HomeMy WebLinkAboutOrd. No. 2005-1139
ORDINANCE NO. 1139
"'"
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE AUTHORIZING THE LEVY OF A
SPECIAL TAX
WHEREAS, on December 14,2004, the City Council (the "Council") of the
City of Lake Elsinore (the "City") adopted Resolution No. ?004-71 stating
its intention to form the City of Lake Elsinore Community Facilities District No.
2005-1 (Serenity) (the "CFD") pursuant to the Mello-Roos Community Facilities
Act of 1982, as amended (the "AcC), 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, operate or finance and that are necessary to meet increased
demands placed upon the City as a result of development or rehabilitation
occurring within the proposed CFD, including but not limited to streets,
streetscape, sidewalk, curb and gutter, t.raffic signal, traffic signing and striping,
park, open space, landscaping improvements, dry utility improvements, stOI:Il
"" drain, water and sewer facilities, City fees and fees of the Elsinore Valley
Municipal Water District, and related costs including designs, inspections:,
professional fees, annexation fees, connection fees and acquisition costs (the
. ,
"Facilities'); and
WHEREAS, on December 14, 2004, the Council also adopted Resolution
No. 2004-70 stating its intention and the necessity to incur bonded indebtedness in
the amount not to exceed $12,000,000 to be issued for the purpose of financing the
purchase, consTIuction, 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 $12,000,000 within the boundaries of the CFD; and
,.......
WHEREAS, on January 25,2005, 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 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
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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.
2005 - 10 determining the validity of prior proceedings and established the
CFD; and
WHEREAS, the Council subsequent to said hearing adopted Resolution No.
2005 - 11 which called an election within the CFD for January 25, 2005 on
the proposition of incurring bonded indebtedness, levying a special tax and setting
an appropriations limit; and
WHEREAS, on January 25, 2005, 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;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. 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 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. 2005 - 10 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; provided, however, the CFD may collect the Special Tax at a
different time or in a different manner if necessary to meet its financial obligations.
45552230.1
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 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. 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.
45552230.1
PASSED, UPON FIRST READING this 25th day of January , 2005, by
the following roll call vote:
AYES:
NOES:
COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY
SCHIFFNER, MAGEE
COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
ABSTAIN: COUNCILMEMBERS: NONE
PASSED, APPROVED AND ADOPTED this 8th day of February
2005, by the following roll call vote:
AYES:
NOES:
COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY,
MAGEE, SCHIFFNER
COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
ABSTAIN: COUNCILMEMBERS: NONE
f { f/A;?-
Mayor //
45552230.1
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) SS:
CITY OF LAKE ELSINORE)
I, VICKI KASAD, CITY CLERK OF THE CITY OF LAKE ELSINORE, DO HEREBY
CERTIFY that the foregoing Ordinance was introduced and read by title only on the 25th day of
January, 2005, and presented for second reading by title only for adoption on the 8th day of
February, 2005, and approved, by the following roll call vote:
AYES:
COUNCILMEMBERS:
BUCKLEY, HICKMAN, KELLEY,
SCHIFFNER, MAGEE
NOES: COUNCILMEMBERS:
fE~T: COUNCILMEMBERS:
0~ry.- C Cll UNCILMEMBERS:
VICKI KASA~ERK
. ,
C1TY' OF LAKE ELSINORE
NONE
NONE
NONE
(SEAL)
STATE OF CALIFORNIA)
COUNTY OF RIVERSIDE ) SS:
CITY OF LAKE ELSINORE)
I, VICKI KASAD, CITY CLERK OF THE CITY OF LAKE ELSINORE,
DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy
of Ordinance No. 1139 of said Council, and that the same has not been amended or repealed.
C..
DA. ;fO:... Jall1.;ary12, 2005
OJ.- (J .'
.{1C~ - , CITY CLERK
CITY GF LAKE ELSINORE
(SEAL)
EXHIBIT" A"
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
45552230.1
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "B"
March 23, 2004
Page B-1
Rate and Method of Apportionment
RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 2005-1
OF THE CITY OF LAKE ELSINORE
(SERENITY)
The following sets forth the Rate and Method of Apportionment for the levy and collection of
Special Taxes in the City of Lake Elsinore ("City") Community Facilities District No. 2005-1
(Serenity) ("CFD No. 2005-1 "). An Annual Special Tax shall be levied on and collected in CFD
No. 2005-1 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. 2005-1,
unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent,
and in the manner herein provided.
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 the Assessor's Parcel Map, the land area as
shown on the applicable Final Map, or if the land area is not shown on the applicable Final Map,
the land area shall be calculated by the City Engineer.
"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 any ordinary and necessary expense incurred by the City on
behalf of CFD No. 2005-1 related to the deteimination of the amount of the levy of Special
Taxes, the collection of Special Taxes including the expenses of collecting delinquencies, the
administration of Bonds, the payment of salaries and benefits of any City employee whose duties
are directly related to the administration of CFD No. 2005-1, and costs otherwise incurred in
orderto carry out the authorized purposes ofCFD No. 2005-1 relating to CFD No. 2005-1.
"Annual Special Tax" means the Special Tax actually levied in any Fiscal Year on any
Assessor's Parcel.
"Assessor's Parcel" means a lot or parcel of land 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.
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 1
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "8"
March 23, 2004
Page B-2
Rate and Method of Apportionment
"Assigned Annual Special Tax" means the Special Tax of that name described in Section D
below.
"Backup Annual Special Tax" 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 within CFD No. 2005-1 have been
pledged.
"Building Square Footage" or "BSF" means the square footage of assessable internal living
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 No. 2005-1" means Community Facilities District No. 2005-1 established by the City
under the Act.
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative
Body ofCFD No. 2005-1, or its designee.
"County" means the County of Riverside.
"Developed Property" means all Assessor's Parcels of Taxable Property for which a building
permit was issued on or before March I 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 ofa 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.
"Lot" means all the Assessors Parcels for which a building permit has or may be issued for the
purposes of constructing a residential dwelling unit.
"Maximum Special Tax" means the maximum Special Tax, determined in accordance with
Section C, that can be levied by CFD No. 2005-1 in any Fiscal Year on any Assessor's Parcel.
City of Lake Elsinore
Community Facilities District No. 2005-1
- -4
M()!cb..23, 2004
. Page 2
'";',:--~;'
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "B"
March 23, 2004
Page B-3
Rate and Method of Apportionment
"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 Annual
Special Tax obligation for an Assessor's Parcel, as described in Section H.
"Prepayment Amount" means the amount required to prepay the Annual Special Tax
obligation in full for an Assessor's Parcel, as described in Section G.
"Proportionately" means that the ratio of the Annual Special Tax levy to the applicable
Assigned Annual Special Tax is equal for all applicable Assessor's Parcels. In the case of
Developed Property subject to the apportionment of the Annual Special Tax under step three of
Section F, "Proportionately" in step three means that the quotient of (a) Annual Special Tax less
the Assigned Annual Special Tax divided by (b) the Backup Annual Special Tax less the
Assigned Annual Special Tax, 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 as applicable.
-
"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 of the special taxes authorized to be levied by CFD No. 2005-1
pursuant to the Act.
"Special Tax Requirement" 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, and (v) the collection or accumulation of funds
for the acquisition or construction of facilities authorized by CFD No. 2005-1 provided that the
inclusion of such amount does not cause an increase in the levy of Special Tax on Undeveloped
Property as set forth in step two of Section F., less (vi) any amounts available to pay debt service
or other periodic costs on the Bonds pursuant to any applicable bond indenture, fiscal agent
agreement, or trust agreement.
"Taxable Property" means all Assessor's Parcels within CFD No. 2005-1, which are not
Exempt Property.
"Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not
Developed Property, or Provisional Undeveloped Property.
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 3
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "8"
March 23, 2004
Page 8-4
Rate and Method of Apportionment
SECTION B
CLASSIFICATION OF ASSESSOR'S PARCELS
Each Fiscal Year, beginning with Fiscal Year 2005-06, each Assessor's Parcel within CFD No.
2005-1 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, 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 be assigned to its appropriate Assigned
Annual Special Tax rate based on its Building Square Footage.
SECTION C
MAXIMUM SPECIAL TAX
1. Develooed Prooertv
The Maximum Special Tax for each Assessor's Parcel of Residential Property or Non-
Residential Property that is classified as Developed Property in any Fiscal Year shall be
the greater of (i) the Assigned Annual Special Tax or (ii) the Backup Annual Special Tax.
-
2.
Undevelooed Prooertv and Provisional Undevelooed Prooertv
The Maximum Special Tax for each Assessor's Parcel classified as Undeveloped
Property, or Provisional Undeveloped Property in any Fiscal Year shall be the Assigned
Annual Special Tax.
SECTION D
ASSIGNED ANNUAL SPECIAL TAX
1. Develooed Prooertv
Each Fiscal Year, each Assessor's Parcel of Residential Property or Non-Residential
Property shall be subject to an Assigned Annual Special Tax. The Assigned Annual
Special Tax applicable to an Assessor's Parcel of Developed Property for Fiscal Year
2005-06 shall be determined pursuant to Table 1 below.
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 4
city of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "B"
March 23, 2004
Page 8-5
Rate and Method of Apportionment
TABLE 1
ASSIGNED ANNUAL SPECIAL TAX RATES
FOR DEVELOPED PROPERTY
FOR FISCAL YEAR 2005-06
Classification Building Square Footage Rate
Residential Less than 1,801 $1,946 per Unit
Residential 1,801 - 2,050 $2,125 per Unit
Residential 2,051 - 2,300 $2,598 per Unit
Residential 2,301 - 2,550 $2,920 per Unit
Residential 2,551 or greater $3,331 per Unit
Non-Residential N/A $17,760 per Acre
2. Undevelooed Prooertv and Provisional Undevelooed Prooertv
Each Fiscal Year, each Assessor's Parcel of Undeveloped Property and Provisional
Undeveloped Property shall be subject to an Assigned Annual Special Tax. The
Assigned Annual Special Tax rate for an Assessor's Parcel classified as Undeveloped
Property and Provisional Undeveloped Property for Fiscal Year 2005-06 shall be $17,760
per Acre.
3. Increase in the Assi2ned Annual Soecial Tax
On each July 1, commencing July 1, 2006, the Assigned Special Tax rate for Developed
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 ANNUAL SPECIAL TAX
At the time a Final Map is recorded, the Backup Annual Special Tax for all Lots within such
Final Map area shall be determined by dividing (a) the product of the Maximum Special Tax rate
for Undeveloped Property and the total Acreage of all Lots in such Final Map area, by (b) the
total number of Lots within such Final Map area. The resulting quotient shall be the Backup
Annual Special Tax for each Lot within such Final Map area.
The Backup Annual Special Tax for all Assessor's Parcels of Developed Property classified as
Non-Residential Property shall be the Maximum Special Tax rate for Undeveloped Property
multiplied by the Acreage of such Assessor's Parcel.
If a Final Map includes Assessor's Parcels of Developed Property which are classified or
reasonably expected to be classified as Residential Property and Non-Residential Property, then
the Backup Annual Special Tax for each Assessor's Parcel which is classified or reasonably
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 5
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "B"
March 23, 2004
Page 8-6
Rate and Method of Apportionment
expected to be classified as Residential Property shall be computed exclusive of the allocable
portion of total Acreage attributable to Assessor's Parcels classified or reasonably expected to be
classified as Non-Residential Property.
Notwithstanding the foregoing, if one or more Lots within a recorded Final Map are
subsequently changed or modified by recordation of a lot line adjustment or similar instrument,
then the aggregate Backup Special Tax applicable to such changed Lots shall be reallocated in a
manner consistent with the first paragraph of this section among such changed Lots so that the
cumulative total of the Backup Special Tax generated by such changed Lots equals the
cumulative total of such Backup Special Tax that would have been generated by such changed
Lots if such change did not take place.
On each July 1, commencing July 1, 2006, the Backup Annual Special Tax 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 ANNUAL SPECIAL TAX
Commencing Fiscal Year 2005-06 and for each subsequent Fiscal Year, the City Council shall levy
Annual Special Taxes on all Taxable Property in accordance with the following steps:
Step One: The Annual Special Tax shall be levied Proportionately on each Assessor's Parcel
of Developed Property at up to 100% of the applicable Assigned Annual Special
Tax rates in Table 1 to satisfy the Special Tax Requirement.
Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the
first step has been completed, the Annual Special Tax shall be levied
Proportionately on each Assessor's Parcel of Undeveloped Property up to 100%
of the Assigned Annual Special Tax applicable to each such Assessor's Parcel as
needed to satisfy the Special Tax Requirement.
Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the
first two steps have been completed, then the Annual Special Tax on each
Assessor's Parcel of Residential Property whose Maximum Special Tax is the
Backup Annual Special Tax shall be increased Proportionately from the Assigned
Annual Special Tax up to 100% of the Backup Annual Special Tax as needed to
satisfy the Special Tax Requirement.
Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the
first three steps have been completed, the Annual Special Tax shall be levied
Proportionately on each Assessor's Parcel of Provisional Undeveloped Property
up to 100% of the Assigned Annual Special Tax applicable to each such
Assessor's Parcel as needed to satisfy the Special Tax Requirement.
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 6
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "B"
March 23, 2004
Page 8-7
Rate and Method of Apportionment
SECTION G
PREPAYMENT OF ANNUAL SPECIAL TAX
The following definitions apply to this Section G:
"CFD Public Facilities" means $7,500,000 expressed in 2005 dollars, which shall increase by
the Construction Inflation Index on July 1, 2006, 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. 2005-1, 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 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. 2005-1.
"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 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 Maximum Special Taxes.
The Special Tax obligation of an Assessor's Parcel of Developed Property, or an Assessor's
Parcel of 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 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 Annual Special Tax obligation shall
provide the City with written notice of intent to prepay, and within 5 days of receipt of such
notice, the City shall notify such owner of the amount of the non-refundable deposit determined
to cover the cost to be incurred by CFD No. 2005-1 in calculating the proper amount of a
prepayment. Within 15 days of receipt of such non-refundable deposit, the Citv.ibA1L.a~.w.!IItlIh
owner of the Prepayment Amount of such Assessor's Parcel.
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 7
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "B"
March 23, 2004
Page B-8
Rate and Method of Apportionment
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
equals
Bond Redemption Amount
Redemption Premium
Future Facilities Amount
Defeasance Cost
Administrative Fee
Reserve Fund 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
Annual Special Tax applicable to the Assessor's Parcel. For an Assessor's
Parcel of Undeveloped Property, compute the Assigned Annual Special
Tax as though is was already designated as Developed Property based
upon the building permit issued or expected to be issued for that
Assessor's Parcel. F or an Assessor's Parcel of Provisional Undeveloped
Property compute the Assigned Annual Special Tax for that Assessor's
Parcel.
2. For each Assessor's Parcel of Developed Property, Undeveloped Property
or Provisional Undeveloped Property to be prepaid, divide the Assigned
Annual Special Tax computed pursuant to paragraph 1 for such Assessor's
Parcel by the sum of the estimated Assigned Annual Special Tax
applicable to all Assessor's Parcels of Taxable Property at buildout, as
reasonably determined by the City.
3. Multiply the quotient computed pursuant to paragraph 2 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 quotient computed pursuant to paragraph 2 by the amount
determined pursuant to paragraph 5 to determine the Future Facilities Cost
to be prepaid (the "Future Facilities Amount").
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 8
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "B"
March 23, 2004
Page 8-9
Rate and Method of Apportionment
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 call date for the Outstanding Bonds.
8. Estimate the amount of interest earnings to be derived from the
reinvestment of the Bond Redemption Amount plus the Redemption
Premium until the earliest call date for the Outstanding Bonds.
9. Subtract the amount computed pursuant to paragraph 8 from the amount
computed pursuant to paragraph 7. This difference is the "Defeasance
Cost. "
10. 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."
11. 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.
12. The Prepayment Amount is equal to the sum of the Bond Redemption
Amount, the Redemption Premium, the Future Facilities Amount, the
Defeasance, and the Administrative Fee, less the Reserve Fund Credit.
13. From the Prepayment Amount, the amounts computed pursuant to
paragraphs 3, 4, 9, and 11 shall be deposited into the appropriate fund as
established under the bond 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 10 shall be retained by CFD No. 2005-1.
With respect to Special Tax obligation that is prepaid pursuant to this Section G, the City Council
shall indicate in the records of CFD No. 2005-1 that there has been a prepayment of the Special Tax
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 obligation and
the release of the Special Tax lien on such Assessor's Parcel, and the obligation nf-i.~b Af;i~~'S
Parcel to pay such Special Taxes shall cease.
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 9
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "B"
March 23, 2004
Page 8-10
Rate and Method of Apportionment
Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Special Tax
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 ANNUAL SPECIAL TAX
The Special Tax obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of
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 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 obligation.
A = the Administrative Fees and Expenses calculated according to Section G.
With respect to any Assessor's Parcel that is partially prepaid, the City Council shall indicate in the
records of CFD No. 2005-1 that there has been a partial prepayment of the Special Tax 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 obligation, to indicate the partial prepayment of
the Special Tax obligation and the partial release of the Special Tax lien on such Assessor's Parcel,
and the obligation of such Assessor's Parcel to pay such prepaid portion of the Special Tax shall
cease.
Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of
Special Tax 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 Annual Special Tax shall be levied on all
Assessor's Parcels subject to the Annual Special Tax. If any delinquent Annual Special Taxes
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 10
City of Lake Elsinore
CFD No. 2005-1 (Serenity)
Exhibit "8"
March 23, 2004
Page 8-11
Rate and Method of Apportionment
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remain uncollected prior to or after all Bonds are retired, the Annual Special Tax may be levied to
the extent necessary to reimburse CFD No. 2005-1 for uncollected Annual Special Taxes
associated with the levy of such Annual Special Taxes, but not later than the 2043-44 Fiscal Year.
SECTION J
EXEMPTIONS
The City shall classify as Exempt Property (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) 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 34.08 Acres.
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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 34.08
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 34.08 Acres will be
classified as Provisional Undeveloped Property, and will be subject to Special Taxes pursuant to
step four in Section F.
SECTION K
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 City Council not later than twelve months after
having paid the first installment of the Special Tax that is disputed. A representative(s) of CFD
No. 2005-1 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 representative'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 of levy), but an adjustment shall be made to the Annual Special Tax on that
Assessor's Parcel in the subsequent Fiscal Year(s).
SECTION L
MANNER OF COLLECTION
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The Annual Special Tax shall be collected in the same manner and at the same time as ordinary
ad valorem property taxes, provided, however, that CFD No. 2005-1 may collect Annual Special
Taxes at a different time or in a different manner if necessary to meet its finC!1lcial obligations.
City of Lake Elsinore
Community Facilities District No. 2005-1
March 23, 2004
Page 11