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HomeMy WebLinkAbout14-127 CFD No. 2005-2 (Alberhill Ranch) for Special TaxesCITY OF LADE LSII` ORTE �� DREAM EXIREMEM REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: GRANT M. YATES CITY MANAGER DATE: MAY 13, 2014 SUBJECT: COMMUNITY FACILITIES DISTRICT NO. 2005 -2 (ALBERHILL RANCH) IMPROVEMENT AREA B: ALTERING THE RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES TO REDUCE THE MAXIMUM SPECIAL TAXES Recommendations Adopt a Resolution of Consideration to alter the rate and method of apportionment of an existing special tax relating to Improvement Area B of City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch) subject to an amendment to the Funding, Construction and Acquisition Agreement that will prioritize use of bond proceeds for Lake Street improvements. As an alternative to the Recommended Action, the City Council may: 2. Adopt a Resolution of Consideration to alter the rate and method of apportionment of an existing special tax relating to Improvement Area B of City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch); PH 3. Deny the petition and do not alter the rate and method of apportionment of an existing special tax relating to Improvement Area B of City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch). Background The City Council established Community Facilities District No. 2005 -2 (Alberhill Ranch) (hereinafter the "CFD ") in 2005. The City Council designated three (3) improvement CFD No. 2005 -2 (Alberhill Ranch) Imp. Area B May 13, 2014 Page 2 areas within the CFD (Improvement Area A, Improvement Area B and Improvement Area C) and the maximum special taxes and maximum bonded indebtedness was established for each improvement area at that time. The maximum special taxes is determined by a rate and method of apportionment (RMA). Improvement Area B of the CFD, at build -out, is projected to contain 482 single family homes and 160 multi - family units. Since the creation of the CFD, no homes have been constructed and no bonds have been issued within Improvement Area B. On July 31, 2013, Castle & Cooke (hereinafter the "Owner') submitted a petition to the City requesting changes to the RMA for Improvement Area B to lower the special taxes. On August 13, 2013, the City Council considered the adoption of a resolution to alter the RMA relating to Improvement Area B. Certain homeowners within Improvement Area A requested that the City Council not lower the special taxes within Improvement Area B asserting that such an action would adversely impact the price of their homes. The City Council decided to table the item and directed City staff to address the following issues when the item returned: 1. What is the effect of reducing the special taxes within Improvement Area B on property values within Improvement Area A? 2. What is the timing of completion of the public improvements for the development? The Owner submitted a new petition on February 20, 2014 seeking the same reduction in special taxes in Improvement Area B and the petition is on file in the City Clerk's office. Discussion Proposed Reduction in Special Taxes The Owner has requested that the City Council reduce the CFD special tax rates within Improvement Area B to be in line with current projected home values and the City's 2% total tax policy. Below are the special tax reductions requested: Land Use Type Building Square Percent Zone Foota a Current Rates Proposed Rates Reduction Single Family Greater than $4,093 - $5,672 $2,100 per Unit 49%-62% 3,250 Single Family 2,751 — 3,250 $3,874 - $4,093 $1,800 per Unit 53%-56% Single Family 2,250 -2,750 $3,698 - $3,874 $1,500 per Unit 59 % -61% CFD No. 2005 -2 (Alberhill Ranch) Imp. Area B May 13, 2014 Page 3 Single Family Less than 2,250 $3,162 - $3,698 $1,200 per Unit 62%-67% Multifamily N/A $2,138 - $2,467 $1,000 per Unit 53%-55% Apartment N/A $23,165 per Acre $8,786 per Acre 62% Zone 1 Non - Residential N/A $23,165 per Acre $8,786 per Acre 62% Zone 1 Apartment N/A $689 per Unit $600 per Unit 13% Zone 2 Non - Residential N/A $5,743 per Acre $5,000 per Acre 13% Zone 2 Based on projected home prices, the total tax burden on the properties within Improvement Area B would decrease from approximately 2.86% to 1.74 %. The City will have an additional opportunity to review the tax total burden on the properties prior to bond sale and further reduce the special taxes if deemed necessary to stay within the 2% policy. Effect of Reducing the Special Taxes on Property Values in Adjacent Improvement Area As noted above, some homeowners within Improvement Area A have voiced concerns that the requested special tax reduction would adversely impact their property values. This concern has been reiterated in a letter recently delivered to the City which is an attachment to this report. Residential property values are driven by the real estate market and there are many economic factors (including special tax rates) that may affect the market. Given the many variables, it is impossible to predict with any certainty the impacts of one factor on values. City staff consulted with James Harris, who has provided appraisal services to the City for several years as part of the City's finance team and several CFD financings. Mr. Harris noted that in his experience, if the tax rates between two planning areas are fairly close (for example, 1.7% to 2.0 %), there would typically not be much difference in values between the planning areas (all other factors being equal). However, if that disparity is, for example, 1.5% versus 2.0 %, then he would expect to see some material differences in value. He noted that current buyers now are most sensitive to the "monthly payment" which includes the special taxes. Consequently, a buyer in the higher tax area would expect to see a lower sales price to account for that difference assuming otherwise comparable properties. However, whether a lower tax rate area next to a higher tax rate area, in itself, would force down property values further, Mr. Harris could not say. That would require a specific study; the market may have already taken into account those higher tax rates CFD No. 2005 -2 (Alberhill Ranch) Imp. Area B May 13, 2014 Page 4 and valued the existing homes accordingly in the higher tax area regardless of a lower tax area nearby. City staff also invited the Owner to address and provide any additional information to the City Council at the public meeting on this matter. Timing of Completion of the Public Improvements The Community Facilities District provides a financing mechanism to fund necessary public improvements. Without CFD bonds, the developer must rely on other funding sources to complete these improvements. The timing of construction of public improvements is governed by the project conditions of approval. As the development horizon of the Alberhill Ranch has stretched out, members of the City Council have expressed concern about the timing of critical public improvements. In particular, the completion of Lake Street improvements has been at the forefront and are not due for completion until the 1,200th home in Alberhill is built. This timing, based on the residential unit count, is provided in the conditions of approval for the project as summarized in the attached matrix. And, as it currently stands, the property owners in Improvement Area A are most impacted on a day to day basis by these lack of traffic facilities. City staff considered whether solutions existed within the requested reduction of special taxes in Improvement Area B that could result in benefits to owners in Improvement Area A. Staff believes that such a solution is available. The City and the Owner have previously entered into a Funding, Construction and Acquisition Agreement (the "FCAA ") for the CFD which details the various improvements to be funded from bond proceeds. In short, the Owner was given some discretion to prioritize the timing of public improvements to receive available bonds funds (albeit still subject to any timing requirements under the conditions of approval). Last year, then interim Public Works Director Ati Eskandari proposed that the City be more active in setting public improvement priorities for funding in all of its future FCAAs. From this, City staff believes that the existing FCAA can be amended to place as a "first priority" the funding of critical Lake Street improvements which, in turn, has the potential for accelerating the completion of these improvements in advance of the condition of approval requirement. Any change to the FCAA will require both City Council and Owner approval. Accordingly, the recommendation above to approve the special tax reduction is conditioned on the owner amending the FCAA to provide the Lake Street improvements for first priority funding. CFD No. 2005 -2 (Alberhill Ranch) Imp. Area B May 13, 2014 Page 5 Process The change proceeding for the CFD requires a specific process as outlined in the attached resolution. The City Council is required to hold a public hearing on the changes and, if approved by the City Council, the Owners will have the opportunity to cast votes to approve the changes. The public hearing must be held at least 30 days but not more than 60 days after adoption of the Resolution of Consideration and can be scheduled for the regular City Council meeting on June 24, 2014. Fiscal Impact The cost of the legal proceedings for these changes to the CFD has been paid for by the Owner through a deposit of $35,000. The cost of administering the CFD is paid for by the CFD special taxes that are levied annually. Prepared by: Jason Simpson Director of Administrative Services Approved by: Grant M. Yates City Manager Attachment: 1. Resolution 2. Map of CFD No. 2005 -2 (Alberhill Ranch) 1 Letter to City Council from Paulie Tehrani and Sharon Gallina 4. Lake Street and other traffic improvements timing matrix RESOLUTION NO. RESOLUTION OF CONSIDERATION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE TO ALTER THE RATE AND METHOD OF APPORTIONMENT OF AN EXISTING SPECIAL TAX RELATING TO IMPROVEMENT AREA B OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005 -2 (ALBERHILL RANCH) WHEREAS, the City Council (the "Council') of the City of Lake Elsinore (the "City ") desires to institute proceedings to alter the rate and method of apportionment of an existing special tax with respect to Improvement Area B (the "Improvement Area ") of the City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch) (the "District") 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'). NOW, THEREFORE, the City Council of the City of Lake Elsinore, California, acting as the legislative body of City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch), does hereby resolve as follows: SECTION 1. A public hearing (the "Hearing ") on the proposed alterations to the rate and method of apportionment of existing special taxes shall be held on June 24, 2014, at 7:00 p.m., or as soon thereafter as practicable, at the Lake Elsinore Cultural Center located at 183 North Main Street, Lake Elsinore, California 92530. The amended and restated rate and method of apportionment of the special tax is described in detail in Exhibit A attached hereto. The approval of the proposed alterations to the rate and method of apportion shall be subject to and conditioned upon the amendment of the Funding, Construction and Acquisition Agreement related to the District to prioritize the timing of public improvements as determined by the District. SECTION 2. At the time and place set forth above for the hearing, any interested person, including all persons owning lands or registered to vote within the Improvement Area, may appear and be heard. SECTION 3. The City Clerk is hereby directed to publish a notice ( "Notice ") of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the Improvement Area. Such Notice shall contain the text or a summary of this Resolution, state the time and place of the Hearing, a statement that the testimony of all interested persons or taxpayers will be heard, a description of the protest rights of the registered voters and landowners in the Improvement Area as provided in Section 53337 of the Act and a description of the proposed voting procedure for the election required by the Act. Such publication shall be completed at least 7 days prior to the date of the Hearing. SECTION 4. The voting procedure with respect to the proposed alteration of the rate and method of apportionment of existing special taxes shall be by personal service or mailed ballot election. 11 SECTION 5. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED on this 13th day of May, 2014 ATTEST: Virginia J Bloom, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore Natasha Johnson, Mayor City of Lake Elsinore 2 STATE OF CALIFORNIA COUNTY OF RIVERSIDE SS CITY OF LAKE ELSINORE I, VIRGINIA J. BLOOM, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2014 - was adopted by the City Council of the City of Lake Elsinore at a regular meeting held on the _ day of 2014 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Virginia J. Bloom, CMC City Clerk EXHIBIT A AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2005 -2 OF THE CITY OF LAKE ELSINORE (ALBERHILL RANCH) (IMPROVEMENT AREA B) SECOND AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2005-2 OF THE CITY OF LAKE ELSINORE (Alberhill Ranch) (IMPROVEMENT AREA B) The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes in Improvement Area B of the City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch) ( "CFD No. 2005 -2 "). The Special Tax shall be levied on and collected in Improvement Area B of CFD No. 2005 -2 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 Improvement Area B, 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 Improvement Area B: 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, Improvement Area B or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, Improvement Area B or any designee thereof of complying with disclosure requirements of the City, Improvement Area B 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, Improvement Area B 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. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or Improvement Area B for any other administrative purposes of Improvement Area B, including attorney's fees and City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 5 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. "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" 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 I si preceding the Fiscal Year in which the Special Tax is being levied. "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. "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 Improvement Area B 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 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 6 "CFD No. 2005 -2" means Community Facilities District No. 2005 -2 (Alberhill Ranch) 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. 2005 -2, 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" 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 I" preceding the Fiscal Year in which the Special Tax is being levied. However, in the event Bonds have not been issued and the building permit has expired prior to the commencement of new construction, such Assessor's Parcel shall (a) be re- classified as either Undeveloped Property or Approved Property, as applicable, for the next fiscal year and (b) be re- classified as Developed Property based on the issuance of a new building permit for such Assessor's Parcel and the Building Square Footage indicated on such building permit shall dictate the Assigned Special Tax for Facilities rate. "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. "Improvement Area B" means Improvement Area B of CFD No. 2005 -2, as identified on the most recent boundary map for CFD No. 2005 -2 on file with the County of Riverside Recorder's Office. "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 and /or Table 2 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. 2005 -2 within Improvement Area B in any Fiscal Year on any Assessor's Parcel. "Multifamily Property" means all Assessor's Parcels of Residential Property on which one or more Multifamily Units are constructed. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 7 "Multifamily Unit" means a dwelling unit within a building comprised of attached residential units available for sale to an end user. "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) 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 for Zone 1 or Zone 2 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. "Single Family Property" means all Assessor's Parcels of Residential Property other than Apartment Property and Multifamily Property. "Single Family Unit" means a residential dwelling unit other than an Apartment Unit or Multifamily Unit. "Special Tax" means any of the special taxes authorized to be levied within Improvement Area B by CFD No. 2005 -2 pursuant to the Act. "Special Tax for Facilities" means any of the special taxes authorized to be levied within Improvement Area B by CFD No. 2005 -2 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 City of Lake Elsinore .Tune 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 8 anticipated shortfall due to Special Tax for Facilities delinquencies, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2005 -2 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 Improvement Area B, 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. "Zone" means 'Zone 1 or Zone 2. "Zone 1" means a specific geographic area within Improvement Area B as depicted in Exhibit B attached hereto. "Zone 2" means a specific geographic area within Improvement Area B as depicted in Exhibit B attached hereto. SECTION B CLASSIFICATION OF ASSESSOR'S PARCELS Each Fiscal Year, beginning with Fiscal Year 2013 -14 , each Assessor's Parcel within Improvement Area B shall be assigned to Zone I or Zone 2 and 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, Multifamily Property, or Apartment Property, and each Assessor's Parcel of Single Family Property and Multifamily 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 Developed Property The Maximum Special Tax for each Assessor's Parcel of Single Family Property and Multifamily Property in any Fiscal Year shall be the greater of (i) the Assigned Annual Special Tax or (ii) the Backup Annual Special Tax. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 hmprovement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doe Page 9 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 or Table 2 of Section D Prior to the issuance of Bonds, the Assigned Special Tax for Facilities on Developed Property set forth in Table I and /or Table 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 adopted by the City Council and in effect at the time of initial CFD formation, 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 and /or Table 2) to the amount necessary to equal such maximum overlapping debt burden level with the written consent of the CFD Administrator. The Maximum Special Tax for Facilities for Approved Property, Undeveloped Property, and Provisional Undeveloped Property shall also be reduced in accordance with the Maximum Special Tax for Facilities reductions for Developed Property. Each Maximum Special Tax for Facilities reduction shall be calculated separately, as reasonably determined by the CFD Administrator, and it shall not be required that reductions among each "Building Square Footage" range of Residential Property be proportional. Additionally, the "CFD Public Facilities" amount in Section G shall be reduced commensurate with an reductions to the Maximum Special Tax for Facilities pursuant to this paragraph, as reasonably determined by 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 ". 2. Multiple Land Use Type 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 properly 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, Multifamily Property, Apartment Property, or Non - Residential Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities applicable City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended __, 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 10 to an Assessor's Parcel of Developed Property for Fiscal Year 2013 -14 shall be determined pursuant to Table I and Table 2 below TABLE 1 ASSIGNED SPECIAL FOR FACILITIES TAX RATES FOR DEVELOPED PROPERTY WITHIN ZONE 1 FOR FISCAL YEAR 2013 -14 Land Use Ty Building Square Footage Rate Single Family Property Single Family Property Greater than 3,250 $2,100 per Single Family Unit Single Family Property 2,751 —3,250 $1,800 per Single Family Unit Single Family Property 2,250 — 2,750 $1,500 per Single Family Unit Single Family Property Less than 2,250 $1,200 per Single Farm Unit Multifamily Property N/A $1,000 per Multifamily Unit Apartment Property N/A $8,786 per Acre Non- Residential Property N/A $8,786 ELr Acre TABLE 2 ASSIGNED SPECIAL FOR FACILITIES TAX RATES FOR DEVELOPED PROPERTY WITHIN ZONE 2 FOR FISCAL YEAR 2013 -14 Land Use Type Building S uare Foota a Rate Single Family Property Greater than 3,250 $2,100 per Single Family Unit Single Family Property 2,751 — 3,250 $1,800 per Single Family Unit Single Family Property 2,250 — 2,750 $1,500 per Single Family Unit Single Family Property Less than 2,250 $1,200 per Single Family Unit Multifamily Property N/A $1,000 per Multifamil Unit Apartment Property N/A $600 per Apartment Unit Non - Residential Property N/A $5,000 per Acre 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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doe Page I l as Approved Property, Undeveloped Property and Provisional Undeveloped Property for Fiscal Year 2013 -14 shall be $8,786 per Acre for Zone 1 and $21,176 per Acre for Zone 2. 3. Increase in the Assigned Special Tax for Facilities On each July 1, commencing July 1, 2014, 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 ANNUAL 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 or Multifamily 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 Properly, 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 or Multifamily 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 or Multifamily Property within such Final Map area. The Maximum Special Tax for Facilities rate(s) applied in (i) above shall be the applicable Undeveloped Property rate for the Zone in which each Assessor's Parcel is located; provided, however, if an Assessor's Parcel is located in two Zones, the Maximum Special Tax for Facilities rate applied shall be the lower of the two Maximum Special Tax for Facilities rates. If the Assigned Special Tax for Facilities rates for Developed Property are reduced pursuant to Section C.1, the Backup Special Tax for Facilities for all Assessor's Parcels of Developed Property classified or reasonably expected to be classified as Single Family Property or Multifamily Property shall be recalculated based on the revised Developed and Undeveloped Property Special Tax for Facilities rates. 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 either Single Family Property or Multifamily 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, 2014, 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 June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _,2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 12 SECTION F METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing Fiscal Year 2013 -14 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 I and Table 2 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 Annual 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 Improvement Area B. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 hnprovement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 13 SECTION G PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G "CFD Public Facilities" means $16,000,000 expressed in 2013 dollars, which shall increase by the Construction Inflation Index on July 1, 2014, and on each July I thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for Improvement Area B, 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. 2005 -2. "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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _,2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 14 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): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Cost plus Administrative Fee less Reserve Fund Credit less Capitalized Interest Credit equals Prepayment Amount As of the date of prepayment, the Prepayment Amount shall be calculated as follows: 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." City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 CC Resolution re CFD 2005 -2 IA B - Consideration re Cliange.doc Page 15 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 0. 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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _, 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 16 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 Improvement Area B. 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 of Improvement Area B 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _ , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 17 The Partial Prepayment Amount shall be calculated according to the following formula: PP= (PG — A)xF +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 Administration 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) shall indicate in the records of CFD No. 2005 -2 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 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 2052 -53 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. 2005 -2 Bonds have been paid; (ii) all authorized facilities of CFD No. 2005 -2 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 Improvement Area B have been satisfied. SECTION J City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended __, 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 18 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 91.03 Acres for Zone 1 and 6.80 Acres for Zone 2. 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 91.03 Acres for Zone I and 6.80 Acres for Zone 2. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 91.03 Acres for Zone I and 6.80 Acres for Zone 2 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 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 Improvement Area B 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doe Page 19 "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by Improvement Area B in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for Improvement Area B 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. 2005 -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 Improvement Area B 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. 2005 -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 Fiscal Year 2013 -14 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 2013 -14 shall be $283.54 per Developed Single Family Unit, $141.77 per Developed Multifamily Unit, and $639 per Acre for each Assessor's Parcel of Non - Residential Property. On each July 1, commencing July 1, 2014, 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 20 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 Improvement Area B 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 of levy), 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 June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 21 EXHIBIT "A" CITY OF LAKE ELSINORE AND CFD NO. 2005 -X CERTIFICATE 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. 2005 -2 of the City of Lake Elsinore ( "CFD No. 2005 -2 ") hereby agree to a reduction in the Maximum Special Tax for Facilities for Developed Property, Approved Property, Undeveloped Property, and /or Provisional Undeveloped Property [within such Improvement Area]: (a) The information in the RMA relating to the Maximum Special Tax for Facilities for Developed Property and /or Approved Property, Undeveloped Property, and Provisional Undeveloped Property within [bnprovernent Area X of CFD No. 2005 -2] shall be modified as follows: [insert Table land /or Table 2 showing effective change to special tax rates for Developed Property and /or insert change to special tax rates for Approved Property, Undeveloped Property, and Provisional Undeveloped Property] (b) The CFD Public Facilities amount in Section G shall be changed to $ 2. Table 1 and /or Table 2 and special tax rates for Approved Property, Undeveloped Property, and Provisional Undeveloped Property may only be modified prior to the issuance of Bonds. Upon execution of the Certificate by the City and CFD No. 2005 -2 the City shall cause an amended Notice of Special Tax Lien ffor the Improvement Area] 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. 2005 -2, receipt of this Certificate and modification of the RMA as set forth in this Certificate. CITY OF LAKE ELSINORE Al CFD Administrator COMMUNITY FACILITIES DISTRICT NO. 2005 -2 OF THE CITY OF LAKE ELSINORE Date: By: Date: City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 22 EXHIBIT "B" ZONE MAP City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 23 Fa: SS t Ui ry 4 ! vi a � ' I r Lo f r }LF t X t t jt s �,l t 3! .....I g2 i City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 CC Resolution re CFD 2005 -2 IA B - Consideration re Change.doc Page 23 RESOLUTION NO. 2014 -025 RESOLUTION OF CONSIDERATION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE TO ALTER THE RATE AND METHOD OF APPORTIONMENT OF AN EXISTING SPECIAL TAX RELATING TO IMPROVEMENT AREA B OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005 -2 (ALBERHILL RANCH) WHEREAS, the City Council (the "Council ") of the City of Lake Elsinore (the "City ") desires to institute proceedings to alter the rate and method of apportionment of an existing special tax with respect to Improvement Area B (the "Improvement Area ") of the City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch) (the "District ") 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 "). NOW, THEREFORE, the City Council of the City of Lake Elsinore, California, acting as the legislative body of City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch), does hereby resolve as follows: SECTION 1. A public hearing (the "Hearing ") on the proposed alterations to the rate and method of apportionment of existing special taxes shall be held on June 24, 2014, at 7:00 p.m., or as soon thereafter as practicable, at the Lake Elsinore Cultural Center located at 183 North Main Street, Lake Elsinore, California 92530. The amended and restated rate and method of apportionment of the special tax is described in detail in Exhibit A attached hereto. SECTION 2. At the time and place set forth above for the hearing, any interested person, including all persons owning lands or registered to vote within the Improvement Area, may appear and be heard. SECTION 3. The City Clerk is hereby directed to publish a notice ( "Notice ") of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the Improvement Area. Such Notice shall contain the text or a summary of this Resolution, state the time and place of the Hearing, a statement that the testimony of all interested persons or taxpayers will be heard, a description of the protest rights of the registered voters and landowners in the Improvement Area as provided in Section 53337 of the Act and a description of the proposed voting procedure for the election required by the Act. Such publication shall be completed at least 7 days prior to the date of the Hearing. SECTION 4. The voting procedure with respect to the proposed alteration of the rate and method of apportionment of existing special taxes shall be by personal service or mailed ballot election. SECTION 5. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED on this 13th day of May, 2014 /1 iTE jT: Virginia J Bloom, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zed Leibold, City Attorney City of Lake Elsinore Natasha Johnson, Mayor City of Lake Elsinore 2 STATE OF CALIFORNIA COUNTY OF RIVERSIDE SS CITY OF LAKE ELSINORE I, VIRGINIA J. BLOOM, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2014 -_ was adopted by the City Council of the City of Lake Elsinore at a regular meeting held on the _ day of 2014 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Virginia J. Bloom, CMC City Clerk EXHIBIT A AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2005 -2 OF THE CITY OF LAKE ELSINORE (ALBERHILL RANCH) (IMPROVEMENT AREA B) SECOND AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2005 -2 OF THE CITY OF LAKE ELSINORE (Alberhill Ranch) (IMPROVEMENT AREA B) The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes in Improvement Area B of the City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch) ( "CFD No. 2005 -2 "). The Special Tax shall be levied on and collected in Improvement Area B of CFD No. 2005 -2 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 Improvement Area B, 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 Improvement Area B: 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, Improvement Area B or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, Improvement Area B or any designee thereof of complying with disclosure requirements of the City, Improvement Area B 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, Improvement Area B 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. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or Improvement Area B for any other administrative purposes of Improvement Area B, including attorney's fees and City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area 13 Second Amended 12014 Reso 2014 -025 CFD Page 5 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. "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'r preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit or, or before May 1" preceding the Fiscal Year in which the Special Tax is being levied. "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. "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 Improvement Area B 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 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area 13 Second Amended , 2014 Reso 2014 -025 CFD Page 6 "CFD No. 2005 -2" means Community Facilities District No. 2005 -2 (Alberhill Ranch) 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. 2005 -2, 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" 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 Is` preceding the Fiscal Year in which the Special Tax is being levied. However, in the event Bonds have not been issued and the building permit has expired prior to the commencement of new construction, such Assessor's Parcel shall (a) be re- classified as either Undeveloped Property or Approved Property, as applicable, for the next fiscal year and (b) be re- classified as Developed Property based on the issuance of a new building permit for such Assessor's Parcel and the Building Square Footage indicated on such building permit shall dictate the Assigned Special Tax for Facilities rate. "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. "Improvement Area B" means Improvement Area B of CFD No. 2005 -2, as identified on the most recent boundary map for CFD No. 2005 -2 on file with the County of Riverside Recorder's Office. "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 and /or Table 2 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. 2005 -2 within Improvement Area B in any Fiscal Year on any Assessor's Parcel. "Multifamily Property" means all Assessor's Parcels of Residential Property on which one or more Multifamily Units are constructed. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 Reso 2014 -025 CFD Page 7 "Multifamily Unit" means a dwelling unit within a building comprised of attached residential units available for sale to an end user. "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 potion 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) 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 for Zone 1 or Zone 2 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. "Single Family Property" means all Assessor's Parcels of Residential Property other than Apartment Property and Multifamily Property. "Single Family Unit" means a residential dwelling unit other than an Apartment Unit or Multifamily Unit. "Special Tax" means any of the special taxes authorized to be levied within Improvement Area B by CFD No. 2005 -2 pursuant to the Act. "Special Tax for Facilities" means any of the special taxes authorized to be levied within Improvement Area B by CFD No. 2005 -2 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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 Reso 2014 -025 CFD Page 8 anticipated shortfall due to Special Tax for Facilities delinquencies, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2005 -2 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 Improvement Area B, 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. "Zone" means Zone 1 or Zone 2. "Zone 1" means a specific geographic area within Improvement Area B as depicted in Exhibit B attached hereto. "Zone 2" means a specific geographic area within Improvement Area B as depicted in Exhibit B attached hereto. SECTION B CLASSIFICATION OF ASSESSOR'S PARCELS Each Fiscal Year, beginning with Fiscal Year 2013 -14 , each Assessor's Parcel within Improvement Area B shall be assigned to Zone 1 or Zone 2 and 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, Multifamily Property, or Apartment Property, and each Assessor's Parcel of Single Family Property and Multifamily 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 Property The Maximum Special Tax for each Assessor's Parcel of Single Family Property and Multifamily Property in any Fiscal Year shall be the greater of (i) the Assigned Annual Special Tax or (ii) the Backup Annual Special Tax. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 Reso 2014 -025 CFD Page 9 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 or Table 2 of Section D Prior to the issuance of Bonds, the Assigned Special Tax for Facilities on Developed Property set forth in Table 1 and /or Table 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 and in effect at the time of initial CFD formation, 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 and /or Table 2) to the amount necessary to equal such maximum overlapping debt burden level with the written consent of the CFD Administrator. The Maximum Special Tax for Facilities for Approved Property, Undeveloped Property, and Provisional Undeveloped Property shall also be reduced in accordance with the Maximum Special Tax for Facilities reductions for Developed Property. Each Maximum Special Tax for Facilities reduction shall be calculated separately, as reasonably determined by the CFD Administrator, and it shall not be required that reductions among each `Building Square Footage" range of Residential Property be proportional. Additionally, the "CFD Public Facilities" amount in Section G shall be reduced commensurate with an reductions to the Maximum Special Tax for Facilities pursuant to this paragraph, as reasonably determined by 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 ". 2. Multiple Land Use Type 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, Multifamily Property, Apartment Property, or Non- Residential Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities applicable City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended __ , 2014 Reso 2014 -025 CFD Page 10 to an Assessor's Parcel of Developed Property for Fiscal Year 2013 -14 shall be determined pursuant to Table 1 and Table 2 below TABLE 1 ASSIGNED SPECIAL FOR FACILITIES TAX RATES FOR DEVELOPED PROPERTY WITHIN ZONE 1 FOR FISCAL YEAR 2013 -14 Land Use__T a Buildin S uare Foota a Rate Single Family Property Greater than 3,250 Greater than 3,250 $2,100 per Single Family Unit Single Family Property $1,800 per 2,751 — 3,250 $1,800 per Single Family Unit Single Family Property Single Family 2,250 — 2,750 $1,500 per Single Family Unit Single Family Property Single Family Less than 2,250 $1,200 per Single Family Unit Multifamily Property Unit N/A $1,000 per Multifamil Unit Apartment Property N/A $8,786 per Acre Non - Residential Property N/A $8,786 er Acre TABLE 2 ASSIGNED SPECIAL FOR FACILITIES TAX RATES FOR DEVELOPED PROPERTY WITHIN ZONE 2 FOR FISCAL YEAR 2013 -14 Land Use T e Building Square Foota a Rate Sin le Family Property Greater than 3,250 $2,100 per Single Fain ily Unit Single Family Property 2,751 — 3,250 $1,800 per Single Family Unit Single Family Property 2,250 -2,750 $1,500 per Single Family Unit Single Family Pro pert Less than 2,250 $1,200 per Single Family Unit Multifamily Property N/A $1,000 per Multifamil Unit Apartment Property N/A $600 er A artment Unit Non - Residential Property N/A $5,000 per Acre 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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Reso 2014 -025 CFD Page 1 I as Approved Property, Undeveloped Property and Provisional Undeveloped Property for Fiscal Year 2013 -14 shall be $8,786 per Acre for Zone 1 and $21,176 per Acre for Zone 2. 3. Increase in the Assigned Special Tax for Facilities On each July 1, commencing July 1, 2014, 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 ANNUAL 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 or Multifamily 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 or Multifamily 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 or Multifamily Property within such Final Map area. The Maximum Special Tax for Facilities rate(s) applied in (i) above shall be the applicable Undeveloped Property rate for the Zone in which each Assessor's Parcel is located; provided, however, if an Assessor's Parcel is located in two Zones, the Maximum Special Tax for Facilities rate applied shall be the lower of the two Maximum Special Tax for Facilities rates. ii the Assigned Special Tail for Faeri.itleS rates for Developed Property are reduced pursuant to Section CA, the Backup Special Tax for Facilities for all Assessor's Parcels of Developed Property classified or reasonably expected to be classified as Single Family Property or Multifamily Property shall be recalculated based on the revised Developed and Undeveloped Property Special Tax for Facilities rates. 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 either Single Family Property or Multifamily 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, 2014, 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 June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 Reso 2014 -025 CFD Page 12 SECTION F METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing Fiscal Year 2013 -14 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 "Pax 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 I and Table 2 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 Annual 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 'Fax 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 Improvement Area B. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended ___, 2014 Reso 2014 -025 CFD Page 13 SECTION G PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "CFD Public Facilities" means $16,000,000 expressed in 2013 dollars, which shall increase by the Construction Inflation Index on July I, 2014, 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 hnprovement Area B, 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. 2005 -2. "Constructions 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 Constriction Fund actually earned prior to the date of prepayment. " Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of .especial 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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 Reso 2014 -025 CFD Page 14 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): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Cost plus Administrative Fee less Reserve Fund Credit less Capitalized Interest Credit equals Prepayment Amount As of the date of prepayment, the Prepayment Amount shall be calculated as follows: I. 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 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 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." City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _, 2014 Reso 2014 -025 CFD Page 15 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 0. 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 fast City of Lake Elsinore .Tune 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Reso 2014 -025 CFD Page 16 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 II shall be retained by Improvement Area B. 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 of Improvement Area B 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 Reso 2014 -025 CFD Page 17 The Partial Prepayment Amount shall be calculated according to the following formula: PP= (PG— A)xF +A The terms above have the following meanings PP = the Partial Prepayment Amount. PG = 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 Administration Fee calculated according to Section G. The owner of any Assessor's Parcel who desires sued 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) shall indicate in the records of CFD No. 2005 -2 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 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 2052 -53 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. 2005 -2 Bonds have been paid; (ii) all authorized facilities of CFD No. 2005 -2 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 Improvement Area B have been satisfied. SECTION J City of lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Reso 2014 -025 CFD Page 18 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 91.03 Acres for Zone 1 and 6.80 Acres for Zone 2. 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 91.03 Acres for Zone 1 and 6.80 Acres for Zone 2. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 91.03 Acres for Zone I and 6.80 Acres for Zone 2 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 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 Improvement Area B 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Reso 2014 -025 CFD Page 19 "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by Improvement Area B in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for Improvement Area B 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. 2005 -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 Improvement Area B 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. 2005 -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 Fiscal Year 2013 -14 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 - Resldenti2i Property, up to the applicable Maximum Special TaX f6r Services to fund the Special Tax Requirement for Services. The Maximum Special Tax for Services for Fiscal Year 2013 -14 shall be $283.54 per Developed Single Family Unit, $141.77 per Developed Multifamily Unit, and $639 per Acre for each Assessor's Parcel of Non - Residential Property. On each July 1, commencing July 1, 2014, 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 Reso 2014 -025 CFD Page 20 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 Improvement Area B 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 of levy), 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 June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Reso 2014 -025 CFD Page 21 EXHIBIT "A" CITY OF LAKE ELSINORE AND CFD NO. 2005 -X 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. 2005 -2 of the City of Lake Elsinore ( "CFD No. 2005 -2 ") hereby agree to a reduction in the Maximum Special Tax for Facilities for Developed Property, Approved Property, Undeveloped Property, and /or Provisional Undeveloped Property [within such Improvement Area]: (a) The information in the RMA relating to the Maximum Special Tax for Facilities for Developed Property and /or Approved Property, Undeveloped Property, and Provisional Undeveloped Property within [Improvement Area X of CFD No. 2005 -2] shall be modified as follows: [insert Table 1 and /or Table 2 showing effective change to special tax rates for Developed Property and /or insert change to special tax rates for Approved Property, Undeveloped Property, and Provisional Undeveloped Property] (b) The CFD Public Facilities amount in Section G shall be changed to $ 2. Table 1 and /or Table 2 and special tax rates for Approved Property, Undeveloped Property, and Provisional Undeveloped Property may only be modified prior to the issuance of Bonds. Upon execution of the Certificate by the City and CFD No. 2005 -2 the City shall cause an amended Notice of Special Tax Lien [for the Improvement Area] to be recorded reflecting the modifications set forth herein. By Pxecutic:: hereof, +he undersiI -ed acknowledge ss, on behalf of the City ^f Lake Elsinore and CFD No. 2005 -2, receipt of this Certificate and modification of the RMA as set forth in this Certificate. CITY OF LAKE ELSINORE M CFD Administrator COMMUNITY FACILITIES DISTRICT NO. 2005 -2 OF THE COPY OF LAKE ELSINORE 0 Date: Date: City of Lake Elsinore June 22, 2005 Comnumity Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _, 2014 Reso 2014 -025 CFD Page 22 EXHIBIT "B" ZONE «AP ! \J j3» LAJ Lj < ®�\ > y.. w \/ ( U) \ \ \\�� \ . w City JLake Elsinore June 22, 20B5 Community Facilities District yva(13hill Ranch) Amended «9, !0,6 Improvement Area B Second Amended ,2014 Reso c o Page 23 PLEASE READ AT THE MAY 13, 2014 CITY COUNCIL MEETING RE: May 13, 2014 City Council Meeting (no agenda item number yet at this time) Dear Mayor Johnson and Council We are asking you to vote NO on placing the reduction of CFD rates for CFD2005 -2B on a future calendar. We don't believe this issue should ever be placed on the calendar for a vote when it is presented to you during the May 13, 2014 by Castle & Cooke. All current homeowners in Alberhill Ranch will be hurt if CFD2005 -213 gets a lower mello roos rate. We understand Castle & Cooke wanting to sell land in 2005 -B and believe the City should make it a mandatory part of the approval that Castle & Cook buy down ALL CFD2005 -2A bonds (for all the houses and land) to meet the new proposed rates for 2005 -B. We would like to remind you last year the City looked at refunding the bond for CFD2005 -A and it was determined at that time we are at the best rate we can get, so refunding is not an option. The CFD rate in Alberhill Ranch was established (we believed when we purchased our homes) at the same rate for all of Alberhill Ranch and we believe it should remain the same and /or the developer Castle & Cooke or their prospective buyer should be required to pay all bonds in CFD2005 -2A down to be equal to the proposed rates they are asking for in 2005 -28. There is no reason for this to be occurring houses are selling and prices of homes are going up. Some of us paid extremely high market values in Alberhill Ranch for our homes over $600k and we are paying CFD taxes on that amount. Some of us are paying approximately $6,000.00 a year in taxes for CFD2005 -A. The proposed rate for CFD2005 -B would be $2,100.00 a year for the same house. The price of many of our homes have plummeted and will take a real nose dive if you approve this proposed reduction in taxes for CFD2005 -B. As our elected representatives we are asking you to help us in this situation and not let this item be placed on a future calendar for a vote. Warm regards, Paulie Tehrani and Sharon Gallina Home Owners Alberhill Ranch CFD -2005A Lake Elsinore, CA 92530 4! tw H C 01 E N 0 O O. L C t0 C L N .G a y � m o - z > v v > 3 3 a c O q7'5 u L w p o ro v o °p o v _ io ➢ « S _ d N _ " w Ff ` ➢ O a _ w � a $ O ° p E .. ➢° c > c o o' ° u a s c O° •' O Z tO 6O V '➢ ° c °o EE v a« v➢ co ° 'o r> U > n n E E ma win a v o„ u m° o ' a a �•+ a s .°, E °i➢ o N a m o ¢ E 'S o E E d d v d v'2' > - o «° H o v c E ° ° s w o d s E_ u° v` a w u° u° ° o a E o o 9 0 d = E o w V c 0 0 d L m E o u o> o m n E o o w a y L ° m �°•i `o u � o c o m o D N E u 3 o o u c r d H y L r c s C d C u 0 ° ° ° u o« u° u° o rv° w 0 v> '^ g E r➢ ry d L o 0 o o E m a E w E L N o o F N Q c O � E o a o m E� ° ° E „ s o E> n o 'O - o .° m .o .° as n o mE E o r «`o °' E o > �• «° a c 'q a E c m E & p d > a E o L in .E° o s yaa° v E E >o v o vs uu'i� ° c i qE o ➢-° o m° 15 a °a o c vi a o nL' o E o E _ E u u° v d0 e1 N c c a a o i a a p E a — — o nT o o 0 c x s a o N o p p - c u D- ` ° o ° o° - _ o n °' c n 0 `o 3 0 o m v o p E o m m a 0 0 ° � m 3 v D v E¢ c c 0° � m o E Q v " v n. � m °c "O C D C f O C J v 2 C C C -n O ✓1 O D D c a m E o z p o v u m y m p 0 c 9 0DO t o o c m ¢° r o zL' y t E c v ° y a.,o -. Y v �i D a_ a o u a m r n u E 2 w ��' Yom' a E A c v n v H r ro E` a z o o U a m o F o U u = U N N M y 3 N n c N a p 4 Agenda Date: 5/13/2014 In Control: City Council City of Lake Elsinore Text File File Number: ID# 14 -128 Version: 2 130 South Main Street Lake Elsinore, CA 92530 w .lake- eIsinore.org Status: Approval Final File Type: Report City of Lake Elsinore Page 1 Printed on 5/8/2014 RESOLUTION NO. 2014 -025 RESOLUTION OF CONSIDERATION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE TO ALTER THE RATE AND METHOD OF APPORTIONMENT OF AN EXISTING SPECIAL TAX RELATING TO IMPROVEMENT AREA B OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005 -2 (ALBERHILL RANCH) WHEREAS, the City Council (the "Council ") of the City of Lake Elsinore (the "City ") desires to institute proceedings to alter the rate and method of apportionment of an existing special tax with respect to Improvement Area B (the "Improvement Area ") of the City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch) (the "District ") 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 "). NOW, THEREFORE, the City Council of the City of Lake Elsinore, California, acting as the legislative body of City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch), does hereby resolve as follows: SECTION 1. A public hearing (the "Hearing ") on the proposed alterations to the rate and method of apportionment of existing special taxes shall be held on June 24, 2014, at 7:00 p.m., or as soon thereafter as practicable, at the Lake Elsinore Cultural Center located at 183 North Main Street, Lake Elsinore, California 92530. The amended and restated rate and method of apportionment of the special tax is described in detail in Exhibit A attached hereto. SECTION 2. At the time and place set forth above for the hearing, any interested person, including all persons owning lands or registered to vote within the Improvement Area, may appear and be heard. SECTION 3. The City Clerk is hereby directed to publish a notice ( "Notice ") of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the Improvement Area. Such Notice shall contain the text or a summary of this Resolution, state the time and place of the Hearing, a statement that the testimony of all interested persons or taxpayers will be heard, a description of the protest rights of the registered voters and landowners in the Improvement Area as provided in Section 53337 of the Act and a description of the proposed voting procedure for the election required by the Act. Such publication shall be completed at least 7 days prior to the date of the Hearing. SECTION 4. The voting procedure with respect to the proposed alteration of the rate and method of apportionment of existing special taxes shall be by personal service or mailed ballot election. SECTION 5. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED on this 13th day of May, 2014 ATTEST: Virginia J Bloom, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore Natasha Johnson, Mayor City of Lake Elsinore 2 STATE OF CALIFORNIA COUNTY OF RIVERSIDE SS CITY OF LAKE ELSINORE I, VIRGINIA J. BLOOM, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2014 -_ was adopted by the City Council of the City of Lake Elsinore at a regular meeting held on the _ day of 2014 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Virginia J. Bloom, CMC City Clerk EXHIBIT A AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2005 -2 OF THE CITY OF LAKE ELSINORE (ALBERHILL RANCH) (IMPROVEMENT AREA B) SECOND AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2005 -2 OF THE CITY OF LAKE ELSINORE (Alberhill Ranch) (IMPROVEMENT AREA B) The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes in Improvement Area B of the City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill Ranch) ( "CFD No. 2005 -2 "). The Special Tax shall be levied on and collected in Improvement Area B of CFD No. 2005 -2 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 Improvement Area B, 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 Improvement Area B: 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, Improvement Area B or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, Improvement Area B or any designee thereof of complying with disclosure requirements of the City, Improvement Area B 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, Improvement Area B 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. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or Improvement Area B for any other administrative purposes of Improvement Area B, including attorney's fees and City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended ___,2014 Reso 2014 -025 CFD Page 5 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. "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" preceding the Fiscal Year in which the Special lax is being levied, and (ii) that have not been issued a building pei777it on Or befurz May 1 s` preceding the Fiscal Year in which the Special Tax is being levied. "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. "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 font 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 Improvement Area B 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 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _ 2014 Reso 2014 -025 CFD Page 6 "CFD No. 2005 -2" means Community Facilities District No. 2005 -2 (Alberhill Ranch) 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. 2005 -2, 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 1st 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. However, in the event Bonds have not been issued and the building permit has expired prior to the commencement of new construction, such Assessor's Parcel shall (a) be re- classified as either Undeveloped Property or Approved Property, as applicable, for the next fiscal year and (b) be re- classified as Developed Property based on the issuance of a new building permit for such Assessor's Parcel and the Building Square Footage indicated on such building permit shall dictate the Assigned Special Tax for Facilities rate. "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. "Improvement Area B" means Improvement Area B of CFD No. 2005 -2, as identified on the most recent boundary map for CFD No. 2005 -2 on file with the County of Riverside Recorder's Office. "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 and /or Table 2 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. 2005 -2 within Improvement Area B in any Fiscal Year on any Assessor's Parcel. "Multifamily Property" means all Assessor's Parcels of Residential Property on which one or more Multifamily Units are constructed. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Reso 2014 -025 CFD Page 7 "Multifamily Unit" means a dwelling unit within a building comprised of attached residential units available for sale to an end user. "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) 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 Assessors 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 for Zone 1 or Zone 2 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. "Single Family Property" means all Assessor's Parcels of Residential Property other than Apartment Property and Multifamily Property. "Single Family Unit" means a residential dwelling unit other than an Apartment Unit or Multifamily Unit. "Special Tax" means any of the special taxes authorized to be levied within Improvement Area B by CFD No. 2005 -2 pursuant to the Act. "Special Tax for Facilities" means any of the special taxes authorized to be levied within Improvement Area B by CFD No. 2005 -2 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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _ 12014 Reso 2014 -025 CFD Page 8 anticipated shortfall due to Special Tax for Facilities delinquencies, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2005 -2 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 Improvement Area B, 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. "Zone" means Zone I or Zone 2. "Zone 1" means a specific geographic area within Improvement Area B as depicted in Exhibit B attached hereto. "Zone 2" means a specific geographic area within Improvement Area B as depicted in Exhibit B attached hereto. SECTION B CLASSIFICATION OF ASSESSOR'S PARCELS Each Fiscal Year, beginning with Fiscal Year 2013 -14 , each Assessor's Parcel within Improvement Area B shall be assigned to Zone I or Zone 2 and 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, Multifamily Property, or Apartment Property, and each Assessor's Parcel of Single Family Property and Multifamily 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 Property The Maximum Special Tax for each Assessor's Parcel of Single Family Property and Multifamily Property in any Fiscal Year shall be the greater of (i) the Assigned Annual Special Tax or (ii) the Backup Annual Special Tax. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 Reso 2014 -025 CFD Page 9 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 or Table 2 of Section D Prior to the issuance of Bonds, the Assigned Special Tax for Facilities on Developed Property set forth in Table 1 and /or Table 2 may be reduced in accordance with, and subject to the conditions sett 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 and in effect at the time of initial CFD formation, 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 'fable 1 and /or Table 2) to the amount necessary to equal such maximum overlapping debt burden level with the written consent of the CFD Administrator. The Maximum Special Tax for Facilities for Approved Property, Undeveloped Property, and Provisional Undeveloped Property shall also be reduced in accordance with the Maximum Special Tax for Facilities reductions for Developed Property. Each Maximum Special Tax for Facilities reduction shall be calculated separately, as reasonably determined by the CFD Administrator, and it shall not be required that reductions among each "Building Square Footage" range of Residential Property be proportional. Additionally, the "CFD Public Facilities" amount in Section G shall be reduced commensurate with an reductions to the Maximum Special Tax for Facilities pursuant to this paragraph, as reasonably determined by 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 ". 2. Multiple Land Use Type 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, Multifamily Property, Apartment Property, or Non - Residential Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities applicable City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _ 2014 Reso 2014 -025 CFD Page 10 to an Assessor's Parcel of Developed Property for Fiscal Year 2013 -14 shall be determined pursuant to Table I and Table 2 below TABLE 1 ASSIGNED SPECIAL FOR FACILITIES TAX RATES FOR DEVELOPED PROPERTY WITHIN ZONE I FOR FISCAL YEAR 2013 -14 Land Use T e Buildin S ware Foota a Rate Rate Single Family Property Greater than 3,250 $2,100 per Single Family Unit Single Family Pro erty. 2,751 — 3,250 $1,800 per Single Family Unit Single Family Property 2,250 — 2,750 $1,500 per Single Family Unit Single Family Property Less than 2,250 $1,200 per Single Family Unit Multifamily Property N/A $1,000 per Multifamily Unit Apartment Property N/A $8,786 per Acre N/A Non - Residential Pro erty I N/A $8,786 er Acre N/A TABLE 2 ASSIGNED SPECIAL FOR FACILITIES TAX RATES FOR DEVELOPED PROPERTY WITHIN ZONE 2 FOR FISCAL YEAR 2013 -14 Land Use Type Buildi 19-Square Foota e Rate Sin le Family Pro erty Greater than 3,250 $2,100 per Single Family Unit Single Family Property 2,751 — 3,250 $1,800 per Single Family Unit Single Family Property 2,250 — 2,750 $1,500 per Single Family Unit Single Family Property Less than 2,250 $1,200 per Single Family Unit Multifamily Property N/A $1,000 per Multifamily Unit Apartment Property N/A $600 per Apartment Unit Non - Residential Property N/A $5,000 per Acre 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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 hnprovement Area B Second Amended 12014 Reso 2014 -025 CFD Page 1 1 as Approved Property, Undeveloped Property and Provisional Undeveloped Property for Fiscal Year 2013 -14 shall be $8,786 per Acre for Zone 1 and $21,176 per Acre for Zone 2. 3. Increase in the Assigned Special Tax for Facilities On each July 1, commencing July 1, 2014, 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 ANNUAL 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 or Multifamily 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 or Multifamily 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 or Multifamily Property within such Final Map area. The Maximum Special Tax for Facilities rate(s) applied in (i) above shall be the applicable Undeveloped Property rate for the Zone in which each Assessor's Parcel is located; provided, however, if an Assessor's Parcel is located in two Zones, the Maximum Special Tax for Facilities rate applied shall be the lower of the two Maximum Special Tax for Facilities rates. If the Assigned Special Tax for Facilities rates for Developed Property are reduced pursuant to Section C.1, the Backup Special Tax for Facilities for all Assessor's Parcels of Developed Property classified or reasonably expected to be classified as Single Family Property or Multifamily Property shall be recalculated based on the revised Developed and Undeveloped Property Special Tax for Facilities rates. 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 either Single Family Property or Multifamily 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, 2014, 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 June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 Reso 2014 -025 CFD Page 12 SECTION F METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing Fiscal Year 2013 -14 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 'fax 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 I and Table 2 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 Annual 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 Improvement Area B. City of Lake Elsinore .Tune 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Reso 2014 -025 CFD Page 13 SECTION G PREPAYMENT OF SPECIAL TAX FOR FACILITIES he following additional definitions apply to this Section G "CFD Public Facilities" means $16,000,000 expressed in 2013 dollars, which shall increase by the Construction Inflation Index on July 1, 2014, 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 Improvement Area B, 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. 2005 -2. "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 hldex 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 niter the first IntefeJt alld %ol 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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 Reso 2014 -025 CFD Page 14 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): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Cost plus Administrative Fee less Reserve Fund Credit less Capitalized Interest Credit equals Prepayment Amount As of the date of prepayment, the Prepayment Amount shall be calculated as follows: 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 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 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 June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 Reso 2014 -025 CFD Page 15 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 0. 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 City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Reso 2014 -025 CFD Page 16 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 Improvement Area B. 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 of Improvement Area B 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Reso 2014 -025 CFD Page 17 The Partial Prepayment Amount shall be calculated according to the following formula: PP= (PG — A)xF +A The terms above have the following meanings PP = the Partial Prepayment Amount. PG = 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 Administration Fee calculated according to Section G. The owner of any Assessor's Parcel Who desires such prepayment siiail 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) shall indicate in the records of CFD No. 2005 -2 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 ail 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 2052 -53 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. 2005 -2 Bonds have been paid; (ii) all authorized facilities of CFD No. 2005 -2 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 Improvement Area B have been satisfied. SECTION J City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _ , 2014 Reso 2014 -025 CFD Page 18 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 91.03 Acres for Zone 1 and 6.80 Acres for Zone 2. 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 91.03 Acres for Zone 1 and 6.80 Acres for Zone 2. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 91.03 Acres for Zone 1 and 6.80 Acres for Zone 2 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 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 Improvement Area B 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 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 2014 Reso 2014 -025 CFD Page 19 "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by Improvement Area B in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for Improvement Area B 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. 2005 -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 Improvement Area B 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. 2005 -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 Fiscal Year 2013 -14 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 Lie applicable Maximum Special Tax 'or Services 'to fund the Special Tax Requirement for Services. The Maximum Special Tax for Services for Fiscal Year 2013 -14 shall be $283.54 per Developed Single Family Unit, $141.77 per Developed Multifamily Unit, and $639 per Acre for each Assessor's Parcel of Non - Residential Property. On each July 1, commencing July 1, 2014, 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. City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended _ _ , 2014 Reso 2014 -025 CFD Page 20 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 Improvement Area B 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 of levy), but an adjustment shall be made to the Special 'Fax 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 June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended 12014 Rose 2014 -025 CFD Page 21 EXHIBIT "A" CITY OF LAKE ELSINORE AND CFD NO. 2005-X CERTIFICATE 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. 2005 -2 of the City of Lake Elsinore ( "CFD No. 2005 -2 ") hereby agree to a reduction in the Maximum Special Tax for Facilities for Developed Property, Approved Property, Undeveloped Property, and /or Provisional Undeveloped Property [within such Improvement Areal: (a) The inkraiation iii d- RMA relating to the Maxii -num Special Tax for F acuities for Developed Property and /or Approved Property, Undeveloped Property, and Provisional Undeveloped Property within [Improvement Area X of CFD No. 2005 -2] shall be modified as follows: [insert Table 1 and/or Table 2 showing effective change to special tax rates for Developed Properi)) and/or insert change to special tax rates,for Approved Property, Undeveloped Property, and Provisional Undeveloped Property] (b) The CFD Public Facilities amount in Section G shall be changed to 2. Table 1 and /or Table 2 and special tax rates for Approved Property, Undeveloped Property, and Provisional Undeveloped Property may only be modified prior to the issuance of Bonds. 3. Upon execution of the Certificate by the City and CFD No. 2005 -2 the City shall cause an amended Notice of Special Tax Lien [for the Improvement Area] to be recorded reflecting the modifications set forth herein. By execution hereof', the undersigned acknowledges, On behalf of the City ^f Lake CFD No. 2005 -2, receipt of this Certificate and modification of the RMA as set forth in this Certificate. CITY OF LAKE ELSINORE By: CFD Administrator COMMUNITY FACILITIES DISTRICT NO. 2005 -2 OF THE CITY OF LAKE ELSINORE Date: By: Date: City of Lake Elsinore June 22, 2005 Community Facilities District No. 2005 -2 (Alberhill Ranch) Amended May 9, 2006 Improvement Area B Second Amended , 2014 Reso 2014 -025 CFD Page 22 EXHIBIT "B , ZONE MAP { < } \V \1 1 2 \ \ J © ) ; \{ ? � y/ ! — � ) �\ E \ \ ( - @ 6� \ � , � City « Lake Elsinore June z 2u! Community Facilities Di a No. 2005-2 (Alber y,r ) imp & yKl0B6 Improvement A a Second Amended ,514 me 201¥02 cro Page 23 ASSUMPTIONS MADE I . The model chosen is a 2,537 sl KB home locoled ol the Tenoces in Alberhill Ronch thot would be offected by lhe reduction in CFD cosi. 2. The Sole Price of the dwelling is lhe bose price of KB's new offering ol The Tenoces. 3. I ossumed o convenlionol loon wilh o 5% down poymenl. 4. Avoiloble finoncing of o 4.5% fixed inlerest rote for o 30 yeor lerm bosed on on interview wilh Morgie Volenzuelo ol KB Homes, the Tenoces. 5. Morlgoge lnsuronce rote is bosed on inlerview of morlgoge bonker Jenny Holl of One Trusl Home Loons. Temeculo. 6. The bose properly lox role used wos loken from o represenlolive dwelling in Alberhill Ronch. 7. The speciol ossessments were olso ioken from o similody sized dwelling in Alberhill, odlusling for the difference in dwelling size. 8. The reduclion in lhe speciol ossessment is loken ftom o REPORT TO CITY COUNCII doted August 13, 2013, Poge 2. 9. Common oreo expense wos loken from informotion provided by KB Homes. I l. The income quolificotion of 3limes the tolol monlly cosl wos provided by Morgie Volenzuelo of KB Homes ot lhe Tenoces. oown Pdvmenl !W" $16,149'50 Amnl Finonced 95.W $306,840'50 PIOPOSED REDUCNON IN CFO 9322,990.00 Sole Price Buyer could quolity for: $1.554.72 $,f.1g6 Monthly Mortgoge lnsuronce l.l5% onnuolly of loon bolonce Property Toxes Bose Property Toxes l% Speciol Assessments Reduced from $3,799 1o $150O 2.13% TotolTqes Common Areo Fee Down Pwment 5A% $17,600.00 Amounl Finonced 95.Wo $334'400.m Monlhly Poyment $1,694.36 txtsnNG crD Sole Price Monlhly Poyment Monlhly Mortgoge lnsuronce Property Toxes Bose Properly Toxes Speciol Assessmenls Totol Toxes Annuolly/Monthly/Rote Monthly Common Areo Fee l.l5% onnuolly of l@n bolonce t%$3.520.00 $2.3r 3. r 6 $s.833.r6 $486.10 $r55.m Dlfidcnce3 ss52,000.(n s2t,010.q, $3n.47 s290.r0 -$2,299.@ 1.66% 9.O& $r 55.00 Monthly lnsuronce Cosl $975lyr $81.25 Iotol Monthly Co$ $2,738.53 lnsuronce $975lyr $81.25 totot tumtntyCosl $Z,l3l.tt $8,2r 5.58 $8,21 r.5rlncome to Quolify 3X lncome lo Quolify 3X $3,229.e0 $4,612.16