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HomeMy WebLinkAboutCC Reso No 2016-023 CC Reso Declaring Its Intent to Establish CFD No. 2015-4RESOLUTION NO. 2016 -023 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, DECLARING ITS INTENT TO ESTABLISH COMMUNITY FACILITIES DISTRICT NO. 2015 -4 OF THE CITY OF LAKE ELSINORE (TERRACINA), TO AUTHORIZE THE LEVY OF A SPECIAL TAX TO PAY THE COSTS OF ACQUIRING OR CONSTRUCTING CERTAIN FACILITIES, SERVICES AND EXPENSES OF THE DISTRICT AND TO PAY DEBT SERVICE ON BONDED INDEBTEDNESS WHEREAS, the City of Lake Elsinore (the "City ") received a petition signed by the owner of more than ten percent of the land within the boundaries of the territory which is proposed for inclusion in a proposed community facilities district, which petition meets the requirements of Sections 53318 and 53319 of the Government Code of the State of California; and WHEREAS, the City Council of the City (the "City Council ") desires to adopt this resolution of intention as provided in Section 53321 of the Government Code of the State of California to establish a community facilities district consisting of the territory described in Attachment "A" hereto and incorporated herein by this reference, which the City Council hereby determines shall be known as "Community Facilities District No. 2015 -4 of the City of Lake Elsinore (Terracina)" (the "Community Facilities District No. 2015 4" or the "District ") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the Government Code (the "Act ") to finance (1) the purchase, construction, modification, expansion, improvement or rehabilitation of certain real or other tangible property described in Attachment "B" hereto and incorporated herein by this reference, including all furnishings, equipment and supplies related thereto (collectively, the "Facilities "), which Facilities have a useful life of five years or longer, (2) the incidental expenses to be incurred in connection with financing the Facilities and forming and administering the District (the "Facilities Incidental Expenses ") (3) maintaining, servicing, cleaning, repairing and /or replacing landscaped areas in public street right -of -ways, public landscaping, public open spaces and other similar landscaped areas officially dedicated for public use and water quality improvements (the "Services "), and (4) the incidental expenses to be incurred in connection with forming and administering the District and financing the Services (the "Services Incidental Expenses" and together with the Facilities Incidental Expenses, the "Incidental Expenses "); WHEREAS, the City Council further intends to approve an estimate of the costs of the Facilities, the Services and the Incidental Expenses for Community Facilities District No. 2015- 4; and WHEREAS, it is the intention of the City Council to consider financing the Facilities, the Services and the Incidental Expenses through the formation of Community Facilities District No. 2015 -4 and the issuance of bonded indebtedness in an amount not to exceed $20,000,000 with respect to the Facilities and the Facilities Incidental Expenses, and the levy of a special tax to pay for the Facilities (the "Facilities Special Tax "), the Services (including the special tax to be levied contingent upon the inability of a property owner association to maintain the Services (collectively, the "Services Special Tax ")) and the Incidental Expenses and to pay debt service on the bonded indebtedness, provided that the bond sale and such special tax levy are approved at an election to be held within the boundaries of Community Facilities District No. 2015 -4; and City Council Resolution No. 2016 -023 Page 2 of 6 WHEREAS, the City desires to enter into a reimbursement agreement with Terracina Investors, LLC, a California limited liability company (the "Developer "), the form of which is on file with the City Clerk (the "Reimbursement Agreement "), to provide for the reimbursement of certain amounts advanced by the Developer in connection with the formation of the District; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct. Section 2. A community facilities district is proposed to be established under the terms of the Act. It is further proposed that the boundaries of the community facilities district shall be the legal boundaries as described in Attachment "A" hereto, which boundaries shall, upon recordation of the boundary map for the District, include the entirety of any parcel subject to taxation by the District, and as depicted on the map of the proposed Community Facilities District No. 2015 -4 which is on file with the City Clerk. The City Clerk is hereby directed to sign the original map of the District and record it with all proper endorsements thereon with the Assessor - County Clerk- Recorder of the County of Riverside within 15 days after the adoption of this resolution, all as required by Section 3111 of the Streets and Highways Code of the State of California. Section 3. The name of the proposed community facilities district shall be "Community Facilities District No. 2015 -4 of the City of Lake Elsinore ( Terracina)." Section 4. The Facilities proposed to be provided within Community Facilities District No. 2015 -4 are public facilities as defined in the Act, which the City and the Elsinore Valley Municipal Water District, with respect to certain water and sewer facilities, are authorized by law to construct, acquire, own and operate. The City Council hereby finds and determines that the description of the Facilities herein is sufficiently informative to allow taxpayers within the proposed District to understand what the funds of the District may be used to finance. The Facilities Incidental Expenses expected to be incurred include the cost of planning and designing the Facilities, the costs of forming the District, issuing bonds and levying and collecting a special tax within the proposed District. The Facilities may be acquired from one or more of the property owners within the District as completed public improvements or may be constructed from bond or Facilities Special Tax proceeds. All or a portion of the Facilities may be purchased with District funds as completed public facilities pursuant to Section 53314.9 or as discrete portions or phases pursuant to Section 53313.51 of the Act and /or constructed with District funds pursuant to Section 53316.2 of the Act. Any portion of the Facilities may be financed through a lease or lease- purchase arrangement if the District hereafter determines that such arrangement is of benefit to the District. The Services proposed to be provided for the benefit of Community Facilities District No. 2015 -4 are public services as defined in the Act, and this City Council finds and determines that the Services to be financed are in addition to those provided in the territory of the District at the present time and do not supplant services already available within the territory of the District. The City Council hereby finds and determines that the description of the Services herein is sufficiently informative to allow taxpayers within the proposed District, to understand what the funds of the District may be used to finance. The Services Incidental Expenses expected to be incurred include the costs of planning the Services, the costs of forming the District, the cost of City Council Resolution No. 2016 -023 Page 3 of 6 levying and collecting the Services Special Tax within the proposed District and the cost of administration. Section 5. Except where funds are otherwise available, it is the intention of the City Council to levy annually in accordance with the procedures contained in the Act the Facilities Special Tax, secured by recordation of a continuing lien against all nonexempt real property in the District, sufficient to pay for: (i) the Facilities and Facilities Incidental Expenses; and (ii) the principal and interest and other periodic costs on bonds -or other indebtedness issued to finance the Facilities and Facilities Incidental Expenses, including the establishment and replenishment of any reserve funds deemed necessary by the District, and any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash). The rate and method of apportionment and manner of collection of the special tax are described in detail in Attachment "C" attached hereto, which Attachment "C" is incorporated herein by this reference. Attachment "C" allows each landowner within the District to estimate the maximum amount of the Facilities Special Tax that may be levied against each parcel. In the first year in which such Facilities Special Tax is levied, the levy shall include an amount sufficient to repay to the District all amounts, if any, transferred to the District pursuant to Section 53314 of the Act and interest thereon. If the Facilities Special Tax is levied against any parcel used for private residential purposes, (i) the maximum Facilities Special Tax rate shall be specified as a dollar amount which shall be calculated and established not later than the date on which the parcel is first subject to the Facilities Special Tax because of its use for private residential purposes and shall not be increased over time except that it may be increased by an amount not to exceed one percent (1 %) per year to the extent permitted in the rate and method of apportionment of the special tax set forth in Attachment "C," (ii) such Facilities Special Tax not shall be levied after fiscal year 2057 -58, as described in Attachment "C" hereto, and (iii) under no circumstances will the Facilities Special Tax levied against any such parcel used for private residential uses be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the District by more than ten percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. The Facilities Special Tax is based on the expected demand that each parcel of real property within proposed Community Facilities District No. 2015 -4 will place on the Facilities and on the benefit that each parcel derives from the right to access the Facilities. The City Council hereby determines that the proposed Facilities are necessary to meet the increased demand placed upon the City and the existing infrastructure in the City as a result of the development of the land proposed for inclusion in the District. The City Council hereby determines the rate and method of apportionment of the special tax with respect to the Facilities Special Tax set forth in Attachment "C" to be reasonable. The Facilities Special Tax is apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act and such special tax is not on or based upon the value or ownership of real property. In the event that a portion of the property within Community Facilities District No. 2015 -4 shall become for any reason exempt, wholly or partially, from the levy of the Facilities Special Tax specified on Attachment "C," the City Council shall, on behalf of Community Facilities District No. 2015 -4, cause the levy to be increased, subject to the limitation of the maximum Facilities Special Tax for a parcel as set forth in Attachment "C," to the extent necessary upon the remaining property within proposed Community Facilities District No. 2015 -4 which is not exempt in order to yield the Facilities Special Tax revenues required for the purposes described in this Section 5. The obligation to pay the Facilities Special Tax may be prepaid only as set forth in Section G of Attachment "C" hereto. City Council Resolution No. 2016 -023 Page 4 of 6 Section 6. Except where funds are otherwise available, it is the intention of the City Council to levy annually in accordance with the procedures contained in the Act the Services Special Tax, secured by recordation of a continuing lien against all nonexempt real property in the District, sufficient to pay for the Services and the Services Incidental Expenses. The rate and method of apportionment and manner of collection of the Services Special Tax are described in detail in Attachment "C" attached hereto. Attachment "C" allows each landowner within the District to estimate the maximum amount of the Services Special Tax that may be levied against each parcel. The Services Special Tax may be increased by the greater of the increase in the consumer price index or two percent (2 %) per year, to the extent permitted in the Rate and Method. The Services Special Tax may be levied for such period as the Services are needed, as further described in Attachment "C" hereto, provided that under no circumstances will such special tax be increased with respect to residential property as a consequence of delinquency or default by the owner of any other parcel or parcels within the District by more than ten percent. The Services Special Tax is based on the expected demand that each parcel of real property within proposed Community Facilities District No. 2015 -4 will place on the Services. The City Council hereby determines that the proposed Services are necessary to meet the increased demand placed upon the City and the maintenance of landscaped areas officially dedicated for public use and water quality improvements in the City as a result of the development of the land proposed for inclusion in the District. The City Council hereby determines the rate and method of apportionment of the special taxes set forth in Attachment "C" to be reasonable. The Services Special Tax is apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act and such Services Special Tax is not on or based upon the value or ownership of real property Section 7. A public hearing (the "Hearing ") on the establishment of the proposed Community Facilities District No. 2015 -4, the proposed rate and method of apportionment of the Facilities Special Tax and the Services Special Tax and the proposed issuance of bonds to finance the Facilities and the Facilities Incidental. Expenses shall be held at 9:30 a.m., or as soon thereafter as practicable, on April 12, 2016, at the City Cultural Center, 183 North Main Street, Lake Elsinore, California. Should the City Council determine to form the District, a special election will be held to authorize the issuance of the bonds and the levy of the special tax in accordance with the procedures contained in Government Code Section 53326. If held, the proposed voting procedure at the election will be a landowner vote with each landowner who is the owner of record of land within the District at the close of the Hearing, or the authorized representative thereof, having one vote for each acre or portion thereof owned within the proposed District. Ballots for the special election may be distributed by mail or by personal service. Section 8. At the time and place set forth above for the Hearing, the City Council will receive testimony as to whether the proposed Community Facilities District No. 2015 -4 shall be established and as to the method of apportionment of the special tax and shall consider: (a) if an ad valorem property tax is currently being levied on property within proposed Community Facilities District No. 2015 -4 for the exclusive purpose of paying principal of or interest on bonds, lease payments or other indebtedness incurred to finance construction of capital facilities; and City Council Resolution No. 2016 -023 Page 5 of 6 (b) if the capital facilities to be financed and constructed by Community Facilities District No. 2015 -4 will provide the same services as were provided by the capital facilities mentioned in subsection (a); and (c) if the City Council makes the findings specified in subsections (a) and (b) above, it will consider appropriate action to determine whether the total annual amount of ad valorem property tax revenue due from parcels within Community Facilities District No. 2015 -4, for purposes of paying principal and interest on the debt identified in subsection (a) above, shall not be increased after the date on which Community Facilities District No. 2015 -4 is established, or after a later date determined by the City Council with the concurrence of the legislative body which levied the property tax in question. Section 8. At the time and place set forth above for the Hearing, any interested person, including all persons owning lands or registered to vote within proposed Community Facilities District No. 2015 -4, may appear and be heard. Section 9. Each City officer who is or will be responsible for providing the Facilities and the Services within proposed Community Facilities District No. 2015 -4, if it is established, is hereby directed to study the proposed District and, at or before the time of the above - mentioned Hearing, file a report with the City Council containing a brief description of the public facilities and services by type which will in his or her opinion be required to meet adequately the needs of Community Facilities District No. 2015 -4 and an estimate of the cost of providing those public facilities and services, including the cost of environmental evaluations of such facilities and an estimate of the fair and reasonable cost of any Incidental Expenses to be incurred. Section 10. The District may accept advances of funds or work -in -kind from any source, including, but not limited to, private persons or private entities, for any authorized purpose, including, but not limited to, paying any cost incurred in creating Community Facilities District No. 2015 -4. The District may enter into an agreement with the person or entity advancing the funds or work -in -kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work -in -kind, as determined by the City Council, with or without interest. Section 11. The City Clerk is hereby directed to publish a notice (the "Notice ") of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of proposed Community Facilities District No. 2015 -4. The City Clerk is further directed to mail a copy of the Notice to each of the landowners within the boundaries of the District at least 15 days prior to the Hearing. The Notice shall contain the text or a summary of this Resolution, 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 proposed district and a description of the proposed voting procedure for the election required by the Act. Such publication shall be completed at least seven (7) days prior to the date of the Hearing. Section 12. The reasonably expected maximum principal amount of the bonded indebtedness to be incurred by the District for the Facilities and Facilities Incidental Expenses is Twenty Million Dollars ($20,000,000). Section 13. The form of the Reimbursement Agreement is hereby approved. The Mayor, the City Manager, the Director of Administrative Services, or their written designees are hereby authorized and directed to execute and deliver the Reimbursement Agreement in the City Council Resolution No. 2016 -023 Page 6 of 6 form on file with the City Clerk with such changes, insertions and omissions as may be approved by the officer or officers executing such agreement, said execution being conclusive evidence of such approval. Section 14. Except to the extent limited in any bond resolution or trust indenture related to the issuance of bonds, the City Council hereby reserves to itself all rights and powers set forth in Section 53344.1 of the Act (relating to tenders in full or partial payment). Section 15. This Resolution shall be effective upon its adoption. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, this 8th day of .March; 016. -� -- Brian Tisda[ , ATTEST: Q san-M. Domen, MMC City Clerk APPROVED AS TO FORM: LI-L:A v�— Barbara Zeild Leibold, City Attorney STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Susan M. women, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. 2016 -023 was adopted by the City Council of the City of Lake Elsinore, California, at the regular meeting of March 8, 2016, and that the same was adopted by the following vote: AYES: Council Members Johnson and Manos, Mayor Pro Tern Magee, and Mayor Tisdale NOES: None ABSENT: Council Member Hickman ABSTAIN: None � a,►.- may,,"` Susan M. Domen, MMC City Clerk 0 I � Z - � w aN o N 0 z wU a Zo Lu O Nzw< m wLU HQ,'JG w W U~'OW O LL rte- z Oa U. z O 0.s � z O D V O v ATTACHMENT A BOUNDARY MAP its mg tE1 I Ell Y� F P w NO sz ��a ATTACHMENT B Types of Facilities to Be Financed by Community Facilities District No. 2015 -4 of the City of Lake Elsinore The proposed types of public facilities and expenses to be financed by the District include:. The construction, purchase, modification, expansion, rehabilitation and /or improvement of (i) drainage, library, park, roadway and other public facilities of the City, including the foregoing public facilities which are included in the City's fee programs with respect to such facilities and authorized to be financed under the Mello -Roos Community Facilities Act of 1982, as amended (the "City Facilities ") and (ii) water and sewer facilities including the acquisition of capacity in the sewer system and /or water system of the Elsinore Valley Municipal Water District which are included in Elsinore Valley Municipal Water District's water and sewer capacity and connection fee programs (the "Water District Facilities" and together, with the City Facilities, the "Facilities "), and all appurtenances and appurtenant work in connection with the foregoing Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking, construction management and supervision for such Facilities, and to finance the incidental expenses to be incurred, including: a. The cost of engineering, planning and designing the Facilities; b. All costs, including costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District; and C. Any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities. Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for the District. Types of Services to Be Financed by Community Facilities District No. 2015 -4 of the City of Lake Elsinore The services which may be funded with proceeds of Special Tax B of CFD No. 2015 -4, as provided by Section 53313 of the Act, will include all costs attributable to maintaining, servicing, cleaning, repairing and /or replacing landscaped areas (may include reserves for replacement) in public street right -of -ways, public landscaping, public open spaces and other similar landscaped areas officially dedicated for public use. These services including the following: (a) maintenance and lighting of parks, parkways, streets, roads and open space, which maintenance and lighting services may include, without limitation, furnishing of electrical power to street lights; repair and replacement of damaged or inoperative light bulbs, fixtures and standards; maintenance (including irrigation and replacement) of landscaping vegetation situated on or adjacent to parks, parkways, streets, roads and open space; maintenance and repair of irrigation facilities; maintenance of public signage; graffiti removal from and maintenance and repair of public structures situated on parks, parkways, streets, roads and open space; maintenance and repair of playground or recreation program equipment or facilities situated on any park; and (b) maintenance and operation of water quality improvements which include storm drainage and flood protection facilities, including, without limitation, drainage inlets, catch basin inserts, infiltration basins, flood control channels, fossil fuel filters, and similar facilities. Maintenance services may include but is not limited to the repair, removal or replacement of all or part of any of the water quality improvements, fossil fuel filters within the public right -of -way including the removal of petroleum hydrocarbons and other pollutants from water runoff, or appurtenant facilities, clearing of inlets and outlets; erosion repairs; and cleanup to improvements, and other items necessary for the maintenance, servicing; or both of the water quality basin improvements within flood control channel improvements; and (c) public street sweeping, on the segments of the arterials within the boundaries of CFD No. 2015 -4; as well as local roads within residential subdivisions located within CFD No. 2015 -4; and any portions adjacent to the properties within CFD No. 2015 -4; and In addition to payment of the cost and expense of the forgoing services, proceeds of Special Tax B may be expended to pay "Administrative Expenses," as said term is defined in the Rate and Method of Apportionment. Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for CFD No. 2015 -4. Types of Services to Be Financed by Community Facilities District No. 2015 -4 of the City of Lake Elsinore The services which may be funded with proceeds of Special Tax C (Contingent) of CFD No. 2015 -4, as provided by Section 53313 of the Act, will include all costs attributable to maintaining, servicing, cleaning, repairing and /or replacing water quality improvements (may include reserves nor-replacement) - in- public-street- right- af- way�pubFiE landsEapin�publ +c -ep spaces and other similar landscaped areas officially dedicated for public use. The authorized Special Tax C Services include the maintenance (including irrigation and replacement) of landscaping vegetation situated on or adjacent to parks, parkways, streets, roads and open space; maintenance of natural, upgraded open space /hillsides including the fuel modification areas; maintenance and repair of irrigation facilities; maintenance and operation of water quality improvements, which include the bio- retention facility and appurtenances, which shall be maintained as described in the adopted Terracina Specific Plan on file with the City of Lake Elsinore and as an exhibit in the Public Hearing Report. Maintenance services may include, but are not limited to the repair, removal or replacement of all or part of any of the water quality improvements. In addition to payment of the cost and expense of the forgoing services, proceeds of Special Tax C (Contingent) may be expended to pay "Administrative Expenses," as said term is defined in the Rate and Method of Apportionment. Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for CFD No. 2015 -4. Attachment C RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR COMMUNITY FACILITIES DISTRICT NO. 2015 -4 (TERRACINA) OF THE CITY OF LAKE ELSINORE A Special Tax (all capitalized terms are defined in Section A, "Definitions ", below) shall be applicable to each Assessor's Parcel of Taxable Property located within the boundaries of the City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) ("CFD No. 2015 -4 "). The amount of Special Tax to be levied in each Fiscal Year, on an Assessor's Parcel, shall be determined by the City Council of the City of Lake Elsinore, acting in its capacity as the legislative body of the CFD No. 2015 -4 by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, Public Property and /or Property Owner's Association Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County parcel map 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 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2015 -4: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes A to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2015 -4 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2015 -4 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2015 -4 or obligated persons associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2015 -4 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 CFD No. 2015 -4 for any other administrative purposes of CFD No. 2015 -4, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1" 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 March 15t 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. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 1 "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 A" means the Special Tax of that name described in Section D below. "Backup Special Tax A" means the Special Tax of that name described in Section D below. "Boundary Map" means a recorded map of the CFD which indicates the boundaries of the CFD. "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 Tax A within CFD No. 2015 -4 have been pledged. "Building Permit" means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, "Building Permit" may or may not include any subsequent building permitsdocument(s) authorizing new construction on an Assessor's Parcel that are issued or changed by the City after the firstoriginal issuance, as determined by the CFD Administrator as necessary to fairly allocate Special Tax A to the Assessor's Parcel, provided that following such determination the Maximum Special Tax A that may be levied on all Assessor's Parcels of Taxable Property will be at least 1.1 times maximum annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses. "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 Permitfor 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 A Requirement, (ii) determining the Special Tax B Requirement, (iii) determining the Special Tax C (Contingent) Requirement, and (iv) providing for the levy and collection of the Special Taxes. "CFD" or "CFD No. 2015 -4" means Community Facilities District No. 2015 -4 (Terracina) 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. 2015 -4, or its designee. "Condominium Plan" means a condominium plan as set forth in the California Civil Code, Section 1352. "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 Vt 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 March 15t preceding the Fiscal Year in which the Special Tax is being levied. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 2 "Exempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes as provided for in Section F. "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 Section 1352 that creates individual lots for which Building Permits may be issued without further subdivision. "Fiscal Year" means the period commencing on July 1St of any year and ending the following June 30tH "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuantto which Bonds are issued, as modified, amended and /or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Category" means any of the categories listed in Table 1 of Section D and Table 2 of Section M. "Maximum Special Tax A" means the maximum Special Tax A, determined in accordance with Section D below, that can be levied by CFD No. 2015 -4 in any Fiscal Year on any Assessor's Parcel. "Maximum Special Tax B" means the Maximum Special Tax B, as determined in accordance with Section M below that can be levied in any Fiscal Year on any Assessor's Parcel of Taxable Propertywithin CFD No. 2015- 4. "Maximum Special Tax C (Contingent)" means the Maximum Special Tax C (Contingent), as determined in accordance with Section S below that can be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property within CFD No. 2015 -4. "Multifamily Property" means all Assessor's Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the Administrator. "Non- Residential Property" or "NR" means all Assessor's Parcels of Taxable Property for which a building permit(s) was issued for a non - residential use. The Administrator shall make the determination if an Assessor's Parcel is Non - Residential Property. "Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax A obligation for an Assessor's Parcel, as described in Section H. "Prepayment Amount" means the amount required to prepay the Special Tax A obligation in full for an Assessor's Parcel, as described in Section G. "Property Owner's Association Property" or "POA" means all Assessor's Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, have been conveyed, dedicated to, or irrevocably offered for dedication to a property owner association, including any master or sub - association. "Proportionately" means for Taxable Property for Special Tax A that is (i) Developed Property, that the ratio of the actual Special Tax A levy to the Assigned Special Tax A is the same for all Assessor's Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax A levy to the Maximum Special Tax A is the same for all Assessor's Parcels of Approved Property, and (iii) Undeveloped Property, Public Property and Property Owner's Association Property, that the ratio of the actual Special Tax A levy per City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 3 Acre to the Maximum Special Tax A per Acre is the same for all Assessor's Parcels of Undeveloped Property, Public Property and Property Owner's Association Property. For Special Tax B that is (i) Developed Property, that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is the same for all Assessor's Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is the same for all Assessor's Parcels of Approved Property, and (iii) Undeveloped Property that the ratio of the actual Special Tax B levy per Acre to the Maximum Special Tax B per Acre is the same for all Assessor's Parcels of Undeveloped Property. For Special Tax C (Contingent) that is (i) Developed Property, that the ratio of the actual Special Tax C (Contingent) levy to the Maximum Special Tax C (Contingent) is the same for all Assessor's Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax C (Contingent) levy to the Maximum Special Tax C (Contingent) is the same for all Assessor's Parcels of Approved Property, and (iii) Undeveloped Property that the ratio of the actual Special Tax C (Contingent) levy per Acre to the Maximum Special Tax C (Contingent) per Acre is the same for all Assessor's Parcels of Undeveloped Property. "Public Property" means all Assessor's Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, are used for rights -of -way or any other purpose and is owned by, dedicated to, or irrevocably offered for dedication to the federal government, the State of California, the County, or any other local jurisdiction, provided, however, that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use. "Residential 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 Units. "Residential Unit" or "RU" means a residential unit that is used or intended to be used as a domicile by one or more persons, as determined by the Administrator. "Service(s)" means services permitted under the Mello -Roos Community Facilities Act of 1982 including, without limitation, those services authorized to be funded by CFD No. 2015 -4 as set forth in the documents adopted by the City Council at the time the CFD was formed. "Single Family Residential Property" means all Assessor's Parcels of Residential Property other than Multifamily Property on an Assessor's Parcel. "Special Tax(es)" means any-of the special taxes authorized to be levied within CFD No. 2015 -4 pursuant to the Act. "Special Tax A" means any of the special taxes authorized to be levied within CFD No. 2015 -4 pursuant to the Act to fund the Special Tax A Requirement. "Special Tax A Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax A delinquencies, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2015 -4 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax A on Undeveloped Property as set forth in Step Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 4 "Special Tax B" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax B Requirement. "Special Tax B Requirement" means that amount to be collected in any Fiscal Yearto pay for certain costs as required to meet the needs of CFD No. 2015 -4 in both the current Fiscal Year and the next Fiscal Year. The costs to be covered shall be the direct costs for Special Tax B Services including but not limited to (i) maintenance and lighting of parks, parkways, streets, roads and open space, (ii) maintenance and operation of water quality improvements, (iii) public street sweeping, (iv) fund an operating reserve for the costs of Special Tax B Services as determined by the CFD Administrator, and (v) Administrative Expenses. Under no circumstances shall the Special Tax B Requirement include funds for Bonds. "Special Tax B Services" means the maintenance and operation of the improvements described in Exhibit "A" attached hereto beginning with the date of City acceptance of each improvement for maintenance purposes. "Special Tax C (Contingent)" means the Special Tax C (Contingent) to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax C (Contingent) Requirement, if required. "Special Tax C (Contingent) Requirement" means that amount required in any Fiscal Year, if the POA is unable to maintain the Service(s) to: (i) pay the costs of Special Tax C (Contingent) Services incurred or otherwise payable in the Calendar Year commencing in such Fiscal Year; (ii) fund an operating reserve for the costs of Special Tax C (Contingent) Services as determined by the CFD Administrator; less a credit for funds available to reduce the annual Special Tax C (Contingent) levy as determined by the CFD Administrator. Special Tax C (Contingent) Services" means the City's maintenance and operation of the improvements described in Exhibit "B" attached hereto following the POA's default of its obligation to maintain such improvements, which default shall be deemed to have occurred in each of the circumstances described in Section Q. "Taxable Property" means all Assessor's Parcels within CFD No. 2015 -4, which are not Exempt Property. "Taxable Unit" means either a Residential Unit or an Acre. "Tract(s)" means an area of land within a subdivision identified by a particular tract number on a Final Map approved for the subdivision. "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, Public Property or Property Owner's Association Property. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracing) Page 5 B. SPECIAL TAX A Commencing Fiscal Year 2016 -2017 and for each subsequent Fiscal Year, the City Council shall levy Special Tax A on all Taxable Property, up to the applicable Maximum Special Tax A to fund the Special Tax A Requirement. C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX A Each Fiscal Year, beginning with Fiscal Year 2016 -2017, each Assessor's Parcel within CFI] No. 201.5.4 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor's Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Public Property and /or Property Owner's Association Property. Assessor's Parcels of Developed Property shall further be classified as Residential Property or Non - Residential Property. Each Assessor's Parcel of Residential Property shall further be classified as a Single Family Residential Property, or Multifamily Property. Each Assessor's Parcel of Single Family Residential Property shall be further categorized into Land Use Categories based on its Building Square Footage and assigned to its appropriate Assigned Special Tax A rate. D. MAXIMUM SPECIAL TAX A 1. Developed Property The Maximum Special Tax A for each Assessor's Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax A or (ii) the Backup Special Tax A. The Maximum Special Tax A for each Assessor's Parcel of Non - Residential Property or Multifamily Residential Property shall be the applicable Assigned Special Tax A described in Table 1 of Section D. a. Assigned Special Tax A Each Fiscal Year, each Assessor's Parcel of Single Family Residential Property, Multifamily Property, or Non - Residential Property shall be subject to an Assigned Special Tax A. The Assigned Special Tax A applicable to an Assessor's Parcel of Developed Property for Fiscal Year 2016 -2017 shall be determined pursuant to Table 1 below. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 6 TABLE 1 ASSIGNED SPECIAL TAX A FOR DEVELOPED PROPERTY Land Use Category Taxable Unit Building Square Footage Assigned Special Tax Per Taxable Unit 1. Single Family Residential Property _ RU Less than 1,750 sq. ft $1,690 2. Single Family Residential Property RU 1,751 sq. ft to 1,950 sq. ft $1,793 3. Single Farnily Residential Property{ RU 1,951 sq. ft to 2,250-sq. ft $1,895 4. Single Family Residential Property RU 2,251 sq. ft to 2,550 sq. ft $2,120 5. Single Family Residential Property RU 2,551 sq. ft to 2,850 sq. ft $2,405 6. Single Family Residential Property RU 2,851 sq. ft to 3,350 sq. ft $2,608 7. Single Family Residential Property RU 3,351 sq. ft to 3,750 sq. ft $2,810 8. Single Family Residential Property RU Greater than 3,751 $3,158 9. Multifamily Property Acres N/A $14,856 10. Non - Residential Property Acres N/A $14,856 On each July 1, commencing July 1, 2017, the Assigned Special Tax A rate for Developed Property shall be increased by one percent (1.00%) of the amount in effect in the prior Fiscal Year. b. Multiple Land Use Categories In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax A levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax A for all Land Use Categories located on the Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. c. Backup Special Tax A The Backup Special Tax A for an Assessor's Parcel within a Final Map classified or to be classified as Single Family Property shall be $2,442 per unit. This Backup Special Tax A has been established based on the land use configurations shown on the Final Map. In the event any portion of the Final Map is changed or modified, the Backup Special Tax A for all Assessor's Parcels within such changed or modified area shall be $14,856 per Acre. In the event any superseding Final Map is recorded as a Final Map within the Boundaries of the CFD, the Backup Special Tax A for all Assessor's Parcels within such Final Map shall be $14,856 per Acre. The Backup Special Tax A shall not apply to Multifamily Residential Property, Non - Residential Property, Public Property, or Property Owners' Association Property. On each July 1, commencing July 1, 2017, the Backup Special Tax A rate shall be increased by one percent (1.00%) of the amount in effect in the prior Fiscal Year. 2. Approved Property The Maximum Special Tax A for each Assessor's Parcel of Approved Property expected to be classified as Single Family Property shall be the Backup Special Tax A computed pursuant to Section D.1.c above. The Maximum Special Tax A for each Assessor's Parcel of Approved Property expected to be classified as Multifamily Residential Property or Non - Residential Property shall be $14,856 per Acre. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 7 On each July 1, commencing July 1, 2017, the Maximum Special Tax A rate for Approved Property shall be increased by one percent (1.00 %) of the amount in effect in the prior Fiscal Year. 3. Undeveloped Property, Public Property, and Property Owner's Association Property that is not Exempt Property pursuant to the provisions of Section 'F The Maximum Special Tax Afor each Assessor's Parcel of Undeveloped Property, Public Property and /or Property Owners Association Property that is not Exempt Property shall be equal to the product of $14,856 multiplied by the Acreage of such Assessor's. Parcel. On each July 1, commencing July 1, 2017, the Maximum Special Tax A rate for Undeveloped, Public Property, and Property Owners Association Property shall be increased by one percent (1.00 %) of the amount in effect in the prior Fiscal Year. E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX A Commencing Fiscal Year 2016 -2017 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes A on all Taxable Property in accordance with the following steps: Step One: The Special Tax A shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax A rates in Table 1 to satisfy the Special Tax A Requirement. Step Two: If additional moneys are needed to satisfy the Special Tax A Requirement afterthe first step has been completed, the Special Tax A shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the Maximum Special Tax A applicable to each such Assessor's Parcel as needed to satisfy the Special Tax A Requirement. Step Three: If additional moneys are needed to satisfy the Special Tax A Requirement after the first two steps have been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor's Parcel as needed to satisfy the Special Tax A Requirement. Step Four: If additional moneys are needed to satisfy the Special Tax A Requirement after the first three steps have been completed, then the Special Tax A on each Assessor's Parcel of Developed Property whose Maximum Special Tax A is the Backup Special Tax A shall be increased Proportionately from the Assigned Special Tax A up to 100% of the Backup Special Tax A as needed to satisfy the Special Tax A Requirement. Step Five: If additional moneys are needed to satisfy the Special Tax A Requirement after the first four steps have been completed, the Special Tax A shall be levied Proportionately on each Assessor's Parcel of Public Property or Property Owner's Association Property up to 100% of the Maximum Special Tax A applicable to each such Assessor's Parcel as needed to satisfy the Special Tax A Requirement. Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year against any Assessor's Parcel of Residential Property as a result of a delinquency in the payment of the Special Tax A applicable to any other Assessor's Parcel be increased by more than ten percent (10 %) above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 8 F. EXEMPTIONS The City shall classify as Exempt Property, in the following 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 74.29 Acres. Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 74.29 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 74.29 Acres will be classified as Undeveloped Property, and will be subject to Special Tax A pursuant to Step Five in Section E. G. PREPAYMENT OF SPECIAL TAX A The following additional definitions apply to this Section G: "CFD Public Facilities" means $21,225,000 expressed in 2016 dollars, which shall increase by the Construction Inflation Index on July 1, 2017, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2015 -4, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax A 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. 2015 -4. "Construction Inflation Index" means the annual percentage change in the Engineering News - Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News- Record Building Cost Index for the city of Los Angeles. "Future Facilities Costs" means the CFD Public Facilities minus public facility costs available to be funded through existing construction or escrow accounts or funded by the Outstanding Bonds, and minus public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment. "Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of Special Tax A 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 Tax A. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 9 1. Prepayment in Full The Maximum Special Tax A obligation may be prepaid and permanently satisfied for (i) Assessor's Parcels of Developed Property, (ii) Assessor's Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Approved or Undeveloped Property for which a Building Permit has not been issued, and (iv) Assessor's Parcels of Public Property or Property Owner's Association Property that are not Exempt Property pursuant to Section F. The Maximum Special Tax A obligation applicable to an Assessor's Parcel may be fully prepaid and the obligation to pay the Special Tax A for such Assessor's Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Special Tax A obligation for such Assessor's Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non - refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor's Parcel. Within 15 days of receipt of such non - refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor's Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes. The Prepayment Amount (defined below) shall be calculated as follows (capitalized terms are defined below): The Prepayment Amount shall be determined as of the proposed prepayment date as follows: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. For an Assessor's Parcel of Developed Property, compute the Maximum Special Tax A for the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax A for the Assessor's Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, Public Property or Property Owner's Association Property to be prepaid, compute the Maximum Special Tax A for the Assessor's Parcel. 3. Divide the Maximum Special Tax A derived pursuant to paragraph 2 bythe total amount of Special Taxes that could be levied at the Maximum Special Tax A at build out of all Assessor's Parcels of Taxable Property based on the applicable Maximum Special Tax A for Assessor's Parcels of Developed Property not including any Assessor's Parcels for which the Special Tax A obligation has been previously prepaid. 4. Multiply the quotient derived pursuant to paragraph 3 bythe principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the "Bond Redemption Amount "). City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 10 Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit Equals: Prepayment Amount The Prepayment Amount shall be determined as of the proposed prepayment date as follows: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. For an Assessor's Parcel of Developed Property, compute the Maximum Special Tax A for the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax A for the Assessor's Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, Public Property or Property Owner's Association Property to be prepaid, compute the Maximum Special Tax A for the Assessor's Parcel. 3. Divide the Maximum Special Tax A derived pursuant to paragraph 2 bythe total amount of Special Taxes that could be levied at the Maximum Special Tax A at build out of all Assessor's Parcels of Taxable Property based on the applicable Maximum Special Tax A for Assessor's Parcels of Developed Property not including any Assessor's Parcels for which the Special Tax A obligation has been previously prepaid. 4. Multiply the quotient derived pursuant to paragraph 3 bythe principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the "Bond Redemption Amount "). City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 10 5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium "). 6. Determine the Future Facilities Costs. 7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor's Parcel (the "Future Facilities Amount "). 8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and /or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax A prepayments. 9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. 10. Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount. 11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the "Defeasance Amount "). 12. Verify the administrative fees and expenses of the CFD, including the cost of computation of the Prepayment Amount, the cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Maximum Special Tax A obligation for the Assessor's Parcel and the redemption of Outstanding Bonds (the "Administrative Fees and Expenses "). 13. The reserve fund credit (the "Reserve Fund Credit ") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit. 15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD. The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next redemption from other Special Tax A prepayments of Outstanding Bonds or to make debt service payments. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 11 As a result of the payment of the current Fiscal Year's Special Tax A levy as determined pursuant to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax A levy for the Assessor's Parcel from the County tax roll. With respect to any Assessor's Parcel for which the Maximum Special Tax A obligation is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Maximum Special Tax A obligation and the release of the Special Tax A lien for the Assessor's Parcel, and the obligation to pay the Special Tax A for such Assessor's Parcel shall cease. Notwithstanding the foregoing, no Special Tax A prepayment shall be allowed unless the amount of Maximum Special Tax A that may be levied on all Assessor's Parcels of Taxable Property after the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses. Tenders of Bonds in prepayment of the Maximum Special Tax A obligation may be accepted upon the terms and conditions established by the City Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case -by -case basis as specifically approved by the City Council. 2. Prepayment in Part The Maximum Special Tax A obligation for an Assessor's Parcel of Developed Property, Approved Property or Undeveloped Property may be partially prepaid. For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the following formula: PP = ((PE —A) x F) +A These terms have the following meaning: PP = Partial Prepayment PE = the Prepayment Amount calculated according to Section G.1 F = the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the Maximum Special Tax A obligation A = the Administrative Fees and Expenses determined pursuant to Section G.1 The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax A obligation for the Assessor's Parcel shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Maximum Special Tax A obligation, (ii) the percentage of the Maximum Special Tax A obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the amount of the non - refundable deposit determined to cover the cost to be incurred by the CFD in calculating the amount of a partial prepayment. Within 15 business days of receipt of such non - refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial Prepayment for the Assessor's Parcel. A Partial Prepayment must be made not less than 60 days prior to the redemption date for the Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment. With respect to any Assessor's Parcel for which the Maximum Special Tax A obligation is partially prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment as provided in Paragraph 15 of Section G.1, and (ii) indicate in the records of the CFD that there has been a Partial Prepayment for the Assessor's Parcel and that a portion of the Special Tax A obligation equal to the remaining percentage (1.00 - F) of Special Tax A obligation will continue on the Assessor's Parcel pursuant to Section E. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 12 I. TERMINATION OF SPECIAL TAX A For each Fiscal Year that any Bonds are outstanding the Special Tax A shall be levied on all Assessor's Parcels subject to the Special Tax A. The Special Tax A shall cease not later than the 2057 -58 Fiscal Year, however, Special Tax A 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. 2015 -4 Bonds have been paid; (ii) all authorized facilities of CFD No. 2015 -4 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Tax A remain uncollected and (iv) all other obligations of CFD No. 2015 -4 have been satisfied. J. MANNER OF COLLECTION The Special Tax A shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2015 -4 may collect Special Tax A 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. K. SPECIAL TAX B Commencing Fiscal Year 2016 -2017 and for each subsequent Fiscal Year, the City Council shall levy Special Tax B on all Taxable Property, up to the applicable Maximum Special Tax B to fund the Special Tax B Requirement. L. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX B For each Fiscal Year, all Assessor's Parcels of Taxable Property within CFD No. 2015 -4 shall be classified as Developed Property, Approved Property, or Undeveloped Property, and shall be subjectto the levy of Special Taxes as determined pursuant to Sections M and N below. Assessor's Parcels of Developed Property and Approved Property shall be classified as either Residential Property or Non - Residential Property. Residential Property shall be further classified as Single Family Residential Property or Multi - Family Property. For Single Family Residential Property the number of Residential Units shall be determined by the CFD Administrator. M. MAXIMUM SPECIAL TAX B For purposes of determining the applicable Maximum Special Tax B for Assessor's Parcels of Developed Property which are classified as Single Family Residential Property, all such Assessor's Parcels shall be assigned the number of Residential Unit(s) constructed thereon as specified in or shown on the Building Permit(s) issued or Final Map as determined by the CFD Administrator. Once a single family attached building or buildings have been built on an Assessor's Parcel, the CFD Administrator shall determine the actual number of Residential Units contained within the building or buildings, and the Special Tax B levied against the Assessor's Parcel in the next Fiscal Year shall be calculated by multiplying the actual number of Residential Units by the Maximum Special Tax B per Residential Unit identified for the tract. For purposes of determining the applicable Maximum Special Tax B for Assessor's Parcels of Developed Property and Approved Property which are classified as Multifamily Property or Non - Residential Property, all such Assessor's Parcels shall be assigned the number of Building Square Footage or Acres as shown on the Final Map as determined by the CFD Administrator. Once the CFD Administrator determines the actual number of Acres for the Assessor's Parcels, the Special Tax B levied against the Assessor's Parcel in the next Fiscal Year shall be calculated by multiplying the number of Acres by the Maximum Special Tax per Taxable Unit. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 13 1. Developed Property a. Maximum Special Tax B The Maximum Special Tax B for each Assessor's Parcel of Taxable Property for Fiscal Year 2016 -2017 is identified in Table 2 below: TABLE 2 MAXIMUM SPECIAL TAX B FOR DEVELOPED PROPERTY _ _ Land Use Category 1. Single Family Residential Property 2. Multifamily Property 3. Non - Residential Property Taxable Maximum Special Tax Per Unit Taxable Unit RU $322 Acre $2,177 Acre - - -- - -- $2,177 On each July 1, commencing on July 1, 2017 the Maximum Special Tax B for Developed Property shall increase by i) the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982 -84 = 100) since the beginning of the preceding Fiscal Year, or ii) by two percent (2.0 %), whichever is greater. b. Multiple Land Use Categories In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax B that can be levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax B that can be levied for each Land Use Category located on that Assessor's Parcel. For an Assessor's Parcel that contains more than one land use, the Acreage of such Assessor's Parcel shall be allocated to each type of property based on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. 2. Approved Property and Undeveloped Property The Maximum Special Tax B for each Assessor's Parcel of Approved Property and Undeveloped Property for Fiscal Year 2016 -2017 is identified in Table 3 below: TABLE 3 MAXIMUM SPECIAL TAX B RATES Maximum Special Tax B Per Acre $2,177 On each July 1, commencing on July 1, 2017 the Maximum Special Tax B for Approved Property and Undeveloped Property shall increase by i) the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982 -84 =100) since the beginning of the preceding Fiscal Year, or ii) by two percent (2.0%), whichever is greater. N. METHOD OF APPORTIONMENT OF ANNUAL SPECIAL TAX Commencing with Fiscal Year 2016 -2017 and for each following Fiscal Year, the Council shall determine the Special Tax B Requirement and shall levy the Special Tax B on all Assessor's Parcels of Taxable Property until the aggregate amount of Special Tax B equals the Special Tax B Requirement. The Special Tax B shall be levied for each Fiscal Year as follows: City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 14 Step One: The Special Tax B shall be levied Proportionately on all Assessor's Parcels of Developed Property up to 100% of the applicable Maximum Special Tax to satisfy the Special Tax B Requirement; Step Two: If additional moneys are needed to satisfy the Special Tax B Requirement after the first step has been completed, the Special Tax B shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the Maximum Special Tax B for Approved Property; Step Three: If additional monies are needed to satisfy the Special Tax B Requirement after the first two steps has been completed, the Special Tax B shall be levied Proportionately on all Assessor's Parcels of Undeveloped Property up to 100% of the Maximum Special Tax B for Undeveloped Property. O. DURATION OF SPECIAL TAX B The Special Tax B shall be levied in perpetuity to fund the Special Tax B Requirement, unless no longer required as determined at the sole discretion of the City Council. P. MANNER OF COLLECTION The Special Tax B shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2015 -4 may collect the Special Tax B at a different time or in a different manner if necessary to meet its funding requirements. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 15 Q. SPECIAL TAX C (CONTINGENT) The City Council shall levy Special Tax C (Contingent) commencing in the first Fiscal Year following the POA's default of its obligation to maintain the improvements described in Exhibit "B" attached hereto, which default shall be deemed to have occurred in each of the following circumstances: (i) the POA files for bankruptcy; (ii) the POA is dissolved; (iii) the POA ceases to levy annual assessments for the maintenance of the improvements described above; or (iv) the POA fails to maintain such improvements at the same level as the City maintains similar improvements throughout the City and within ninety (90) days after written notice from the City, or such longer period permitted by the City Manager, fails to remedy such maintenance deficiency to the reasonable satisfaction of the City Council. R. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX C (CONTINGENT) For each Fiscal Year, all Assessor's Parcels of Taxable Property within CFD No. 2015 -4 shall be classified as Developed Property, Approved Property, or Undeveloped Property, and shall be subject to the levy of Special Taxes as determined pursuant to Sections S and T below. Assessor's Parcels of Developed Property and Approved Property shall be classified as either Residential Property or Non - Residential Property. Residential Property shall be further classified as Single Family Residential Property or Multi - Family Property. For Single Family Residential Property the number of Residential Units shall be determined by the CFD Administrator. S. MAXIMUM SPECIAL TAX C (CONTINGENT) For purposes of determining the applicable Maximum Special Tax C (Contingent) for Assessor's Parcels of Developed Property which are classified as Single Family Residential Property, all such Assessor's Parcels shall be assigned the number of Residential Unit(s) constructed thereon as specified in or shown on the Building Permit(s) issued as determined by the CFD Administrator. Once a single family attached building or buildings have been built on an Assessor's Parcel, the CFD Administrator shall determine the actual number of Residential Units contained within the building or buildings, and the Special Tax C (Contingent) levied against the Assessor's Parcel in the next Fiscal Year shall be calculated by multiplying the actual number of Residential Units by the Maximum Special Tax C (Contingent) per Residential Unit identified for the Assessor's Parcel. For purposes of determining the applicable Maximum Special Tax C (Contingent) for Assessor's Parcels of Developed Property and Approved Property which are classified as Multifamily Property or Non - Residential Property, all such Assessor's Parcels shall be assigned the number of Building Square Footage or Acres as shown on the Final Map as determined by the CFD Administrator. Once the CFD Administrator determines the actual number of Acres for the Assessor's Parcels, the Special Tax C (Contingent) levied against the Assessor's Parcel in the next Fiscal Year shall be calculated by multiplying the number of Acres by the Maximum Special Tax per Acre. 1. Developed Property a. Maximum Special Tax C (Contingent) The Maximum Special Tax C (Contingent) for each Assessor's Parcel of Taxable Property for Fiscal Year City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 16 2016 -2017 is identified in Table 2 below: TABLE 2 MAXIMUM SPECIAL TAX C (CONTINGENT) FOR DEVELOPED PROPERTY Taxable Maximum Special Tax Per Land Use Category Unit Taxable Unit 1. Single Family Residential Property RU $299 2. Multifamily Property Acre $2,021 3. Non - Residential Property Acre $2,021 On each July 1, commencing on July 1, 2017 the Maximum Special Tax C (Contingent) for Developed Property shall increase by i) the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982 -84 =100) since the beginning of the preceding Fiscal Year, or ii) by two percent (2.0 %), whichever is greater. b. Multiple Land Use Categories In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax C (Contingent) that can be levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax C (Contingent) that can be levied for each Land Use Category located on that Assessor's Parcel. For an Assessor's Parcel that contains more than one land use, the Acreage of such Assessor's Parcel shall be allocated to each type of property based on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. 2. Approved Property and Undeveloped Property The Maximum Special Tax C (Contingent) for each Assessor's Parcel of Approved Property and Undeveloped Property for Fiscal Year 2016 -2017 is identified in Table 3 below: TABLE 3 MAXIMUM SPECIAL TAX C (CONTINGENT) RATES Maximum Special Tax C (Contingent) Per Acre $2,021 On each July 1, commencing on July 1, 2017 the Maximum Special Tax C (Contingent) for Approved Property and Undeveloped Property shall increase by i) the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982 -84 = 100) since the beginning of the preceding Fiscal Year, or ii) by two percent (2.0 %), whichever is greater. T. METHOD OF APPORTIONMENT OF ANNUAL SPECIAL TAX Commencing with Fiscal Year 2016 -2017 and for each following Fiscal Year, the Council shall determine the Special Tax C (Contingent) Requirement and shall levy the Special Tax C (Contingent) on all Assessor's Parcels of Taxable Property until the aggregate amount of Special Tax C (Contingent) equals the Special Tax C (Contingent) Requirement. The Special Tax C (Contingent) shall be levied for each Fiscal Year as follows: Step One: The Special Tax C (Contingent) shall be levied Proportionately on all Assessor's Parcels of Developed Property up to 100% of the applicable Maximum Special Tax to satisfy the Special Tax C (Contingent) Requirement; City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 17 Step Two: If additional moneys are needed to satisfy the Special Tax C (Contingent) Requirement after the first step has been completed, the Special Tax C (Contingent) shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the Maximum Special Tax C (Contingent) for Approved Property; Step Three: If additional monies are needed to satisfy the Special Tax C (Contingent) Requirement after the first two steps has been completed, the Special Tax C (Contingent) shall be levied Proportionately on all Assessor's Parcels of Undeveloped Property up to 100% of the Maximum Special Tax C (Contingent) for Undeveloped Property. U. DURATION OF SPECIAL TAX C (CONTINGENT) The Special Tax C (Contingent) shall be levied in perpetuity to fund the Special Tax C (Contingent) Requirement, unless no longer required as determined at the sole discretion of the City Council. V. MANNER OF COLLECTION OF SPECIAL TAX C (CONTINGENT) The Special Tax C (Contingent) shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2015 -4 may collect the Special Tax C (Contingent) at a different time or in a different manner if necessary to meet its funding requirements. W. APPEALS OF SPECIAL TAXES Any taxpayer may file a written appeal of the Special Taxes on his /her Assessor's Parcel(s) with the CFD Administrator, provided that the appellant is current in his /her payments of Special Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant's Assessor's Parcel(s). No refunds of previously paid Special Taxes shall be made. The CFD Administrator shall interpret this Rate and Method of Apportionment and make determinations relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as herein specified. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracina) Page 18 EXHIBIT "A" DESCRIPTION OF AUTHORIZED SPECIAL TAX B SERVICES COMMUNITY FACILITIES DISTRICT NO. 2015 -4 (TERRACINA) OF THE CITY OF LAKE ELSINORE The services which may be funded with proceeds of Special Tax B of CFD No. 2015 -4, as provided by Section 53313 of the Act, will include all costs attributable to maintaining, servicing, cleaning, repairing and/or replacing landscaped areas (may include reserves for replacement) in public street right -of -ways, public landscaping, public open spaces and other similar landscaped areas officially dedicated for public use. These services including the following: (a) maintenance and lighting of parks, parkways, streets, roads and open space, which maintenance and lighting services may include, without limitation, furnishing of electrical power to street lights; repair and replacement of damaged or inoperative light bulbs, fixtures and standards; maintenance (including irrigation and replacement) of landscaping vegetation situated on oradjacentto parks, parkways, streets, roads and open space; maintenance and repair of irrigation facilities; maintenance of public signage; graffiti removal from and maintenance and repair of public structures situated on parks, parkways, streets, roads and open space; maintenance and repair of playground or recreation program equipment orfacilities situated on any park; and (b) maintenance and operation of water quality improvements which include storm drainage and flood protection facilities, including, without limitation, drainage inlets, catch basin inserts, infiltration basins, flood control channels, fossil fuel filters, and similar facilities. Maintenance services may include but is not limited to the repair, removal or replacement of all or part of any of the water quality improvements, fossil fuel filters within the public right -of -way including the removal of petroleum hydrocarbons and other pollutants from water runoff, or appurtenant facilities, clearing of inlets and outlets; erosion repairs; and cleanup to improvements, and other items necessary for the maintenance, servicing; or both of the water quality basin improvements within flood control channel improvements; and (c) public street sweeping, on the segments of the arterials within the boundaries of CFD No. 2015- 4; as well as local roads within residential subdivisions located within CFD No. 2015 -4; and any portions adjacent to the properties within CFD No. 2015 -4; and In addition to payment of the cost and expense of the forgoing services, proceeds of Special Tax B may be expended to pay "Administrative Expenses," as said term is defined in the Rate and Method of Apportionment. City of Lake Elsinore Community Facilities District No. 2015 -4 (Terracing) Page 19 FXHIRIT "R" DESCRIPTION OF AUTHORIZED SPECIAL TAX C SERVICES COMMUNITY FACILITIES DISTRICT NO. 2015-4 (TERRACINA) OF THE CITY OF LAKE ELSINORE The services which may be funded with proceeds of Special Tax C (Contingent) of CFD No. 2015 -4, as provided by Section 53313 of the Act, will include all costs attributable to maintaining, servicing, cleaning, repairing and /or replacing water quality improvements (may include reserves for replacement) in public street right -of -ways, public landscaping, public open spaces and other similar landscaped areas officially dedicated for public use. The authorized Special Tax CServices include the maintenance (including irrigation and replacement) of landscaping vegetation situated on or adjacent to parks, parkways, streets, roads and open space; maintenance of natural, upgraded open space /hillsides including the fuel modification areas; maintenance and repair of irrigation facilities; maintenance and operation of water quality improvements, which include the bio- retention facility and appurtenances, which shall be maintained as described in the adopted Terracina Specific Plan on file with the City of Lake Elsinore and as an exhibit in the Public Hearing Report. Maintenance services may include, but are not limited to the repair, removal or replacement of all or part of any of the water quality improvements In addition to payment of the cost and expense of the forgoing services, proceeds of Special Tax C (Contingent) may be expended to pay "Administrative Expenses," as said term is defined in the Rate and Method of Apportionment. City of Lake Elsinore Community Facilities District No. 2015 -4 ( Terracina) Page 20