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Nos 2006-1167-1206 ORDINANCE NO. 1167 AN ORDINANCE OF THE CITY OF LAKE ELSINORE ADDING CHAPTER 14.12 TO TITLE 14 of THE LAKE ELSINORE MUNICIPAL CODE ESTABLISHING A REQUIREMENT TO SUBMIT AND COMPLY WITH A WASTE MANAGEMENT PLAN FOR CERTAIN CONSTRUCTION AND DEMOLITION PROJECTS WITHIN THE CITY OF LAKE ELSINORE WHEREAS, the California Integrated Waste Management Act of 1989, commonly referred to as Assembly Bill 939 ("AB 939" or the "Act"), codified in substantial part at Public Resources Code Section 40000 et seq., requires each local jurisdiction in the state to divert fifty percent (50%) of discarded materials from disposal in landfills and transformation facilities, and authorizes the California Integrated Waste Management Board ("CIWMB") to impose penalties of up to $10,000 per day for non-compliance with these diversion requirements; and WHEREAS, certain provisions of the Act, codified at Public Resources Code Section 41821, require the City to provide CIWMB with an annual report concerning the City's progress in meeting the diversion requirements with respect to construction and demolition materials; and WHEREAS, certain provisions of the Act, codified at Public Resources Code Section 41850, require CIWMB to take into consideration whether the City has adopted an ordinance requiring diversion of construction and demolition materials, or made other good faith efforts to meet the diversion requirements with respect to construction and demolition materials, in determining whether to impose penalties on the City for failure to meet the diversion requirements; and WHEREAS, construction and demolition materials currently represent a significant portion of the volume of waste originating in the City of Lake Elsinore, and the experiences of other cities and studies undertaken by the CIWMB Board have shown that, except in unusual circumstances, it is feasible to divert at least 50% of all construction and demolition materials from landfills by engaging in reuse and recycling of these materials; and WHEREAS, the reuse and recycling of construction and demolition materials is essential to further the City's efforts to reduce waste and comply with AB 939 diversion requirements; and WHEREAS, waste reduction, reuse, and recycling of construction and demolition materials reduces the amount of construction and demolition materials CITY COUNCIL ORDINANCE NO. 1167 Page 2 of9 transported for disposal in landfills and transformation facilities, increases site and worker safety, and are cost effective; and WHEREAS, to ensure compliance with this Chapter and to ensure that those contractors that comply with this Chapter are not placed at a competitive disadvantage, it is necessary to impose a diversion security deposit requirement; and WHEREAS, pursuant to California Constitution Article XI, Section 7 and Public Resources Code Section 40059, the City has the authority to regulate solid waste generated within the City's municipal boundaries; and WHEREAS, the City Council has determined that the public health, safety and welfare of the residents of the City will be promoted and the environmental quality of the City and surrounding areas will be preserved and maintained through the adoption of an ordinance requiring diversion of construction and demolition materials from landfills. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. Chapter 14.12 is hereby added to Title 14 of the Lake Elsinore Municipal Code to read as follows: Chapter 14.12 CONSTRUCTION AND DEMOLITION WASTE MANAGEMENT Sections: 14.12.010 14.12.020 14.12.030 14.12.040 14.12.050 14.12.060 14.12.070 14.12.080 14.12.090 14.12.100 Purpose and intent Definitions Covered projects Projects exempt from this chapter Compliance and diversion rates Submission of waste management plan Security deposit Review of waste management plan Compliance review and refund of security deposit Violations - penalty established 14.12.010 Purpose and intent. The purpose and intent of this ordinance is to reduce the amount of waste generated within the City of Lake Elsinore and ultimately disposed of in landfills, by requiring the project applicant for every CITY COUNCIL ORDINANCE NO. 1167 Page 3 of9 project covered by this ordinance to divert a minimum of fifty percent (50%) of the construction and demolition debris resulting from that project, in compliance with state and local statutory goals and policies, and to create a mechanism to secure compliance with the stated diversion requirements. 14.12.020 Definitions. For purposes of this Chapter, the following terms, phrases, words, and derivations shall have the meaning given in this section. "Applicant" means any individual, firm, limited liability company, association, partnership, political subdivision, government agency, municipality, industry, public or private corporation, or any other entity whatsoever who applies to the City for any permit, as defined in this Chapter, and who is, therefore, responsible for meeting the requirements of this Chapter. "Completion" means the earliest of the following dates: the date a temporary certificate of occupancy is issued by the City for a project, the date a certificate of occupancy is issued by the City for a project, or the date the final City inspection approving the project is completed. "Construction" means the building or enlargement of any structure, or any portion thereof, and includes without limitation alterations or improvements to an existing structure. "Construction and demolition material" means the excess or discarded material that is removed from a site during or after the construction or demolition of any structure, fence, wall, or paving. "Conversion rate" means the rate set forth in the standardized conversion rate table for use in estimating the volume or weight of construction and demolition debris, approved by the California Integrated Waste Management Board ("CIWMB"). "Covered project" means any project meeting the thresholds established in Section 14.12.030. "Demolition" means the razing, tearing down, or wrecking of any structure, wall, fence, or paving, whether in whole or in part, whether interior or exterior. "Diversion requirement" means the diversion of a minimum of 50% of the total construction and demolition material generated by a project, or the lower percentage requirement granted by exception pursuant to Section 14.12.040. "Divert" or "diversion" mean the recycling and/or reuse of construction and demolition debris to avoid disposal in a landfill. CITY COUNCIL ORDINANCE NO. 1167 Page 4 of9 "Excavation" means digging or removing soil, rocks, gravel, and/or sand from a site, including but not limited to such work as is customarily performed in construction of buildings or dredging or construction of canals, drainage basins, waterways, lakes, levees, or dams. "Mining" means any activity governed by the Surface Mining and Reclamation Act (Public Resources Code S 2710, et seq.). "Paving" means driveways, walkways, parking areas, streets, and sidewalks. "Permit" means any grading, building, or demolition permit. "Project" means any proposal for new or changed use, or for new construction, alteration or enlargement of any structure, that requires a permit from the City. "Recycling and reuse" means the process of collecting, sorting, cleansing, treating, and reconstituting construction and demolition debris, that would otherwise become solid waste and be disposed of in a landfill, for use as raw material for, new, reused, or reconstituted products which meet the quality standards necessary to be used in the marketplace. "Recycling Coordinator" means the person designated by the City Manager to serve as the City's Recycling Coordinator for purposes of this chapter. "Structure" means anything constructed or erected that requires a location in the ground, including a building or swimming pool, but not including a fence or wall used as a fence, or driveways, or walkways. "Waste management plan" means a plan describing the amount of construction and demolition material to be produced by or removed from a project, and establishing methods by which 50% of such material will be diverted. 14.12.030 Covered projects. Projects meeting any of the following criteria shall be considered covered projects and shall comply with all provisions of this Chapter, including but not limited to the diversion requirement for construction and demolition materials: 1. Residential additions of 1,500 square feet or more of gross floor area; 2. New detached single family residential dwellings; CITY COUNCIL ORDINANCE NO. 1167 Page 5 of9 3. New attached single family residential dwellings; 4. gross floor area; Tenant improvements affecting 1,500 square feet or more of 5. New commercial buildings; 6. Demolition of 1,000 square feet or more of gross floor area; 7. Excavation, mining, or grading activities that result in the export of earth, soil, rocks, gravel, or other materials off the project site. 8. All City public works and City public construction projects; the waste management plan and diversion security deposit shall be prepared and submitted by the prime contractor constructing each such project. 14.12.040 Projects exempt from this chapter. Projects meeting any of the following criteria shall be exempt from the requirements of this Chapter, provided that the applicant has provided the City with satisfactory evidence supporting the claimed exemption, and provided that the City has issued a written determination of exemption, which may take the form of a stamp or other notation of exemption on applicant's application for a permit: 1. Projects not meeting any of the criteria described in Section 14.12.030; 2. Immediate or emergency construction, repair, or demolition work required to protect the public health or safety in an emergency, as defined in Section 21060.3 of the Public Resources Code, as it may be amended from time to time; 3. Work for which a permit is not required by this Municipal Code; 4. A project for which a permit has been issued prior to the effective date of this ordinance and remains in effect at the time of construction; 5. A City project for which the notice inviting bids has been published prior to the effective date of this ordinance; 6. Excavation of residential swimming pools; CITY COUNCIL ORDINANCE NO. 1167 Page 6 of9 7. Projects in which the Recycling Coordinator has determined that: a. There are exceptional or extraordinary circumstances applicable to the project that do not apply generally to similar projects, such as contamination of construction and demolition materials by hazardous substances or low recyclability of specific materials to be used in or removed from the project; b. Granting the application will not constitute a grant of special privilege inconsistent with limitations imposed on similar projects; and c. Cost to the applicant of strict compliance with the requirements of this Chapter is not the primary reason for granting the exemption. 14.12.050 Compliance and diversion rates. The applicant for a covered project shall divert or cause to be diverted a minimum of 50% of the construction and demolition materials resulting from the project. Compliance with this requirement and the other provisions of this Chapter shall be listed as a condition of approval on permits issued for a covered project. 14.12.060 Submission of waste management plan. The applicant for each covered project shall complete and submit to the City a waste management plan as part of the application packet for a permit, and payment of any application fee established by resolution of the City Council. The waste management plan shall include the estimated volume and weight of construction and demolition material, with separate listings for each type of material (unless waived by the Recycling Coordinator upon the applicant's demonstrates that he or she will use the services of the solid waste hauler holding an exclusive solid waste franchise with the City), the vendor or facility that will collect or receive the construction and demolition material and the estimated commencement date for the demolition or construction work. 14.12.070 Security deposit. Each applicant requesting a permit for a covered project shall submit, in conjunction with the waste management plan, a diversion security deposit, in cash, certified or cashiers' check, or by irrevocable letter of credit or performance bond, in the amount of three percent (3%) of the estimated project costs, or $10,000, whichever is greater. The Recycling Coordinator may waive or reduce diversion security deposit requirement if the applicant demonstrates that he or she will use the services of the solid waste hauler holding an exclusive solid waste franchise with the City. CITY COUNCIL ORDINANCE NO. 1167 Page 7 of9 14.12.080 Review of waste management plan. A. Following submission of the waste management plan, and prior to the issuance of any grading and/or building permit, the Recycling Coordinator shall review and determine (i) that the waste management plan provides all of the information required by Section 14.12.060; (ii) the waste management plan indicates that at least 50% of the construction and demolition material produced by the project will be diverted, and the applicant has complied with Section 14.12.070. B. If the Recycling Coordinator approves the waste management plan, he or she shall mark the waste management plan as "approved", retain one copy, and return copies to the applicant and the Community Development Department. If the Recycling Coordinator disapproves the waste management plan, he or she shall state the grounds for denial in writing, retain one copy, and return copies and the grounds for denial to the applicant and the Community Development Department. 14.12.090 Compliance review and refund of security deposit. A. Within thirty (30) days after the completion of any covered project, the applicant shall submit to the Recycling Coordinator documentation concerning the applicant's compliance with the diversion requirements for the project. This documentation shall include: 1. Receipts from the vendor or facility that collected or received construction and demolition material from the project, noting the actual weight or volume of material collected or received, including separate summary listings for material diverted and material placed in the landfill; 2. Information concerning the weight or volume of construction and demolition material recycled or reused in the project. B. Applicants shall make reasonable efforts to ensure that construction and demolition materials, whether diverted or placed in the landfill, are measured and recorded. Volumetric measurements may be used, incorporating the standardized conversion rates approved by the City. C. The Recycling Coordinator shall review the information submitted under subsection A to determine whether the applicant has complied with the diversion requirement applicable to the project. CITY COUNCIL ORDINANCE NO. 1167 Page 8 of9 1. If it is determined that the diversion requirement has been achieved, the full amount of the diversion security deposit shall be refunded to the applicant. 2. If it is determined that the diversion requirement has not been met, a portion of the diversion security deposit shall be refunded which is equal to the portion of the diversion requirement that has been met. Any portion of the diversion security deposit not released to the applicant shall be forfeited to the City, and shall be used either to offset administrative costs associated with enforcing the requirements of this Chapter or for efforts to educate the community about the need for recycling and encourage recycling. 14.12.100 Violations - penalty established. Violations of this Chapter shall be governed by Chapter 1.16. SECTION 2: If any provISIOn, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 3: This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of the Ordinance and cause this Ordinance to be published and posted in the manner required by law. CITY COUNCIL ORDINANCE NO. 1167 Page 9 of9 INTRODUCED AND APPROVED UPON FIRST READING this loth day of January, 2006, by the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 24th day of January, 2006, by the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: Robert E. Magee, yor City of Lake Elsinore Frederick Ray, City Clerk City of Lake Elsinore ORDINANCE NO. 1168 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXA TION AREA NO. 15 (LA STRADA) ANNEXED TO SAID DISTRICT WHEREAS, on December 13,2005, the City Council (the "Council") of the City of Lake Elsinore, California (the "City") adopted Resolution No. 2005-170 stating its intention to annex certain property ("Annexation Area No. 15 (La Strada)") into City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, (the "Act"); and WHEREAS, notice was published as required by law relative to the intention of the Council to annex Annexation Area No. 15 (La Strada) into the District; and WHEREAS, on January 24, 2006 this Council held a noticed public hearing as required by law relative to the determination to proceed with the annexation of Annexation Area No. 15 (La Strada) into the District and the rate and method of apportionment and manner of collection of the special tax to be levied within Annexation Area No. 15 (La Strada) to finance certain public services; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the annexation of Annexation Area No. 15 (La Strada) were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-14 determining the validity of prior proceedings relative to the annexation of Annexation Area No. 15 (La Strada), annexed Annexation Area No. 15 (La Strada) into the District and authorized the levy of a special tax within Annexation Area No. 15 (La Strada); and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-15 which called an election within Annexation Area No. 15 (La Strada) for January 24, 2006 on the proposition of levying a special tax; and WHEREAS, on January 24, 2006 an election was held within each Annexation Area No. 15 (La Strada) in which the eligible electors approved by more than two-thirds vote the proposition of levying a special tax. CITY COUNCIL ORDINANCE NO. 1168 Page 2 of3 THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES), DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax is levied within the boundaries of Annexation Area No. 15 (La Strada) pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 15 (La Strada) prior to the annexation of Annexation Area No. 15 (La Strada) into the District, periodic costs, and costs of the tax levy and collection. SECTION 2. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the next fiscal year, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 3. All of the collections of the special tax shall be used as provided for in the Act and Resolution No. 2006-16 of the Council. SECTION 4. The above authorized special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes. SECTION 5. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the Council Members voting for and against the ordinance. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. This ordinance relating to the levy of the special tax takes effect and shall be in force from and after thirty (30) days after the date of its final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. CITY COUNCIL ORDINANCE NO. 1168 Page 3 of3 The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 24th day of January, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 28th day of February 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: Robert E. Magee, M City of Lake Elsino AZ~ Frederick Ray, tity Clerk City of Lake Elsinore NOTICE OF ADOPTION OF ORDINANCE NO. 1168 NOTICE IS HEREBY GIVEN that on January 24, 2006, at the Council Chambers of the City of Lake Elsinore, 183 North Main Street, Lake Elsinore, California 92530, the City Council of the City of Lake Elsinore, in its capacity as the legislative body of the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services), held a public hearing and adopted Ordinance No. 1168. A summary of Ordinance No. 1168 follows and is marked as Exhibit "B". At said time and place the testimony of all interested persons or taxpayers for or against said ordinance was heard. Ordinance No. 1168 was adopted by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLA TIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) Dated: (YlCl,J" ;l ,2006 By EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction Special taxes shall be annually levied on all Developed Residential Property and Developed Multi-Family Property (as hereinafter defined) in the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), in accordance with the rate and method of apportionment of special taxes hereinafter set forth. All of the property within the District that is not Developed Residential or Developed Multi-Family Residential Property shall be exempt from the Maximum Annual Special Taxes of the District. Definitions Assessor's Parcel. A parcel of land in the District designated and assigned a discrete identifying number on a map of the County Assessor of the County of Riverside. City. City of Lake Elsinore, California. Developed Multi-Family Property. Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding the Fiscal Year for the construction of a Unit that is located or shall be located within a building in which each individual Units has or shall have at least one common wall with another Unit. Developed Residential Property. All other Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding any Fiscal Year for the construction of a Unit that is not Developed Multi- family Property. Fiscal Year. The period beginning on July 1 and ending on the following June 30. Maximum Annual Special Taxes. The maximum annual special taxes levied within the District for any Fiscal Year. Unit. Each separate residential dwelling unit, which comprises an independent facility capable of conveyance or use separate from adjacent dwelling units. Rate and Method of Apportionment of Maximum Annual Special Taxes As of July 1 of each Fiscal Year, commencing July 1, 2003, the City shall determine which of the Assessor's Parcels within the District constitute Developed Residential Property or Developed Multi-Family Property. Beginning in Fiscal Year 2003-04, and all subsequent Fiscal Years, the City shall levy the Maximum Annual Special Taxes on each Assessor's Parcel of Developed Residential Property in the amount of $300 and on each Assessor's Parcel of Developed Multi-Family Property in the amount of $150 per Unit. The amount of Maximum Annual Special Taxes shall be increased annually by 2%, commencing in Fiscal Year 2004-05, and each Fiscal Year thereafter. Duration of the Maximum Annual Special Taxes The Maximum Annual Special Taxes shall be levied in perpetuity so long as Law Enforcement, Fire and Paramedic Services are being provided within the District. The Maximum Annual Special Taxes levied in each Fiscal Year shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. The Maximum Annual Special taxes when levied shall be secured by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each levy of Maximum Annual Special Taxes. The lien of Maximum Annual Special Taxes shall continue in force and effect until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government Code. CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction Special taxes shall be annually levied on all Developed Residential Property and Developed Multi-Family Property (as hereinafter defined) in the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), in accordance with the rate and method of apportionment of special taxes hereinafter set forth. All of the property within the District that is not Developed Residential or Developed Multi-Family Residential Property shall be exempt from the Maximum Annual Special Taxes of the District. Definitions Assessor's Parcel. A parcel of land in the District designated and assigned a discrete identifying number on a map of the County Assessor of the County of Riverside. City. City of Lake Elsinore, California. Developed Multi-Family Property. Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding the Fiscal Year for the construction of a Unit that is located or shall be located within a building in which each individual Units has or shall have at least one common wall with another Unit. Developed Residential Property. All other Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding any Fiscal Year for the construction ofa Unit that is not Developed Multi-family Property. Fiscal Year. The period beginning on July 1 and ending on the following June 30. Maximum Annual Special Taxes. The maximum annual special taxes levied within the District for any Fiscal Year. Unit. Each separate residential dwelling unit, which comprises an independent facility capable of conveyance or use separate from adjacent dwelling units. - Rate and Method of Apportionment of Maximum Annual Special Taxes As of July 1 of each Fiscal Year, commencing July 1, 2003, the City shall determine which of the Assessor's Parcels within the District constitute Developed Residential Property or Developed Multi-Family Property. Beginning in Fiscal Year 2003-04, and all subsequent Fiscal Years, the City shall levy the Maximum Annual Special Taxes on each Assessor's Parcel of Developed Residential Property in the amount of $300 and on each Assessor's Parcel of Developed Multi-Family Property in the amount of $150 per Unit. The amount of Maximum Annual Special Taxes shall be increased annually by 2%, commencing in Fiscal Year 2004-05, and each Fiscal Year thereafter. Duration of the Maximum Annual Special Taxes The Maximum Annual Special Taxes shall be levied in perpetuity so long as Law Enforcement, Fire and Paramedic Services are being provided within the District. The Maximum Annual Special Taxes levied in each Fiscal Year shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. The Maximum Annual Special taxes when levied shall be secured by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each levy of Maximum Annual Special Taxes. The lien of Maximum Annual Special Taxes shall continue in force and effect until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government Code. EXHIBIT B BEFORE THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE IN ITS CAP ACITY AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) IN THE MATTER OF Authorizing the Levy of a Special Tax Within Annexation Area No. 15 (La Strada) Annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) ) ORDINANCE NO. 1168 SUMMARY ) ) ) ) ) ) The ordinance authorizes levy of an annual special tax within Annexation Area No. 15 (La Strada) annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), collected in the same manner as ordinary ad valorem taxes, in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 15 (La Strada) prior to the annexation of Annexation Area No. 15 (La Strada) to the District, which is necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within Annexation Area No. 15 (La Strada). DATED: ;f!d/d ;2- , 2006 CITY OF LAKE ELSINORE By: ~y,irk - ORDINANCE NO. 1169 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 16 (TR 32129) ANNEXED TO SAID DISTRICT WHEREAS, on December 13,2005, the City Council (the "Council") of the City of Lake Elsinore, California (the "City") adopted Resolution No. 2005-168 stating its intention to annex certain property ("Annexation Area No. 16 (TR 32129)") into City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, (the "Act"); and WHEREAS, notice was published as required by law relative to the intention of the Council to annex Annexation Area No. 16 (TR 32129) into the District; and WHEREAS, on January 24, 2006 this Council held a noticed public hearing as required by law relative to the determination to proceed with the annexation of Annexation Area No. 16 (TR 32129) into the District and the rate and method of apportionment and manner of collection of the special tax to be levied within Annexation Area No. 16 (TR 32129) to finance certain public services; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the annexation of Annexation Area No. 16 (TR 32129) were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-17 determining the validity of prior proceedings relative to the annexation of Annexation Area No. 16 (TR 32129), annexed Annexation Area No. 16 (TR 32129) into the District and authorized the levy of a special tax within Annexation Area No. 16 (TR 32129); and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-18 which called an election within Annexation Area No. 16 (TR 32129) for January 24, 2006 on the proposition of levying a special tax; and WHEREAS, on January 24, 2006 an election was held within each Annexation Area No. 16 (TR 32129) in which the eligible electors approved by more than two-thirds vote the proposition of levying a special tax. CITY COUNCIL ORDINANCE NO. 1169 Page 2 of3 THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES), DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax is levied within the boundaries of Annexation Area No. 16 (TR 32129) pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 16 (TR 32129) prior to the annexation of Annexation Area No. 16 (TR 32129) into the District, periodic costs, and costs of the tax levy and collection. SECTION 2. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the next fiscal year, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 3. All of the collections of the special tax shall be used as provided for in the Act and Resolution No. 2006-19 of the Council. SECTION 4. The above authorized special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes. SECTION 5. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the Council Members voting for and against the ordinance. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. This ordinance relating to the levy of the special tax takes effect and shall be in force from and after thirty (30) days after the date of its final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. CITY COUNCIL ORDINANCE NO. 1169 Page 3 of3 The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 24th day of January, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 28th day of February 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KElLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: /1 Frederick Ray, . y Clerk City of Lake Elsinore NOTICE OF ADOPTION OF ORDINANCE NO. 1169 NOTICE IS HEREBY GIVEN that on January 24, 2006, at the Council Chambers of the City of Lake Elsinore, 183 North Main Street, Lake Elsinore, California 92530, the City Council of the City of Lake Elsinore, in its capacity as the legislative body of the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services), held a public hearing and adopted Ordinance No. 1169. A summary of Ordinance No. 1169 follows and is marked as Exhibit "B". At said time and place the testimony of all interested persons or taxpayers for or against said ordinance was heard. Ordinance No. 1169 was adopted by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEM NT, FIRE AND PARAMEDIC SERVICES) Dated: J~\Cifc.h J , 2006 By EXHIBIT A - RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX - CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction Special taxes shall be annually levied on all Developed Residential Property and Developed Multi-Family Property (as hereinafter defined) in the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), in accordance with the rate and method of apportionment of special taxes hereinafter set forth. All of the property within the District that is not Developed Residential or Developed Multi-Family Residential Property shall be exempt from the Maximum Annual Special Taxes of the District. Definitions Assessor's Parcel. A parcel of land in the District designated and assigned a discrete identifying number on a map of the County Assessor of the County of Riverside. City. City of Lake Elsinore, California. Developed Multi-Family Property. Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding the Fiscal Year for the construction of a Unit that is located or shall be located within a building in which each individual Units has or shall have at least one common wall with another Unit. Developed Residential Property. All other Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding any Fiscal Year for the construction ofa Unit that is not Developed Multi-family Property. Fiscal Year. The period beginning on July 1 and ending on the following June 30. Maximum Annual Special Taxes. The maximum annual special taxes levied within the District for any Fiscal Year. Unit. Each separate residential dwelling unit, which comprises an independent facility capable of conveyance or use separate from adjacent dwelling units. - Rate and Method of Apportionment of Maximum Annual Special Taxes As of July 1 of each Fiscal Year, commencing July 1, 2003, the City shall determine which of the Assessor's Parcels within the District constitute Developed Residential Property or Developed Multi-Family Property. Beginning in Fiscal Year 2003-04, and all subsequent Fiscal Years, the City shall levy the Maximum Annual Special Taxes on each Assessor's Parcel of Developed Residential Property in the amount of $300 and on each Assessor's Parcel of Developed Multi-Family Property in the amount of $150 per Unit. The amount of Maximum Annual Special Taxes shall be increased annually by 2%, commencing in Fiscal Year 2004-05, and each Fiscal Year thereafter. Duration of the Maximum Annual Special Taxes The Maximum Annual Special Taxes shall be levied in perpetuity so long as Law Enforcement, Fire and Paramedic Services are being provided within the District. The Maximum Annual Special Taxes levied in each Fiscal Year shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. The Maximum Annual Special taxes when levied shall be secured by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each levy of Maximum Annual Special Taxes. The lien of Maximum Annual Special Taxes shall continue in force and effect until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government Code. - CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction Special taxes shall be annually levied on all Developed Residential Property and Developed Multi-Family Property (as hereinafter defined) in the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), in accordance with the rate and method of apportionment of special taxes hereinafter set forth. All of the property within the District that is not Developed Residential or Developed Multi-Family Residential Property shall be exempt from the Maximum Annual Special Taxes of the District. Definitions Assessor's Parcel. A parcel of land in the District designated and assigned a discrete identifying number on a map of the County Assessor of the County of Riverside. City. City of Lake Elsinore, California. Developed Multi-Family Property. Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding the Fiscal Year for the construction of a Unit that is located or shall be located within a building in which each individual Units has or shall have at least one common wall with another Unit. Developed Residential Property. All other Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding any Fiscal Year for the construction ofa Unit that is not Developed Multi-family Property. Fiscal Year. The period beginning on July 1 and ending on the following June 30. Maximum Annual Special Taxes. The maximum annual special taxes levied within the District for any Fiscal Year. Unit. Each separate residential dwelling unit, which comprises an independent facility capable of conveyance or use separate from adjacent dwelling units. Rate and Method of Apportionment of Maximum Annual Special Taxes As of July 1 of each Fiscal Year, commencing July 1, 2003, the City shall determine which of the Assessor's Parcels within the District constitute Developed Residential Property or Developed Multi-Family Property. Beginning in Fiscal Year 2003-04, and all subsequent Fiscal Years, the City shall levy the Maximum Annual Special Taxes on each Assessor's Parcel of Developed Residential Property in the amount of $300 and on each Assessor's Parcel of Developed Multi-Family Property in the amount of $150 per Unit. The amount of Maximum Annual Special Taxes shall be increased annually by 2%, commencing in Fiscal Year 2004-05, and each Fiscal Year thereafter. Duration of the Maximum Annual Special Taxes The Maximum Annual Special Taxes shall be levied in perpetuity so long as Law Enforcement, Fire and Paramedic Services are being provided within the District. The Maximum Annual Special Taxes levied in each Fiscal Year shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. The Maximum Annual Special taxes when levied shall be secured by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each levy of Maximum Annual Special Taxes. The lien of Maximum Annual Special Taxes shall continue in force and effect until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government Code. - EXHIBIT B BEFORE THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE IN ITS CAPACITY AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) IN THE MATTER OF Authorizing the Levy of a Special Tax Within Annexation Area No. 16 (TR 32129) Annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) ) ORDINANCE NO. 1169 SUMMARY ) ) ) ) ) ) The ordinance authorizes levy of an annual special tax within Annexation Area No. 16 (TR 32129) annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), collected in the same manner as ordinary ad valorem taxes, in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 16 (TR 32129) prior to the annexation of Annexation Area No. 16 (TR 32129) to the District, which is necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within Annexation Area No. 16 (TR 32129). DATED: t11c;<.r~ 2- , 2006 CITY OF LAKE ELSINORE By: Frederick Ra ORDINANCE NO. 1170 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL T AX WITHIN ANNEXATION AREA NO. 17 (SUMMERLY) ANNEXED TO SAID DISTRICT WHEREAS, on January 24, 2006, the City Council (the "Council") of the City of Lake Elsinore, California (the "City") adopted Resolution No. 2006-07 stating its intention to annex certain property ("Annexation Area No. 17 (Summerly)") into City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, (the "Act"); and WHEREAS, notice was published as required by law relative to the intention of the Council to annex Annexation Area No. 17 (Summerly) into the District; and WHEREAS, on February 28, 2006 this Council held a noticed public hearing as required by law relative to the determination to proceed with the annexation of Annexation Area No. 17 (Summerly) into the District and the rate and method of apportionment and manner of collection of the special tax to be levied within Annexation Area No. 17 (Summerly) to finance certain public services; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the annexation of Annexation Area No. 17 (Summerly) were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-26 determining the validity of prior proceedings relative to the annexation of Annexation Area No. 17 (Summerly), annexed Annexation Area No. 17 (Summerly) into the District and authorized the levy of a special tax within Annexation Area No. 17 (Summerly); and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-27 which called an election within Annexation Area No. 17 (Summerly) for February 28, 2006 on the proposition of levying a special tax; and WHEREAS, on February 28, 2006 an election was held within each Annexation Area No. 17 (Summerly) in which the eligible electors approved by more than two-thirds vote the proposition of levying a special tax. CITY COUNCIL ORDINANCE NO. 1170 Page 2 of3 THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES), DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax is levied within the boundaries of Annexation Area No. 17 (Summerly) pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 17 (Summerly) prior to the annexation of Annexation Area No. 17 (Summerly) into the District, periodic costs, and costs of the tax levy and collection. SECTION 2. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the next fiscal year, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 3. All of the collections of the special tax shall be used as provided for in the Act and Resolution No. 2006-27 of the Council. SECTION 4. The above authorized special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency as provided for ad valorem taxes. SECTION 5. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the Council Members voting for and against the ordinance. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. This ordinance relating to the levy of the special tax takes effect and shall be in force from and after thirty (30) days after the date of its final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. CITY COUNCIL ORDINANCE NO. 1170 Page 3 of3 The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 28th day of February, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: BUCKLEY ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 14th day of March, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: BUCKLEY ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: A~y Frederick Ray, City Clerk City of Lake Elsinore bara Zeid Le bold, City Attorney City of Lake Elsinore EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX NOTICE OF ADOPTION OF ORDINANCE NO. 1170 NOTICE IS HEREBY GIVEN that on February 28, 2006, at the Council Chambers of the City of Lake Elsinore, 183 North Main Street, Lake Elsinore, California 92530, the City Council of the City of Lake Elsinore, in its capacity as the legislative body of the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services), held a public hearing and adopted Ordinance No. 1170. A summary of Ordinance No. 1170 follows and is marked as Exhibit "B". At said time and place the testimony of all interested persons or taxpayers for or against said ordinance was heard. Ordinance No. 1170 was adopted by the following vote: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: BUCKLEY ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLA TIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) Dated: \'<\Q..\c-~ \C) ,2006 By EXHIBIT B BEFORE THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE IN ITS CAP ACITY AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) IN THE MATTER OF Authorizing the Levy of a Special Tax Within Annexation Area No. 17 (Summerly) Annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) ) ORDINANCE NO. \ 17 b SUMMARY ) ) ) ) ) ) The ordinance authorizes levy of an annual special tax within Annexation Area No. 17 (Summerly) annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), collected in the same manner as ordinary ad valorem taxes, in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 17 (Summerly) prior to the annexation of Annexation Area No. 17 (Summerly) to the District, which is necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within Annexation Area No. 17 (Summerly). DATED: \'(\ ().r G\..r-. \ <; , 2006 CITY OF LAKE ELSINORE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction Special taxes shall be annually levied on all Developed Residential Property and Developed Multi-Family Property (as hereinafter defined) in the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), in accordance with the rate and method of apportionment of special taxes hereinafter set forth. All of the property within the District that is not Developed Residential or Developed Multi-Family Residential Property shall be exempt from the Maximum Annual Special Taxes of the District. Definitions Assessor's Parcel. A parcel of land in the District designated and assigned a discrete identifying number on a map of the County Assessor of the County of Riverside. City. City of Lake Elsinore, California. Developed Multi-Family Property. Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding the Fiscal Year for the construction of a Unit that is located or shall be located within a building in which each individual Units has or shall have at least one common wall with another Unit. Developed Residential Property. All other Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March I preceding any Fiscal Year for the construction ofa Unit that is not Developed Multi-family Property. Fiscal Year. The period beginning on July 1 and ending on the following June 30. Maximum Annual Special Taxes. The maximum annual special taxes levied within the District for any Fiscal Year. Unit. Each separate residential dwelling unit, which comprises an independent facility capable of conveyance or use separate from adjacent dwelling units. Rate and Method of Apportionment of Maximum Annual Special Taxes As of July 1 of each Fiscal Year, commencing July 1, 2003, the City shall determine which of the Assessor's Parcels within the District constitute Developed Residential Property or Developed Multi-Family Property. Beginning in Fiscal Year 2003-04, and all subsequent Fiscal Years, the City shall levy the Maximum Annual Special Taxes on each Assessor's Parcel of Developed Residential Property in the amount of $300 and on each Assessor's Parcel of Developed Multi-Family Property in the amount of $150 per Unit. The amount of Maximum Annual Special Taxes shall be increased annually by 2%, commencing in Fiscal Year 2004-05, and each Fiscal Year thereafter. Duration of the Maximum Annual Special Taxes The Maximum Annual Special Taxes shall be levied in perpetuity so long as Law Enforcement, Fire and Paramedic Services are being provided within the District. The Maximum Annual Special Taxes levied in each Fiscal Year shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. The Maximum Annual Special taxes when levied shall be secured by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each levy of Maximum Annual Special Taxes. The lien of Maximum Annual Special Taxes shall continue in force and effect until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government Code. ORDINANCE NO. 1171 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX WHEREAS, on January 24, 2006, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2006-08 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to finance a portion of the cost of providing parks, open space and storm drains maintenance services (the "Services") that are in addition to those provided in the territory within the CFD prior to the formation of the CFD, and to finance the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities and other governmental facilities, which the city is authorized by law to construct, own or operate (the "Facilities"), and designating portions of the CFD as Improvement Area No.1, Improvement Area No.2 and Improvement Area No.3; and WHEREAS, on January 24, 2006, the Council also adopted Resolution No. 2006-31 stating its intention and the necessity to incur bonded indebtedness in the amount of not to exceed $30,000,000, $28,000,000 and $27,000,000 for Improvement Area No.1, Improvement Area No.2 and Improvement Area No.3, respectively, to be issued for the purpose of financing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, notice was published as required by law relative to the intention of the Council to form the CFD and to incur bonded indebtedness in the amount not to exceed $30,000,000, $28,000,000 and $27,000,000 within the boundaries of Improvement Area No.1, Improvement Area No.2 and Improvement Area No.3, respectively, of the CFD; and WHEREAS, on February 28, 2006, this Council held a noticed public hearing as required by law relative to the determination to proceed with the formation of the CFD, the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay for the Services and the rate and method of apportion and manner of collection of the special tax to be levied within each Improvement Area to pay the principal and interest on the proposed bonded indebtedness of each Improvement Area of the CFD, and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds and the maximum annual rate of interest to be paid; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD and the incurring of bonded indebtedness by each CITY COUNCIL ORDINANCE NO. 1171 Page 2 of 4 - of the Improvement Areas of the CFD were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-30 determining the validity of prior proceedings and established the CFD; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-31 which called an election within the CFD for February 28, 2006 on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on February 28, 2006, an election was held within the CFD in which the eligible electors approved by more than two-thirds vote the proposition of incurring bonded indebtedness, levying a special tax, and setting an appropriations limit. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: - SECTION 1. A special tax (the "Services Special Tax") is levied within the boundaries of the CFD pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Services, periodic costs, and costs of the tax levy and collection, and all other costs. SECTION 2. A special tax (the "Special Tax") is levied within the boundaries of each Improvement Area of the CFD pursuant to the formulas set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection, and all other costs including amounts payable with respect to the bonded indebtedness. SECTION 3. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the then current or future tax years, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 4. All of the collections of the Services Special Tax and Special Tax shall be used as provided for in the Act and Resolution No. 2006-30 of the Council (Resolution of Formation). SECTION 5. The above authorized Services Special Tax and the Special Tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency as provided for ad valorem taxes; provided, however, the CFD may collect the Services CITY COUNCIL ORDINANCE NO. 1171 Page 3 of 4 - Special Tax and the Special Tax at a different time or in a different manner if necessary to meet its financial obligations. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable SECTION 7. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the council Members voting for and against the ordinance. SECTION 8. This ordinance relating to the levy of the services special tax and the Special Tax takes effect and shall be in force from and after 30 days from the date of final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. INTRODUCED AND APPROVED UPON FIRST READING this 28th day of February, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: BUCKLEY CITY COUNCIL ORDINANCE NO. 1171 Page 4 of 4 - PASSED, APPROVED AND ADOPTED UPON SECOND READING this 14th day of March, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: BUCKLEY ATTEST: ~V/ Frederick Ray, CIty Clerk City of Lake Elsinore ORDINANCE NO. 1171 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX WHEREAS, on January 24, 2006, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2006-08 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to finance a portion of the cost of providing parks, open space and storm drains maintenance services (the "Services") that are in addition to those provided in the territory within the CFD prior to the formation of the CFD, and to finance the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities and other governmental facilities, which the city is authorized by law to construct, own or operate (the "Facilities"), and designating portions of the CFD as Improvement Area No.1, Improvement Area No.2 and Improvement Area No.3; and WHEREAS, on January 24, 2006, the Council also adopted Resolution No. 2006-31 stating its intention and the necessity to incur bonded indebtedness in the amount of not to exceed $30,000,000, $28,000,000 and $27,000,000 for Improvement Area No.1, Improvement Area No.2 and Improvement Area No.3, respectively, to be issued for the purpose of financing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, notice was published as required by law relative to the intention of the Council to form the CFD and to incur bonded indebtedness in the amount not to exceed $30,000,000, $28,000,000 and $27,000,000 within the boundaries of Improvement Area No.1, Improvement Area No.2 and Improvement Area No.3, respectively, of the CFD; and WHEREAS, on February 28, 2006, this Council held a noticed public hearing as required by law relative to the determination to proceed with the formation of the CFD, the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay for the Services and the rate and method of apportion and manner of collection of the special tax to be levied within each Improvement Area to pay the principal and interest on the proposed bonded indebtedness of each Improvement Area of the CFD, and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds and the maximum annual rate of interest to be paid; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD and the incurring of bonded indebtedness by each CITY COUNCIL ORDINANCE NO. 1171 Page 2 of 4 - of the Improvement Areas of the CFD were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-30 determining the validity of prior proceedings and established the CFD; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-31 which called an election within the CFD for February 28, 2006 on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on February 28, 2006, an election was held within the CFD in which the eligible electors approved by more than two-thirds vote the proposition of incurring bonded indebtedness, levying a special tax, and setting an appropriations limit. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: - SECTION 1. A special tax (the "Services Special Tax") is levied within the boundaries of the CFD pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Services, periodic costs, and costs of the tax levy and collection, and all other costs. SECTION 2. A special tax (the "Special Tax") is levied within the boundaries of each Improvement Area of the CFD pursuant to the formulas set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection, and all other costs including amounts payable with respect to the bonded indebtedness. SECTION 3. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the then current or future tax years, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 4. All of the collections of the Services Special Tax and Special Tax shall be used as provided for in the Act and Resolution No. 2006-30 of the Council (Resolution of Formation). SECTION 5. The above authorized Services Special Tax and the Special Tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency as provided for ad valorem taxes; provided, however, the CFD may collect the Services CITY COUNCIL ORDINANCE NO. 1171 Page 3 of 4 - Special Tax and the Special Tax at a different time or in a different manner if necessary to meet its financial obligations. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable SECTION 7. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the council Members voting for and against the ordinance. SECTION 8. This ordinance relating to the levy of the services special tax and the Special Tax takes effect and shall be in force from and after 30 days from the date of final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. INTRODUCED AND APPROVED UPON FIRST READING this 28th day of February, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: BUCKLEY CITY COUNCIL ORDINANCE NO. 1171 Page 4 of 4 - PASSED, APPROVED AND ADOPTED UPON SECOND READING this 14th day of March, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: BUCKLEY ATTEST: ~V/ Frederick Ray, CIty Clerk City of Lake Elsinore EXHIBIT" A" RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX (IMPROVEMENT AREA NO.1) (IMPROVEMENT AREA NO.2) (IMPROVEMENT AREA NO.3) EXHIBIT" A" RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX (IMPROVEMENT AREA NO.1) (IMPROVEMENT AREA NO.2) (IMPROVEMENT AREA NO.3) FINAL - RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT No. 2006-1 IMPROVEMENT AREA No.1 (SUMMERL Y) A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly) ("CFD No. 2006-1 (IA No.1)") and collected each Fiscal Y ear commencing in Fiscal Year 2006-2007, in an amount determined through the application ofthis Rate and Method of Apportionment as described below. All ofthe real property in CFD No. 2006-1 (IA No.1), unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner 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. "Act" means the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5, Part 1, Division 2 of Title 5 of the California Government Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2006-1 (IA No.1): 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 City 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. 2006-1 (IA No.1) or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-1 (IA No. 1) or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-1 (IA No.1) or obligated persons associated with 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. 2006-1 (IA No.1) or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2006-1 (IA No. 1) for any other administrative purposes of CFD No. 2006-1 (IA No.1), including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summerly) January 16, 2006 Page 1 " Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor ofthe County designating parcels by Assessor's Parcel number. "Assigned Special Tax for Facilities" means the Special Tax for Facilities for each Land Use Class of Developed Property, as determined in accordance with Section C.1.(b) below. "Authorized Facilities" means those authorized improvements, as listed in an exhibit to the Resolution of Formation. "Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.l.( c) below. "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 for Facilities, the Special Tax Requirement for Services as determined in accordance with Section I below, and providing for the levy and collection of the Special Taxes. "CFD No. 2006-1" means City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly). "CFD No. 2006-1 (IA No.1)" means Improvement Area No.1 of CFD No. 2006-1. as identified on the boundary map for CFDNo. 2006-1. "CFD No. 2006-1 (IA No.1) Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 2006-1 (IA No.1) and secured solely by the Special Tax for Facilities levy on property within the boundaries of CFD No. 2006-1 (IA No.1) under the Act. "City" means the City of Lake Elsinore. "City Council" means the City Council of the City of Lake Elsinore, acting as the legislative body of CFD No. 2006-1 (IA No.1). "County" means the County of Riverside. "Developed Property" means, with respect to the Special Tax for Facilities, 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 on City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No. I (Summerly) January 16, 2006 Page 2 or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Tax for Facilities is being levied. "Final Subdivision" means (i) a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots for which building permits may be issued, or (ii) for condominiums, a final map, or portion thereof, approved by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 that creates individual lots for which building permits may be issued. "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 CFD No. 2006-1 (IA No.1) Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1 below. "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, 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 or more non-residential units or facilities has been issued by the City. "Outstanding Bonds" means all CFD No. 2006-1 (IA No.1) Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2006-1 (IA No.1) 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 ofthe actual Special Tax for Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of Undeveloped Property. The term "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. 2006-1 (IA No.1) owned by, irrevocably offered or dedicated to, or over, through or under which an easement for purposes of public use has been granted, to the federal government, the State, the County, the City, the Lake Elsinore Unified School District, or any City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summerly) January 16, 2006 Page 3 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. 2006-1 (IA No. 1) that was encumbered, as of January 1 of the previous Fiscal Year, by an unmanned utility easement making impractical its utilization for other than the purpose set forth in the easement. "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 permit(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. "Resolution of Formation " means the resolution of formation for CFD No. 2006-1 (IA No. 1 ). "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2006-1 (IA No.1) pursuant to the Act. "Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property, Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means that amount required in any Fiscal Year for CFD No. 2006-1 (IA No.1) 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 CFD No. 2006- 1 (IA No.1) Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No. 2006-1 (IA No.1) Bonds due in the calendar year commencing in such Fiscal Year; (iii) pay a proportionate share of Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay for reasonably anticipated Special Tax for Facilities delinquencies based on the delinquency rate for the Special Tax for Facilities levy in the previous Fiscal Year; (vi) pay directly for acquisition or construction of Authorized Facilities to the extent that the inclusion of such amount does not increase the Special Tax for Facilities levy on Undeveloped Property; less (vii) a credit for funds available to reduce the annual Special Tax for Facilities 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 ofCFD No. 2006-1 (IA No.1) which are not exempt from the Special Tax for Facilities pursuant to law or Section E below. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summerly) January 16, 2006 Page 4 "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section E below. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Property Owner Association Property, or Taxable Public Property. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2006-1 (IA No.1) shall be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, or Undeveloped 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. Residential Property shall be assigned to Land Use Classes 1 through 7 as listed in Table 1 below based on the Residential Floor Area for each unit. Non-Residential Property shall be assigned to Land Use Class 8. 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. C. MAXIMUM SPECIAL TAX FOR FACILITIES Prior to the issuance of CFD No. 2006-1 (IA No. 1) Bonds, the Assigned Special Tax for Facilities on Developed Property (set forth in Table 1), and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced in accordance with, and subject to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the City Council, the "Goals and Policies") calculated pursuant to the Goals and Policies based upon the Assigned Special Tax for Facilities on Developed Property exceeds the City's maximum level objective set forth in such document, the Assigned Special Tax for Facilities on Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced to the amount necessary to satisfy the City's objective with respect to the maximum overlapping debt burden level with the written consent of the CFD Administrator. The reductions permitted pursuant to this paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to be recorded by executing a certificate in substantially the form attached hereto as Exhibit "A". 1. Developed Property (a) Maximum Special Tax for Facilities City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summerly) January 16, 2006 Page 5 The Maximum Special Tax for Facilities 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 for Facilities or (ii) the amount derived by application of the Backup Special Tax for Facilities. (b) Assigned Special Tax for Facilities The Fiscal Year 2006-2007 Assigned Special Tax for Facilities for each Land Use Class is shown below in Table 1. TABLE 1 Assigned Special Tax for Facilities for Developed Property Community Facilities District No. 2006-1 Fiscal Year 2006-2007 Residential Property More than 3,649 sq. ft. $3,112 per unit 2 Residential Property 3,350 - 3,649 sq. ft. $2,871 per unit 3 Residential Property 3,050 - 3,349 sq. ft. $2,723 per unit 4 Residential Property 2,750 - 3,049 sq. ft. $2,588 per unit 5 Residential Property 2,450 - 2,749 sq. ft. $2,373 per unit 6 Residential Property 2,150 - 2,449 sq. ft. $2,321 per unit 7 Residential Property Less than 2,150 sq. ft. $2,235 per unit 8 Non-Residential Property NA $16,513 per Acre City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summerly) January 16, 2006 Page 6 (c) Backup Special Tax for Facilities - The Fiscal Year 2006-2007 Backup Special Tax for Facilities attributable to a Final Subdivision will equal $18,348, 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 Facilities for each Assessor's Parcel of Residential Property shall be computed by dividing the Backup Special Tax for Facilities attributable to the applicable Final Subdivision by the number of Assessor's Parcels for which building permits for residential construction have or may be issued (i.e., the number or residential lots). The Backup Special Tax for Facilities for each Assessor's Parcel of Non-Residential Property therein shall equal $18,348, multiplied by the Acreage of such Assessor's Parcel. 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 Facilities 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 may be issued within such Final Subdivision, then the Backup Special Tax for Facilities for each Assessor's Parcel of Developed Property that is part 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 for Facilities previously determined for an Assessor's Parcel of Developed Property that is not a part of the lot line adjustment or similar instrument for such Final Subdivision shall not be recalculated. 1. Determine the total Backup Special Tax for Facilities 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. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summerly) January 16, 2006 Page 7 3. The result of paragraph 2 above shall be the Backup Special Tax for Facilities per Acre which shall be applicable to Assessor's Parcels of Developed Property in such changed or modified portion ofthe Final Subdivision area for all remaining Fiscal Years in which the Special Tax for Facilities may be levied. (d) Release of Obligation to Pay and Disclose Backup Special Tax All Assessor's Parcels within CFD No. 2006-1 (IA No.1) will be relieved simultaneously and permanently from the obligation to pay and disclose the backup Special Tax if the CFD Administrator determines that the annual debt service required for the Outstanding Bonds, when compared to the Assigned Special taxes that may be levied against all Assessor's Parcels of Developed Property results in 110% debt service coverage (i.e., the Assigned Special Taxes that may be levied against all Developed Property in each remaining Fiscal Year based on then existing development in CFD No. 2006-1 (IA No.1) 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). (e) Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities The Fiscal Year 2006-2007 Assigned Special Tax for Facilities, identified in Table 1 above, and Backup Special Tax for Facilities shall increase thereafter, commencing on July 1, 2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (f) 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 for Facilities levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities 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. Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property The Fiscal Year 2006-2007 Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $18,348 per Acre and shall increase thereafter, commencing on July 1, 2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Maximum Special Tax for Facilities in effect for the previous Fiscal Year. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summerly) January 16, 2006 Page 8 D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the City Council shall determine the Special Tax Requirement for Facilities and levy the Special Tax for Facilities until the amount of Special Tax for Facilities levy equals the Special Tax Requirement for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows: First: The Special Tax for Facilities shall be levied on each Assessor's Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Special Tax for Facilities; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Facilities for Undeveloped Property; Third: Ifadditional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Special Tax for Facilities on each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is determined through the application of the Backup Special Tax for Facilities shall be increased in equal percentages from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for each such Assessor's Parcel; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property and Taxable Public Property at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. Notwithstanding the above, the City Council may, in any Fiscal Year, levy Proportionately less than 100% of the Assigned Special Tax for Facilities in step one (above), when (i) the City Council is no longer required to levy the Special Tax for Facilities pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-1 (IA No.1) Bonds have already been issued or the City Council has covenanted that it will not issue any additional CFD No. 2006-1 (IA No.1) Bonds (except refunding bonds) to be supported by the Special Tax for Facilities; and (iii) all Authorized Facilities have been constructed and/or acquired. Further notwithstanding the above, under no circumstances will the Special Tax for Facilities 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. 2006-1 (IA No.1). City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summerly) January 16, 2006 Page 9 E. EXEMPTIONS No Special Tax for Facilities shall be levied on up to 25.1 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006-1 (IA No.1). Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or Public Property, its tax-exempt status will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Tax for Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed Proportionately as part of the fourth step in Section D above, at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. F. MANNER OF COLLECTION The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2006-1 (IA No.1) may directly bill the Special Tax for Facilities, may collect Special Taxes at a different time or in a different manner 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. G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "Buildout" means, for CFD No. 2006-1 (IA No.1), that all expected building permits have been issued. "CFD Public Facilities" means either $18,635,000 in 2006 dollars, which shall increase by the Construction Inflation Index on July 1,2007, and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2006-1 (IA No.1) under the authorized bonding program for CFD No. 2006-1 (IA No.1), or (ii) shall be determined by the City Council concurrently with a covenant that it will not issue any more CFD No. 2006-1 (IA No. 1) Bonds (except refunding bonds) to be supported by the Special Tax for Facilities levy under this Rate and Method of Apportionment as described in Section D above. "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. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summerly) January 16, 2006 Page 10 "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 Improvement Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance the cost of CFD Public Facilities. "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 Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may be prepaid. The obligation of the Assessor's Parcel to pay the Special Tax for Facilities may be permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor's Parcel only ifthere 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 for Facilities 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 next occurring date that notice of redemption ofCFD No. 2006-1 (IA No.1) Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus plus plus plus less less Total: equals Redemption Premium Future Facilities Amount Defeasance Amount Administrative Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Special Tax for Facilities Prepayment Amount As of the proposed date of prepayment, the Special Tax for Facilities Prepayment Amount shall be calculated as follows: Paraeraph No.: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. City of Lake Elsinore Community Facilities District No. 2006-1 January 16, 2006 Improvement Area No.1 (Summerly) Page 11 2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities 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 for Facilities computed pursuant to paragraph 2 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-1 (IA No.1) based on the Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all expected development through Buildout of CFD No. 2006-1 (IA No.1), excluding any Assessor's Parcels which have been prepaid, and (b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-1 (IA No.1), excluding any Assessor's Parcels which have been prepaid. 4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the 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-l 00%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Previously Issued Bonds. 9. Determine the Special Tax for Facilities 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 for Facilities Prepayment 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. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No. I (Summerly) January 16, 2006 Page 12 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 ofCFD No. 2006-1 (IA No.1) 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 CFD No. 2006-1 (IA No.1) Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 13. The reserve fund 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 fund 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 fund 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 first 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 for Facilities prepayment is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Special Tax for Facilities Prepayment Amount"). From the Special Tax for Facilities 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 Indenture and be used to retire CFD No. 2006-1 (IA No.1) Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2006-1 (IA No.1). The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full $5,000 increment ofCFD No. 2006-1 (IA No.1) 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 prepaymentofCFD No. 2006-1 (IA No.1) Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined under paragraph 9 (above), the CFD Administrator shall remove the current City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summe/'ly) January 16, 2006 Page 13 - Fiscal Year's Special Tax for Facilities levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax for Facilities and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax for Facilities shall cease. Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be allowed unless, at the time of such proposed prepayment, the amount of Maximum Special Tax for Facilities that may be levied on Taxable Property within CFD No. 2006-1 (lA No.1) (after excluding 25.1 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006-1 (IA No.1) 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, as defined in Section A above, 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 for Facilities on an Assessor's Parcel of Developed Property or an Assessor's Parcel of 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 G.I; 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 for Facilities Prepayment Amount calculated according to Section G.I. F = the percentage, expressed as a decimal, by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities. A = the Administrative Fees and Expenses calculated according to Section G.I. 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 for Facilities and the percentage by which the Special Tax for Facilities 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 Facilities 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 City Council shall (i) distribute the funds remitted to it according to Section G.l, and (ii) indicate in the records ofCFD No. 2006-1 (lANo. 1) that there has been a partial prepayment of the Special Tax for Facilities and that a portion of the Special Tax for Facilities with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to Section D above. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.1 (Summer{v) January 16, 2006 Page 14 H. TERM OF SPECIAL TAX FOR FACILITIES - The Special Tax for Facilities shall be levied for a period not to exceed forty years commencing with Fiscal Year 2006-2007, provided however that the Special Tax for Facilities 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. 2006-1 (IA No.1) Bonds have been paid; (ii) all Authorized Facilities have been acquired and all reimbursements to the developer have been paid; and (iii) all other obligations of CFD No. 2006-1 (IA No.1) have been satisfied. I. SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section I: "Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-1 (IA No.1) in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-1 (IA No.1) for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-1 (IA No.1) pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-1 (IA No.1) equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) pay a proportionate share of Administrative Expenses, and (iii) anticipated Special Tax for Services delinquencies based City of Lake Elsinore Community Facilities District No. 2006-1 January 16, 2006 Improvement Area No.1 (Summerly) Page 15 on the delinquency rate for the Special Tax for Services levy in CFD No. 2006-1 (IA No.1) for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 1. Rate and Method of Apportionment of the Special Tax for Services Commencing with Fiscal Year 2006-2007 and for each subsequent Fiscal Year, the City Council shall levy the Special Tax for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non-Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. The Maximum Special Tax for Services for Fiscal Year 2006-2007 shall be $246.84 per Developed Single Family Unit, $123.42 per Developed Multifamily Unit, and $555.90 per Acre for each Assessor's Parcel of Non-Residential Property. On each July 1, commencing July 1,2007, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services - The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the City Council. 3. Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-1 (IA No.1) may collect the Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. J. 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. 2006-1 (IA No.1). 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 City 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 City Council shall be final and binding as to all persons. K: ICLIENTS2VohnLaingsummer/ylMe/lolRMAVA I Fina/RMA.doc City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No. I (Summerly) January 16, 2006 Page 16 EXHIBIT A CERTIFICATE TO AMEND SPECIAL TAX FOR FACILITIES CITY OF LAKE ELSINORE AND CFD No. 2006-1 (IA No.n CERTIFICATE 1. Pursuant to Section C of the Rate and Method of Apportionment, the City of Lake Elsinore and City of Lake Elsinore Community Facilities District No. 2006-1 ("CFD No. 2006-1 (IA No.1)") hereby agree to a reduction in the Assigned Special Tax for Facilities for Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 2006-1 (IA No.1): (a) The information in Table 1 relating to the Assigned Special Tax for Facilities for Developed Property within CFD No. 2006-1 (IA No.1) shall be modified as follows: 1 2 3 4 5 6 7 8 Residential Property Residential Property Residential Property Residential Property Residential Property Residential Property Residential Property Non-Residential Property More than 3,649 sq. ft. 3,350 - 3,649 sq. ft. 3,050 - 3,349 sq. ft. 2,750 - 3,049 sq. ft. 2,450 - 2,749 sq. ft. 2,150 - 2,449 sq. ft. Less than 2,150 sq. ft. NA $_ per unit $ per unit $ per unit $ per unit $ per unit $ per unit $ per unit $_ per Acre (b) The Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 2006-1 (IA No.1), as stated in Section C.l.(c), shall be reduced from $18,348 per Acre to $_ per Acre. (c) The Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property within CFD No. 2006-1 (IA No.1), as stated in Section C.2, shall be reduced from $18,348 per Acre to $_ per Acre. 2. The Special Tax for Facilities may only be modified prior to the first issuance ofCFD No. 2006- 1 (IA No. 1) Bonds. 3. Upon execution of the Certificate by the City of Lake Elsinore and landowner(s), the City shall cause an amended notice of Special Tax lien for CFD No. 2006-1 (IA No. 1) to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf ofthe City of Lake Elsinore and CFD No. 2006-1 (IA No.1), receipt of this Certificate and modification of the Rate and Method of Apportionment as set forth in this Certificate. CITY OF LAKE ELSINORE By: Date: CFD Administrator Landowner( s) By: Date: FINAL - RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT No. 2006-1 IMPROVEMENT AREA No.2 (SUMMERL Y) A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly) ("CFD No. 2006-1 (IA No. 2)") and collected each Fiscal Year commencing in Fiscal Year 2006-2007, in an amount determined through the application of this Rate and Method of Apportionment as described below. All of the real property in CFD No. 2006-1 (IA No.2), unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner 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. "Act" means the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5, Part 1, Division 2 of Title 5 of the California Government Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration ofCFD No. 2006-1 (IA No.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 City 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. 2006-1 (IA No.2) or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-1 (IA No. 2) or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-1 (IA No.2) or obligated persons associated with 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. 2006-1 (IA No.2) or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2006-1 (IA No.2) for any other administrative purposes ofCFD No. 2006-1 (IA No.2), including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 1 "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's Parcel number. "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 for Facilities" means the Special Tax for Facilities for each Land Use Class of Developed Property, as determined in accordance with Section C.1.(b) below. "Authorized Facilities" means those authorized improvements, as listed in an exhibit to the Resolution of Formation. "Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.( c) below. "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 for Facilities, the Special Tax Requirement for Services as determined in accordance with Section I below, and providing for the levy and collection of the Special Taxes. "CFD No. 2006-1" means City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly). "CFD No. 2006-1 (IA No.2)" means Improvement Area No.2 of CFD No. 2006-1. as identified on the boundary map for CFD No. 2006-1. "CFD No. 2006-1 (IA No.2) Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 2006-1 (IA No.2) and secured solely by the Special Tax for Facilities levy on property within the boundaries of CFD No. 2006-1 (IA No.2) under the Act. "City" means the City of Lake Elsinore. "City Council" means the City Council of the City of Lake Elsinore, acting as the legislative body ofCFD No. 2006-1 (IA No.2). "County" means the County of Riverside. "Developed Property" means, with respect to the Special Tax for Facilities, 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 on City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 2 or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Tax for Facilities is being levied. "Final Subdivision" means (i) a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots for which building permits may be issued, or (ii) for condominiums, a final map, or portion thereof, approved by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 that creates individual lots for which building permits may be issued. "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 CFD No. 2006-1 (IA No.2) Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1 below. "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, 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 or more non-residential units or facilities has been issued by the City. "Outstanding Bonds" means all CFD No. 2006-1 (IA No.2) Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2006-1 (IA No.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 ofthe actual Special Tax for Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of Undeveloped Property. The term "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. 2006-1 (IA No.2) owned by, irrevocably offered or dedicated to, or over, through or under which an easement for purposes of public use has been granted, to the federal government, the State, the County, the City, the Lake Elsinore Unified School District, or any City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerl)!) January 16, 2006 Page 3 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. 2006-1 (IA No.2) that was encumbered, as of January 1 of the previous Fiscal Year, by an unmanned utility easement making impractical its utilization for other than the purpose set forth in the easement. "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 permit(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. "Resolution of Formation" means the resolution of formation for CFD No. 2006-1 (IA No. 2). "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2006-1 (IA No.2) pursuant to the Act. "Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property, Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means that amount required in any Fiscal Year for CFD No. 2006-1 (IA No.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 CFD No. 2006- 1 (IA No.2) Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No. 2006-1 (IA No.2) Bonds due in the calendar year commencing in such Fiscal Year; (iii) pay a proportionate share of Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay for reasonably anticipated Special Tax for Facilities delinquencies based on the delinquency rate for the Special Tax for Facilities levy in the previous Fiscal Year; (vi) pay directly for acquisition or construction of Authorized Facilities to the extent that the inclusion of such amount does not increase the Special Tax for Facilities levy on Undeveloped Property; less (vii) a credit for funds available to reduce the annual Special Tax for Facilities 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 ofCFD No. 2006-1 (IA No.2) which are not exempt from the Special Tax for Facilities pursuant to law or Section E below. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 4 "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section E below. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Property Owner Association Property, or Taxable Public Property. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2006-1 (IA No.2) shall be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, or Undeveloped 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. Residential Property shall be assigned to Land Use Classes 1 through 7 as listed in Table 1 below based on the Residential Floor Area for each unit. Non-Residential Property shall be assigned to Land Use Class 8. 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. C. MAXIMUM SPECIAL TAX FOR FACILITIES Prior to the issuance ofCFD No. 2006-1 (IA No.2) Bonds, the Assigned Special Tax for Facilities on Developed Property (set forth in Table 1), and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced in accordance with, and subject to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the City Council, the "Goals and Policies") calculated pursuant to the Goals and Policies based upon the Assigned Special Tax for Facilities on Developed Property exceeds the City's maximum level objective set forth in such document, the Assigned Special Tax for Facilities on Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced to the amount necessary to satisfy the City's objective with respect to the maximum overlapping debt burden level with the written consent of the CFD Administrator. The reductions permitted pursuant to this paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to be recorded by executing a certificate in substantially the form attached hereto as Exhibit "A". 1. Developed Property (a) Maximum Special Tax for Facilities City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16,2006 Page 5 The Maximum Special Tax for Facilities 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 for Facilities or (ii) the amount derived by application of the Backup Special Tax for Facilities. (b) Assigned Special Tax for Facilities The Fiscal Year 2006-2007 Assigned Special Tax for Facilities for each Land Use Class is shown below in Table 1. TABLE 1 Assigned Special Tax for Facilities for Developed Property Community Facilities District No. 2006-1 Fiscal Year 2006-2007 1 Residential Property More than 3,649 sq. ft. $3,112 per unit 2 Residential Property 3,350 - 3,649 sq. ft. $2,871 per unit 3 Residential Property 3,050 - 3,349 sq. ft. $2,723 per unit 4 Residential Property 2,750 - 3,049 sq. ft. $2,588 per unit 5 Residential Property 2,450 - 2,749 sq. ft. $2,373 per unit 6 Residential Property 2,150 - 2,449 sq. ft. $2,321 per unit 7 Residential Property Less than 2,150 sq. ft. $2,235 per unit 8 Non-Residential Property NA $15,781 per Acre City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 6 (c) Backup Special Tax for Facilities The Fiscal Year 2006-2007 Backup Special Tax for Facilities attributable to a Final Subdivision will equal $17,533, 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 Facilities for each Assessor's Parcel of Residential Property shall be computed by dividing the Backup Special Tax for Facilities attributable to the applicable Final Subdivision by the number of Assessor's Parcels for which building permits for residential construction have or may be issued (i.e., the number or residential lots). The Backup Special Tax for Facilities for each Assessor's Parcel ofN on- Residential Property therein shall equal $17,533, multiplied by the Acreage of such Assessor's Parcel. 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 Facilities 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 may be issued within such Final Subdivision, then the Backup Special Tax for Facilities for each Assessor's Parcel of Developed Property that is part 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 for Facilities previously determined for an Assessor's Parcel of Developed Property that is not a part of the lot line adjustment or similar instrument for such Final Subdivision shall not be recalculated. 1. Determine the total Backup Special Tax for Facilities 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. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 7 3. The result of paragraph 2 above shall be the Backup Special Tax for Facilities per Acre which shall be applicable to Assessor's Parcels of Developed Property in such changed or modified portion ofthe Final Subdivision area for all remaining Fiscal Years in which the Special Tax for Facilities may be levied. (d) Release of Obligation to Pay and Disclose Backup Special Tax All Assessor's Parcels within CFD No. 2006-1 (IA No.2) will be relieved simultaneously and permanently from the obligation to pay and disclose the backup Special Tax if the CFD Administrator determines that the annual debt service required for the Outstanding Bonds, when compared to the Assigned Special taxes that may be levied against all Assessor's Parcels of Developed Property results in 110% debt service coverage (i.e., the Assigned Special Taxes that may be levied against all Developed Property in each remaining Fiscal Year based on then existing development in CFD No. 2006-1 (IA No.2) 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). (e) Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities The Fiscal Year 2006-2007 Assigned Special Tax for Facilities, identified in Table 1 above, and Backup Special Tax for Facilities shall increase thereafter, commencing on July 1,2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (f) 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 for Facilities levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities 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. Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Propertv The Fiscal Year 2006-2007 Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $17,533 per Acre and shall increase thereafter, commencing on July 1,2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Maximum Special Tax for Facilities in effect for the previous Fiscal Year. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 8 D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the City Council shall determine the Special Tax Requirement for Facilities and levy the Special Tax for Facilities until the amount of Special Tax for Facilities levy equals the Special Tax Requirement for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows: First: The Special Tax for Facilities shall be levied on each Assessor's Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Special Tax for Facilities; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Facilities for Undeveloped Property; Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Special Tax for Facilities on each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is determined through the application of the Backup Special Tax for Facilities shall be increased in equal percentages from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for each such Assessor's Parcel; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property and Taxable Public Property at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. Notwithstanding the above, the City Council may, in any Fiscal Year, levy Proportionately less than 100% of the Assigned Special Tax for Facilities in step one (above), when (i) the City Council is no longer required to levy the Special Tax for Facilities pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-1 (IA No.2) Bonds have already been issued or the City Council has covenanted that it will not issue any additional CFD No. 2006-1 (IA No.2) Bonds (except refunding bonds) to be supported by the Special Tax for Facilities; and (iii) all Authorized Facilities have been constructed and/or acquired. Further notwithstanding the above, under no circumstances will the Special Tax for Facilities 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. 2006-1 (IA No.2). City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 9 E. EXEMPTIONS No Special Tax for Facilities shall be levied on up to 22.1 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006-1 (IA No.2). Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or Public Property, its tax-exempt status will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Tax for Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed Proportionately as part of the fourth step in Section D above, at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. F. MANNER OF COLLECTION The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2006-1 (IA No.2) may directly bill the Special Tax for Facilities, may collect Special Taxes at a different time or in a different manner 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. G. PREP A YMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "Buildout" means, for CFD No. 2006-1 (IA No.2), that all expected building permits have been issued. "CFD Public Facilities" means either $17,030,000 in 2006 dollars, which shall increase by the Construction Inflation Index on July 1,2007, and on each July I thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2006-1 (IA No.2) under the authorized bonding program for CFD No. 2006-1 (IA No.2), or (ii) shall be determined by the City Council concurrently with a covenant that it will not issue any more CFD No. 2006-1 (IA No.2) Bonds (except refunding bonds) to be supported by the Special Tax for Facilities levy under this Rate and Method of Apportionment as described in Section D above. "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. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 10 "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 Improvement Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance the cost of CFD Public Facilities. "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 Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may be prepaid. The obligation of the Assessor's Parcel to pay the Special Tax for Facilities may be permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor's Parcel only ifthere 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 for Facilities 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 next occurring date that notice of redemption ofCFD No. 2006-1 (IA No.2) Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus plus plus plus less less Total: equals Redemption Premium Future Facilities Amount Defeasance Amount Administrative Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Special Tax for Facilities Prepayment Amount As of the proposed date of prepayment, the Special Tax for Facilities Prepayment Amount shall be calculated as follows: Parae:raph No.: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. City of Lake Elsinore Community Facilities District No. 2006-1 January 16, 2006 Improvement Area No.2 (Summerly) Page II 2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities 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 for Facilities computed pursuant to paragraph 2 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-1 (IA No.2) based on the Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all expected development through Buildout of CFD No. 2006-1 (IA No.2), excluding any Assessor's Parcels which have been prepaid, and (b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-1 (IA No.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-l 00%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Previously Issued Bonds. 9. Determine the Special Tax for Facilities 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 for Facilities Prepayment 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. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 12 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. 2006-1 (IA No.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 CFD No. 2006-1 (IA No.2) Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 13. The reserve fund 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 fund 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 fund 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 first 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 for Facilities prepayment is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Special Tax for Facilities Prepayment Amount"). From the Special Tax for Facilities 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 Indenture and be used to retire CFD No. 2006-1 (IA No.2) Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2006-1 (IA No.2). The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full $5,000 increment ofCFD No. 2006-1 (IA No.2) Bonds. In such cases, the increment above $5,000 or integral multiple thereofwill be retained in the appropriate fund established under the Indenture to be used with the next prepaymentofCFD No. 2006-1 (IA No.2) Bonds orto make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined under paragraph 9 (above), the CFD Administrator shall remove the current City of Lake Elsinore Community Facilities District No. 2006-1 January 16, 2006 Improvement Area No.2 (SlImmerly) Page 13 Fiscal Year's Special Tax for Facilities levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax for Facilities and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax for Facilities shall cease. Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be allowed unless, at the time of such proposed prepayment, the amount of Maximum Special Tax for Facilities that may be levied on Taxable Property within CFD No. 2006-1 (IA No.2) (after excluding 22.1 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006-1 (IA No.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, as defined in Section A above, 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 for Facilities on an Assessor's Parcel of Developed Property or an Assessor's Parcel ofD ndeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section G.l; 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 for Facilities Prepayment Amount calculated according to Section G.l. F = the percentage, expressed as a decimal, by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities. A = the Administrative Fees and Expenses calculated according to Section G.l. 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 for Facilities and the percentage by which the Special Tax for Facilities 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 Facilities 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 City Council shall (i) distribute the funds remitted to it according to Section G.I, and (ii) indicate in the records ofCFD No. 2006-1 (IA No.2) that there has been a partial prepayment of the Special Tax for Facilities and that a portion of the Special Tax for Facilities with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00- F) of the remaining Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to Section D above. City of Lake Elsinore Community Facilities District No. 2006-1 1mprovement Area No.2 (Summerly) January 16, 2006 Page 14 H. TERM OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be levied for a period not to exceed forty years commencing with Fiscal Year 2006-2007, provided however that the Special Tax for Facilities 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. 2006-1 (IA No.2) Bonds have been paid; (ii) all Authorized Facilities have been acquired and all reimbursements to the developer have been paid; and (iii) all other obligations of CFD No. 2006-1 (IA No.2) have been satisfied. I. SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section I: "Developed Multifamily Unit" means a residential dwelling unit within a building in which each ofthe individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May I preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May I preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-1 (IA No.2) in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-1 (IA No.2) for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-1 (IA No.2) pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-1 (IA No.2) equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) pay a proportionate share of Administrative Expenses, and (iii) anticipated Special Tax for Services delinquencies based City of Lake Elsinore Community Facilities District No. 2006-1 January 16, 2006 Improvement Area No.2 (Summerly) Page 15 on the delinquency rate for the Special Tax for Services levy in CFD No. 2006-1 (IA No.2) for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 1. Rate and Method of Apportionment of the Special Tax for Services Commencing with Fiscal Year 2006-2007 and for each subsequent Fiscal Year, the City Council shall levy the Special Tax for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non-Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. The Maximum Special Tax for Services for Fiscal Year 2006-2007 shall be $246.84 per Developed Single Family Unit, $123.42 per Developed Multifamily Unit, and $555.90 per Acre for each Assessor's Parcel of Non-Residential Property. On each July 1, commencing July 1,2007, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the City Council. 3. Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-1 (IA No.2) may collect the Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. J. APPEALS AND INTERPRET A TIONS 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. 2006-1 (IA No.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 City Council may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration ofthe Special Tax and any landowner or resident appeals. Any decision of the City Council shall be final and binding as to all persons. K: Ie Lf ENTS2VohnLaing,SummerlylMellolRMAVA 1 FinalRMA. doc City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.2 (Summerly) January 16, 2006 Page 16 EXHIBIT A CERTIFICATE TO AMEND SPECIAL TAX FOR FACILITIES CITY OF LAKE ELSINORE AND CFD No. 2006-1 (lA No.2) CERTIFICATE 1. Pursuant to Section C of the Rate and Method of Apportionment, the City of Lake Elsinore and City of Lake Elsinore Community Facilities District No. 2006-1 ("CFD No. 2006-1 (IA No. 2)") hereby agree to a reduction in the Assigned Special Tax for Facilities for Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 2006-1 (IA No.2): (a) The information in Table 1 relating to the Assigned Special Tax for Facilities for Developed Property within CFD No. 2006-1 (IA No.2) shall be modified as follows: 1 2 3 4 5 6 7 8 Residential Property Residential Property Residential Property Residential Property Residential Property Residential Property Residential Property Non-Residential Property More than 3,649 sq. ft. 3,350 - 3,649 sq. ft. 3,050 - 3,349 sq. ft. 2,750 - 3,049 sq. ft. 2,450 - 2,749 sq. ft. 2,150 - 2,449 sq. ft. Less than 2,150 sq. ft. NA $_ per unit $ per unit $ per unit $ per unit $ per unit $ per unit $ per unit $_ per Acre (b) The Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 2006-1 (IA No.2), as stated in Section c.1.(c), shall be reduced from $17,533 per Acre to $ _ per Acre. (c) The Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property within CFD No. 2006-1 (IA No.2), as stated in Section C.2, shall be reduced from $17,533 per Acre to $_ per Acre. 2. The Special Tax for Facilities may only be modified prior to the first issuance ofCFD No. 2006- 1 (IA No.2) Bonds. 3. Upon execution of the Certificate by the City of Lake Elsinore and landowner(s), the City shall cause an amended notice of Special Tax lien for CFD No. 2006-1 (IA No.2) to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf ofthe City of Lake Elsinore and CFD No. 2006-1 (IA No.2), receipt of this Certificate and modification of the Rate and Method of Apportionment as set forth in this Certificate. CITY OF LAKE ELSINORE By: Date: CFD Administrator Landowner( s) By: Date: FINAL RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT No. 2006-1 IMPROVEMENT AREA No.3 (SUMMERL Y) A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly) ("CFD No. 2006-1 (IA No. 3)") and collected each Fiscal Year commencing in Fiscal Year 2006-2007, in an amount determined through the application ofthis Rate and Method of Apportionment as described below. All ofthe real property in CFD No. 2006-1 (IA No.3), unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner 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. "Act" means the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5, Part 1, Division 2 of Title 5 of the California Government Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration ofCFD No. 2006-1 (IA No.3): 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 City 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. 2006-1 (IA No.3) or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-1 (IA No. 3) or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-1 (IA No.3) or obligated persons associated with 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. 2006-1 (IA No.3) or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2006-1 (IA No.3) for any other administrative purposes ofCFD No. 2006-1 (IA No.3), including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 1 "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's Parcel number. "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 for Facilities" means the Special Tax for Facilities for each Land Use Class of Developed Property, as determined in accordance with Section C.1.(b) below. "Authorized Facilities" means those authorized improvements, as listed in an exhibit to the Resolution of Formation. "Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.( c) below. "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 for Facilities, the Special Tax Requirement for Services as determined in accordance with Section I below, and providing for the levy and collection of the Special Taxes. "CFD No. 2006-1" means City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly). "CFD No. 2006-1 (IA No.3)" means Improvement Area No.3 of CFD No. 2006-1. as identified on the boundary map for CFD No. 2006-1. "CFD No. 2006-1 (IA No.3) Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 2006-1 (IA No.3) and secured solely by the Special Tax for Facilities levy on property within the boundaries of CFD No. 2006-1 (IA No.3) under the Act. "City" means the City of Lake Elsinore. "City Council" means the City Council of the City of Lake Elsinore, acting as the legislative body ofCFD No. 2006-1 (IA No.3). "County" means the County of Riverside. "Developed Property" means, with respect to the Special Tax for Facilities, 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 on City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (SlImmerly) January 16, 2006 Page 2 or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Tax for Facilities is being levied. "Final Subdivision" means (i) a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots for which building permits may be issued, or (ii) for condominiums, a final map, or portion thereof, approved by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 that creates individual lots for which building permits may be issued. "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 CFD No. 2006-1 (IA No.3) Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1 below. "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, 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 or more non-residential units or facilities has been issued by the City. "Outstanding Bonds" means all CFD No. 2006-1 (IA No.3) Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2006-1 (IA No.3) 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 for Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of Undeveloped Property. The term "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 CFO No. 2006-1 (IA No.3) owned by, irrevocably offered or dedicated to, or over, through or under which an easement for purposes of public use has been granted, to the federal government, the State, the County, the City, the Lake Elsinore Unified School District, or any City of Lake Elsinore Community Facilities District No. 2006-1 1mprovemellf Area No.3 (Summerly) January 16, 2006 Page 3 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. 2006-1 (IA No.3) that was encumbered, as of January 1 of the previous Fiscal Year, by an unmanned utility easement making impractical its utilization for other than the purpose set forth in the easement. "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 permit(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. "Resolution of Formation" means the resolution of formation for CFD No. 2006-1 (IA No. 3). "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2006-1 (IA No.3) pursuant to the Act. "Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property, Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means that amount required in any Fiscal Year for CFD No. 2006-1 (IA No.3) 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 CFD No. 2006- 1 (IA No.3) Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No. 2006-1 (IA No.3) Bonds due in the calendar year commencing in such Fiscal Year; (iii) pay a proportionate share of Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay for reasonably anticipated Special Tax for Facilities delinquencies based on the delinquency rate for the Special Tax for Facilities levy in the previous Fiscal Year; (vi) pay directly for acquisition or construction of Authorized Facilities to the extent that the inclusion of such amount does not increase the Special Tax for Facilities levy on Undeveloped Property; less (vii) a credit for funds available to reduce the annual Special Tax for Facilities 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 ofCFD No. 2006-1 (IA No.3) which are not exempt from the Special Tax for Facilities pursuant to law or Section E below. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16,2006 Page 4 "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section E below. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Property Owner Association Property, or Taxable Public Property. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2006-1 (IA No.3) shall be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, or Undeveloped 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. Residential Property shall be assigned to Land Use Classes 1 through 7 as listed in Table 1 below based on the Residential Floor Area for each unit. Non-Residential Property shall be assigned to Land Use Class 8. 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. C. MAXIMUM SPECIAL TAX FOR FACILITIES Prior to the issuance ofCFD No. 2006-1 (IA No.3) Bonds, the Assigned Special Tax for Facilities on Developed Property (set forth in Table 1), and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced in accordance with, and subject to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the City Council, the "Goals and Policies") calculated pursuant to the Goals and Policies based upon the Assigned Special Tax for Facilities on Developed Property exceeds the City's maximum level objective set forth in such document, the Assigned Special Tax for Facilities on Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced to the amount necessary to satisfy the City's objective with respect to the maximum overlapping debt burden level with the written consent of the CFD Administrator. The reductions permitted pursuant to this paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to be recorded by executing a certificate in substantially the form attached hereto as Exhibit "A". 1. Developed Property (a) Maximum Special Tax for Facilities City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 5 The Maximum Special Tax for Facilities 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 for Facilities or (ii) the amount derived by application of the Backup Special Tax for Facilities. (b) Assigned Special Tax for Facilities The Fiscal Year 2006-2007 Assigned Special Tax for Facilities for each Land Use Class is shown below in Table 1. TABLE 1 Assigned Special Tax for Facilities for Developed Property Community Facilities District No. 2006-1 Fiscal Year 2006-2007 Residential Property More than 3,649 sq. ft. $3,112 per unit 2 Residential Property 3,350 - 3,649 sq. ft. $2,871 per unit 3 Residential Property 3,050 - 3,349 sq. ft. $2,723 per unit 4 Residential Property 2,750 - 3,049 sq. ft. $2,588 per unit 5 Residential Property 2,450 - 2,749 sq. ft. $2,373 per unit 6 Residential Property 2,150 - 2,449 sq. ft. $2,321 per unit 7 Residential Property Less than 2,150 sq. ft. $2,235 per unit 8 Non-Residential Property NA $16,848 per Acre City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 6 (c) Backup Special Tax for Facilities The Fiscal Year 2006-2007 Backup Special Tax for Facilities attributable to a Final Subdivision will equal $18,718, 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 Facilities for each Assessor's Parcel of Residential Property shall be computed by dividing the Backup Special Tax for Facilities attributable to the applicable Final Subdivision by the number of Assessor's Parcels for which building permits for residential construction have or may be issued (i.e., the number or residential lots). The Backup Special Tax for Facilities for each Assessor's Parcel of Non- Residential Property therein shall equal $18,718, multiplied by the Acreage of such Assessor's Parcel. 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 Facilities 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 may be issued within such Final Subdivision, then the Backup Special Tax for Facilities for each Assessor's Parcel of Developed Property that is part 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 for Facilities previously determined for an Assessor's Parcel of Developed Property that is not a part of the lot line adjustment or similar instrument for such Final Subdivision shall not be recalculated. 1. Determine the total Backup Special Tax for Facilities 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. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 7 3. The result of paragraph 2 above shall be the Backup Special Tax for Facilities 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 for Facilities may be levied. (d) Release of Obligation to Pay and Disclose Backup Special Tax All Assessor's Parcels within CFD No. 2006-1 (IA No.3) will be relieved simultaneously and permanently from the obligation to pay and disclose the backup Special Tax if the CFD Administrator determines that the annual debt service required for the Outstanding Bonds, when compared to the Assigned Special taxes that may be levied against all Assessor's Parcels of Developed Property results in 110% debt service coverage (i.e., the Assigned Special Taxes that may be levied against all Developed Property in each remaining Fiscal Year based on then existing development in CFD No. 2006-1 (IA No.3) 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). (e) Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities The Fiscal Year 2006-2007 Assigned Special Tax for Facilities, identified in Table 1 above, and Backup Special Tax for Facilities shall increase thereafter, commencing on July 1, 2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (f) 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 for Facilities levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities 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. Taxable Property Owner Association Property. Taxable Public Property. and Undeveloped Property The Fiscal Year 2006-2007 Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $18,761 per Acre and shall increase thereafter, commencing on July 1, 2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Maximum Special Tax for Facilities in effect for the previous Fiscal Year. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 8 D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES - Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the City Council shall determine the Special Tax Requirement for Facilities and levy the Special Tax for Facilities until the amount of Special Tax for Facilities levy equals the Special Tax Requirement for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows: First: The Special Tax for Facilities shall be levied on each Assessor's Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Special Tax for Facilities; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Facilities for Undeveloped Property; Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Special Tax for Facilities on each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is determined through the application of the Backup Special Tax for Facilities shall be increased in equal percentages from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for each such Assessor's Parcel; Fourth: Ifadditional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property and Taxable Public Property at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. Notwithstanding the above, the City Council may, in any Fiscal Year, levy Proportionately less than 100% of the Assigned Special Tax for Facilities in step one (above), when (i) the City Council is no longer required to levy the Special Tax for Facilities pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-1 (IA No.3) Bonds have already been issued or the City Council has covenanted that it will not issue any additional CFD No. 2006-1 (IA No.3) Bonds (except refunding bonds) to be supported by the Special Tax for Facilities; and (iii) all Authorized Facilities have been constructed and/or acquired. Further notwithstanding the above, under no circumstances will the Special Tax for Facilities 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. 2006-1 (IA No.3). City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 9 E. EXEMPTIONS - No Special Tax for Facilities shall be levied on up to 19.2 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006-1 (IA No.3). Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or Public Property, its tax-exempt status will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Tax for Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed Proportionately as part of the fourth step in Section D above, at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. F. MANNER OF COLLECTION The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2006-1 (IA No.3) may directly bill the Special Tax for Facilities, may collect Special Taxes at a different time or in a different manner 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. G. PREP A YMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "Huildout" means, for CFD No. 2006-1 (IA No.3), that all expected building permits have been issued. "CFD Public Facilities" means either $16,410,000 in 2006 dollars, which shall increase by the Construction Inflation Index on July 1,2007, and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2006-1 (IA No.3) under the authorized bonding program for CFD No. 2006-1 (IA No.3), or (ii) shall be determined by the City Council concurrently with a covenant that it will not issue any more CFD No. 2006-1 (IA No.3) Bonds (except refunding bonds) to be supported by the Special Tax for Facilities levy under this Rate and Method of Apportionment as described in Section D above. "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. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 10 - "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 Improvement Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance the cost of CFD Public Facilities. "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 Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may be prepaid. The obligation ofthe Assessor's Parcel to pay the Special Tax for Facilities may be permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor's Parcel 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 for Facilities 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 next occurring date that notice of redemption ofCFD No. 2006-1 (IA No.3) Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus plus plus plus less less Total: equals Redemption Premium Future Facilities Amount Defeasance Amount Administrative Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Special Tax for Facilities Prepayment Amount As of the proposed date of prepayment, the Special Tax for Facilities Prepayment Amount shall be calculated as follows: Para2:raph No.: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. City of Lake Elsinore Community Facilities District No. 2006-1 January 16, 2006 Improvement Area No.3 (Summerly) Page 11 2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities 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 for Facilities computed pursuant to paragraph 2 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-1 (IA No.3) based on the Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all expected development through Buildout ofCFD No. 2006-1 (IA No.3), excluding any Assessor's Parcels which have been prepaid, and '.I.ir,,. (b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-1 (IA No.3), 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-l 00%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Previously Issued Bonds. 9. Determine the Special Tax for Facilities 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 for Facilities Prepayment 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. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (SlImmerly) January 16, 2006 Page 12 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 ofCFDNo. 2006-1 (IA No.3) are asca1culated by the CFD Administrator and include the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming CFD No. 2006-1 (IA No.3) Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 13. The reserve fund 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 fund 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 fund 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 first 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 for Facilities prepayment is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Special Tax for Facilities Prepayment Amount"). From the Special Tax for Facilities 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 Indenture and be used to retire CFD No. 2006-1 (IA No.3) Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2006-1 (IA No.3). The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full $5,000 increment ofCFD No. 2006-1 (IA No.3) 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 prepaymentofCFD No. 2006-1 (IA No.3) Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined under paragraph 9 (above), the CFD Administrator shall remove the current City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 13 Fiscal Year's Special Tax for Facilities levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax for Facilities and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax for Facilities shall cease. '%-. Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be allowed unless, at the time of such proposed prepayment, the amount of Maximum Special Tax for Facilities that may be levied on Taxable Property within CFD No. 2006-1 (IA No.3) (after excluding 19.2 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006-1 (IA No.3) 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, as defined in Section A above, 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 for Facilities on an Assessor's Parcel of Developed Property or an Assessor's Parcel of 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 G.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 for Facilities Prepayment Amount calculated according to Section G.1. F = the percentage, expressed as a decimal, by which the owner ofthe Assessor's Parcel is partially prepaying the Special Tax for Facilities. A = the Administrative Fees and Expenses calculated according to Section G.l. 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 for Facilities and the percentage by which the Special Tax for Facilities shall be prepaid. The CFD Administrator shall provide the owner with a statement ofthe amount required for the partial prepayment of the Special Tax for Facilities 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 City Council shall (i) distribute the funds remitted to it according to Section G.I, and (ii) indicate in the records ofCFD No. 2006-1 (IA No.3) that there has been a partial prepayment ofthe Special Tax for Facilities and that a pOliion of the Special Tax for Facilities with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00- F) of the remaining Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to Section D above. City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 14 H. TERM OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be levied for a period not to exceed forty years commencing with Fiscal Year 2006-2007, provided however that the Special Tax for Facilities 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. 2006-1 (IA No.3) Bonds have been paid; (ii) all Authorized Facilities have been acquired and all reimbursements to the developer have been paid; and (iii) all other obligations ofCFD No. 2006-1 (IA No.3) have been satisfied. ....., I. SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section I: "Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-1 (IA No.3) in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-1 (IA No.3) for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-1 (IA No.3) pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-1 (IA No.3) equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) pay a proportionate share of Administrative Expenses, and (Hi) anticipated Special Tax for Services delinquencies based City of Lake Elsinore Community Facilities District No. 2006-1 January 16, 2006 Improvement Area No.3 (SlImmerly) Page 15 - on the delinquency rate for the Special Tax for Services levy in CFD No. 2006-1 (IA No.3) for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 1. Rate and Method of Apportionment of the Special Tax for Services ~ Commencing with Fiscal Year 2006-2007 and for each subsequent Fiscal Year, the City Council shall levy the Special Tax for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non-Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. The Maximum Special Tax for Services for Fiscal Year 2006-2007 shall be $246.84 per Developed Single Family Unit, $123.42 per Developed Multifamily Unit, and $555.90 per Acre for each Assessor's Parcel of Non-Residential Property. On each July 1, commencing July 1,2007, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the City Council. 3. Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-1 (IA No.3) may collect the Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. J. 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. 2006-1 (IA No.3). 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 City 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 ofthe City Council shall be final and binding as to all persons. K: leLl ENTS2VohnLaingsummerlyIMellolRMA \fA I FinaIRMA. doc City of Lake Elsinore Community Facilities District No. 2006-1 Improvement Area No.3 (Summerly) January 16, 2006 Page 16 EXHIBIT A CERTIFICATE TO AMEND SPECIAL TAX FOR FACILITIES CITY OF LAKE ELSINORE AND CFD No. 2006-1 (lA No.3) CERTIFICATE 1. Pursuant to Section C of the Rate and Method of Apportionment, the City of Lake Elsinore and City of Lake Elsinore Community Facilities District No. 2006-1 ("CFD No. 2006-1 (IA No. 3)") hereby agree to a reduction in the Assigned Special Tax for Facilities for Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision within CFO No. 2006-1 (IA No.3): (a) The information in Table 1 relating to the Assigned Special Tax for Facilities for Developed Property within CFD No. 2006-1 (IA No.3) shall be modified as follows: 1 2 3 4 5 6 7 8 $_ per unit $ per unit $ per unit $ per unit $ per unit $ per unit $ per unit $_ per Acre Residential Property Residential Property Residential Property Residential Property Residential Property Residential Property Residential Property Non-Residential Property More than 3,649 sq. ft. 3,350 - 3,649 sq. ft. 3,050 - 3,349 sq. ft. 2,750 - 3,049 sq. ft. 2,450 - 2,749 sq. ft. 2,150 - 2,449 sq. ft. Less than 2,150 sq. ft. NA (b) The Backup Special Tax for Facilities attributable to a Final Subdivision within CFO No. 2006-1 (IA No.3), as stated in Section C.1.(c), shall be reduced from $18,718 per Acre to $_ per Acre. (c) The Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property within CFO No. 2006-1 (IA No.3), as stated in Section C.2, shall be reduced from $18,761 per Acre to $_ per Acre. 2. The Special Tax for Facilities may only be modified prior to the first issuance ofCFO No. 2006- 1 (IA No.3) Bonds. 3. Upon execution of the Certificate by the City of Lake Elsinore and landowner(s), the City shall cause an amended notice of Special Tax lien for CFD No. 2006-1 (IA No.3) to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf of the City of Lake Elsinore and CFD No. 2006-1 (IA No.3), receipt of this Certificate and modification of the Rate and Method of Apportionment as set forth in this Certificate. CITY OF LAKE ELSINORE By: Date: CFD Administrator Landowner( s) By: Date: ORDINANCE NO. 1172 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING ZONE CHANGE NO. 2005-02 CHANGING THE ZONING DESIGNATION OF THE P ARCEL(S) SPECIFICALLY DESCRIBED AS ASSESSOR PARCEL NUMBER'S 379-150-001, 002, 041, 042, 043, & 044 FROM R-E (ESTATE SINGLE-FAMILY RESIDENTIAL DISTRICT) TO R-l (SINGLE-FAMILY RESIDENTIAL DISTRICT) UNDER THE ZONING ORDINANCE WHEREAS, Corman Leigh Communities has initiated proceedings to change the zoning designation of the subject parcels known as Assessor Parcel Number's 379-150- 001,002,041,042,043, & 044 from R-E (Estate Single Family Residential District) to R-1 (Single Family Residential District); and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on January 17, 2006 made its report upon the desirability of the proposed project and made its recommendations in favor of said Zone Change No. 2005-02 by adopting Planning Commission Resolution No. 2006-08 recommending to the City Council approval of Zone Change No. 2005-02; and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item both on December 20,2005 and on February 28, 2006. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed Zone Change No. 2005-03, prior to making a decision to approve the proposed amendment to the Land Use Designation and establish a Zoning Designation. SECTION 2. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 3. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. CITY COUNCIL ORDINANCE NO. 1172 Page 2 of2 INTRODUCED AND APPROVED UPON FIRST READING this 28th day of February, 2006, by the following vote: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: BUCKLEY ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 14th day of March, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE Frederick Ray, ity Clerk City of Lake Elsinore arbara Zeid L bold, City Attorney City of Lake E sinore ORDINANCE NO. 1173 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADDING CHAPTER 17.69 TO TITLE 17 OF THE LAKE ELSINORE MUNICIPAL CODE TO PROHIBIT THE ESTABLISHMENT OF MEDICAL MARIJUANA DISPENSARIES IN THE CITY OF LAKE ELSINORE WHEREAS, the people of the State of California have enacted Proposition 215, the Compassionate Use Act of 1996 (codified at Health and Safety Code Section 11362.5 and the State Legislature subsequently enacted the Medical Marijuana Program (codified at Health & Safety Code Section 11362.7 et seq.) (collectively "the Act") to allow the medical use of marijuana for certain persons; and WHEREAS, the Act does not require or provide for the opening of businesses commonly known as Medical Marijuana Dispensaries which are defined as any facility or location where medical marijuana is made available to and/or distributed by or to one or more of the following: a primary caregiver, a qualified patient, or a person with an identification card in strict accordance with the Act; and WHEREAS, notwithstanding passage of the Act, the distribution and use of marijuana is prohibited by the Controlled Substances Act. 21 U. S. C. Section 841; and WHEREAS, the United States Supreme Court in Gonzales v. Raich, confirmed that the Controlled Substances Act does not contain a "compassionate use" exemption and therefore it is a violation of Federal Law to possess or distribute marijuana even if for medical purposes; and WHEREAS, the City Council of the City of Lake Elsinore concludes that federal law prohibiting the distribution and use of marijuana precludes the opening of Medical Marijuana Dispensaries within the City of Lake Elsinore. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council of the City of Lake Elsinore hereby finds and determines that it is the purpose and intent of this Ordinance to prohibit Medical Marijuana Dispensaries in order to promote the health, safety, morals, and general welfare of the residents and businesses within the City. SECTION 2. Chapter 17.69 is hereby added to Title 17 of the Lake Elsinore Municipal Code to read as follows: CITY COUNCIL ORDINANCE NO. 1173 Page 2 of 4 Chapter 17.69 MEDICAL MARIJUANA DISPENSARIES Sections: 17.69.010 17.69.020 Medical marijuana dispensaries defined. Prohibited. 17.69.010 Medical marijuana dispensaries defined. A. As used in this chapter, "Medical Marijuana Dispensary" or "Dispensary" means any facility or location where medical marijuana is made available to and/or distributed by or to one or more of the following: a primary caregiver, a qualified patient, or a person with an identification card, in strict accordance with California Health and Safety Code Sections 11362.5 and 11362.7 et seq. B. A "Medical Marijuana Dispensary" shall not include the following uses, as long as the location of such uses are otherwise regulated by this code or applicable law: a clinic licensed pursuant to Chapter 1 of Division 2 of the Health and Safety Code, a health care facility licensed pursuant to Chapter 2 of Division 2 of the Health and Safety Code, a residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code, a residential care facility for the elderly licensed pursuant to Chapter 3.2 of Division 2 of the Health and Safety Code, a residential hospice, or a home health agency licensed pursuant to Chapter 8 of Division 2 of the Health and Safety Code, as long as any such use complies strictly with applicable law including, but not limited to, California Health and Safety Code Sections 11362.5 and 11362.7 et seq. 17.69.020 Prohibited. Medical Marijuana Dispensaries are prohibited in all City zones, and no permit shall be issued therefor. 17.69.030 No Conflict with State Law. This Chapter 17.69 shall in no way limit the right to possess, use or cultivate marijuana for medicinal purposes as is authorized by the laws of the State of California. SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. CITY COUNCIL ORDINANCE NO. 1173 Page 3 of 4 - SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 28th day of February, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: PASSED, APPROVED AND ADOPTED UPON SECOND READING this 14th day of March, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: CITY COUNCIL ORDINANCE NO. 1173 Page 4 of 4 ATTEST: ORDINANCE NO. 1174 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA GRANTING A NON- EXCLUSIVE FRANCHISE TO PROVIDE CABLE SERVICE TO VERIZON CALIFORNIA INC. WHEREAS, t he City of Lake Elsinore is a "Franchising Authority" as defined by Title VI of the Communications Act (see 47 D.S.C. ~ 522(10)) and is authorized to grant one or more nonexclusive cable franchises pursuant to California Government Code Section 53066 and Chapter 5.40 of the City of Lake Elsinore Municipal Code; and WHEREAS, Verizon California Inc. ("Franchisee") is in the process of planning and installing a Fiber to the Premise Telecommunications Network ("FTTP Network") that will occupy the Public Rights-of-Way within the City of Lake Elsinore for the transmission of non-cable services pursuant to its status as a telecommunications carrier as set forth in Title II of the Communications Act and under authority granted by the State of California; and WHEREAS, the FTTP Network, once installed, will enable the provision of cable service to the residents of Lake Elsinore; and WHEREAS, negotiations between the Franchising Authority and the Franchisee have resulted in a franchise agreement, which agreement comports with the requirements of applicable law; and WHEREAS, notice of public hearing before the City Council to consider the proposed cable franchise agreement was properly published in The Press- Enterprise on March 13, 2006 and March 20, 2006 in accordance with California Government Code Sections 6066 and 53066.3(a); and WHEREAS, the Franchising Authority has reviewed the legal, technical and financial qualifications of the Franchisee to operate and provide cable service within the City and Franchising Authority's staff has prepared a Staff Report and attached Executive Summary and Analysis dated March 28, 2006 and April 11, 2006 (collectively, the "Staff Report") setting forth those qualifications, the future cable-related needs and interest of the City of Lake Elsinore and its residents, and examining each of the requirements and criteria set forth by federal, state and local law with respect to granting an additional cable television franchise, as well as any applicable provisions in existing franchises; and CITY COUNCIL ORDINANCE NO. 1174 PAGE20F4 WHEREAS, after receiving the comments of interested parties at a public hearing affording due process to all parties, in deliberation of the entire record regarding this matter before it, including other pertinent information, and specifically considering each of the requirements and criteria enumerated in California Government Code Section 53066.3(a), 47 V.S.C. Section 541(a), and all other applicable provisions of law, as well as any applicable provisions in existing franchises, the Franchising Authority determines that is in the public interest to approve the proposed cable television franchise agreement and authorize and direct the execution of the proposed Franchise Agreement. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council concludes that the cable-related needs and interests of the City of Lake Elsinore and the Franchisee's legal, technical, and financial qualifications to operate and provide cable service within the City are accurately identified by the attached Staff Report. The Staff Report, as well as the supporting evidence presented at the public hearing on March 28, 2006 and April 11, 2006, is hereby adopted by the Franchising Authority in its entirety as its ascertainment of the cable-related needs and interests of the City, the Franchisee's qualifications to operate and provide cable service within the City, and the Franchisee's qualifications to operate and provide cable service within the City. The Staff Report and evidence also supports the Franchising Authority's consideration of each of the requirements and criteria enumerated in Government Code Section 53066.3(a), 47 V.S.C. Section 541(a), all other applicable provisions of law, as well as any applicable provision in existing franchises. SECTION 2. The Franchising Authority determines that it is in the public interest to grant a nonexclusive franchise to operate and provide cable service to Verizon California Inc. As evidence of its consideration of each of the factors enumerated in Government Code Section 53066.3(a), 47 V.S.C. Section 541 (a)(3), all other applicable provisions of law, as well as any applicable provisions in existing franchises, the Franchising Authority hereby adopts the Staff Report attached Findings of Fact in support of this determination. SECTION 3. The Franchising Authority authorizes the grant of a nonexclusive franchise to the Franchisee to operate and provide cable service within the City. This authorization is made in accordance with the applicable CITY COUNCIL ORDINANCE NO. 1174 PAGE30F4 provisions of California Government Code Section 53066.3 and Title VI of the Communications Act. A copy of the Franchise Agreement in the form set forth and presented at the public hearings on March 28, 2006 and April 11, 2006, is directed to be retained in the office of the City Clerk for the purpose of public inspection. SECTION 4. That certain Franchise Agreement in the form set forth and presented to the City Council at this public hearing is approved, and the Mayor is authorized and directed to execute that agreement on behalf of the Franchising Authority following its execution by the Franchisee. SECTION 5. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 6. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 11th day of April, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1174 PAGE 4 OF 4 PASSED, APPROVED AND ADOPTED UPON SECOND READING this 25th day of April, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ATTEST: -- APPROVED AS TO FORM: Barbara Zei eibold, City Attorney City of Lake Elsinore ORDINANCE NO. 1175 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING ZONE CHANGE (pRE-ZONE) NO. 2005-09 TO CHANGE THE ZONING DESIGNATION OF THE PARCELS SPECIFICALLY DESCRIBED AS APN(S) 365-220-026, 365-230-001, 005, 006, 007, 009, 010, 011, 012, AND 013 TO SP SPECIFIC PLAN SUBJECT TO COMPLETION OF THE ANNEXATION NO. 75 WHEREAS, Vicki Mata, Trumark Companies, has filed an application to change the Zoning Designation of the parcels known as Assessor Parcel Number(s) 365-220-026, 365-230-001, 005, 006, 007, 009, 010, 011, 012, AND 013 to SP Specific Plan subject to the completion of Annexation No. 75; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on February 21, 2006 made its report upon the desirability of the proposed project, however, the Planning Commission's split-decision vote did not result in a recommendation to the City Council for Zone Change No. 2005-09; and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 11, 2006. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed Zone Change (Pre- Zone) No. 2005-09, prior to making a decision to approve the proposed amendment to the Land Use Map and establish a Zoning Designation. The City Council finds and determines that Negative Declaration No. 2006-02 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of ends City Council certification, based upon the following findings and determinations. SECTION 2. That in accordance with State 'planning and Zoning law and the City of Lake Elsinore, the following findings for the approval of Zone Change (Pre-Zone) No. 2005-09 have been made as follows: CITY COUNCIL ORDINANCE NO. 1175 Page 2 of 4 FINDINGS - ZONE CHANGE (PRE-ZONING) 1. The proposed zone change will not be; a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed amendment or within the City, or b) injurious to the property or improvements in the neighborhood or within the City. The proposed Zone Change has been analyzed relative to its potential to be detrimental to the health, safety, comfort and welfare of the persons residing or working within the neighborhood of the proposed amendment. The primary issue identified by staff relates to the health and safety of the persons residing or working within the neighborhood of the existing land use. Staff concluded, based on the properties safety records, that the health and safety of the persons residing or working within the neighborhood of the property will not be degraded as a result of this project upon completion of the annexation. 2. The proposed action will be consistent with the Goals, Objectives, and Policies of the General Plan and the development standards established with the Lake Elsinore Municipal Code (LEMC). Based on its analysis, staff has concluded that the requested Zone Change, allowing the annexation of the subject property as Specific Plan, is consistent with GOAL 1.0 of the General Plan in that this Pre-Zoning will assist in achieving the development of a well- balanced and functional mix of residential, by encouraging the inclusion of residential land use within the City boundaries. SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. CITY COUNCIL ORDINANCE NO. 1175 Page 2 of3 SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 11th day of April 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: KELLEY ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 25th day of April, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: Robert E. Magee, Ma~ City of Lake Elsinore CITY COUNCIL ORDINANCE NO. 1175 Page 3 of3 - :22~1 Frederick Ray(City Clerk City of Lake Elsinore - ORDINANCE NO. 1176 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING SECTIONS 2.46.030 THROUGH 2.46.050 OF THE LAKE ELSINORE MUNICIPAL CODE RELATING TO THE MEMBERSHIP, APPOINTMENT AND TERM OF OFFICE OF THE PUBLIC SAFETY ADVISORY COMMISSION WHEREAS, the City of Lake Elsinore first established a Public Safety Commission in 1984; and WHEREAS, on March 23, 2004 the Lake Elsinore City Council adopted Ordinance No. 1116 revising Section 2.46 of the Lake Elsinore Municipal Code and thereby reactivating the Public Safety Advisory Commission; and WHEREAS, the City Council desires to clarify the membership and appointment provisions of Section 2.46 and to change the term of office of members of the Public Safety Advisory Commission. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. Section 2.46.030 of the Lake Elsinore Municipal Code is hereby amended in its entirety to read as follows: 2.46.030 Membership. The Public Safety Advisory Commission shall consist of five members who shall not be officials or employees of the City. Members of the Public Safety Advisory Commission shall: (1) reside within the City of Lake Elsinore; or (2) be an owner of a business that is established and currently licensed inside the City of Lake Elsinore. Members shall be subject to a routine background check to be administered by the Police Department. SECTION 2. Section 2.46.040 of the Lake Elsinore Municipal Code is hereby amended in its entirety to read as follows: 2.46.040 Appointment - Removal. The members of the Public Safety Advisory Commission shall be appointed by the Mayor with the approval of a majority of the City Council and may be removed by the Mayor at his/her pleasure, but subject to the approval by the majority of the members of the City Council. CITY COUNCIL ORDINANCE NO. 1176 Page 2 of3 SECTION 3. Section 2.46.050 of the Lake Elsinore Municipal Code is hereby amended in its entirety to read as follows: 2.46.050. Term of office. Except as provided herein, the members of the Public Safety Advisory Commission shall be appointed for a term of four years. Each term shall commence on July I of the respective year in which appointed. A member's term that would otherwise expire on June 30, 2006 shall serve until June 30, 2009. A member's term that commenced on July I, 2005 shall serve out such existing term until June 30, 2007. Thereafter, all appointments shall be for a four-year term. SECTION 4. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 5. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 6. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 11th day of April, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1176 Page 3 of3 PASSED, APPROVED AND ADOPTED UPON SECOND READING this 25th day of April, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE NOES: ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NO/ ( Robert E. Magee, M City of Lake Elsinore ATTEST: ORDINANCE NO. 1177 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX RELATING TO THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-2 (VISCAYA) WHEREAS, on February 9,2006, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2006-20 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2006-2 (Viscaya) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to finance a portion of the cost of providing parks, open space and storm drain maintenance services (the "Services") that are in addition to those provided in the territory within the CFD prior to the formation of the CFD, and to finance the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities and other governmental facilities, which the City is authorized by law to construct, own or operate (the "Facilities"); and WHEREAS, on February 9, 2006, the Council also adopted Resolution No. 2006- 21 stating its intention and the necessity to incur bonded indebtedness in the amount not to exceed $7,500,000 to be issued for the purpose of financing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, notice was published as required by law relative to the intention of the Council to form the CFD and to incur bonded indebtedness in the amount not to exceed $7,500,000 within the boundaries of the CFD; and WHEREAS, on March 28, 2006, and continuing on April 25, 2006, this Council held a noticed public hearing as required by law relative to the determination to proceed with the formation of the CFD, the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay for the Services and the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay the principal and interest on the proposed bonded indebtedness of the CFD, and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds and the maximum annual rate of interest to be paid; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD and the incurring of bonded indebtedness by the CFD were heard and a full and fair hearing was held; and CITY COUNCIL ORDINANCE NO. 1177 Page 2 of 4 WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-52 determining the validity of prior proceedings and established the CFD; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-53 which called an election within the CFD for April 25, 2006 on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on April 25, 2006, an election was held within the CFD in which the eligible electors approved by more than two-thirds vote the proposition of incurring bonded indebtedness, levying a special tax, and setting an appropriations limit. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax (the "Services Special Tax") is levied within the boundaries of the CFD pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Services, periodic costs, and costs of the tax levy and collection, and all other costs. SECTION 2. A special tax (the "Special Tax") is levied within the boundaries of the CFD pursuant to the formulas set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection, and all other costs including amounts payable with respect to the bonded indebtedness. SECTION 3. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the then current or future tax years, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A". SECTION 4. All of the collections of the Services Special Tax and Special Tax shall be used as provided for in the Act and Resolution No. 2006-52 (Resolution of Formation). SECTION 5. The above authorized Services Special Tax and the Special Tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes; provided, however, the CFD may collect the Services Special Tax and the Special Tax at a different time or in a different manner if necessary to meet its financial obligations. CITY COUNCIL ORDINANCE NO. 1177 Page 3 of 4 SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the council Members voting for and against the ordinance. SECTION 8. This ordinance relating to the levy of the Services Special Tax and the Special Tax takes effect and shall be in force from and after 30 days from the date of final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. INTRODUCED AND APPROVED UPON FIRST READING this 25th day of April, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1177 Page 4 of 4 PASSED, APPROVED AND ADOPTED UPON SECOND READING this 9 day of May, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: ATTEST: Frz(~i~rk City of Lake Elsinore APPROVED AS TO FORM: RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT No. 2006-2 (VISCAYA) A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community Facilities District No. 2006-2 (Viscaya) ("CFD No. 2006-2") and collected each Fiscal Year commencing in Fiscal Year 2005-2006, in an amount determined through the application of this Rate and Method of Apportionment as described below. All of the real property in CFD No. 2006-2, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner 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. "Act" means the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5, Part I, Division 2 of Title 5 of the California Government Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2006-2: 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 City 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. 2006-2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-2 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-2 or obligated persons associated with 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. 2006-2 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2006-2 for any other administrative purposes of CFD No. 2006-2, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure 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. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's Parcel number. I "Assigned Special Tax for Facilities" means the Special Tax for Facilities for each Land Use Class of Developed Property, as determined in accordance with Section C.1.(b) below. "Authorized Facilities" means those authorized improvements, as listed in an exhibit to the Resolution of Formation. "Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.(c) below. "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 for Facilities, the Special Tax Requirement for Services as determined in accordance with Section I below, and providing for the levy and collection of the Special Taxes. "CFD No. 2006-2" means City of Lake Elsinore Community Facilities District No. 2006-2 (Viscaya). "CFD No. 2006-2 Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 2006-2 and secured solely by the Special Tax for Facilities levy on property within the boundaries of CFD No. 2006-2 under the Act. "City" means the City of Lake Elsinore. "Council" means the City Council of the City of Lake Elsinore, acting as the legislative body of CFD No. 2006-2. "County" means the County of Riverside. "Developed Property" means, with respect to the Special Tax for Facilities, 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 on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Tax for Facilities is being levied. "Final Subdivision" means (i) a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots for which building permits may be issued, or (ii) for condominiums, a final map, or portion thereof, approved by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 that creates individual lots for which building permits may be issued. "Fiscal Year" means the period starting July 1 and ending on the following June 30. 2 "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which CFD No. 2006-2 Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table I below. "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, 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 or more non-residential units or facilities has been issued by the City. "Outstanding Bonds" means all CFD No. 2006-2 Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2006-2 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 for Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of Undeveloped Property. The term "Proportionately" may similarly be applied to other categories of Taxable Property as listed in Section D below. "Public Property" means property within the boundaries of CFD No. 2006-2 owned by, irrevocably offered or dedicated to, or over, 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, 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. "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 permit(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. "Resolution of Formation" means the resolution of formation for CFD No. 2006-2. "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2006-2 pursuant to the Act. 3 "Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property, Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means that amount required in any Fiscal Year for CFD No. 2006-2 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 CFD No. 2006-2 Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No. 2006-2 Bonds due in the calendar year commencing in such Fiscal Year; (Hi) pay a proportionate share of Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay for reasonably anticipated Special Tax for Facilities delinquencies based on the delinquency rate for the Special Tax for Facilities levy in the previous Fiscal Year; (vi) pay directly for acquisition or construction of Authorized Facilities to the extent that the inclusion of such amount does not increase the Special Tax for Facilities levy on Undeveloped Property; less (vii) a credit for funds available to reduce the annual Special Tax for Facilities levy, as determined by the CFD Administrator pursuant to the Indenture. "State" means the State ofCalifomia. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2006-2 which are not exempt from the Special Tax for Facilities pursuant to law or Section E below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section E below. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Property Owner Association Property, or Taxable Public Property . B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2006-2 shall be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, or Undeveloped 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. Residential Property shall be assigned to Land Use Classes 1 through 4 as listed in Table 1 below based on the Residential Floor Area for each unit. Non-Residential Property shall be assigned to Land Use Class 5. 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. 4 C. MAXIMUM SPECIAL TAX FOR FACILITIES Prior to the issuance of CFD No. 2006-2 Bonds, the Assigned Special Tax for Facilities on Developed Property (set forth in Table 1), and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced in accordance with, and subject to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the Council, the "Goals and Policies") calculated pursuant to the Goals and Policies exceeds the City's maximum level objective set forth in such document, the Assigned Special Tax for Facilities on Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced to the amount necessary to satisfy the City's objective with respect to the maximum overlapping debt burden level with the written consent of the CFD Administrator. The reductions permitted pursuant to this paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to be recorded by executing a certificate in substantially the form attached hereto as Exhibit "A". 1. Developed Property (a) Maximum Special Tax for Facilities The Maximum Special Tax for Facilities 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 for Facilities or (ii) the amount derived by application of the Backup Special Tax for Facilities. (b) Assigned Special Tax for Facilities The Fiscal Year 2005-2006 Assigned Special Tax for Facilities for each Land Use Class is shown below in Table 1. TABLE 1 Assigned Special Tax for Facilities for Developed Property Community Facilities District No. 2006-2 Fiscal Year 2005-2006 1 Residential Property More than 2,349 sq. ft. $2,908 per unit 2 Residential Property 1,950 - 2,349 sq. ft. $2,711 per unit 3 Residential Property 1,550 -1,949 sq. ft. $2,577 per unit 4 Residential Property Less than 1,550 sq. ft. $2,398 per unit 5 Non-Residential Property NA $29,060 per Acre 5 (c) Backup Special Tax for Facilities The Fiscal Year 2005-2006 Backup Special Tax for Facilities attributable to a Final Subdivision will equal $30,575 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 Facilities for each Assessor's Parcel of Residential Property shall be computed by dividing the Backup Special Tax for Facilities attributable to the applicable Final Subdivision by the number of Assessor's Parcels for which building permits for residential construction have or may be issued (i.e., the number or residential lots). The Backup Special Tax for Facilities for each Assessor's Parcel of Non-Residential Property therein shall equal $30,575 multiplied by the Acreage of such Assessor's Parcel. 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 Facilities 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 may be issued within such Final Subdivision, then the Backup Special Tax for Facilities for each Assessor's Parcel of Developed Property that is part 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 for Facilities previously determined for an Assessor's Parcel of Developed Property that is not a part of the lot line adjustment or similar instrument for such Final Subdivision shall not be recalculated. 1. Determine the total Backup Special Tax for Facilities 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 for Facilities 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 for Facilities may be levied. 6 (d) Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities The Fiscal Year 2005-2006 Assigned Special Tax for Facilities, identified in Table I above, and Backup Special Tax for Facilities shall increase thereafter, commencing on July I, 2006 and on July I of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the amount in effect for the previous 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 for Facilities levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities 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. Taxable Property Owner Association Property. Taxable Public Property. and Undeveloped Property The Fiscal Year 2005-2006 Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $30,602 per Acre and shall increase thereafter, commencing on July I, 2006 and on July I of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Maximum Special Tax for Facilities in effect for the previous Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing with Fiscal Year 2005-2006 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement for Facilities and levy the Special Tax for Facilities until the amount of Special Tax for Facilities levy equals the Special Tax Requirement for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows: First: The Special Tax for Facilities shall be levied on each Assessor's Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Special Tax for Facilities; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Facilities for Undeveloped Property; Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Special Tax for Facilities on each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is determined through the application of the Backup Special Tax for Facilities shall be increased in equal percentages from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for each such Assessor's Parcel; 7 Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property and Taxable Public Property at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. Notwithstanding the above, the Council may, in any Fiscal Year, levy Proportionately less than 100% of the Assigned Special Tax for Facilities in step one (above), when (i) the Council is no longer required to levy the Special Tax for Facilities pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-2 Bonds have already been issued or the Council has covenanted that it will not issue any additional CFD No. 2006-2 Bonds (except refunding bonds) to be supported by the Special Tax for Facilities; and (iii) all Authorized Facilities have been constructed and/or acquired. Further notwithstanding the above, under no circumstances will the Special Tax for Facilities 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. 2006-2. E. EXEMPTIONS No Special Tax for Facilities shall be levied on up to 8.1 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006-2. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or Public Property, its tax-exempt status will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Tax for Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed Proportionately as part of the fourth step in Section D above, at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. F. MANNER OF COLLECTION The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2006-2 may directly bill the Special Tax for Facilities, may collect Special Taxes at a different time or in a different manner 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. G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "Buildout" means, for CFD No. 2006-2, that all expected building permits have been issued. 8 "CFD Public Facilities" means either $5,650,000 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) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2006-2 under the authorized bonding program for CFD No. 2006-2, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more CFD No. 2006-2 Bonds (except refunding bonds) to be supported by the Special Tax for Facilities levy under this Rate and Method of Apportionment as described in Section D above. "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 Improvement Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance the cost of CFD Public Facilities. "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 Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may be prepaid. The obligation of the Assessor's Parcel to pay the Special Tax for Facilities may be permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor's Parcel only ifthere 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 for Facilities 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 next occurring date that notice of redemption of CFD No. 2006-2 Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): 9 Bond Redemption Amount plus plus plus plus less less Total: equals Redemption Premium Future Facilities Amount Defeasance Amount Administrative Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Special Tax for Facilities Prepayment Amount As of the proposed date of prepayment, the Special Tax for Facilities Prepayment Amount shall be calculated as follows: Paraeraph 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 for Facilities and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities 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 for Facilities computed pursuant to paragraph 2 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-2 based on the Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all expected development through Buildout of CFD No. 2006-2, excluding any Assessor's Parcels which have been prepaid, and (b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-2, 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-l00%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Previously Issued Bonds. 10 9. Determine the Special Tax for Facilities 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 for Facilities Prepayment 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. 2006-2 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 CFD No. 2006-2 Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 13. The reserve fund 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 fund 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 fund 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 first 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 for Facilities prepayment is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Special Taxfor Facilities Prepayment Amount"). From the Special Tax for Facilities 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 Indenture and be used to retire CFD No. 2006-2 Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2006-2. The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full $5,000 increment of CFD No. 2006-2 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 CFD No. 2006-2 Bonds or to make debt service payments. 11 As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined under paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax for Facilities 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 for Facilities and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax for Facilities shall cease. Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be allowed unless, at the time of such proposed prepayment, the amount of Maximum Special Tax for Facilities that may be levied on Taxable Property within CFD No. 2006-2 (after excluding 8.1 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006- 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, as defined in Section A above, 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 for Facilities on an Assessor's Parcel of Developed Property or an Assessor's Parcel of 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 G.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 for Facilities Prepayment Amount calculated according to Section G.1. F = the percentage, expressed as a decimal, by which the owner ofthe Assessor's Parcel is partially prepaying the Special Tax for Facilities. A = the Administrative Fees and Expenses calculated according to Section G.1. 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 for Facilities and the percentage by which the Special Tax for Facilities 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 Facilities 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 shall (i) distribute the funds remitted to it according to Section G.1, and (ii) indicate in the records of CFD No. 2006-2 that there has been a partial prepayment of the Special Tax for Facilities and that a portion of the Special Tax for Facilities with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to Section D above. 12 H. TERM OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be levied for a period not to exceed forty years commencing with Fiscal Year 2005-2006, provided however that the Special Tax for Facilities 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. 2006-2 Bonds have been paid; (ii) all Authorized Facilities have been acquired and all reimbursements to the developer have been paid; and (iii) all other obligations of CFD No. 2006-2 have been satisfied. I. SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section I: "Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May I preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May I preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-2 in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-2 for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-2 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-2 equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) pay a proportionate share of Administrative Expenses, and (iii) anticipated Special Tax for Services delinquencies based on the delinquency rate for the Special Tax for Services levy in CFD No. 2006-2 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 13 1. Rate and Method of Apportionment of the Special Tax for Services Commencing with Fiscal Year 2005-2006 and for each subsequent Fiscal Year, the Council shall levy the Special Tax for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non- Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. The Maximum Special Tax for Services for Fiscal Year 2005-2006 shall be $242 per Developed Single Family Unit, $121 per Developed Multifamily Unit, and $545 per Acre for each Assessor's Parcel of Non-Residential Property. On each July 1, commencing July 1, 2006, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the Council. 3. Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-2 may collect the Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. J. 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. 2006-2. 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. 14 EXHIBIT A CERTIFICATE TO AMEND SPECIAL TAX FOR FACILITIES 15 CITY OF LAKE ELSINORE AND CFD No. 2006-2 CERTIFICATE 1. Pursuant to Section C of the Rate and Method of Apportionment, the City of Lake Elsinore ("City") and City of Lake Elsinore Community Facilities District No. 2006-2 ("CFD No. 2006-2") hereby agree to a reduction in the Assigned Special Tax for Facilities for Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 2006-2: (a) The information in Table 1 relating to the Assigned Special Tax for Facilities for Developed Property within CFD No. 2006-2 shall be modified as follows: Residential Property More than 2,349 sq. ft. $_ per unit 2 Residential Property 1,950 - 2,349 sq. ft. $ _ per unit 3 Residential Property 1,550 - 1,949 sq. ft. $ _ per unit 4 Residential Property Less than 1,550 sq. ft. $ _ per unit 5 Non-Residential Property NA $ _ per Acre (b) The Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 2006-2, as stated in Section C.l.(c), shall be reduced from $30,575 per Acre to $_ per Acre. 2. The Special Tax for Facilities may only be modified prior to the first issuance of CFD No. 2006- 2 Bonds. 3. Upon execution of the Certificate by the City and CFD No. 2006-2, the City shall cause an amended notice of Special Tax lien for CFD No. 2006-2 to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf of the City and CFD No. 2006-2, receipt of this Certificate and modification of the Rate and Method of Apportionment as set forth in this Certificate. CITY OF LAKE ELSINORE By: Date: CFD Administrator COMMUNITY FACILITIES DISTRICT NO. 2006-2 OF THE CITY OF LAKE ELSINORE By: Date: 16 ORDINANCE NO. 1178 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA AMENDING SECTION 16.83.030 AND SECTION 16.83.040, SUBPART A, OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING ADOPTION OF THE FEES FOR THE TRANSPORTATION UNIFORM MITIGATION FEE PROGRAM WHEREAS, Section 16.83.040C provides for periodic adjustment of the fee schedule pertaining to Chapter 16.83; and WHEREAS, WRCOG with the assistance of its member agencies have now prepared an updated "Western Riverside County Transportation Fee Nexus Study" ("Nexus Study") pursuant to California Government Code Section 66000 et seq., the Mitigation Fee Act for the purpose of updating the fees imposed by Chapter 16.83; and WHEREAS, the City Council finds that future development within Western Riverside County and the cities therein will result in traffic volumes exceeding the capacity of the Regional System as it presently exists; and WHEREAS, the City Council finds that if the capacity of the Regional System is not enlarged, the result will be substantial traffic congestion in all parts of Western Riverside County and the City, with unacceptable Levels of Service throughout Western Riverside County by 2030; and WHEREAS, the City Council finds that funding, in addition to those fees currently set under Chapter 16.83 will be inadequate to fund construction of the Regional System. Absent an update of the "Transportation Uniform Mitigation Fee" ("TUMF") based on the Nexus Study, existing and known future funding sources will be inadequate to provide necessary improvements to the Regional System, resulting in an unacceptably high level of traffic congestion within and around Western Riverside County and the City; and WHEREAS, the City Council finds that future development within the County and City will substantially adversely affect the Regional System, and that unless such development contributes to the cost of improving the Regional System, the Regional System will operate at unacceptable Levels of Service; and WHEREAS, the City Council finds that the failure to mitigate growing traffic impacts on the Regional System within Western Riverside County and the City will substantially impair the ability of public safety services (police and fire) to respond. The failure to mitigate impacts on the Regional System will adversely affect the public health, safety and welfare; and CITY COUNCIL ORDINANCE NO. 1178 Page 2 of6 WHEREAS, the City Council finds that there is a reasonable and rational relationship between the use of the TUMF and the type of development projects on which the fees are imposed because the fees will be used to construct the transportation improvements that are necessary for the safety, health and welfare of the residential and non-residential users of the development projects on which the TUMF will be levied; and WHEREAS, the City Council finds that there is a reasonable and rational relationship between the need for the improvements to the Regional System and the type of development projects on which the TUMF is imposed because it will be necessary for the residential and non-residential users of such projects to have access to the Regional System. Such development will benefit from the Regional System improvements and the burden of such development will be mitigated in part by the payment of the TUMF; and WHEREAS, the City Council finds that the cost estimates set forth in the Nexus Study are reasonable cost estimates for constructing the Regional System improvements, and that the amount of the TUMF expected to be generated by new development will not exceed the total fair share cost to such development; and WHEREAS, the City Council finds that the cost estimates set forth in the Nexus Study are reasonable cost estimates for the facilities that comprise the Regional System; and that TUMF program revenues to be generated by new development will not exceed the total fair share of these costs; and WHEREAS, the fees collected pursuant to this Ordinance shall be used to help pay for the construction and acquisition of the Regional System improvements identified in the Nexus Study. The need for the improvements is related to new development because such development results in additional traffic thus creating the demand for the improvements; and ' WHEREAS, by notice duly given and published, the City Council set the time and place for a public hearing on the Nexus Study and the fee proposed thereunder, and at least ten days prior to the hearing, the City made the Nexus Study available to the public; and WHEREAS, at the time and place set for the hearing, the City Council duly considered that data and information provided by the public relative to the cost of the services for which the fees are proposed and all other comments, whether written or oral, submitted prior to the conclusion of the hearing; and - WHEREAS, the City Council finds that the Nexus Study proposes a fair and equitable method for distributing a portion of the unfunded costs of improvements to the Regional System; and WHEREAS, the City Council hereby adopts the Nexus Study, which Study is on file with the office of the City Clerk. CITY COUNCIL ORDINANCE NO. 1178 Page 3 of6 THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. That Section 16.83.030 of the Lake Elsinore Municipal Code is hereby amended to add the following: K. "Class 'A' Office" means an office building that is typically characterized by high quality design, use of high end building materials, state of the art technology for voice and data, on site support services/maintenance, and often includes full service ancillary uses such as, but not limited to a bank, restaurant/office coffee shop, health club, printing shop, and reserved parking. The minimum requirements of an office building classified as Class 'A" Office shall be as follows: (i) minimum of three stories; (ii) minimum of 15,000 square feet per floor; (iii) steel frame construction; (iv) central, interior lobby; and (v) access to suites shall be from inside the building unless the building is located in a central business district with major foot traffic, in which case the first floor may be accessed from the street to provide entrances/ exits for commercial uses within the building. L. "Class 'B' Office" means an office building that is typically characterized by high quality design, use of high end building materials, state of the art technology for voice and data, on site support services/maintenance, and often includes full service ancillary uses such as, but not limited to a bank, restaurant/office coffee shop, health club, printing shop, and reserved parking. The minimum requirements of an office building classified as Class 'B" Office shall be as follows: (i) minimum of two stories; (ii) minimum of 20,000 square feet per floor; (iii) steel frame, concrete or masonry shell construction; (iv) central, interior lobby; and (v) access to suites shall be from inside the building unless the building is located in a central business district with major foot traffic, in which case the first floor may be accessed from the street to provide entrances/exits for commercial uses within the building. M. "Habitable Structure" means any structure or part thereof where persons reside, congregate or work and which is legally occupied in whole or part in accordance with applicable building code,s, and state and local laws. SECTION 2. That 16.83.040, Part A, of the Lake Elsinore Municipal Code is hereby amended and restated as follows: A. Adoption. Subject to the exemptions set forth in Section 16.83.040F and the phase-in periods set forth herein, there is hereby adopted the following schedule of fees: CITY COUNCIL ORDINANCE NO. 1178 Page 4 of6 (i) TUMF fee schedule: $9,693.00 per single family residential unit $6,806.00 per multi-family residential unit $2.27 per square foot of an industrial project $12.49 per square foot ofa retail commercial project $6.33 per square foot of a service commercial project $2.11 per square foot of a Class A Office project until June 30, 2007 plus any Construction Cost Index adjustments that may occur $2.11 per square foot of a Class B Office project until June 30, 2007 plus any Construction Cost Index adjustments that may occur (ii) For non-residential projects, the fees set forth in Section 16.83.040F(i) shall be phased in as follows: From July 1, 2006 to June 30, 2007, the fee schedule shall be as follows: $1.58 per square foot of an industrial project $8.51 per square foot of a retail commercial project $5.28 per square foot of a service commercial project $2.11 per square foot of a Class A Office project and Class B Office project until June 30, 2007 plus any Construction Cost Index adjustments that may occur From July 1, 2007 to June 30, 2008, the fee schedule shall be as follows: $1.81 per square foot of an industrial project $9.83 per square foot of a retail commercial project $5.63 per square foot of a service comme'rcial project From July 1,2008 to June 30, 2009, the fee schedule shall be as follows: $2.04 per square foot of an industrial project $11.16 per square foot of a retail commercial project CITY COUNCIL ORDINANCE NO. 1178 Page 5 of6 $5.98 per square foot of a service commercial project From July 1,2009, the fee schedule shall be as follows: $2.27 per square foot of an industrial project $12.49 per square foot ofa retail commercial project $6.33 per square foot of a service commercial project SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 4. This Ordinance shall take effect sixty (60) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 25 day of April, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUC~EY, HICKMAN, KELLEY, SCHIFFNER NOES: COUNCILMEMBERS: MAGEE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO.117S Page 6 of6 PASSED, APPROVED AND ADOPTED UPON SECOND READING this 23 day of May, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER NOES: COUNCILMEMBERS: MAGEE ABSENT: COUNCILMEMBERS: NONE I Robert E. Magee, City of Lake Elsin , ABSTAIN: COUNCILMEMBERS: NONE Frederick Ray, ty Clerk City of Lake Elsinore ORDINANCE NO. 1179 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-5 (PARKS, OPEN SPACE AND STORM DRAIN MAINTENANCE) AUTHORIZING THE LEVY OF A SPECIAL TAX WHEREAS, on March 28, 2006, the City Council (the "Council") of the City of Lake Elsinore, California (the "City") adopted Resolution No. 2006-41 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2006-5 (Parks, Open Space and Storm Drain Maintenance) (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, (the "Act"); and WHEREAS, notice was published as required by law relative to the intention of the Council to form the District; and WHEREAS, on May 9, 2006 this Council held a noticed public hearing as required by law relative to the determination to proceed with the formation of the District and the rate and method of apportionment and manner of collection of the special tax to be levied within the District to finance certain public services; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the District by the District were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-56 determining the validity of prior proceedings relative to the formation of the District, established the District and authorized the levy of a special tax within the District; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-57 which called an election within the District for May 9, 2006 on the proposition of levying a special tax; and WHEREAS, on May 9, 2006 an election was held within the District in which the eligible electors approved by more than two-thirds vote the proposition of levying a special tax. CITY COUNCIL ORDINANCE NO. 1179 Page 2 of 4 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-5 (PARKS, OPEN SPACE AND STORM DRAIN MAINTENANCE), DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax is levied within the boundaries of the District pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to finance a portion of the cost of providing parks, open space and storm drain maintenance services that are in addition to those provided in the territory within the District prior to the formation of the District, periodic costs, and costs of the tax levy and collection. SECTION 2. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the next fiscal year, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 3. All of the collections of the special tax shall be used as provided for in the Act and Resolution No. 2006- 56 of the Council. SECTION 4. The above authorized special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes. SECTION 5. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the Council Members voting for and against the ordinance. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. CITY COUNCIL ORDINANCE NO. 1179 Page 3 of 4 SECTION 7. This ordinance relating to the levy of the special tax takes effect and shall be in force from and after thirty (30) days after the date of its final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 9th day of May, 2006, upon the following roll call vote: AYES: NOES: COUNCILMEMBERS: KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: BUCKLEY, HICKMAN ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 23 day of May, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: R rt E. Magee, M City of Lake Elsinor CITY COUNCIL ORDINANCE NO. 1179 Page 4 of 4 Frederick Ray, Cit Clerk City of Lake Elsinore EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-5 (PARKS, OPEN SPACE AND STORM DRAIN MAINTENANCE) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction Special taxes shall be annually levied on all Developed Residential Property and Developed Multi-Family Property (as hereinafter defined) in City of Lake Elsinore Community Facilities District No. 2006-5 (Parks, Open Space and Storm Drain Maintenance ) (the "District"), in accordance with the rate and method of apportionment of special taxes hereinafter set forth. All of the property within the District that is not Developed Residential Property or Developed Multi-Family Property shall be exempt from the Maximum Annual Special Taxes of the District. Definitions "Assessor's Parcel" means a parcel of land in the District designated and assigned a discrete identifying number on a map of the County Assessor of the County of Riverside. "City" means the City of Lake Elsinore, California. "Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal Year in which the Special Tax is being levied. "Developed Non-Residential Property" means all Assessor's Parcels for which a building permit was issued by the City for any type of non-residential use on or prior to May 1 preceding the Fiscal Year in which the Special Tax is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax is being levied. "Fiscal Year" means the period beginning on July 1 and ending on the following June 30. "Maximum Special Tax" means the maximum Special Tax that can be levied by CFD No. 2006-5 in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-5 for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. "Special Tax" means any of the special taxes authorized to be levied within CFD No. 2006-5 pursuant to the Act to fund the Special Tax Requirement. "Special Tax Requirement" means the amount determined in any Fiscal Year for CFD No. 2006-5 equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) Administrative Expenses, and (iii) anticipated delinquent Special Taxes based on the delinquency rate in CFD No. 2006-5 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. "U nit" means each separate residential dwelling unit, which comprises an independent facility capable of conveyance or use separate from adjacent dwelling units. Rate and Method of Apportionment of the Special Tax Commencing Fiscal Year 2005-2006 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non-Residential Property, up to the applicable Maximum Special Tax to fund the Special Tax Requirement. The Maximum Special Tax for Fiscal Year 2005-2006 shall be $242 per Developed Single Family Unit, $121 per Developed Multifamily Unit, and $545 per Acre for each Assessor's Parcel of Non-Residential Property. On each July 1, commencing July 1, 2006, the Maximum Special Tax shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. Duration of the Special Tax The Special Tax shall be levied in perpetuity to fund the Special Tax Requirement, unless no longer required as determined at the sole discretion of the City Council. Collection of the Special Tax 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. 2006-5 may collect the Special Tax at a different time or in a different manner if necessary to meet its funding requirements. NOTICE OF ADOPTION OF ORDINANCE NO. 1179 NOTICE IS HEREBY GIVEN that on May 9,2006, at the Council Chambers of the City of Lake Elsinore, 183 North Main Street, Lake Elsinore, California 92530, the City Council of the City of Lake Elsinore, in its capacity as the legislative body of the City of Lake Elsinore Community Facilities District No. 2006-5 (Parks, Open Space and Storm Drain Maintenance), held a public hearing and adopted Ordinance No. 1179. A summary of Ordinance No. 1179 follows and is marked as Exhibit "B". At said time and place the testimony of all interested persons or taxpayers for or against said ordinance was heard. Ordinance No. 1179 was adopted by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-5 (PARKS, OPEN SPACE AND STORM DRAIN MAINTENANCE) Dated: May 23, 2006 By EXHIBIT B BEFORE THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE IN ITS CAPACITY AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-5 (PARKS, OPEN SPACE AND STORM DRAIN MAINTENANCE) IN THE MATTER OF Authorizing the Levy of a Special Tax Within City of Lake Elsinore Community Facilities District No. 2006-5 (Parks, Open Space and Storm Drain Maintenance) ) ORDINANCE NO. 1179 SUMMARY ) ) ) ) ) ) The ordinance authorizes levy of an annual special tax within City of Lake Elsinore Community Facilities District No. 2006-5 (Parks, Open Space and Storm Drain Maintenance ) (the "District"), collected in the same manner as ordinary ad valorem taxes, in an amount necessary to finance a portion of the cost of providing parks, open space and storm drain maintenance services that are in addition to those provided in the territory within the District prior to the formation of the District, which is necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within the District. DATED: May 23, 2006 CITY OF LAKE ELSINORE By: L~ V Frederick RaY, City Clerk ORDINANCE NO. 1180 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 18 (APNS 377-231-013 AND -014) ANNEXED TO SAID DISTRICT WHEREAS, on March 28, 2006, the City Council (the "Council") of the City of Lake Elsinore, California (the "City") adopted Resolution No. 2006-40 stating its intention to annex certain property ("Annexation Area No. 18 (APNs 377-231-013 and -014)") into City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, (the "Act"); and WHEREAS, notice was published as required by law relative to the intention of the Council to annex Annexation Area No. 18 (APNs 377-231-013 and -014) into the District; and WHEREAS, on May 9, 2006 this Council held a noticed public hearing as required by law relative to the determination to proceed with the annexation of Annexation Area No. 18 (APNs 377-231-013 and -014) into the District and the rate and method of apportionment and manner of collection of the special tax to be levied within Annexation Area No. 18 (APNs 377-231-013 and -014) to finance certain public services; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the annexation of Annexation Area No. 18 (APNs 377-231-013 and- 014) were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-59 determining the validity of prior proceedings relative to the annexation of Annexation Area No. 18 (APNs 377-231-013 and -014), annexed Annexation Area No. 18 (APNs 377-231-013 and -014) into the District and authorized the levy of a special tax within Annexation Area No. 18 (APNs 377-231-013 and -014); and CITY COUNCIL ORDINANCE NO. 1180 Page 2 of 4 WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-60 which called an election within Annexation Area No. 18 (APNs 377-231- 013 and -014) for May 9,2006 on the proposition of levying a special tax; and WHEREAS, on May 9,2006 an election was held within each Annexation Area No. 18 (APNs 377-231-013 and -014) in which the eligible electors approved by more than two-thirds vote the proposition of levying a special tax. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES), DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax is levied within the boundaries of Annexation Area No. 18 (APNs 377-231-013 and -014) pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 18 (APNs 377-231-013 and -014) prior to the annexation of Annexation Area No. 18 (APNs 377-231-013 and -014) into the District, periodic costs, and costs of the tax levy and collection. SECTION 2. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the next fiscal year, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 3. All of the collections of the special tax shall be used as provided for in the Act and Resolution No. 2006-59 of the Council. SECTION 4. The above authorized special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes. SECTION 5. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within CITY COUNCIL ORDINANCE NO. 1180 Page 3 of 4 fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the Council Members voting for and against the ordinance. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. This ordinance relating to the levy of the special tax takes effect and shall be in force from and after thirty (30) days after the date of its final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. CITY COUNCIL ORDINANCE NO. 1180 Page 4 of 4 INTRODUCED AND APPROVED UPON FIRST READING this 9th day of May, 2006, upon the following roll call vote: AYES: NOES: COUNCILMEMBERS: KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: BUCKLEY, HICKMAN ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 23 day of May, 2006, upon the following roll call vote: AYES: NOES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: ATTEST: ~d Frederick Ray, City Clerk City of Lake Elsinore eibold, City Attorney Elsinore EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction Special taxes shall be annually levied on all Developed Residential Property and Developed Multi-Family Property (as hereinafter defined) in the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services ) (the "District"), in accordance with the rate and method of apportionment of special taxes hereinafter set forth. All of the property within the District that is not Developed Residential or Developed Multi-Family Residential Property shall be exempt from the Maximum Annual Special Taxes of the District. Definitions Assessor's Parcel. A parcel of land in the District designated and assigned a discrete identifying number on a map of the County Assessor of the County of Riverside. City. City of Lake Elsinore, California. Developed Multi-Family Property. Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding the Fiscal Year for the construction of a Unit that is located or shall be located within a building in which each individual Units has or shall have at least one common wall with another Unit. Developed Residential Property. All other Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding any Fiscal Year for the construction of a Unit that is not Developed Multi-family Property. Fiscal Year. The period beginning on July 1 and ending on the following June 30. Maximum Annual Special Taxes. The maximum annual special taxes levied within the District for any Fiscal Year. Unit. Each separate residential dwelling unit, which comprises an independent facility capable of conveyance or use separate from adjacent dwelling units. Rate and Method of Apportionment of Maximum Annual Special Taxes As of July 1 of each Fiscal Year, commencing July 1, 2003, the City shall determine which of the Assessor's Parcels within the District constitute Developed Residential Property or Developed Multi-Family Property. Beginning in Fiscal Year 2003-04, and all subsequent Fiscal Years, the City shall levy the Maximum Annual Special Taxes on each Assessor's Parcel of Developed Residential Property in the amount of $300 and on each Assessor's Parcel of Developed Multi- Family Property in the amount of$150 per Unit. The amount of Maximum Annual Special Taxes shall be increased annually by 2%, commencing in Fiscal Year 2004-05, and each Fiscal Year thereafter. Duration of the Maximum Annual Special Taxes The Maximum Annual Special Taxes shall be levied in perpetuity so long as Law Enforcement, Fire and Paramedic Services are being provided within the District. The Maximum Annual Special Taxes levied in each Fiscal Year shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. The Maximum Annual Special taxes when levied shall be secured by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each levy of Maximum Annual Special Taxes. The lien of Maximum Annual Special Taxes shall continue in force and effect until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government Code. NOTICE OF ADOPTION OF ORDINANCE NO. 1180 NOTICE IS HEREBY GIVEN that on May 9,2006, at the Council Chambers of the City of Lake Elsinore, 183 North Main Street, Lake Elsinore, California 92530, the City Council of the City of Lake Elsinore, in its capacity as the legislative body of the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services), held a public hearing and adopted Ordinance No. 1180. A summary of Ordinance No. 1180 follows and is marked as Exhibit "B". At said time and place the testimony of all interested persons or taxpayers for or against said ordinance was heard. Ordinance No. 1180 was adopted by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) II Ii Dated: May 23, 2006 By ~/O/ Frederick R~City Clerk EXHIBIT B BEFORE THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE IN ITS CAPACITY AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) IN THE MATTER OF Authorizing the Levy of a Special Tax Within Annexation Area No. 18 (APNs 377-231-013 and -014) Annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) ) ORDINANCE NO. 1180 SUMMARY ) ) ) ) ) ) ) ) ) The ordinance authorizes levy of an annual special tax within Annexation Area No. 18 (APNs 377-231-013 and -014) annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), collected in the same manner as ordinary ad valorem taxes, in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 18 (APNs 377-231-013 and -014) prior to the annexation of Annexation Area No. 18 (APNs 377-231-013 and -014) to the District, which is necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within Annexation Area No. 18 (APNs 377-231-013 and -014). DATED: May 23, 2006 CITY OF LAKE ELSINORE By: Frederick Ray, - ORDINANCE NO. 1181 AN ORDINANCE OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING CHAPTER 16.74 TO TITLE 16 OF THE LAKE ELSINORE MUNICIPAL CODE ESTABLISmNG A FIRE FACILITIES FEE FOR DEVELOPMENT PROJECTS WITHIN THE CITY OF LAKE ELSINORE WHEREAS, Chapter 16.74 of the Lake Elsinore Municipal Code establishes a mechanism for the benefit of the citizens whereby as a condition to the issuance of a building permit or certificate of occupancy by the City the property owner or land developer will be required to pay Development Impact Fees or provide other consideration to the City; and WHEREAS, it is the purpose and intent of the City Council of the City of Lake Elsinore to amend Chapter 16.74 by including an additional Development Impact Fee for the purpose of defraying the costs of public expenditures for capital improvements (and operational services to the extent allowed by law) for Fire Facilities which will benefit such new development. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. That Section 16.74.020 of Chapter 16.74 ofthe Lake Elsinore Municipal Code is hereby amended to add the following defined term: "Fire Facilities" means fire stations and similar public safety facilities that will primarily serve residents in the City by providing the physical facilities necessary to support fire, paramedic and emergency response programs, including the cost of planning, preliminary engineering, engineering design studies, land surveys, issuance of permits, and construction of such facilities construction proj ects. SECTION 2. That Section 16.74.049 is hereby added to Chapter 16.74 of the Lake Elsinore Municipal Code as follows: 16.74.049 Fire Facilities Fee. To mitigate the additional burdens created by new development for City Fire Facilities, a Development Impact Fee identified as the Fire Facilities Fee will be imposed on all new development in the City to finance the costs of Fire Facilities. SECTION 3. If any provision, clause, sentence or paragraph of this ordinance or the application thereof to any person or circumstance shall be held - CITY COUNCIL ORDINANCE NO. 1181 PAGE20F3 invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 4. This Ordinance shall take effect sixty (60) days after the date of its final passage. The City Clerk shall certify as to adoption of the Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 23rd day of May, 2006, by the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY,HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: None NOES: ABSENT: COUNCILMEMBERS: None ABSTAIN: COUNCILMEMBERS: None PASSED, APPROVED AND ADOPTED UPON SECOND READING 13th day of June, 2006, upon the following roll call vote: AYES: NOES: COUNCILMEMBERS: Buckley, Hickman, Kell ey, Schiffner, Magee COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Frederick , City Clerk City of Lake Elsinore - CITY COUNCIL ORDINANCE NO. 1181 PAGE30F3 ORDINANCE NO. 1182 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX WHEREAS, on January 24, 2006, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2006-10 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to finance a portion of the cost of providing parks, open space and storm drains maintenance services (the "Services") that are in addition to those provided in the territory within the CFD prior to the formation of the CFD, and to finance the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities and other governmental facilities, which the City is authorized by law to construct, own or operate (the "Facilities"); and WHEREAS, on January 24, 2006, the Council also adopted Resolution No. 2006-11 stating its intention and the necessity to incur bonded indebtedness in the amount not to exceed $12,800,000 to be issued for the purpose of financing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, notice was published as required by law relative to the intention of the Council to form the CFD and to incur bonded indebtedness in the amount not to exceed $12,800,000 within the boundaries of the CFD; and WHEREAS, on February 28, 2006, which original public hearing date was continued to March 28, 2006 and further continued to June 13, 2006 due to the complexity of the CFD, this Council held a noticed public hearing as required by law relative to the determination to proceed with the formation of the CFD, the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay for the Services and the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay the principal and interest on the proposed bonded indebtedness of the CFD, and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds and the maximum annual rate of interest to be paid; and CITY COUNCIL ORDINANCE NO. 1182 Page 2 of 4 WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD and the incurring of bonded indebtedness by the CFD were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-79 determining the validity of prior proceedings and established the CFD; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-80 which called an election within the CFD for June 13, 2006 on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on June 13, 2006, an election was held within the CFD in which the eligible electors approved by more than two-thirds vote the proposition of incurring bonded indebtedness, levying a special tax, and setting an appropriations limit. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax (the "Services Special Tax") is levied within the boundaries of the CFD pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount-necessary to pay all of the costs of providing the Services, periodic costs, and costs of the tax levy and collection, and all other costs. SECTION 2. A special tax (the "Special Tax") is levied within the boundaries of the CFD pursuant to the formulas set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection, and all other costs including amounts payable with respect to the bonded indebtedness. SECTION 3. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the then current or future tax years, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit" A" . CITY COUNCIL ORDINANCE NO. 1182 Page 3 of 4 SECTION 4. All of the collections of the Services Special Tax and Special Tax shall be used as provided for in the Act and Resolution No. 2006-79 (Resolution of Formation). SECTION 5. The above authorized Services Special Tax and the Special Tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes; provided, however, the CFD may collect the Services Special Tax and the Special Tax at a different time or in a different manner if necessary to meet its financial obligations. SECTION 6. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the council Members voting for and against the ordinance. SECTION 7. This ordinance relating to the levy of the Services Special Tax and the Special Tax takes effect and shall be in force from and after 30 days from the date of final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer- Tax Collector of Riverside County. CITY COUNCIL ORDINANCE NO. 1182 Page 4 of 4 INTRODUCED AND APPROVED UPON FIRST READING this 13 day of June, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 27 day of June, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE . obert Magee, City of Lake El CITY COUNCIL ORDINANCE NO. 1182 Page 5 of 4 ATTEST: Frederick , City Clerk City of Lake Elsinore APPROVED AS TO FORM: ~~.~ ~ Barbara Zeid Leibold, City Attorney City of Lake Elsinore RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2006-3 OF THE CITY OF LAKE ELSINORE (La Strada) The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes of the City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) ("CFD No. 2006-3"). The Special Tax shall be levied on and collected each Fiscal Year, in an amount determined through the application of the Rate and Method of Apportionment described below. All ofthe real property within CFD No. 2006-3 unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in ~he manner herein provided. SECTION 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 or instrument. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560. "Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5, Part I of Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2006-3: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting the Special Taxes for Facilities to the Trustee; the costs of the Trustee (including legal counsel) in the discharge ofthe duties required of it under the Indenture; the costs to the City, CFD No. 2006-3 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-3 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-3 or obligated persons associated with 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. 2006-3 or any designee thereof related to an appeal ofthe Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2006-3 for any other administrative purposes ofCFD No. 2006-3, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Apartment Property" means all Assessor's Parcels of Residential Property on which one or more Apartment Units are constructed. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 1 "Apartment Unit" means a dwelling unit within a building comprised of attached residential units available for rental by the general public, not for sale to an end user, and under common management. "Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit on or before May 1 st preceding the Fiscal Year in which the Special Tax is being levied. "Assessor's Parcel" means a lot or parcel ofland designated on an Assessor's Parcel Map with an assigned Assessor's Parcel Number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel Number. "Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the County for purposes of identification. "Assigned Special Tax for Facilities" means the Special Tax of that name described in Section D below. "Backup Special Tax for Facilities" means the Special Tax of that name described in Section E below. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which Special Taxes for Facilities with~n CFD No. 2006-3 have been pledged. "Building Square Footage" or "BSF" means the square footage of assessable intemalliving space, exclusive of garages or other structures not used as living space, as determined by reference to the building permit application for such Assessor's Parcel. "Calendar Year" means the period commencing January 1 of any year and ending the following December 31. "CFD Administrator" means an official of the City, or designee thereof, responsible for (i) determining the Special Tax Requirement for Facilities, (ii) determining the Special Tax Requirement for Services, as defined in Section L, as applicable, and (iii) providing for the levy and collection of the Special Taxes. "CFD No. 2006-3" means Community Facilities District No. 2006-3 (La Strada) established by the City under the Act. "City" means the City of Lake Elsinore. "City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body ofCFD No. 2006-3, or its designee. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 2 "County" means the County of Riverside. "Developed Property" means all Assessor's Parcels of Taxable Property that: (i) are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) a building permit for new construction was issued on or before May 1 st preceding the Fiscal Year in which the Special Tax is being'levied. "Exempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes as provided for in Section 1. "Final Map" 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 1352 that creates individual lots for which building permits may be issued without further subdivision. "Fiscal Year" means the period commencing on July 1 of any year and ending 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, and any instrument replacing or supplementing the same. "Land Use Type" means any of the types listed in Table 1 of Section D. "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, determined in accordance with Section C, that can be levied by CFD No. 2006-3 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 was issued for any type of non-residential use. "Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax for Facilities obligation for an Assessor's Parcel, as described in Section H. "Prepayment Amount" means the amount required to prepay the Special Tax for Facilities obligation in full for an Assessor's Parcel, as described in Section G. "Proportionately" means that the ratio of the actual Special Tax for Facilities levy to the applicable Assigned Special Tax for Facilities is equal for all applicable Assessor's Parcels. In case of Developed Property subject to the apportionment ofthe Special Tax for Facilities under step four of Section F, "Proportionately" in step four means that the quotient of (a) actual Special Tax for Facilities less the Assigned Special Tax for Facilities divided by (b) the Backup Special Tax for Facilities less the Assigned Special Tax for Facilities, is equal for all applicable Assessor's Parcels. "Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section J, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section J. City of Lake Elsinore May 25, 2006 Community Facilities District No. 2006-3 (La Strada) Page 3 "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Single Family Property" means all Assessor's Parcels of Residential Property other than Apartment Property. "Single Family Unit" means a residential dwelling unit other than an Apartment Unit. "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2006-3 pursuant to the Act. "Special Tax for Facilities" means any ofthe special taxes authorized to be levied within CFD No. 2006-3 pursuant to the Act to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax for Facilities delinquencies in the prior Fiscal Year, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2006-3 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax for Facilities on Undeveloped Property as set forth in Step Three of Section F., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture. "Taxable Property" means all Assessor's Parcels within CFD No. 2006-3, which are not Exempt Property . "Trustee" means the trustee, fiscal agent, or paying agent Under the Indenture. "Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not Developed Property, Approved Property or Provisional Undeveloped Property. SECTION B CLASSIFICATION OF ASSESSOR'S PARCELS Each Fiscal Year, beginning with Fiscal Year 2006-07, each Assessor's Parcel within CFD No. 2006-3 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor's Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property. In addition, each Assessor's Parcel of Developed Property shall further be classified as Residential Property or Non-Residential Property. Lastly, each Assessor's Parcel of Residential Property shall further be classified as a Single Family Property or Apartment Property, and each Assessor's Parcel of Single Family Property shall be assigned to its appropriate Assigned Special Tax for Facilities rate based on its Building Square Footage. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 4 SECTION C MAXIMUM SPECIAL TAX FOR FACILITIES 1. Developed Property The Maximum Special Tax for Facilities for each Assessor's Parcel of Single Family Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax for Facilities or (ii) the Backup Special Tax for Facilities. The Maximum Special Tax for Facilities for each Assessor's Parcel of Apartment Property or Non-Residential Property shall be the applicable Assigned Special Tax for Facilities described in Table 1 of Section D. Prior to the issuance of Bonds, the Assigned Special Tax for Facilities on Developed Property set forth in Table 1 may be reduced in ,accordance with, and subject to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the City Council, the "Goals and Policies") calculated pursuant to the Goals and Policies exceeds the City's maximum level objective set forth in such document, the Maximum Special Tax for Facilities on Developed Property may be reduced (by modifying Table 1) to the amount necessary to satisfy the City's objective with respect to the maximum overlapping debt burden level with the written consent of the CFD Administrator. In order to reduce the Maximum Special Tax for Facilities on Developed Property it may be necessary to reduce the Maximum Special Tax for Facilities for Undeveloped Property. The reductions permitted pursuant to this paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to be recorded by executing a certificate in substantially the form attached hereto as Exhibit "A". 2. Multiple Land Use Tvpe In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax for Facilities levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities for all Land Use Types located on the Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. 3. Approved Property. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Approved Property, Undeveloped Property, or Provisional Undeveloped Property in any Fiscal Year shall be the applicable Assigned Special Tax for Facilities. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 5 SECTION D ASSIGNED SPECIAL TAX FOR FACILITIES 1. Developed Property Each Fiscal Year, each Assessor's Parcel of Single Family Property, Apartment Property, or Non-Residential Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities applicable to an Assessor's Parcel of Developed Property for Fiscal Year 2006-07 shall be determined pursuarit to Table I below. TABLE 1 ASSIGNED SPECIAL TAX FOR FACILITIES RATES FOR DEVELOPED PROPERTY FOR FISCAL YEAR 2006-07 Land Use T e Single Family Property Buildin S uare Foota e Greater than or equal to 3,301 3,101 - 3,300 2,901 - 3,100 Less than or e ual to 2,900 N/A N/A Rate $4,946 per Single Family Unit Unit Unit Unit 2. Approved Property. Undeveloped Property and Provisional Undeveloped Property Each Fiscal Year, each Assessor's Parcel of Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities rate for an Assessor's Parcel classified as Approved Property, Undeveloped Property and Provisional Undeveloped Property for Fiscal Year 2006-07 shall be $27,741 per Acre. 3. Increase in the Assie:ned Special Tax for Facilities On each July 1, commencing July 1, 2007, the Assigned Special Tax for Facilities rate for Developed Property, Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. SECTION E BACKUP SPECIAL TAX FOR FACILITIES At the time a Final Map is recorded, the Backup Special Tax for Facilities for all Assessor's Parcels of Developed Property classified or reasonably expected to be classified as a Single Family Property within such Final Map area shall be determined by (i) multiplying (a) the Maximum Special Tax for Facilities rate for Undeveloped Property by (b) the total Acryage of Taxable Property in such Final City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 6 Map area, excluding Acreage classified as Provisional Undeveloped Property, Acreage classified or - reasonably expected to be classified as Apartment Property or Non-Residential Property, and any Acreage reasonably expected to be classified as Exempt Property in such Final Map area, and (ii) dividing the results in (i) by the total number of Single Family Units reasonably expected to be constructed within such Final Map area. The resulting quotient shall be the Backup Special Tax for Facilities for each Assessor's Parcel of Single Family Property ~thin such Final Map area. The Backup Special Tax for Facilities shall not apply to Non-Residential Property or Apartment Property . Notwithstanding the foregoing, if Assessor's Parcels of Developed Property which are classified or to be classified as Single Family Property are subsequently changed or modified by recordation of a lot line adjustment or similar instrument, then the Backup Special Tax for Facilities for the area that has been changed or modified shall be recalculated, based on the methodology above, to equal the amount of Backup Special Tax for Facilities that would have been generated if such change did not take place. On each July 1, commencing July 1, 2007, the Backup Special Tax for Facilities rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. SECTION F METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing Fiscal Year 2006-07 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes for Facilities on all Taxable Property in accordance with the following steps: Step One: The Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax for Facilities rates in Table 1 to satisfy the Special Tax Requirement for Facilities. Step Two: Ifadditional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% ofthe Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Step Three: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% ofthe Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Step Four: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities on each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is the Backup Special Tax for Facilities shall be increased Proportionately City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 7 from the Assigned Special Tax for Facilities up to 100% of the Backup Special Tax for Facilities as needed to satisfy the Special Tax Requirement for Facilities. Step Five: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first four steps have been completed~ the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Notwithstanding the above, under no circumstances will the Special Tax for Facilities levied against any Assessor's Parcel of Residential Property for which an o,?cupancy permit for private residential use has been issued be increased by more than ten percent as a consequence of delinquency or default by owner of any other Assessor's Parcel within CFD No. 2006-3. SECTION G PREP A YMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "CFD Public Facilities" means $7,990,000, expressed in 2006 dollars, which shall increase by the Construction Inflation Index on July 1,2007, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2006-3, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taxes for Facilities levied under this Rate and Method of Apportionment. "Construction Fund" means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible under CFD No. 2006-3. "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 City 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 public facility costs available to be funded through existing construction or escrow accounts or funded by the Outstanding Bonds, and minus public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 8 "Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of Special Taxes for Facilities which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Taxes for Faciliti~s. The Special Tax for Facilities obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or an Assessor's Parcel of Provisional Undeveloped Property may be prepaid in full, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Prepayment Amount for an Assessor's Parcel eligible for prepayment shall be determined as described below. An owner of an Assessor's Parcel intending to prepay the Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such notice the CFD Administrator shall notify such owner of the Prepayment Amount of 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 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 Prepayment Amount for each applicable Assessor's Parcel shall be calculated according to the following formula (capitalized terms defined below): plus plus plus plus less less equals Bond Redemption Amount Redemption Premium Future Facilities Amount Defeasance Cost Administrative Fee Reserve Fund Credit Capitalized Interest Credit Prepayment Amount As of the date of prepayment, the Prepayment Amount shall be calculated as follows: 1. For an Assessor's Parcel of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities, if any, applicable to the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property, compute the Assigned Special Tax for Facilities and the Backup Special Tax for Facilities as though it was already designated as Developed Property based upon the building permit issued or expected to be issued for that Assessor's Parcel. For an Assessor's Parcel of Provisional Undeveloped Property compute the Assigned Special Tax for Facilities for that Assessor's Parcel. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 9 2. For each Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property to be prepaid, (a) divide the Assigned Special Tax for Facilities computed pursuant to paragraph I for such Assessor's Parcel by the sum of the estimated Assigned Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at buildout, as reasonably determined by the City, and (b) divide the Backup Special Tax for Facilities computed pursuant to paragraph I for such Assessor's Parcel by the sum of the estimated Backup Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at buildout, as reasonably determined by the City. 3. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the Outstanding Bonds. The produ,ct shall be the "Bond Redemption Amount" . 4. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed with the proceeds of the Bond Redemption Amount. This product is the "Redemption Premium." 5. Compute the Future Facilities Cost. 6. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the amount determined pursuant to paragraph 5 to determine the Future Facilities Cost to be prepaid (the "Future Facilities Amount"). 7. Compute the amount needed to pay interest on the Bond Redemption Amount to be redeemed with the proceeds of the Prepayment Amount until the earliest redemption date for the Outstanding Bonds. 8. Determine the actual Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 9. Estimate the amount of interest earnings to be derived from the reinvestment of the Bond Redemption Amount plus the Redemption Premium until the earliest redemption date for the Outstanding Bonds. 10. Add the amounts computed pursuant to paragraph 7 and 8 and subtract the amount computed pursuant to paragraph 9. This difference is the "Defeasance Cost." 11. Estimate the administrative fees and expenses associated with the prepayment, including the costs of computation of the Prepayment Amount, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption. This amount is the "Administrative Fee." City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page lO 12. Calculate the "Reserve Fund Credit" as the lesser of: (a) the expected reduction in the applicable reserve requirements, if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirements in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the applicable reserve funds on the prepayment date. Notwithstanding the foregoing, if the reserve fund requirement is satisfied by a surety bond or other instrument at the time of the prepayment, then no Reserve Fund Credit shall be given. Notwithstanding the foregoing, the Reserve Fund Credit shall in no event be less than O. 13. If any capitalized interest for the Outstanding Bonds will not have been expended as of the date immediately following the first 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 2( a) or 2(b) by the expected balance in the capitalized interest fund or account under the Indenture after such first interest and/or principal payment. This amount is the "Capitalized Interest Credit." 14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Cost, and the Administrative Fee, less the Reserve Fund Credit and the Capitalized Interest Credit. 15. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 10, 12, and 13 shall be deposited into the appropriate fund as established under the Indenture and used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 6 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by CFD No. 2006-3. The Special Tax for Facilities 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. With respect to a Special Tax for Facilities obligation that is prepaid pursuant to this Section G, the City Council shall indicate in the records ofCFD No. 2006-3 that there has been a prepayment ofthe Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such prepayment to indicate the prepayment of the Special Tax for Facilities obligation and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay such Special Taxes for Facilities shall cease. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 11 Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. SECTION H PARTIAL PREP A YMENT OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or and Assessor's Parcel of Provisional Undeveloped Property, as calculated in this Section H below, may be partially prepaid, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Partial Prepayment Amount shall be calculated according to the following formula: PP = (Po - A) x F + A The terms above have the following meanin&s: PP = the Partial Prepayment Amount. Po = the Prepayment Amount calculated according to Section G. F = the percent by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities obligation. A = the Administrative Fee calculated according to Section G. The owner of any Assessor's Parcel who desires suc~ prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax for Facilities and the percentage by which the Special Tax for Facilities 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 Facilities 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 City Council shall (i) distribute the funds remitted to it according to Section G, and (ii) indicate in the records ofCFD No. 2006-3 that there has been a partial prepayment of the Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in. compliance with the Act within thirty (30) days of receipt of such partial prepayment of the Special Tax for Facilities obligation to indicate the obligation of such Assessor's Parcel to pay such prepaid portion ofthe Special Tax for Facilities shall cease. Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 12 SECTION I TERMINATION OF SPECIAL TAX For each Fiscal Year that any Bonds are outstanding the Special Tax for Facilities shall be levied on all Assessor's Parcels subject to the Special Tax for Facilities. The Special Tax for Facilities shall cease not later than the 2044-2045 Fiscal Year, however, the Special Taxes for Facilities will cease to be levied in an earlier Fiscal Year if the CFD Administra~or has determined (i) that all required interest and principal payments on the CFD No. 2006-3 Bonds have been paid; (ii) all authorized facilities for CFD No. 2006-3 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Taxes for Facilities remain uncollected and (iv) all other obligations of CFD No. 2006-3 have been satisfied. SECTION J EXEMPTIONS The City shall classify as Exempt Property, in order of priority, (i) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor's Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor's Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 21. 75 Acres. Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 21.75 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 21.75 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Taxes pursuant to Step Five in Section F. SECTION K MANNER OF COLLECTION OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be collected in the same ~anner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-3 may collect Special Taxes for Facilities at a different time or in a different manner 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. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 13 SECTION L SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section L: "Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-3 in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-3 for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains: "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-3 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-3 equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain component~ of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) Administrative Expenses, and (iii) anticipated delinquent Special Taxes for Services based on the delinquency rate in CFD No. 2006-3 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 1. Rate and Method of Apportionment of the Special Tax for Services Commencing Fiscal Year 2006-2007 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non-Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 14 The Maximum Special Tax for Services for Fiscal Year 2006-2007 shall be $246.84 per Developed Single Family Unit, $123.42 per Developed Multifamily Unit, and $555.90 per Acre for each Assessor's Parcel of Non-Residential Property. On each July 1, commencing July 1, 2007, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion ofthe City Council. 3. Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-3 may collect the Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. SECTION M APPEALS Any property owner claiming that the amount or application of the Special Tax is not correct may file a written notice of appeal with the CFD Administrator not later than twelve months after having paid the first installment of the Special Tax that is disputed. The CFD Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the CFD Administrator's decision requires that the Special Tax for an Assessor's Parcel be modified or changed in favor of the property owner, a cash refund shall not be made (except for the last year oflevy), but an adjustment shall be made to the Special Tax on that Assessor's Parcel in the subsequent Fiscal Year(s). The City 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 residents appeals. Any decision of the City Council shall be final and binding as to all persons. City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 15 EXHIBIT "A" CITY OF LAKE ELSINORE AND CFD NO. 2006-3 CERTIFICATE 1. Pursuant to Section _ of the Rate and Method of Apportionment of Special Tax (the "RMA"), the City of Lake Elsinore (the "City") and Community Facilities District No. 2006-3 of the City of Lake Elsinore ("CFD No. 2006-3 ") hereby agree to a reduction in the Maximum Special Tax for Facilities for Developed Property [within CFD No. 2006-3J: (a) The information in Table 1 relating to the Maximum Special Tax for Facilities for Developed Property and/or Undeveloped Property within [CFD No. 2006-3 J shall be modified as follows: [insert Table 1 showing effective change to special tax rates and/or insert change to special tax rates for Undeveloped Property J 2. Table 1 may only be modified prior to the issuance of Bonds. 3. Upon execution of the Certificate by the City and CFD No. 2006-3 the City shall cause an amended Notice of Special Tax Lien [for the CFD No. 2006-3 J to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf of the City of Lake Elsinore and CFD No. 2006-3, receipt ofthis Certificate and modification of the RMA as set forth in this Certificate. CITY OF LAKE ELSINORE By: Date: CFD Administrator COMMUNITY FACILITIES DISTRICT NO. 2006-3 OF THE CITY OF LAKE ELSINORE By: Date: City of Lake Elsinore Community Facilities District No. 2006-3 (La Strada) May 25, 2006 Page 16 ORDINANCE NO. 1183 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AUTHORIZING THE LEVY OF A SPECIAL TAX WHEREAS, the City Council (the "Council") of the City of Lake Elsinore (the "City") has received a petition from the landowner of Improvement Area No. 2 of the City of Lake Elsinore Community Facilities District No. 2004-3 (Rosetta Canyon) (the "CFD") to institute proceedings to increase the amount of bonded indebtedness authorized to be incurred within Improvement Area No.2 from $28,000,000 to $33,000,000, the proceeds of which will be used to finance the acquisition and/or construction of public infrastructure facilities, all pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the Government Code of the State of California (the "Act"), and to alter the existing rate and method of apportionment of special taxes with respect to Improvement Area No.2 of the CFD; and WHEREAS, on May 23,2006, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2006-72 stating its intention to incur bonded indebtedness in the amount not to exceed $33,000,0000 within Improvement Area No.2 of the CFD and to consider alteration of the existing rate and method of apportion of special taxes; and WHEREAS, notice was published as required by law relative to the intention of the Council to incur bonded indebtedness in the amount not to exceed $33,000,0000 within Improvement Area No. 2 of the CFD and to consider alteration of the existing rate and method of apportion of special taxes; and WHEREAS, on June 27, 2006 this Council held a noticed public hearing as required by law relative to the rate and method of apportionment and manner of collection of the special tax to be levied within Improvement Area No.2 of the CFD to pay the principal and interest on the proposed bonded indebtedness of Improvement Area No.2 of the CFD, and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds and the maximum annual rate of interest to be paid; and WHEREAS, at said hearing all persons not exempt from the Special Tax desiring to be heard on all matters pertaining to the incurring of bonded CITY COUNCIL ORDINANCE NO. 1183 PAGE20F4 indebtedness and alteration of the rate and method of apportionment of special taxes were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-97 determining the validity of prior proceedings; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-98 which called an election within Improvement Area No.2 of the CFD for June 27, 2006 on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on June 27, 2006, an election was held within Improvement Area No.2 of the CFD in which the eligible electors approved by more than two- thirds vote the proposition of incurring bonded indebtedness, levying a special tax, and setting an appropriations limit. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax (the "Special Tax") is levied within the boundaries of Improvement Area No.2 of the CFD pursuant to the formulas set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection, and all other costs induding amounts payable with respect to the bonded indebtedness. SECTION 2. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the then current or future tax years, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A". SECTION 3. All of the collections of the Special Tax shall be used as provided for in the Act and Resolution No. 2006-97 (Resolution Determining Validity of Prior Proceedings). SECTION 4. The above authorized Special Tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes; provided, however, the CFD may collect the CITY COUNCIL ORDINANCE NO. 1183 PAGE30F4 - Special Tax at a different time or in a different manner if necessary to meet its financial obligations. SECTION 5. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the council Members voting for and against the ordinance. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. This ordinance relating to the levy of the Special Tax takes effect and shall be in force from and after 30 days from the date of final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. INTRODUCED AND APPROVED UPON FIRST READING this 27th day of June, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE NOES: ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1183 PAGE40F4 PASSED, APPROVED AND ADOPTED UPON SECOND READING this l.L day of J UL Y , 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE NOES: ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE ATTEST: Frederick Ra , City Clerk City of Lake Elsinore APPROVED AS TO FORM: AMENDED RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT No. 2004-3 IMPROVEMENT AREA No.2 (ROSETTA CANYON) A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community Facilities District No. 2004-3 (Improvement Area No.2) (Rosetta Canyon) ("CFD No. 2004-3 (IA No. 2)") and collected each Fiscal Year commencing in Fiscal Year 2005-2006, in an amount determined through the application ofthe Rate and Method of Apportionment as described below. All ofthe real property in CFD No. 2004-3 (IA No.2), unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in th~ manner 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. "Act" means the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5, Division 2 of Title 5 of the California Government Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2004-3 (IA No.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 City 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. 2004-3 (IA No.2) or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2004-3 (IA No. 2) or any designee thereof of complying with disclosure requirements of the City, CFD No. 2004-3 (IA No.2) or obligated persons associated with 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. 2004-3 (IA No.2) or any designee thereof related to an appeal ofthe Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2004-3 (IA No.2) for any other administrative purposes of CFD No. 2004-3 (IA No.2), including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure 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 Lake Elsinore CFD No. 2004-3 (IA No.2) December 16,2004 (Amended May 23,2006) Page 1 "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 in each Zone, as determined in accordance with Section C.1.b. below. "Authorized Facilities" means those authorized improvements, as listed on Exhibit "A" to the Resolution of Formation. "Backup Special Tax" means the Special Tax applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.d. below. "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. 2004-3" means City of Lake Elsinore Community Facilities District No. 2004-3 (Rosetta Canyon). "CFD No. 2004-3 (IA No.2)" means Improvement Area No.2 of CFD No. 2004-3, as identified on the boundary map for CFD No. 2004-3. "CFD No. 2004-3 (IA No.2) Bonds" means any bonds or other debt (as defined in Section 53317(d) ofthe Act), whether in one or more series, issued by CFD No. 2004-3 and secured solely by Special Taxes levied on property within the boundaries ofCFD No. 2004-3 (IA No. 2) under the Act. "City" means the City of Lake Elsinore. "City Council" means the City Council of the City of Lake Elsinore, acting as the legislative body of CFD No. 2004-3 (lA No.2). "County" means the County of Riverside. "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, 2004 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied. "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 1352 that creates individual lots for which building permits may be issued without further subdivision. City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 2 "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 CFD No. 2004-3 (lA No.2) Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1. "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 or more non-residential units or facilities has been issued by the City. "Outstanding Bonds" means all CFD No. 2004-3 (11\ No.2) Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2004-3 (lA No.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, or where the Backup Special Tax is being levied, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels upon which a Backup Special Tax is being levied. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property. The term "Proportionately" may similarly be applied to other categories of Taxable Property as listed in Section D below. "Public Property" means property within the boundaries of CFD No. 2004-3 (lA No.2) owned by, irrevocably offered or dedicated to, or over, 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, 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. "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 permit(s) issued for such Assessor's Parcel. City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 3 "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. "Resolution of Formation" means the Resolution of Formation for CFD No. 2004-3 (IA No.2). "Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property, Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property to fund the Special Tax Requirement. "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2004-3 (IA No.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 CFD No. 2004-3 (IA No.2) Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No. 2004-3 (IA No.2) 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 for 'reasonably anticipated Special Tax delinquencies based on the delinquency rate for the Special Tax levy in the previous Fiscal Year; (vi) 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; 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 ofthe Assessor's Parcels within the boundaries of CFD No. 2004-3 (IA No.2) which are not exempt from the Special Tax pursuant to law or Section E below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section E below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "D ndeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Property Owner Association Property, or Taxable Public Property . "Zone" means Zone 1 or Zone 2, as applicable. "Zone 1" means the land geographically identified within the boundaries of zone 1 as delineated in Exhibit A to this Rate and Method of Apportionment. City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 4 "Zone 2" means the land geographically identified within the boundaries of zone 2 as delineated in Exhibit A to this Rate and Method of Apportionment. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2004-3 (IA No.2) shall be assigned to a Zone and further classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, or Undeveloped 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. Residential Property shall be assigned to Land Use Classes 1 through 11 as listed in Table 1 below based on the Residential Floor Area for each unit. Non-Residential Property shall be assigned to Land Use Class 12. C. MAXIMUM SPECIAL TAX RATE 1. Developed Property a. Maximum Soecial 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 Assigned Special Tax for each Land Use Class is shown below in Table 1. City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 5 TABLE 1 Assigned Special Taxes for Developed Property Community Facilities District No. 2004-3 Improvement Area No.2 Fiscal Year 2005-2006 1 Residential Property > 3,950 s.f. $3,271.79 per unit $3,565.47 per unit 2 Residential Property 3,701 - 3,950 s.f. $3,174.02 per unit $3,504.87 per unit 3 Residential Property 3,451 - 3,700 s.f. $3,076.25 per unit $3,443.77 per unit 4 Residential Property 3,201 - 3,450 s.f. $2,978.48 per unit $3,290.64 per unit 5 Residential Property 2,951 - 3,200 s.f. $2,880.71 per unit $3,172.60 per unit 6 Residential Property 2,701 - 2,950 s.f. $2,727.85 per unit $3,055.06 per unit 7 Residential Property 2,451 - 2,700 s.f. $2,659.26 per unit $2,975.78 per unit 8 Residential Property 2,201 - 2,450 s.f. $2,590.67 per unit $2,844.10 per unit 9 Residential Property 1,951 - 2,200 s.f. $2,411.94 per unit $2,770.55 per unit 10 Residential Property 1,700 - 1,950 s.f. $2,353.03 per unit $2,688.11 per unit 11 Residential Property < 1,700 s.f. $2,294.11 per unit $2,590.62 per unit 12 Non-Residential Property NA $17,817 per Acre $16,754 per Acre c. Increase in the Assigned Special Tax The Assigned Special Taxes identified in Table 1 above shall be applicable for Fiscal Year 2005-2006, and shall increase thereafter, commencing on July 1, 2006 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Assigned Special Tax for the previous Fiscal Year. d. Backup Special Tax The Fiscal Year 2005-2006 Backup Special Tax attributable to a Final Subdivision in Zone 1 or Zone 2 will equal $19,868 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 may be issued (i.e., the number or City of Lake Elsinore December 16, 2004 (Amended May 23, 2006) CFD No. 2004-3 (IA No.2) Page 6 residential lots). The Backup Special Tax for each Assessor's Parcel of Non- Residential Property therein shall equal $19,868 multiplied by the Acreage of such Assessor's Parcel. 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, then the Backup Special Tax for each Assessor's Parcel of Developed Property in such Final Subdivision area that is changed or modified shall be a rate per square foot of Acreage calculated as follows: 1. Determine the total Backup Special Taxes anticipated to apply to the changed or modified 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 Final Subdivision area, as reasonably determined by the CFD Administrator. 3. The result of paragraph 2 above shall be divided by 43,560. The result is the Backup Special Tax per square foot of Acreage which shall be applicable to Assessor's Parcels of Developed Property in such changed or modified Final Subdivision area for all remaining Fiscal Years in which the Special Tax may be levied. 1. Release of Obligation to Pay and Disclose Backup Special Tax All Assessors' Parcels within CFD No. 2004-3 (IA No.2) will be relieved simultaneously and permanently from the obligation to pay and disclose the Backup Special Tax if the CFD Administrator determines that 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 result in 110% debt service coverage (i.e., the Assigned Special Taxes that may be levied against all Developed Property in each remaining Fiscal Year based on then existing development in CFD No. 2004-3 (IA No.2) is at least equal to the sum of (i) the Administrative City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 7 Expenses and (ii) 1.10 times maximum annual debt service, in each remaining Fiscal Year on the Outstanding Bonds). e. Increase in the Backup Special Tax On each July 1, commencing on July 1,2006, the Backup Special Tax shall be increased by an amount equal to two percent (2%) of the Backup Special Tax for the previous Fiscal Year. f. Multil'le 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. Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property The Fiscal Year 2005-2006 Maximum Special Tax for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property in Zone 1 or Zone 2 shall be $19,868 per Acre, and shall increase thereafter, commencing on July 1, 2006 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Maximum Special Tax for the previous Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2005-2006 and for each following Fiscal Year, the City Council shall levy the Special Tax until the amount of Special Taxes levied equals the Special Tax Requirement. 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 Undeveloped Property in Zone 1 and Zone 2 at up to 100% of the applicable Maximum Special Tax for Undeveloped Property; Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have 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 Proportionately from the Assigned Special Tax up to the Maximum Special Tax for each such Assessor's Parcel; City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) , Page 8 Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property and Taxable Public Property in Zone 1 and Zone 2 at up to the applicable Maximum Special Tax for Taxable Property Owner Association Property or Taxable Public Property. Notwithstanding the above the City Council may, in any Fiscal Year, levy Proportionately less than 100% of the Assigned Special Tax in step one (above), when (i) the City Council is no longer required to levy the Special Tax pursuant to steps two through four above in order to meet the Special Tax Requirement; and (ii) all authorized CFD No. 2004-3 (lA No.2) Bonds have already been issued or the City Council has covenanted that it will not issue any additional CFD No. 2004-3 (lA No.2) Bonds (except refunding bonds) to be supported by the Special Tax. Further notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property for which an occupancy permit for private residential use 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. 2004-3 (lA No.2). E. EXEMPTIONS The City shall classify Property Owner Association Property and/or Public Property in CFD No. 2004-3 (lANo. 2) as exempt property, provided that no such classification would reduce the Acreage of all Taxable Property to less than 75.86 Acres. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or Public Property, its tax-exempt status will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Taxes under this section shall be subject to the levy of the Special Tax and shall be taxed Proportionately as part of the fourth step in Section D above, at up to 100% of the applicable Maximum Special Tax for Taxable Property Owner Association Property or Taxable Public Property . F. 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. 2004-3 (lA No.2) may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner 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. City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 9 G. APPEALS 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. 2004-3 (lA No.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 City 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 City Council shall be final and binding as to all persons. H. PREP A YMENT OF SPECIAL TAX The following definitions apply to this Section H: "Buildout" means, for CFD No. 2004-3 (lA No.2), that all expected building permits have been issued. "CFD Public Facilities" means either $27,000,000 in 2006 dollars, which shall increase by the Construction Inflation Index on July 1,2007, and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2004-3 (lANo. 2) under the authorized bonding program for CFD No. 2004-3 (lA No.2), or (ii) shall be determined by the City Council concurrently with a covenant that it will not issue any more CFD No. 2004-3 (lA No.2) Bonds (except refunding bonds) to be supported by the Special Taxes levied under 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 Improvement Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance the cost of CFD Public Facilities. "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. City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 10 "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 Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may be prepaid. The obligation of the Assessor's Parcel to pay any Special Tax may be permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor's Parcel 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 next occurring date that notice of redemption of CFD No. 2004-3 (IA No.2) 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 terms as defined below): Bond Redemption Amount plus plus plus plus less less Total: equals Redemption Premium Future Facilities Amount Defeasance Amount Administrative Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Prepayment Amount ! As of the proposed date of prepayment, the Special Tax Prepayment Amount shall be calculated as follows: Parae:raoh 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 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. City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16,2004 (Amended May 23,2006) Page 11 - 3. (a) Divide the Assigned Special Tax computed pursuant to paragraph 2 by the total estimated Assigned Special Taxes for the entire CFD No. 2004-3 (IA No.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. 2004-3 (IA No.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. 2004-3 (IA No. 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-l00%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the 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 Prepayment 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 ofCFD No. 2004-3 (IA No.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 CFD No. 2004-3 City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 12 - (IA No.2) Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 13. The reserve fund 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 fund 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 fund 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 first 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 amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Prepayment Amount"). 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 Indenture and be used to retire CFD No. 2004-3 (IA No.2) Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2004-3 (IA No.2). The Special Tax Prepayment Amount may be insuffi~ient to redeem a full $5,000 increment ofCFD No. 2004-3 (IA No.2) Bonds. In such cases, the increment above $5,000 or integral multiple thereofwill be retained in the appropriate fund established under the Indenture to be used with the next prepayment ofCFD No. 2004-3 (IA No.2) Bonds or to make debt service payments. As a result of the payment ofthe 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 City 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. City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 13 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. 2004-3, (IA No.2) 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 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.I; 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.I. 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.I. 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 City Council shall (i) distribute the funds remitted to it according to Section H.I, and (ii) indicate in the records of CFD No. 2004-3 (IA No.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 Maximum 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 years commencing with Fiscal Year 2005-2006, provided however that Special Taxes will cease to be levied in an earlier Fiscal Year ifthe CFD Administrator has determined (i) that all required interest and principal payments on the CFD No. 2004-3 (IA No.2) Bonds have been paid; and (ii) all Authorized Facilities have been constructed. City of Lake Elsinore CFD No. 2004-3 (IA No.2) December 16, 2004 (Amended May 23, 2006) Page 14 RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT No. 2004-3 IMPROVEMENT AREA No.2 (ROSETTA CANYON) EXHIBIT A MAP OF ZONE 1 AND ZONE 2 ORDINANCE NO. 1184 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AMENDING AND RESTATING CHAPTER 9.42 OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING LARGE PARTIES WHEREAS, Chapter 9.42 of the Lake Elsinore Municipal Code regulates large parties in the City of Lake Elsinore; and WHEREAS, in order to enhance the deterrents set forth in Chapter 9.42, the City Council has determined to amend Chapter 9.42. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. That Chapter 9.42 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: CHAPTER 9.42 CHARGES FOR POLICE SERVICES AT LARGE PARTIES, GATHERINGS OR EVENTS 9.42.005 General purposes. The City Council finds and determines that large parties, gatherings or events on private property can constitute a threat to the peace, health, safety or general welfare of the public. Police officers have been required to make many return calls to large parties, gath~rings or events in order to disperse unruly participants. Such return calls require significant police personnel and equipment. As a result, the Police Department's ability to deter criminal activity is reduced due to the lack of police presence throughout the City and police resources are not available to quickly respond to other criminal activity. The Ordinance will assist the City in maintaining adequate levels of police protection throughout the City so as to maintain a safe community for our citizens. , 9.42.010 Definitions. The following words, phrases and terms as used in this chapter shall have the meaning as indicated below: CITY COUNCIL ORDINANCE NO. 1184 PAGE20F5 "First Response Notice" means a notice issued by a police officer pursuant to this chapter advising a responsible person that a loud party or noise disturbance is taking place and that the disturbance must cease. "Host" means a person who owns the property where the party, gathering or event takes place; the person in charge of the premises and/or the person who organizes the event. If the host is a minor, then the parents or guardians of that minor will be jointly and severally liable for the charge incurred for police services. "Large party, gathering or event" means a group of ten (10) or more persons who have assembled or are assembling for a social occasion or for a social activity. "Police Services Charge" means the charge to recover the cost to the City of any Special Security Assignment. Such charge may be either a flat charge of (i) five hundred dollars ($500) for the first security assignment, (ii) one thousand dollars ($1,000) for the second security assignment, (iii) one thousand five hundred dollars ($1,500) for the third and any subsequent security assignment; or, as an alternative to the foregoing flat charge, an itemized charge based on, but not limited to, salaries of police officers while responding to or remaining at the party, gathering or event, the pro rata cost of equipment, the cost of repairing City equipment and the property, and the cost of any medical treatment of injured police officers. "Special Security Assignment" means the assignment of police officers, services and equipment during a second or subsequent response to the party, gathering or event after the distribution of a First Response Notice to the host that a Police Services Charge will be imposed for costs incurred by the City for any subsequent police response. 9.42.020 Initial police responses to large parties, gatherings or events. When any police officer responds to any large party, gathering or event, and the police officer encounters (1) one or more persons who are causing an inordinate amount of noise or commotion or behaving in' such a manner which constitutes a threat to the public peace, health, safety, or general welfare, the police officer shall issue a First Response Notice to the host or hosts. Such First Response Notice shall also advise the host that a subsequent response to that same location or address within a ten (10) day period shall be deemed a Special Security Assignment rendered to provide security and order for the party, gathering or event and that the host shall be liable for a Police Se~ices Charge. CITY COUNCIL ORDINANCE NO. 1184 PAGE30F5 9.42.030 Subsequent police responses to large parties, gatherings or events; liability. If after a First Response Notice is issued pursuant to Section 9.42.020, all subsequent police response or responses to the same location or address within a ten (10) day period shall be deemed a Special Security Assignment. Persons previously warned shall be jointly and severally liable for a Police Services Charge as defined in this chapter. The amount of such charge shall be a debt owed to the City by the person or persons warned, and if the person is a minor, the debt shall be owed by his or her parents or guardians. In no event shall the charge be more than one thousand five hundred dollars ($1,500), provided, however, the City reserves its rights to seek reimbursements for actual costs exceeding one thousand five hundred dollars ($1,500) through other legal remedies or procedures. 9.42.040 Cost, collection. The City Manager or designee shall notify the Director of Administrative Services in writing, of the performance of the Special Security Assignment, the name and address of the responsible person or persons, the date and time of the incident, the services performed, the costs thereof and such other information as may be required. The Director of Administrative Services shall thereafter cause appropriate billings to be made. In the event billings are not paid when due, the Director of Administrative Services shall have the authority to collect said billings through a small claims action or, based upon action of the City Council after noticed hearing, place the delinquent billing on the equalized tax roll for collection. 9.42.050 Administrative appeal. An administrative appeal of a Police Services Charge may be made in the same manner as the appeal procedures set forth for administrative citation in Chapter 1.20, Administrative Citation Procedure. 9.42.060. Affect On Criminal Prosecution. The provisions of this chapter are an additional authority for the regulation of loud or unruly disturbances, and shall supplement and not replace the enforcement of any other available law or ordinance of any type, including, but not limited to, ordering persons to immediately disperse along with the arrest or citation of violators of State of California law or any other regulation. SECTION 2. SEVERABILITY. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be CITY COUNCIL ORDINANCE NO. 1184 PAGE 4 OF 5 held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 3. EFFECTIVE DATE. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 11th day of July, 2006, by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING 25th day of July, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ' ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE obertE.~agee ayor City of Lake EI more CITY COUNCIL ORDINANCE NO. 1184 PAGE 5 OF 5 ATTEST: Frederick ay, City Clerk City of Lake Elsinore APPROVED AS TO FORM: ;ib?t, ... ORDINANCE NO. 1185 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX WHEREAS, on June 13,2006, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2006-76 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to finance a portion of the cost of providing parks, open space and storm drains maintenance services (the "Services") that are in addition to those provided in the territory within the CFD prior to the formation of the CFD, and to finance the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities and other governmental facilities, which the City is authorized by law to construct, own or operate (the "Facilities"); and WHEREAS, on June 13, 2006, the Council also adopted Resolution No. 2006-77 stating its intention and the necessity to incur bonded indebtedness in the amount not to exceed $10,000,000 to be issued for the purpose of financing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, notice was published as required by law relative to the intention of the Council to form the CFD and to incur bonded indebtedness in the amount not to exceed $10,000,000 within the boundaries of the CFD; and WHEREAS, on July 25, 2006, this Council'held a noticed public hearing as required by law relative to the determination to proceed with the formation of the CFD, the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay for the Services and the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay the principal and interest on the proposed bonded indebtedness of the CFD, and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds and the maximum annual rate of interest to be paid; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD and the incurring of bonded indebtedness by the CFD were heard and a full and fair hearing was held; and CITY COUNCIL ORDINANCE NO. 1185 Page 2 of 4 WHEREAS, the Council subsequent to such hearing adopted Resolution No. 2006-117 determining the validity of prior proceedings and established the CFD; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-118 which called an election within the CFD for July 25, 2006 on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on July 25, 2006, an election was held within the CFD in which the eligible electors approved by more than two-thirds vote the proposition of incurring bonded indebtedness, levying a special tax, and setting an appropriations limit. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax (the "Services Special Tax") is levied within the boundaries of the CFD pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Services, periodic costs, and cost~ of the tax levy and collection, and all other costs. SECTION 2. A special tax (the "Special Tax") is levied within the boundaries of the CFD pursuant to the formulas set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection, and all other costs including amounts payabl~ with respect to the bonded indebtedness. SECTION 3. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the then current or future tax years, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A". SECTION 4. All of the collections of the Services Special Tax and Special Tax shall be used as provided for in the Act and Resolution No. 2006-117 (Resolution of Formation). CITY COUNCIL ORDINANCE NO. 1185 Page 3 of 4 SECTION 5. The above authorized Services Special Tax and the Special Tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes; provided, however, the CFD may collect the Services Special Tax and the Special Tax at a different time or in a different manner if necessary to meet its financial obligations. SECTION 6. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the council Members voting for and against the ordinance. SECTION 7. This ordinance relating to the levy of the Services Special Tax and the Special Tax takes effect and shall be in force from and after 30 days from the date of final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer- Tax Collector of Riverside County. INTRODUCED AND APPROVED UPON FIRST READING this 25th day of July 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, IDCKMAN, KELLEY, SCIDfFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1185 Page 4 of 4 PASSED, APPROVED AND ADOPTED UPON SECOND READING this 8th day of August 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE Frederick Ra , City Clerk City of Lake lsinore APPROVED AS TO FORM: ?;,~~ Barbara Zeid Leibold, City Attorney City of Lake Elsinore RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2006-4 OF THE CITY OF LAKE ELSINORE (Tracts 30698 & 32129) The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes in the City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) ("CFD No. 2006-4"). The Special Tax shall be levied on and collected in CFD No. 2006-4 each Fiscal Year, in an amount determined through the application of the Rate and Method of Apportionment described below. All of the real property witpin CFD No. 2006-4, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. SECTION 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 or instrument. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560. "Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5, Part 1 of Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2006-4: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting the Special Taxes for Facilities to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2006-4 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-4 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-4 or obligated persons associated with 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 ofthe City, CFD No. 2006-4 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release offunds from an escrow account; and the City's annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2006-4 for any other administrative purposes ofCFD No. 2006-4, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Apartment Property" means all Assessor's Parcels of Residential Property on which one or more Apartment Units are constructed. City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 1 "Apartment Unit" means a dwelling unit within a building comprised of attached residential units available for rental by the general public, not for sale to an end user, and under common management. "Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January I st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied. "Assessor's Parcel" means a lot or parcel ofland designated on an Assessor's Parcel Map with an assigned Assessor's Parcel Number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel Number. " Assessor's Parcel N urn ber" means that number assigned to an Assessor's Parcel by the County for purposes of identification. "Assigned Special Tax for Facilities" means the Special Tax of that name described in Section D below. "Backup Special Tax for Facilities" means the Special Tax of that name described in Section E below. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which Special Taxes for Facilities withIn CFD No. 2006-4 have been pledged. "Building Square Footage" or "BSF" means the square footage of assessable intemalliving space, exclusive of garages or other structures not used as living space, as determined by reference to the building permit application for such Assessor's Parcel. "Calendar Year" means the period commencing January I of any year and ending the following December 31. "CFD Administrator" means an official of the City, or designee thereof, responsible for (i) determining the Special Tax Requirement for Facilities, (ii) determining the Special Tax Requirement for Services, as defined in Section L, as applicable, and (iii) providing for the levy and collection of the Special Taxes. "CFD No. 2006-4" means Community Facilities District No. 2006-4 (Tracts 30698 & 32129) established by the City under the Act. "City" means the City of Lake Elsinore. "City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD No. 2006-4, or its designee. City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 2 "County" means the County of Riverside. "Developed Property" means all Assessor's Parcels of Taxable Property that: (i) are included in a Final Map that was recorded prior to the January I st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) a building permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being'levied. "Exempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes as provided for in Section 1. "Final Map" 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 Cl:j.lifornia Civil Code 1352 that creates individual lots for which building permits may be issued without further subdivision. "Fiscal Year" means the period commencing on July I of any year and ending 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, and any instrument replacing or supplementing the same. "Land Use Type" means any of the types listed in Table I of Section D. "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, determined in accordance with Section C, that can be levied by CFD No. 2006-4 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 was issued for any type of non-residential use. "Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax for Facilities obligation for an Assessor's Parcel, as described in Section H. "Prepayment Amount" means the amount required to prepay the Special Tax for Facilities obligation in full for an Assessor's Parcel, as described in Section G. "Proportionately" means that the ratio of the actual Special Tax for Facilities levy to the applicable Assigned Special Tax for Facilities is equal for all applicable Assessor's Parcels. In case of Developed Property subject to the apportionment of the Special Tax for Facilities under step four of Section F, "Proportionately" in step four means that the quotient of (a) actual Special Tax for Facilities less the Assigned Special Tax for Facilities divided by (b) the Backup Special Tax for Facilities less the Assigned Special Tax for Facilities, is equal for all applicable Assessor's Parcels. "Provisional Undeveloped Property" means all Assessor' s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section J, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section J. City of Lake Elsinore 5/30/2006 Community Facilities District No. 2006-4 (Tracts 30698 & 32129) Page 3 "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Single Family Property" means all Assessor's Parcels of Residential Property other than Apartment Property. "Single Family Unit" means a residential dwelling unit other than an Apartment Unit. "Special Tax" means any of the special taxes authorized to be levied within CFD No. 2006-4 pursuant to the Act. "Special Tax for Facilities" means any of the special taxes authorized to be levied within CFD No. 2006-4 pursuant to the Act to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax for Facilities delinquencies in the prior Fiscal Year, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2006-4 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax for Facilities on Undeveloped Property as set forth in Step Three of Section F., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture. "Taxable Property" means all Assessor's Parcels within CFD No. 2006-4, which are not Exempt Property . "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not Developed Property, Approved Property or Provisional Undeveloped Property. SECTION B CLASSIFICATION OF ASSESSOR'S PARCELS Each Fiscal Year, beginning with Fiscal Year 2006-07, each Assessor's Parcel within CFD No. 2006-4 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor's Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property. In addition, each Assessor's Parcel of Developed Property shall further be classified as Residential Property or N on-Residential Property. Lastly, each Assessor's Parcel of Residential Property shall further be classified as a Single Family Property or Apartment Property, and each Assessor's Parcel of Single Family Property shall be assigned to its appropriate Assigned Special Tax for Facilities rate based on its Building Square Footage. City of Lake Elsinore 5/30/2006 Community Facilities District No. 2006-4 (Tracts 30698 & 32129) Page 4 SECTION C MAXIMUM SPECIAL TAX FOR FACILITIES 1. Developed Property The Maximum Special Tax for Facilities for each Assessor's Parcel of Single Family Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax for Facilities or (ii) the Backup Special Tax for Facilities. The Maximum Special Tax for Facilities for each Assessor's Parcel of Apartment Property or Non-Residential Property shall be the applicable Assigned Special Tax for Facilities described in Table 1 of Section D. Prior to the issuance of Bonds, the Assigned Special Tax for Facilities on Developed Property set forth in Table 1 and the Assigned Special Tax for Facilities on Approved Property, Undeveloped Property and Provisional Undeveloped Property set forth in Section D.2 may be reduced in accordance with, and subject to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the City Council, the "Goals and Policies") calculated pursuant to the Goals and Policies exceeds,the City's maximum level objective set forth in such document, the Maximum Special Tax for Facilities on Developed Property may be reduced (by modifying Table 1) to the amount necessary to satisfy the City's objective with respect to the maximum overlapping debt burden level with the written consent of the CFD Administrator. In order to reduce the Maximum Special Tax for Facilities on Developed Property it may be necessary to reduce the Maximum Special Tax for Facilities for Undeveloped Property. The reductions permitted pursuant to this paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to be recorded by executing a certificate in substantially the form attached hereto as Exhibit "A". 2. Multiple Land Use Tvpe In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax for Facilities levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities for all Land Use Types located on the Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. 3. Approved Property. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Approved Property, Undeveloped Property, or Provisional Undeveloped Property in any Fiscal Year shall be the applicable Assigned Special Tax for Facilities. City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 5 SECTION D ASSIGNED SPECIAL TAX FOR FACILITIES 1. DeveloDed ProDertv Each Fiscal Year, each Assessor's Parcel of Single Family Property, Apartment Property, or Non-Residential Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities applicable to an Assessor's Parcel of Developed Property for Fiscal Year 2006-07 shall be determined pursuant to Table 1 below. TABLE 1 ASSIGNED SPECIAL TAX FOR FACILITIES RATES FOR DEVELOPED PROPERTY FOR FISCAL YEAR 2006-07 BuUdin S uare Foota e Greater than 3,300 3,001 - 3,300 2,701 - 3,000 Less than or e ual to 2,700 N/A N/A $3,323 $3,228 $2,953 Unit Unit Unit Unit 2. ADD roved ProDertv. UndeveloDed ProDertv and Provisional UndeveloDed ProDertv Each Fiscal Year, each Assessor's Parcel of Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities rate for an A~sessor's Parcel classified as Approved Property, Undeveloped Property and Provisional Undeveloped Property for Fiscal Year 2006-07 shall be $19,868 per Acre. 3. Increase in the Assilmed SDecial Tax for Facilities On each July 1, commencing July 1,2007, the Assigned Special Tax for Facilities rate for Developed Property, Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. SECTION E BACKUP SPECIAL TAX FOR FACILITIES At the time a Final Map is recorded, the Backup Special Tax for Facilities for all Assessor's Parcels of Developed Property classified or reasonably expected to be classified as a Single Family Property within such Final Map area shall be determined by (i) multiplying (a) the Maximum Special Tax for City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 6 Facilities rate for Undeveloped Property by (b) the total Acreage of Taxable Property in such Final Map area, excluding Acreage classified as Provisional Undeveloped Property, Acreage classified or reasonably expected to be classified as Apartment Property or Non-Residential Property, and any Acreage reasonably expected to be classified as Exempt Property in such Final Map area, and (ii) dividing the results in (i) by the total number of Single Family Units reasonably expected to be constructed within such Final Map area. The resulting quotient shall be the Backup Special Tax for Facilities for each Assessor's Parcel of Single Family Property within such Final Map area. The Backup Special Tax for Facilities shall not apply to Non-Residential Property or Apartment Property . Notwithstanding the foregoing, if Assessor's Parcels of Developed Property which are classified or to be classified as Single Family Property are subsequently changed or modified by recordation of a lot line adjustment or similar instrument, then the Backup Special Tax for Facilities for the area that has been changed or modified shall be recalculated, based on the methodology above, to equal the amount of Backup Special Tax for Facilities that would have been generated if such change did not take place. On each July 1, commencing July 1, 2007, the Backup Special Tax for Facilities rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. SECTION F METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing Fiscal Year 2006-07 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes for Facilities on all Taxable Property in accordance with the following steps: Step One: The Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax for Facilities rates in Table 1 to satisfy the Special Tax Requirement for Facilities. Step Two: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Step Three: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% of the Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax R,equirement for Facilities. Step Four: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities on City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 7 each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is the Backup Special Tax for Facilities shall be increased Proportionately from the Assigned Special Tax for Facilities up to 100% of the Backup Special Tax for Facilities as needed to satisfy the Special Tax Requirement for Facilities. Step Five: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first four steps have been completed; the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Notwithstanding the above, under no circumstances will the Special Tax for Facilities levied against any Assessor's Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent as a consequence of delinquency or default by owner of any other Assessor's Parcel. SECTION G PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section 0': "CFD Public Facilities" means $8,200,000 expressed in 2006 dollars, which shall increase by the Construction Inflation Index on July 1,2007, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2006-4, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taxes for Facilities levied under this Rate and Method of Apportionment. "Construction Fund" means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible under CFD No. 2006-4. "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 City 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 public facility costs available to be funded through existing construction or escrow accounts or funded by the Outstanding Bonds, and minus public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment. City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 8 "Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of Special Taxes for Facilities which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Taxes for Facilities. The Special Tax for Facilities obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or an Assessor's Parcel of Provisional Undeveloped Property may be prepaid in full, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Prepayment Amount for an Assessor's Parcel eligible for prepayment shall be determined as described below. An owner of an Assessor's Parcel intending to prepay the Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such notice the CFD Administrator shall notify such owner of the Prepayment Amount of 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 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 Prepayment Amount for each applicable Assessor's Par~el shall be calculated according to the following formula (capitalized terms defined below): plus plus plus plus less less equals Bond Redemption Amount Redemption Premium Future Facilities Amount Defeasance Cost Administrative Fee Reserve Fund Credit Capitalized Interest Credit Prepayment Amount As of the date of prepayment, the Prepayment Amount shall be calculated as follows: 1. For an Assessor's Parcel of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities, if any, applicable to the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property, compute the Assigned Special Tax for Facilities and the Backup Special Tax for Facilities as though it was already designated as Developed Property based upon the building permit issued or expected to be issued for that Assessor's Parcel. For an Assessor's Parcel of Provisional Undeveloped Property compute the Assigned Special Tax for Facilities for that Assessor's Parcel. 2. For each Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property to be prepaid, ( a) 5/30/2006 City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) Page 9 divide the Assigned Special Tax for Facilities computed pursuant to paragraph 1 for such Assessor's Parcel by the sum of the estimated Assigned Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at buildout, as reasonably determined by the City, and (b) divide the Backup Special Tax for Facilities computed pursuant to paragraph 1 for such Assessor's Parcel by the sum of the estimated Backup Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at buildout, as reasonably determined by the City: 3. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the Outstanding Bonds. The product shall be the "Bond Redemption Amount" . 4. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed with the proceeds of the Bond Redemption Amount. This product is the "Redemption Premium. " 5. Compute the Future Facilities Cost. 6. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the amount determined pursuant to paragraph 5 to determine the Future Facilities Cost to be prepaid (the "Future Facilities Amount"). 7. Compute the amount needed to pay interest on the Bond Redemption Amount to be redeemed with the proceeds of the Prepayment Amount until the earliest redemption date for the Outstanding Bonds. 8. Determine the actual Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 9. Estimate the amount of interest earnings to be derived from the reinvestment of the Bond Redemption Amount plus the Redemption Premium until the earliest redemption date for the Outstanding Bonds. 10. Add the amounts computed pursuant to paragraph 7 and 8 and subtract the amount computed pursuant to paragraph 9. This difference is the "Defeasance Cost." 11. Estimate the administrative fees and expenses associated with the prepayment, including the costs of computation of the Prepayment Amount, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption. This amount is the "Administrative Fee." 12. Calculate the "Reserve Fund Credit" as the lesser of: (a) the expected reduction in the applicable reserve requirements, if any, associated with the 5/30/2006 City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) Page 10 redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirements in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the applicable reserve funds on the prepayment date. Notwithstanding the foregoing, if the reserve fund requirement is satisfied by a surety bond or other instrument at the time of the prepayment, then no Reserve Fund Credit shall be given. Notwithstanding the foregoing, the Reserve Fund Credit shall in no event be less than O. 13. If any capitalized interest for the Outstanding Bonds will not have been expended as of the date immediately following the first 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 2( a) or 2(b) by the expected balance in the capitalized interest fund or account under the Indenture after such first interest and/or principal payment. This amount is the "Capitalized Interest Credit." 14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Cost, and the Administrative Fee, less the Reserve Fund Credit and the Capitalized Interest Credit. 15. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3,4, 10, 12, and 13 shall be deposited into the appropriate fund as established under the Indenture and used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 6 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by CFD No. 2006-4. The Special Tax for Facilities 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. With respect to a Special Tax for Facilities obligation that is prepaid pursuant to this Section G, the City Council shall indicate in the records ofCFD No. 2006-4 that there has been a prepayment of the Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such prepayment to indicate the prepayment of the Special Tax for Facilities obligation and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay such Special Taxes for Facilities shall cease. Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. ' City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 11 SECTION H PARTIAL PREP A YMENT OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities obligation of an Assessor's,Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or and Assessor's Parcel of Provisional Undeveloped Property, as calculated in this Section H below, may be partially prepaid, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Partial Prepayment Amount shall be calculated according to the following formula: PP = (Po - A) x F + A The terms above have the following meanings: PP = the Partial Prepayment Amount. Po = the Prepayment Amount calculated according to Section G. F = the percent by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities obligation. A = the Administrative Fee calculated according to Section G. 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 for Facilities and the percentage by which the Special Tax for Facilities 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 Facilities 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 City Council shall (i) distribute the funds remitted to it according to Section G, and (ii) indicate in the records ofCFD No. 2006-4 that there has been a partial prepayment of the Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such partial prepayment of the Special Tax for Facilities obligation to indicate the partial prepayment of the Special Tax for Facilities obligation and the partial release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay such prepaid portion of the Special Tax for Facilities shall cease. , Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. SECTION I City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 12 TERMINATION OF SPECIAL TAX For each Fiscal Year that any Bonds are outstanding the Special Tax for Facilities shall be levied on all Assessor's Parcels subject to the Special Tax for Facilities. The Special Tax for Facilities shall cease not later than the 2041-42 Fiscal Year, however, the Special Taxes for Facilities 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. 2006-4 Bonds have been paid; (ii) all authorized facilities for CFD No. 2006-4 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Taxes for Facilities remain uncollected and (iv) all other obligations of CFD No. 2006-4 have been satisfied. SECTION J EXEMPTIONS The City shall classify as Exempt Property, in order of priority, (i) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor's Parcels with public or utility easements making impractioal their utilization for other than the purposes set forth in the easement, (v) Assessor's Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor's Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 28.71 Acres. Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 28.71 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 28.71 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Taxes for Facilities pursuant to Step Five in Section F. SECTION K MANNER OF COLLECTION OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-4 may collect Special Taxes for Facilities at a different time or in a different manner 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. ' City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 13 SECTION L SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section L: "Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-4 in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-4 for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-4 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-4 equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) Administrative Expenses, and (iii) anticipated delinquent Special Taxes for Services based on the delinquency rate in CFD No. 2006-4 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Admin~strator. 1. Rate and Method of Apportionment of the Special Tax for Services Commencing Fiscal Year 2006-2007 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non-Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. City of Lake Elsinore 5/30/2006 Community Facilities District No. 2006-4 (Tracts 30698 & 32129) Page 14 The Maximum Special Tax for Services for Fiscal Y;ear 2006-2007 shall be $246.84 per Developed Single Family Unit, $123.42 per Developed Multifamily Unit, and $555.90 per Acre for each Assessor's Parcel of Non-Residential Property. On each July 1, commencing July 1, 2007, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the City Council. 3. Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-4 may collect the Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. SECTION M APPEALS Any property owner claiming that the amount or application of the Special Tax is not correct may file a written notice of appeal with the CFD Administrator not later than twelve months after having paid the first installment of the Special Tax that is disputed. The CFD Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the CFD Administrator's decision requires that the Special Tax for an Assessor's Parcel be modified or changed in favor of the property owner, a cash refund shall not be made (except for the last yearoflevy), but an adjustment shall be made to the Special Tax on that Assessor's Parcel in the subsequent Fiscal Year(s). The City 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 residents appeals. Any decision of the City Council shall be final and binding as to all persons. City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 15 EXHIBIT" A" CITY OF LAKE ELSINORE AND CFD NO. 2006-4 CERTIFICATE I. Pursuant to Section _ of the Rate and Method of Apportionment of Special Tax (the "RMA"), the City of Lake Elsinore (the "City") and Community Facilities District No. 2006-4 of the City of Lake Elsinore ("CFD No. 2006-4") hereby agree to a reduction in the Maximum Special Tax for Facilities for Developed Property: (a) The information in Table I relating to the Maximum Special Tax for Facilities for Developed Property and/or Undeveloped Property within CFD No. 2006-4 shall be modified as follows: [insert Table 1 showing effective change to special tax rates and/or insert change to special tax rates for Undeveloped Property] 2. Table I may only be modified prior to the issuance of Bonds. 3. Upon execution of the Certificate by the City and CFD No. 2006-4 the City shall cause an amended Notice of Special Tax Lien to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf of the City of Lake Elsinore and CFD No. 2006-4, receipt of this Certificate and modification of the RMA as set forth in this Certificate. CITY OF LAKE ELSINORE By: Date: CFD Administrator COMMUNITY FACILITIES DISTRICT NO. 2006-4 OF THE CITY OF LAKE ELSINORE By: Date: City of Lake Elsinore Community Facilities District No. 2006-4 (Tracts 30698 & 32129) 5/30/2006 Page 16 ORDINANCE NO. 1186 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 19 (TRACT 31957) ANNEXED TO SAID DISTRICT WHEREAS, on June 13,2006, the City Council (the "Council") of the City of Lake Elsinore, California (the "City") adopted Resolution No. 2006-74 stating its intention to annex certain property (Annexation Area No. 19 (Tract 31957) ("Annexation Area No. 19")) into City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, (the "Act"); and WHEREAS, notice was published as required by law relative to the intention of the Council to annex Annexation Area No. 19 into the District; and WHEREAS, on July 25, 2006 this Council held a noticed public hearing as required by law relative to the determination to proceed with the annexation of Annexation Area No. 19 into the District and the rate and method of apportionment and manner of collection of the special tax to be levied within Annexation Area No. 19 to finance certain public services; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the annexation of Annexation Area No. 19 were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-120 determining the validity of prior proceedings relative to the annexation of Annexation Area No. 19, annexed Annexation Area No. 19 into the District and authorized the levy of a special tax within Annexation Area No. 19; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-121 which called an election within Annexation Area No. 19 for July 25, 2006 on the proposition of levying a special tax; and CITY COUNCIL ORDINANCE NO. 1186 Page 2 of 4 WHEREAS, on July 25,2006 an election was held within each Annexation Area No. 19 in which the eligible electors approved by more than two-thirds vote the proposition of levying a special tax. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES), DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax is levied within the boundaries of Annexation Area No. 19 pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 19 prior to the annexation of Annexation Area No. 19 into the District, periodic costs, and costs of the tax levy and collection. SECTION 2. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the next fiscal year, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 3. All of the collections of the special tax shall be used as provided for in the Act and Resolution No. 2006- of the Council. SECTION 4. The above authorized special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes. SECTION 5. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the Council Members voting for and against the ordinance. CITY COUNCIL ORDINANCE NO. 1186 Page 3 of 4 SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. This ordinance relating to the levy of the special tax takes effect and shall be in force from and after thirty (30) days after the date of its final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. CITY COUNCIL ORDINANCE NO. 1186 Page 4 of 4 - INTRODUCED AND APPROVED UPON FIRST READING this 25th day of July, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 8th day of August 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE NOES: ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: Frederick R , City Clerk City of Lake Elsinore - EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX NOTICE OF ADOPTION OF ORDINANCE NO. 1186 NOTICE IS HEREBY GIVEN that on July 25,2006, at the Council Chambers of the City of Lake Elsinore, 183 North Main Street, Lake Elsinore, California 92530, the City Council of the City of Lake Elsinore, in its capacity as the legislative body of the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services), held a public hearing and adopted Ordinance No. 1186. A summary of Ordinance No. 1186 follows and is marked as Exhibit "B". At said time and place the testimony of all interested persons or taxpayers for or against said ordinance was heard. Ordinance No. 1186 was adopted by the following vote: AYES: COUNCILMEMBERS:Buckley, Hickman, Kelley, Schiffner Magee NOES: COUNCILMEMBERS:None ABSTAIN: COUNCILMEMBERS:None ABSENT: COUNCILMEMBERS:None CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEME T, FIRE AND PARAMEDIC SERVICES) Dated: August 8 , 2006 By - EXHIBIT B BEFORE THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE IN ITS CAPACITY AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) IN THE MATTER OF Authorizing the Levy of a Special Tax Within Annexation Area No. 19 (Tract 31957) Annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) ) ORDINANCE NO. 1186 SUMMARY ) ) ) ) ) ) ) ) ) The ordinance authorizes levy of an annual special tax within Annexation Area No. 19 (Tract 31957) annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), collected in the same manner as ordinary ad valorem taxes, in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 19 (Tract 31957) prior to the annexation of Annexation Area No. 19 (Tract 31957) to the District, which is necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within Annexation Area No. 19 (Tract 31957). DATED: tl'1i/rl 1/ , 2006 CITY OF LAKE ELSINORE BY:~ Frederick Ray, City Clerk CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction Special taxes shall be annually levied on all Developed Residential Property and Developed Multi-Family Property (as hereinafter defined) in the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), in accordance with the rate and method of apportionment of special taxes hereinafter set forth. All of the property within the District that is not Developed Residential or Developed Multi-Family Residential Property shall be exempt from the Maximum Annual Special Taxes of the District. Definitions Assessor's Parcel. A parcel of land in the District designated and assigned a discrete identifying number on a map of the County Assessor of the County of Riverside. City. City of Lake Elsinore, California. Developed Multi-Family Property. Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding the Fiscal Year for the construction of a Unit that is located or shall be located within a building in which each individual Units has or shall have at least one common wall with another Unit. Developed Residential Property. All other Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding any Fiscal Year for the construction of a Unit that is not Developed Multi-family Property. Fiscal Year. The period beginning on July 1 and ending on the following June 30. Maximum Annual Special Taxes. The maximum annual special taxes levied within the District for any Fiscal Year. Unit. Each separate residential dwelling unit, which comprises an independent facility capable of conveyance or use separate from adjacent dwelling units. Rate and Method of Apportionment of Maximum Annual Special Taxes As of July 1 of each Fiscal Year, commencing July 1, 2003, the City shall determine which of the Assessor's Parcels within the District constitute Developed Residential Property or Developed Multi-Family Property. Beginning in Fiscal Year 2003-04, and all subsequent Fiscal Years, the City shall levy the Maximum Annual Special Taxes on each Assessor's Parcel of Developed Residential Property in the amount of$300 and on each Assessor's Parcel of Developed Multi- Family Property in the amount of$150 per Unit. The amount of Maximum Annual Special Taxes shall be increased annually by 2%, commencing in Fiscal Year 2004-05, and each Fiscal Year thereafter. Duration of the Maximum Annual Special Taxes The Maximum Annual Special Taxes shall be levied in perpetuity so long as Law Enforcement, Fire and Paramedic Services, are being provided within the District. The Maximum Annual Special Taxes levied in each Fiscal Year shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. The Maximum Annual Special taxes when levied shall be secured, by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each levy of Maximum Annual Special Taxes. The lien of Maximum Annual Special Taxes shall continue in force and effect until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government Code. ORDINANCE NO. 1187 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE REPEALING CHAPTER 10.40 OF THE LAKE ELSINORE MUNICIPAL CODE AND AMENDING AND RESTATING CHAPTER 10.12 OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING PARKING WHEREAS, Chapters 10.12 and 10.40 of the Lake Elsinore Municipal Code regulate parking in the City of Lake Elsinore; and WHEREAS, in order to streamline parking in the City and address public safety concerns, the City Council has determined to amend Chapter 10.12 and repeal Chapter 10.40. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. That Chapter 10.40 of the Lake Elsinore Municipal Code is hereby repealed. SECTION 2. That Chapter 10.12 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: CHAPTER 10.12, PARKING, STOPPING, AND STANDING REGULATIONS/ ENFORCEMENTNIOLATIONS 10.12.010 Intent and purpose. The intent and purpose of this chapter is to establish parking regulations that will enhance the health, safety and welfare of persons using public right-of-ways within the City of Lake Elsinore. Illegal parking, stopping and standing of vehicles create unsafe conditions for motorist and pedestrians. Accordingly, this chapter also provides the authority for enforcement of the parking violations program. 10.12.020 Enforcement personnel. The provisions of this chapter shall be administered and enforced by the Lake Elsinore Police Department (Riverside County Sheriff), Lake Elsinore Code Enforcement personnel and CITY COUNCIL ORDINANCE NO. 1187 PAGE 2 OF 8 any other employee so designated as the Parking Code Enforcement Officer by the City Manager. Said personnel are authorized to issue citations for all violations of this Chapter. 10.12.025 Definition of Commercial Vehicle. "Commercial vehicle" means any commercial vehicle as defined in the California Vehicle Code, including but not limited to truck tractors, trailers, or semi-trailers, regardless of gross weight rating, used for the purpose of transporting materials or goods for commercial purposes" and bearing a commercial license plate as defined in the California Vehicle Code, provided, however, that no passenger vehicle or pickup truck with a standard bed shall be deemed a commercial vehicle even if bearing a commercial license plate. 10.12.030 Angle parking. The City Council may adopt a resolution designating the location of angle parking on certain streets or portion thereof, provided that angle parking shall be permitted only where: A. Such parking does not diminish the width of the roadway available for travel to less than twenty (20) feet. B. The surfaced roadway between curbs on a State highway is more than sixty-five (65) feet in width. C. There is a clear width of forty (40) feet left for vehicle travel on any street which is a continuation of or part of a County truck line highway or state highway. 10.12.040 Handicap parking. Parking spaces may be reserved for the exclusive use of vehicles displaying proper disabled persons' exemption identification as defined in the California Vehicle Code. The Director of Community Development is hereby authorized' to locate and establish such reserved spaces in public parking lots and in curb side parking areas as may be reasonably necessary to meet the needs of the disabled. Whenever any handicap parking spaces are so designated, said spaces shall be identified by signs or markings giving notice thereof in a manner consistent with the provisions of the California Vehicle Code. 10.12.050 Loading zones. The City Council may adopt a resolution designating the location of loading zones on certain streets. CITY COUNCIL ORDINANCE NO. 1187 PAGE30F8 A. Whenever such a zone is established on any street subject to any parking prohibition or restriction established pursuant to this chapter, said parking prohibitions or restrictions shall not apply to such loading zone. B. It shall be unlawful for the operator of any vehicle to park or stop such vehicle for any purpose other than the loading or unloading of passengers or material within an established loading zone; provided, however, that the stop for the loading or unloading of passengers shall not be made for more than three minutes nor the loading or unloading of materials for more than twenty minutes in any loading zone so established. C. Whenever any such loading zone is established, the area(s) affected shall be identified by signs or markings giving notice thereof. 10.12.055 Prohibition of commercial vehicle loading and unloading on Main Street. A "Commercial Vehicle No Loading and Unloading Zone" is designated on both sides of Main Street between Sulphur Street and Heald Avenue and shall be identified by posted signs or curb markings giving notice of such restriction. It shall be unlawful to park, stop, or leave standing any commercial vehicle, whether attended or unattended, in the Commercial Vehicle No Loading and Unloading Zone. Notwithstanding any other provision in this chapter, any commercial vehicle in violation of this provision may be removed from the street at the direction of the police authority. 10.12.060 Bus zones. The Director of Community Development is hereby authorized to establish bus zones opposite curb space for the loading and unloading of buses or common carriers of ,passengers and to determine the location thereof, when such zones are found to be necessary and will not cause a safety hazard. Whenever such a zone is established on any street subject to any parking prohibition established pursuant to this chapter, said parking prohibition shall not apply to buses. Whenever such a zone is established, the area affected shall be identified by signs or markings giving notice thereof. 10.12.070 Taxi zones. The City Council may adopt a resolution designating the location of taxi zones on certain streets. Whenever such a zone is so designated: CITY COUNCIL ORDINANCE NO. 1187 PAGE 4 OF 8 A. It shall be marked by painting the curb red with the words "Taxi Loading Zone" in white letters. B. It shall be for the exclusive use of taxicabs and public carriers and it shall be unlawful for the operator of any other vehicle to park or stop such vehicle in said zone. c. Taxicabs and other carriers may park their vehicles in said designated area for the receiving and discharging of passengers or for any other taxicab purpose at any time. 10.12.080 Public parking lots. Any parking regulation, restriction or prohibition set forth in this chapter may be applied to any off-street publicly- owned parking lot or facility. 10.12.090 Reserved. 10.12.100 Parking on hills. When the grade within a business or residential district exceeds three percent (3%), it shall be unlawful to park, stop or leave a vehicle standing unattended wi~hout blocking the wheels by turning them against the curb or by using other means. 10.12.110 Parking in alleys. Unless otherwise posted, it shall be unlawful to park, any vehicle standing in an alley for purposes other than the loading or unloading of materials and such parking shall not exceed twenty minutes. In no event shall the driver of such vehicle leave less than one traffic lane for unobstructed passage. 10.12.120 Parking prohibitions. Parking prohibitions in violation of this chapter shall include: A. Any vehicle left unattended upon any bridge, driveway apron, designated and signed equestrian trial, or the parkway area in the commercial and industrial zones. B. Any vehicle which is parked or left standing in a position so as to obstruct the normal movement of traffic or in a condition so as to create a hazard to other traffic upon the street which may include, without limitation, the deployment of RV pop-outs or other extensions into the public right-of- way. CITY COUNCIL ORDINANCE NO. 1187 PAGE 5 OF 8 C. Any vehicle which is parked or left standing in a position so as to obstruct the normal movement of pedestrians upon any sidewalk which may include, without limitation, the deployment of R V pop-outs or other extensions into the public right-of-way. D. Any vehicle which is parked so as to block the entrance to a private driveway. E. Any vehicle which is parked so as to prevent access by fire fighting equipment to a fire hydrant. F. Any vehicle found stopped, standing, parked or left unattended along any street or street segment for a period of time longer than that permitted, or restricted as a no-parking area as has been established by ordinance or resolution of the City Council where signs have been posted or curb markings made providing notice of such restrictions. 10.12.130 Oversized vehicle parking. No, person shall park or leave standing upon any public street or highway in a residential district for a period in excess of twenty-four (24) consecutive hours: A. Except for recreation vehicles as provided in Section IO.12.130.E, any motor vehicle or motor vehicle with an attached trailer or nonmotorized vehicle over twenty-five (25) feet long measured from the extreme forward point to the extreme rear point, including extens,ions; B. Any motor vehicle, including buses, motor trucks, trailers, semi- trailers, trailer coaches, or truck tractors as defined in the Vehicle Code, over ninety-six (96) inches wide, measured at its widest point excluding side- view mirrors or similar extensions, designed, used or maintained for the transportation of property; C. Any commercial vehicle as defined in Section 10.12.025; D. Any nonmotorized vehicle, such as a semitrailer, trailer, trailer coach, motorcycle or other utility trailer, two or more axle camper, or a one-axle camper, which has been detached from its drawing vehicle, boat/watercraft trailer, or farm machinery; CITY COUNCIL ORDINANCE NO. 1187 PAGE 6 OF 8 E. Any "recreational vehicle (RV)" over twenty (20) feet long measured from the extreme forward point to the extreme rear point, including extensions. The term "recreational vehicle (R V)" shall have the same meaning as set forth in California Health and Safety Code Section 18010 or successor statute. 10.12.140 Removal of vehicle from streets. Enforcement personnel may remove or cause to be removed: A. Any vehicle that has been parked or left standing upon a street, or highway for seventy-two (72) or more consecutive hours. B. Any vehicle which is parked or left standing upon a street or highway where: 1. The use of such street or highway or portion thereof is necessary for the cleaning, repair or construction of the street or highway; or 2. Any portion thereof is authorized for the purpose other than the normal flow of traffic and such authorization is designated by signs; or 3. The use of the street or highway or any portion thereof is necessary for the movement of equipment, articles or structures of unusual size, and where the parking of such vehicle would prohibit or interfere with such use; or 4. Signs are erected or placed at least twenty-four (24) hours prior to the removal providing notice that the vehicle may be removed. C. The City hereby adopts Section 22658 of the California Vehicle Code (Removal of vehicle from private property by property owner; Requirements; Notice; etc.) in its entirety and as amended from time to time, which allows the owner or person in lawful possession of private property, to, under certain specific circumstances, cause the removal of a vehicle parked on the property to the nearest public garage and/or a citation may be issued for the parking violation. 10.12.150 Temporary suspension of regulations. When deemed warranted by special circumstances, the Police Chief may temporarily CITY COUNCIL ORDINANCE NO. 1187 PAGE 7 OF 8 suspend parking regulations, restrictions or prohibitions established pursuant to this chapter. SECTION 3. SEVERABILITY. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby decJared to be severable. SECTION 4. EFFECTIVE DATE. This Ordinance shall take effect on October 1, 2006 or such later date that is thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this July 25,2006, by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE , ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1187 PAGE 8 OF 8 PASSED, APPROVED AND ADOPTED UPON SECOND READING August 8, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE Robert E. Magee, City of Lake Elsi ATTEST: Frederick Ray, i Clerk City of Lake Elsinore APPROVED AS TO FORM: ORDINANCE NO. 1188 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 20 (TESSERA) ANNEXED TO SAID DISTRICT WHEREAS, on June 27, 2006, the City Council (the "Council") of the City of Lake Elsinore, California (the "City") adopted Resolution No. 2006-93 stating its intention to annex certain property (Annexation Area No. 20 (Tessera) ("Annexation Area No. 20")) into City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, (the "Act"); and WHEREAS, notice was published as required by law relative to the intention of the Council to annex Annexation Area No. 20 into the District; and WHEREAS, on August 8, 2006 this Council held a noticed public hearing as required by law relative to the determination to proceed with the annexation of Annexation Area No. 20 into the District and the rate and method of apportionment and manner of collection of the special tax to be levied within Annexation Area No. 20 to finance certain public services; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the annexation of Annexation Area No. 20 were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-129 determining the validity of prior proceedings relative to the annexation of Annexation Area No. 20, annexed Annexation Area No. 20 into the District and authorized the levy of a special tax within Annexation Area No. 20; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-130 which called an election within Annexation Area No. 20 for August 8, 2006 on the proposition of levying a special tax; and CITY COUNCIL ORDINANCE NO.II88 Page 2 of 4 WHEREAS, on August 8, 2006 an election was held within each Annexation Area No. 20 in which the eligible electors approved by more than two- thirds vote the proposition of levying a special tax. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES), DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax is levied within the boundaries of Annexation Area No. 20 pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 20 prior to the annexation of Annexation Area No. 20 into the District, periodic costs, and costs of the tax levy and collection. SECTION 2. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the next fiscal year, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 3. All of the collections of the special tax shall be used as provided for in the Act and Resolution No. 2006-130 of the Council. SECTION 4. The above authorized special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes. SECTION 5. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the Council Members voting for and against the ordinance. CITY COUNCIL ORDINANCE NO.1188 Page 3 of 4 SECTION 6. If any provision, clause, ,sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. This ordinance relating to the levy of the special tax takes effect and shall be in force from and after thirty (30) days after the date of its final passage. A copy of this ordinance shall be transmi,tted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. CITY COUNCIL ORDINANCE NO.1188 Page 4 of 4 INTRODUCED AND APPROVED UPON FIRST READING this 8th day of August, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 22 day of August, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE , ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: :2Zr 'Frederick ~y, City Clerk City of Lake Elsinore EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX . CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction Special taxes shall be annually levied on all Developed Residential Property and Developed Multi-Family Property (as hereinafter defined) in the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services ) (the "District"), in accordance with the rate and method of apportionment of special taxes hereinafter set forth. All of the property within the District that is not Developed Residential or Developed Multi-Family Residential Property shall be exempt from the Maximum Annual Special Taxes of the District. Definitions Assessor's Parcel. A parcel of land in the District designated and assigned a discrete identifying number on a map of the County Assessor of the County of Riverside. City. City of Lake Elsinore, California. Developed Multi-Family Property. Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding the Fiscal Year for the construction of a Unit that is located or shall be located within a building in which each individual Units has or shall have at least one common wall with another Unit. Developed Residential Property. All other Assessor's Parcels in the District for which a building permit has been issued by the City on or prior to March 1 preceding any Fiscal Year for the construction of a Unit that is not Developed Multi-family Property. Fiscal Year. The period beginning on July 1 and ending on the following June 30. Maximum Annual Special Taxes. The maximum annual special taxes levied within the District for any Fiscal Year. Unit. Each separate residential dwelling unit, which comprises an independent facility capable of conveyance or use separate from adjacent dwelling units. Rate and Method of Apportionment of Maximum Annual Special Taxes As of July 1 of each Fiscal Year, commencing July 1, 2003, the City shall determine which of the Assessor's Parcels within the District constitute Developed Residential Property or Developed Multi-Family Property. Beginning in Fiscal Year 2003-04, and all subsequent Fiscal Years, the City shall levy the Maximum Annual Special Taxes on each Assessor's Parcel of Developed Residential Property in the amount of$300 and on each Assessor's Parcel of Developed Multi- Family Property in the amount of$150 per Unit. The amount of Maximum Annual Special Taxes shall be increased annually by 2%, commencing in Fiscal Year 2004-05, and each Fiscal Year thereafter. Duration of the Maximum Annual Special Taxes The Maximum Annual Special Taxes shall be levied in perpetuity so long as Law Enforcement, Fire and Paramedic Services are being provided within the District. The Maximum Annual Special Taxes levied in each Fiscal Year shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. The Maximum Annual Special taxes when levied shall be secured by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each levy of Maximum Annual Special Taxes. The lien of Maximum Annual Special Taxes shall continue in force and effect until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government Code. NOTICE OF ADOPTION OF ORDINANCE NO. 1188 NOTICE IS HEREBY GIVEN that on August 8, 2006, at the Council Chambers of the City of Lake Elsinore, 183 North Main Street, Lake Elsinore, California 92530, the City Council of the City of Lake Elsinore, in its capacity as the legislative body of the City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services), held a public hearing and adopted Ordinance No. 1188. A summary of Ordinance No. 1188 follows and is marked as Exhibit "B". At said time and place the testimony of all interested persons or taxpayers for or against said ordinance was heard. . Ordinance No. 1188 was adopted by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) Dated: , 2006 By Frederick Ray, City Clerk EXHIBIT B BEFORE THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE IN ITS CAPACITY AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) IN THE MATTER OF Authorizing the Levy of a Special Tax Within Annexation Area No. 20 (Tessera) Annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) ) ORDINANCE NO. 1188 SUMMARY ) ) ) ) ) ) )) ) The ordinance authorizes levy of an annual special tax within Annexation Area No. 20 (Tessera) annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), collected in the same manner as ordinary ad valorem taxes, in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 20 (Tessera) prior to the annexation of Annexation Area No. 20 (Tessera) to the District, which is necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within Annexation Area No. 20 (Tessera). DATED: , 2006 CITY OF LAKE ELSINORE By: F~ederick Ray, City Clerk - ORDINANCE NO. 1189 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX WHEREAS, on June 27, 2006, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2006-95 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to finance a portion of the cost of providing parks, open space and storm drains maintenance services (the "Services") that are in addition to those provided in the territory within the CFD prior to the formation of the CFD, and to finance the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated usefu11ife of five years or longer, including public infrastructure facilities and other governmental facilities, which the City is authorized by law to construct, own or operate (the "Facilities"); and WHEREAS, on June 27, 2006, the Council also adopted Resolution No. 2006-96 stating its intention and the necessity to incur bonded indebtedness in the amount not to exceed $5,000,000 to be issued for the purpose of financing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, notice was published as required by law relative to the intention of the Council to form the CFD and to incur bonded indebtedness in the amount not to exceed $5,000,000 within the boundaries of the CFD; and WHEREAS, on August 8, 2006, this Council held a noticed public hearing as required by law relative to the determination to proceed with the formation of the CFD, the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay for the Services and the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay the principal and interest on the proposed bonded indebtedness of the CFD, and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds and the maximum annual rate of interest to be paid; and CITY COUNCIL ORDINANCE NO. 1189 Page 2 of 4 - WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD and the incurring of bonded indebtedness by the CFD were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-133 determining the validity of prior proceedings and established the CFD; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-134 which called an election within the CFD for August 8, 2006 on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on August 8, 2006, an election was held within the CFD in which the eligible electors approved by more than two-thirds vote the proposition of incurring bonded indebtedness, levying a special tax, and setting an appropriations limit. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax (the "Services Special Tax") is levied within the boundaries of the CFD pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Services, periodic costs, and costs of the tax levy and collection, and all other costs. SECTION 2. A special tax (the "Special Tax") is levied within the boundaries of the CFD pursuant to the formulas set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection, and all other costs including amounts payable with respect to the bonded indebtedness. SECTION 3. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the then current or future tax years, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A". CITY COUNCIL ORDINANCE NO. 1189 Page 3 of 4 SECTION 4. All of the collections of the Services Special Tax and Special Tax shall be used as provided for in the Act and Resolution No. 2006-133 (Resolution of Formation). SECTION 5. The above authorized Services Special Tax and the Special Tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes; provided, however, the CFD may collect the Services Special Tax and the Special Tax at a different time or in a different manner if necessary to meet its financial obligations. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the council Members voting for and against the ordinance. SECTION 8. This ordinance relating to the levy of the Services Special Tax and the Special Tax takes effect and shall be in force from and after 30 days from the date of final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer- Tax Collector of Riverside County. CITY COUNCIL ORDINANCE NO. 1189 Page 4 of4 INTRODUCED AND APPROVED UPON FIRST READING this 8th day of August, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, IDCKMAN, KELLEY, SCIDFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 22 day of August, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, IDCKMAN, KELLEY, SCIDFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE l obert E. Magee, ayor City of Lake Els" ore Zr Frederick Rd'y, City Clerk City of Lake Elsinore ,'"' ,Ii RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT No. 2006-6 (TESSERA) A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) ("CFD No. 2006-6") and collected each Fiscal Year commencing in Fiscal Year 2006-2007, in an amount determined through the application ofthis Rate and Method of Apportionment as described below. All of the real property in CFD No. 2006-6, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner 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 or determined from the applicable Assessor's Parcel Map. Notwithstanding the foregoing, the Acreage attributable to a Condominium shall be computed by the CFD Administrator by dividing the total Acreage for the Final Subdivision in which the Condominium is located, less the Acreage for any Property Owner Association Property and/or Public Property, by the total number of Condominiums to be constructed within such Final Subdivision as determined from the applicable Condominium Plan. "Act" means the Mello- Roos Community Facilities Act of 1982, being Chapter 2.5, Part 1, Division 2 of Title 5 of the California Government Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2006-6: 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 City or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs ofthe Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2006-6 or any designee thereof of complying with arbitrage rebate requirements; the costs t9 the City, CFD No. 2006-6 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-6 or obligated persons associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 1 disclosure statements andresponding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2006-6 or any designeethereofrelated to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 20066 for any other administrative purposes ofCFD No. 2006-6, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. ' "Assessor's Parcel" means a lot or parcel, including but not limited to Condominiums, to which an Assessor's parcel number is assigned as determined from an Assessor's Parcel Map or the applicable assessment roll. "Assessor's Parcel Map" means an official map ofthe County Assessor of the County designating parcels by Assessor's Parcll number. "Assigned Special Tax for Facilities" means the Special Tax for Facilities for each Land Use Class of Developed Property, as determined in accordance with Section C.l.(b) below. "Authorized Facilities" means those facilities eligible to be funded by CFD No. 2006-6. "Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.l.( c) below. "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 for Facilities, the Special Tax Requirement for Services as determined in accordance with Section I below, and providing for the levy and collection of the Special Taxes. "CFD No. 2006-6" means City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera). City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 2 "CFD No. 2006-6 Bonds" means any bonds or other debt (as defined in Section 53317( d) ofthe Act), whether in one or more series, issued by CFD No. 2006-6 and secured solely by the Special Tax for Facilities levy on property within the boundaries ofCFD No. 2006-6 under the Act. "City" means the City of Lake Elsinore. "Condominium" means a unit meeting the statutory definition of a condominium contained in the California Civil Code, Section 1351, and for which a condominium plan has been recorded pursuant to California Civil Code, Section 1352. "Condominium Plan" means a condominium plan as set forth in the California Civil Code, Section 1352. "Council" means the City Council of the City of Lake Elsinore, acting as the legislative body of CFD No. ~06-6. "County" means the County of Riverside. "Developed Property" means, with respect to the Special Tax for Facilities, 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 on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Tax for Facilities is being levied. ' "Final Subdivision" means a subdivision of property by recordation of (i) a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots for which building permits may be issued, or (ii) lot line adjustment approved by the City. "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 whichCFD No. 2006-6 Bonds are issued, as modified, City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 3 amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1 below. "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, 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 or more non-residential units or facilities has been issued by the City. "Outstanding Bonds" means all CFD No. 2006-6 Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, (i) any property within the boundaries of CFD No. 2006-6 that was owned by a property owner association, including any master or sub-association, as of January 1 of the prior Fiscal Year, (ii) any property located in a Final Subdivision that was recorded as of the May 1 preceding the Fiscal Year in which the Special Tax is being levied and which, as determined from such Final Subdivision, is or will be open space, a common area recreation facility, or a private street, or (iii) any property which, as of the May 1 preceding the Fiscal Year for which the Special Tax is being levied, has been conveyed, irrevocably dedicated, or irrevocably offered to a property owner's association, including any master or sub-association, provided such conveyance, dedication, or offer is submitted to the CFD Administrator by May 1 preceding the Fiscal Year for which the Special Tax is being levied. Notwithstanding the preceding, Property Owner Association Property shall not include any property on which Condominiums are or will be located. "Proportionately" means for Developed Property that the ratio of the actual Special Tax for Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acres equal for all Assessor's Parcels of Undeveloped Property. The term "Proportionately" may similarly be applied to other categories of Taxable Property as listed in Section D below. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 4 "Public Property" means property within the boundaries of CFD No. 2006-6 owned by, irrevocably offered or dedicated to, or over, through or under which an easement for purposes of public use has been granted, to the federal government, the State, the County, the City, or any local government or other public agency, 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. "Residential Floor Area" means all ofthe square footage ofliving 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 permit( 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. "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2006-6 pursuant to the Act. "Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property, Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means that amount required in any Fiscal Year for CFD No. 2006-6 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 CFD No. 2006-6 Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No. 2006-6 Bonds due in the calendar year commencing in such Fiscal Year; (iii) pay a proportionate share of Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay for reasonably anticipated Special Tax for Facilities delinquencies based on the delinquency rate for the Special Tax for Facilities levy in the previous Fiscal Year; (vi) pay directly for acquisition or construction of Authorized Facilities to the extent that the inclusion of such amount does not increase the Special Tax for Facilities levy on Undeveloped Property; less (vii) a creditfor funds available to reduce City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 5 the annual Special Tax for Facilities levy, as determined by the CFD Administrator pursuant to the Indenture. "State" means the State ofCalifomia. "Taxable Property" means all ofthe Assessor's Parcels within the boundaries of CFD No. 2006-6 which are not exempt from the Special Tax for Facilities pursuant to law or Section E below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section E below. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Property Owner Association Property, or Taxable Public Property. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2006-6 shall be classified as Developed Property, Taxable P~blic Property, Taxable Property Owner Association Property, or Undeveloped Property, and shall be subjectto the Special Tax for Facilities in accordance with this Rate and Method of Apportionment determined pursuant to Sections C and D below. Residential Property shall be assigned to Land Use Classes 1 through 3 as listed in Table 1 below based on the Residential Floor Area for each unit. Non-Residential Property shall be assigned to Land Use Class 4. With respect to Residential Property, the Residential Floor Area shall be determined from the:nost recent building permit issued prior to the issuance of a Certificate of Occupancy for such Assessor's Parcel. C. MAXIMUM SPECIAL TAX FOR FACILITIES Prior to the issuance ofCFDNo. 2006-6 Bonds, the Assigned Special Tax for Facilities on Developed Property (set forth in Table 1), and the Backup Special City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 6 Tax for Facilities attributable to a Final Subdivision, may be reduced in accordance with, and subj ect to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the Council, the "Goals and Policies") calculated pursuant to the Goals and Policies based upon the Assigned Special Tax for Facilities on Developed Property exceeds the City's maximum level objective set forth in such document, the Assigned Special Tax for Facilities on Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced to the amount necessary to satisfy the City's objective ,with respect to the maximum overlapping debt burden level with the written consent of the CFD Administrator. The reductions permitted pursuant to this paragraph shall be reflected in an amended notice of Special Tax lien which the City shall cause to be recorded by executing a certificate in substantially the form attached hereto as Exhibit "A". 1. Developed Property (a) Maximum Special Tax for Facilities The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigneq Special Tax for Facilities or (ii) the amount derived by application of the Backup Special Tax for Facilities. (b) Assigned Special Tax for Facilities The Fiscal Year 2006-2007 Assigned Special Tax for Facilities for each Land Use Class is shown below in Table 1. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 7 TABLEt Assigned Special Tax for Facilities for Developed Property Community Facilities District No. 2006-6 Fiscal Year 2006-2007 Residential Property More than 1,775 sq. ft. $3,033 per unit $2,953 per unit $2,914 per unit $43,732 per Acre 1 2 3 Residential Property 1,625 - 1,775 sq. ft. Residential Property Less than 1,625 sq. ft. Non-Residential Property NA 4 (c) Backup Special Tax for Facilities The Fiscal Year 2006-2007 Backup Special Tax for Facilities attributable to a Final Subdivision will equal $48,640 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 Facilities for each Assessor's Parcel of Residential Property shall be computed by dividing the Backup Special Tax for Facilities attributable to the applicable Final Subdivision by the number of Assessor's Parcels and/or residential units for which building permits for residential construction have or may be issued (i.e., the number or residential lots and/or units). The Backup Special Tax for Facilities for each Assessor's Parcel of Non-Residential Property therein shall equal $48,640 multiplied by the Acreage of such Assessor's Parcel. 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 Facilities for each Assessor's Parcel of Residential Property shall be computed exclusive of the Acreage and Assessor's City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 8 , 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 may be issued within such Final Subdivision, then the Backup Special Tax for Facilities for each Assessor's Parcel of Developed Property that is part 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 for Facilities previously determined for an Assessor's Parcel of Developed Property that is not a part of the lot line adjustment or similar instrument for such Final Subdivision shall not be recalculated. 1. Determine the total Backup Special Tax for Facilities anticipated to apply to th~ 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 for Facilities per Acre which shall be applicable to Assessor's Parcels of Developed Property in such changed or modified portion of t~e Final Subdivision area for all remaining Fiscal Years in which the Special Tax for Facilities may be levied. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 9 (d) Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities The Fiscal Year 2006-2007 Assigned Special Tax for Facilities, identified in Table 1 above, and Backup Special Tax for Facilities shall increase thereafter, commencing on July 1,2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. ( e) Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one LandUse Class. The Maximum Special Tax for Facilities levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities 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. Taxable Property Owner Association Property . Taxable Public Property. and Undeveloped Property The Fiscal Year 2006-2007 Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $49,527 per Acre and shall increase thereafter, commencing on July 1,2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Maximum Special Tax for Facilities in effect for theprevious Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES , Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement for Facilities and levy the Special Tax for Facilities until the amount of Special Tax for Facilities levy equals the Special Tax Requirement for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows: First: The Special Tax for Facilities shall be levied on each Assessor's Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Special Tax for Facilities; City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 10 , ----_._----~--- Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Facilities for Undeveloped Property; Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Special Tax for Facilities on each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is determined through the application of the Backup Special Tax for Facilities shall be increased in equal percentages from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for each such Assessor's Parcel; Fourth: If additional monies are needed to sat~sfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property and Taxable Public Property at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. Notwithstanding the above, the Council may, in any Fiscal Year, levy Proportionately less than 100% of the Assigned Special Tax for Facilities in step one (above), when (i) the Council is no longer required to levy the Special Tax for Facilities pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-6 Bonds have already been issued or the Council has covenanted that it will not issue any additional CFD No. 2006-6 Bonds (except refunding bonds) to be supported by the Special Tax for Facilities; and (iii) all Authorized Facilities have been constructed and/or acquired and all reimbursements to the developer for the construction and/or acquisition of such facilities have been paid as permitted by law. Further notwithstanding the above, under no circumstances will the Special Tax for Facilities levied against any Assessor's P,arcel 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. 2006-6. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page II E. EXEMPTIONS No Special Tax for Facilities shall be levied on up to 3.1 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006-6. Tax- exempt status will be assigned bythe CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or,Public Property, its tax-exempt status will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Tax for Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed Proportionately as part of the fourth step in Section D above, at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Prop'erty or Taxable Public Property. F. MANNER OF COLLECTION The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2006-6 may directly bill the Special Tax for Facilities, may collect the , Special Tax for Facilities at a different time or in a different manner 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. G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "Buildout" means, for CFD No. 2006-6, that all expected building permits have been issued, as reasonably determined by the CFD Administrator. "CFD Public Facilities" means either $3,485,000 in 2006 dollars, which shall increase by the Construction Inflation Index on July 1, 2007, and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide funding for all of the Authorized Facilities, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more CFD No. 2006-6 Bonds (except refunding bonds) to be supported by the Special Tax for Facilities levy under this Rate and Method of Apportionment as described in Section D above. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 12 "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) costs of Authorized Facilities previously paid from the ImprovementFund, (ii) moneys currently on deposit in the Improvement Fund available to pay costs of Authorized Facilities, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance thecost of Authorized Facilities. "Improvement Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct Authorized Facilities. "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 Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may ,be prepaid. The obligation of the Assessor's Parcel to pay the Special Tax for Facilities may be permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor's Parcel 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 for Facilities 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 next occurring date that notice of redemption of CFD No. 2006-6 Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 13 The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount 'plus plus plus plus less less Total: equals Redemption Premium Future Facilities Amount Defeasance Amomt Administrative Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Special Tax for Fayilities Prepayment Amount As of the proposed date of prepayment, the Special Tax for Facilities Prepayment Amount shall be calculated as follows: Parae:raph 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 for Facilities and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities 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 for Facilities computed pursuantto paragraph 2 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-6 based on the Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all expected development through Buildout of CFD No. 2006-6, excluding any Assessor's Parcels which have been prepaid, and (b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-6, excluding any Assessor's Parcels which have been prepaid. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 14 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. 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 F aGilities 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 for Facilities levied on the Assessor's Parcel in the current Fiscal Year whbh has not yet been paid. 10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Special Tax for Facilities Prepayment 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. 2006-6 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 CFD No.2006-6 Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and ExpenseS'). City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 15 13. The reserve fund 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 fund 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 fund 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 first 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 for Facilities prepayment is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Special Tax for Facilities Prepayment Amount'). From the Special Tax for Facilities 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 Indenture and be used to retire CFD No. 20066 Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 200e6. The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full $5,000 increment of CFD No.~006-6 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 CFD No. 2006-6 Bonds or to make debt service payments. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 16 As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined under paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax for Facilities 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 pr~payment of the Special Tax for Facilities and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax for Facilities shall cease. Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be allowed unless, at the time of such proposed prepayment, the amount of Maximum Special Tax for Facilities that may be levied on Taxable Property within CFD No. 2006-6 (after excluding 3.1 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006-6 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, as defined in Section A above, 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 for Facilities on an Assessor's Parcel of Developed Property or an Assessor's Parcel of 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 G.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 for Facilities Prepayment Amount calculated according to Section G.1. F = the percentage, expressed as a decimal, by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities. A = the Administrative Fees and Expenses calculated according to Section G.1. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 17 The owner of any Assessor' sParcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax for Facilities and the percentage by which the Special Tax for Facilities shall be prepaid The CFD Administrator shall provide the owner with a statement of the amount required for the parti'al prepayment of the Special Tax for Facilities 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 shall (i) distribute the funds remitted to it according to Section G.l, and (ii) indicate in the records of CFD No. 2006-6 that there has been a partial prepaymentofthe Special Tax for Facilities and that a portion ofthe Special TaxJor Facilities with respectto such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to Section D above. H. TERM OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be levied for a period not to exceed forty years commencing with Fiscal Year 2006-2007, provided however that the Special Tax for Facilities 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. 2006-6 Bonds have been paid; (ii) all Authorized Facilities have been constructed and/or acquired and all reimbursements to the developer for the construction and/or acquis~tion of such facilities have been paid as permitted by law; and (iii) all other obligations of CFD No. 2006-6 have been satisfied. I. SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section I: "Developed Multifamily Unit" means a residential dwelling unit within a building in which each ofthe individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 18 permit has been issued by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-6 in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-6 for any Fiscal Year to pay for the actual co~ts of maintenance related to the Service Area, and the applicable Administrative EJPenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-6 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-6 equal to (i) t~e budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) pay a proportionate share of Administrative Expenses, and (iii) anticipated Special Tax for Services delinquencies based on the delinquency rate for the Special Tax for Services levy in CFD No. 2006-6 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 1. Rate and Method of Apportionment of the Special Tax for Services Commencing with Fiscal Year 2006-2007 and for each subsequent Fiscal Year, the Council shall levy the Special Tax for SerVices on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non-Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 19 The Maximum Special Tax for Services for, Fiscal Year 2006-2007 shall be $246.84 per Developed Single Family Unit, $123.42 per Developed Multifamily Unit, and $555.90 per Acre for each Assessor's Parcel of Non-Residential Property. On each July I, commencing July 1, 2007, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the Council. 3. Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-6 may collect the Special Tax for Services at a different timoor in a different manner if necessary to meet its funding requirements. J. 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. 2006-6. 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. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) June 6, 2006 Page 20 EXHIBIT A CERTIFICATE TO AMEND SPECIAL TAX FOR FACILITIES CITY OF LAKE ELSINORE AND CFD No. 2006-6 CERTIFICATE 1. Pursuant to Section C of the Rate and Method of Apportionment, the City of Lake Elsinore ("City") and City of Lake Elsinore Community Facilities District No. 2006-6 ("CFD No. 2006-6") hereby agree to a reduction in the Assigned Special Tax for Facilities for Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivisionwithin CFD No. 2006-6: (a) The information in Table 1 relating to the Assigned Special Tax for Facilities for Developed Property within CFD No. 20066 shall be modified as follows: 1 Residential Property More than 1,775 sq. $ _ per unit 2 Residential Property 1,625 - 1,775 sq. ft. $ _ per unit 3 Residential Property Less than 1,625 sq. ft. $ _ per unit 4 Non-Residential Property NA $ _ per Acre (b) The Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 2006-6, as stated in Section C.l.( c), ~hall be reduced from $48,640 per Acre to $ per Acre. 2. The Special Tax for Facilities may only be modified prior to the first issuance of CFD No. 2006-6 Bonds. 3. Upon execution of the Certificate by the City and CFD No. 2006-6, the City shall cause an amended notice of Special Tax lien for, CFD No. 2006-6 to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf of the City and CFD No. 2006-6, receipt of this Certificate and modification of the Rate and Method of Apportionment as set forth in this Certificate. CITY OF LAKE ELSINORE By: Date: CFD Administrator COMMUNITY FACILITIES DISTRICT NO. 2006-6 OF THE CITY OF LAKE ELSINORE By: Date: ORDINANCE NO. 1190 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING RAMS GATE SPECIFIC PLAN NO. 89-1 FOURTH REVISION, LOCATED APPROXIMATELY ONE MILE EAST OF INTERSTATE 15, SOUTH OF STATE HIGHWAY 74, AND WEST OF GREENW ALD AVENUE. WHEREAS, an application has been filed with the City of Lake Elsinore by The Shopoff Group, 8951 Research Drive, Irvine, CA 92618, to amend the Ramsgate Specific Plan No. 89-1; and WHEREAS, the Planning Commission of the City of Lake Elsinore has been delegated with the responsibility of making recommendations to the City Council pertaining to changes to approved specific plans; and WHEREAS, the Planning Commission at a regular meeting held on August 1, 2006, made its report upon the desirability of the proposed project and made its recommendations in favor of the Ramsgate Specific Plan No. 89-1 Fourth Revision by adopting Planning Commission Resolution No. 2006-66 recommending to the City Council approval of the Ramsgate Specific Plan No. 89-1 Fourth Revision; and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on August 22,2006. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed Ramsgate Specific Plan No. 89-1 Fourth Revision prior to making a decision. The City Council certifies that Addendum No. 3 to the Final Supplemental Environmental Impact Report, SCH # 88090525 prepared for this project is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the proposed project. CITY COUNCIL ORDINANCE NO. 1190 Page 2 of5 SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore Municipal Code, the following findings for the approval of the Ramsgate Specific Plan No. 89-1 Fourth Revision have been made as follows: 1. The location and design of the proposed development is consistent with the goals and policies of the City's General Plan and with any other applicable plan or policies adopted by the City, or in the process of being prepared and adopted. a. The General Plan supports the development of the Ramsgate Specific Plan. The proposed Revision has been reviewed and conditioned to enhance and update the original Specific Plan. b. The proposal has been designed to support the objectives of the Multi-Species Habitat Conservation Plan adopted by the City, by preserving habitat areas identified in the Conservation Plan. c. A marketing analysis by DDS Marketing dated June 2006 determined that there are insufficient households in the catchment area to support a retail grocer. 2. The proposed location allows the development to be well- integrated with or adequately buffered from its surroundings, whichever may be the case. a. The proposed Revision integrates development of medium high density residential, as a buffer between apartment development to the west and the single family detached residential neighborhoods to the east. b. The proposed Revision increases the variety of housing types offered in the Ramsgate Specific Plan. 3. All vehicular traffic generated by the development, either in phased increments or at full build-out, is to be accommodated CITY COUNCIL ORDINANCE NO. 1190 Page 3 of 5 safely and without causing undue congestion upon adjoining streets. a. The environmental review of the Fourth Revision indicates that traffic generated by the proposed project will be significantly less than that generated by the previously approved specific plan. Project trip generation is reduced from 16,000 daily trips to 2, 775. b. The City of Lake Elsinore General Plan states that the objective of the City is to "strive to maintain a minimum Level of Service 'c' at all intersections during non-peak hours and Level of Service 'D' at all intersections during peak hours to ensure that traffic delays are kept to a minimum." Except for the intersection of River Road at State Route 74 in the County, all intersections within the study area will meet the City's level of service objective. 4. The Final Specific Plan shall identify a methodology to allow land uses to be adequately serviced by existing or proposed public facilities and services. a. The proposed Revision has been reviewed and conditioned to provide adequate public services to the site. b. The proposed Revision provides recreational amenities, pedestrian pathways, and open space for residents in the medium high density residential development. 5. The overall design of the Specific Plan shall produce an attractive, efficient and stable development. a. The proposed Revision will allow the construction of a mix of residential units within Ramsgate. Design Guidelines have been included to establish a consistent design expression among site planning, architectural and CITY COUNCIL ORDINANCE NO. 1190 Page 4 of5 landscaping components while allowing reasonable flexibility in design. 6. In accordance with the requirements of the California Environmental Quality Act (CEQA), impacts have been reduced to a level of non-significance, or in the case where impacts remain, a Statement of Overriding Considerations is recommended for adoption to justify the merits of project implementation. SECTION 3. SEVERABILITY. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 22nd day of August, 2006 by the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER COUNCILMEMBERS: MAGEE NOES: ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1190 Page 5 of5 - PASSED, APPROVED AND ADOPTED UPON SECOND READING this 12th day of September , 2006, upon the following roll call vote: NOES: COUNCILMEMBERS: BUCKLEY, HI CKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE AYES: Robert E. Magee, Ma City of Lake Elsinor ABSTAIN: COUNCILMEMBERS: ONE Zv FrederiC~' City Clerk ORDINANCE NO. 1191 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AMENDING CHAPTER 17.66 (PARKING REQUIREMENTS) OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING COMPACT PARKING, DRIVE AISLE WIDTH, AND PARKING RATIO FOR MEDICAL USES. WHEREAS, an application has been initiated by the City of Lake Elsinore amending portions of Lake Elsinore Municipal Code (LEMC) Chapter 17.66 (Parking Requirements), related to 1) eliminating compact parking provisions for commercial and industrial uses and instead requiring all parking spaces to be standard full-size spaces, 2) modifying the required width of 90-degree parking drive aisles, and 3) establishing a minimum off- street parking requirement for medical uses; and WHEREAS, a Negative Declaration has been prepared for the project pursuant to the requirements of the California Environmental Quality Act (CEQA) Section 15070, describing the reasons that the proposed text amendments will not have a significant effect on the environment and do not require the preparation of an environmental impact report; and WHEREAS, Section 17.84.050 of the LEMC stipulates that the City Council shall make a final determination on a Zoning Ordinance text amendment; and WHEREAS, public notice of the application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on August 22, 2006. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: CITY COUNCIL ORDINANCE NO. 1191 PAGE20F5 SECTION 1. The City Council has considered the proposed Zoning Ordinance Text Amendment. The City Council finds and determines that an Initial Study was completed to analyze the potential environmental impacts of the proposed project. The Initial Study concluded that the proposed Text Amendment would have no significant environmental impacts. SECTION 2. That in accordance with State Planning and Zoning law and the LEMC, the City Council makes the following findings for approval of Text Amendment No. 2006-01: 1. The proposed Text Amendment to the City's Parking Ordinance will: a. Not be detrimental to the to the health, safety, comfort, or the general welfare of the persons working or residing within the City in that revisions are proposed to compact stalls, drive aisle widths, and parking ratio regulations that will create parking areas with less congestion and better vehicle circulation that will contribute to the safety and comfort of drivers traversing these parking areas. b. Not be injurious to property or improvements within the City because the proposed amendments to the parking ordinance will create wider parking spaces and aisle widths that will make parking areas safer and less likely to create situations where property or existing improvements could be damaged. Furthermore, the proposed amendments apply to new developments. 2. The proposed text amendment is consistent with the General Plan as the proposed changes to the Parking Ordinance will help provide sufficient onsite parking to accommodate all vehicles associated with the uses found on each site. Furthermore, the proposed revisions will not inhibit the implementation of appropriate parking layout and design standards set forth in the Community Design Element of the General Plan. SECTION 3. That Chapter 17.66 (Parking Requirements) is hereby amended as follows: Medical Use Parkinf! Requirement (Add New Subsection to 17.66.030) CITY COUNCIL ORDINANCE NO. 1191 PAGE30F5 17.66.030 Number of parkin!! spaces required 16. Medical uses (including offices for doctors, dentists, and chiropractors) one (1) space for each 175 square feet of gross floor area. Section to 17.66.040 is amended and restated as follows: 17.66.040 Size of parkin!! spaces and required aisle width A. Parking spaces shall have the following minimum clear dimensions and aisle width as indicated below: District Residential-covered Residential-uncovered Industrial-Commercial Recreational Vehicle Parallel Spaces Space (in feet) Width(1) Length(2) 10 20 9 18 9 18 10 30 8 23 Aisle Width (in feet) 30 45 60 90 28 12 15 18 26 12 15 18 26 15 18 21 28 (l) Open or uncovered spaces with sides abutting a wall, building, fence, or other obstruction shall be two-feet (2') wider than the standard required width. (2) Parking space length may include a two (2) foot allowance for vehicle overhang of a landscaped area. (3) The required dimensions of a garage or carport shall be measured from the interior of the garage or carport. (4) For multi-car garages or carports, the mInImUm width for parking stalls shall be nine and one-half (9-l/2') feet. SECTION 4. SEVERABILITY. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. CITY COUNCIL ORDINANCE NO. 1191 PAGE40F5 SECTION 5. EFFECTIVE DATE. This Ordinance shall take effect on October 13, 2006 or such later date that is thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 22nd of August 2006, by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE NOES: ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING September 12 ,2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE NOES: ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE Robert E. Magee ayor City of Lake ElSInore Z 'Frederick icity Clerk City of Lake Elsinore CITY COUNCIL ORDINANCE NO. 1191 PAGE50F5 ORDINANCE NO. 1192 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, AMENDING AND RESTATING CHAPTER 2.20 OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING DISASTER RELIEF WHEREAS, Chapter 2.20 Disaster Relief, of the Lake Elsinore Municipal Code identifies a list of emergency situations and provides for an organized response by the city to them; and WHEREAS, the last major revision of Chapter 2.20 was in 1991; and WHEREAS, the list of enumerated emergencies and the appropriate responses to them is incomplete by today's standards. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. That Chapter 2.20 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: Sections: 2.20.010 2.20.020 2.20.030 2.20.040 2.20.050 2.20.060 2.20.070 2.20.080 2.20.090 2.20.100 2.20.110 2.20.120 2.20.130 Chapter 2.20 DISASTER RELIEF General purposes. Definitions. Disaster council established -- membership. Disaster council powers and duties. Disaster corps. Disaster corps -- activation. Orders by members of disaster corps. Disaster director Office of disaster preparedness. Powers of succession. Line of succession for council members. Emergency operating centers. Proclamation of emergency -- effective term CITY COUNCIL ORDINANCE NO. 1192 PAGE 2 OF 10 2.20.150 2.20.160 2.20.170 2.20.180 Proclamation of emergency -- rules and regulation -- powers of disaster director. Requisition of equipment or personnel. Termination of emergency. Prohibited acts during emergencies. Violation -- penalty. 2.20.140 2.20.010 General purposes. The purpose of this chapter is to provide for the preparation and carrying out of plans for the protection of persons and property within the City in the event of the emergency or disaster conditions hereinafter referred to; the direction of the disaster organization; and the coordination of the disaster functions of the City with the County of Riverside and with all other public agencies, corporations, organizations and affected private persons. 2.20.020 Definitions. "Local emergency" means the duly proclaimed existence of conditions of disaster or of extreme peril to the safety of persons and property within the territorial limits of a county, city and county, or city caused by such conditions as air pollution, fire, flood, storm, epidemic, riot, drought, sudden and severe energy shortage, plant or animal infestation or disease, the governor's warning of an earthquake or volcanic prediction, or other conditions (other than conditions resulting from a labor controversy), which conditions are or are likely to be beyond the control of the services, personnel, equipment and facilities of that political subdivision and require the combined forces of other political subdivisions to combat, or with respect to regulated energy utilities, a sudden and severe energy shortage that requires extraordinary measures beyond the authority vested in the California Public Utilities Commission. "State of emergency" means the duly proclaimed existence of conditions of disaster or of extreme peril to the safety of persons and property within the state caused by such conditions as air pollution, fire, flood, storm, epidemic, riot, drought, sudden and severe energy shortage, plant or animal infestation or disease, the governor's warning of an earthquake or volcanic prediction, or an earthquake or other conditions, other than the conditions resulting from a labor controversy or conditions causing a "state of war emergency," which conditions, by reason of the magnitude, are or are likely to be beyond the control of the services, personnel, equipment and facilities of any single county, city and county, or city and require CITY COUNCIL ORDINANCE NO. 1192 PAGE 3 OF 10 the combined forces of a mutual aid region or regions to combat, or with respect to regulated energy utilities, a sudden severe energy shortage requires extraordinary measures beyond the authority vested in the California Public Utilities Commission. "State of war emergency" means the condition which exists immediately, with or without a proclamation thereof by the governor, whenever this state or nation is attacked by an enemy of the United States, or upon receipt by the state of a warning from the federal government indicating that such an enemy attack is probable or imminent. Other terms used in this chapter shall have meanings as used in the California Emergency Services Act. 2. 20.030 Disaster council established -- Membership. The city disaster council is created and established and shall consist of the following individuals: A. The city manager, who shall be the chair of the council; B. The city emergency services coordinator, who shall be designated by the city manager and who shall serve as vice-chair of the council; and C. Such other city personnel as may be appointed by the city manager. 2.20.040 Disaster council powers and duties. It shall be the duty of the city disaster council, and it is empowered, to develop and recommend for adoption by the city council, emergency and mutual aid plans and agreements and such ordinances and resolutions and rules and regulations as are necessary to implement such plans and agreements. The disaster council shall meet upon the call of the council's chair or in the chair's absence from the city or inability to call such meeting, upon the call of the council's vice-chair. 2.20.050 Disaster corps. The city disaster corps consists of all officers and employees of the city and its agencies, together with all volunteers and all groups, organizations and persons commandeered under the provisions of the California Emergency Services Act and this chapter, with all equipment and material publicly owned, volunteered, commandeered or in any way under the control of the aforementioned personnel, for the support of the aforementioned personnel in the conduct of disaster operations. The disaster corps shall be composed of such elements as are provided for in the disaster operations plan of the city. The officers CITY COUNCIL ORDINANCE NO. 1192 PAGE 4 OF 10 of the city shall have the authority and duty to plan for mobilization, operation and support of that segment of the disaster corps for which each is responsible as provided for in the disaster operations plan of the city, and to conduct the activities thereof. 2.20.060 Disaster corps -- Activation. The disaster corps shall be activated and shall function as a disaster relief body, only: A. Upon the existence of a state of war emergency; B. Upon the declaration by the governor of the state or of persons authorized to act in his stead, of a state of emergency affecting and including the city; C. Upon the declara~ion of a local emergency by the board of supervisors of Riverside County, or by persons authorized to act in its stead, affecting and including the city; or D. Upon the declaration of a local emergency by the city council of the city, or by persons herein authorized to act in its stead. 2.20.070 Orders by members of disaster corps. During the existence of a state of war emergency or of a proclaimed state of emergency or local emergency affecting the city each member of the city disaster corps shall have authority to require that all persons shall follow reasonable orders given by him within the scope of his functions in order to execute the disaster operations plan of the city, and the willful failure of any person to follow such reasonable order or orders is a misdemeanor. 2.20.080 Disaster director. The city manager shall be the disaster director. In the city manager's absence or inability to act the city manager shall automatically be succeeded as disaster director by the officials and persons named for this purpose, and in the order specified, in the disaster operations plan of the city. The disaster director shall have the following powers and duties: A. To make key appointments, and to make all other appointments or delegate the making of the same, within the disaster corps; B. To request the city council to proclaim the existence of a local emergency if the council is in session, or to issue such proclamation if the council is not in session and order activation of the city's Emergency Operating Center (EOC). Whenever a local emergency is proclaimed by the director, the city council shall take action to ratify the proclamation within seven days thereafter or the proclamation CITY COUNCIL ORDINANCE NO. 1192 PAGE 5 OF 10 shall have no further force or effect. The city council shall review the necessity for continuing the local emergency no less frequently than every fourteen days until the emergency is terminated; C. During the existence of a state of war emergency, or the proclaimed existence of a state of emergency or a local emergency affecting the city, to: 1. Control and direct the activities of the city disaster corps; 2. Use all city resources for the preservation of life and property and to reduce the effects of disaster; 3. Resolve questions of authority and responsibility that may arise in disaster operations; 4. Obtain vital supplies, equipment and other resources needed for the preservation of life and property by either binding the city for the fair value thereof or by commandeering the same; 5. Delegate to elected and appointed officials of the city such duties and authorities as he deems necessary; 6. Make and issue rules and regulations on matters reasonably related to the protection of life and property as affected by any condition proclaimed an emergency as provided herein; 7. Require performance of emergency services by any city officer or employee and to command the aid of as many citizens of the city as he thinks necessary in the execution of his duties; and 8. Exercise complete authority over the city and to exercise all police power vested in the city by the constitution and general laws; D. In addition to the powers granted in this chapter, the director shall have such power incidental to the performance of his duties as shall be necessary to allow him to carry out the disaster operations plan of the city, it being the intent of this chapter that the enumerated powers herein are not limitations upon his powers. 2.20.090 Office of disaster preparedness. There is created the city office of disaster preparedness, which shall consist of such positions as may be established by the city manager. 2.20.100 Powers of succession. Each person who shall succeed to each position or office as provided in this chapter, and as provided in the disaster CITY COUNCIL ORDINANCE NO. 1192 PAGE 6 OF 10 operations plan of the city, shall succeed to all powers and duties of the office succeeded to immediately upon such succession. 2.20.110 Line of succession for council members. The line of succession for the position of mayor during a state of emergency, war emergency, local emergency or other condition of disaster, unless otherwise ordered by the city council, shall be mayor pro tempore followed by the remaining city council members in the order of their seniority, excluding standby successors who may have been appointed pursuant to Section 8638 of the California Government Code. 2.20.120 Emergency operating centers. The EOC manager is the City emergency services coordinator. The EOC is located at the Lake Elsinore Police Department; alternate EOCs are located at the Lake Elsinore City Hall and McVicker Canyon Fire Station. 2.20.130 Proclamation of emergency-- Effective Term. The proclamation of local emergency provided herein shall become effective immediately upon its issuance and shall be disseminated to the public by appropriate news media. Such a state of local emergency shall exist from the time the proclamation of emergency is issued until such time as it is similarly and duly terminated by the governing body. 2.20.150 Proclamation of emergency-- Rules and regulations--Powers of disaster director. After issuance of a proclamation of local emergency, the disaster director shall have the power to make, issue and enforce rules and regulations on matters reasonably related to the protection of life, and property as affected by such emergency; provided, however, such rules and regulations shall be confirmed as soon as practicable by the city council. In addition to those powers and duties set forth in Section 2.56.080, the disaster director is granted, but shall not be limited to, the following powers: A. Curfew. 1. The disaster director may order a general curfew applicable to the entire city or such geographical areas thereof as he deems necessary to protect the public health, safety, welfare and morals. 2. As used herein "curfew" means a prohibition against any person or persons walking, running, loitering, standing, riding or motoring upon any alley, street, highway, public property or private property except as authorized by the owner, lessee or CITY COUNCIL ORDINANCE NO. 1192 PAGE 7 OF 10 person in charge of such private property. Persons officially delegated to duty with reference to such civil emergency and representatives of news media, physicians, nurses, ambulance operators performing medical services, utility personnel maintaining essential public services, firemen and law enforcement officers and other such personnel as well as those specifically authorized to duty by duly delegated authority are exempted from the foregoing curfew requirements. B. Business Closing. The disaster director may order the closing of any business establishments anywhere within the city, such businesses to include but not be limited to those selling alcoholic beverages, gasoline or firearms. C. Alcoholic Beverages. The disaster director may order that no person shall consume any alcoholic beverages in a public street or place which is publicly owned or in any other public or private area on which the consumption of such alcoholic beverages shall be found by the disaster director, on just cause, to precipitate a clear and present danger to the well-being of the community during the emergency. D. Weapons. The disaster director may order that no person shall carry or possess any gun, bomb, fire bomb, knife, rock or other such weapon or item the use of which would tend to inflict great bodily harm on persons or damage to property. E. Closed Areas. The disaster director may designate any public street, thoroughfare or vehicular parking area closed to motor vehicles and pedestrian traffic during the course of such emergency. The forgoing specific authorizations of authority vested in the disaster director and other such authorizations as may be deemed necessary during such emergencies are declared to be imminently necessary for the protection of life and property during such period. 2.20.150 A. Requisition of equipment or personnel. Once a proclamation of emergency is issued, the disaster director may request from the governor all necessary assistance, requisition necessary personnel or materials from any city department or other source, control and direct all city personnel and equipment, obtain vital supplies and such other properties found lacking and needed for their protection of life and property, and bind the city for the fair value CITY COUNCIL ORDINANCE NO. 1192 PAGE 8 OF 10 thereof, and if required, commandeer immediately such property, equipment and personnel necessary for the public use during the term of the emergency. B. The disaster director may also require emergency services of any city official or employee and may command the aid of as many citizens of this city as he determines to be necessary in the execution of his duties. Such person shall be entitled to all privileges, benefits and immunities as are provided by state or local law for registered civil defense and disaster worker volunteers. 2.20.160 Termination of emergency. Any state of local emergency proclaimed in accordance with the provisions of this chapter shall terminate upon the issuance of a proclamation by the governing body terminating the emergency. 2.20.170 Prohibited acts during emergencies. It is a criminal act and a misdemeanor for any person during a state emergency, war emergency, local emergency or other condition of disaster: A. To willfully obstruct, hinder or delay any member of the city disaster corps in the enforcement of any law or lawful rule, regulation or order issued pursuant to this chapter, or in the performance of any duty imposed upon such disaster corps member by virtue of this chapter; B. To do any act forbidden by any lawful rule, regulation or order issued pursuant to this chapter if such is of such a nature as to give, or be likely to give, assistance to the enemy, or to imperil life or property, or to prevent, hinder of delay the defense or protection of persons or property; or C. To wear, carry or display, without authority, any means of identification specified by the emergency services of disaster or civil defense agencies of the federal or state governments. 2.20.180 Violation--Penalty. Any person violating any provision of this chapter or any executive order issued pursuant thereto is guilty of a misdemeanor and subject to punishment in accordance with Section 1.16.010. - SECTION 2. SEVERABILITY. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. CITY COUNCIL ORDINANCE NO. 1192 PAGE 9 OF 10 SECTION 3. EFFECTIVE DATE. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 22nd day of August, 2006, by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE NOES: ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING September 12 , 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE NOES: ABSTAIN: COUNCILMEMBERS:BUC;KLy c;) . t / ./0 Robert E. Mag ayor City of Lake E sinore Frederick ay, City Clerk City of Lake Elsinore CITY COUNCIL ORDINANCE NO. 1192 PAGE 10 OF 10 - APPROVED AS TO FORM: { eibold, City Attorney lsinore - - ORDINANCE NO. 1193 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA APPROVING SPECIFIC PLAN NO. 2005-01 CHANGING THE ZONING DESIGNATION OF THE PROPERTY GENERALLY LOCATED AT THE NORTHWEST CORNER OF GRAND AVENUE AND RIVERSIDE DRIVE FROM C-P COMMERCIAL PARK DISTRICT TO SPECIFIC PLAN UNDER THE ZONING ORDINANCE WHEREAS, Classic Pacific, C/O Albert A Webb Associates, has initiated proceedings to change the zoning designation of the subject property generally located at the northwest comer of Grand Avenue and Riverside Drive from C-P Commercial Park to Specific Plan; and - WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on August 15, 2006 made its report upon the desirability of the proposed project and made its recommendations in favor of said Specific Plan No. 2005-01 by adopting Planning Commission Resolution No. 2006-74 recommending to the City Council approval of Specific Plan No. 2005-01; and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on September 12,2006. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed Specific Plan No. 2005-01, prior to making a decision to approve the proposed amendment to the Land Use Designation and establish a Zoning Designation. The City Council finds and determines that Mitigated Negative Declaration No. 2006-05 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the proposed project and recommends City Council certification, based upon the following findings and determinations: CITY COUNCIL ORDINANCE NO. 1193 - Page 2 of 5 SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore the following findings for the approval of Specific Plan No. 2005-01 have been made as follows: 1. The proposed zone change will not be: a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed amendment or within the City, or b) injurious to the property or improvements in the neighborhood or within the City. The proposed Zone Change has been analyzed relative to its potentiality to be detrimental to the health, safety, comfort and welfare of the persons residing or working within the neighborhood of the proposed amendment. The primary issue identified by staff relates to the traffic impacts of the proposed project. Staff, concluded, based on the Traffic Study, that the Level of Service for the intersections in the Study Area will not be degraded as a result of the mitigations and conditions of approval placed on this project as well as the ultimate goals and objectives of the General Plan Circulation Element. 2. The proposed action will be consistent with the Goals, Objectives, and Policies of the General Plan and the development standards established with the Lake Elsinore Municipal Code (LEMC). Based on its analysis, staff has concluded that the requested Zone Change, allowing the development of the subject Specific Plan project is consistent with GOAL 1.0 of the General Plan Housing Element, obligating the City to provide "decent housing opportunities and a satisfying living environment for residents of Lake Elsinore ". SECTION TWO: ZONING RECLASSIFICATION This Zoning Map of the City of Lake Elsinore, California, is hereby amended by changing, reclassifying and rezoning the following described property, to wit: Generally located at the northwest comer of Grand Avenue and Riverside Drive from C-P Commercial Park District to Specific Plan. CITY COUNCIL ORDINANCE NO. 1193 Page 3 of5 Avenue and Riverside Drive from C-P Commercial Park District to Specific Plan. Approval is based on the following: 1. The proposed Zoning is consistent with the Goals, Policies, and Objectives in the General Plan. 2. The proposed Zoning is consistent with the General Plan and the various land uses authorized by the Ordinance are compatible with the objectives, policies, general land uses, and programs specified in the Plan. (Government Code Section 65860). 3. Reasons why the City has considered the effect of Zoning Ordinances on the regional housing needs in which the City is located and how the City has balanced these needs against the public service needs of. its residents and available fiscal and environmental resources. (Government Code Section 65863.6). SECTION 3: This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. CITY COUNCIL ORDINANCE NO. 1193 Page 4 of5 INTRODUCED AND APPROVED UPON FIRST READING this 12th day of September, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 26th day of September, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: HICKMAN ABSTAIN: COUNCILMEMBERS: CITY COUNCIL ORDINANCE NO. 1193 Page 5 of5 Frederick ay, City Clerk City of Lake Elsinore B rbara Zei eibold, City Attorney City of Lake Elsinore ORDINANCE NO. 1194 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AMENDING AND RESTATING SECTIONS 8.18.100, 14.04.220, 17.70.014, 17.70.038, 17.74.070, 17.76.070, 17.80.020, 17.82~090, 17.82.100, 17.92.050, 17.98.100, AND 17.99.180 OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING APPEAL OF NUISANCE ABATEMENT AND PLANNING COMMISSION DECISIONS WHEREAS, Section 8.18.100 of the Lake Elsinore Municipal Code sets the time period to appeal a decision by the nuisance abatement board to the City Council at ten (10) calendar days; and WHEREAS, Section 14.04.220 and various sections of Title 17 "Zoning" of the Lake Elsinore Municipal Code identify a ten (10) calendar day time period to appeal a Planning Commission decision to City Council; and WHEREAS, the City Council wishes, to extend the appeal periods for nuisance abatement and Planning Commission decisions to fifteen (15) calendar days; and WHEREAS, the language of Section 8.18.100, Section 14.04.220 and the various sections of Title 17 "Zoning" of the Lake Elsinore Municipal Code should be consistent when referring to an appeal of a nuisance abatement and/or Planning Commission decision to City Council. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. That the introductory paragraph to Section 8.18.100 of the Lake Elsinore Municipal Code be amended and restated as follows: 8.18.10 Appeal. Any person entitled to notice of the hearing who has participated in that hearing and who is dissatisfied by the determinations of the hearing officer, may appeal those determinations to the City Council by filing an appeal with the City Clerk within fifteen days from the date of the hearing officer's decision and by paying the appeal fee set by resolution. The City Council shall set a hearing date within a reasonable time following the filing of the appeal and shall CITY COUNCIL ORDINANCE NO. 1194 PAGE20F8 hold the hearing at a regularly scheduled Council Meeting. The appeal shall specify : A. A description of the property. B. The abatement proceedings appealed. C. The owner's legal or equitable interest in the property. D. A statement of disputed and undisputed facts. E. A statement specifying that portion of the proceedings that are being appealed, together with any evidentiary or supporting materials that would support the appeal. F. A verification of the truth of all matters asserted. The City Council may limit the issues on appeal, may consider the record produced for the hearing officer, and may allow additional evidence to be produced. Notice shall be provided to the appellant utilizing substantially the same procedure as required for the hearing before the hearing officer. In said notice the appellant will be apprised of the scope of the appeal. The decision of the City Council shall be the final and binding action and the property owner shall be so notified of its determinations. SECTION 2. That Section 14.04.220 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: 14.04.220 Appeals. Any person aggrieved by an act or determination of the Community Development Department in the exercise of the authority granted herein, shall have the right to appeal to the Planning Commission. An appeal of a Planning Commission decision to the City Council shall be filed in writing with the City Clerk within fifteen (15) calendar days from the date of the Commission's decision pursuant to the provisions of Chapter 17.80. SECTION 3. That Section 17.70.014 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: 17.70.014 Time limits for action on Conditional Use Permit. An application for Conditional Use Permit shall be approved or denied by the Planning Commission within forty-five (45) days of its acceptance as complete by the CITY COUNCIL ORDINANCE NO. 1194 PAGE30F8 Community Development Department. The Planning Commission, or City Council on appeal, shall approve an application for a Conditional Use Permit for an adult business upon findings that the applicant has met all the applicable requirements and performance standards of this Chapter. Any proceeding to appeal such decision to the City Council shall be filed in writing with the City Clerk within fifteen (15) calendar days from the date of the decision pursuant to the provisions of Chapter 17.80. The City Council shall consider the appeal at a regular meeting within thirty (30) calendar days following the receipt by the Clerk of the appeal, or within such time as the Council shall continue the matter. SECTION 4. That the third paragraph of Section 17.70.038 of the Lake Elsinore Municipal Code entitled "Hearing on revocation of license" is hereby amended and restated as follows: At the conclusion of the hearing, the Planning Commission shall decide whether the grounds for revocation exist and shall submit a written report to the Director. Such written report shall contain a brief summary of the evidence considered and shall state findings, conclusions and directives to the Director regarding whether the license is to be revoked. All such reports shall be filed with the City Clerk and shall be public records. ' A copy of such report shall be forwarded by certified mail, postage prepaid, to the licensee on the day it is filed with the City Clerk. If the Planning Commission determines that any grounds for revocation exist, as provided in Section 17.070.036 of this Chapter, the Director, based upon the report of the Planning Commission or, if no hearing was requested by the licensee, based upon the report of the City staff, shall immediately revoke the adult business license. The decision of the Planning Commission shall be appealable to the City Council by the filing of a written appeal with the City Clerk within fifteen (15) calendar days following the date of mailing of such decision pursuant to the provisions of Chapter 17.80. A timely filed appeal shall vacate the decision of the Planning Commission. Any such appeal shall be a de novo public hearing held in the manner and within the time limitations set forth in Section 17.70.014. The decision of the City Council upon appeal, or the decision of the Planning Commission in the absence of a timely appeal, shall be final and conclusive. SECTION 5. That Section 17.74.070 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: CITY COUNCIL ORDINANCE NO. 1194 PAGE 4 OF 8 17.74.070 Effective date of the Use Permit. The decision of the Commission shall be final unless a written appeal is filed with the City Clerk within fifteen (15) calendar days from the date of the decision pursuant to the provisions of Chapter 17.80. SECTION 6. That Section 17.76.070 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: 17.76.070 Effective date of the variance. The decision of the Commission shall be final unless a written appeal is filed with the City Clerk within fifteen (15) days from the date of the decision pursuant to the provisions of Chapter 17.80. SECTION 7. That Section 17.80.020 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: 17.80.020 Appeals. Any person may file a written appeal to the City Council with the City Clerk within fifteen (15) calendar days from the date of the Commission's decision. A recommendation of the Commission shall not be considered a decision within the meaning of this Section and cannot be appealed. All appeals shall be on forms provided by the City Clerk and accompanied by a fee as set pursuant to Chapter 3.32 of the Municipal Code. Any member of the City Council may appeal a decision of the Planning Commission by written request to the City Clerk filed within fifteen (15) calendar days of the Planning Commission decision. SECTION 8. That Section 17.82.090 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: 17.82.090 Effective date of Design Review approval. The decision of the Commission shall be final unless a written appeal is filed with the City Clerk within fifteen (15) calendar days from the date of the decision pursuant to the provisions of Chapter 17.80. SECTION 9. That Section 17.82.100 G. of the Lake Elsinore Municipal Code is hereby amended and restated as follows: CITY COUNCIL ORDINANCE NO. 1194 PAGE 5 OF 8 17.82.100 Minor Design Review G. The person submitting the project for "Minor Design Review" may appeal the Director's decision and/or conditions to the Planning Commission; provided that said appeal is submitted to the Director of Community Development within fifteen (15) calendar days. The Planning Commission shall hear the appeal in the same manner prescribed for a "Design Review" pursuant to the provisions of this Chapter. Planning Commission decisions may be appealed to the City Council by filing a written appeal with the City Clerk within fifteen (15) calendar days from the date of the decision pursuant to the provisions of Chapter 17.80. No construction related to the "Minor Design Review" shall commence prior to Planning Commission approval, or if appealed, City Council approval. SECTION 10. That Section 17.92.050 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: 17.92.050 Denials. The Commission may deny or recommend that a petition be denied. Upon receipt of such report from the Planning Commission, recommending denial of the proposed petition, the City Council shall not be required to take any further action, unless the applicant or any interested person, files a written appeal of the action with the City Clerk within fifteen (15) calendar days from the date of the decision pursuant to the provisions of Chapter 17.80. SECTION 11. That Section 17.98.100 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: 17.98.100 Appeals. An applicant or any interested person may file a written appeal of the Community Development Director's decision with the Planning Commission within fifteen (15) calendar days of the rendering of such a decision. Any person may file a written appeal with the City Clerk within fifteen (15) calendar days from the date of the Planning Commission's decision pursuant to the provisions of Chapter 17.80. SECTION 12. That Section 17.99.180 of the Lake Elsinore Municipal Code is hereby amended and restated as follows: 17.99.180 Site plan and tentative subdivision map appeal. The applicant may file a written appeal with the City Clerk within fifteen (15) calendar CITY COUNCIL ORDINANCE NO. 1194 PAGE 6 OF 8 days from the date of the Planning Comm,ission's decision pursuant to the provisions of Chapter 17.80. Such appeal shall be filed in duplicate with the Department of Community Development. The City Council shall consider the appeal at a regular meeting within thirty (30) calendar days following the receipt by the Clerk of the appeal, or within such time as the Council shall continue the matter. The City Council shall review the site plan and shall approve, approve with conditions, or deny the application. SECTION 13. SEVERABILITY. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 14. EFFECTIVE DATE. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. CITY COUNCIL ORDINANCE NO. 1194 PAGE 7 OF 8 INTRODUCED AND APPROVED UPON FIRST READING this lih day of September, 2006, by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 26th day of September, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: HICKMAN ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1194 PAGE80F8 rbara Zeid eibold, City Attorney City of Lake Elsinore ORDINANCE NO. 1195 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING PRE-ANNEXATION ZONE CHANGE NO. 2006-05 CHANGING THE OFFICIAL ZONING MAP OF THE CITY OF LAKE ELSINORE, SUBJECT TO THE COMPLETION OF ANNEXATION NO. 76, BRINGING 62.42 ACRES OF LAND INTO THE CITY OF LAKE ELSINORE BOUNDARIES, LOCATED SOUTH OF LITTLE VALLEY ROAD, NORTH AND SOUTH OF SCENIC CREST DRIVE, WEST OF GREENW ALD AVENUE AND EAST OF GRASSY MEADOW DRIVE, CONTIGUOUS TO THE NORTHEASTERLY BOUNDARY OF THE CITY OF LAKE ELSINORE. WHEREAS, TSG Little Valley has submitted an application with the City of Lake Elsinore to change the City's official zoning map to "Ramsgate SP" and "R-E Estate Single Family Residential, 1/2 acre minimum lot size" for the Assessor's Parcel Nos. 349-240-043 thru -047; 349-240-050 and - 051; 349-240-054 thru -058; 349-380-024 and -025 (the "Properties"); and WHEREAS, the pre-zoning designations conform to and are consistent with the proposed General Plan Amendment No. 2006-05 for the Properties; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on September 5, 2006, made its report upon the desirability of the proposed project and made its recommendations in favor of Pre-Annexation Zone Change No. 2006-05 by adopting Planning Commission Resolution No. 2006-90 recommending to the City Council approval of the Pre-Annexation Zone Change No. 2006-05; and WHEREAS, public notice of the application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on September 26, 2006. CITY COUNCIL ORDINANCE NO. 1195 PAGE20F4 THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed pre- zoning prior to making its decision. The City Council adopted Mitigated Negative Declaration No. 2006-04 prepared for this project as adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the proposed project. SECTION 2. That in accordance with State Planning and Zoning law and the Lake Elsinore Municipal Code, the City Council makes the following findings for the approval of Pre-Annexation Zone Change No. 2006-05 : 1. The proposed zone change will not be: a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed zone change or within the City, or b) injurious to the property or improvements in the neighborhood or within the City. a. The proposed zone change has been analyzed relative to its potential to have detrimental effects. It has been determined that the health, safety and welfare of surrounding residents may be improved as a result of future improvements to infrastructure such as water, sewer, paving and drainage facilities brought to the site as a requirement for any future development. The proposed "Ramsgate SP" zoning will ensure that development standards and design guidelines of the specific plan will be consistently applied throughout the site. b. The proposed "R-E Estate Single Family Residential, ~ acre minimum lot size" zoning will enable existing land uses to continue on the four (4) outlying parcels that exist today in the County, including the keeping of horses. 2. The proposed zone change will permit reasonable development of the area consistent with its constraints and will make the area more compatible with adjacent properties. CITY COUNCIL ORDINANCE NO. 1195 PAGE30F4 a. The proposed zoning of "Ramsgate SP" will allow for the continuation of the single family residential neighborhood already approved across Scenic Crest Drive in Tentative Tract Map No. 25475 Revision No.1. 3. The proposed zone change would establish a land use density and usage more in character with the subject property's location, access, and constraints. a. The zone change proposes a boundary adjustment to allow for a seamless integration of the property with the adjacent Ramsgate Specific Plan. b. The zone change allows for the development of the site in accordance with proposed Tentative Tract Map No. 33725, which provides primary and secondary accessfor both TTM 33725 and 25475. SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 26th day of September, 2006 by the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: HICKMAN ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1195 PAGE40F4 PASSED, APPROVED AND ADOPTED UPON SECOND READING this 10th day of October, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: Buckley, Hickman, Kelley Schiffner, Magee NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None ABSTAIN: COUNCILMEMBERS: Non Robett E. Magee, ayor City of Lake Elsinore AZ~ Frederick Ray, City Clerk City of Lake Elsinore ORDINANCE NO. 1196 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING ZONE CHANGE NO. 2006-07 CHANGING THE OFFICIAL ZONING MAP OF THE CITY OF LAKE ELSINORE, LOCATED SOUTH OF SCENIC CREST DRIVE, WEST OF GREENWALD AVENUE AND EAST OF GRASSY MEADOW DRIVE, AND KNOWN AS ASSESSOR'S PARCEL NO. 349-240- 006. WHEREAS, TSG Little Valley has submitted an application with the City of Lake Elsinore to change the City's official zoning map to "Ramsgate SP" for Assessor's Parcel No. 349-240-006 (the "Property"); and WHEREAS, the zone change designation conforms to and is consistent with the proposed General Plan Amendment No. 2006-05 that covers the Property; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on September 5, 2006, made its report upon the desirability of the proposed project and made its recommendations in favor of Zone Change No. 2006-07 by adopting Planning Commission Resolution No. 2006-91 recommending to the City Council approval of Zone Change No. 2006-07; and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on September 26, 2006. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed zoning prior to making its decision. The City Council adopted Mitigated Negative Declaration No. 2006-04 prepared for this project as adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the proposed project. CITY COUNCIL ORDINANCE NO. 1196 PAGE20F4 SECTION 2. That in accordance with State Planning and Zoning law and the Lake Elsinore Municipal Code, the City Council makes the following findings for the approval of Zone Change No. 2006-07: 1. The proposed zone change will not be: a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed zone change or within the City, or b) injurious to the property or improvements in the neighborhood or within the City. a. The proposed zone change has been analyzed relative to its potential to have detrimental effects. It has been determined that the health, safety and welfare of surrounding residents may be improved as a result of future improvements to infrastructure such as water, sewer, paving and drainage facilities brought to the site as a requirement for any future development. The proposed "Ramsgate SP" zoning will ensure that development standards and design guidelines of the specific plan will be consistently applied throughout the site. 2. The proposed zone change will permit reasonable development of the area consistent with its constraints and will make the area more compatible with adjacent properties. a. The proposed zoning of "Ramsgate SP" will allow for the continuation of the single family residential neighborhood already approved in Tentative Tract Map No. 25475 Revision No.1 that lies to the west. 3. The proposed zone change would establish a land use density and usage more in character with the Property's location, access, and constraints. a. The zone change proposes a boundary adjustment to allow for a seamless integration of the Property with the adjacent proposed Ramsgate Specific Plan. CITY COUNCIL ORDINANCE NO. 1196 PAGE30F4 - SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 26th day of September, 2006 by the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE - ABSENT: COUNCILMEMBERS: HICKMAN ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 10th day of October, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: Buckley, Hickman, Kelley, Schiffner, Magee NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None Rober E.Magee,Ma r City of Lake Elsinord ~ ABSTAIN: COUNCILMEMBERS: l'lone CITY COUNCIL ORDINANCE NO. 1196 PAGE40F4 - ATTEST: ,~~L Frederic Ray, City Clerk City of Lake Elsinore 'w ORDINANCE NO. 1197 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING RAMS GATE SPECIFIC PLAN NO. 89-1 FIFTH REVISION, LOCATED APPROXIMATELY ONE MILE EAST OF INTERESTATE 15, SOUTH OF HIGHWAY 74, AND WEST OF GREENW ALD AVENUE. WHEREAS, The Shopoff Group filed an application with the City of Lake Elsinore to amend the Ramsgate Specific Plan No. 89-1; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on September 5, 2006, made its report upon the desirability of the proposed project and made its recommendations in favor of Ramsgate Specific Plan No. 89-1 Fifth Revision by adopting Planning Commission Resolution No. 2006-92 recommending to the City Council approval of Rams gate Specific Plan No. 89-1 Fifth Revision; and WHEREAS, public notice of the application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on September 26, 2006. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed specific plan amendment prior to making its decision. The City Council adopted Mitigated Negative Declaration No. 2006-04 prepared for this project as adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the proposed project. SECTION 2. That in accordance with State Planning and Zoning law and Chapter 17.99 (Specific Plan District) of the Lake Elsinore Municipal Code, the City Council makes the following findings for approval of the Ramsgate Specific Plan No. 89-1 Fifth Revision: CITY COUNCIL ORDINANCE NO. 1197 PAGE 2 OF 5 - 1. The location and design of the proposed development is consistent with the goals and policies of the City's General Plan and with any other applicable plan or policies adopted by the City, or in the process of being prepared and adopted. a. The General Plan supports the development of the Ramsgate Specific Plan. The Fifth Revision adds acreage to the General Plan that is contiguous to its eastern boundary, and supplements Planning Area 6, which lost three-fourths of its original acreage to open space preservation. The Fifth Revision has been reviewed and conditioned to enhance and update the Ramsgate Specific Plan Fourth Revision. b. The Fifth Revision has been designed to support the objectives of the Multi-Species Habitat Conservation Plan adopted by the City, by preserving habitat areas identified in the Conservation Plan. - c. The Fifth Revision has been presented to the General Plan Advisory Committee charged with the preparation of the Draft General Plan Update, and received a favorable response. 2. The proposed location allows the development to be well-integrated with or adequately buffered from its surroundings, whichever may be the case. a. The Fifth Revision provides for the development of low-medium density residential, as an extension of the single family detached residential neighborhoods within Planning Area 6. In so doing, both Planning Areas 6 and 10 have primary and secondary access from Greenwald Avenue. b. The Fifth Revision increases the single family neighborhood on the eastern portion of the Plan, in both size and amenities, providing an aggregate three acres of parks, and compensating for the loss of acreage in this portion of the Plan to the preservation of open space. 3. All vehicular traffic generated by the development, either in phased increments or at full build-out, is to be accommodated safely and without causing undue congestion upon adjoining streets. CITY COUNCIL ORDINANCE NO. 1197 PAGE30F5 - a. A Traffic Impact Analysis (TIA) was prepared by Urban Crossroads in October 2005, which determined that the proposed project will generate 2,211 trip-ends daily with 173 in the a.m. peak period and 233 in the p.m. peak period. The TIA identified that traffic from the project will use Scenic Crest Drive and Greenwald Avenue. As a secondary highway, Greenwald has the capacity for 35,000 vehicle trips. The project will not cause this capacity to be exceeded. b. The City of Lake Elsinore General Plan states that the objective of the City is to "strive to maintain a minimum Level of Service 'c' at all intersections during non-peak hours and Level of Service (LOS) 'D' at all intersections during peak hours to ensure that traffic delays are kept to a minimum. " With the incorporation of mitigation measures in the Mitigation Monitoring and Reporting Program, the project will meet LOS 'D' objective, except for the intersection of River Road at State Route 74 in the County. 4. The Final Specific Plan shall identify a methodology to allow land uses to be adequately serviced by existing or proposed public facilities and servIces. a. The Fifth Revision has been reviewed and conditioned to provide adequate public services for the site. b. The Fifth Revision provides recreational amenities, pedestrian pathways, and open space for residents in the low-medium density residential development. 5. The overall design of the Specific Plan shall produce an attractive, efficient and stable development. The proposed Revision will allow the construction of a more substantial and complete single family neighborhood in the eastern portion of the Plan, with parks and amenities and primary and secondary access to Greenwald Avenue. 6. In accordance with the requirements of the California Environmental Quality Act (CEQA), impacts have been reduced to a level of non- CITY COUNCIL ORDINANCE NO. 1197 PAGE40F5 significance through adoption of mitigation measures and conditions of approval. SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 26th day of September, 2006 by the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: HICKMAN ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 10th day of October, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: Buckley, Hickman, Kelley, Schiffner., Magee COUNCILMEMBERS: None NOES: ABSENT: COUNCILMEMBERS: None ABSTAIN: COUNCILMEMBERS: CITY COUNCIL ORDINANCE NO. 1197 PAGE50F5 ATTEST: ORDINANCE NO. 1198 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA APPROVING PRE-ZONING NO. 2006-04 SUBJECT TO THE COMPLETION OF ANNEXATION NO. 77 WHEREAS, the City of Lake Elsinore (the "City") has commenced proceedings to annex 154 acres of land into the City's corporate boundaries and is concurrently initiating proceedings to change the zoning designation on 154 acres of land located adjacent to State Route 74, East of Trellis, from the County of Riverside's zoning designations to City's Pre-Zoning designations as set forth below; and WHEREAS, the Pre-Zoning application conforms to and is consistent with the City of Lake Elsinore's General Plan Land Use Map, as amended by the general plan amendment which is also being processed simultaneously with this Pre-Zone application; and WHEREAS, pursuant to the California Environmental Quality Act (Cal. Pub. Res. Code SS 21000 et seq.: "CEQA") and the CEQA Guidelines (14 C.C.R. SS 15000 et seq.), Mitigated Negative Declaration No. 2005-12 was prepared to mitigate to a level of insignificance any potentially significant environmental effects presented by Annexation 77; and WHEREAS, the Planning Commission opened the public hearing on the Annexation 77 at a duly noticed public hearing on August 1, 2006; and WHEREAS, in response to the public comments shared at the August 1, 2006 meeting, the Planning Commission voted to continue the public hearing on Annexation 77 until the regularly scheduled meeting of September 19,2006; and WHEREAS, on September 19, 2006, the Planning Commission considered additional evidence presented by the Community Development Department and other interested parties with regard to the annexation application; and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on September 26, 2006. - CITY COUNCIL ORDINANCE NO. 1198 Page 2 of 4 THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed Pre-Zoning No. 2006-04 prior to making its decision. The City Council adopted Mitigated Negative Declaration No. 2006-04 prepared for this project as adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the proposed project. SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore Municipal Code ("LEMC"), the City Council makes the following findings for the approval of Pre- Zoning 2006-04: 1. The proposed zone change will not be; a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed amendment or within the City, or b) injurious to the property or improvements in the neighborhood or within the City. The proposed Pre-Zoning has been analyzed relative to its potential to be detrimental to the health, safety, comfort and welfare of the persons residing or working within the neighborhood of the proposed zone change. Staff believes that the health and safety of the persons residing or working within the neighborhood of the property may be improved due to the future development that could include improvements to infrastructure such as water and sewer lines, lighting and paving of existing dirt rights-of-way. 2. The proposed action will be consistent with the Goals, Objectives, and Policies of the General Plan and the development standards established with the LEMC. The Pre-Zoning is consistent with GOAL 1.0 of the General Plan in that this Pre-Zoning will assist in achieving the City's goal to provide "decent housing opportunities and a satisfying living environment for residents of Lake Elsinore". SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. - CITY COUNCIL ORDINANCE NO. 1198 Page 3 of 4 SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 26th day of September, 2006, by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: HICKMAN ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this day of October 10, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None ABSTAIN: COUNCILMEMBER,: : - CITY COUNCIL ORDINANCE NO. 1198 Page 4 of 4 ORDINANCE NO. 1199 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING PRE-ANNEXATION ZONE CHANGE NO. 2006-03, CHANGING THE OFFICIAL ZONING MAP OF THE CITY OF LAKE ELSINORE SUBJECT TO THE COMPLETION OF ANNEXATION NO. 78, BRINGING 21.13+ ACRES OF VACANT PROPERTY INTO THE CITY OF LAKE ELSINORE. WHEREAS, the C & J Family Trust has filed an application with the City of Lake Elsinore to change the City's official zoning map to "East Canyon Hills SP" for the property located approximately 3.5 miles west of Interstate 215, south of Holland Road, north of Corson Avenue, and contiguous to the easterly boundary of the City of Lake Elsinore, and known as Assessor's Parcel No. 358-130-020 (the "Property"); and WHEREAS, the pre-zoning designations conform to and are consistent with the proposed General Plan Amendment No. 2006-01 for the Property; and WHEREAS, C & J Family Trust has submitted an application for Annexation No. 78; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on September 5, 2006, made its report upon the desirability of the proposed project and made its recommendations in favor of Pre-Annexation Zone Change No. 2006-03 by adopting Planning Commission Resolution No. 2006-85 recommending to the City Council approval of the Pre-Annexation Zone Change No. 2006-03; and WHEREAS, public notice of the application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on September 26, 2006. CITY COUNCIL ORDINANCE NO. 1199 PAGE20F4 - THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed pre- zoning prior to making a decision to approve Pre-Annexation Zone Change No. 2006-01. The City Council adopted Mitigated Negative Declaration No. 2006-03 prepared for this project as adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the proposed project. SECTION 2. That in accordance with State Planning and Zoning law and the Lake Elsinore Municipal Code, the City Council makes the following findings for the approval of Pre-Annexation Zone Change No. 2006-01 : 1. The proposed zone change will not be: a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed amendment or within the City, or b) injurious to the property or improvements in the neighborhood or wi thin the City. a. The proposed pre-zoning has been analyzed relative to its potential to have detrimental effects. It has been determined that the health, safety and welfare of surrounding residents may be improved as a result of future improvements to infrastructure such as water, sewer, paving and drainage facilities brought to the site as a requirement for any future development. b. The proposed "East Canyon Hills SP" zoning will ensure that development standards and design guidelines of the specific plan will be consistently applied to the entirety of the site. 2. The proposed zone change will be consistent with the proposed General Plan Amendment. a. Both the zoning and the general plan designation are proposed to be "East Canyon Hills Specific Plan. " CITY COUNCIL ORDINANCE NO. 1199 PAGE30F4 - SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 26th day of September, 2006, by the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: HICKMAN ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 10th day of October 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: Buckley, Hickman, Kelley, Schiffner, Magee COUNCILMEMBERS: None NOES: ABSENT: COUNCILMEMBERS: None ABSTAIN: COUNCILMEMBE CITY COUNCIL ORDINANCE NO. 1199 PAGE40F4 - 22/ Frederick Ray, City Clerk City of Lake Elsinore ORDINANCE NO. 1200 WAS NOT USED NOR PRESENTED AS AN ORDINANCE (SKIPPED OVER BY CITY CLERK) - ORDINANCE NO. 1201 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AMENDING SECTION 2.08.020 OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING INCREASING SALARIES OF CITY COUNCIL MEMBERS WHEREAS, Government Code Section 36516 regulates the amount and manner of setting the salary for the members of City Council based on population; and WHEREAS, the current City Council salary of $300 per month was based on a population under 35,000; and WHEREAS, once the population increases over 35,000, the City Council may adopt an Ordinance increasing the City Council salary to $400 a month; and WHEREAS, the City's population is now over 41,000; and WHEREAS, any salary increase takes effect only when at least one member of City Council begins a new term. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. Section 2.08.020 of the Lake Elsinore Municipal Code is hereby amended in its entirety as follows: 2.08.020 Compensation. Members of the City Council shall each receive compensation for their services in the sum of four hundred dollars ($400) per month. SECTION 2. The salary increases adopted by this Ordinance shall become effective January 1,2007. SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. CITY COUNCIL ORDINANCE NO. 1201 PAGE 2 OF 3 - SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 26th day of September, 2006, by the following vote: AYES: COUNCILMEMBERS: KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: BUCKLEY ABSENT: COUNCILMEMBERS: HICKMAN ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this loth day of October, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: Kelley, Schiffner., Magee NOES: COUNCILMEMBERS: Buckley, Hickman ABSENT: COUNCILMEMBERS: None ABSTAIN: COUNCILMEMBERS: None obert E. Magee, City of Lake Elsin e CITY COUNCIL ORDINANCE NO. 1201 PAGE30F3 ATTEST: ~~City Clerk City of Lake Elsinore ORDINANCE NO. 1202 AN ORDINANCE OF THE CITY OF LAKE ELSINORE, CALIFORNIA, REPEALING CHAPTER 2.09 CODE OF ETHICS OF THE LAKE ELSINORE MUNICIPAL CODE WHEREAS, in 1984, the City of Lake Elsinore, California (the "City") adopted Ordinance No. 728, which added Chapter 2.09 "Code of Ethics" to the Lake Elsinore Municipal Code (Chapter 2.09); and WHEREAS, in 1986, the City adopted Policy No. 100-2 also entitled "Code of Ethics" which Policy was revised on September 12, 2006 to conform with applicable state laws and regulations; and WHEREAS, Chapter 2.09 has not been amended since it was adopted and, in its current form, conflicts with applicable state laws and regulations and with City Council Policy No.1 00-2; and WHEREAS, state laws and regulations together with City Council Policy No. 100-2 and the City's Conflict of Interest Code adopted and reviewed biennially in accordance with the Political Reform Act, create a comprehensive regulatory scheme governing the conduct of City officials; and WHEREAS, the provisions of Chapter 2.09 of the Lake Elsinore Municipal Code are potentially confusing and unnecessary in light of applicable state laws and regulations and the City's Conflict of Interest Code and City Council Policy No. 100-2. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council of the City of Lake Elsinore hereby repeals Municipal Code Chapter 2.09, entitled "Code of Ethics" in its entirety. SECTION 2. If any provision, clause, sentence or paragraph of this ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 3. This Ordinance shall take effect thirty (30) days after the date of its passage. The City Clerk shall certify as to adoption of the Ordinance and cause this Ordinance to be published and posted in the manner required by law. CITY COUNCIL ORDINANCE NO. 1202 PAGE20F2 - INTRODUCED AND APPROVED UPON FIRST READING this 26th day of September, 2006, by the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: HICKMAN ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 10th day of October, 2006, by the following roll call vote: AYES: COUNCILMEMBERS: Buckley, Hickman, Kelley, Schiffner, Magee NOES: COUNCILMEMBERS: None ABSENT: ABSTAIN: ~ ORDINANCE NO. 1203 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX WHEREAS, on October 10, 2006, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2006-195 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates ) (the "CFD") pursuant to the Mello- Roos Community Facilities Act of 1982, as amended (the "Act"), to finance a portion of the cost of providing parks, open space and storm drains maintenance services (the "Services") that are in addition to those provided in the territory within the CFD prior to the formation of the CFD, and to finance the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities and other governmental facilities, which the City is authorized by law to construct, own or operate (the "Facilities"); and WHEREAS, on October 10, 2006, the Council also adopted Resolution No. 2006-196 stating its intention and the necessity to incur bonded indebtedness in the amount not to exceed $7,000,000 to be issued for the purpose of financing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, notice was published as required by law relative to the intention of the Council to form the CFD and to incur bonded indebtedness in the amount not to exceed $7,000,000 within the boundaries of the CFD; and WHEREAS, on November 28, 2006, this Council held a noticed public hearing as required by law relative to the determination to proceed with the formation of the CFD, the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay for the Services and the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay the principal and interest on the proposed bonded indebtedness of the CFD, and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds and the maximum annual rate of interest to be paid; and CITY COUNCIL ORDINANCE NO. 1203 Page 2 of 4 WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD and the incurring of bonded indebtedness by the CFD were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-195 determining the validity of prior proceedings and established the CFD; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-196 which called an election within the CFD for November 28, 2006 on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on November 28, 2006, an election was held within the CFD in which the eligible electors approved by more than two-thirds vote the proposition of incurring bonded indebtedness, levying a special tax, and setting an appropriations limit. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax (the "Services Special Tax") is levied within the boundaries of the CFD pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Services, periodic costs, and costs of the tax levy and collection, and all other costs. SECTION 2. A special tax (the "Special Tax") is levied within the boundaries of the CFD pursuant to the formulas set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection. and all other costs including amounts payable with respect to the bonded indebtedness. SECTION 3. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the then current or future tax years, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A". CITY COUNCIL ORDINANCE NO. 1203 Page 3 of 4 SECTION 4. All of the collections of the Services Special Tax and Special Tax shall be used as provided for in the Act and Resolution No. 2006-195 (Resolution of Formation). SECTION 5. The above authorized Services Special Tax and the Special Tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes; provided, however, the CFD may collect the Services Special Tax and the Special Tax at a different time or in a different manner if necessary to meet its financial obligations. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the council Members voting for and against the ordinance. SECTION 8. This ordinance relating to the levy of the Services Special Tax and the Special Tax takes effect and shall be in force from and after 30 days from the date of final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer- Tax Collector of Riverside County. CITY COUNCIL ORDINANCE NO. 1203 Page 4 of 4 INTRODUCED AND APPROVED UPON FIRST READING this 28th day of November, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCIllFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this lih day of December, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, IllCKMAN, KELLEY, SCIllFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: Robert Magee, ayor City of Lake sinore ATTEST:c/ '~R Frederick ay, City Clerk City of Lake Elsinore B rbara Zeid ibold, City Attorney City of Lake Elsinore RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-8 (RUNNING DEER ESTATES) The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes in the City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) ("CFD No. 2006-8"). The Special Tax shall be levied on and collected in CFD No. 2006-8 each Fiscal Year, in an amount determined through the application of the Rate and Method of Apportionment described below. All of the real property within CFD No. 2006-8 unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. SECTION 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 or instrument. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560. "Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5, Part I of Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2006-8: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting the Special Taxes for Facilities to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2006-8 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-8 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-8 or obligated persons associated with 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. 2006-8 or any designee thereof related to an appeal ofthe Special Tax; the costs associated with the release offunds from an escrow account; and the City's annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2006-8 for any other administrative purposes ofCFD No. 2006-8, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit on or before May 1 st preceding the Fiscal Year in which the Special Tax is being levied. City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page I "Assessor's Parcel" means a lot or parcel ofland designated on an Assessor's Parcel Map with an assigned Assessor's Parcel Number. "Assessor's Parcel Map" means an official map of the Assessor ofthe County designating parcels by Assessor's Parcel Number. "Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the County for purposes of identification. "Assigned Special Tax for Facilities" means the Special Tax of that name described in Section D below. "Backup Special Tax for Facilities" means the Special Tax of that name described in Section E below. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which Special Taxes for Facilities within CFD No. 2006-8 have been pledged. "Building Square Footage" or "BSF" means the square footage of assessable intemalliving space, exclusive of garages or other structures not used as living space, as determined by reference to the building permit application for such Assessor's Parcel. "Calendar Year" means the period commencing January 1 of any year and ending the following December 31. "CFD Administrator" means an official of the City, or designee thereof, responsible for (i) determining the Special Tax Requirement for Facilities, (ii) determining the Special Tax Requirement for Services, as defined in Section L, as applicable, and (iii) providing for the levy and collection of the Special Taxes. "CFD No. 2006-8" means Community Facilities District No. 2006-8 (Running Deer Estates) established by the City under the Act. "City" means the City of Lake Elsinore. "City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD No. 2006-8, or its designee. "County" means the County of Riverside. "Developed Property" means all Assessor's Parcels of Taxable Property that: (i) are included in a Final Map that was recorded prior to the January I st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) a building permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied. City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 2 "Exempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes as provided for in Section J. "Final Map" 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 1352 that creates individual lots for which building permits may be issued without further subdivision. "Fiscal Year" means the period commencing on July 1 of any year and ending 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, and any instrument replacing or supplementing the same. "Land Use Type" means any of the types listed in Table 1 of Section D. "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, determined in accordance with Section C that can be levied by CFD No. 2006-8 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 was issued for any type of non-residential use. "Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax for Facilities obligation for an Assessor's Parcel, as described in Section H. "Prepayment Amount" means the amount required to prepay the Special Tax for Facilities obligation in full for an Assessor's Parcel, as described in Section G. "Proportionately" means that the ratio of the actual Special Tax for Facilities levy to the applicable Assigned Special Tax for Facilities is equal for all applicable Assessor's Parcels. In case of Developed Property subject to the apportionment of the Special Tax for Facilities under step four of Section F, "Proportionately" in step four means that the quotient of (a) actual Special Tax for Facilities less the Assigned Special Tax for Facilities divided by (b) the Backup Special Tax for Facilities less the Assigned Special Tax for Facilities, is equal for all applicable Assessor's Parcels. "Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section J, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section J. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Special Tax" means any ofthe special taxes authorized to be levied CFD No. 2006-8 pursuant to the Act. City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 3 "Special Tax for Facilities" means any of the special taxes authorized to be levied within CFD No. 2006-8 pursuant to the Act to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax for Facilities delinquencies in the prior Fiscal Year, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2006-8 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax for Facilities on Undeveloped Property as set forth in Step Three of Section F., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture. "Taxable Property" means all Assessor's Parcels within CFD No. 2006-8, which are not Exempt Property . "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means all Assessor's Parcels of Taxable Property, which are not Developed Property, Approved Property, or Provisional Undeveloped Property. SECTION B CLASSIFICATION OF ASSESSOR'S PARCELS Each Fiscal Year, beginning with Fiscal Year 2007-08, each Assessor's Parcel within CFD No. 2006-8 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor's Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property. Additionally, each Assessor's Parcel of Developed Property shall further be classified as Residential Property or Non-Residential Property, and each Assessor's Parcel of residential Property shall be assigned to its appropriate Assigned Special Tax for Facilities rate based on its Building Square Footage. SECTION C MAXIMUM SPECIAL TAX FOR FACILITIES 1. Developed Propertv The Maximum Special Tax for Facilities for each Assessor's Parcel of residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax for Facilities or (ii) the Backup Special Tax for Facilities. Prior to the issuance of Bonds, the Assigned Special Tax for Facilities on Developed Property set forth in Table 1 may be reduced in accordance with, and subject to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the City of Lake Elsinore September 29, 2006 Community Facilities District No. 2006-8 (Running Deer Estates) Page 4 City Council, the "Goals and Policies") calculated pursuant to the Goals and Policies exceeds the City's maximum level objective set forth in such document, the Maximum Special Tax for Facilities on Developed Property may be reduced (by modifying Table 1) to the amount necessary to satisfy the City's objective with respect to the maximum overlapping debt burden level with the written consent of the CFD Administrator. In order to reduce the Maximum Special Tax for Facilities on Developed Property it may be necessary to reduce the Maximum Special Tax for Facilities for Undeveloped Property. The reductions permitted pursuant to this paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to be recorded by executing a certificate in subs~antially the form attached hereto as Exhibit "A". 2. Multiple Land Use Tvpe In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax for Facilities levied on an Assessor's Parcel shall be the sum ofthe Maximum Special Tax for Facilities for all Land Use Types located on the Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. 3. Approved Property. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Approved Property, Undeveloped Property, or Provisional Undeveloped Property in any Fiscal Year shall be the applicable Assigned Special Tax for Facilities. SECTION D ASSIGNED SPECIAL TAX FOR FACILITIES 1. Developed Property Each Fiscal Year, each Assessor's Parcel of Single Family Property or Non-Residential Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities applicable to an Assessor's Parcel of Developed Property for Fiscal Year 2007-08 shall be determined pursuant to Table 1 below. TABLE 1 ASSIGNED SPECIAL TAX FOR FACILITIES RATES FOR DEVELOPED PROPERTY FOR FISCAL YEAR 2007-08 Buildin S uare Foota e Greater than 3,300 3,001 - 3,300 2,701 - 3,000 2,401 - 2,700 Less than 2,401 N/A $4,510 $4,361 $4,112 $3,814 Unit Unit Unit Unit Unit City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 5 2. Approved Propertv. Undeveloped Propertv and Provisional Undeveloped Propertv Each Fiscal Year, each Assessor's Parcel of Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities rate for an Assessor's Parcel classified as Approved Property, Undeveloped Property and Provisional Undeveloped Property for Fiscal Year 2007-08 shall be $25,065 per Acre. 3. Increase in the Assie:ned Special Tax for Facilities On each July 1, commencing July 1,2008, the Assigned Special Tax for Facilities rate for Developed Property, Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. SECTION E BACKUP SPECIAL TAX FOR FACILITIES At the time a Final Map is recorded, the Backup Special Tax for Facilities for all Assessor's Parcels of Developed Property classified or reasonably expected to be classified as a Residential Property within such Final Map area shall be determined by (i) multiplying (a) the Maximum Special Tax for Facilities rate for Undeveloped Property by (b) the total Acreage of Taxable Property in such Final Map area, excluding Acreage classified as Provisional Undeveloped Property, Acreage classified or reasonably expected to be classified as Non-Residential Property, and any Acreage reasonably expected to be classified as Exempt Property in such Final Map area, and (ii) dividing the results in (i) by the total number of Residential Property Units reasonably expected to be constructed within such Final Map area. The resulting quotient shall be the Backup Special Tax for Facilities for each Assessor's Parcel of Residential Property within such Final Map area. The Backup Special Tax for Facilities shall not apply to Non-Residential Property. Notwithstanding the foregoing, if Assessor's Parcels of Developed Property which are classified or to be classified as Residential Property are subsequently changed or modified by recordation of a lot line adjustment or similar instrument, then the Backup Special Tax for Facilities for the area that has been changed or modified shall be recalculated, based on the methodology above, to equal the amount of Backup Special Tax for Facilities that would have been generated if such change did not take place. On each July 1, commencing July 1, 2008, the Backup Special Tax for Facilities rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 6 SECTION F METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing Fiscal Year 2007-08 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes for Facilities on all Taxable Property in accordance with the following steps: Step One: The Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax for Facilities rates in Table 1 to satisfy the Special Tax Requirement for Facilities. Step Two: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Step Three: Ifadditional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% of the Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Step Four: Ifadditional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities on each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is the Backup Special Tax for Facilities shall be increased Proportionately from the Assigned Special Tax for Facilities up to 100% ofthe Backup Special Tax for Facilities as needed to satisfy the Special Tax Requirement for Facilities. Step Five: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first four steps have been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Provisional Undeveloped Property up to 100% ofthe Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Notwithstanding the above, under no circumstances will the Special Tax for Facilities levied against any Assessor's Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent as a consequence of delinquency or default by owner of any other Assessor's Parcel within CFD No. 2006-8. City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 7 SECTION G PREP A YMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "CFD Public Facilities" means $5,100,000 expressed in 2006 dollars, which shall increase by the Construction Inflation Index on July 1,2007, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2006-8, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taxes for Facilities levied under this Rate and Method of Apportionment. "Construction Fund" means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible under CFD No. 2006-8. "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 City 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 public facility costs available to be funded through existing construction or escrow accounts or funded by the Outstanding Bonds, and minus public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment. "Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of Special Taxes for Facilities which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Taxes for Facilities. The Special Tax for Facilities obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or an Assessor's Parcel of Provisional Undeveloped Property may be prepaid in full, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Prepayment Amount for an Assessor's Parcel eligible for prepayment shall be determined as described below. An owner of an Assessor's Parcel intending to prepay the Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such notice the CFD Administrator shall notify such owner of the Prepayment Amount of 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 next occurring date that notice of City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 8 redemption of Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. The Prepayment Amount for each applicable Assessor's Parcel shall be calculated according to the following formula (capitalized terms defined below): plus plus plus plus less less equals Bond Redemption Amount Redemption Premium Future Facilities Amount Defeasance Cost Administrative Fee Reserve Fund Credit Capitalized Interest Credit Prepayment Amount As of the date of prepayment, the Prepayment Amount shall be calculated as follows: 1. For an Assessor's Parcel of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities, if any, applicable to the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property, compute the Assigned Special Tax for Facilities and the Backup Special Tax for Facilities as though it was already designated as Developed Property based upon the building permit issued or expected to be issued for that Assessor's Parcel. For an Assessor's Parcel of Provisional Undeveloped Property compute the Assigned Special Tax for Facilities for that Assessor's Parcel. 2. For each Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property to be prepaid, ( a) divide the Assigned Special Tax for Facilities computed pursuant to paragraph 1 for such Assessor's Parcel by the sum ofthe estimated Assigned Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at build out, as reasonably determined by the City, and (b) divide the Backup Special Tax for Facilities computed pursuant to paragraph 1 for such Assessor's Parcel by the sum of the estimated Backup Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at build out, as reasonably determined by the City. 3. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the Outstanding Bonds. The product shall be the "Bond Redemption Amount" . 4. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed with the proceeds of the Bond Redemption Amount. This product is the "Redemption Premium. " City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 9 5. Compute the Future Facilities Cost. 6. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the amount determined pursuant to paragraph 5 to determine the Future Facilities Cost to be prepaid (the "Future Facilities Amount"). 7. Compute the amount needed to pay interest on the Bond Redemption Amount to be redeemed with the proceeds of the Prepayment Amount until the earliest redemption date for the Outstanding Bonds. 8. Determine the actual Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 9. Estimate the amount of interest earnings to be derived from the reinvestment of the Bond Redemption Amount plus the Redemption Premium until the earliest redemption date for the Outstanding Bonds. 10. Add the amounts computed pursuant to paragraph 7 and 8 and subtract the amount computed pursuant to paragraph 9. This difference is the "Defeasance Cost." 11. Estimate the administrative fees and expenses associated with the prepayment, including the costs of computation of the Prepayment Amount, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption. This amount is the "Administrative Fee." 12. Calculate the "Reserve Fund Credit" as the lesser of: (a) the expected reduction in the applicable reserve requirements, if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirements in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the applicable reserve funds on the prepayment date. Notwithstanding the foregoing, if the reserve fund requirement is satisfied by a surety bond or other instrument at the time of the prepayment, then no Reserve Fund Credit shall be given. Notwithstanding the foregoing, the Reserve Fund Credit shall in no event be less than O. 13. If any capitalized interest for the Outstanding Bonds will not have been expended as of the date immediately following the first 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 2(a) or 2(b) by the expected balance in the capitalized interest fund or account under the Indenture after such first interest and/or principal payment. This amount is the "Capitalized Interest Credit." City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 10 14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Cost, and the Administrative Fee, less the Reserve Fund Credit and the Capitalized Interest Credit. 15. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 10, 12, and 13 shall be deposited into the appropriate fund as established under the Indenture and used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 6 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by CFD No. 2006-8. The Special Tax for Facilities 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. With respect to a Special Tax for Facilities obligation that is prepaid pursuant to this Section G, the City Council shall indicate in the records ofCFD No. 2006-8 that there has been a prepayment of the Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such prepayment to indicate the prepayment of the Special Tax for Facilities obligation and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay such Special Taxes for Facilities shall cease. Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. SECTION H PARTIAL PREP A YMENT OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or and Assessor's Parcel of Provisional Undeveloped Property, as calculated in this Section H below, may be partially prepaid, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Partial Prepayment Amount shall be calculated according to the following formula: PP = (Po-A) x F + A The terms above have the following meanings: PP = the Partial Prepayment Amount. City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 11 Pa = the Prepayment Amount calculated according to Section G. F = the percent by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities obligation. A = the Administrative Fee calculated according to Section G. 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 for Facilities and the percentage by which the Special Tax for Facilities 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 Facilities 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 City Council shall (i) distribute the funds remitted to it according to Section G, and (ii) indicate in the records ofCFD No. 2006-8 thatthere has been a partial prepayment of the Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such partial prepayment of the Special Tax for Facilities obligation to indicate the obligation of such Assessor's Parcel to pay such prepaid portion of the Special Tax for Facilities shall cease. Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. SECTION I TERMINATION OF SPECIAL TAX For each Fiscal Year that any Bonds are outstanding, the Special Tax for Facilities shall be levied on all Assessor's Parcels subject to the Special Tax for Facilities. The Special Tax for Facilities shall cease not later than the 2041-42 Fiscal Year, however, the Special Taxes for Facilities 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. 2006-8 Bonds have been paid; (ii) all authorized facilities for CFD No. 2006-8 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Taxes for Facilities remain uncollected and (iv) all other obligations ofCFD No. 2006-8 have been satisfied. SECTION J EXEMPTIONS The City shall classify as Exempt Property, in order of priority, (i) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor's Parcels which are privately owned and are City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 12 encumbered by or restricted solely for public uses, or (vi) Assessor's Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 16.25 Acres. Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 16.25 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 16.25 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Taxes pursuant to Step Five in Section F. SECTION K MANNER OF COLLECTION OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-8 may collect Special Taxes for Facilities at a different time or in a different manner 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. SECTION L SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section L: "Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-8 in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-8 for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 13 "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-8 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-8 equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) Administrative Expenses, and (iii) anticipated delinquent Special Taxes for Services based on the delinquency rate in CFD No. 2006-8 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 1. Rate and Method of Apportionment of the Special Tax for Services Commencing Fiscal Year 2007-2008 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non-Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. The Maximum Special Tax for Services for Fiscal Year 2007-2008 shall be $251.78 per Developed Single Family Unit, $125.89 per Developed Multifamily Unit, and $567.02 per Acre for each Assessor's Parcel of Non-Residential Property. On each July 1, commencing July 1, 2008, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the City Council. 3. Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-8 may collect the Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. SECTION M APPEALS Any property owner claiming that the amount or application ofthe Special Tax is not correct may file a written notice of appeal with the CFD Administrator not later than twelve months after having paid the first installment of the Special Tax that is disputed. The CFD Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the CFD Administrator's decision requires that the Special Tax for an Assessor's Parcel be modified or changed in favor of the City of Lake Elsinore September 29,2006 Community Facilities District No. 2006-8 (Running Deer Estates) Page 14 property owner, a cash refund shall not be made (except for the last year oflevy), but an adjustment shall be made to the Special Tax on that Assessor's Parcel in the subsequent Fiscal Year(s). The City 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 residents appeals. Any decision of the City Council shall be final and binding as to all persons. City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 15 EXHIBIT" A" CITY OF LAKE ELSINORE AND CFD NO. 2006-8 CERTIFICATE 1. Pursuant to Section _ of the Rate and Method of Apportionment of Special Tax (the "RMA"), the City of Lake Elsinore (the "City") and Community Facilities District No. 200&-8 of the City of Lake Elsinore ("CFD No. 200&-8") hereby agree to a reduction in the Maximum Special Tax for Facilities for Developed Property within CFD No. 2006-8: (a) The information in Table 1 relating to the Maximum Special Tax for Facilities for Developed Property and/or Undeveloped Property within CFD No. 2006-8 shall be modified as follows: 2. Table 1 may only be modified prior to the issuance of Bonds. 3. Upon execution of the Certificate by the City and CFD No. 2006-8 the City shall cause an amended Notice of Special Tax Lien for CFD No. 2006-8 to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf of the City of Lake Elsinore and CFD No. 2006-8, receipt of this Certificate and modification of the RMA as set forth in this Certificate. CITY OF LAKE ELSINORE By: CFD Administrator Date: COMMUNITY FACILITIES DISTRICT NO. 2006-8 OF THE CITY OF LAKE ELSINORE By: Date: City of Lake Elsinore Community Facilities District No. 2006-8 (Running Deer Estates) September 29, 2006 Page 16 ORDINANCE NO. 1204 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX WHEREAS, on October 24, 2006, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2006-178 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to finance a portion of the cost of providing parks, open space and storm drains maintenance services (the "Services") that are in addition to those provided in the territory within the CFD prior to the formation of the CFD, and to finance the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities and other governmental facilities, which the City is authorized by law to construct, own or operate (the "Facilities"); and WHEREAS, on October 24,2006, the Council also adopted Resolution No. 2006-179 stating its intention and the necessity to incur bonded indebtedness in the amount not to exceed $2,500,000 to be issued for the purpose of financing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, notice was published as required by law relative to the intention of the Council to form the CFD and to incur bonded indebtedness in the amount not to exceed $2,500,000 within the boundaries of the CFD; and WHEREAS, on November 28, 2006, this Council held a noticed public hearing as required by law relative to the determination to proceed with the formation of the CFD, the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay for the Services and the rate and method of apportionment and manner of collection of the special tax to be levied within the CFD to pay the principal and interest on the proposed bonded indebtedness of the CFD, and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds and the maximum annual rate of interest to be paid; and CITY COUNCIL ORDINANCE NO. 1204 Page 2 of5 WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD and the incurring of bonded indebtedness by the CFD were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-199 determining the validity of prior proceedings and established the CFD; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-200 which called an election within the CFD for November 28, 2006 on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on November 28, 2006, an election was held within the CFD in which the eligible electors approved by more than two-thirds vote the proposition of incurring bonded indebtedness, levying a special tax, and setting an appropriations limit. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax (the "Services Special Tax") is levied within the boundaries of the CFD pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Services, periodic costs, and costs of the tax levy and collection, and all other costs. SECTION 2. A special tax (the "Special Tax") is levied within the boundaries of the CFD pursuant to the formulas set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection, and all other costs including amounts payable with respect to the bonded indebtedness. SECTION 3. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the then current or future tax years, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit" A" . CITY COUNCIL ORDINANCE NO. 1204 Page 3 of5 SECTION 4. All of the collections of the Services Special Tax and Special Tax shall be used as provided for in the Act and Resolution No. 2006-199 (Resolution of Formation). SECTION 5. The above authorized Services Special Tax and the Special Tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes; provided, however, the CFD may collect the Services Special Tax and the Special Tax at a different time or in a different manner if necessary to meet its financial obligations. SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the council Members voting for and against the ordinance. SECTION 8. This ordinance relating to the levy of the Services Special Tax and the Special Tax takes effect and shall be in force from and after 30 days from the date of final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer- Tax Collector of Riverside County. CITY COUNCIL ORDINANCE NO. 1204 Page 4 of5 INTRODUCED AND APPROVED UPON FIRST READING this 28th day of November, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE PASSED, APPROVED AND ADOPTED UPON SECOND READING this 12th day of December, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: ATTEST: F~~~Clerk City of Lake Elsinore CITY COUNCIL ORDINANCE NO. 1204 Page 5 of5 RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2006-10 OF THE CITY OF LAKE ELSINORE (Riverlake Villas) The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes of the City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) ("CFD No. 2006-10"). The Special Tax shall be levied on and collected each Fiscal Year, in an amount determined through the application ofthe Rate and Method of Apportionment described below. All of the real property within CFD No. 2006-10 unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. SECTION 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 or instrument. The square footage ofan Assessor's Parcel is equal to the Acreage multiplied by 43,560. "Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5, Part 1 of Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2006-10: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting the Special Taxes for Facilities to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2006-10 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-10 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-10 or obligated persons associated with 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. 2006-10 or any designee thereof related to an appeal ofthe Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2006-10 for any other administrative purposes ofCFD No. 2006-10, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page I "Apartment Property" means all Assessor's Parcels of Residential Property on which one or more Apartment Units are constructed. "Apartment Unit" means a dwelling unit within a building comprised of attached residential units available for rental by the general public, not for sale to an end user, and under common management. "Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit on or before May 1 st preceding the Fiscal Year in which the Special Tax is being levied. "Assessor's Parcel" means a lot or parcel designated on an Assessor's Parcel Map with an assigned Assessor's Parcel Number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel Number. " Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the County for purposes of identification. "Assigned Special Tax for Facilities" means the Special Tax of that name described in Section D below. "Backup Special Tax for Facilities" means the Special Tax of that name described in Section E below. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which Special Taxes for Facilities within CFD No. 2006-10 have been pledged. "Building Square Footage" or "BSF" means the square footage of assessable intemalliving space, exclusive of garages or other structures not used as living space, as determined by reference to the building permit application for such Assessor's Parcel. "Calendar Year" means the period commencing January 1 of any year and ending the following December 31. "CFD Administrator" means an official of the City, or designee thereof, responsible for (i) determining the Special Tax Requirement for Facilities, (ii) determining the Special Tax Requirement for Services, as defined in Section L, as applicable, and (iii) providing for the levy and collection of the Special Taxes. "CFD No. 2006-10" means Community Facilities District No. 2006-10 (Riverlake Villas) established by the City under the Act. City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 2 "City" means the City of Lake Elsinore. "City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD No. 2006-10, or its designee. "County" means the County of Riverside. "Developed Property" means all Assessor's Parcels of Taxable Property that: (i) are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) a building permit for new construction was issued on or before May 1 st preceding the Fiscal Year in which the Special Tax is being levied. "Exempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes as provided for in Section J. "Final Map" 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 1352 that creates individual lots for which building permits may be issued without further subdivision. "Fiscal Year" means the period commencing on July 1 of any year and ending 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, and any instrument replacing or supplementing the same. "Land Use Type" means any ofthe types listed in Table 1 of Section D. "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, determined in accordance with Section C, that can be levied by CFD No. 2006-10 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 was issued for any type of non-residential use. "Partial Prepayment Amount" means the amount required to prepay a portion ofthe Special Tax for Facilities obligation for an Assessor's Parcel, as described in Section H. "Prepayment Amount" means the amount required to prepay the Special Tax for Facilities obligation in full for an Assessor's Parcel, as described in Section G. City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 3 "Proportionately" means that the ratio of the actual Special Tax for Facilities levy to the applicable Assigned Special Tax for Facilities is equal for all applicable Assessor's Parcels. In case of Developed Property subject to the apportionment of the Special Tax for Facilities under step four of Section F, "Proportionately" in step four means that the quotient of (a) actual Special Tax for Facilities less the Assigned Special Tax for Facilities divided by (b) the Backup Special Tax for Facilities less the Assigned Special Tax for Facilities, is equal for all applicable Assessor's Parcels. "Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section J, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section J. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Single Family Property" means all Assessor's Parcels of Residential Property other than Apartment Property. "Single Family Unit" means a residential dwelling unit other than an Apartment Unit. "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2006-10 pursuant to the Act. "Special Tax for Facilities" means any of the special taxes authorized to be levied within CFD No. 2006-10 pursuant to the Act to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax for Facilities delinquencies in the prior Fiscal Year, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2006-10 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax for Facilities on Undeveloped Property as set forth in Step Three of Section F., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture. "Taxable Property" means all Assessor's Parcels within CFD No. 2006-10, which are not Exempt Property . "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not Developed Property, Approved Property or Provisional Undeveloped Property. City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 4 SECTION B CLASSIFICATION OF ASSESSOR'S PARCELS Each Fiscal Year, beginning with Fiscal Year 2006-07, each Assessor's Parcel within CFD No. 2006-10 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor's Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property. In addition, each Assessor's Parcel of Developed Property shall further be classified as Residential Property or Non-Residential Property. Lastly, each Assessor's Parcel of Residential Property shall further be classified as a Single Family Property or Apartment Property, and each Assessor's Parcel of Single Family Property shall be assigned to its appropriate Assigned Special Tax for Facilities rate based on its Building Square Footage. SECTION C MAXIMUM SPECIAL TAX FOR FACILITIES 1. Developed Propertv The Maximum Special Tax for Facilities for each Assessor's Parcel of Single Family Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax for Facilities or (ii) the Backup Special Tax for Facilities. The Maximum Special Tax for Facilities for each Assessor's Parcel of Apartment Property or Non-Residential Property shall be the applicable Assigned Special Tax for Facilities described in Table 1 of Section D. Prior to the issuance of Bonds, the Assigned Special Tax for Facilities on Developed Property set forth in Table 1 may be reduced in accordance with, and subject to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the City Council, the "Goals and Policies") calculated pursuant to the Goals and Policies exceeds the City's maximum level objective set forth in such document, the Maximum Special Tax for Facilities on Developed Property may be reduced (by modifying Table 1) to the amount necessary to satisfy the City's objective with respect to the maximum overlapping debt burden level with the written consent of the CFD Administrator. In order to reduce the Maximum Special Tax for Facilities on Developed Property it may be necessary to reduce the Maximum Special Tax for Facilities for Undeveloped Property. The reductions permitted pursuant to this paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to be recorded by executing a certificate in substantially the form attached hereto as Exhibit "A". City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 5 2. Multiple Land Use Tvpe In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax for Facilities levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities for all Land Use Types located on the Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. 3. Approved Property. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Approved Property, Undeveloped Property, or Provisional Undeveloped Property in any Fiscal Year shall be the applicable Assigned Special Tax for Facilities. SECTION D ASSIGNED SPECIAL TAX FOR FACILITIES 1. Developed Property Each Fiscal Year, each Assessor's Parcel of Single Family Property, Apartment Property, or Non-Residential Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities applicable to an Assessor's Parcel of Developed Property shall be determined pursuant to Table 1 below. TABLE 1 ASSIGNED SPECIAL TAX FOR FACILITIES RATES FOR DEVELOPED PROPERTY Land Use T e Single Family Property Buildin S uare Foota e Greater than or equal to 1,551 1,301 - 1,550 Less than or e ual to 1,300 N/A N/A Rate $3,339 per Single Family Unit Unit Unit City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 6 2. Approved Propertv. Undeveloped Propertv and Provisional Undeveloped Propertv Each Fiscal Year, each Assessor's Parcel of Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities rate for an Assessor's Parcel classified as Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be $164,692 per Acre. SECTION E BACKUP SPECIAL TAX FOR FACILITIES At the time a Final Map is recorded, the Backup Special Tax for Facilities for all Assessor's Parcels of Developed Property classified or reasonably expected to be classified as a Single Family Property within such Final Map area shall be determined by (i) multiplying (a) the Maximum Special Tax for Facilities rate for Undeveloped Property by (b) the total Acreage of Taxable Property in such Final Map area, excluding Acreage classified as Provisional Undeveloped Property, Acreage classified or reasonably expected to be classified as Apartment Property or Non-Residential Property, and any Acreage reasonably expected to be classified as Exempt Property in such Final Map area, and (ii) dividing the results in (i) by the total number of Single Family Units reasonably expected to be constructed within such Final Map area. The resulting quotient shall be the Backup Special Tax for Facilities for each Assessor's Parcel of Single Family Property within such Final Map area. The Backup Special Tax for Facilities shall not apply to Non-Residential Property or Apartment Property. Notwithstanding the foregoing, if Assessor's Parcels of Developed Property which are classified or to be classified as Single Family Property are subsequently changed or modified by recordation of a lot line adjustment or similar instrument, then the Backup Special Tax for Facilities for the area that has been changed or modified shall be recalculated, based on the methodology above, to equal the amount of Backup Special Tax for Facilities that would have been generated if such change did not take place. SECTION F METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing Fiscal Year 2006-07 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes for Facilities on all Taxable Property in accordance with the following steps: Step One: The Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to 100% ofthe applicable Assigned Special Tax for Facilities rates in Table 1 to satisfy the Special Tax Requirement for Facilities. Step Two: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% ofthe City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 7 Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Step Three: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% of the Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Step Four: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities on each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is the Backup Special Tax for Facilities shall be increased Proportionately from the Assigned Special Tax for Facilities up to 100% of the Backup Special Tax for Facilities as needed to satisfy the Special Tax Requirement for Facilities. Step Five: If additional moneys are needed to satisfy the Special Tax Requirement for Facilities after the first four steps have been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax for Facilities applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement for Facilities. Notwithstanding the above, under no circumstances will the Special Tax for Facilities levied against any Assessor's Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent as a consequence of delinquency or default by owner of any other Assessor's Parcel within CFD No. 2006-10. SECTION G PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "CFD Public Facilities" means $1,476,000, expressed in 2006 dollars, which shall increase by the Construction Inflation Index on July 1,2007, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2006-10, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taxes for Facilities levied under this Rate and Method of Apportionment. "Construction Fund" means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible under CFD No. 2006-10. City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3,2006 Page 8 "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 City 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 public facility costs available to be funded through existing construction or escrow accounts or funded by the Outstanding Bonds, and minus public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment. "Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of Special Taxes for Facilities which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Taxes for Facilities. The Special Tax for Facilities obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or an Assessor's Parcel of Provisional Undeveloped Property may be prepaid in full, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Prepayment Amount for an Assessor's Parcel eligible for prepayment shall be determined as described below. An owner of an Assessor's Parcel intending to prepay the Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such notice the CFD Administrator shall notify such owner of the Prepayment Amount of 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 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 Prepayment Amount for each applicable Assessor's Parcel shall be calculated according to the following formula (capitalized terms defined below): plus plus plus plus less less equals Bond Redemption Amount Redemption Premium Future Facilities Amount Defeasance Cost Administrative Fee Reserve Fund Credit Capitalized Interest Credit Prepayment Amount As of the date of prepayment, the Prepayment Amount shall be calculated as follows: City of Lake Elsinore October 3, 2006 Community Facilities District No. 2006-10 (Riverlake Villas) Page 9 1. For an Assessor's Parcel of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities, if any, applicable to the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property, compute the Assigned Special Tax for Facilities and the Backup Special Tax for Facilities as though it was already designated as Developed Property based upon the building permit issued or expected to be issued for that Assessor's Parcel. For an Assessor's Parcel of Provisional Undeveloped Property compute the Assigned Special Tax for Facilities for that Assessor's Parcel. 2. For each Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property to be prepaid, (a) divide the Assigned Special Tax for Facilities computed pursuant to paragraph 1 for such Assessor's Parcel by the sum of the estimated Assigned Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at buildout, as reasonably determined by the City, and (b) divide the Backup Special Tax for Facilities computed pursuant to paragraph 1 for such Assessor's Parcel by the sum of the estimated Backup Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at buildout, as reasonably determined by the City. 3. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the Outstanding Bonds. The product shall be the "Bond Redemption Amount" . 4. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed with the proceeds of the Bond Redemption Amount. This product is the "Redemption Premium. " 5. Compute the Future Facilities Cost. 6. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the amount determined pursuant to paragraph 5 to determine the Future Facilities Cost to be prepaid (the "Future Facilities Amount"). 7. Compute the amount needed to pay interest on the Bond Redemption Amount to be redeemed with the proceeds of the Prepayment Amount until the earliest redemption date for the Outstanding Bonds. 8. Determine the actual Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 10 9. Estimate the amount of interest earnings to be derived from the reinvestment of the Bond Redemption Amount plus the Redemption Premium until the earliest redemption date for the Outstanding Bonds. 10. Add the amounts computed pursuant to paragraph 7 and 8 and subtract the amount computed pursuant to paragraph 9. This difference is the "Defeasance Cost." 11. Estimate the administrative fees and expenses associated with the prepayment, including the costs of computation of the Prepayment Amount, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption. This amount is the "Administrative Fee." 12. Calculate the "Reserve Fund Credit" as the lesser of: (a) the expected reduction in the applicable reserve requirements, if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirements in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the applicable reserve funds on the prepayment date. Notwithstanding the foregoing, if the reserve fund requirement is satisfied by a surety bond or other instrument at the time of the prepayment, then no Reserve Fund Credit shall be given. Notwithstanding the foregoing, the Reserve Fund Credit shall in no event be less than O. 13. If any capitalized interest for the Outstanding Bonds will not have been expended as of the date immediately following the first 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 2(a) or 2(b) by the expected balance in the capitalized interest fund or account under the Indenture after such first interest and/or principal payment. This amount is the "Capitalized Interest Credit." 14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Cost, and the Administrative Fee, less the Reserve Fund Credit and the Capitalized Interest Credit. 15. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3,4, 10, 12, and 13 shall be deposited into the appropriate fund as established under the Indenture and used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 6 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by CFD No. 2006-10. City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page II The Special Tax for Facilities 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 thereofwill 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. With respect to a Special Tax for Facilities obligation that is prepaid pursuant to this Section G, the City Council shall indicate in the records of CFD No. 2006-10 that there has been a prepayment of the Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such prepayment to indicate the prepayment of the Special Tax for Facilities obligation and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay such Special Taxes for Facilities shall cease. Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. SECTION H PARTIAL PREPAYMENT OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or and Assessor's Parcel of Provisional Undeveloped Property, as calculated in this Section H below, may be partially prepaid, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Partial Prepayment Amount shall be calculated according to the following formula: PP = (Po - A) x F + A The terms above have the following meanings: PP = the Partial Prepayment Amount. Po = the Prepayment Amount calculated according to Section G. F = the percent by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities obligation. A = the Administrative Fee calculated according to Section G. 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 for Facilities and the percentage by which the Special Tax for Facilities shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 12 Tax for Facilities 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 City Council shall (i) distribute the funds remitted to it according to Section G, and (ii) indicate in the records ofCFD No. 2006-10 that there has been a partial prepayment of the Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such partial prepayment of the Special Tax for Facilities obligation to indicate the obligation of such Assessor's Parcel to pay such prepaid portion of the Special Tax for Facilities shall cease. Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. SECTION I TERMINATION OF SPECIAL TAX For each Fiscal Year that any Bonds are outstanding the Special Tax for Facilities shall be levied on all Assessor's Parcels subject to the Special Tax for Facilities. The Special Tax for Facilities shall cease not later than the 2044-2045 Fiscal Year, however, the Special Taxes for Facilities 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. 2006-10 Bonds have been paid; (ii) all authorized facilities for CFD No. 2006-10 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Taxes for Facilities remain uncollected and (iv) all other obligations of CFD No. 2006-10 have been satisfied. SECTION J EXEMPTIONS The City shall classify as Exempt Property, in order of priority, (i) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor's Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor's Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 0.98 Acres. Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 0.98 Acres. City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 13 Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 0.98Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Taxes pursuant to Step Five in Section F. SECTION K MANNER OF COLLECTION OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-10 may collect Special Taxes for Facilities at a different time or in a different manner 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. SECTION L SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section L: "Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-10 in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-10 for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-10 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-10 equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been City of Lake Elsinore October 3, 2006 Community Facilities District No. 2006-10 (Riverlake Villas) Page 14 accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) Administrative Expenses, and (iii) anticipated delinquent Special Taxes for Services based on the delinquency rate in CFD No. 2006-10 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 1. Rate and Method of Apportionment of the Special Tax for Services Commencing Fiscal Year 2006-2007 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non-Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. The Maximum Special Tax for Services for Fiscal Year 2006-2007 shall be $246.84 per Developed Single Family Unit, $123.42 per Developed Multifamily Unit, and $555.90 per Acre for each Assessor's Parcel of Non-Residential Property. On each July 1, commencing July 1, 2007, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the City Council. 3. Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-10 may collect the Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. SECTION M APPEALS Any property owner claiming that the amount or application ofthe Special Tax is not correct may file a written notice of appeal with the CFD Administrator not later than twelve months after having paid the first installment of the Special Tax that is disputed. The CFD Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the CFD Administrator's decision requires that the Special Tax for an Assessor's Parcel be modified or changed in favor of the property owner, a cash refund shall not be made (except for the last year oflevy), but an adjustment shall be made to the Special Tax on that Assessor's Parcel in the subsequent Fiscal Year(s). The City 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 City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 15 any landowner or residents appeals. Any decision of the City Council shall be final and binding as to all persons. City of Lake Elsinore Community Facilities District No. 2006-10 (Riverlake Villas) October 3, 2006 Page 16 EXHIBIT" A" CITY OF LAKE ELSINORE AND CFD NO. 2006-10 CERTIFICATE 1. Pursuant to Section C of the Rate and Method of Apportionment of Special Tax (the "RMA"), the City of Lake Elsinore (the "City") and Community Facilities District No. 2006-10 of the City of Lake Elsinore ("CFD No. 2006-10 ") hereby agree to a reduction in the Maximum Special Tax for Facilities for Developed Property within CFD No. 2006-10: (a) The information in Table 1 relating to the Maximum Special Tax for Facilities for Developed Property and/or Undeveloped Property within CFD No. 2006-10 shall be modified as follows: [insert Table 1 showing effective change to special tax rates and/or insert change to special tax rates for Undeveloped Property] 2. Table 1 may only be modified prior to the issuance of Bonds. 3. Upon execution of the Certificate by the City and CFD No. 2006-10 the City shall cause an amended Notice of Special Tax Lien for CFD No. 2006-10 to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf ofthe City of Lake Elsinore and CFD No. 2006-10, receipt of this Certificate and modification of the RMA as set forth in this Certificate. CITY OF LAKE ELSINORE By: Date: CFD Administrator COMMUNITY FACILITIES DISTRICT NO. 2006-10 OF THE CITY OF LAKE ELSINORE By: Date: City of Lake Elsinore October 3,2006 Community Facilities District No. 2006-10 (Riverlake Villas) Page I 7 ORDINANCE NO. 1205 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 21 (RIVERLAKE VILLAS) ANNEXED TO SAID DISTRICT WHEREAS, on October 24, 2006, the City Council (the "Council") of the City of Lake Elsinore, California (the "City") adopted Resolution No. 2006-177 stating its intention to annex certain property (Annexation Area No. 21 (Riverlake Villas) ("Annexation Area No. 21")) into City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, (the "Act"); and WHEREAS, notice was published as required by law relative to the intention of the Council to annex Annexation Area No. 21 into the District; and WHEREAS, on November 28, 2006 this Council held a noticed public hearing as required by law relative to the determination to proceed with the annexation of Annexation Area No. 21 into the District and the rate and method of apportionment and manner of collection of the special tax to be levied within Annexation Area No. 21 to finance certain public services; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the annexation of Annexation Area No. 21 were heard and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-202 determining the validity of prior proceedings relative to the annexation of Annexation Area No. 21, annexed Annexation Area No. 21 into the District and authorized the levy of a special tax within Annexation Area No. 21; and WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2006-203 which called an election within Annexation Area No. 21 for November 28, 2006 on the proposition of levying a special tax; and CITY COUNCIL ORDINANCE NO. 1205 PAGE20F4 WHEREAS, on November 28, 2006 an election was held within each Annexation Area No. 21 in which the eligible electors approved by more than two- thirds vote the proposition of levying a special tax. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES), DOES ORDAIN AS FOLLOWS: SECTION 1. A special tax is levied within the boundaries of Annexation Area No. 21 pursuant to the formula set forth in Exhibit "A" attached hereto and incorporated by reference in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 21 prior to the annexation of Annexation Area No. 21 into the District, periodic costs, and costs of the tax levy and collection. SECTION 2. This legislative body is hereby further authorized each year, by resolution adopted as provided in section 53340 of the Act, to determine the specific special tax rate and amount to be levied for the next fiscal year, except that the special tax rate to be levied shall not exceed the maximum rate set forth in Exhibit "A." SECTION 3. All of the collections of the special tax shall be used as provided for in the Act and Resolution No. 2006-202 of the Council. SECTION 4. The above authorized special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency and provided for ad valorem taxes. SECTION 5. The Mayor shall sign this ordinance and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of the this ordinance, together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City, and to post at the main office of the City a certified copy of the full text of the adopted ordinance along with the names of the Council Members voting for and against the ordinance. CITY COUNCIL ORDINANCE NO. 1205 PAGE30F4 SECTION 6. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 7. This ordinance relating to the levy of the special tax takes effect and shall be in force from and after thirty (30) days after the date of its final passage. A copy of this ordinance shall be transmitted to the Clerk of the Board of Supervisors of Riverside County, the Assessor and the Treasurer-Tax Collector of Riverside County. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 28th day of November, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1205 PAGE40F4 PASSED, APPROVED AND ADOPTED UPON SECOND READING this Ith day of December, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: Frederick ay, CMC, City Clerk City of Lake Elsinore EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX EXHIBIT B BEFORE THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE IN ITS CAPACITY AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) IN THE MATTER OF Authorizing the Levy of a Special Tax Within Annexation Area No. 21 (Riverlake Villas) Annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) ) ORDINANCE NO. 1205 SUMMARY ) ) ) ) ) ) ) ) ) The ordinance authorizes levy of an annual special tax within Annexation Area No. 21 (Riverlake Villas) annexed to City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services) (the "District"), collected in the same manner as ordinary ad valorem taxes, in an amount necessary to finance a portion of the cost of providing law enforcement, fire and paramedic services that are in addition to those provided in the territory within Annexation Area No. 21 (Riverlake Villas) prior to the annexation of Annexation Area No. 21 (Riverlake Villas) to the District, which is necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within Annexation Area No. 21 (Riverlake Villas). DATED: , 2006 CITY OF LAKE ELSINORE By: Frederick Ray, CMC, City Clerk ORDINANCE NO. 1206 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AMENDING AND RESTATING SECTIONS 17.40.080 C., 17.44.070 C., 17.48.080 C., 17.52.090 C., 17.54.090 C., 17.56.100 C., 17.60.100 C., AND 17.66.100 H. OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING MINIMUM ON-SITE LANDSCAPING REQUIREMENTS IN COMMERCIAL AND INDUSTRIAL DISTRICTS WHEREAS, Sections 17.40.080 C., 17.44.070 C., 17.48.080 C., 17.52.090 C. of the Lake Elsinore Municipal Code require that all commercial building sites have a minimum landscaped coverage equivalent to ten percent (10%) of the total lot area; and WHEREAS, Sections 17.54.090 C., 17.56.100 C., 17.60.1 00 C. of the Lake Elsinore Municipal Code require that all industrial building sites have a minimum landscaped coverage equivalent to eight percent (8%) of the total lot area; and WHEREAS, Section 17.66.100 H. requires that at least one (1) fifteen (15) gallon tree shall be provided within the parking area for every ten (10) parking spaces; and WHEREAS, the City Council wishes to 1) increase the minimum landscaped coverage in commercial and industrial zones to twenty percent (20%) and 2) change the minimum tree requirement such that one (1) twenty-four inch (24") box tree shall be planted for every five (5) parking spaces built; and WHEREAS, pursuant to Section 15070 of the CEQA Guidelines (14 C.C.R. SS 15000 et seq.) a Negative Declaration was prepared for the project explaining why the proposed text amendments will not have a significant effect on the environment; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: CITY COUNCIL ORDINANCE NO. 1206 PAGE20F6 SECTION 1. The City Council finds and determines that based on the Initial Study the proposed Text Amendments will not have a significant impact on the environment. SECTION 2. The City Council makes the following findings for approval of the proposed text amendments: A. The proposed text amendments will not be detrimental to the to the health, safety, comfort, or the general welfare of the persons working or residing within the City in that revisions are proposed to increase the minimum on-site landscape percentages in all commercial and industrial zoning district as well as increasing the size and amount of trees within parking areas as outlined in Chapter 17.66 (Parking Requirements). B. The proposed text amendments will not be injurious to property or improvements within the City because the proposed amendments to the minimum on-site landscaping percentages within all new commercial and industrial zoning districts as well as increasing the size and amount of trees within parking areas will assist in enhancing property values and resale value, beautifying streetscapes and public right-of-ways, and improving air-quality and reducing energy consumption. C. The proposed text amendments are consistent with the General Plan because they will help provide sufficient on-site landscaping coverage for new commercial and industrial development. The additional landscaping requirements will provide additional shading and screening methods within parking areas, which enhance the aesthetic pleasure of the development. Furthermore, the proposed revisions will not inhibit the implementation of appropriate design standards as set forth in the Community Design Element of the General Plan. SECTION 3. That Sections 17.40.080 C., 17.44.070 C., 17.48.080 C., 17.52.090 C., 17.54.090 C., 17.56.100 C., and 17.60.100 C. of the Lake Elsinore Municipal Code shall be amended and restated as follows: CITY COUNCIL ORDINANCE NO. 1206 PAGE30F6 17.40.080 C. Generally: All building sites shall have a minimum landscaped coverage equivalent to twenty percent (20%) of the total lot area. Such landscaping shall be evenly distributed over the site and consist of an effective combination of trees, ground cover, and shrubbery, which may include landscaping required for setbacks or buffers. A reduction in coverage may be sought and approved during the Design Review process in recognition of quality design. For the purpose of this provision, quality considerations include the use of courtyards, atriums, creative use of ground floor public space, creative use of water elements, and the incorporation of sculpture or art work in the landscape proposal. 17.44.070 C. Generally: All building sites shall have a minimum landscaped coverage equivalent to twenty percent (20%) of the total lot area. Such landscaping shall be evenly distributed over the site and consist of an effective combination of trees, ground cover, and shrubbery, which may include landscaping required for setbacks or buffers. A reduction in coverage may be sought and approved during the Design Review process in recognition of quality design. F or the purpose of this provision, quality considerations include the use of courtyards, atriums, creative use of ground floor public space, creative use of water elements, and the incorporation of sculpture or art work in the landscape proposal. 17.48.080 C. Generally: All building sites shall have a minimum landscaped coverage equivalent to twenty percent (20%) of the total lot area. Such landscaping shall be evenly distributed over the site and consist of an effective combination of trees, ground cover, and shrubbery, which may include landscaping required for setbacks or buffers. A reduction in coverage may be sought and approved during the Design Review process in recognition of quality design. For the purpose of this provision, quality considerations include the use of courtyards, atriums, creative use of ground floor public space, creative use of water elements, and the incorporation of sculpture or art work in the landscape proposal. 17.52.090 C. Generally: All building sites shall have a minimum landscaped coverage equivalent to twenty percent (20%) of the total lot area. Such landscaping shall be evenly distributed over the site and consist of an effective combination of trees, ground cover, and shrubbery, which may include landscaping required for setbacks or buffers. A reduction in CITY COUNCIL ORDINANCE NO. 1206 PAGE 4 OF 6 coverage may be sought and approved during the Design Review process in recognition of quality design. F or the purpose of this provision, quality considerations include the use of courtyards, atriums, creative use of ground floor public space, creative use of water elements, and the incorporation of sculpture or art work in the landscape proposal. 17.54.090 C. Generally: All building sites shall have a minimum landscaped coverage equivalent to the twenty percent (20%) of the total lot area. Such landscaping shall be evenly distributed over the site and consist of an effective combination of trees, ground cover, and shrubbery, which may include landscaping required for setbacks or buffers. A reduction in coverage may be sought and approved during the Design Review process in recognition of quality design. F or the purposes of this provision, quality considerations include the use of courtyards, atriums, creative use of ground floor public space, creative use of water elements, and the incorporation of sculpture or artwork in the landscaped proposal. 17.56.100 C. Generally: All building sites shall have a minimum landscaped coverage equivalent to twenty percent (20%) of the total lot area. Such landscaping shall be evenly distributed over the site and consist of an effective combination of trees, ground cover, and shrubbery, which may include landscaping required for setbacks or buffers. A reduction in coverage may be sought and approved during the Design Review process in recognition of quality design. For the purpose of this provision, quality considerations include the use of courtyards, atriums, creative use of ground floor public space, creative use of water elements, and the incorporation of sculpture or art work in the landscape proposal. 17.60.100 C. Generally: All building sites shall have a minimum landscaped coverage equivalent to twenty percent (20%) of the total lot area. Such landscaping shall be evenly distributed over the site and consist of an effective combination of trees, ground cover, and shrubbery, which may include landscaping required for setbacks or buffers. A reduction in coverage may be sought and approved during the Design Review process in recognition of quality design. For the purpose of this provision, quality considerations include the use of courtyards, atriums, creative use of ground floor public space, creative use of water elements, and the incorporation of sculpture or art work in the landscape proposal. CITY COUNCIL ORDINANCE NO. 1206 PAGE 5 OF 6 SECTION 4. That Section 17.66.100 H. of the Lake Elsinore Municipal Code shall be amended and restated as follows: 17.66.100 H. At least one (1) twenty-four inch (24") box tree shall be provided within the parking area for every five (5) parking spaces built. SECTION 5. SEVERABILITY. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 4. EFFECTIVE DATE. This Ordinance shall take effect on January 10, 2006 or such later date that is thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 28th of November 2006, by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE CITY COUNCIL ORDINANCE NO. 1206 PAGE 6 OF 6 PASSED, APPROVED AND ADOPTED UPON SECOND READING this lih day of December, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE obert E. Magee, M or City of Lake Elsin re ATTEST: Frederic ay, CMC, City Clerk City of Lake Elsinore APPROVED AS TO FORM: uar....,....:;,