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HomeMy WebLinkAboutOrd. No. 2016-1358 CFD 2003-2 Canyon Hills Authorizing Levy of SpecialTaxes Improvement Area EORDINANCE NO. 2016 -1358 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003 -2 (CANYON HILLS) AUTHORIZING THE LEVY OF SPECIAL TAXES WITHIN IMPROVEMENT AREA E WHEREAS, the City of Lake Elsinore the (the "City ") has previously formed City of Lake Elsinore Community Facilities District No. 2003 -2 (Canyon Hills) ( "Community Facilities District No. 2003 -2" or the "District') pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the "Act'); and, WHEREAS, on March 8, 2016, the City Council (the "City Council ") of the City adopted Resolution No. 2016 -021 declaring its intention to annex territory to be designated as Improvement Area E of the District ( "Improvement Area E ") pursuant to the Act and its intention to incur bonded indebtedness for Improvement Area E; and, WHEREAS, on April 12, 2016, after providing all notice required by the Act, the City Council conducted a noticed public hearing required by the Act relative to the proposed annexation of Improvement Area E, the proposed levy of a special tax therein to finance certain public facilities and services described in Resolution No. 2016 -032 and to secure the payment of any bonded indebtedness of the District for Improvement Area E, and the proposed issuance of up to $3,000,000 of bonded indebtedness as described in Resolution No. 2016 -033; and, WHEREAS, at the April 12, 2016, public hearing, all persons desiring to be heard on all matters pertaining to the annexation of Improvement Area E and the proposed levy of the special tax to finance the facilities and services described in Resolution No. 2016 -032 and to secure the payment of up to $3,000,000 of bonded indebtedness of the District for Improvement Area E as described in Resolution No. 2016 -033 (the "Bonds ") were heard and a full and fair hearing was held; and, WHEREAS, on April 12, 2016, the City Council adopted Resolution Nos. 2016 -032 and 2016 -033 which formed the District and called a special election within the District on April 12, 2016 on two propositions relating to the levy of a special tax within the District and the issuance of the Bonds; and, WHEREAS, on April 12, 2016, an election was held within the District at which the qualified electors approved by more than a two - thirds vote Propositions A and B authorizing the levy of a special tax within the District for the purposes described in Resolution No. 2016 -032 and the issuance of the Bonds as described in Resolution No. 2016 -033. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003 -2 (CANYON HILLS) ORDAINS AS FOLLOWS: Section 1. The above recitals are all true and correct. Section 2. By the passage of this Ordinance, the City Council authorizes and levies special taxes within Improvement Area E pursuant to Sections 53328 and 53340 of the Act at the rates and in accordance with the Rate and Method of apportionment set forth in Attachment "A" to Resolution No. 2016 -032, which is incorporated by reference herein (the CITY COUNCIL ORDINANCE NO. 2016 -1358 PAGE 2OF3 "Rate and Method "). The special taxes are hereby levied commencing in the fiscal year specified in the Rate and Method and in each fiscal year thereafter until payment in full of the Bonds (including any bonds issued to refund the Bonds), payment of all costs of the public facilities and services authorized to be financed by the District for Improvement Area E, and payment of all costs of administering the District. Section 3. Each of the Mayor, the City Manager, the Director of Administrative Services, or their written designees (each, an "Authorized Officer "), acting alone, is hereby authorized and directed each fiscal year to determine the specific special tax rates and amounts to be levied in such fiscal year on each parcel of real property within Improvement Area E, in the manner and as provided in the Rate and Method. The special tax rate levied on a parcel pursuant to the Rate and Method shall not exceed the maximum rate set forth in the Rate and Method for such parcel, but the special tax may be levied at a lower rate. Each Authorized Officer is hereby authorized and directed to provide all necessary information to the Treasurer - Tax Collector of the County of Riverside and to otherwise take all actions necessary in order to effect proper billing and collection of the special tax, so that the special tax shall be levied and collected in sufficient amounts and at times necessary to satisfy the financial obligations of the District in each fiscal year until the Bonds are paid in full, the facilities have been paid for, and provision has been made for payment of all of the administrative costs of the District. Section 4. Properties or entities of the state, federal or other local governments shall be exempt from the special tax, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act and Section F of the Rate and Method. No other properties or entities are exempt from the special tax unless the properties or entities are expressly exempted in Resolution No. 2016 -032, or in a resolution of consideration to levy a new special tax or special taxes or to alter the rate or method of apportionment or an existing special tax as provided in Section 53334 of the Act. Section 5. All of the collections of the special tax shall be used as provided for in the Act, the Rate and Method and Resolution No. 2016 -032. Section 6. The special tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes (which such procedures include the exercise of all rights and remedies permitted by law to make corrections, including, but not limited to, the issuance of amended or supplemental tax bills), as such procedure may be modified by law or by this City Council from time to time. Section 7. As a cumulative remedy, if any amount levied as a special tax for payment of the interest or principal of the Bonds (including any bonds issued to refund the Bonds), together with any penalties and other charges accruing under this Ordinance, are not paid when due, the City Council may, not later than four years after the due date of the last installment of principal on the Bonds (including any bonds issued to refund the Bonds), order that the same be collected by an action brought in the superior court to foreclose the lien of such special tax, as authorized by the Act. Section 8. The Mayor of the City shall sign this Ordinance and the City Clerk shall attest to the Mayor's signature and then cause the same to be published within fifteen (15) days after its passage at least once in The Press Enterprise, a newspaper of general circulation published and circulated in the City of Lake Elsinore. Section 9. The specific authorization for adoption of this Ordinance is pursuant to the provisions of Section 53340 of the Act. CITY COUNCIL ORDINANCE NO. 2016 -1358 PAGE 3OF3 Section 10. The City Clerk is hereby authorized to transmit a certified copy of this ordinance to the Treasurer -Tax Collector of the County of Riverside, and to perform all other acts which are required by the Act, this Ordinance or by law in order to accomplish the purpose of this Ordinance. Section 11. A full reading of this Ordinance is dispensed with prior to its final passage, a written or printed copy having been available to the City Council and the public a day prior to its final passage. Section 12. This Ordinance shall take effect thirty days after its final passage. INTRODUCED at a regular meeting of the City Council of the City of Lake Elsinore, California, on the 12th day of April, 2016, and ADOPTED at the regular meeting of the City Council of the City of Lake Elsinore, California, on the 26th day of April, 2016. ATTEST: Susan M, Domen, MMC, City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE } ss. CITY OF LAKE ELSINORE } Brian TisdaK, Mayor APPROVED AS TO FORM: B ara Leibold, City Attorney I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, hereby certify that Ordinance No. 2016 -1358 was introduced at the regular City Council meeting of April 26, 2016, and adopted at the regular meeting of April 26, 2016, by the following roll call vote: AYES: Council Members Manos and Hickman, Mayor Pro Tem Magee, Mayor Tis3ale NOES: None ABSENT: Council Member Johnson ABSTAIN: Nome Susan M. Domen, MMC, Cr C erk RESOLUTION NO. 2016 -032 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003 -2 (CANYON HILLS), ANNEXING TERRITORY AS IMPROVEMENT AREA E TO CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003 -2 (CANYON HILLS), AUTHORIZING THE LEVY OF A SPECIAL TAX THEREIN, CALLING AN ELECTION AND APPROVING AND AUTHORIZING CERTAIN ACTIONS RELATED THERETO WHEREAS, the City of Lake Elsinore the (the "City ") has previously formed City of Lake Elsinore Community Facilities District No. 2003 -2 (Canyon Hills) ( "Community Facilities District No. 2003 -2" or the "District ") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the "Act "); and, WHEREAS, the City Council (the "Council ") of the City has heretofore adopted Resolution No. 2016 -021 stating its intention to annex territory to the District to be designated as Improvement Area E of the District ( "Improvement Area E "); and, WHEREAS, a copy of Resolution No. 2016 -021 setting forth a description of the proposed boundaries of Community Facilities District No. 2003 -2, the facilities and incidental expenses to be financed by the District and the rate and method of apportionment of the special tax proposed to be levied within the District is on file with the City Clerk; and, WHEREAS, notice was published and mailed to all landowners of the land proposed to be included within the District as required by law relative to the intention of this Council to annex Improvement Area E to the District and to levy a special tax and to incur bonded indebtedness in the amount of up to $3,000,000 therein to finance the facilities and incidental expenses described in Resolution No. 2016 -021; and, WHEREAS, on April 12, 2016, this Council conducted a noticed public hearing as required by law relative to the proposed annexation of Improvement Area E, the levy of the special tax therein and the issuance of bonded indebtedness by the District for Improvement Area E; and, WHEREAS, at the April 12, 2016, public hearing there was filed with this Council a report containing a description of the facilities necessary to meet the needs of Improvement Area E and an estimate of the cost of such facilities and services as required by Section 53321.5 of the Act (the "Engineer's Report"); and, WHEREAS, at the April 12, 2016, public hearing all persons desiring to be heard on all matters pertaining to the annexation of Improvement Area E, the levy of the special tax and the issuance of bonded indebtedness were heard and full and fair hearings were held; and, WHEREAS, following the public hearing, this Council has determined to authorize the annexation of Improvement Area E to finance the types of facilities (the "Facilities ") and the incidental expenses (the "Incidental Expenses ") set forth in Attachment "B" hereto, which are described in more detail in the Engineer's Report; and, CITY COUNCIL RESOLUTION NO. 2016 -032 PAGE 2 OF 6 WHEREAS, at the public hearing evidence was presented to this Council on the matters before it, and the proposed special tax to be levied within Improvement Area E was not precluded by a majority protest of the type described in Section 53324 of the Act, and this Council at the conclusion of the hearing was fully advised as to all matters relating to the annexation of Improvement Area E, the levy of the special tax and the issuance of bonded indebtedness therein; and, WHEREAS, this Council has determined, based on a Certificate of Registrar of Voters of the County of Riverside on file in the office of the City Clerk, that no registered voters have been residing in the proposed boundaries of Improvement Area E for each of the 90 days prior to April 12, 2016, and that the qualified electors in Improvement Area E are the landowners within Improvement Area E; and, WHEREAS, on the basis of all of the foregoing, this Council has determined to proceed with the annexation of Improvement Area E and to call an election therein to authorize (i) the levy of special taxes pursuant to the rate and method of apportionment of the special tax, as set forth in Attachment "A" attached hereto and (ii) the issuance of bonds to finance the Facilities and Incidental Expenses. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003 -2 (CANYON HILLS), HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. Each of the above recitals is true and correct. Section 2. An improvement area to be designated "Improvement Area E of Community Facilities District No. 2003 -2 is hereby established pursuant to the Act. The Council hereby finds and determines that all prior proceedings taken with respect to the annexation of Improvement Area E were valid and in conformity with the requirements of law, including the Act. This finding is made in accordance with the provisions of Section 53325.1(b) of the Act. Section 3. The boundaries of Community Facilities District No. 2003 -2 are established as shown on the map designated "Map of Proposed Boundaries of City of Lake Elsinore Community Facilities District No. 2003 -2 (Canyon Hills) ", which map is on file in the office of the City Clerk and was recorded pursuant to Sections 3111 and 3113 of the Streets and Highways Code in the City of County Book of Maps of Assessment and Community Facilities Districts in the Assessor - County Clerk- Recorder's office of the County of Riverside in Book No. 79 Page Nos. 47 -48, on March 14, 2016, as Instrument No. 2016 - 0097839. Section 4. The types of Facilities and Incidental Expenses authorized to be provided for Improvement Area E are those set forth in Attachment "B" attached hereto. The estimated cost of the Facilities and Incidental Expenses to be financed is set forth in the Engineer's Report, which estimates may change as the Facilities are designed and bid for construction and acquisition, as applicable. The City is authorized by the Act to contribute revenue to, or to construct or acquire the Facilities, all in accordance with the Act. The Council finds and determines that the proposed Facilities are necessary to meet the increased demand that will be placed upon local agencies and public infrastructure as a result of new development within the District and that the Facilities CITY COUNCIL RESOLUTION NO. 2016 -032 PAGE 3OF6 to be financed, including those to be financed pursuant to a joint community facilities agreement to be entered into with the Elsinore Valley Municipal Water District (the "Water District "), benefit residents of the City and the future residents of the District. The District anticipates entering into a join community facilities agreement with the Water District prior to the approval of the issuance of bonds pursuant to the Act for Improvement Area E. Section 5. Except where funds are otherwise available, it is the intention of this Council, subject to the approval of the eligible voters of Improvement Area E, to levy annually a special tax at the rates set forth in Attachment "A" hereto on all non- exempt property within Improvement Area E sufficient to pay for (i) the Facilities, (ii) the principal and interest and other periodic costs on the bonds proposed to be issued to finance the Facilities and Incidental Expenses, including the establishment and replenishment of reserve funds, any remarketing, credit enhancement and liquidity facility fees and other expenses of the type permitted by Section 53345.3 of the Act; and (iii) the Incidental Expenses. The District expects to incur, and in certain cases has already incurred, Incidental Expenses in connection with the annexation of Improvement Area E, the issuance of bonds, the levying and collecting of the special tax, the completion and inspection of the Facilities and the annual administration of the bonds and Improvement Area E. The rate and method of apportionment of the special tax is described in detail in Attachment "A" hereto and incorporated herein by this reference, and the City Council hereby finds that Attachment "A" contains sufficient detail to allow each landowner within Improvement Area E to estimate the maximum amount that may be levied against each parcel. As described in greater detail in the Engineer's Report, which is incorporated by reference herein, the special tax is based on the expected demand that each parcel of real property within Improvement Area E will place on the Facilities and on the benefit that each parcel will derive from the right to access the Facilities and, accordingly, is hereby determined to be reasonable. The special tax shall be levied on each assessor's parcel provided, however, that the special tax shall not be levied after Fiscal Year 2057 -58. The special tax is apportioned to each parcel on the foregoing bases pursuant to Section 53325.3 of the Act and such special tax is not on or based upon the ownership of real property or the assessed value of real property. If special taxes of the District for Improvement Area E are levied against any parcel used for private residential purposes, (i) the maximum 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 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 two percent (2 %) per year to the extent permitted in the rate and method of apportionment of the special tax set forth in Attachment "A," (ii) the special tax shall not be levied after Fiscal Year 2057 -58, and (iii) under no circumstances will the 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 City Manager of the City of Lake Elsinore, 130 South Main Street, Lake Elsinore, California 92530, telephone number (951) 674 -3124, will be responsible for preparing annually, or authorizing a designee to prepare, a current roll of special tax levy obligations by assessor's parcel number and will be responsible for estimating future special tax levies pursuant to Section 53340.2 of the Act. CITY COUNCIL RESOLUTION NO. 2016 -032 PAGE 4 OF 6 Section 6. In the event that a portion of the property within Improvement Area E shall become for any reason exempt, wholly or partially, from the levy of the special tax specified in Attachment "A" hereto, or in the event of delinquencies in the payment of special taxes levied, the Council shall, on behalf of Community Facilities District No. 2003 -2, increase the levy within Improvement Area E to the extent necessary and permitted by law and these proceedings upon the remaining property within Improvement Area E which is not exempt or delinquent in order to yield the required debt service payments on any outstanding bonds of the District for Improvement Area E, or to prevent the District from defaulting on any of its other obligations or liabilities; provided, however, under no circumstances will the special tax levied against any 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 Improvement Area E 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 amount of the special tax will be set in accordance with the rate and method of apportionment of the special tax attached hereto as Attachment "A." The obligation to pay special taxes may be prepaid only as set forth in Section G of Attachment "A" hereto. Section 7. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the Streets and Highways Code, a continuing lien to secure each levy of the special tax shall attach to all non - exempt real property in Improvement Area E and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the special tax by the District within Improvement Area E ceases. Section 8. Consistent with Section 53325.6 of the Act, the City Council finds and determines that the land within Improvement Area E, if any, devoted primarily to agricultural, timber or livestock uses and being used for the commercial production of agricultural, timber or livestock products is contiguous to other land within Improvement Area E and will be benefited by the Facilities proposed to be provided within Improvement Area E. Section 9. It is hereby further determined that there is no ad valorem property tax currently being levied on property within proposed Improvement Area E for the exclusive purpose of paying the principal of or interest on bonds or other indebtedness incurred to finance the construction of capital facilities which provide the same services to the territory of Improvement Area E as are proposed to be provided by the Facilities to be financed by Community Facilities District No. 2003 -2 for Improvement Area E. Section 10. Written protests against the annexation of Improvement Area E have not been filed by one -half or more of the registered voters within the boundaries of Improvement Area E or by the property owners of one -half (1/2) or more of the area of land within Improvement Area E. The Council hereby finds that the proposed special tax has not been precluded by a majority protest pursuant to Section 53324 of the Act. Section 11. An election is hereby called for Improvement Area E on the proposition of levying the special tax on the property within Improvement Area E pursuant to Section 53325.7 of the Act and shall be consolidated with the election on the proposition of incurring bonded indebtedness, pursuant to Sections 53351 and 53353.5 of the Act. The language of the propositions to be placed on the ballot is attached hereto as Attachment "C." CITY COUNCIL RESOLUTION NO. 2016 -032 PAGE 5OF6 Section 12. The date of the election for Community Facilities District No. 2003 -2 with respect to Improvement Area E on the propositions of incurring the bonded indebtedness, authorizing the levy of the special tax shall be April 12, 2016, or such later date as is consented to by the City Clerk of the City of Lake Elsinore; provided that, if the election is to take place sooner than 90 days after April 12, 2016, then the unanimous written consent of each qualified elector within the District to such election date must be obtained. The polls shall be open for said election immediately following the public hearing on April 12, 2016. The election shall be conducted by the City Clerk. Except as otherwise provided by the Act, the election shall be .. _._:corrducted_in..accorclan ,ce wjthAhe.- provisions of._!aw_cegulating__.: ,eJ -r,ii()riE,, of the City-of Lake Elsinore insofar as such provisions are determined by the City Clerk to be applicable. The City Clerk is authorized to conduct the election following the adoption of this resolution, and all ballots shall be received by, and the City Clerk shall close the election by, 11:00 p.m. on the election day; provided the election shall be closed at such earlier time as all qualified electors have voted as provided in Section 53326(d) of the Act. Pursuant to Section 53326 of the Act, the ballots for the special election shall be distributed in person, or by mail with return postage prepaid, to the qualified electors within Improvement Area E. The City Clerk has certified in a certificate on file with the City Council that there were no registered voters within Improvement Area E as of March 8, 2016. Accordingly, since there were fewer than 12 registered voters within Improvement Area E for each of the 90 days preceding April 12, 2016, the qualified electors shall be the landowners within Improvement Area E and each landowner, or the authorized representative thereof, shall have one vote for each acre or portion thereof that such landowner owns within Improvement Area E, as provided in Section 53326 of the Act. The sole landowner within Improvement Area E has executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on April 12, 2016, which waiver is on file with the City Clerk Section 13. The preparation of the Engineer's Report is hereby ratified. The Engineer's Report, as submitted, is hereby approved and was made a part of the record of the public hearing regarding the annexation of Improvement Area E. The Engineer's Report is ordered to be kept on file with the transcript of these proceedings and open for public inspection. Section 14. 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, on the 12th day of April, 2016. ATTEST: ��-) '--8 an M. Domen, MMC, City Clerk Bria&T -is" ale, Mayas CITY COUNCIL RESOLUTION NO. 2016 -032 PAGE 6OF6 STATE OF CALIFORNIA COUNTY OF RIVERSIDE SS CITY OF LAKE ELSINORE I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2016 -032 was adopted by the City Council of the City of Lake _----- __.Elsinore -at- -a regi,ila.r- meeting hel �n--the 12th -day of April, 201.6 by the following vote: AYES: Council Members Johnson, Manos and Hickman, Mayor Pro Tern Magee, and Mayor Tisdale NOES: None ABSTAIN: None ABSENT: None Susan M. Domen, MMC, City Clerk ATTACHMENT "A" RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003 -2 (CANYON HILLS) 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. 2003 -2 Improvement Area E (Canyon Hills) ( "CFD No. 2003 -2 IA E "). 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 Improvement Area E of CFD No. 2003 -2 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 Improvement Area E: 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 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 E or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, Improvement Area E or any designee thereof of complying with disclosure requirements of the City, Improvement Area E 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 E 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 E for any other administrative purposes of CFD No. 2003 -2 for Improvement Area E, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. A -1 "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 11t 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 1St 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" means the Special Tax of that name described in Section D below. "Backup Special Tax" means the Special Tax of that name described in Section D below. "Boundary Map" means a recorded map of Improvement Area E of CFD No. 2003 -2 which indicates the boundaries of Improvement Area E. "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 within Improvement Area E of CFD No. 2003 -2 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 include any subsequent building document(s) authorizing new construction on an Assessor's Parcel that are issued or changed by the City after the original issuance, as determined by the CFD Administrator as necessary to fairly allocate the Special Tax to the Assessor's Parcel, provided that following such determination the Maximum Special Tax 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 Permit 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 determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD" or "CFD No. 2003 -2" means Community Facilities District No. 2003 -2 (Canyon Hills) established by the City under the Act. "City" means the City of Lake Elsinore. A -2 "City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD No. 2003 -2 IA E, 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. 10evelopdd,P- r.operty "-, deans -all A,ssessor's_Parcels_of_ Taxable.-' ropecty _.tlirit�_�,iyare.includt,(j 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 March 18t preceding the Fiscal Year in which the Special Tax is being levied. "Exempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes as provided for in Section 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 "Improvement Area E" means Improvement Area E of CFD No. 2003 -2, as identified on the boundary map for CFD No. 2003 -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 andfor 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. Maximum Special Tax means the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2003 -2 within Improvement Area E in any Fiscal Year on any Assessor's Parcel. Multifamily Property means all Assessors 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 obligation for an Assessor's Parcel, as described in Section H. A -3 "Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an Assessor's Parcel, as described in Section G. "Proportionately" means for Taxable Property for Special Tax that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Assessor's Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor's Parcels of Approved Property, and (iii) Undeveloped Property that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor's Parcels of Undeveloped Property. "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. "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 Improvement Area E of CFD No. 2003 -2 pursuant to the Act. "Special Tax" means any of the special taxes authorized to be levied within Improvement Area E of CFD No. 2003 -2 pursuant to the Act to fund the Special Tax Requirement. "Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax delinquencies, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2003 -2 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Undeveloped Property as set forth in Step Three of Section E., 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 E of CFD No. 2003 -2, 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. A -4 B. SPECIAL TAX Commencing Fiscal Year 2016 -2017 and for each subsequent Fiscal Year, the City Council shall levy the Special Tax on all Taxable Property, up to the applicable Maximum Special Tax to fund the Special Tax Requirement. C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX Each Fiscal Year, beginning with Fiscal Year 2016 -2017, each Assessor's Parcel within lmprovement.Area,_E _ of__CFDr._No._20.03 -2 shall --be--classified- as Taxable. Property - -.or-Exempt m__. Property. In addition, each Assessor's Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, or Undeveloped Property. Assessor's Parcel 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 rate. D. MAXIMUM SPECIAL TAX 1. Developed Property The Maximum Special Tax for each Assessor's Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax or (ii) the Backup Special Tax. The Maximum Special Tax for each Assessor's Parcel of Non - Residential Property or Multifamily Residential Property shall be the applicable Assigned Special Tax described in Table 1 of Section D. a. Assigned Special Tax 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. The Assigned Special Tax applicable to an Assessor's Parcel of Developed Property for Fiscal Year 2016 -2017 shall be determined pursuant to Table 1 below. TABLE 1 ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY Taxable _ Land Use Categ9q_ Unit 1. Single Family Residential Property _ RU 2. Single Family Residential Property RU 3. Single Family Residential Assigned Special Tax Building Square Per Taxable Footage Unit _ Less than 2,200 sq. ft $1,755 2,201 sq. ft to 2,600 sq, ft $1,831 RU I2,601 sq. ft to 3,000 sq. ft 1 $1,970 A -5 4. Single Family Residential Property 5. Single Family Residential Property RU RU RU 3,001 sq. ft to 3,400 sq. ft 3,401 sq. ft to 3,800 sq. Greater than 3,801 N/A _ N/A $2,140 $2,455 6. Single Family Residential Property $2,757 7. Multifamily Property Acres $12,625 8. Non- Residential Propertv Acres $12,625 On each duty. A., commencing July 1. 2017, the Assigned .Special Tax 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 Cate pries In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax 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 Saecial Tax The Backup Special Tax for an Assessor's Parcel within a Final Map classified or to be classified as Single Family Property shall be $2,470 per unit. This Backup Special Tax 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 for all Assessor's Parcels within such changed or modified area shall be $12,625 per Acre. In the event any superseding Final Map is recorded as a Final Map within the Boundaries of the Improvement Area E of CFD No. 2003 -2, the Backup Special Tax for all Assessor's Parcels within such Final Map shall be $12,625 per Acre. The Backup Special Tax 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 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 for each Assessor's Parcel of Approved Property expected to be classified as Single Family Property shall be the Backup Special Tax computed pursuant to Section D.1.c above. The Maximum Special Tax for each Assessor's classified as Multifamily Residential Property or per Acre. A -6 Parcel of Approved Property expected to be Non - Residential Property shall be $12,625 On each July 1, commencing July 1, 2017, the Maximum Special Tax 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 for each Assessor's Parcel of Undeveloped Property, shall be equal to the product of $12,625 multiplied by the Acreage of such Assessor's Parcel. On each July 1, commencing July 1, 2017, the Maximum Special Tax rate for Undeveloped, 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 Commencing Fiscal Year 2016 -2017 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance with the following steps: Step One: The Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax rates in Table 1 to satisfy the Special Tax Requirement. Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement. Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Annual Special Tax 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 Requirement. Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax on each Assessor's Parcel of Developed Property whose Maximum Special Tax is the Backup Special Tax shall be increased Proportionately from the Assigned Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special Tax 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 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. F. 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 A -7 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 13.03 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 13.03 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 13.03 Acres will be classified as Undeveloped Property, and will be subject to Special Tax pursuant to Step Three in Section E. G. PREPAYMENT OF SPECIAL TAX The following additional definitions apply to this Section G: "CFD Public Facilities" means $2,835,000 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 Improvement Area E, 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 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 Improvement Area E. "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 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 -8 1. Prepayment in Full The Maximum Special Tax 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, and (iii) Approved or Undeveloped Property for which a Building Permit has not been issued. The Maximum Special Tax obligation applicable to an Assessor's Parcel may be fully prepaid and the obligation to pay the Special Tax 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 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 Improvement Area E 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: 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 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 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, compute, the Maximum Special Tax for the Assessor's Parcel. 3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount of Special Taxes that could be levied at the Maximum Special Tax at build out of all Assessor's Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor's Parcels of Developed Property not including any Assessor's Parcels for which the Special Tax obligation has been previously prepaid. A -9 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: 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 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 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, compute, the Maximum Special Tax for the Assessor's Parcel. 3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount of Special Taxes that could be levied at the Maximum Special Tax at build out of all Assessor's Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor's Parcels of Developed Property not including any Assessor's Parcels for which the Special Tax obligation has been previously prepaid. A -9 4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the "Bond Redemption Amount "). 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,- _--- _Multipi,y- - the_..quotient -- derived - pursuant to.. paragraph...3, by -,the _ amount.,dctermin.ed- , 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 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 Improvement Area E, 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 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 A -10 Fund. The Administrative Fees and Expenses shall be retained by Improvement Area E. 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 prepayments of Outstanding Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined pursuant to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax ....levy for -the Assessor`s Parcel from the County tax-roll:-With respect- to•any Assessor- ":s- Parcebfor --- which the Maximum Special Tax 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 obligation and the release of the Special Tax lien for the Assessor's Parcel, and the obligation to pay the Special Tax for such Assessor's Parcel shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax 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 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 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 GA 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 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 obligation for the Assessor's Parcel shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum Special Tax 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 Improvement Area E 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 A -11 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 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 Improvement Area E that there has been a Partial Prepayment for the Assessor's Parcel and that a portion of the Special Tax obligation equal to the remaining percentage (1.00 - F) of Special Tax obligation will continue cart -the- Assessor's Parcel- pursuant to- Section E. TERMINATION OF SPECIAL TAX For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor's Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2057 -58 Fiscal Year, however, the Special Tax 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 Improvement Area E Bonds have been paid; (ii) all authorized facilities of Improvement Area E have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected and (iv) all other obligations of Improvement Area E have been satisfied. J. MANNER OF COLLECTION The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that Improvement Area E may collect Special Tax 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. 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. A -12 ATTACHMENT "B" Types of Facilities to Be Financed by City of Lake Elsinore Community Facilities District No. 2003 -2 (Canyon Hills) (Improvement Area E) 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. ATTACHMENT "C" BALLOT PROPOSITIONS CITY OF LAKE ELSINORE (CANYON HILLS) COMMUNITY FACILITIES DISTRICT NO. 2003 -2 - - SPECIAL TAX AND.SRECIAL BONA ELECTION -- 2016 PROPOSITION A: Shall City of Lake Elsinore Community Facilities District No. 2003 -2 (Canyon Hills) (the "District') incur an indebtedness and issue bonds for Improvement Area E in the maximum principal amount of YES $3,000,000, with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance NO the Facilities and the Incidental Expenses described in Resolution No. 2016 -021 of the City Council of the City of Lake Elsinore annexing Improvement Area E to the District? YES PROPOSITION B: Shall a special tax with a rate and method of apportionment as provided in Resolution No. NO_ 2016 -021 of the City Council of the City of Lake Elsinore annexing Improvement Area E to the District be levied to pay for the Facilities, Incidental Expenses and other purposes described in Resolution No. 2016 -021, including the payment of the principal of and interest on bonds issued to finance the Facilities and Incidental Expenses? C -1