Loading...
HomeMy WebLinkAboutOrd. No. 2007-1232 ORDINANCE NO. 1232 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 August 28, 2007, the City Council (the "Council") of the City of Lake Elsinore (the "City") adopted Resolution No. 2007-156 stating its intention to form the City of Lake Elsinore Community Facilities District No. 2007-4 (Makenna Court) (the "CFO") 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 August 28,2007, the Council also adopted Resolution No. 2007- 157 stating its intention and the necessity to incur bonded indebtedness in the amount not to exceed $4,000,000 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 $4,000,000 within the boundaries of the CFD; and WHEREAS, on October 9, 2007, 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 WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2007- 177 determining the validity of prior proceedings and established the CFD; and 1 WHEREAS, the Council subsequent to said hearing adopted Resolution No. 2007- 157 which called an election within the CFD for October 9, 2007, on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit; and WHEREAS, on October 9,2007, an election wa~ 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, CALIFORNIA, 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 in an amount necessary to pay all of the costs of providing the Services, periodic costs, and costs ofthe 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 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 rand 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. 2007- 177 (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. 2 SECTION 7. The Mayor shall sign this ordinance arid 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 Ta~ 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. PASSEP, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, on this ~ of October 2007. c ROBERT E. MA MAYOR CITY OF LAKE EL ATTEST: L L. L~. VIVIAN M. MUNSON CITY CLERK -- APPROVED ASiO FORM: \\'\ ~'- 'v'vv.- ~~ - BARBARA ZEID LEIBOLD CITY ATTORNEY CITY OF LAKE ELSINORE 3 STATE OF CALIFORNIA ) COUNTY OF RIVERSUDE )ss. CITY OFLAKEiELSINORE ) I, VIVIAN M. MUNSON, City Clerk of the City of Lake Elsinore, California, hereby certify that the foregoing Ordinance No. 1232 was introduced at a regular meeting of the City Coumcil of the City of Lake Elsinore on the 28th day of September 2007, and was finally passed at a regular meeting of the City Council of the City of Lake Elsinore held on the 9th day of October 2007, by the fOllowing roll call vote: AYES: NOES: ABSENT: ABSTAIN: [ l.L_ VIVIAN M. MUNSON CITY CLERK 4 RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT No. 2007-4 OF THE . CITY OF LAKE ELSINORE (MAKENNA COURT) A Special Tax shall be levied on all Assessor's Parcels in Community Facilities District No. 2007-4 of the City of Lake Elsinore (Makenna Court) ("CFD No. 2007-4") and collected each Fiscal Year commencing in Fiscal Year 2007-2008, in an amount detennined through the application df this Rate and Method of Apportionment as described below. All of the real property in CFD No. 2007-4, unless exempted by law or by the provisions hereof, shall be taxed for the !purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre" ot IIAcreagell means the land area of an Assessor's Parcel as shown on an \ Assessor's Parcel Map, or if the land area is nbt 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.' me~ns the Mello,.Roos Community Facilities Act of 1982, being Chapter 2.5, Part 1, Division 2 of Title 5 of the California Government Code. "Admlnl$tratlve Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2007-4: the .costs of "computing the Special Taxes and preparing the annual Special Tax collection schedule$ (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 T$xes 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.: 2007-4 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2007-4 or any designee "thereof of complying with disclosure requirements of the City, CFD No. 2007-4 or obligated persons associated with applicable federal and state securities laws and theAct; 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, 2007- 4 or any designee thereof related to an appeal of the SpeCial Tax; the costs associate(:l 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. ~007 -4 for any other administrative purposes of CFD No. 2007-4, inclUding attorney's !fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Apartment Propertyll means all Assessor's Parcels of Residential Property on which one! or more Apartment Units are constructed. City 01 Lake Elsinore. Community FacllltiesiDistrlct No. 2007-1 (Makenna Court) August 15,2007 Page 1 "Apartment Unit" means a dwelling unit within a building comprised or attached residential units available for rental by the general public, not for sale to an end user, and under common management. "Assessor's Parcel'" means a lot or parcel to which an Assessor's parcel number is assigned: as determined from an Assessor's Parcel Map or' the applicable assessment roll. . "AssessQr'sParcel 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 O.1.(b) below. "Authori~ed Facilities" means those facilities eligible to be funded by CFD No. 2007-4. "Backup: Special Tax for Facilities" means the Special Tax for Facilities applicabl~ to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.(c) below. "Certiflc~te 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 ofthe City, or designee thereof, responsible for detentnining the Special Tax Requirement for Facilities, the Special Tax Requirement for Services as determined in accordance with Section I below, and providing ~or the levy and collection of the Special Taxes. "CFD No~ 2007-4" means Community Facilities District No. 2007-4 of the City of Lake Elsinore (Makenna Court). "CFD No. 2007-4 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. 2007-4 and secured solely by the Special Tax for Facilities levy on property within the boundaries' of CFD No. 2007-4 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. 2007-4. "County... means the County of Riverside. City of Lake Elsinore: . Community Facn~ District No. 2007-4 (Makenna Court) August 15, 2007 Page 2 "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 Yesr for which the Special Tax for Facilities i~ being levied. "Final SulJdivlslon" means a subdivision of propefty by recordation of (i) a final map, or portion thereof, approved by the City pursu~nt 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 Iin~ 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 which CFD No. 2007-4 Bonds are issued, as modified, amended ~nd/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 YesI' on any Assessor's Parcel. "Non-Residential Property" means all Assessor's Parcels of Developed Property for which ai building permit permitting the construction of one or more non-residential units orfadilities has been issued by the City, and which is not otherwise Residential Property. "Outstanding Bonds" means all CFD No. 2007-4 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. 2007-4 that was owned by a property owner asscj)ciafion, including any master or sub-association, as of January 1 ofthe prior Fisca~ Year, (ii) any property located in a Final Subdivision that was recorded @softhe May 1 preceding the Fiscal Year in which the Special Tax is being levied and which,ias determined from such Final Subdivision, is or will be open space, a common atea recreation facility, or a private street, or (ill) any property which, as of the May 1 preceding the Fiscal Year for which the Special Tax is being levied, has been conv$yed, 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 Yea~forwhich the Special Tax is being levied. . City 01 Lake Elsinore Community FllCilitles District No~ 2007-4 (Maunna Court) August 15, 2007 Page 3 "Proportipnately" 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 appl.ied tOiother categories of Taxable Property as listed in Section 0 below. "Public Property" means property within the boundaries of CFD No. 2007-4 owned by, irrevoQably 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 of the square footage of living area within the perimeteriof a' residential structure, not including any carport, walkway, garage, overhang,! patio, enclosed patio, or similar area. The determination of Residential Floor Are$ for an Assessor's Parcel shall be made by reference to tl:le building permit(s) Issued for such Assessor's Parcel. Such determination shall be final following the issuance of a Certificate of Occupancy for the dwelling unit. "Residen~iaIProperty" means all Assessor's Parcels of Developed Property for which a building permit permitting the construction thereon of one or more residential dwelling units has been issued by the City. "Single Family Property" means all Assessor's Parcels of Residential Property other than Apartment Property. "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2007-4 pu!rsuant 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 Associatiqn Property, Taxable Public Property, and Undeveloped Property to fund the Special Tax Requirement for Facilities. "Special tax Requirement for Facilities" rneans that amount required in any Fiscal Year for CFD No. 2007-4 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. 2007-4 Bonds, including but not limited to, credit enhancement and rebate p~yments on the CFD No. 2007-4 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 City of Lllke Elsinore Community FacilJties>!Jistrlct No. 20074 (Makenna Court) August 15, 2007 Page 4 Facilities qelinquencies; (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" m'eans the State of California. "Taxable property" means all of the Assessor's Parcels within the boundaries of CFD No. 2007-4 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 Qwner 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 Ptlblic Property. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fis~1 Year, all Taxable Property within CFD No. 2007-4 shall be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, or Undeveloped Property, and shall be subject to the Special Tax for Facilities in accordance with this Rate and Method of Apportionment determined pursuant to Sections C and D below. Each Assessor's Parcel of Residential Property shall be assigned to Land Use Classes 1 through 7 as listed in Table 1 below bas~d on unit type and Residential Floor Area. Each Assessor's parcel of Non-Residential Property shall be assigned to Land Use Class 8. C. MAXIMUM SPECIAL TAX FOR FACILITIES Prior to th~ issuance of CFD No. 2007-4 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 sUbje<?t 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 Communitv Facilities Act of 1982 adopted by the Council, the "Goals and Policies.) calculated pursuant t~ the Goals and Policies based upon the Assigned Special Tax for City of Lake Elsinore , Community FacUlties ~lstrlct No. 2007-4 (Makenna Court) August 15,2007 Page 5 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, ~nd 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 respe~ to the maximum overlapping debt burden level with the written consent ofthe CFDiAdministrator. 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 "An. 1. Develooed Prooertv (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 derivad 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 Assigned Special Tax for Facilities for each Land Use Class is shown below in Table 1. TABLE 1 As$lgned Special Tax for Facilities for Developed Property Community Facilities District No. 2007-4 Fiscal Year 2007.2008 1 Single Family Property More than 2,700 sq. 2 ! Single Family Property 2,450 - 2,700 sq. ft. 3 Single Family Property 2,200 - 2,449 sq. ft. 4 Single Family Property 1,950 - 2,199 sq. ft. 5 t Single Family Property 1,700 - 1,949 sq. ft. 6 i Single Family Property Less than 1,700 sq. 7 Apartment Property NA . ~.' .' .~. ' .-.' $2,784 per unit $2,676 per unit $2,569 per .unit $2,462 per unit $2,309 per unit $2,157 per unit $12,728 per City of Lake Elsinore Community Facillt1es JJfstrict No. 2007-4 (Milkenna Court) August 15, 2007 . Page 6 (c) IBackup Special Tax far Facilities The Fiscal Year 2007-2008 Backup Special Tax far Facilities attributable ta a Final Subdivisian will equal $13,395 multiplied by th.e Acreage 'Of all Taxable Property, exclusive 'Of any Taxable Property Owner Assaciatian Property and Taxable Public Praperty, therein. The Backup Special Tax far Facilities far ea~h Assessar's Parcel 'Of Residential Praperty shall be computed by dividing thei Backup Special Tax far Facilities attributable ta the applicable Final Subdivisian by the numberof Assessar's Parcels and/ar residential units far whlch building permits far residential canstructian have 'Or may be issued (i.e~, the number 'Or residentiallats and/ar units). The Backup Special Tax far Facj:i1ities far each Assessar's Parcel 'Of Nan-Residential. Praperty therein sh~1I equal $13,395 multiplied by the Acrea.ge 'Of such Assessar's Parcel. If al Final Subdivisian includes Assessar's Parcels 'Of Taxable Praperty far whi,ch building permits far bath residential and nan-residential constructian may be issued, exclusive 'Of Taxable Praperty Owner Associatian Praperty and Taxable PUblic Praperty, then the Backup Special Tax far Facilities far eaqh Assessar's Parcel of Residential Praperty shalt be computed exclusive 'Of tne Acreage and Assessar's Parcels 'Of praperty far which building permits far nan-residential constructian may be issued. Na~ithstanding the faregaing,if all 'Or any partian 'Of the Final SUbdivisian(s) de~cribed in the preceding paragraphs is subsequently changed 'Or madified by recordatian 'Of a lat line adjustment 'Or similar instrument, and 'Only if the CFP Administratar determines that such change 'Or madificatian results in a deorease in the number 'Of Assessar's Parcels 'Of Taxable Prapertyfarwhich building permits far residential constructian have 'Or may be issued within suqh Final Subdivisian, then the Backup Special Tax far Facilities far each Assessar's Parcel 'Of Developed Property that is part 'Of the lot line adjl!Jstment 'Or similar instrument far such Final Subdivisian shall be a rate per Acr~ as calculateq below. The Backup Special Tax for Facilities previously det~rmined far an Assessor's Parcel 'Of Develaped Praperty that is nat a part 'Of t~e lat line adjustment 'Or similar instrument far such Final Subdivisian shall natibe recalculated. 1. Determine the total Backup Special Tax far Facilities anticipated ta apply ta the changed 'Or madified partian 'Of the Final Subdivision area priar ta the change 'Or madificatian. City of Lake Elsinore · Community Facilities 'pistrlct No. 2007-4 (Makenna Court) August 15, 2007 Page 7 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 ofthe Final Subdivision area for all remaining Fiscal Years in which the Special Tax for Facilities may be levied. (d) hhcrease in the Assigned Special Tax for Facilities and Backup Special Tax tor Facilities The Fiscal Year 2007-2008 Assigned Special Tax for Facilities, identified in Tabl~ 1 above, and Backup Special Tax for Facilities shall increase ther~after, commencing on July 1, 2008 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 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 F Bcilities for all Land Use Classes located on that Assessor's Parcel. The CFD iAdministrator's allocation to each type of property shall be final. 2. Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property The Fiscal 'r1ear 2007-2008 Maximum Special Tax for Facilities for Taxable Property Owner Assdciation Property, Taxable Public Property, and Undeveloped Property shall be $13,395 per Acre and shall increase thereafter, commencing on July 1, 2008 and oh 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.. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing with Fiscal Year 2007-2008 and for each following Fiscal Year, the Council sha(1 determine the Special Tax Requirement for Facilities and levy the Special Tax ~or 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: i City of Lake Elsinore August 15, 2007 Community Facilities Dlftrict No. 2007-4 (Makenna Court) Page 8 First: Th~ 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 ~fter 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 ~dditional monies are needed to satisfy the Special Tax Requirement for Facilities ~fter the first two steps have been completed, then the levy of the Special Tax for t=acilities 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 ~fter 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 <l>wner Association Property and Taxable Pliblic Property at up to 100% of the "Maximum Special Tax for Facilities for Taxable Property Owner Association Property Qr 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 (abo~e), 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 Requirem~nt for Facilities; (ii) all authorized CFD No. 2007-4 Bonds have already been issued or the Council has covenanted that it will not issue any additional CFD No. 2007J1. 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 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. 2007-4. E. EXEMPTIONS No Special Tax for Facilities shall be levied on up to 5.3 Acres of Property Owner Associati~n Property and/or Public Property in CFD No. 2007-4: Tax-exempt status will be aS$igned by the CFD Administrator in the chronological order in which I " City 01 LaIu Elsinore i August 15, 2007 Community Facilltles!Dlstrict No. 2007-4 (Makenna Court) Page 9 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 T~x for Facilities under this section shall be subject to the levy of the Special TlIlx 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 iOF COLLECTION The Spec'al Tax for Facilities shall be collected in the same manner and at the same timei as ordinary ad valorem property taxes; provided, however, that CFD No. 2007 -4 m~y directly bill the Special Tax for Facilities, may collect the Special Tax for Facilities ~t a different time or in a different manner if necessary to meet its financial obligation$, and may covenant to foreclose and may actually foreclose on delinquen~ Assessor's Parcels as permitted by the Act. G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "Bulldouti' means, for CFD No. 2007-4, that all expected building permits for dwelling uinits to be constructed in CFD No. 2007-4 have been issued, as . reasonably determined by the CFD Administrator. "CFD Pul)lic Facilities" means either $2,550,000 in 2007 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 de~ermined by the Council concurrently with a covenant that it will not issue any more q:FD No. 2007-4 Bonds (except refunding bonds) to be supported by the Special T~ for Facilities levy under this Rate and Method of Apportionment as described in Section 0 above. "Constru~tion 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 ihdex ceases to be published, the Construction Inflation Index shall be another in~ex 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 F.cilitles Costs" means. the CFD Public Facilities minus (i) costs of Authorized! Facilities previously paid from the Improvement Fund, (ii) moneys currently or) deposit in the Improvement Fund available to pay costs of Authorized City of Lake Elsinore, . . . Allgust 15, 2007 Commllnity FacilJtle, ~lstrict No. 20074 (Makenna COllrt) Ptlge 10 Facilities, ~nd (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance the cost 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. "Prevlou.ly Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are deem~d to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year. 1. Pr~payment In Full Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a b~i1ding permit has been issued, may be prepaid. The obligation of the Assessor'$ Parcel to pay the Special Tax for Facilities may be permanently satisfied as descrif)ed herein, provided that a prepayment may be made with respect to a particular ~ssessor's Parcel only if there are no delinquent Special Taxes with respect tOI 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 shalr provide th~ 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 ofthe prepayment amount for such Assessor's Parcel. The CFD Administrator may charge a r~asonable 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. 2007-4 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 Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Caoitalized Interest Credit Total: equals 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: Paraarach No.: 1. Co~fjrm that no Special Tax delinquencies apply to such Assessor's Parcel. City of Lake Elsinore . Community Facilities 1r'istrict No. 20074 (Makenna Court) August 15, 2007 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 Sp~cial Tax for Facilities for that Assessor's Parcel as though it was already de$ignated as Developed Property, based upon the building permit which ha$ already been issued for that Assessor's Parcel. 3. (a) !Divide the Assigned Special Tax for Facilities computed pursuant to paijlgraph 2 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2007-4 based on the Developed Property Special Tax for Fadilities which could be levied in the current Fiscal Year on all expected dev:elopment through Buildout of CFD No. 2007-4, excluding any Assessor's Pa~cels which have been prepaid, and ' 6. Compute the current Future Facilities Costs. 7. MulJiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the ~mount determined pursuant to paragraph 6 to compute the amount of FutliJre Facilities Costs to be prepaid (the "Future Facilities Amounr). 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 purrent Fiscal Year until the earliest redemption date for the Previously ISSUed Bonds. 9. Det~rmine the Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 10. COn!Jpute 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 City of Lake Elsinore : Community FacUlties ~lstrlct No. 2007-4 (Mllkenna Court) August 15, 2007 Page 12 Exp~nses (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 Amounr). 12. The! administr~tive fees and expenses of CFD No. 2007-4 are as calculated by ~he CFD Administrator and include the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of red~eming CFD No. 2007-4 Bonds, and the costs of recording any notices to evid~nce the prepayment and the redemption (the "Administrative Fees and Expenses"). 13. The ireserve fund credit (the "Reserve Fund Credit') shall equal the lesser of: (a) ~he expected reduction in the reserve requirement (as defined in the Indanture), if any, associated with the redemption of Previously Issued Bon~s as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in , effe<;:t after the redemption of Previously Issued Bonds as a result of the pre~ayment 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 F?reviously Issued Bonds is below 100% of the reserve requirement (as defined in the IndentLire). 14. If any capitalized interest for the Previously Issued Bonds will not have been exp~nded as of the date immediately following the first interest and/or prin~ipal payment following the current Fiscal Year, a capitalized interest credIt shall be calculated by multiplying the larger quotient computed purslJant to paragraph 3(a) or 3(b) by the expected balance in the capitalized inter~st fund or account under the Indenture after such first interest and/or prindipal payment (the "Capitalized Interest Credif'). 15. The $pecial 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 comll>uted pursuant to paragraphs 13 and 14 (the" Special Tax for Facilities Prep'ayment Amount'): From the Special Tax for Facilities Prepayment Amount, the amounts computed pursuant to iparagraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as est~blished under the Indenture and be used to retire CFD No. 2007-4 Bonds or rtlake debt service payments. The amount computed pursuant to paragraph ~ shall be deposited into the Improvement Fund. The amount computed pursuant tOlparagraph 12 shall be retained by CFD No. 2007-4. The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full $5,000 increment of CFD No. 2007-4 Bonds. In such cases, the increment City 01 Lake Elsinore ! August 15, 2007 Community'Facilities D~rlct No. 2007-4 (Makenna Court) Page 13 above $5,000 or integral multiple thereof will be retained in the appropriate fund establishet1 under the Indenture to be used with the next prepayment of CFD No. 2007 -4 Bo~ds or to make debt service payments. As a resultiofthe payment of the current Fiscal Year's Special Tax for Facilities levy as determihed under paragraph 9 (above), the CFD Administrator shall remove the current Fis~al Year's Special Tax for Facilities levy for such Assessor's Parcel from . the CountY tax rolls. With respect to any Assessor's Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate th~ prepayment of the Special Tax for Facilities and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor'$ Parcel to pay the Special Tax for Facilities shall cease. Notwithstahding the foregoing, no Special Tax for Facilities prepayment shall be allowed unless, at the time of such proposed prepayment, the amount of Maximum Special Tape for Facilities that may be levied on Taxable Property within CFD No. 2007-4 (after excluding 5.3 Acres of Property Owner Association Property and Public Property 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 ~ection 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 Speci~1 Tax for Facilities on an Assessor's Parcel of Developed Property or an Assessor'si Parcel of Undeveloped Property for which a building permit has been issued ma~ 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 followirlg formula: PP = [(PE - A) x F] + A G.1. The~e terms have the following meaning: PP =? the partial prepayment. Pe =1 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 ,- The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Admi~istrator of such owner's intent to partially prepay the Special Tax for Facilities a~d the percentage by which the Special Tax for Facilities shall be prepaid. T~e CFD Administrator shall provide the owner with a statement of the amount req~ired for the partial prepayment of the Special Tax for Facilities for an City 01 Lake Elsinore i A.ugust 15, 2007 Community FacUlties ~istrlct No. 2007-4 (Makenna Court) Page 14 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, t~e Council shall (i) di.stribute the funds remitted to it according to Section G.1, and (Ii) indicate in the records of CFD No. 2007-4 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 tp be levied on such Assessor's Parcel pursuant to Section 0 above. H. TERM O~SPECIAL TAX FOR FACILITIES The Spec~al Tax for Facilities shall be levied for a period not to exceed forty years commenclng with Fiscal Year 2007-2008, 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. 2007-4 Bqnds have been paid; (ii) all Authorized Facilities have been constructed and/or acquired and all reimbursements to the developet for the construction and/or acquisition of such facilities have been paid as permitted by law; and (iii) all other obligation~ of CFD No. 2007-4 have been satisfied. I. SPECIAL iT' AX FOR SERVICES I The follOWIng additional definitions apply to this Section I: "Develop~d Multifamily Unit" means a residential dwelling unit within a building in which eac~ of the individual dwelling units has or shall have at least one common wall with a~other 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 T~x for Services is being levied. "Develope,d Non-Residential Property" means all Assessor's Parcels for which a building pe,rmit was issued by the City for any type of non-residential use, excluding property qwned by local, state, or federal government, on. or prior to May 1 preceding ~he Fiscal Year in which the Special Taxis being levied. "Develop~d 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 issu~d by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Maximun> Spe~lal Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2007-4 in any Fiscal Year on any Assessor'si Parcel. City of Lake Elsinore . Community Facilities l!1str1ct No. 2007-4 (M~enna Court) , . August 15,2007 Page 15 "Operatin~ Fund" means a fund that shall be maintained for CFD No. 2007-4 for any FiscallYear 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 oflhe preceding Fiscal Year. "Service Area" means parks, open space, and storm drains. "Speclall)lx for Services" means any of the special taxes authorized to be levied within CFDI No. 20074 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Trax Requirement for Services" means the amount determined in any Fiscal Yeat for CFD No. 2007-4 equal to (i) the budgeted costs directly related to the Servic$ Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted and maintained or are reasonabl;1 expected to be accepted and maintained during the current Fiscal Year, (ii) pay a ,proportionate share of Administrative Expenses, and (iii) anticipated Special Tap< for Services delinquencies based on the delinquency rate for the Special Ta*for Services levy in CFD No. 2007-4 for the previous Fiscal Year, less (iv) the Op~rating Fund Balance, as determined by the CFD Administrator. 1. Rat~ and Method of Apportionment of the Special Tax for Services Commencing with Fiscal Year 2007-2008 and for each subsequent Fiscal Year, the Council shall levy the Special Tax for Services on (i) all Assessor's Parcels Gontaining a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's i 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 $567.02 p~r Acre for each Assessor's Parcel of Developed Non-Residential Property. . On each Ju~y 1, commencing July 1, 2008, the Maximum Special Tax for Services shall be incteased by two percent (2.00%) ofthe amount in effect in the prior Fiscal Year. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirememt for Services, unless no longer required as determined at the sole discretion or the Council. City of Lake Elsinore Community FacllitJes Dfstrict No. 2007-4 (Makenna Court) August 15, 2007 Page 16 3. Col'ection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time las ordinary ad valorem property taxes, provided, however, that CFD No. 2007-4 m~y collect the Special Tax for Services at a different time or in a different manner if mecessary to meet its funding requirements. J. APPEALSIAND INTERPRETATIONS Any lando,+,ner or resident who feels that the amount of the Special Tax levied on their Asse$sor's Parcel. is in error may submit a written appeal to CFD No. 2007-4. The CFD ~dministrator shall review the appeal and if the CFD AdfTlinistrator concurs, tHe amount of the Special Tax levied shall be appropriately modified. The Counqil 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 o~ the Council shall be final and binding as to all persons. K:\CLlENTS2\CLC\Makenna Court\RMA \Makenna Court CFD RMA Draft 3.doc Revised: t 0/3/07 -. City of Lake Elsinore Community Facilities ~lstrlct No. 2007-4 (Makenna Court) August 15, 2007 Page 17 - EXHIBIT A CERTIFICATE TO AMEND SPECIAL TAX FOR FACILITIES CITY OF LAKE ELSINORE AND CFD No. 2007-4 CERTIFICATE : 1. Pursuant to S~ction C of the Rate and Method of Apportionment, the City of lake Elsinore ("Cit}1') and Community Facilities District No. 2007-4 of the City of lake Elsinore ("CFrj, No. 200.7-4") hereby agree to a reduction in the Assigned Special Tax for Facilities (or Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 20.0.7-4: (a) The information in Table 1 relating to the Assigned Special Tax for Facilities for Developed Property within CFD No. 20.0.7-4 shall be modified as follows: 1 Single Family Property More than 2,70.0. sq. ft. per unit I 2 Single Family Property 2,450. - 2,70.0. sq. ft. per unit 3 Single Family Property 2,20.0. - 2,449 sq. ft. per unit 4 Sin ile Family Property 1,950. - 2,199 sq. ft. per unit 5 Sing! e Family Property ,1,70.0. -1,949 sq. ft. per unit - 6 Single Family Property less than 1,70.0. sq. ft. per unit 7 Apalftment Property NA per Acre 8 Non+Residential NA per Acre I (b) The Backup Special Tax for Facilities attributable to a Final Subdivision within CFD . No. 20.07 -4;1 as stated in Section C.1.( c), shall be reduced from $13,395 per Acre to $ 'per!Acre. ' , 2. The Special T~x for Facilities may only be modified prior to the first issuance of CFD No. 20.0.7-4 Bomds. 3. Upon execution of the Certificate by the City and CFD No. 20.0.7-4, the City shall cause an amended nqtice of Special Tax lien forCFD No. 2007-4 to be recorded reflecting the modifications s~t forth herein. I I By execution herecj)f, the undersigned acknowledges, on behalf of the City and CFD No. 200.7-4, receipt ~f this Certificate and modification of the Rate and Method of Apportionment as ~et forth in this Certificate. CITY OF LAKE ELSINORE By: CFD Administrator Date: COMMUNITY FAcILITIES DISTRICT NO. 2007-4 OF THE CITY Of LAKE ELSINORE By: Date: