other means, upon delivery at the address specified in this Section. Section 6. California Law. This Deposit Agreement shall be governed and construed in accordance with the laws of the State of California. The Parties shall be entitled to seek any remedy available at law and in equity. All legal actions must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in Riverside County, or in the United States District Court for the Central District of California. Section 7 Successors and Assigns. This Deposit Agreement shall be binding upon and insure to the benefit of the successors and assigns of the parties hereto. Section 8 Counterparts. This Deposit Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. Section 9. Other Agreements. The obligations of the Owner hereunder shall be that of a party hereto. Nothing herein shall be construed as affecting the City's or Owner's rights, or duties to perform their respective obligations, under other agreements, use regulations or subdivision requirements relating to the development. This Deposit Agreement shall not confer any additional rights, or waive any rights given, by either party hereto under any development or other agreement to which they are a party. Section 10. _Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Deposit Agreement or of any of its terns. References to section numbers are to sections in this Deposit Agreement, unless expressly stated otherwise. Section 11. Interpretation. As used in this Deposit Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Deposit Agreement shall be interpreted as though prepared jointly by both Parties. Section 12. No Waiver. A waiver by either Party of a breach of any of the covenants, conditions or agreements under this Deposit Agreement to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Deposit Agreement. Section 13. Modifications. Any alteration, change or modification of or to this Deposit Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party. Section 14. Severability. If any tern, provision, condition or covenant of this Deposit Agreement or its application to any party or circumstances shall be held, to any 5 01003/0080/40169 01 extent, invalid or unenforceable, the remainder of this Deposit Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. Section 15. Computation of Time. The time in which any act is to be done under this Deposit Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The tern "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. Section 16. Legal Advice. Each Party represents and warrants to the other the following: they have carefidly read this Deposit Agreement, and in signing this Deposit Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Deposit Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Deposit Agreement; and, they have freely signed this Deposit Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or their respective agents, employees, or attorneys, except as specifically set forth in this Deposit Agreement, and without duress or coercion,whether economic or otherwise. Section 17 Cooperation. Each Party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to cant' out the purposes and intent of this Deposit Agreement including, but not limited to, releases or additional agreements. Section 18. Conflicts of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in this Deposit Agreement, nor shall any such member, official or employee participate in any decision relating to the Deposit Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. [Signatures on following page] 6 01003/0080/40169.01 CALIF9RNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of �� �j���Q as. (' Onm �`r 6 _...�before me,�����—_��'— Y_(��— Nome antlrille of.11rv,(e,g,'Jane Doe, olary Pubhe) l� personally appeared _ �Y�o ( Name(s)of slgner(s) ' EPP6 sonally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(,) whose name(,} is4rs subscribed to the within instrument and acknowledged to me that hlil; kfiey executed WENDVD. Ill 0 the same in hi 's±� authorized ss CommMebn/JW69! capacityOes',, and that by hi '.',„t,-Fr�;,r-n• 2 YRMC-Ca"Olnlo signature* un the instrument the Person{s�or NCanly the entity uponted behalf o ch the ersora� MYCaarn.Dpi��D�� acted, execu the in rument. ITNES y hand d fficia`e I. Slgna re of Not Pubbc OPTIONAL Though the information below Is not required bylaw,it may prove valuable f0 persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): Top of thumb here ❑ Partner—❑ Limited ❑General ❑ Attorney-in-Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: ©1999 Nallonal plolary Assoclalion•9350 Ce Salo Av9.,PO Box 2402-Ch-NI.o h,CA 91313-2402-www natlonalnota or ry� 9 Prod.No 5907 Reorder:Call Toll-Free 1-800-976-5327 ( �7 IN WITNESS WHEREOF, the Parties have executed this Deposit Agreement as of the respective dates set forth below. "CITY" CITY OF PALM SPRINGS, a municipal corporation Dated: By: ATTEST: David Ready, City Manager By: James Thompson, City Clerk APPROVED AS TO FORM: ALESHIRE & WYNDER,LLP Bond Counsel By: URBAN J. SCHREINER "OWNER" PALM SPRINGS CLASSIC, LLC, A Delaware limited liability company By: Lennar Homes of California, Inc., A California corporation, Its Manager By: Name: %Em /3/-gfc1KS Title: Y r C E Y2E616 LEAJ j Dated: July 11, 2005 7 01003/0080/40169.01 EXHIBIT A Community Facilities District No. 2005-1 (Escena) of The City of Palm Springs WRITTEN STATEMENT NO. FOR DISBURSEMENTS PURSUANT—TO THE DEPOSIT AND REIMBURSEMENT AGREEMENT The undersigned hereby states and certifies: (i) that he is the duly authorized Director of Finance and Treasurer of the City of Palm Springs ("City"), and as such, is familiar with the facts herein certified and is authorized and qualified to execute and deliver this certificate; (ii) that he is authorized pursuant to the Deposit and Reimbursement Agreement, dated as of July 11, 2005 (the "Agreement'), by and between the City of Palm Springs and Palm Springs Classic, LLC, relating to the formation of Community Facilities District No. 2005-1 (Escena) of the City of Palm Springs (the "CFD") to execute this statement; (iii) that pursuant to Section 1 (e) of the Agreement, the City is hereby directed to disburse this date to the person or entity, designated on Exhibit 1 attached hereto and by this reference incorporated herein, the respective sums set forth opposite each such person or entity, in payment of certain expenses related to the CFD; (iv) that each obligation shown on Exhibit 1 has been properly incurred and is a proper charge against the Deposits; (v) That no item to be paid pursuant to this Written Statement has been previously paid or reimbursed from the Deposits; and (vi) that capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Agreement. 1 01003/0080/40169.01 �r < Dated: 2005 CITY OF PALM SPRINGS Craig A. Graves, Director of Finance and Treasurer [Written Statement No._For Disbursements Pursuant To The Deposit And Reimbursement Agreement] 2 0100310080/40169.01 - EXHIBIT 1 Payee Purpose Amount 1 0 1 003/0 0 8 0/401 6 9.01 TO: CITY COUNCIL OF THE CITY OF PALM SPRINGS FROM: PALM SPRINGS CLASSIC, LLC PETITION (INCLUDING CONSENT AND WAIVER) REQUESTING THE ESTABLISHMENT OF A COMMUNITY FACILITIES DISTRICT The undersigned landowner (the "Landowner") does hereby certify that the following statements are all true and correct: 1. The Landowner has the authority to petition the City Council (the "Council") of the City of Palm Springs (the "City") and to give the consent and waiver contained herein with respect to a Community Facilities District to be established over the properties included within this petition (the "CFD") to be formed under the provisions of the Mello-Roos Community Facilities Act of 1982 (the "Act"), being Chapter 2.5 of Part 1 of Division 2 of title 5 (commencing with Section 53311) of the California Government Code. 2. The Landowner hereby certifies that as of the date indicated opposite the Landowner's signature, the Landowner listed herein is the owner of the property within the proposed boundary of the CFD described in Exhibit "A"hereto (the "Property"). 3. The Landowner, pursuant to Section 53318 of the Act, hereby requests that proceedings be commenced (i) to establish the CFD for the purpose of financing subdivision public improvements in connection with a master planned community project known as `Escena," (ii) to authorize the issuance of bonds for the CFD and (iii) to establish an appropriations limit for the CFD. 4. In accordance with the provisions of the Act, and specifically Sections 53326(a) and 53327(b) thereof allowing certain time and conduct requirements relative to a special landowner election to be waived with the unanimous consent of all the landowners to be included in a community facilities district and concurrence of the election official conducting the election, the Landowner (i) expressly consents to the conduct of the special election at the earliest possible time following the adoption by the Council of a Resolution of Formation Establishing the CFD and (ii) expressly waives any requirement to have the special election conducted within the time periods specified in Section 53326 of the Act or in the California Elections Code. 5. The Landowner waives any requirement for the mailing of the ballot for the special election and expressly agrees that said election may be conducted by mailed or hand- delivered ballot to be retuuned as quickly as possible to the designated election official, being the office of the City Clerk and the Landowner requests that the results of said election be canvassed 01003/0080/40421.02 and reported to the Council at the same meeting of the Council as the public hearing on the formation of the CFD or the next available meeting. 6. The Landowner expressly waives all applicable waiting periods for the election and waives the requirement for analysis and arguments relating to the special election, as set forth in Section 53327 of the Act, and consents to not having such materials provided to the Landowner in the ballot packet, and expressly waives any requirements as to the form of the ballot. 7. The Landowner expressly waives all notice requirements relating to hearings and special elections, whether by posting, publishing or mailing, and whether such requirements are found in the California Elections Code, the California Government Code or other laws or procedures, including but limited to any notice provided for by compliance with the provisions of Section 4101 of the California Elections Code. IN WITNESS WHEREOF, the Landowner has executed this Petition (including Consent and Waiver)this 11th day of July, 2005. PALM SPRINGS CLASSIC, LLC, a Delaware limited liability company By: LENNAR HOMES OF CALIFORNIA, INC., a California corporation, its Manng .r By: Name: 1 CM 64AX 5 Title: yicE AeES/0c-roi FILED IN THE OFFICE OF THE CITY CLERK OF THE CITY OF PALM SPRINGS THIS 13T" DAY OF :JVJ--f 2005. ty Clerk 8ei-nrT�, 2 01003/0080/40421.02 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of ss.� � � Q On 1�\\ Cete` ehl before me� l�Q fM�Namdantl Tile of}oQflmer'(�e g,'Jane Doe,T6�l'a r(yTEii, A personally appeared ffi�kC� aorro,." her personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person{e)_whose names} is4F subscribed to the within instrument and acknowledged to me that helsNe/£kW executed WENDYD.PeTRAS the same in hls44QW4 @W- authorized Cmftslon#15m"S capacity#&&&r and that by hi 'e'nep their. NOWYNbYc.-Coltgrya signature(•s•)-on the instrument the perso44,, or lithwa leCounly the entity upon behalf of which the persons} WCamn'Er �Dee25 2008 acted, executed the instrument. WITNESS my hand and off 'al s I Sign re of N ary blur OPTIONAL Though the information below 1s not required by law,it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual Top of thumb here ❑ Corporate Officer —Title(s): ❑ Partner—❑ Limited ❑ General SI ❑ Attorney-in-Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: I Signer Is Representing: I C01999 Nalienal Notary Aeseclaka-9350 De Bale Avo,PO.Be.2402-Chatswodh,CA 91315-2402-wunv.a0croolnotaryerg Prod No 5997 geerder Call Toll-Free 1-000376 6827 EXHIBIT A THE LAND REFERRED TO IN THIS PETITION (INCLUDING CONSENT AND NVAIVER) IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE AND IS DESCRIBED AS THE LAND INCLUDED IN TENTATIVE TRACT MAP NO. 32233 (EXCLUDING THE GOLF COURSE AND HOTEL SITES). r'l 3 01003/0090/40421.02 W ALESHIRE 18881 Von Karman Ave. WYNDER1. LLP Suite 400 A T'ro aNevs nr Lnw Irvine,CA 92612 Phone 949.223.1170 w ww.awattorneys.com fax 949.223.1180 July 12, 2005 SENDER'S E-MAIL: USCHREINER@AW ATTORNEYS.COM VIA OVERNIGHT EXPRESS James Thompson City Cleric �_ cs 3200 E. Taliquitz Canyon Way Palm Springs, CA 92262 - w t - Re: Escena rr Dear Mr. Thompson: Enclosed please the following with respect with the above project: 1. Petition, Consent and Waiver to be placed on file in your office; 2. Deposit and Reimbursement Agreement to be approved by the City Council at the July 20th Meeting a form of resolution approving this document has been provided; 3. Check for $76,500.00 to be placed in on account for the project I'm faxing you this material today with the original being sent overnight so they will arrive in your office tomorrow. Please call if you have any questions. Sincerely yours, ALESHIRE & WYNDER, LLP Urban J. Schreiner UJS:ct CC: Doug Holland Esq.-. City Attorney Craig Graves - Director of Finance Suzanne Q. Harrell—Financial Advisor Robert M. Haight, Esq. —Developer Counsel 5,J 9 01003/0080/0 0 DEPOSIT AND REIMBURSEMENT AGREEMENT THIS DEPOSIT AND REIMBURSEMENT AGREEMENT (this "Deposit Agreement"), dated as of July 11, 2005 for identification purposes only, is by and between the City of Palm Springs, California (the "City") and Palm Springs Classic, LLC, a Delaware limited liability company(the "Owner"). RECITALS WHEREAS, the City has determined to initiate proceedings to create a community facilities district designated "Community Facilities District No. 2005-1 (Eseena) of the City of Palm Springs" (the "Community Facilities District") under the Mello-Roos Community Facilities Act of 1982 (the "Act"); and WHEREAS, Owner is the owner of the real property within the proposed Community Facilities District; and WHEREAS, in accordance with City's policy regarding use of the Act, the Owner is required to compensate the City for all costs incurred in the formation of the Community Facilities District and issuance of bonds for the Community Facilities District; and WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district (including the issuance of bonds thereby); and WHEREAS, Section 53314.9 of the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the finds advanced, as determined by the legislative body, with or without interest under all of the following conditions: (a)the proposal to repay the fiords is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53321 of the Act and in the resolution of formation to establish the community facilities district pursuant to Section 53325.1 of the Act (including the issuance of bonds thereby), (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any fiords which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the finds; and 01003/0080/40169 01 1 WHEREAS, the City and the Owner desire to enter into this Deposit Agreement in accordance with Section 53314.9 of the Act in order to provide for the advancement of funds by the Owner to be used to pay costs incurred in connection with the formation of the Community Facilities District and issuance of special tax bonds for the Community Facilities District (the "Bonds"), and to provide for the reimbursement to the Owner of such funds advanced, without interest, from the proceeds of any Bonds: NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: Section 1. The Deposits and Application Thereof. (a) The Owner has deposited herewith the amount of $76,500 (the "Initial Deposit"). The City, by its execution hereof, acknowledges receipt of, and accepts, the Initial Deposit. (b) City hereby agrees and Owner hereby acknowledges that the City shall hold the Initial Deposit, and any subsequent deposits pursuant to (c) hereof. (c) The Initial Deposit and any subsequent deposit required to be made by the Owner pursuant to the terns hereof(collectively, the "Deposits"), are to be used to pay for any costs incurred for any authorized purpose in connection with the formation of the Community Facilities District and the issuance of the Bonds (other than costs, fees and expenses to be paid out of the proceeds of the Bonds), including, without limitation, (i)the fees and expenses of any consultants to the City employed in connection with the formation of the Community Facilities District and the issuance of the Bonds, including an engineer, special tax consultant, financial advisor, bond counsel and any other consultant deemed necessary or advisable by the City, (ii) the costs of appraisals, market absorption and feasibility studies and other reports deemed necessary or advisable by the City in connection with the formation of the Community Facilities District and issuance of the Bonds, (iii) the costs of publication of notices, preparation and mailing of ballots and other costs related to any hearing, election or other action or proceeding undertaken in connection with the formation of the Community Facilities District and issuance of the Bonds, (iv)reasonable charges for City staff time incurred in connection with the formiation of the Community Facilities District and the issuance of the Bonds by the Community Facilities District, including a reasonable allocation of City overhead expense related thereto, and (v) any and all other actual costs and expenses incurred by the City in connection with the formation of the Community Facilities District and the issuance of the Bonds (collectively, the "Initial Costs"). The City may as provided in subsection (f) hereof draw upon the Deposits from time to time to pay the Initial Costs. (d) If, at any time, the unexpended and unencuunbered balance of the Deposits is less than $5,000, the City may request, in writing, that the Owner make an additional deposit in an amount estimated by the City to be sufficient, together with any such unexpended and unencumbered balance, to pay for all Initial Costs. The Owner shall make such additional deposit with the City within two weeks of the receipt by the Owner of the City's written request therefor. If the Owner fails to make any such 2 01003/0080/40169.01 additional deposit within such two week period, the City may cease all work related to the issuance of the Bonds. (e) The Deposits shall be kept separately and may be invested in lawful investments and the City shall at all times maintain records as to the expenditure of the Deposits. (f) The City shall draw upon the Deposits to pay the Initial Costs in accordance with a statement in the form attached hereto as Exhibit A and by this reference incorporated herein. The City shall pay such Initial Costs pursuant to such statement as approved by the Director of Finance and Treasurer of the City. (g) The City shall provide the Owner with a written monthly summary of expenditures made from the Deposits, and the unexpended balance thereof, within ten business days of receipt of the City of a written request therefor submitted by the Owner. The cost of providing any such summary shall be charged to the Deposits. Section 2. Return of Deposits; Reimbursement. (a) As provided in Section 53314.9 of the Act, the approval by the qualified electors of the Community Facilities District of the proposed special tax to be levied therein is a condition to the repayment to the Owner of the ftmds advanced by the Owner pursuant hereto. Therefore, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied thereon, the City shall have no obligation to repay the Owner any portion of the Deposits expended or encumbered to pay Initial Costs. In accordance with Section 53314.9 of the Act, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied therein, the City shall return to the Owner any portion of the Deposits which have not been expended or encumbered to pay Initial Costs by the time of the election on said proposed special tax. (b) If proceedings for the issuance of the Bonds are terminated, the City shall, within ten business days after official action by the City or the Community Facilities District to terminate said proceedings, the City shall return the then unexpended and unencumbered portion of the Deposits to the Owner, including interest. (c) If the Bonds are issued by the Community Facilities District, the City shall reimburse the Owner, without interest, for the portion of the Deposits that has been expended or encumbered, said reimbursement to be made within ten business days after the issuance of such Bonds, solely from the proceeds of such Bonds and only to the extent otherwise permitted under the Act. The City shall, within twenty (20) business days after the issuance of such Bonds, return the then unexpended and unencumbered portion of the Deposits to the Owner, including interest. Section 3. Abandonment of Proceedings. The Owner acknowledges and agrees that the issuance of the Bonds shall be in the sole discretion of the Community Facilities 3 01 0 0 3/00 8 0/40 1 6 9.01 District. No provision of this Deposit Agreement shall be construed as an agreement, promise or warranty of the City to issue the Bonds. Section 4. Deposit Agreement Not Debt or Liability of City. As provided in Section 53314.9(b) of the Act, this Deposit Agreement does not constitute a debt or liability of the City, but shall constitute a debt and liability of the Community Facilities District upon its formation. The City shall not be obligated to advance any of its own fiords to pay Initial Costs or any other costs incurred in connection with the issuance of the Bonds. No member of the City Council of the City and no officer, employee or agent of the City shall to any extent be personally liable hereunder. Section 5. Notices. Any notices, requests, demands, documents, approvals or disapprovals given or sent rider this Deposit Agreement from one Party to another (collectively, "Notices") may be personally delivered, transmitted by facsimile (FAX) transmission, or deposit with the United States Postal Service for mailing, postage prepaid, to the address of the other Party as stated in this Section. Notices shall be sent as follows: If to City: City of Palm Springs Attn: City Manager 3200 Tahquitz Caynon Way Palm Springs, California 92262 Telephone: (760) 323-8229 Fax No. (760) 323-8267 With copies to: Aleshire &Wynder, LLP Attn: Urban J. Schreiner, Bond Counsel 18881 Von Kannan Avenue, Ste. 400 Irvine, California 92612 Telephone: (949) 223-1170 Fax No. (949) 223-1180 If to Owner: Palm Springs Classic, LLC c/o Lennar Homes of California, Inc. Attn: Suzanne Johns 391 N. Main Street, Suite 301 Corona, CA 92880 Telephone: (951) 817-3649 Fax: (951) 817-3679 Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier upon the sender's receipt of an appropriate answerback or other written acknowledgement, (c) if given by registered or certified mail, return receipt requested, deposited with the United 4 01003/0080/40169 01 States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. Section 6. California Law. This Deposit Agreement shall be governed and construed in accordance with the laws of the State of California. The Parties shall be entitled to seek any remedy available at law and in equity. All legal actions must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in Riverside County, or in the United States District Court for the Central District of California. Section 7 Successors and Assigns. This Deposit Agreement shall be binding upon and insure to the benefit of the successors and assigns of the parties hereto. Section S Counterparts. This Deposit Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. Section 9. Other Agreements. The obligations of the Owner heremzder shall be that of a party hereto. Nothing herein shall be construed as affecting the City's or Owner's rights, or duties to perform their respective obligations, under other agreements, use regulations or subdivision requirements relating to the development. This Deposit Agreement shall not confer any additional rights, or waive any rights given, by either party hereto under any development or other agreement to which they are a party. Section 10. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Deposit Agreement or of any of its terms. References to section numbers are to sections in this Deposit Agreement, unless expressly stated otherwise. Section 11. Interpretation. As used in this Deposit Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Deposit Agreement shall be interpreted as though prepared jointly by both Parties. Section 12. No Waiver. A waiver by either Party of a breach of any of the covenants, conditions or agreements under this Deposit Agreement to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Deposit Agreement. Section 13. Modifications. Any alteration, change or modification of or to this Deposit Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party. Section 14. Severability. If any term, provision, condition or covenant of this Deposit Agreement or its application to any party or circumstances shall be held, to any 5 01003/0080/40169.01 extent, invalid or unenforceable, the remainder of this Deposit Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. Section 15. Computation of Time. The time in which any act is to be done under this Deposit Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Goverment Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. Section 16. Lellal Advice. Each Party represents and warrants to the other the following: they have carefidly read this Deposit Agreement, and in signing this Deposit Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Deposit Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Deposit Agreement; and, they have freely signed this Deposit Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or their respective agents, employees, or attorneys, except as specifically set forth in this Deposit Agreement, and without duress or coercion, whether economic or otherwise. Section 17 Cooperation. Each Party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Deposit Agreement including, but not limited to,releases or additional agreements. Section 18. Conflicts of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in this Deposit Agreement, nor shall any such member, official or employee participate in any decision relating to the Deposit Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. [Signatures on following page] 6 01003/0080/40169.01 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of 1:�J�Ilsk � ii Ona before meA ANq)A�. r Name andtill1a or Offil 'lar,Doxa,Notary Pulso personally appeared Nonni or Sil IrkEfiDe—r—s�onal�y known to me 1,tj g II El of satisfacto proved to me on the basis V1 ry - evidence to be the person* whose name(s)- ishare r it subscribed to the within instrument and acknowledged to me that he/she/they executed Pi ylFl WtNDY 0.PIETRAS the same in hisrherr/t4e4ir authorized A 11. and that by hi capacityfiK�, �, l;/her/thei ,�j commisgM#1 SM698 F Nokry Puble-CWoMia signatur*yon the instrument the persou(s}I or h"i Mmkie Cm* the entity upon behalf 0 ich the ersol *`QWM.E*kWD*c2&2W4 acted, executed the ins grument. roN ) ITNES� yha�nd cl ffici e I. Signalre of Nol Puhhc 4 OPTIONAL Though the information below is not required by law,it may prove valuable to persons relying on the document and could prevent Ill fraudulent removal and reattachment of this form to another document. IS Description of Attached Document t� Title or Type of Document: it Document Date: Number of Pages: It Signer(s)Other Than Named Above: k)l Capacity(ies) Claimed by Signer Signer's Name: D Individual Top or thumb here El Corporate Officer —Title(s): El Partner—El Limited 0 General El Attorney-in-Fact It; El Trustee L1 Guardian or Conservator IZ El Other: Il0 I: ii51 Signer Is Representing: Cl)1999 Nalional Notary Association-9350 De Soto Ave,PO Box 2402-Chatsworth,CA 91313 2402-www,rationanateryor, Prod No 5907 Reorder Call Toll-Firs 4800-876-6827 IN WITNESS WHEREOF, the Parties have executed this Deposit Agreement as of the respective dates set forth below. "CITY" CITY OF PALM SPRINGS, a municipal corporation Dated: By: David Ready, City Manager ATTEST: By: James Thompson, City Clerk APPROVED AS TO FORM: ALESHIRE & WYNDER, LLP Bond Counsel By: URBAN J. SCHREINER "OWNER" PALM SPRINGS CLASSIC, LLC, A Delaware limited liability company By: Lennar Homes of California, Inc., A California corporation, Its A�Augff—_e By: ✓ Name: ln-r)7 8PiUKS Title: {O/2C--5i6Ei0T Dated: July 11, 2005 7 01 003/00 8 0/4 0 1 6 9.01 EXHIBIT A Community Facilities District No. 2005-1 (Escena) of The City of Palm Springs WRITTEN STATEMENT NO. _FOR DISBURSEMENTS PURSUANT TO THE DEPOSIT AND REIMBURSEMENT AGREEMENT The undersigned hereby states and certifies: (i) that he is the duly authorized Director of Finance and Treasurer of the City of Palm Springs ("City"), and as such, is familiar with the facts herein certified and is authorized and qualified to execute and deliver this certificate; (ii) that he is authorized pursuant to the Deposit and Reimbursement Agreement, dated as of July 11, 2005 (the "Agreement'), by and between the City of Palm Springs and Palm Springs Classic, LLC, relating to the formation of Community Facilities District No. 2005-1 (Escena) of the City of Palm Springs (the "CFD") to execute this statement; (iii) that pursuant to Section 1 (e) of the Agreement, the City is hereby directed to disburse this date to the person or entity, designated on Exhibit 1 attached hereto and by this reference incorporated herein, the respective stuns set forth opposite each such person or entity, in payment of certain expenses related to the CFD; (iv) that each obligation shown on Exhibit 1 has been properly incurred and is a proper charge against the Deposits; (v) That no item to be paid pursuant to this Written Statement has been previously paid or reimbursed from the Deposits; and (vi) that capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Agreement. 1 01003/0080/40169.01 Dated: 2005 CITY OF PALM SPRINGS Craig A. Graves, Director of Finance and Treasurer [Written Statement No._For Disbursements Pursuant To The Deposit And Reimbursement Agreement] 2 01003/0080/40169.01 EXHIBIT 1 ]Payee Purpose Amount 1 01003/0080/40169.01 TO: CITY COUNCIL OF THE CITY OF PALM SPRINGS FROM: PALM SPRINGS CLASSIC, LLC PETITION(INCLUDING CONSENT AND WAIVER) REQUESTING THE ESTABLISHMENT OF A COMMUNITY FACILITIES DISTRICT The undersigned landowner (the "Landowner") does hereby certify that the following statements are all true and correct: 1. The Landowner has the authority to petition the City Council (the "Council") of the City of Palm Springs (the "City") and to give the consent and waiver contained herein with respect to a Community Facilities District to be established over the properties included within this petition (the "CFD") to be formed under the provisions of the Mello-Roos Community ]Facilities Act of 1982 (the "Act"), being Chapter 2.5 of Part 1 of Division 2 of title 5 (commencing with Section 53311) of the California Government Code. 2. The Landowner hereby certifies that as of the date indicated opposite the Landowner's signature, the Landowner listed herein is the owner of the property within the proposed boundary of the CFD described in Exhibit "A"hereto (the "Property"). 3. The Landowner, pursuant to Section 53318 of the Act, hereby requests that proceedings be commenced (i) to establish the CFD for the purpose of financing subdivision public improvements in connection with a master planned community project known as "Escena," (ii) to authorize the issuance of bonds for the CFD and (iii) to establish an appropriations limit for the CFD. 4. In accordance with the provisions of the Act, and specifically Sections 53326(a) and 53327(b) thereof allowing certain time and conduct requirements relative to a special landowner election to be waived with the unanimous consent of all the landowners to be included in a community facilities district and concurrence of the election official conducting the election, the Landowner (i) expressly consents to the conduct of the special election at the earliest possible time following the adoption by the Council of a Resolution of Formation '.Establishing the CFD and (ii) expressly waives any requirement to have the special election conducted within the time periods specified in Section 53326 of the Act or in the California ]Elections Code. 5. The Landowner waives any requirement for the mailing of the ballot for the special election and expressly agrees that said election may be conducted by mailed or hand- delivered ballot to be returned as quickly as possible to the designated election official, being the office of the City Clerk and the Landowner requests that the results of said election be canvassed 01 00 3/0 0 8 0/4 042 1.02 and reported to the Council at the same meeting of the Council as the public hearing on the formation of the CFD or the next available meeting. 6. The Landowner expressly waives all applicable waiting periods for the election and waives the requirement for analysis and arguments relating to the special election, as set forth in Section 53327 of the Act, and consents to not having such materials provided to the ]Landowner in the ballot packet, and expressly waives any requirements as to the form of the ballot. 7. The Landowner expressly waives all notice requirements relating to hearings and special elections, whether by posting, publishing or mailing, and whether such requirements are iFound in the California Elections Code, the California Government Code or other laws or procedures, including but limited to any notice provided for by compliance with the provisions of Section 4101 of the California Elections Code. IN WITNESS WHEREOF, the Landowner has executed this Petition (including Consent and Waiver) this 1 lth day of July, 2005. PALM SPRINGS CLASSIC, LLC, a Delaware limited liability company By: LENNAR HOMES OF CALIFORNIA, INC., a California corporation, its JYlanaga_ By Name: iCr" l3i4iJK5 Title: 1/!cC p/LE51ae;0 FILED IN THE OFFICE OF THE CITY CLERK OF THE CITY OF PALM SPRINGS THIS 16'r" DAY OF J'01�4 2005. ty Clerk 2 01003/0090/40421.02 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT p State of California il 4� ss County of �rj v--2 On A LA���before mel),)k J�Aftj2XS�� �'b9f�� 1`l�l �l! s; Pale Nam d Tile of Chiron leg„"Jane add, bblll) i personallyappeared P <: Namaial a eerie��egst , k;,1 pC'Y ersonally known to me 1 ❑ proved to me on the basis of satisfactory evidence `n i-1 n If to be the persona)- whose names} islare. subscribed to the within instrument and �11 acknowledged to me that hokAefihey executed I I;T WENDYD.PETIVI the same in higithol Sheir authorized » lr,:' 11 CammkWn# 1 h,I 538648 capacity(es)- and that by hisetbthe� NalloN Public'Conol ' signature(s)-on the instrument the personf(4 or !71 RNMydeCounty the entity upon behalf of which the persou(s), u+: tMYCome.6pYeoDec28r20M acted, executed the instrument. „) �{ WITNESS my hand and offi 'al s of i,' I -- ��`t eign reo1N an, o1a 4 Br It OPTIONAL "I Though the information below is not required by law,rt may prove valuable to persons relying on the document and could prevent haudulent removal and reattachment of this form to another document ,1 Description of Attached Document Title or Type of Document: -, Document Date: Number of Pages: al ,I Signer(s) Other Than Named Above. I� lt3 ;i t Capacity(ies) Claimed by Signer '�� Signer's Name: >� ❑ Individual Top of thumb here ❑ Corporate Officer — Title(s): 'r.n ❑ Partner—❑ Limited ❑General n =� ❑ Attorney-in-Fact n �i ❑ Trustee fly El Guardian or Conservator ;p ❑ Other: Signer Is Representing: sbJ -71 — 0 1999 National Notary Assoolallon-9350 De Solo Ave,P.O Box 2402-Ci lawmlh,OA 913132402 www naliOnalnolaryor9 Prod.No.5907 Reorbor Call TOIFRod 1800-376-9021 EXHIBIT A THE LAND REFERRED TO IN THIS PETITION (INCLUDING CONSENT AND WAIVER) IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE AND IS DESCRIBED AS THE LAND INCLUDED IN TENTATIVE TRACT MAP NO. 32233 (EXCLUDING THE GOLF COURSE AND HOTEL SITES). 3 0[00310080/40421.02 DEPOSIT AND REIMBURSEMENT AGREEMENT THIS DEPOSIT AND REIMBURSEMENT AGREEMENT (this "Deposit Agreement"), dated as of July 11, 2005 for identification purposes only, is by and between the City of Palm Springs, California (the "City") and Palm Springs Classic, LLC, a Delaware limited liability company(the "Owner"). RECITALS WHEREAS, the City has determined to initiate proceedings to create a community facilities district designated "Community Facilities District No. 2005-1 (Escena) of the City of Palm Springs" (the "Community Facilities District") under the Mello-Roos Community Facilities Act of 1982 (the "Act"); and WHEREAS, Owner is the owner of the real property within the proposed Community Facilities District; and WHEREAS, in accordance with City's policy regarding use of the Act, the Owner is required to compensate the City for all costs incurred in the fonnation of the Community Facilities District and issuance of bonds for the Community Facilities District; and WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of fiords from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district (including the issuance of bonds thereby); and WHEREAS, Section 53314.9 of the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest under all of the following conditions: (a)the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53321 of the Act and in the resolution of formation to establish the community facilities district pursuant to Section 53325.1 of the Act (including the issuance of bonds thereby), (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the funds; and 01003/0080/40169.01 1 WHEREAS, the City and the Owner desire to enter into this Deposit Agreement in accordance with Section 53314.9 of the Act in order to provide for the advancement of funds by the Owner to be used to pay costs incurred in connection with the formation of the Community Facilities District and issuance of special tax bonds for the Community Facilities District (the `Bonds"), and to provide for the reimbursement to the Owner of such funds advanced, without interest, from the proceeds of any Bonds: NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: Section 1. The Deposits and Application Thereof. (a) The Owner has deposited herewith the amount of $76,500 (the "Initial Deposit"). The City, by its execution hereof, acknowledges receipt of, and accepts,the Initial Deposit. (b) City hereby agrees and Owner hereby acknowledges that the City shall hold the Initial Deposit, and any subsequent deposits pursuant to (c) hereof. (c) The Initial Deposit and any subsequent deposit required to be made by the Owner pursuant to the terms hereof(collectively, the "Deposits"), are to be used to pay for any costs incurred for any authorized purpose in connection with the formation of the Community Facilities District and the issuance of the Bonds (other than costs, fees and expenses to be paid out of the proceeds of the Bonds), including, without limitation, (i) the fees and expenses of any consultants to the City employed in connection with the formation of the Community Facilities District and the issuance of the Bonds, including an engineer, special tax consultant, financial advisor, bond counsel and any other consultant deemed necessary or advisable by the City, (ii)the costs of appraisals, market absorption and feasibility studies and other reports deemed necessary or advisable by the City in connection with the formation of the Commmunity Facilities District and issuance of the Bonds, (iii) the costs of publication of notices, preparation and mailing of ballots and other costs related to any hearing, election or other action or proceeding undertaken in connection with the formation of the Community Facilities District and issuance of the Bonds, (iv) reasonable charges for City staff time incurred in connection with the formation of the Community Facilities District and the issuance of the Bonds by the Community Facilities District, including a reasonable allocation of City overhead expense related thereto, and (v) any and all other actual costs and expenses incurred by the City in connection with the formation of the Community Facilities District and the issuance of the Bonds (collectively, the "Initial Costs"). The City may as provided in subsection(f) hereof draw upon the Deposits from time to time to pay the Initial Costs. (d) If, at any time, the unexpended and unencumbered balance of the Deposits is less than $5,000, the City may request, in writing, that the Owner make an additional deposit in an amount estimated by the City to be sufficient, together with any such unexpended and unencumbered balance, to pay for all Initial Costs. The Owner shall make such additional deposit with the City within two weeks of the receipt by the Owner of the City's written request therefor. If the Owner fails to make any such 2 01003/0080/40169 01 additional deposit within such two week period, the City may cease all work related to the issuance of the Bonds. (e) The Deposits shall be kept separately and may be invested in lawful investments and the City shall at all times maintain records as to the expenditure of the Deposits. (f) The City shall draw upon the Deposits to pay the Initial Costs in accordance with a statement in the form attached hereto as Exhibit A and by this reference incorporated herein. The City shall pay such Initial Costs pursuant to such statement as approved by the Director of Finance and Treasurer of the City. (g) The City shall provide the Owner with a written monthly summary of expenditures made from the Deposits, and the unexpended balance thereof, within ten business days of receipt of the City of a written request therefor submitted by the Owner. The cost of providing any such summary shall be charged to the Deposits. Section 2. Return of Deposits; Reimbursement. (a) As provided in Section 53314.9 of the Act, the approval by the qualified electors of the Community Facilities District of the proposed special tax to be levied therein is a condition to the repayment to the Owner of the funds advanced by the Owner pursuant hereto. Therefore, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied thereon, the City shall have no obligation to repay the Owner any portion of the Deposits expended or encumbered to pay Initial Costs. In accordance with Section 53314.9 of the Act, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied therein, the City shall return to the Owner any portion of the Deposits which have not been expended or encumbered to pay Initial Costs by the time of the election on said proposed special tax. (b) If proceedings for the issuance of the Bonds are terminated, the City shall, within ten business days after official action by the City or the Community Facilities District to terminate said proceedings, the City shall return the then unexpended and unencumbered portion of the Deposits to the Owner, including interest. (c) If the Bonds are issued by the Community Facilities District, the City shall reimburse the Owner, without interest, for the portion of the Deposits that has been expended or encumbered, said reimbursement to be made within ten business days after the issuance of such Bonds, solely from the proceeds of such Bonds and only to the extent otherwise permitted under the Act. The City shall, within twenty (20) business days after the issuance of such Bonds, return the then unexpended and unencumbered portion of the Deposits to the Owner, including interest. Section 3. Abandonment of Proceedings. The Owner acknowledges and agrees that the issuance of the Bonds shall be in the sole discretion of the Community Facilities 3 01003/0080/401KOI District. No provision of this Deposit Agreement shall be construed as an agreement, promise or warranty of the City to issue the Bonds. Section 4. Deposit Agreement Not Debt or Liability of City. As provided in Section 53314.9(b) of the Act, this Deposit Agreement does not constitute a debt or liability of the City, but shall constitute a debt and liability of the Community Facilities District upon its formation. The City shall not be obligated to advance any of its own funds to pay Initial Costs or any other costs incurred in connection with the issuance of the Bonds. No member of the City Council of the City and no officer, employee or agent of the City shall to any extent be personally liable hereunder. Section 5. Notices. Any notices, requests, demands, documents, approvals or disapprovals given or sent under this Deposit Agreement from one Party to another (collectively, "Notices") may be personally delivered, transmitted by facsimile (FAX) transmission, or deposit with the United States Postal Service for mailing, postage prepaid, to the address of the other Party as stated in this Section. Notices shall be sent as follows: If to City: City of Palm Springs Attn: City Manager 3200 Tahquitz Caynon Way Palm Springs, California 92262 Telephone: (760) 323-8229 Fax No. (760) 323-8267 With copies to: Aleshire & Wynder, LLP Attn: Urban J. Schreiner, Bond Counsel 18881 Von Karman Avenue, Ste. 400 Irvine, California 92612 Telephone: (949) 223-1170 Fax No. (949) 223-1180 If to Owner: Patin Springs Classic, LLC c/o Lennar Homes of California, Inc. Attn: Suzanne Johns 391 N. Main Street, Suite 301 Corona, CA 92880 Telephone: (951) 817-3649 Fax: (951) 817-3679 Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier upon the sender's receipt of an appropriate answerback or other written acknowledgement, (c) if given by registered or certified mail, return receipt requested, deposited with the United 4 01003/0080/40169.01 States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. Section 6. California Law. This Deposit Agreement shall be governed and construed in accordance with the laws of the State of California. The Parties shall be entitled to seek any remedy available at law and in equity. All legal actions must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in Riverside County, or in the United States District Court for the Central District of California. Section 7 Successors and ALs1 . This Deposit Agreement shall be binding upon and insure to the benefit of the successors and assigns of the parties hereto. Section 8 Counterparts. This Deposit Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. Section 9. Other Agreements. The obligations of the Owner hereunder shall be that of a party hereto. Nothing herein shall be construed as affecting the City's or Owner's rights, or duties to perform their respective obligations, under other agreements, use regulations or subdivision requirements relating to the development. This Deposit Agreement shall not confer any additional rights, or waive any rights given, by either patty hereto under any development or other agreement to which they are a party. Section 10. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Deposit Agreement or of any of its terms. References to section numbers are to sections in this Deposit Agreement, unless expressly stated otherwise. Section 11. Interpretation. As used in this Deposit Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Deposit Agreement shall be interpreted as though prepared jointly by both Parties. Section 12. No Waiver. A waiver by either Party of a breach of any of the covenants, conditions or agreements under this Deposit Agreement to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Deposit Agreement. Section 13. Modifications. Any alteration, change or modification of or to this Deposit Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party. Section 14. Severability. If any term, provision, condition or covenant of this Deposit Agreement or its application to any party or circumstances shall be held, to any 5 01003/0080/40169 01 extent, invalid or unenforceable, the remainder of this Deposit Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. Section 15. Computation of Time. The time in which any act is to be done under this Deposit Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The tern "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. Section 16. Le2a1 Advice. Each Party represents and warrants to the other the following: they have carefully read this Deposit Agreement, and in signing this Deposit Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Deposit Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Deposit Agreement; and, they have freely signed this Deposit Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or their respective agents, employees, or attorneys, except as specifically set forth in this Deposit Agreement, and without duress or coercion, whether economic or otherwise. Section 17 Cooperation. Each Party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Deposit Agreement including, but not limited to, releases or additional agreements. Section 18. Conflicts of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in this Deposit Agreement, nor shall any such member, official or employee participate in any decision relating to the Deposit Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. [Signatures on following page] 6 01003/0080/40169.01 IN WITNESS WHEREOF, the Parties have executed this Deposit Agreement as of the respective dates set forth below. "CITY" CITY OF PALM SPRINGS, a municipal corporation Dated: By: David Ready, City Manager ATTEST: By: James Thompson, City Clerk APPROVED AS TO FORM: ALESHIRE & WYNDER, LLP Bond Counsel By: URBAN J. SCHRLINER "OWNER" PALM SPRINGS CLASSIC, LLC, A Delaware limited liability company By: Lennar Homes of California, Inc., A California corporation, Its Mang By: i =— Name: `Fort n/-j/gjV KS Title: Dated: July 11, 2005 7 01003/0080/40169.01 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of JJ I I On before me, 1W C personally appeared of 1,pI,vO Ji O Etpers6nally known to me El proved to me on the basis of satisfactory A evidence to be the personils)—whose narna��Were- BSI 4" subscribed to the within instrument and CI)Mrn=�PI acknowledged to me that heAshelthey-executed 386" Nottayptum-CONI the same in his/her/their authorized capacity4jes,), and that by histher/th&r 11':) signature(s­)-on the instrument the perso*,or fj the entitybehalf ch the brsdh(s4 it upon e acted, executed the ins, urnSnit WITNESS on an a iGi Ise I. IOl Signal N-tar, (r; OPTIONAL Though the information below is not required by law,it may prove valuable to persons TOIV!n r'; g on the document end could preventIt; fraudulentremoval and reattachment of this form to another document ; Description of Attached Document If) Title or Type of Document: it Document Date: Number of Pages: Signer(s)Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: 11 Individual of thumb here to'I 1-1 Corporate Officer— Trfle(s): i El Partner — 0 Limited D General El Attorney-in-Fact Q, El Trustee ub 11 Guardian or Conservator 0 Other: 16< Signer Is Representing: Pied N.5907 Heorder Call TO Free 1 000 876 6327 EXHIBIT A Community Facilities District No. 2005-1 (Escena) of The City of Palm Springs WRITTEN STATEMENT NO. _ FOR DISBURSEMENTS PURSUANT TO THE DEPOSIT AND REIMBURSEMENT AGREEMENT The undersigned hereby states and certifies: (i) that he is the duly authorized Director of Finance and Treasurer of the City of Palm Springs ("City"), and as such, is familiar with the facts herein certified and is authorized and qualified to execute and deliver this certificate; (ii) that he is authorized pursuant to the Deposit and Reimbursement Agreement, dated as of July 11, 2005 (the "Agreement'), by and between the City of Palm Springs and Palm Springs Classic, LLC, relating to the formation of Community Facilities District No. 2005-1 (Escena) of the City of Palm Springs (the "CFD") to execute this statement; (iii) that pursuant to Section 1 (e) of the Agreement, the City is hereby directed to disburse this date to the person or entity, designated on Exhibit 1 attached hereto and by this reference incorporated herein, the respective sums set forth opposite each such person or entity, in payment of certain expenses related to the CFD; (iv) that each obligation shown on Exhibit I has been properly incurred and is a proper charge against the Deposits; (v) That no item to be paid pursuant to this Written Statement has been previously paid or reimbursed from the Deposits; and (vi) that capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Agreement. 1 01003/0080/40169.01 Dated: 2005 CITY OF PALM SPRINGS Craig A. Graves, Director of Finance and Treasurer [Written Statement No._For Disbursements Pursuant To The Deposit And Reimbursement Agreement] 2 01003/0080/40169.01 EXHIBIT 1 Payee Purpose Amount 1 01003/0080/40169.01 TO: CITY COUNCIL OF THE CITY OF PALM SPRINGS FROM: PALM SPRINGS CLASSIC, LLC PETITION (INCLUDING CONSENT AND WAIVER) REQUESTING THE ESTABLISHMENT OF A COMMUNITY FACILITIES DISTRICT The undersigned landowner (the "Landowner") does hereby certify that the following statements are all true and correct: 1. The Landowner has the authority to petition the City Council (the "Council") of the City of Palm Springs (the "City") and to give the consent and waiver contained herein with respect to a Community Facilities District to be established over the properties included within this petition (the "CFD") to be formed under the provisions of the Mello-Roos Community Facilities Act of 1982 (the "Act"), being Chapter 2.5 of Part 1 of Division 2 of title 5 (commencing with Section 53311) of the California Government Code. 2. The Landowner hereby certifies that as of the date indicated opposite the Landowner's signature, the Landowner listed herein is the owner of the property within the proposed boundary of the CFD described in Exhibit "A" hereto (the "Property"). 3. The Landowner, pursuant to Section 53318 of the Act, hereby requests that proceedings be commenced (i) to establish the CFD for the purpose of financing subdivision public improvements in connection with a master planned community project known as "Escena," (ii) to authorize the issuance of bonds for the CFD and (iii) to establish an appropriations limit for the CFD. 4. In accordance with the provisions of the Act, and specifically Sections 53326(a) and 53327(b) thereof allowing certain time and conduct requirements relative to a special landowner election to be waived with the unanimous consent of all the landowners to be included in a community facilities district and concurrence of the election official conducting the election, the Landowner (i) expressly consents to the conduct of the special election at the earliest possible time following the adoption by the Council of a Resolution of Formation Establishing the CFD and (ii) expressly waives any requirement to have the special election conducted within the time periods specified in Section 53326 of the Act or in the California Elections Code. 5. The Landowner waives any requirement for the mailing of the ballot for the special election and expressly agrees that said election may be conducted by mailed or hand- delivered ballot to be returned as quickly as possible to the designated election official, being the office of the City Clerk and the Landowner requests that the results of said election be canvassed 0 1 003/008 0/4042 1.02 and reported to the Council at the same meeting of the Council as the public hearing on the formation of the CFD or the next available meeting. 6. The Landowner expressly waives all applicable waiting periods for the election and waives the requirement for analysis and arguments relating to the special election, as set forth in Section 53327 of the Act, and consents to not having such materials provided to the Landowner in the ballot packet, and expressly waives any requirements as to the form of the ballot. 7. The Landowner expressly waives all notice requirements relating to hearings and special elections, whether by posting, publishing or mailing, and whether such requirements are found in the California Elections Code, the California Government Code or other laws or procedures, including but limited to any notice provided for by compliance with the provisions of Section 4101 of the California Elections Code. IN WITNESS WHEREOF, the Landowner has executed this Petition (including Consent and Waiver) this 1 Ith day of July, 2005. PALM SPRINGS CLASSIC, LLC, a Delaware limited liability company r By: LENNAR HOMES OF CALIFORNIA, INC., a California corporation, its Manager By: Name: BlwJK5 Title: VCr to26-616E--AjJ FILED IN THE OFFICE OF THE CITY CLERK OF THE CITY OF PALM SPRINGS THIS ➢ �" DAY OF <1-0 4 , 2005. Y Clerk 2 01003/0080/4042 102 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT It State of California 4 ss. County of it 0 before rt me 11_13_ 41A Date Na andTiFe Off oor(o g, Jare Doe,N T personally appeared �tOwri, Name(s)of Slgoor(r) ILi 1�1-p�erqonally known to me �j 11 proved to me on the basis of satisfactory Ifi evidence to be the person(()-whose nam*p is/are subscribed to the within instrument and PLIRAS acknowledged to me that he4she"executed Irl Cornfinb0on#1538698 f the same in his4r&Hthek authorized i Holary Public-California RhimmIde County capacity:(, and that by hig#tertithek ,l MVCOFRM.EVIfes Dec 25.2 signature(is)-on the instrument the person(4, or the entity upon behalf of which the perso hl acted, executed the instrument. tj WITNQSS my hand and o ial seal. Oa(meth gory n Ira C OPTIONAL E � Though the information below is not required by law,it may prove valuable to persons relying on the document and could prevent "i (it fraudulent removal and reattachment of this form to another document. ,'j Description of Attached Document re Title or Type of Document: Document Date: Number of Pages: it If) Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name. 0 Individual Top of thumb here El Corporate Officer Title(s): �(j 0 Partner — El Limited L1 General If, El Attorneyrin-Fact [11, D Trustee 0 Guardian or Conservator 11 Other: Signer Is Representing: ,ji 7 iD 1999 Nul.ml N.1o,,Aoo.oroo-9350 Do S.I.M.,PO Box 2402•Charsworth,CA 91313 2402-vlwwnahonainoiaryorg Prod No 5909 Reorder C.11 T.11 Free 1 BOO 876 6B27 EXHIBIT A THE LAND REFERRED TO IN THIS PETITION (INCLUDING CONSENT AND WAIVER) IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE AND IS DESCRIBED AS THE LAND INCLUDED IN TENTATIVE TRACT MAP NO. 32233 (EXCLUDING THE GOLF COURSE AND HOTEL SITES). 3 01003/0080/40421 02 •- ti i TRANSMITTAL DATE: July 11, 2005 TO: Urban Schreiner FROM: Sharon Duensing Lennar Communities Inland RE: Palm Springs Classic Please find attached the following: 1. Check No. 1043 in the amount of$76,500.00 for the deposit for the formation of the CFD at Palm Springs Classic. Enclosure ,Ar H:U,+bpms\TRANSMITTAL-ch.cks.d.c /"v3 Lennar Communities Inland • 391 N. Main Street, Ste. 301 • Corona, CA 92880 u Main: (951) 817-3600 • Fax: (951) 817-3699 • lennar.com PALM SPRINGS CLASSIC, LLC 043 MANAGERS 1 391 N MAIN ST SUITE 301 PAY TO THE CORONA, CA 92880 DATE 7—//�0 16-339/1220 /� K ORDER OF CAV (k1W1 ping i $` 7G� 50�.00 � DOLLARS 8 'EM...r B CALIFORNIA BANK TRUST Tavex new e,uuronx,n11114 FOR f LCYla 0 'OO i043ii' �: L 2 Z003 396�: 3090 i 50 L0 iii' AWhorized5igmtory d TRANSMITTAL. To: Urban Schreiner From: Sharon buensing Firm: Project Coordinator Address: Date: July 11, 2005 CC: file Re: Palm Springs Classic E rding Via: __XX_Overnight Delivery _Hand Delivery/Pick up Trans/Bag _Messenger/Courier USPS No, of Originals: Description 2 Deposit and ReImburrs-emea Agreement 2 Petition requesting the establishment of a CFb 1 Check and cover transmittal for the requested deposit 11 Th' is material is -sent uat-Yhe-re- Crest of ll- �' q II I I �I - ---- - ------_...-------- This material is being sent for: _Signature& Approval _XX_As Requested _Review A Comment Fill out& Return Information& Use I� If you have any questions, please feel free to contact me. Thank you. 'RVzo-ay- 79_� sirs a � ----------------- Lennar Communities Inland • 391 N. Main Street, Ste. 301 • Corona, CA 92880 Main: (951) 817-3600 • Fax: (951) 817-3699 • lennar.com