HomeMy WebLinkAboutItem No. 15 CFD No. 2018-1 Wasson Canyon IIText File
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
www.lake-elsinore.org
File Number: RES 2014-070
Agenda Date: 2/13/2018 Status: Consent AgendaVersion: 1
File Type: ResolutionIn Control: City Council / Successor Agency
Agenda Number: 15)
Page 1 City of Lake Elsinore Printed on 2/8/2018
REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Grant Yates, City Manager
Prepared by: Jason Simpson, Assistant City Manager
Date:February 13, 2018
Subject:Community Facilities District (CFD) No. 2018-1 (Wasson Canyon II), Incur
Bonded Indebtedness
Recommendation
adopt A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, TO ESTABLISH COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE (WASSON CANYON II), TO AUTHORIZE THE LEVY OF
A SPECIAL TAX TO PAY THE COSTS OF ACQUIRING OR CONSTRUCTION OF CERTAIN
FACILITIES AND EXPENSES OF THE DISTRICT AND TO PAY DEBT SERVICE ON BONDED
INDEBTEDNESS; and,
adopt A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, TO INCUR BONDED INDEBTEDNESS IN AN AMOUNT NOT TO
EXCEED $12,000,000 WITHIN PROPOSED COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE (WASSON CANYON II)
Background and Discussion
The developer, Ava Karras, a California Limited Liability Company, property owner of residential
tract containing 272 proposed lots within the City (TR 37381 & TR 37382) has requested that
the City assist them in forming a CFD to finance the costs of certain public improvements
through the levy of a special tax and the issuance of bonds in an amount not to exceed
$12,000,000.
The landowner has requested the City that the area described in Exhibit A of the Resolution of
Intention be the boundaries of the CFD and that a Rate and Method of Apportionment (RMA) of
the special taxes to be levied as described in Exhibit B.
The Resolution of Intention is the first step in the process of forming the CFD. The attached
Resolutions declare the City’s intention to establish CFD No. 2018-1, its intention to incur
bonded indebtedness by CFD No. 2018-1 and calls a public hearing. A public hearing on the
matter will take place on March 27, 2018, and at that time the Council will formally consider
CFD 2018-1 WASSON CANYON II
Page 2
approval to form the CFD and hold an election on the approval of the special taxes and the
need to incur bonded indebtedness within the CFD.
Fiscal Impact
The developer has made a deposit to pay for the costs of the formation proceedings which may
be reimbursed to the developer in accordance with the reimbursement agreement on file with
the City Clerk.
CFD No. 2018-1 will annually levy special taxes on all of the taxable property within CFD No.
2018-1 in accordance with the RMA in order to pay for the costs of facilities, debt service on
bonds and administration of CFD No. 2018-1. Any bonds issued by CFD No. 2018-1 are not
obligations of the City and will be secured solely by the Special Taxes levied in CFD No. 2018-
1.
Exhibits
A Resolution No. 2018 – Intention to Form
B Resolution No. 2018 – Intention to Incur Debt
C Reimbursement Agreement
D Landowner Petition
E Project Map
RESOLUTION NO. 2018-___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, DECLARING ITS INTENTION TO ESTABLISH COMMUNITY
FACILITIES DISTRICT NO. 2018-1 OF THE CITY OF LAKE ELSINORE
(WASSON CANYON II), TO AUTHORIZE THE LEVY OF A SPECIAL TAX TO
PAY THE COSTS OF ACQUIRING OR CONSTRUCTING CERTAIN FACILITIES
AND EXPENSES OF THE DISTRICT AND TO PAY DEBT SERVICE ON BONDED
INDEBTEDNESS
Whereas,the City of Lake Elsinore (City) received a petition signed by the owner of more than
ten percent of the land within the boundaries of the territory which is proposed for inclusion in a
proposed Community Facilities District, (CFD) which petition meets the requirements of
Sections 53318 and 53319 of the Government Code of the State of California; and,
Whereas,the City Council (Council) of the City desires to adopt this Resolution of intention as
provided in Section 53321 of the Government Code of the State of California to establish a CFD
consisting of the territory described in Exhibit “A” hereto and incorporated herein by this
reference, which the Council hereby determines shall be known as “Community Facilities
District No. 2018-1 of the City of Lake Elsinore (Wasson Canyon II)” (CFD No. 2018-1 or the
District) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended,
commencing with Section 53311 of the Government Code (Act) to finance (1) the purchase,
construction, modification, expansion, improvement or rehabilitation of certain real or other
tangible property described in Exhibit “B” hereto and incorporated herein by this reference,
including all furnishings, equipment and supplies related thereto (Facilities), which Facilities
have a useful life of five years or longer, and (2) the incidental expenses to be incurred in
connection with financing the Facilities and forming and administering the District (Incidental
Expenses); and,
Whereas,the Council further intends to approve an estimate of the costs of the Facilities and
the Incidental Expenses for CFD No. 2018-1; and,
Whereas,it is the intention of the Council to consider financing the Facilities, the Services and
the Incidental Expenses through the formation of CFD No. 2018-1 and the issuance of bonded
indebtedness in an amount not to exceed $12,000,000.00 with respect to the Facilities and the
Incidental Expenses and the levy of a special tax to pay for the Facilities and the Incidental
Expenses (Special Tax) and to pay debt service on the bonded indebtedness, provided that the
bond sale and such Special Tax levy are approved at an election to be held within the
boundaries of CFD No. 2018-1;and,
Whereas,the City desires to enter into a reimbursement agreement with AVA Karas, LLC, a
California limited liability company (Developer), the form of which is on file with the City Clerk
(Reimbursement Agreement), to provide for the reimbursement of certain amounts advanced by
the Developer in connection with the formation of the District; and,
Whereas,the District, the Owner and the Elsinore Valley Municipal Water District (Water
District) propose to enter into a Joint Community Facilities Agreement (JCFA) relating to certain
facilities proposed to be financed by the District and owned and operated by the Water District,
and the District expects to enter into the JCFA prior to the approval of the issuance of bonds
pursuant to the Act.
Reso. No. 2018-
Page 2 of 20
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES
HEREBY RESOLVE AS FOLLOWS:
Section 1.The above recitals are true and correct.
Section 2. A CFD is proposed to be established under the terms of the Act. It is further
proposed that the boundaries of the CFD shall be the legal boundaries as described in Exhibit
“A” hereto, which boundaries shall, upon recordation of the boundary map for the District,
include the entirety of any parcel subject to taxation by the District, and as depicted on the map
of the proposed CFD No. 2018-1 which is on file with the City Clerk. The City Clerk is hereby
directed to sign the original map of the District and record it with all proper endorsements
thereon with the Assessor-County Clerk-Recorder of the County of Riverside within 15 days
after the adoption of this resolution, all as required by Section 3111 of the Streets and Highways
Code of the State of California.
Section 3. The name of the proposed CFD shall be “Community Facilities District No. 2018-1 of
the City of Lake Elsinore (Wasson Canyon II).”
Section 4.The Facilities proposed to be provided within CFD No. 2018-1 are public facilities as
defined in the Act, which the City and the Water District, with respect to certain water and sewer
facilities, are authorized by law to construct, acquire, own and operate. The Council hereby
finds and determines that the description of the Facilities herein is sufficiently informative to
allow taxpayers within the proposed District to understand what the funds of the District may be
used to finance. The Incidental Expenses expected to be incurred include the cost of planning
and designing the Facilities, the costs of forming the District, issuing bonds and levying and
collecting the Special Tax within the proposed District. The Facilities may be acquired from one
or more of the property owners within the District as completed public improvements or may be
constructed from bond or Special Tax proceeds.
All or a portion of the Facilities may be purchased with District funds as completed public
facilities pursuant to Section 53314.9 or as discrete portions or phases pursuant to Section
53313.51 of the Act and/or constructed with District funds pursuant to Section 53316.2 of the
Act. Any portion of the Facilities may be financed through a lease or lease-purchase
arrangement if the District hereafter determines that such arrangement is of benefit to the
District.
Section 5.Except where funds are otherwise available, it is the intention of the Council to levy
annually in accordance with the procedures contained in the Act the Special Tax, secured by
recordation of a continuing lien against all nonexempt real property in the District, sufficient to
pay for: (i) the Facilities and Incidental Expenses; and (ii) the principal and interest and other
periodic costs on bonds or other indebtedness issued to finance the Facilities and Incidental
Expenses, including the establishment and replenishment of any reserve funds deemed
necessary by the District, and any remarketing, credit enhancement and liquidity facility fees
(including such fees for instruments which serve as the basis of a reserve fund in lieu of cash).
The Rate and Method of apportionment and manner of collection of the Special Tax are
described in detail in Exhibit “C” attached hereto, which Exhibit “C” is incorporated herein by this
reference. Exhibit “C” allows each landowner within the District to estimate the maximum
amount of the Special Tax that may be levied against each parcel. In the first year in which
such Special Tax is levied, the levy shall include an amount sufficient to repay to the District all
amounts, if any, transferred to the District pursuant to Section 53314 of the Act and interest
thereon.
Reso. No. 2018-
Page 3 of 20
3
If the Special Tax is 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, (ii) such
Special Tax not shall be levied after fiscal year 2057-58, as described in Exhibit “C” hereto, 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 10 percent above the
amount that would have been levied in that fiscal year had there never been any such
delinquencies or defaults.
The Special Tax is based on the expected demand that each parcel of real property within
proposed CFD No. 2018-1 will place on the Facilities and on the benefit that each parcel derives
from the right to access the Facilities. The Council hereby determines that the proposed
Facilities are necessary to meet the increased demand placed upon the City and the existing
infrastructure in the City as a result of the development of the land proposed for inclusion in the
District. The Council hereby determines the Rate and Method of apportionment of the special
tax with respect to the Special Tax set forth in Exhibit “C” to be reasonable. The Special Tax is
apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act and
such special tax is not on or based upon the value or ownership of real property. In the event
that a portion of the property within CFD No. 2018-1 shall become for any reason exempt,
wholly or partially, from the levy of the Special Tax specified on Exhibit “C,” the Council shall, on
behalf of CFD No. 2018-1, cause the levy to be increased, subject to the limitation of the
maximum Special Tax for a parcel as set forth in Exhibit “C,” to the extent necessary upon the
remaining property within proposed CFD No. 2018-1 which is not exempt in order to yield the
Special Tax revenues required for the purposes described in this Section 5. The obligation to
pay the Special Tax may be prepaid only as set forth in Section G of Exhibit “C” hereto.
Section 6.A Public Hearing (Hearing) on the establishment of the proposed CFD No. 2018-1,
the proposed Rate and Method of apportionment of the Special Tax and the proposed issuance
of bonds to finance the Facilities and the Incidental Expenses shall be held at 7:00 p.m., or as
soon thereafter as practicable, on March 27, 2018, at the City Cultural Center, 183 North Main
Street, Lake Elsinore, California. Should the Council determine to form the District, a special
election will be held to authorize the issuance of the bonds and the levy of the special tax in
accordance with the procedures contained in Government Code Section 53326. If held, the
proposed voting procedure at the election will be a landowner vote with each landowner who is
the owner of record of land within the District at the close of the Hearing, or the authorized
representative thereof, having one vote for each acre or portion thereof owned within the
proposed District. Ballots for the special election may be distributed by mail or by personal
service.
Section 7.At the time and place set forth above for the Hearing, the Council will receive
testimony as to whether the proposed CFD No. 2018-1 shall be established and as to the
method of apportionment of the special tax and shall consider:
(a) if an ad valorem property tax is currently being levied on property within proposed CFD No.
2018-1 for the exclusive purpose of paying principal of or interest on bonds, lease payments or
other indebtedness incurred to finance construction of capital facilities; and,
(b) if the capital facilities to be financed and constructed by CFD No. 2018-1 will provide the
same services as were provided by the capital facilities mentioned in subsection (a); and,
Reso. No. 2018-
Page 4 of 20
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(c) if the Council makes the findings specified in subsections (a) and (b) above, it will consider
appropriate action to determine whether the total annual amount of ad valorem property tax
revenue due from parcels within CFD No. 2018-1, for purposes of paying principal and interest
on the debt identified in subsection (a) above, shall not be increased after the date on which
CFD No. 2018-1 is established, or after a later date determined by the Council with the
concurrence of the legislative body which levied the property tax in question.
Section 8.At the time and place set forth above for the Hearing, any interested person,
including all persons owning lands or registered to vote within proposed CFD No. 2018-1, may
appear and be heard.
Section 9.Each City officer who is or will be responsible for providing the Facilities within
proposed CFD No. 2018-1, if it is established, is hereby directed to study the proposed District
and, at or before the time of the above-mentioned Hearing, file a report with the Council
containing a brief description of the public facilities by type which will in his or her opinion be
required to meet adequately the needs of CFD No. 2018-1 and an estimate of the cost of
providing those public facilities, including the cost of environmental evaluations of such facilities
and an estimate of the fair and reasonable cost of any Incidental Expenses to be incurred.
Section 10.The District may accept advances of funds or work-in-kind from any source,
including, but not limited to, private persons or private entities, for any authorized purpose,
including, but not limited to, paying any cost incurred in creating CFD No. 2018-1. The District
may enter into an agreement with the person or entity advancing the funds or work-in-kind, to
repay all or a portion of the funds advanced, or to reimburse the person or entity for the value,
or cost, whichever is less, of the work-in-kind, as determined by the Council, with or without
interest.
Section 11.The City Clerk is hereby directed to publish a notice (Notice) of the Hearing
pursuant to Section 6061 of the Government Code in a newspaper of general circulation
published in the area of proposed CFD No. 2018-1. The City Clerk is further directed to mail a
copy of the Notice to each of the landowners within the boundaries of the District at least 15
days prior to the Hearing. The Notice shall contain the text or a summary of this Resolution, the
time and place of the Hearing, a statement that the testimony of all interested persons or
taxpayers will be heard, a description of the protest rights of the registered voters and
landowners in the proposed district and a description of the proposed voting procedure for the
election required by the Act. Such publication shall be completed at least 7 days prior to the
date of the Hearing.
Section 12.The reasonably expected maximum principal amount of the bonded indebtedness
to be incurred by the District for the Facilities and Incidental Expenses is $12,000,000.00.
Section 13.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 14. Except to the extent limited in any bond resolution or trust indenture related to the
issuance of bonds, the Council hereby reserves to itself all rights and powers set forth in Section
53344.1 of the Act (relating to tenders in full or partial payment).
Reso. No. 2018-
Page 5 of 20
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Section 15.This Resolution shall be effective upon its adoption.
Passed and Adopted on this 13th day of February 2018.
_____________________________
Natasha Johnson, Mayor
Attest:
_____________________________
Susan M. Domen, MMC
City Clerk
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. 2018- ______ was adopted by the City Council of the City of Lake Elsinore,
California, at the Regular meeting of February 13, 2018, and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Susan M. Domen, MMC
City Clerk
A-1
Exhibit A
BOUNDARY MAP
A-2
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as
follows:
Assessor Parcel Nos. (as set forth in the County of Riverside Assessor’s Fiscal Year 2017-18
Roll):
347-330-001
347-330-002
347-330-065
347-330-067
347-330-068
347-330-069
347-330-070
347-330-071
347-330-072
347-330-073
347-330-074
347-330-075
347-531-001
347-360-001
347-360-002
347-330-022
347-330-023
347-330-066
347-540-001
347-540-002
347-540-037
377-100-006
377-100-009
377-100-010
B-1
Exhibit B
Types of Facilities
to Be Financed by Community
Facilities District No. 2018-1 of the City of Lake Elsinore
The proposed types of public facilities and expenses to be financed by the District
include:
The construction, purchase, modification, expansion, rehabilitation and/or improvement
of (i) drainage, library, park, roadway and other public facilities of the City, including the
foregoing public facilities which are included in the City’s fee programs with respect to such
facilities and authorized to be financed under the Mello-Roos Community Facilities Act of 1982,
as amended (the “City Facilities”) and (ii) water and sewer facilities including the acquisition of
capacity in the sewer system and/or water system of the Elsinore Valley Municipal Water District
which are included in Elsinore Valley Municipal Water District’s water and sewer capacity and
connection fee programs (the “Water District Facilities” and together, with the City Facilities, the
“Facilities”), and all appurtenances and appurtenant work in connection with the foregoing
Facilities, including the cost of engineering, planning, designing, materials testing, coordination,
construction staking, construction management and supervision for such Facilities, and to
finance the incidental expenses to be incurred, including:
a.The cost of engineering, planning and designing the Facilities;
b.All costs, including costs of the property owner petitioning to form the District,
associated with the creation of the District, the issuance of the bonds, the determination of the
amount of special taxes to be levied and costs otherwise incurred in order to carry out the
authorized purposes of the District; and
c.Any other expenses incidental to the construction, acquisition, modification,
rehabilitation, completion and inspection of the Facilities.
Capitalized terms used and not defined herein shall have the meaning set forth in the
Rate and Method of Apportionment of Special Taxes for the District.
C-1
Exhibit C
RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE
(WASSON CANYON II)
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. 2018-1 (Wasson Canyon II) ("CFD No. 2018-1"). 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 CFD No. 2018-1 by applying the
appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and
Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real
property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the
purposes, to the extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or
if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final
map, parcel map, condominium plan, or other recorded County parcel map or instrument. The square
footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.
"Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State
of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to
the administration of CFD No. 2018-1: 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, CFD No. 2018-1 or any designee thereof of complying with arbitrage
rebate requirements; the costs to the City, CFD No. 2018-1 or any designee thereof of complying with
disclosure requirements of the City, CFD No. 2018-1 or obligated persons associated with applicable
federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure
statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No.
2018-1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the
release of funds from an escrow account; and the City’s annual administration fees and third party
expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or
advanced by the City or CFD No. 2018-1 for any other administrative purposes of CFD No. 2018-1,
including attorney’s fees and other costs related to commencing and pursuing to completion any
foreclosure of delinquent Special Taxes.
"Approved Property" means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final
Map that was recorded prior to the January 1
st preceding the Fiscal Year in which the Special Tax is being
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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 the CFD which indicates the boundaries of the CFD.
"Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds,
notes, certificates of participation, long-term leases, loans from government agencies, or loans from
banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any
refunding thereof, to which Special Tax of CFD No. 2018-1 have been pledged.
"Building Permit"means the first legal document issued by a local agency giving official permission for
new construction. For purposes of this definition, “Building Permit” may or may not include any
subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are
issued or changed by the City after the first original issuance, as determined by the CFD Administrator as
necessary to fairly allocate 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. 2018-1"means Community Facilities District No. 2018-1 (Wasson Canyon II)
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. 2018-1.
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“Condominium Plan"means a condominium plan as set forth in the California Civil Code, Section 1352.
"County" means the County of Riverside.
"Developed Property" means all Assessor’s Parcels of Taxable Property that: (i) are included in a Final
Map that was recorded prior to the January 1
st 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 1st 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.
“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”means any of the categories listed in Table 1 of Section D.
"Maximum Special Tax"means for each Assessor’s Parcel, the maximum Special Tax, determined in
accordance with Section D below, that can be levied by CFD No. 2018-1 in any Fiscal Year on such
Assessor’s Parcel.
“Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit
has been issued for the purpose of constructing a building or buildings comprised of attached
Residential Units available for rental by the general public, not for sale to an end user, and under
common management, as determined by the CFD 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 CFD 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 G.2.
"Prepayment Amount"means the amount required to prepay the Special Tax obligation in full for an
Assessor’s Parcel, as described in Section G.1.
“Proportionately”means for Taxable Property 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, or Provisional
Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax
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per Acre is the same for all Assessor’s Parcels of Undeveloped Property, or Provisional Undeveloped
Property, as applicable.
"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 F, but cannot be
classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property
below the required minimum Acreage set forth in Sections F.
"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 CFD Administrator.
“Single Family Residential Property”means all Assessor’s Parcels of Residential Property other than
Multifamily Property.
"Special Tax"means any of the special taxes authorized to be levied within CFD No. 2018-1 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 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) for the collection or
accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2018-1 or
the payment of debt service on Bonds anticipated to be issued, provided that the inclusion of such
amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped
Property as set forth in Steps Two or 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 CFD No. 2018-1, 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, Provisional Undeveloped Property.
B. SPECIAL TAX
Commencing Fiscal Year 2018-2019 and for each subsequent Fiscal Year, the City Council shall levy
Special Taxes 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
C-5
Each Fiscal Year, beginning with Fiscal Year 2018-2019, each Assessor’s Parcel within CFD No. 2018-1
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.
Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non-
Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as a Single
Family Residential Property, or Multifamily Property. Each Assessor’s Parcel of Single Family Residential
Property shall be further categorized into Land Use Categories based on its Building Square Footage and
assigned to its appropriate Assigned Special Tax 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 2018-2019 shall be
determined pursuant to Table 1 below.
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit
1.Single Family Residential Property RU Less than 1,600 sq. ft $2,090.00
2. Single Family Residential Property RU 1,600 sq. ft to 1,800 sq. ft $2,186.00
3. Single Family Residential Property RU 1,801 sq. ft to 2,000 sq. ft $2,331.00
4. Single Family Residential Property RU 2,001 sq. ft to 2,200 sq. ft $2,427.00
5. Single Family Residential Property RU 2,201 sq. ft to 2,400 sq. ft $2,524.00
6. Single Family Residential Property RU 2,401 sq. ft to 2,600 sq. ft $2,620.00
7. Single Family Residential Property RU 2,601 sq. ft to 2,800 sq. ft $2,716.00
8. Single Family Residential Property RU 2,801 sq. ft to 3,000 sq. ft $2,765.00
11. Single Family Residential Property RU Greater than 3,000 sq. ft $2,813.00
12. Multifamily Property Acre N/A $15,745.00
13. Non-Residential Property Acre N/A $15,745.00
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b. Multiple Land Use Categories
In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use
Type. The Maximum Special Tax 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 Special Tax
The Backup Special Tax for an Assessor’s Parcel within a Final Map classified or to be classified as
Single-Family Property shall calculated according to the following formula.
B = (U x A) / L
The terms above have the following meanings:
B = Backup Special Tax per Assessor’s Parcel within the Final Map
U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below
A = Acreage of Single Family Residential Property expected to exist in such Final Map at the time
of calculation, as determined by the Administrator
L = Number of Residential Units expected to exist in such Final Map at the time of calculation, as
determined by the Administrator.
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 $15,745 per Acre.
In the event any superseding Final Map is recorded as a Final Map within the Boundaries of the CFD,
the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $15,745 per Acre. The
Backup Special Tax shall not apply to Multifamily Residential Property, or Non-Residential Property.
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 Parcel of Approved Property expected to be classified
as Multifamily Residential Property or Non-Residential Property shall be $15,745 per Acre.
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3.Undeveloped Property and Provisional Undeveloped 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 and Provisional
Undeveloped Property that is not Exempt Property shall be equal to the product of $15,745
multiplied by the Acreage of such Assessor’s Parcel.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2018-2019 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 levy on each Assessor's Parcel of
Developed Property for which the 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.
Step Five:If additional moneys are needed to satisfy the Special Tax Requirement after the first
four steps have been completed, the Special Tax shall be levied Proportionately on each
Assessor’s Parcel of Provisional 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.
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.
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F.EXEMPTIONS
The City shall classify as Exempt Property, in the following order of priority, (i) Assessor’s Parcels which
are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of
California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are
used as places of worship and are exempt from ad valorem property taxes because they are owned by a
religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication,
encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or
utility easements making impractical their utilization for other than the purposes set forth in the
easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely
for public uses, or (vi) Assessor’s Parcels restricted to other types of public uses determined by the City
Council, provided that no such classification would reduce the sum of all Taxable Property to less than
41.81 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 41.81 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 41.81 Acres will be classified as Provisional Undeveloped
Property, and will be subject to Special Tax pursuant to Step Five in Section E.
G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
“CFD Public Facilities” means $8,000,000 expressed in 2018 dollars, which shall increase by the
Construction Inflation Index on July 1, 2019, and on each July 1 thereafter, or such lower amount (i)
determined by the City Council as sufficient to provide the public facilities under the authorized bonding
program for CFD No. 2018-1, 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 to be financed by CFD No. 2018-1.
“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
C-9
current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior
prepayments of Special Tax.
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, (iii) Approved Property or Undeveloped Property for which a Building
Permit has not been issued and (iv) Assessor’s Parcels of Public Property or Property Owner’s
Association Property, or Provisional Undeveloped Property that are not Exempt Property pursuant to
Section F. 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 the CFD in calculating the Prepayment Amount (as
defined below) for the Assessor’s Parcel. Within 15 days of receipt of such non-refundable deposit, the
CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel.
Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be
redeemed with the proceeds of such prepaid Special Taxes.
The Prepayment Amount (defined below) shall be calculated as follows (capitalized terms are defined
below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals:Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1.Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.
2.For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax 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, Public Property, Property
Owner’s Association Property, or Provisional Undeveloped Property to be prepaid 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
C-10
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.
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.Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to
paragraph 6 to determine the amount of Future Facilities Costs for the Assessor’s Parcel (the
“Future Facilities Amount”).
8.Determine the amount needed to pay interest on the Bond Redemption Amount from the first
bond interest and/or principal payment date following the current Fiscal Year until the earliest
redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax
prepayments.
9.Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which
have not yet been paid.
10.Determine the amount the CFD Administrator reasonably expects to derive from the
investment of the Bond Redemption Amount and the Redemption Premium from the date of
prepayment until the redemption date for the Outstanding Bonds to be redeemed with the
Prepayment Amount.
11.Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived
pursuant to paragraph 10 (the “Defeasance Amount”).
12.Verify the administrative fees and expenses of the CFD, including the cost of computation of
the Prepayment Amount, the cost to invest the Prepayment Amount, the cost of redeeming the
Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Maximum
Special Tax 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.
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15.From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and
Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture
and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities
Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall
be retained by the CFD.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such
event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate
fund established under the Indenture to be used with the next redemption from other Special Tax
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 Parcel for 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 G.1 shall be modified as provided by the following formula:
PP = ((PE –A) x F) +A
These terms have the following meaning:
PP = Partial Prepayment Amount
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 CFD in
C-12
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 Amount for the Assessor’s Parcel. A Partial Prepayment Amount 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 Amount.
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 Amount as provided in Paragraph 15 of
Section G.1, and (ii) indicate in the records of the CFD that there has been a Partial Prepayment for the
Assessor’s Parcel and that a portion of the Maximum Special Tax obligation equal to the remaining
percentage (1.00 - F) of the Maximum Special Tax obligation will continue to be levied on the Assessor’s
Parcel pursuant to Section E.
H. 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 2057-2058 Fiscal Year,
however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has
determined (i) that all the required interest and principal payments on the CFD No. 2018-1 Bonds have
been paid; (ii) all authorized facilities of CFD No. 2018-1 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 CFD No. 2018-1 have been satisfied.
I.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 CFD No. 2018-1 may collect Special Taxes 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.
J. 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.
RESOLUTION NO. 2018-_______
RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, TO INCUR BONDED INDEBTEDNESS IN AN
AMOUNT NOT TO EXCEED $12,000,000 WITHIN PROPOSED COMMUNITY
FACILITIES DISTRICT NO. 2018-1 OF THE CITY OF LAKE ELSINORE
(WASSON CANYON II)
Whereas, the City Council (Council) of the City of Lake Elsinore (City) upon receipt of a petition
as provided in Section 53318 of the Government Code of the State of California instituted
proceedings to form Community Facilities District No. 2018-1 of the City of Lake Elsinore
(Wasson Canyon II) (Community Facilities District No. 2018-1 or the District) pursuant to the
Mello-Roos Community Facilities Act of 1982 (Act), as amended, pursuant to Resolution No.
2018- _____ adopted by the Council on the date hereof to finance (1) the purchase,
construction, modification, expansion, improvement and/or rehabilitation of public facilities
identified in Attachment “A” hereto and incorporated herein by this reference, including all
furnishings, equipment and supplies related thereto (Facilities) and (2) the incidental expenses
to be incurred in financing the Facilities and forming and administering the District (Incidental
Expenses); and,
Whereas, the Council estimates that the amount required to finance the Facilities and Incidental
Expenses is approximately $12,000,000; and,
Whereas, in order to finance the Facilities and Incidental Expenses, the Council intends to
authorize the issuance of bonds in the maximum aggregate principal amount of $12,000,000,
the repayment of which is to be secured by special taxes levied in accordance with Section
53328 of the Act on all property in the proposed Community Facilities District No. 2018-1, other
than those properties exempted from taxation in the Rate and Method of apportionment set forth
in Attachment “C” to Resolution No. 2018- _____.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1.The above recitals are true and correct.
Section 2.It is necessary to incur bonded indebtedness within the boundaries of proposed
Community Facilities District No. 2018-1 in an amount not to exceed $12,000,000 to finance the
costs of the Facilities and Incidental Expenses, as permitted by the Act.
Section 3.The indebtedness will be incurred for the purpose of financing the costs of the
Facilities and the Incidental Expenses, including, but not limited to, the funding of reserve funds
for the bonds, the financing of costs associated with the issuance of the bonds and all other
costs and expenses necessary to finance the Facilities which are permitted to be financed
pursuant to the Act.
Section 4.It is the intent of the Council to authorize the sale of bonds in one or more series, in
the maximum aggregate principal amount of $12,000,000 and at a maximum interest rate not in
excess of 12 percent per annum, or a higher rate not in excess of the maximum rate permitted
by law at the time that the bonds are issued. The term of the bonds of each series shall be
determined pursuant to a resolution of this City Council acting in its capacity as the legislative
Reso No. 2018-
Page 2 of 4
2
body of the District authorizing the issuance of the bonds of such series, but such term shall in
no event exceed 35 years from the date of issuance of the bonds of such series, or such longer
term as is then permitted by law.
Section 5. A public hearing (the “Hearing”) on the proposed issuance of bonded indebtedness
shall be held at 7:00 p.m. or as soon thereafter as practicable, on March 27, 2018, at the City
Cultural Center, 183 North Main Street, Lake Elsinore, California.
Section 6. At the time and place set forth in this Resolution for the Hearing, any interested
persons, including all persons owning land or registered to vote within proposed Community
Facilities District No. 2018-1, may appear and be heard.
Section 7. The Clerk of the Board is hereby directed to publish a notice (the “Notice”) of the
Hearing pursuant to Section 6061 of the Government Code in a newspaper of general
circulation published in the area of the proposed Community Facilities District No. 2018-1. Such
publication shall be completed at least seven days prior to the date of the Hearing. The Clerk of
the Board is further directed to mail a copy of the Notice to each of the landowners within the
boundaries of proposed Community Facilities District No. 2018-1 at least 15 days prior to the
Hearing.
Passed and Adopted on this 13th day of February, 2018.
_____________________________
Natasha Johnson, Mayor
Attest:
_____________________________
Susan M. Domen, MMC
City Clerk
Reso No. 2018-
Page 3 of 4
3
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. 2018- ______ was adopted by the City Council of the City of Lake Elsinore,
California, at the Regular meeting of February 13, 2018 and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Susan M. Domen, MMC
City Clerk
A-1
ATTACHMENT A
Types of Facilities to Be
Financed by Community
Facilities District No. 2018-1
The proposed types of public facilities and expenses to be financed by the District
include:
The construction, purchase, modification, expansion, rehabilitation and/or improvement
of (i) drainage, library, park, roadway and other public facilities of the City, including the
foregoing public facilities which are included in the City’s fee programs with respect to such
facilities and authorized to be financed under the Mello-Roos Community Facilities Act of 1982,
as amended (the “City Facilities”) and (ii) water and sewer facilities including the acquisition of
capacity in the sewer system and/or water system of the Elsinore Valley Municipal Water District
which are included in Elsinore Valley Municipal Water District’s water and sewer capacity and
connection fee programs (the “Water District Facilities” and together, with the City Facilities, the
“Facilities”), and all appurtenances and appurtenant work in connection with the foregoing
Facilities, including the cost of engineering, planning, designing, materials testing, coordination,
construction staking, construction management and supervision for such Facilities, and to
finance the incidental expenses to be incurred, including:
a.The cost of engineering, planning and designing the Facilities;
b.All costs, including costs of the property owner petitioning to form the District,
associated with the creation of the District, the issuance of the bonds, the determination of the
amount of special taxes to be levied and costs otherwise incurred in order to carry out the
authorized purposes of the District; and
c.Any other expenses incidental to the construction, acquisition, modification,
rehabilitation, completion and inspection of the Facilities.
Capitalized terms used and not defined herein shall have the meaning set forth in the
Rate and Method of Apportionment of Special Taxes for the District.
REIMBURSEMENT AGREEMENT
RE PROPOSED
COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE (WASSON CANYON II)
THIS REIMBURSEMENT AGREEMENT RE PROPOSED COMMUNITY FACILITIES
DISTRICT NO. 2018-1 OF THE CITY OF LAKE ELSINORE (WASSON CANYON II) (the
“Agreement”) dated as of February 1, 2018 is entered into by and between the City of Lake
Elsinore, a general law city organized and existing under the laws and constitution of the State of
California (the “City”), and AVA Karas, LLC, a California limited liability company (the “Owner”).
R E C I T A L S:
A.The Owner owns approximately 74.52 acres of land described in Exhibit A
attached hereto (the “Property”) for which the Owner desires to include the Property within
proposed Community Facilities District No. 2018-1 of the City of Lake Elsinore (the “District”) to
be established by the City pursuant to the Mello-Roos Community Facilities Act of 1982
(Government Code Section 53311 et seq.) (the “Act”).
B.The City and the Owner are desirous of entering into this Agreement in order to
provide a mechanism by which the Owner may advance certain costs related to the cost of
formation of the District, and to provide that such District, if formed, will reimburse the Owner for
the amounts advanced hereunder.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereto agree as follows:
1.Recitals. Each of the above recitals is incorporated herein and is true and correct.
2.Potential Formation of the District and Issuance of Bonds.
(a)At the request of the Owner, the City will undertake to form the District. The
City will retain, at the Owner’s expense, the necessary consultants to analyze the proposed
formation of the District and issuance of bonds, including an engineer, special tax consultant,
financial advisor, bond counsel, market absorption consultant, appraiser and other consultants
deemed necessary by the City. In addition, City staff time spent in connection with the formation
of the District and the issuance of bonds shall be at Owner’s expense.
(b)In order to begin the process of analyzing the potential formation of the
District, the Owner shall advance to the City a sum totaling $50,000. From time to time, the Owner
shall make additional advances to the City within 15 days following receipt from the City of a
request for an additional advance to cover the costs of forming the District and/or issuing bonds.
In the event the Owner does not deliver the requested amount to the City within such 15-day
period, the City will have no obligation to proceed with the analysis or bond issue unless and until
such additional advance is received. The Owner shall have the right to notify the City at any time,
in writing, of its intention to abandon the formation of the District or the issuance of bonds. Upon
receipt of such notice, the City shall instruct its consultants to cease work as soon as practicable.
The Owner shall be responsible to pay all costs and expenses incurred by the City or any City
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consultant or advisor prior to the date on which the City’s consultants are notified of the Owner’s
notice of abandonment. Notwithstanding a decision of the Owner to abandon the formation of the
District or the issuance of bonds, the City may, in its sole discretion, elect to proceed with
formation of the District and/or the issuance of bonds with funds other than those of the Owner;
provided, however, that, in executing this Agreement, the Owner shall not be deemed to have
waived their right to object to the formation of the District or the issuance of bonds.
(c)The City will provide to the Owner on request a summary of how the
advances have been spent and the unexpended balance remaining. The amounts advanced by
the Owner will be reimbursable to the Owner, without interest, from the proceeds of bonds issued
by the District when and if the District is formed. In the event that bonds are not issued to provide
a source of reimbursement to the Owner, the City shall have no liability to the Owner to reimburse
them for any of amounts previously advanced by the Owner and expended by the City in
accordance with this Agreement.
3.Reimbursement Procedure. The City shall return any funds which have been
advanced by the Owner which are not expended on the purposes set forth in Section 2 above.
Such returned funds shall be without interest.
4.Abandonment of CFD Formation Process. The Owner understands that any
formation of the District shall be in the sole discretion of the City. No provision of this Agreement
shall be construed as a promise, warranty or agreement by the City to form the District, to annex
the Property to any other district or improvement area of the City or to issue any bonds. The City
shall have no liability to Owner for its decision not to form the District or issue bonds.
5.Indemnification and Hold Harmless. The Owner hereby assumes the defense of,
and indemnifies and saves harmless, jointly and severally, the City and each of its officers,
directors, employees and agents, from and against all actions, damages, claims, losses or
expenses of every type and description to which they may be subjected or put, by reason of, or
arising out of any acts or omissions taken by the Owner or any of the Owner’s officers, employees,
contractors and agents with respect to the formation of the District.
6.Notices. Any notice to be provided pursuant to this Agreement shall be delivered
to the following addresses:
Owner AVA Karas, LLC
4030 Birch Street
Newport Beach, California 92660
Attention: Emad Bolous
Telephone: (949) 262-1558
City:City of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
Attn: Assistant City Manager
Telephone: (951) 674-3124
Email: jsimpson@lake-elsinore.org
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With a copy to:Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, CA 92660
Attention: Brian Forbath, Esq.
Telephone: (949) 725-4193
Email: bforbath@sycr.com
Each party may change its address for delivery of notice by delivering written notice of
such change of address to the other party.
7.Assignment. The Owner may assign its interest in this Agreement at any time
provided, however, that the Owner shall provide written evidence of any assignment to the City.
8.Severability. If any part of this Agreement is held to be illegal or unenforceable by
a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the
fullest extent permitted by law.
9.Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the matters provided for herein.
10.Amendments. This Agreement may be amended or modified only by written
instrument signed by all parties.
11.Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original.
12.Governing Law. This Agreement and any dispute arising hereunder shall be
governed by and interpreted in accordance with the laws of the State of California.
13.No Third Party Beneficiaries. No person or entity shall be deemed to be a third
party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to
confer upon any person or entity, other than the City and the Owner, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
14.Singular and Plural; Gender. As used herein, the singular of any word includes
the plural, and terms in the masculine gender shall include the feminine.
15.Termination. This Agreement shall terminate and be of no further force and effect
on February 1, 2021 unless expressly amended by the parties; provided, however, that the
Owner’s obligations under Section 5 shall survive the termination and the City’s obligation to
provide reimbursement in accordance with Section 3 for expenses incurred prior to the termination
date shall also survive termination.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
S-1
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.
CITY OF LAKE ELSINORE, a political subdivision
of the State of California
By:
Assistant City Manager
ATTEST:
By:
Susan M. Domen, CMC, City Clerk
AVA Kara, LLC, a California limited liability
company
By:
Emad Bolous, Managing Member
APPROVED AS TO FORM:
CITY ATTORNEY
By:
A-1
EXHIBIT A
DESCRIPTION OF PROPERTY
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as
follows:
Assessor Parcel Nos.:
347-330-001
347-330-002
347-330-065
347-330-067
347-330-068
347-330-069
347-330-070
347-330-071
347-330-072
347-330-073
347-330-074
347-330-075
347-531-001
347-360-001
347-360-002
347-330-022
347-330-023
347-330-066
347-540-001
347-540-002
347-540-037
377-100-006
377-100-009
377-100-010
1
PETITION TO THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE REQUESTING INSTITUTION OF PROCEEDINGS
FOR ESTABLISHMENT OF A COMMUNITY FACILITIES
DISTRICT (COMMUNITY FACILITIES DISTRICT NO. 2018-1 OF
THE CITY OF LAKE ELSINORE (WASSON CANYON II))
1.The undersigned (the “Owner”) is the owner of more than 10% of the land
depicted in Exhibit A hereto and described in Exhibit B hereto (the “Property”), which land is
expected to be all of the land included within the boundaries of a community facilities district
hereby proposed to be established. The Property is located within the City of Lake Elsinore (the
“City”) in the County of Riverside.
2.The Owner requests that the City Council of the City (the “City Council”) institute
proceedings to establish a community facilities district to be known as “Community Facilities
District No. 2018-1 of the City of Lake Elsinore (Wasson Canyon II)” (referred to herein as the
“District”) pursuant to Chapter 2.5 (commencing with Section 53311), Part 1, Division 2, Title 5,
of the Government Code of the State of California, commonly known as the “Mello-Roos
Community Facilities Act of 1982” (the “Act”) to include all of the Property.
3.The boundaries of the territory which is proposed for inclusion in the District are
those depicted in Exhibit A hereto and described in Exhibit B hereto.
4.The Owner requests that the proposed District be used to finance the
construction, purchase, modification, expansion 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 Act (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.
5.The Owner further requests that the City Council authorize the levy of special
taxes in the District to pay the costs of the Facilities and the incidental costs described in
paragraph 4 above (the “Special Tax”) and to pay principal of, interest and premium, if any, on
the bonds in order to contribute to the financing of the Facilities and costs described in
paragraph 4 above.
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6.The Owner further requests that, upon the sale of bonds, the City Council, as
legislative body of the District, annually levy Special Taxes on the property within the District for
the construction, acquisition and rehabilitation of the Facilities, for the payment of the aggregate
amount of principal of and interest owing on the bonds in each fiscal year, including the
maintenance of reserves therefor, and for the payment of administrative expenses of the
District.
8.The Owner has advanced to the City the amounts necessary to pay for the costs
related to the formation of the District, which amounts will be reimbursed, without interest, from
the proceeds of the first sale of the bonds, if any. The reimbursement of such amounts is
expected to be governed by the terms of that certain Reimbursement Agreement to be entered
into by and between the City and the Owner relating to the District. If bonds are not sold, the
City will have no obligation to reimburse amounts expended for costs incurred but will reimburse
any unexpended amounts advanced by the Owner as set forth in the Reimbursement
Agreement.
Dated: February __, 2018
AVA KARAS, LLC, a California limited
liability company
By:
Emad Bolous, Managing Member
A-1
EXHIBIT A
BOUNDARY MAP
B-1
EXHIBIT B
LEGAL DESCRIPTION
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as
follows:
Assessor Parcel Nos. (as set forth in the County of Riverside Assessor’s Fiscal Year 2017-18
Roll)::
347-330-001
347-330-002
347-330-065
347-330-067
347-330-068
347-330-069
347-330-070
347-330-071
347-330-072
347-330-073
347-330-074
347-330-075
347-531-001
347-360-001
347-360-002
347-330-022
347-330-023
347-330-066
347-540-001
347-540-002
347-540-037
377-100-006
377-100-009
377-100-010
CFD NO. 2018-1 (WASSON CANYON II)
FORMATION