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HomeMy WebLinkAboutCC Reso No 2017-068 CFD No. 2007-4 Second Amendment to Special Tax Makenna CourtRESOLUTION NO. 2017 — 068 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. 2007 -4 (MAKENNA COURT), DECLARING ITS INTENTION TO CONSIDER A SECOND AMENDMENT TO THE RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Whereas, on August 28, 2007, the City Council (Council) of the City of Lake Elsinore (City) adopted Resolution No. 2007 -156 stating its intention to form City of Lake Elsinore Community Facilities District (CFD) No. 2007 -4 (Makenna Court) (Community Facilities District No. 2007 -4 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 (Act); and, Whereas, on August 28, 2007, the Council also adopted Resolution No. 2007 -157 stating its intention to incur bonded indebtedness within the District in the amount not to exceed $4,000,000 to finance the facilities and improvements identified in Exhibit "B" to Resolution No. 2007 -156 (Improvements); and the incidental expenses to be incurred in financing the Improvements and forming and administering the District (Incidental Expenses); and, , Whereas, pursuant to Resolution No. 2007 -156, the Council also stated its intention to finance parks, open space and storm drain maintenance services (Services) within the District through the levy of a services special tax in accordance with the Rate and Method (as defined below); and, Whereas, a notice calling a Public Hearing on October 9, 2007, was published as required by law relative to the intention of the Council to establish CFD No. 2007 -4 and to incur bonded indebtedness within CFD No. 2007 -4; and, Whereas, on October 9, 2007, the Council conducted a noticed Public Hearing to determine whether it should proceed with the establishment of CFD No. 2007 -4, issue bonds for the benefit of CFD No. 2007 -4 to pay for the Improvements and Incidental Expenses and authorize the rate and method of apportionment of the special taxes in the form attached as Exhibit "A" to Resolution No. 2007 -156 (Rate and Method) to be levied within CFD No. 2007 -4 for the purposes described in Resolution No. 2007 -156; and, Whereas, at the October 9, 2007, public hearing, all persons desiring to be heard on all matters pertaining to the establishment of CFD No. 2007 -4, the levy of the special taxes in accordance with the Rate and Method and the issuance of bonds within CFD No. 2007 -4 to pay for the cost of the proposed Improvements and Incidental Expenses were heard and a full and fair hearing was held; and, Whereas, after the public hearing, on October 9, 2007, the Council adopted Resolution Nos. 2007 -177 (Resolution of Formation) and 2007 -178 (Resolution to Incur Bonded Indebtedness) which formed the District and called a special election on October 9, 2007, within the District on three propositions relating to the levying of the special taxes, the incurring of bonded indebtedness and the establishment of an appropriations limit for the District, which were approved by more than two - thirds vote by the qualified electors on October 9, 2007; and, Whereas, pursuant to Resolution No. 2007 -179, adopted on October 9, 2007, the Council, acting as the legislative body of CFD No. 2007 -4, declared the results of the special election and directed the recording of a Notice of Special Tax Lien within CFD No. 2007 -4; and, CC Reso. No. 2017 -068 Page 2 of 19 Whereas, pursuant to a petition received from the owner of the land within the District, on October 25, 2016, the Council, acting as the legislative body of the District, adopted Resolution No. 2016- 119, stating its intention to consider (i) increasing the amount of bonded indebtedness authorized to be incurred by the District from $4,000,000 to $6,000,000, to finance the Improvements and the Incidental Expenses and (iii) to amend the rate and method of apportionment of special taxes for the District as set forth in Attachment "B" to Resolution No. 2016 -119; and, Whereas, on December 13, 2016, the Council conducted a noticed Public Hearing to determine whether it should proceed with the approval of the increase in the amount of bonded indebtedness authorized to be incurred by the District from $4,000,000 to $6,000,000, and to approve a first amended rate and method of apportionment for the District; and, Whereas, at the December 13, 2016, Public Hearing all persons desiring to be heard on all matters pertaining to the increase in the amount of bonded indebtedness authorized to be incurred by the District from $4,000,000 to $6,000,000 and the approval of a first amended rate and method of apportionment for the District were heard and a full and fair hearing was held; and, Whereas, after the Public Hearing, on December 13, 2016, the Council adopted Resolution No. 2016 -146 which approved the first amended rate and method of apportionment attached thereto as Attachment "A" (First Amended Rate and Method), determined the necessity to increase the amount of bonded indebtedness authorized to be incurred by the District from $4,000,000 to $6,000,000, and called a special election on December 13, 2016, within the District on two propositions relating to the approval of the First Amended Rate and Method and the increase of the amount of bonded indebtedness authorized to be incurred by the District from $4,000,000 to $6,000,000, which were approved by more than two - thirds vote by the qualified electors on December 13, 2016; and, Whereas, pursuant to Resolution No. 2016 -147, adopted on December 13, 2016, the Council, acting as the legislative body of CFD No. 2007 -4, declared the results of the special election and directed the recording of an Amended and Restated Notice of Special Tax Lien within CFD No. 2007 -4; and, Whereas, the District has received a petition signed by Western Pacific Housing, Inc., a Delaware corporation (Owner), which is the current owner of the land within CFD No. 2007 -4, the boundaries of which are described herein in Attachment "A," which petition meets the requirements of Section 53332 of the Act, requesting that the District initiate proceedings to approve a new rate and method of apportionment for CFD No. 2007 -4, attached hereto as Attachment "B" (Second Amended Rate and Method); and, Whereas, the District desires to enter into a reimbursement agreement with the Owner, the form of which is on file with the City Clerk (Reimbursement Agreement), to provide for the reimbursement of certain amounts advanced by the Owner in connection with the change proceedings described herein. NOW, THEREFORE, THE CITY COUNCIL, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2007 -4 (MAKENNA COURT), DOES HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS: Section 1. Each of the above recitals is true and correct and is adopted by the legislative body of the District. 4 CC Reso. No. 2017 -068 Page 3 of 19 Section 2. The Council, acting as the legislative body of the District, declares its intention to conduct proceedings pursuant to the Act to consider amending and restating the First Amended Rate and Method with the Second Amended Rate and Method. Section 3. A Public Hearing (Hearing) on the levy of special taxes in the District in accordance with the Second Amended Rate and Method, shall be held at 7:00 p.m., or as soon thereafter as practicable, on July 25, 2017, at the City Cultural Center, 183 North Main Street, Lake Elsinore, California. Should the Council determine to submit the proposed Second Amended Rate and Method to the qualified electors of the District, a special election will be held to authorize the Second Amended Rate and Method in accordance with the procedures contained in Government Code Section 53326. If such election is 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 District. Ballots for the special election may be distributed by mail or by personal service. Section 4. At the time and place set forth above for the Hearing, any interested person, including all persons owning lands or registered to vote within the District, may appear and be heard. Section 5. The City Clerk is hereby directed to publish a notice of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area within CFD No. 2007 -4. The City Clerk is further directed to mail a copy of the notice to each of the landowners within the boundaries of CFD No. 2007 -4 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 days prior to the date of the Hearing. Section 6. The form of the Reimbursement Agreement is hereby approved. The Mayor, the City Manager, the Assistant City Manager, or their written designees are hereby authorized and directed to execute and deliver the Reimbursement Agreement in the 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 7. This Resolution shall be effective immediately upon its adoption. Passed and Adopted on this 13th day of June, 2017. Attest,-- '-Su - . omen, MMC City Clerk Cl CC Reso. No. 2017 -068 Page 4 of 19 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, do hereby certify that Resolution No. 2017 -068 was adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of June 13, 2017, and that the same was adopted by the following vote: AYES: Council Members Manos and Tisdale; Mayor Pro Tem Johnson and Mayor Magee NOES: None ABSENT: Council Member Hickman ABSTAIN: None u Domen, MMC City Clerk 4 CC Reso. No. 2017 -068 Page 1 of 19 ATTACHMENT "A" DESCRIPTION OF BOUNDARIES OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2007 -4 (MAKENNA COURT) Real property in the City of Lake Elsinore, County of Riverside, State of California, described as follows: Tract Map No. 33486 which includes Assessor's Parcel Nos: 379 - 150 -048 -5 379 - 150 -002 -3 379 - 150 -041 -8 379 - 150 -042 -9 379 - 150 -043 -0 379 - 150 -050 -6 A -1 CC Reso. No. 2017 -068 Page 1 of 19 ATTACHMENT "B" PROPOSED SECOND AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2007 -4 (MAKENNA COURT) The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Tax of the City of Lake Elsinore Community Facilities District No. 2007 -4 (Makenna Court) ( "CFD No. 2007 -4 "). The Special Tax shall be levied on and collected each Fiscal Year, in an amount determined through the application of the Rate and Method of Apportionment described below. All of the real property within CFD No. 2007 -4 unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. A. DEFINITIONS "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 similar instrument. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560. "Act" means the Mello -Roos Community Facilities Act of 1982, being Chapter 2.5, Part 1, Division 2 of Title 5 of the California Government Code. "Administrative Expenses" means the actual or reasonably estimated costs directly related to the formation, annexation, and administration of CFD No. 2007 -4 including, but not limited to: the costs of computing the Special Tax for Facilities and preparing the annual Special Tax for Facilities collection schedules (whether by the City or designee thereof or both); the costs to the City, CFD No. 2007 -4, or any designee thereof associated with fulfilling the CFD No. 2007 -4 disclosure requirements; the costs associated with responding to public inquiries regarding the Special Tax for Facilities; the costs of the City, CFD No. 2007 -4 or any designee thereof related to an appeal of the Special Tax for Facilities; and the City's annual administration fees including payment of a proportional share of salaries and benefits of any City employees and City overhead whose duties are related to the administration and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2007 -4 for any other administrative purposes of CFD No. 2007 -4, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Tax for Facilities. "CFD Administrator" means an official of the City, or designee thereof, responsible for (i) determining the Special Tax for Facilities Requirement, (ii) determining the Special Tax for Services Requirement, and (iii) providing for the levy and collection of the 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 V preceding the Fiscal Year in which the Special Tax for Facilities is being levied, and (ii) that have not been issued a building permit on or before May Vt preceding the Fiscal Year in which the Special Tax for Facilities is being levied. As CC Reso. No. 2017 -068 Page 2 of 19 "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel Number valid at the time the Special Tax for Facilities is enrolled for the Fiscal Year for which the Special Tax for Facilities is being levied. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel Number. "Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the County for purposes of identification. "Assigned Special Tax for Facilities" means the Special Tax for Facilities of that name described in Section D below. "Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section E below. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long -term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long -term contracts, or any refunding thereof, to which Special Tax for Facilities within CFD No. 2007 -4 have been pledged. "Building Square Footage" or "BSF" means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, reflected on the original construction building permit issued for construction of a Residential Unit, including square footage of internal living space subsequently added to a Residential Unit after issuance of a building permit for expansion or renovation of such Residential Unit. "Calendar Year" means the period commencing January 1 of any year and ending the following December 31. "CFD" or "CFD No. 2007 -4" means Community Facilities District No. 2007 -4 (Makenna Court) 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. 2007 -4, or its designee. "County" means the County of Riverside. "Developed Property" means all Assessor's Parcels of Taxable Property, not classified as Approved Property, Undeveloped Property, Provisional Undeveloped Property that are not Exempt Property pursuant to the provisions of Section J. below : (i) that are included in a Final Map that was recorded prior to the January 1St preceding the Fiscal Year in which the Special Tax for Facilities or Special Tax for Services is being levied, and (ii) a building permit for new construction has been issued on or before May 11t preceding the Fiscal Year in which the Special Tax for Facilities or Special Tax For Services is being levied. B -2 CC Reso. No. 2017 -068 Page 3 of 19 "Exempt Property" means all Assessor's Parcels designated as being exempt from Special Tax for Facilities and /or Special Tax for Services pursuant to Section J, below. "Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which building permits may be issued without further subdivision. "Fiscal Year" means the period commencing on July 1 of any year and ending the following June 30. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and /or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Category" or "LUC" means any of the categories contained in Section B hereof to which an Assessor's Parcel is assigned consistent with the land use approvals that have been received or proposed for the Assessor's Parcel as of May 1 preceding the Fiscal Year in which the Special Tax for Facilities is being levied. "Maximum Special Tax for Facilities" means the Maximum Special Tax for Facilities, determined in accordance with Section C, that can be levied by CFD No. 2007 -4 in any Fiscal Year on any Assessor's Parcel. "Maximum Special Tax for Services" means the Maximum Special Tax for Services, as determined in accordance with Section M below that can be levied in any Fiscal Year on any Assessor's Parcel of Developed Property within CFD No. 2007 -4. "Operating Fund" means a fund that shall be maintained for any Fiscal Year to pay for the actual costs of maintenance related to the Services, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Multi- Family Residential 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 CFD Administrator. "Non- Residential Property" means all Assessor's Parcels of Developed Property for which a building permit(s) was issued for a non - residential use. The CFD Administrator shall make the determination if an Assessor's Parcel is Non - Residential Property. "Proportionately" means that the ratio of the actual Special Tax for Facilities levy to the applicable Assigned Special Tax for Facilities is equal for all applicable Assessor's Parcels. In case of Developed Property subject to the apportionment of the Special Tax for Facilities under step four of Section F, "Proportionately" in step four means that the quotient of (a) actual Special Tax for Facilities less the Assigned Special Tax for Facilities divided by (b) the Backup Special Tax for Facilities less the Assigned Special Tax for Facilities, is equal for all applicable Assessor's Parcels. Am CC Reso. No. 2017 -068 Page 4 of 19 "Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section J, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section J. "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 CFD Administrator. "Residential Property" means all Assessor's Parcels of Developed Property upon which completed Residential Units have been constructed or for which building permits have been issued for purposes of constructing one or more Residential Units. "Single Family Residential Property" means any Residential Property other than Multi - Family Residential Property on an Assessor's Parcel. "Services" means maintenance 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 such services as determined by the CFD Administrator. "Special Tax for Facilities" means the Special Tax for Facilities to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property, Undeveloped Property and Provisionally Undeveloped Property to fund the Special Tax for Facilities Requirement. "Special Tax for Facilities Requirement" means that amount required in any Fiscal Year for CFD No. 2007 -4 to: (i) pay debt service on all Outstanding Bonds due in the calendar year commencing in such Fiscal Year; (ii) pay periodic costs on the CFD No. 2007 -4 Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No. 2007 -4 Bonds due in the calendar year commencing in such Fiscal Year; (iii) pay a proportionate share of Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay for reasonably anticipated Special Tax for Facilities delinquencies; (vi) pay directly for acquisition or construction of CFD Public Facilities to the extent that the inclusion of such amount does not increase the Special Tax for Facilities levy on Approved Property or Undeveloped Property; less (vii) a credit for funds available to reduce the annual Special Tax for Facilities levy, as determined by the CFD Administrator pursuant to the Indenture. "Special Tax for Services" means any of the Special Tax for Services authorized to be levied within CFD No. 2007 -4 pursuant to the Act to fund the Special Tax for Services Requirement. "Special Tax for Services Requirement" means that amount to be collected in any Fiscal Year to pay for certain costs as required to meet the needs of CFD No. 2007 -4 in both the current Fiscal Year and the next Fiscal Year. The costs to be covered shall be the direct costs for maintenance 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 such services as determined by the CFD Administrator, and (v) Administrative Expenses. Under no circumstances shall the Special Tax for Services Requirement include funds for Bonds. CC Reso. No. 2017 -068 Page 5 of 19 "Taxable Property" means all Assessor's Parcels within the boundaries of CFD No. 2007 -4, which are not Exempt Property. "Taxable Unit" means a Residential Unit or an Acre. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not Developed Property, Approved Property or Provisional Undeveloped Property. B. ASSIGNMENT TO LAND USE CATERGORIES Each Fiscal Year, beginning with Fiscal Year 2017 -18, each Assessor's Parcel within CFD No. 2007 -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 Provisional Undeveloped Property. C. MAXIMUM SPECIAL TAX FOR FACILITIES 1. Developed Property The Maximum Special Tax for Facilities for each Assessor's Parcel of Developed Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax for Facilities or (ii) the Backup Special Tax for Facilities. 2. Approved Property, Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Approved Property, Undeveloped Property, or Provisional Undeveloped Property in any Fiscal Year shall be the applicable Assigned Special Tax for Facilities. D. ASSIGNED SPECIAL TAX FOR FACILITIES Developed Property Each Fiscal Year, each Assessor's Parcel of Single Family Residential Property, Multi - Family Property or Non - Residential Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities applicable to an Assessor's Parcel of Developed Property for Fiscal Year 2017 -18 shall be determined pursuant to Table 1 below. CC Reso. No. 2017 -068 Page 6 of 19 TABLE 1 ASSIGNED SPECIAL TAX FOR FACILITIES RATES FOR DEVELOPED PROPERTY FISCAL YEAR 2017 -18 Land Use Category Description Building Square Footage Assigned Special Tax for Facilities 1 Single Family Residential Property Less than or equal to 2,200 sq. ft. $2,030 per RU 2 Single Family Residential Property 2,201— 2,400 sq. ft. $2,120 per RU 3 Single Family Residential Property 2,401— 2,600 sq. ft. $2,220 per RU 4 Single Family Residential Property More than or equal to 2,601 sq. ft $2,330 per RU 5 Multi - Family Residential Property N/A $12,370 per Acre 6 Non - Residential Property N/A $12,370 per Acre 2. Approved Property, Undeveloped Property and Provisional Undeveloped Propert y Each Fiscal Year, each Assessor's Parcel of Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be subject to an Assigned Special Tax for Facilities. The Assigned Special Tax for Facilities rate for an Assessor's Parcel classified as Approved Property, Undeveloped Property and Provisional Undeveloped Property for Fiscal Year 2017 -18 shall be $12,370 per Acre. 3. Increase in the Assigned Special Tax for Facilities On each July 1, commencing July 1, 2018, the Assigned Special Tax for Facilities rate for Developed Property, Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. E. BACKUP SPECIAL TAX FOR FACILITIES At the time a Final Map is recorded, the Backup Special Tax for Facilities for all Assessor's Parcels of Developed Property classified or reasonably expected to be classified as a Single Family Property within such Final Map area shall be determined by (i) multiplying (a) the Maximum Special Tax for Facilities rate for Undeveloped Property by (b) the total Acreage of Taxable Property in such Final Map area, excluding Acreage classified as Provisional Undeveloped Property, Acreage classified or reasonably expected to be classified as Multi - Family Residential Property, Acreage classified or reasonably expected to be classified as Non - Residential Property, and any Acreage reasonably expected to be classified as Exempt Property in such Final Map area, and (ii) dividing the results in (i) by the total number of Residential Units reasonably expected to be constructed within such Final Map area. The resulting quotient shall be the Backup Special Tax for Facilities for each Assessor's Parcel of Single Family Residential Property within such Final Map area. The Backup Special Tax for Facilities shall not apply to Multi - Family Residential Property or Non - Residential Property. Notwithstanding the foregoing, if Assessor's Parcels of Developed Property which are classified or to be classified as Single-Family Residential Property are subsequently changed or modified by recordation of a lot line adjustment or similar instrument, then the Backup Special Tax for Facilities for the area that has been changed or modified shall be recalculated, based on the methodology above, to equal the amount of Backup Special Tax for Facilities that would have been generated if such change did not take place. CC Reso. No. 2017 -068 Page 7 of 19 On each July 1, commencing July 1, 2018, the Backup Special Tax for Facilities rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. F. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES 1. Special Tax for Facilities Commencing with Fiscal Year 2017 -18 and for each following Fiscal Year, the City Council shall determine the Special Tax for Facilities Requirement and shall levy the Special Tax for Facilities on all Assessor's Parcels of Taxable Property until the aggregate amount of Special Tax for Facilities equals the Special Tax for Facilities Requirement. The Special Tax for Facilities shall be levied for each Fiscal Year as follows: First: The Special Tax for Facilities shall be levied Proportionately on all Assessor's Parcels of Developed Property up to 100% of the applicable Assigned Special Tax for Facilities to satisfy the Special Tax for Facilities Requirement; Second: If additional moneys are needed to satisfy the Special Tax for Facilities Requirement after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the Maximum Special Tax for Facilities for Approved Property; Third: If additional monies are needed to satisfy the Special Tax for Facilities Requirement after the first two steps have been completed, the Special Tax for Facilities shall be levied Proportionately on all Assessor's Parcels of Undeveloped Property up to 100% of the Maximum Special Tax for Facilities for Undeveloped Property. Fourth: If additional moneys are needed to satisfy the Special Tax for Facilities Requirement after the first three steps have been completed, the Special Tax for Facilities shall be levied on each Assessor's Parcel of Developed Property whose Maximum Special Tax for Facilities is the Backup Special Tax for Facilities and such levy shall be increased Proportionately from the Assigned Special Tax for Facilities up to 100% of the Backup Special Tax for Facilities as needed to satisfy the Special Tax for Facilities Requirement; Fifth: If additional monies are needed to satisfy the Special Tax for Facilities Requirement after the first four steps have been completed, the Special Tax for Facilities shall be levied Proportionately on all Assessor's Parcels of Provisional Undeveloped Property up to 100% of the Maximum Special Tax for Facilities for Provisional Undeveloped Property. Notwithstanding the above, under no circumstances will the Special Tax for Facilities 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 for Facilities 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. G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES MW CC Reso. No. 2017 -068 Page 8 of 19 The following additional definitions apply to this Section G: "CFD Public Facilities" means $3,720,000 expressed in 2017 dollars, which shall increase by the Construction Inflation Index on July 1, 2018, 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, 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 for Facilities levied under this Amended and Restated 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. 2007 -4. "Construction Inflation Index" means the annual percentage change in the Engineering News - Record Building Cost Index forthe 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 for Facilities which will remain outstanding after the first interest and /or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax for Facilities. The Special Tax for Facilities obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or an Assessor's Parcel of Provisional Undeveloped Property may be prepaid in full, provided that there are no delinquent Special Tax for Facilities, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Prepayment Amount for an Assessor's Parcel eligible for prepayment shall be determined as described below. An owner of an Assessor's Parcel intending to prepay the Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such notice, the CFD Administrator shall notify such owner of the Prepayment Amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this service. Prepayment must be made not less than 45 days prior to the next occurring date that notice of redemption of Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. The Prepayment Amount. for each applicable Assessor's Parcel shall be calculated according to the following formula (capitalized terms defined below): Bond Redemption Amount ME CC Reso. No. 2017 -068 Page 9 of 19 plus Redemption Premium plus Future Facilities Amount plus Defeasance Cost plus Administrative Fee less Reserve Fund Credit less Capitalized Interest Credit equals Prepayment Amount As of the date of prepayment, the Prepayment Amount shall be calculated as follows: 1. For an Assessor's Parcel of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities, if any, applicable to the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property, compute the Assigned Special Tax for Facilities and the Backup Special Tax for Facilities as though it was already designated as Developed Property based upon the building permit issued or expected to be issued for that Assessor's Parcel. For an Assessor's Parcel of Provisional Undeveloped Property compute the Assigned Special Tax for Facilities for that Assessor's Parcel. 2. For each Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property to be prepaid, (a) divide the Assigned Special Tax for Facilities computed pursuant to paragraph 1 for such Assessor's Parcel by the sum of the estimated Assigned Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at buildout, as reasonably determined by the City, and (b) divide the Backup Special Tax for Facilities computed pursuant to paragraph 1 for such Assessor's Parcel by the sum of the estimated Backup Special Tax for Facilities applicable to all Assessor's Parcels of Taxable Property at buildout, as reasonably determined by the CFD Administrator. 3. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the Outstanding Bonds. The product shall be the "Bond Redemption Amount ". 4. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed with the proceeds of the Bond Redemption Amount. This product is the "Redemption Premium." 5. Compute the Future Facilities Cost. 6. Multiply the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the amount determined pursuant to paragraph 5 to determine the Future Facilities Cost to be prepaid (the "Future Facilities Amount "). 7. Compute the amount needed to pay interest on the Bond Redemption Amount to be redeemed with the proceeds of the Prepayment Amount until the earliest redemption date for the Outstanding Bonds. 8. Determine the actual Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 9. Estimate the amount of interest earnings to be derived from the reinvestment of the Bond Redemption Amount plus the Redemption Premium until the earliest redemption date for the Outstanding Bonds. • CC Reso. No. 2017 -068 Page 10 of 19 10. Add the amounts computed pursuant to paragraph 7 and 8 and subtract the amount computed pursuant to paragraph 9. This difference is the "Defeasance Cost." 11. Estimate the administrative fees and expenses associated with the prepayment, including the costs of computation of the Prepayment Amount, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption. This amount is the "Administrative Fee." 12. Calculate the "Reserve Fund Credit" as the lesser of: (a) the expected reduction in the applicable reserve requirements, if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirements in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the applicable reserve funds on the prepayment date. Notwithstanding the foregoing, if the reserve fund requirement is satisfied by a surety bond or other instrument at the time of the prepayment, then no Reserve Fund Credit shall be given. Notwithstanding the foregoing, the Reserve Fund Credit shall in no event be less than 0. 13. If any capitalized interest for the Outstanding Bonds will not have been expended as of the date immediately following the first interest and /or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 2(a) or 2(b) by the expected balance in the capitalized interest fund or account under the Indenture after such first interest and /or principal payment. This amount is the "Capitalized Interest Credit." 14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Cost, and the Administrative Fee, less the Reserve Fund Credit and the Capitalized Interest Credit. 15. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 10, 12, and 13 shall be deposited into the appropriate fund as established under the Indenture and used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 6 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by CFD 2007 -4. The Special Tax for Facilities prepayment amount may be insufficient to redeem a full $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of Bonds or to make debt service payments. With respect to a Special Tax for Facilities obligation that is prepaid pursuant to this Section G, the City Council shall indicate in the records of CFD 2007 -4 that there has been a prepayment of the Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such prepayment to indicate the prepayment of the Special Tax for Facilities obligation and the release of the Special Tax for Facilities lien on such Assessor's Parcel and the obligation of such Assessor's Parcel to pay such Special Tax for Facilities shall cease. Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property, net of Administrative Expenses, shall be at least 1.1 B -10 CC Reso. No. 2017 -068 Page 11 of 19 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. H. PARTIAL PREPAYMENT OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities obligation of an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Approved Property or Undeveloped Property for which a building permit has been issued or is expected to be issued, or and Assessor's Parcel of Provisional Undeveloped Property, as calculated in this Section H below, may be partially prepaid, provided that there are no delinquent Special Tax for Facilities, penalties, or interest charges outstanding with respect to such Assessor's Parcel at the time the Special Tax for Facilities obligation would be prepaid. The Partial Prepayment Amount shall be calculated according to the following formula: PP= (PG — A)xF +A The terms above have the following meanings: -PP= the Partial Prepayment Amount. PG = the Prepayment Amount calculated according to Section G. F = the percent by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities obligation. A = the Administration Fee calculated according to Section G. The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax for Facilities and the percentage by which the Special Tax for Facilities shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax for Facilities for an Assessor's Parcel within 30 days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City Council shall (i) distribute the funds remitted to it according to Section G, and (ii) shall indicate in the records of CFD No. 2007 -4 that there has been a partial prepayment of the Special Tax for Facilities obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such partial prepayment of the Special Tax for Facilities obligation to indicate the partial prepayment of the Special Tax for Facilities obligation and the partial release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay such prepaid portion of the Special Tax for Facilities shall cease. Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Special Tax for Facilities that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. I. TERMINATION OF.SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall cease not later than the 2057 -2058 Fiscal Year, however, the Special Tax for Facilities will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that B -11 CC Reso. No. 2017 -068 Page 12 of 19 all required interest and principal payments on Bonds for which the Special Tax for Facilities has been pledged have been paid; (ii) all authorized facilities for CFD No. 2007 -4 have been acquired, (iii) no delinquent Special Tax for Facilities remain uncollected and (iv) all other obligations of CFD No. 2007 -4 have been satisfied. J. EXEMPTIONS The City shall classify as Exempt Property, in order of priority, (i) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor's Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor's Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 14.24 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 14.24 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 14.24 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax for Facilities pursuant to step five in Section F. K. MANNER OF COLLECTION OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2007 -4 may collect Special Tax for Facilities at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. L. APPEALS RELATING TO SPECIAL TAX FOR FACILITIES Any property owner claiming that the amount or application of the Special Tax for Facilities is not correct may file a written notice of appeal with the CFD Administrator not later than twelve months after having paid the first installment of the Special Tax for Facilities that is disputed. The CFD Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax for Facilities, and rule on the appeal. If the CFD Administrator's decision requires that the Special Tax for Facilities for an Assessor's Parcel be modified or changed in favor of the property owner, a cash refund shall not be made (except for the last year of levy), but an adjustment shall be made to the Special Tax for Facilities on that Assessor's Parcel in the subsequent Fiscal Year(s). The City Council may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration and levy of the Special Tax for Facilities and any landowner or resident's appeals. Any decision of the City Council shall be final and binding as to all persons. M. SPECIAL TAX FOR SERVICES Commencing with Fiscal Year 2017 -18 and for each following Fiscal Year, the City Council shall determine the Special Tax for Services Requirement and shall levy the Special Tax for Services on all Assessor's Parcels B -12 CC Reso. No. 2017 -068 Page 13 of 19 of Developed Property until the aggregate amount of Special Tax for Services equals the Special Tax for Services Requirement. The Special Tax for Services 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 for Services Requirement; Developed Property a. Maximum Special Tax for Services The Maximum Special Tax for Services for each Assessor's Parcel of Developed Property for Fiscal Year 2017 -18 is identified in Table 2 below: TABLE 2 MAXIMUM SPECIAL TAX FOR SERVICES FOR DEVELOPED PROPERTY Land Use Category Taxable Unit Maximum Special Tax Per Taxable Unit 1. Single Family Residential Property RLI $307 2. Multi - Family Residential Property RLI $154 3. Non - Residential Property Acre $685 On each July 1, commencing on July 1, 2018 the Maximum Special Tax for Services 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. N. DURATION OF SPECIAL TAX FOR SERVICES The Special Tax for Services shall be levied in perpetuity to fund the Special Tax for Services Requirement, unless no longer required as determined at the sole discretion of the City Council. O. MANNER OF COLLECTION The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2007 -4 may collect the Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. P. APPEALS RELATING TO SPECIAL TAX FOR SERVICES Any property owner claiming that the amount or application of the Special Tax for Services is not correct may file a written notice of appeal with the CFD Administrator not later than twelve months after having paid the first installment of the Special Tax for Services that is disputed. The CFD Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax for Services, and rule on the appeal. If the CFD Administrator's decision requires that the Special Tax for Services for an Assessor's Parcel be modified or changed in favor of the property owner, a cash refund shall not be made (except for the last year of levy), but an adjustment shall be made to the Special Tax for Services on that Assessor's Parcel in the subsequent Fiscal Year(s). B -13 CC Reso. No. 2017 -068 Page 14 of 19 The City Council may interpret this Amended and Restated Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration of the Special Tax for Services and any landowner or residents appeals. Any decision of the City Council shall be final and binding as to all persons. B -14