HomeMy WebLinkAboutItem No. 17 CFD 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 2014-079
Agenda Date: 3/27/2018 Status: Public HearingVersion: 1
File Type: ResolutionIn Control: City Council / Successor Agency
Agenda Number: 17)
Page 1 City of Lake Elsinore Printed on 3/22/2018
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:March 27, 2018
Subject:Formation of the City of Lake Elsinore to Establish Community Facilities
District No. 2018-1 of the City of Lake Elsinore (Wasson Canyon II)
Recommendation
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2018-1 OF THE CITY
OF LAKE ELSINORE (WASSON CANYON II), AUTHORIZING THE LEVY OF A SPECIAL TAX
THEREIN, CALLING AN ELECTION AND APPROVING AND AUTHORIZING CERTAIN
ACTIONS RELATED THERETO; and,
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT
NO. 2018-1 OF THE CITY OF LAKE ELSINORE (WASSON CANYON II) DETERMINING THE
NECESSITY TO INCUR BONDED INDEBTEDNESS IN AN AMOUNT NOT TO EXCEED
$12,000,000 WITHIN COMMUNITY FACILITIES DISTRICT NO. 2018-1 OF THE CITY OF LAKE
ELSINORE (WASSON CANYON II) AND CALLING AN ELECTION THEREIN; and,
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY
FACILITIES DISTRICT NO. 2018-1 OF THE CITY OF LAKE ELSINORE (WASSON CANYON II)
CERTIFYING ELECTION RESULTS; and,
introduce by title only and waive further reading of AN ORDINANCE OF THE CITY COUNCIL OF
THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING IN ITS CAPACITY AS THE
LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2018-1 OF THE CITY OF
LAKE ELSINORE (WASSON CANYON II) AUTHORIZING THE LEVY OF SPECIAL TAXES
Background and Discussion
The developer, Ava Karas, LLC, a California Limited Liability Company (Developer), property
owner of a residential tract containing 272 proposed lots within the City (TR 37381 & TR 37382)
has requested that the City form a Community Facilities District (CFD or District) to finance the
CFD 2018-1 WASSON CANYON II
Page 2
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 that the area shown on the project map presented at this meeting
and more particularly described in Exhibit A of Resolution No. 2018-032 adopted by the City
Council on February 13, 2018 (Resolution of Intention) be the boundaries of the CFD ,and that
special taxes be levied within the CFD in accordance with the Rate and Method of Apportionment
(RMA) as described in Exhibit B to the Resolution of Intention.
The Resolution of Intention called for a public hearing to be held on March 27, 2018, for the City
Council to formally consider the approval of the formation of the CFD and the approval of the levy
of the special taxes within the CFD. Notice of the public hearing was published in the Press
Enterprise and mailed to the property owner in accordance with the Mello-Roos Act.
In connection with the public hearing, Spicer Consulting Group has prepared a CFD Public
Hearing Report which describes and analyzes the facilities to be financed by the CFD and the
estimated costs of such facilities. Following the close of the public hearing, the City Council will
be asked to adopt the Resolution of Formation and the Resolution Determining the Necessity to
Incur Debt which, together, approves the formation of the CFD and the levy of the special taxes
in accordance with the RMA and determines the necessity for the CFD to issue bonds in an
amount not to exceed $12,000,000. Such resolutions call for an election to submit to the qualified
voters in the CFD ballot measures on the approval of the special taxes, the issuance of the bonds
and an appropriations limit for the CFD.
In addition, the Resolution of Formation, approves the execution and delivery of the following
agreements in the forms presented to the City Council: (i) the Acquisition, Construction and
Funding Agreement with the Developer (the “Acquisition Agreement”); and (ii) the Joint
Community Facilities Agreement with the Developer and Elsinore Valley Municipal Water District
(JCFA). The Acquisition Agreement sets forth the terms, among others, pursuant to which the
CFD will finance improvements to be either constructed by the City or constructed by the
Developer and acquired by the City. In accordance with the Mello-Roos Act, the approval and
execution of the Joint Community Facilities Agreement allows for the CFD to finance
improvements to be owned and operated by Elsinore Valley Municipal Water District which benefit
the development within the District.
On file with the City Clerk is a Certificate of the Registrar of Voters of Riverside County certifying
that there are no registered voters residing within the boundaries of the CFD. Accordingly, under
the Mello-Roos Act, only property owners owning land in the District are eligible to vote at the
election with each owner having one vote for each acre (or portion thereof) that they own within
the CFD. The Developer has executed a consent and waiver of certain election procedures,
including certain timing requirements with respect to the election, and the City Clerk has executed
a certificate concurring to the holding of the election on this date, all in accordance with the Mello-
Roos Act. Accordingly, if the City Council approves the Resolution of Formation and the
Resolution Determining the Necessity to Incur Debt, the City Clerk will conduct the election. The
City Clerk will announce the election results and the City Council will be asked to adopt the
Resolution Certifying the Election Results. Based on upon certification that 2/3rds of the votes
cast are in favor of the propositions voted upon, the Resolution Certifying the Election Results
directs the City Clerk to record a notice of special tax lien on the property within the CFD. The
City Council will then be asked to introduce the Ordinance authorizing the levy of the special tax
within the CFD in accordance with the RMA.
CFD 2018-1 WASSON CANYON II
Page 3
Fiscal Impact
The District will be required to annually levy special taxes on all of the taxable property within the
CFD in order to pay for the costs of facilities, debt service on bonds and administration of the
CFD. Any bonds issued by the District are NOT obligations of the City and will be secured solely
by the special taxes levied in the CFD.
Ava Karas, LLC, a California Limited Liability Company has made a deposit to pay for the costs
of forming the CFD. The Resolution of Intention approved a form of a Reimbursement Agreement
to reimburse the developer for these costs if and when bonds are issued for CFD.
Exhibits
A - Resolution Establishing of Formation
B - Resolution Necessity to Incur Debt
C - Resolution Certifying the Election Results
D - Ordinance Authorizing the Levy of Special Tax
E - Certificate of the Registrar of Voters
F - Landowner Waiver
G - Public Hearing Report
H – Project Map
I - Joint Community Facilities Agreement
JOINT COMMUNITY FACILITIES AGREEMENT
among
CITY OF LAKE ELSINORE
and
ELSINORE VALLEY MUNICIPAL WATER DISTRICT
and
AVA KARAS, LLC
a California Limited Liability Company
relating to
COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE
(WASSON CANYON II)
JOINT COMMUNITY FACILITIES AGREEMENT
THIS JOINT COMMUNITY FACILITIES AGREEMENT (the “Agreement”) is dated as of
the 27th day of March, 2018, by and among the CITY OF LAKE ELSINORE, a political subdivision
of the State of California (the “City”), the ELSINORE VALLEY MUNICIPAL WATER DISTRICT, a
municipal corporation (the “Water District”), and AVA KARAS, LLC, a California limited liability
company (the “Company”), and relates to Community Facilities District No. 2018-1 of the City of
Lake Elsinore (Wasson Canyon II) (the “District”) for the purpose of financing certain facilities to
be owned and operated by the Water District, consisting of various water improvements described
in Exhibit B hereto (the “Water District Facilities”).
R E C I T A L S:
A.The Company is the developer of the land described in Exhibit A hereto (the
“Property”) which is located in the City of Lake Elsinore, County of Riverside, and consists of all
the property located within the District.
B.The Company as the developer of the Property intends to obtain, or has obtained,
the necessary development approvals to construct approximately 272 residential units on the
Property and to provide the required infrastructure for such units and improvements. The required
infrastructure includes the Water District Facilities.
C.The City Council of the City (the “City Council”) has formed the District pursuant to
the provisions of the Mello-Roos Community Facilities Act of 1982, Chapter 2.5 (commencing with
Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the “Act”) and
has primary responsibility for administration of the District.
D.The provision of the Water District Facilities is necessitated by the development of
the Property and the parties hereto find and determine that the residents residing within the
boundaries of the Water District, the City and the District will be benefited by the construction
and/or acquisition of the Water District Facilities and that this Agreement is beneficial to the
interests of such residents.
E.The parties hereto intend to have the District assist in financing the construction
and/or acquisition of the Water District Facilities by disbursing proceeds of bonds issued by the
District.
F.The Water District is authorized by Section 53313.5 of the Act to assist in the
financing of the acquisition and/or construction of the Water District Facilities. This Agreement
constitutes a joint community facilities agreement, within the meaning of Section 53316.2 of the
Act, by and among the Water District, the Company and the City, pursuant to which the District,
when formed, will be authorized to finance the construction and/or acquisition of the Water District
Facilities. As authorized by Section 53316.6 of the Act, responsibility for constructing, providing
for and operating the Water District Facilities is delegated to the Water District to the extent set
forth herein.
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I.The parties hereto intend to have the District assist in financing the Water District
Facilities by transferring to the Water District a portion of the bond proceeds of the District, in
accordance with the terms of this Agreement and pursuant to the Act.
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.Sale of Bonds and Use of Proceeds. The purpose of this Agreement is to provide
a mechanism by which the Company may request the District to issue bonds to provide funds to
finance the Water District Facilities. In the event that bond proceeds are not available to finance
the Water District Facilities, then the Company shall make alternate arrangements with the Water
District to finance the Water District Facilities.
In the event that the District is formed, the City Council of the City acting as the
legislative body of the District may, in its sole discretion, finance the design, construction and
acquisition of the Water District Facilities by issuing bonds (the “Bonds”). To the extent that the
District determines, in its sole discretion, that Bond proceeds are available to finance the Water
District Facilities, it shall reserve an amount (the “Water District Facilities Amount”) for such
purpose.
The Company and the Water District acknowledge that the timing of the
disbursement of the Water District Facilities Amount to the Water District shall be in all respects
subject to the sole discretion and approval of the City. In no event will an act, or an omission or
failure to act, by the City or the District with respect to the disbursement or nondisbursement of
the Water District Facilities Amount subject the District or the City to pecuniary liability hereunder.
The Bonds shall be issued only if, in its sole discretion, the City Council determines
that all requirements of state and federal law and all City policies have been satisfied or have
been waived by the City. In no event shall the Company or the Water District have a right to
compel the issuance of the Bonds or the disbursement of Bond proceeds to fund the Water District
Facilities Amount.
3.Disbursements.
(a)Bond proceeds of the District designated for the Water District Facilities
shall be held by the District in a special fund (the “Water District Facilities Account of the
Acquisition and Construction Fund”) which shall be invested by the City and earn and accumulate
its own interest. In the event that the District has deposited Bond proceeds to the Water District
Facilities Account of the Acquisition and Construction Fund to fund all or a portion of the Water
District Facilities Amount, the City shall notify the Water District and the Company, in writing, as
to the amount of Bond proceeds so deposited. All interest earnings on amounts in the District’s
Water District Facilities Account of the Acquisition and Construction Fund shall remain in the
Water District Facilities Account of the Acquisition and Construction Fund and will be available for
disbursement for the Water District Facilities as described below.
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(b)The City shall make disbursements from the Water District Facilities
Account of the Acquisition and Construction Fund in accordance with the terms of this Agreement
and neither the City nor the District shall be responsible to the Water District for costs incurred by
the Water District as a result of withheld or delayed payments.
(c)The Water District agrees that it will request a disbursement of Bond
proceeds only for costs related to the Water District Facilities that are eligible for financing under
the Act. The Water District agrees that prior to requesting payment from the District it shall review
and approve all costs includedin its request and will have already paid such costs of Water District
Facilities from its own funds or will disburse such amounts to pay the costs of the Water District
Facilities within five banking days of receipt of funds from the District. In the event that the Water
District does not disburse any Bond proceeds received for disbursement to third parties within
five banking days of receipt, it will trace and remit to the District from which such Bond proceeds
were received all earnings, if any, earned by the Water District in excess of the yield on the Bonds,
from the date of receipt of such Bond proceeds by the Water District to the date of expenditure
by the Water District of such Bond proceeds for capital costs of the Water District Facilities. Such
remittance, if any, shall occur on the earlier of the date of expenditure of such Bond proceeds or
each anniversary date of the transfer of such Bond proceeds from the District to the Water District.
The Water District agrees that in processing the above disbursements it will comply with all legal
requirements for the expenditure of Bond proceeds under the Act and the Internal Revenue Code
of 1986 and any amendments thereto. As a condition to receiving any proceeds of the Bonds,
the Water District agrees that it shall provide to the District, a certificate confirming the
representations contained in Section 3 hereof and such other matters as the District may
reasonably request upon which the District and its bond counsel may rely in connection with the
issuance of such Bonds and their conclusion that interest on such Bonds is not included in gross
income for federal income tax purposes.
(d)The Water District agrees to maintain adequate internal controls over its
payment function and to maintain accounting records in accordance with generally accepted
accounting procedures. The Water District will, upon request, provide to the District and the City
its annual financial report certified by an independent certified public accountant and any other
documents deemed necessary by the District and the City for purposes of calculating the District’s
arbitrage rebate obligations. The District and the City shall have the right to conduct their own
audit of the Water District’s records related to the expenditure of the Water District Facilities
Amount at reasonable times during normal business hours.
(e)The Water District shall submit a request for payment along with adequate
supporting documentation to the District which shall be in the form attached hereto as Exhibit C,
which shall be signed by the General Manager, Director of Strategic Programs, or his or her or
written designee, and which shall be for the exact amount to be reimbursed to the Water District,
which costs shall in no event exceed the amount remaining on deposit in the Water District
Facilities Account of the Acquisition and Construction Fund. Upon receipt of an approved
payment request completed in accordance with the terms of this Agreement, the City shall wire
transfer such portion of requested funds as are then available for release pursuant to the
documents pursuant to which the Bonds are issued to the Water District’s bank account, as
directed by the Water District.
(f)If five (5) years following the issuance of the Bonds, 85% or more of the
amount deposited into the Water District Facilities Account of the Acquisition and Construction
Fund from proceeds of such Bonds have not been expended for federal tax law purposes, the
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District may in its sole discretion transfer such funds to the City Facilities Account of the
Acquisition and Construction Fund to be used to pay for the costs of eligible public facilities or to
the redemption fund to redeem Bonds; provided, however that such funds may be retained in the
Water District Facilities Account of the Acquisition and Construction Fund beyond such five year
period upon the written request of the Water District, and delivery by the Water District of an
opinion of bond counsel that such extension will not affect the exclusion from gross income of
interest on such Bonds issued on a tax-exempt basis.
4.Construction and Ownership of Facilities. The Water District will complete the
design of the Water District Facilities and the plans and specifications for construction of the Water
District Facilities and will be responsible for constructing and inspecting the Water District
Facilities. The Water District covenants and agrees that with respect to the Water District
Facilities it will comply with all statutory provisions applicable to the design and construction of
public works projects. The Water District Facilities shall be and remain the property of the Water
District.
Nothing in this Agreement obligates the Water District to provide water or sewer service
to the Property unless the applicable fees of the Water District have been paid with respect to the
Property or funds are made available by the Company or the CFD to finance the facilities
necessary to provide such service to the Property, as determined by the Water District.
5.Indemnification. The City shall assume the defense of, indemnify and save
harmless, the Water District, its officers, employees and agents, and each and every one of them,
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 resulting from, any act or omission of the
City with respect to this Agreement and the issuance of the Bonds. No provision of this Agreement
shall in any way limit the extent of the City’s responsibility for payment of damages resulting from
the operations of the City and its contractors; provided, however, that the City shall not be required
to indemnify any person or entity as to damages resulting from negligence or willful misconduct
of such person or entity or their agents or employees. The Water District shall assume the
defense of, indemnify and save harmless, the City, its officers, employees and agents, and each
and every one of them, 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 resulting from,
any act or omission of the Water District with respect to this Agreement, and the design,
engineering and construction of the Water District Facilities. No provision of this Agreement shall
in any way limit the extent of the Water District’s responsibility for payment of damages resulting
from the operations of the Water District and its contractors; provided, however, that the Water
District shall not be required to indemnify any person or entity as to damages resulting from
negligence or willful misconduct of such person or entity or their agents or employees.
The Company shall assume the defense of, indemnify and save harmless, the Water
District and the City, each of their officers, employees and agents, and each and every one of
them, 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 resulting from, any act or
omission of the Company with respect to this Agreement; provided, however, that the Company
shall not be required to indemnify any person or entity as to damages resulting from negligence
or willful misconduct of such person or entity or their agents or employees.
6.Allocation of Special Taxes. The City Council, as the legislative body of the District,
shall annually levy a special tax as provided for in the formation proceedings of the District. The
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entire amount of any special tax levied by the District to repay Bonds, or to fund other obligations,
shall be allocated at the discretion of the District.
7.Amendment. This Agreement may be amended at any time but only in writing
signed by each party hereto.
8.Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the matters provided for herein and supersedes all prior agreements and
negotiations between the parties with respect to the subject matter of this Agreement.
9.Notices. Any notice, payment or instrument required or permitted by this
Agreement to be given or delivered to either party shall be deemed to have been received when
personally delivered or seventy-two hours following deposit of the same in any United States Post
Office in California, registered or certified, postage prepaid, addressed as follows:
City/District:City of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
Attn: Assistant City Manager
Elsinore Valley Municipal Water District:
Elsinore Valley Municipal Water District
P.O. Box 3000
31315 Chaney Street
Lake Elsinore, CA 92531
Attn: Director of Strategic Programs
Company:Ava Karas, LLC
4030 Birch Street, Suite 100
Newport Beach, CA 92660
Attn: Emad Bolous
Each party may change its address for delivery of notice by delivering written
notice of such change of address to the other parties hereto.
10.Exhibits. All exhibits attached hereto are incorporated into this Agreement by
reference.
11.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 reasonably possible.
12.Governing Law and Venue. This Agreement and any dispute arising hereunder
shall be governed by and interpreted in accordance with the laws of the State of California. In the
event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue
shall be a court of competent jurisdiction located in the County of Riverside, California, and the
parties hereto agree to and do hereby submit to the jurisdiction of such court, notwithstanding
Code of Civil Procedure Section 394. Furthermore, the parties specifically agree to waive any
and all rights to request that an action be transferred for trial to another county.
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13.Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this Agreement by the other parties hereto, or the failure by a party to exercise its
rights upon the default of another party, shall not constitute a waiver of such party’s right to insist
and demand strict compliance by such other parties with the terms of this Agreement thereafter.
14.No Third Party Beneficiaries. No person or entity other than the District when and
if formed 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 Water
District, the City, the District and the Company (and their respective successors and assigns), any
rights, remedies, obligations or liabilities under or by reason of this Agreement.
15.Assignment. The Company may assign all or any of its rights pursuant to this
Agreement to a purchaser of all or any portion of the Developer Property. Such a purchaser and
assignee shall, as a condition to taking an assignment of such rights, enter into an assignment
and assumption agreement with the City and Company, in a form reasonably acceptable to
Company and the City, whereby such rights assigned are specified and such purchaser agrees,
except as may be otherwise specifically provided therein, to assume the obligations of the
Company pursuant to this Agreement and to be bound thereby.
16.Termination. This Agreement shall terminate on April 15, 2023, unless extended
by all the parties hereto.
17.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.
18.Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute but one instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
first year written above.
CITY OF LAKE ELSINORE, a political subdivision
of the State of California
By:
Assistant City Manager
ATTEST:
By:
Susan M. Domen, CMC, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY OF THE CITY OF LAKE ELSINORE
By:
Barbara Z. Leibold, City Attorney
ELSINORE VALLEY MUNICIPAL WATER
DISTRICT
By:
John Vega, General Manager
ATTEST:
By:
Terese Quintanar, Board Secretary
APPROVED AS TO FORM:
By:
John Brown, General Counsel
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AVA KARAS, LLC , a California limited
liability company
By:
Its:Emad Bolous, Managing Member
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 Numbers:
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
DESCRIPTION OF WATER DISTRICT FACILITIES
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
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
“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.
C-1
EXHIBIT C
DISBURSEMENT REQUEST FORM
1.Community Facilities District No. 2018-1 of the City of Lake Elsinore (Wasson
Canyon II) (“CFD No. 2018-1”) is hereby requested to pay from the Water District Facilities
Account of the Acquisition and Construction Fund established by the City Council of the City of
Lake Elsinore (the “City”) in connection with its CFD No. 2018-1 Series _____ Special Tax Bonds
(the “Bonds”), to the Elsinore Valley Municipal Water District (the “Water District”), as Payee, the
sum set forth below in payment of project costs described below.
2.The undersigned certifies that the amount requested has been expended or
encumbered for the purposes of constructing and completing Water District Facilities. The
amount requested is due and payable under, or is encumbered for the purpose of funding, a
purchase order, contract or other authorization with respect to the project costs described below
and has not formed the basis of a prior request or payment. In the event that the Water District
does not disburse any Bond proceeds received for disbursement to third parties within five
banking days of receipt, the Water District agrees to trace and remit to CFD No. 2018-1 all
earnings, if any, in excess of the yield on the Bonds accruing from the investment of such Bond
proceeds, from the date of receipt by the Water District of such amounts to the date of expenditure
of such amounts by payment thereof to a third party for the costs set forth below. Such remittance,
if any, shall be made each year on the earlier of the expenditure of such amounts or the
anniversary date of the transfer of the requested amounts by CFD No. 2018-1 to the Water
District.
3.Description of Water District Facilities Costs:
4.Amount requested:$______________.
5.The amount set forth is authorized and payable pursuant to the terms of the Joint
Community Facilities Agreement among the City, Ava Karas, LLC and the Elsinore Valley
Municipal Water District dated as of ________, 2018 (the “Agreement”). Capitalized terms not
defined herein shall have the meaning set forth in the Agreement.
6.Total payments to the Water District for the Water District Facilities from CFD No.
2018-1, including the amounts to be paid under paragraph 4 above, will not exceed the maximum
amount to be disbursed for Water District Facilities under the Agreement.
C-2
Executed by an authorized representative of the Elsinore Valley Municipal Water District.
By:
Name:
Title:
Date:
Request No.
CONCURRED BY:
___________
RESOLUTION NO. 2018 - _____
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2018-1 OF
THE CITY OF LAKE ELSINORE (WASSON CANYON II), AUTHORIZING THE LEVY
OF A SPECIAL TAX THEREIN, CALLING AN ELECTION AND APPROVING AND
AUTHORIZING CERTAIN ACTIONS RELATED THERETO
Whereas, the City Council (Council) of the City of Lake Elsinore (City) has heretofore adopted
Resolution No. 2018-032, stating its intention to form 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, 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, a copy of Resolution No. 2018-032, setting forth a description of the proposed
boundaries of CFD No. 2018-1, the facilities and incidental expenses to be financed by the
District and the Rate and Method of apportionment of the special tax proposed to be levied
within the District is on file with the City Clerk; and,
Whereas, notice was published and mailed to all landowners of the land proposed to be
included within the District as required by law relative to the intention of this Council to form
proposed CFD No. 2018-1 and to levy a special tax (Special Tax) and to incur bonded
indebtedness in the amount of up to $12,000,000 therein to finance the facilities and incidental
expenses described in Resolution No. 2018-032; and,
Whereas, on March 27, 2018, this Council conducted a noticed public hearing as required by
law relative to the proposed formation of CFD No. 2018-1, the levy of the Special Tax therein
and the issuance of bonded indebtedness by the District; and,
Whereas, at the March 27, 2018, public hearing there was filed with this Council a report
containing a description of the facilities necessary to meet the needs of the District and an
estimate of the cost of such facilities as required by Section 53321.5 of the Act (Engineer’s
Report); and,
Whereas, at the March 27, 2018, public hearing all persons desiring to be heard on all matters
pertaining to the formation of CFD District No. 2018-1, the levy of the Special Tax and the
issuance of bonded indebtedness were heard, and full and fair hearings were held; and,
Whereas, following the public hearing, this Council has determined to authorize the formation of
the District to finance the types of facilities (Facilities) and the incidental expenses (Incidental
Expenses) set forth in Attachment A hereto, which are described in more detail in the Engineer’s
Report; and,
Whereas, at the public hearing evidence was presented to this Council on the matters before it,
and the proposed Special Tax to be levied within the District was not precluded by a majority
protest of the type described in Section 53324 of the Act, and this Council at the conclusion of
the hearing was fully advised as to all matters relating to the formation of the District, the levy of
the Special Tax and the issuance of bonded indebtedness therein; and,
Whereas, this Council has determined, based on a Certificate of Registrar of Voters of the
County of Riverside on file in the office of the City Clerk, that no registered voters have been
2
residing in the proposed boundaries of CFD No. 2018-1 for each of the 90 days prior to March
27, 2018, and that the qualified electors in CFD No. 2018-1 are the landowners within the
District; and,
Whereas, on the basis of all of the foregoing, this Council has determined to proceed with the
establishment of CFD No. 2018-1 and to call an election therein to authorize (i) the levy of
Special Tax pursuant to the rate and method of apportionment of the special tax, as set forth in
Attachment C to Resolution No. 2018-032 (Rate and Method), (ii) the issuance of bonds to
finance the Facilities and Incidental Expenses, and (iii) the establishment of an appropriations
limit for Community Facilities District No. 2018-1; and,
Whereas, in order to facilitate the funding of the Facilities, the legislative body of the District
desires to enter into an Acquisition, Construction and Funding Agreement (Funding Agreement)
with Ava Kara, LLC, a California limited liability company (Developer) and the form of the
Funding Agreement is on file with the City Clerk; and,
Whereas, in connection with the proposed formation of the District, the City proposes to enter
into a Joint Community Facilities Agreement (JCFA) with the Elsinore Valley Municipal Water
District (Water District) and the Developer, relating to certain facilities proposed to be financed
by the District and owned and operated by the Water District and the form of the JCFA is on file
with the City Clerk.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1.Each of the above recitals is true and correct.
Section 2.A Community Facilities District to be designated “Community Facilities District
No. 2018-1 of the City of Lake Elsinore (Wasson Canyon II)” is hereby established pursuant to
the Act. The City Council hereby finds and determines that all prior proceedings taken with
respect to the establishment of the District were valid and in conformity with the requirements of
law, including the Act. This finding is made in accordance with the provisions of Section
53325.1(b) of the Act.
Section 3.The boundaries of CFD No. 2018-1 are established as shown on the map
designated “Community Facilities District No. 2018-1 (Wasson Canyon II) City of Lake Elsinore,
County of Riverside, State of California”, which map is on file in the office of the City Clerk and
was recorded pursuant to Sections 3111 and 3113 of the Streets and Highways Code in the
County Book of Maps of Assessment and Community Facilities Districts in the Assessor-County
Clerk-Recorder’s office of the County of Riverside in Book No. 82 Page No. 5 on February 21,
2018 as Instrument No. 2018-0064169.
Section 4.The types of Facilities and Incidental Expenses authorized to be provided for
CFD No. 2018-1 are those set forth in Attachment A attached hereto. The estimated cost of the
Facilities and Incidental Expenses to be financed is set forth in the Engineer’s Report, which
estimates may change as the Facilities are designed and bid for construction and acquisition, as
applicable.
The City is authorized by the Act to contribute revenue to, or to construct or acquire the
Facilities, all in accordance with the Act. The Council finds and determines that the proposed
Facilities are necessary to meet the increased demand that will be placed upon local agencies
3
and public infrastructure as a result of new development within the District and that the Facilities
to be financed, including those to be financed pursuant the JCFA to be entered into with the
Water District, benefit residents of the City and the future residents of the District.
Section 5.Except where funds are otherwise available, it is the intention of this Council,
subject to the approval of the eligible voters of the District, to levy annually a Special Tax at the
rates set forth in the Rate and Method on all non-exempt property within the District sufficient to
pay for (i) the Facilities, (ii) the principal and interest and other periodic costs on the bonds
proposed to be issued to finance the Facilities and Incidental Expenses, including the
establishment and replenishment of reserve funds, any remarketing, credit enhancement and
liquidity facility fees and other expenses of the type permitted by Section 53345.3 of the Act;
and (iii) the Incidental Expenses. The District expects to incur, and in certain cases has already
incurred, Incidental Expenses in connection with the creation of the District, the issuance of
bonds, the levying and collecting of the Special Tax, the completion and inspection of the
Facilities and the annual administration of the bonds and the District. The Rate and Method is
described in detail in Attachment C to Resolution No. 2018-032 and incorporated herein by this
reference, and the Council hereby finds that the Rate and Method contains sufficient detail to
allow each landowner within the District to estimate the maximum amount that may be levied
against each parcel. As described in greater detail in the Engineer’s Report, which is
incorporated by reference herein, the Special Tax is based on the expected demand that each
parcel of real property within Community Facilities District No. 2018-1 will place on the Facilities
and on the benefit that each parcel will derive from the right to access the Facilities and,
accordingly, is hereby determined to be reasonable. The Special Tax shall be levied on each
assessor’s parcel in accordance with the Rate and Method provided, however, that the Special
Tax shall not be levied after Fiscal Year 2057-58. The Special Tax is apportioned to each
parcel on the foregoing bases pursuant to Section 53325.3 of the Act and such Special Tax is
not on or based upon the ownership of real property or the assessed value of real property.
If Special Taxes of the District are levied against any parcel used for private residential
purposes, (i) the maximum Special Tax rate shall be specified as a dollar amount which shall be
calculated and established not later than the date on which the parcel is first subject to the
Special Tax because of its use for private residential purposes and shall not be increased over
time, (ii) the Special Tax shall not be levied after Fiscal Year 2057-58, and (iii) under no
circumstances will the Special Tax levied against any such parcel used for private residential
uses be increased as a consequence of delinquency or default by the owner or owners of any
other parcel or parcels within the District by more than ten percent above the amount that would
have been levied in that fiscal year had there never been any such delinquencies or defaults.
The City Manager of the City of Lake Elsinore, will be responsible for preparing annually, or
authorizing a designee to prepare, a current roll of special tax levy obligations by assessor’s
parcel number and will be responsible for estimating future special tax levies pursuant to
Section 53340.2 of the Act.
Section 6.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 in the Rate
and Method, or in the event of delinquencies in the payment of Special Taxes levied, the
Council shall, on behalf of CFD No. 2018-1, increase the levy to the extent necessary and
permitted by law and these proceedings upon the remaining property within CFD No. 2018-1
which is not exempt or delinquent in order to yield the required debt service payments on any
outstanding bonds of the District, or to prevent the District from defaulting on any of its other
obligations or liabilities; provided, however, under no circumstances will the Special Tax levied
4
against any parcel used for private residential uses be increased as a consequence of
delinquency or default by the owner or owners of any other parcel or parcels within the District
by more than ten percent above the amount that would have been levied in that fiscal year had
there never been any such delinquencies or defaults. The amount of the Special Tax will be set
in accordance with the Rate and Method. The obligation to pay Special Taxes may be prepaid
only as set forth in Section G of the Rate and Method.
Section 7.Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the
Streets and Highways Code, a continuing lien to secure each levy of the Special Tax shall
attach to all non-exempt real property in the District and this lien shall continue in force and
effect until the Special Tax obligation is prepaid and permanently satisfied and the lien canceled
in accordance with law or until collection of the Special Tax by the District ceases.
Section 8.Consistent with Section 53325.6 of the Act, the Council finds and determines that
the land within Community Facilities District No. 2018-1, if any, devoted primarily to agricultural,
timber or livestock uses and being used for the commercial production of agricultural, timber or
livestock products is contiguous to other land within Community Facilities District No. 2018-1
and will be benefited by the Facilities proposed to be provided within Community Facilities
District No. 2018-1.
Section 9.It is hereby further determined that there is no ad valorem property tax currently
being levied on property within proposed CFD No. 2018-1 for the exclusive purpose of paying
the principal of or interest on bonds or other indebtedness incurred to finance the construction of
capital facilities which provide the same services to the territory of CFD No. 2018-1 as are
proposed to be provided by the Facilities to be financed by CFD No. 2018-1.
Section 10.Written protests against the establishment of the District have not been filed by
one-half or more of the registered voters within the boundaries of the District or by the property
owners of one-half (1/2) or more of the area of land within the District. The City Council hereby
finds that the proposed Special Tax has not been precluded by a majority protest pursuant to
Section 53324 of the Act.
Section 11.An election is hereby called for CFD No. 2018-1 on the propositions of levying
the Special Tax on the property within CFD No. 2018-1 and establishing an appropriations limit
for the District pursuant to Section 53325.7 of the Act and shall be consolidated with the election
on the proposition of incurring bonded indebtedness, pursuant to Sections 53351 and 53353.5
of the Act. The language of the propositions to be placed on the ballot is attached hereto as
Attachment B.
Section 12.The date of the election for CFD No. 2018-1 on the propositions of incurring the
bonded indebtedness, authorizing the levy of the Special Tax and establishing an appropriations
limit for the District shall be March 27, 2018, or such later date as is consented to by the City
Clerk of the City of Lake Elsinore; provided that, if the election is to take place sooner than 90
days after March 27, 2018, then the unanimous written consent of each qualified elector within
the District to such election date must be obtained. The polls shall be open for said election
immediately following the close of the public hearing on March 27, 2018. The election shall be
conducted by the City Clerk. Except as otherwise provided by the Act, the election shall be
conducted in accordance with the provisions of law regulating elections of the City of Lake
Elsinore insofar as such provisions are determined by the City Clerk to be applicable. The City
Clerk is authorized to conduct the election following the adoption of this resolution, and all
ballots shall be received by, and the City Clerk shall close the election by, 11:00 p.m. on the
5
election day; provided the election shall be closed at such earlier time as all qualified electors
have voted as provided in Section 53326(d) of the Act. Pursuant to Section 53326 of the Act,
the ballots for the special election shall be distributed in person, or by mail with return postage
prepaid, to the qualified electors within Community Facilities District No. 2018-1. The City Clerk
has secured a certificate from the Registrar of Voters of the County of Riverside certifying that
there were no registered voters within the District as of February 15, 2018. Accordingly, since
there were fewer than 12 registered voters within the District for each of the 90 days preceding
March 27, 2018, the qualified electors shall be the landowners within the District and each
landowner, or the authorized representative thereof, shall have one vote for each acre or portion
thereof that such landowner owns within Community Facilities District No. 2018-1, as provided
in Section 53326 of the Act. The sole landowner within the District has executed and delivered
a waiver of certain election law requirements and consenting to the holding of the election on
March 27, 2018, which waiver is on file with the City Clerk.
Section 13.The preparation of the Engineer’s Report is hereby ratified. The Engineer’s
Report, as submitted, is hereby approved and was made a part of the record of the public
hearing regarding the formation of Community Facilities District No. 2018-1. The Engineer’s
Report is ordered to be kept on file with the transcript of these proceedings and open for public
inspection.
Section 14.The form of the Funding Agreement on file with the City Clerk is approved as to
form, and each of the City Manager, Assistant City Manager, and their written designees, is
authorized to execute the Funding Agreement in substantially the form on file with the City
Clerk, together with such changes as are approved by the officer executing the same, with the
approval of such changes to be conclusively evidenced by the execution and delivery thereof.
Section 15.The form of the JCFA on file with the City Clerk is approved as to form, and each
of the City Manager, Assistant City Manager, and their written designees, is authorized to
execute the JCFA in substantially the form on file with the City Clerk, together with such
changes as are approved by the officer executing the same, with the approval of such changes
to be conclusively evidenced by the execution and delivery thereof.
Section 16.This Resolution shall be effective upon its adoption.
Passed and Adopted on this 27th day of March, 2018.
_____________________________
Natasha Johnson, Mayor
Attest:
_____________________________
Susan M. Domen, MMC
City Clerk
6
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 March 27, 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.
B-1
ATTACHMENT B
BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE (WASSON CANYON II)
SPECIAL TAX AND SPECIAL BOND ELECTION
March 27, 2018
PROPOSITION A: Shall Community Facilities District
No. 2018-1 of the City of Lake Elsinore (Wasson Canyon
II) (the “District”) incur an indebtedness and issue bonds
in the maximum principal amount of $12,000,000, with
interest at a rate or rates not to exceed the maximum
interest rate permitted by law, to finance the Facilities
and the Incidental Expenses described in Resolution No.
2018-032 of the City Council of the City of Lake
Elsinore?
PROPOSITION B: Shall a special tax with a rate and
method of apportionment as provided in Resolution No.
2018-032 of the City Council of the City of Lake Elsinore
be levied to pay for the Facilities, Incidental Expenses
and other purposes described in Resolution No. 2018-
032, including the payment of the principal of and
interest on bonds issued to finance the Facilities and
Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with
Fiscal Year 2017-18, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2018-1 be an amount equal to $5,000,000?
YES______
NO_______
RESOLUTION NO. 2018- _____
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA,ACTING AS THE LEGISLATIVE BODY OF COMMUNITY
FACILITIES DISTRICT NO. 2018-1 OF THE CITY OF LAKE ELSINORE (WASSON
CANYON II) DETERMINING THE NECESSITY TO INCUR BONDED
INDEBTEDNESS IN AN AMOUNT NOT TO EXCEED $12,000,000 WITHIN
COMMUNITY FACILITIES DISTRICT NO. 2018-1 OF THE CITY OF LAKE
ELSINORE (WASSON CANYON II) AND CALLING AN ELECTION THEREIN
Whereas, on February 13, 2018, the City Council (Council) of the City of Lake Elsinore (City)
adopted Resolution No. 2018-032, stating its intention to form 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 (Act); and,
Whereas, on February 13, 2018, the Council also adopted Resolution No. 2018-033, stating its
intention to incur bonded indebtedness in the amount of up to $12,000,000 within proposed
CFD No. 2018-1 to finance (1) the purchase, construction, modification, expansion,
improvement or rehabilitation of public facilities identified in Attachment B to Resolution No.
2018-032, and (2) the incidental expenses to be incurred in financing such public facilities and
services and forming and administering the District, as identified in Attachment B to Resolution
No. 2018-032; and,
Whereas, notice was published as required by law relative to the intention of the Council to form
proposed CFD No. 2018-1 and to incur bonded indebtedness in the amount of up to
$12,000,000 within the boundaries of proposed Community Facilities District No. 2018-1; and,
Whereas, on March 27, 2018, this Council conducted a noticed public hearing to determine
whether it should proceed with the formation of CFD No. 2018-1, issue bonds to pay for the
facilities and incidental expenses described in Resolution No. 2018-032 and authorize the Rate
and Method of apportionment of a special tax to be levied within CFD No. 2018-1 for the
purposes described in Resolution No. 2018-032; and,
Whereas, at said hearing all persons desiring to be heard on all matters pertaining to the
formation of CFD No. 2018-1, the levy of a special tax and the issuance of bonds to pay for the
cost of the proposed facilities, the levy of the special tax to pay for the proposed services and
incidental expenses were heard and a full and fair hearing was held; and,
Whereas, the Council subsequent to such hearing adopted Resolution No. 2018-___
establishing CFD No. 2018-1 (Resolution of Formation) and authorizing the financing of the
public facilities (Facilities) and the incidental expenses (Incidental Expenses) described in
Attachment B thereto; and,
Whereas, the Council desires to make the necessary findings to incur bonded indebtedness
within the District, to declare the purpose for said debt, and to authorize the submittal of a
proposition to issue bonded indebtedness to the voters of the District, being the landowners
within the proposed District, all as authorized and required by law.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE HEREBY
FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS:
2
Section 1.It is necessary to incur bonded indebtedness in a maximum aggregate principal
amount not to exceed $12,000,000 within CFD No. 2018-1.
Section 2.The indebtedness is to be incurred for the purpose of financing the costs of
purchasing, constructing, modifying, expanding, improving, or rehabilitating the Facilities and
financing the Incidental Expenses, as described in the Resolution of Formation, and carrying out
the powers and purposes of CFD No. 2018-1, including, but not limited to, financing the costs of
selling the bonds, establishing and replenishing bond reserve funds and paying remarketing,
credit enhancement and liquidity facility fees and other expenses of the type authorized by
Section 53345.3 of the Act.
Section 3.The whole of the property within CFD No. 2018-1, other than property exempted
from the special tax pursuant to the provisions of the rate and method of apportionment
attached to Resolution No. 2018-032 as Attachment C, shall pay for the bonded indebtedness
pursuant to the levy of the special tax authorized by the Resolution of Formation.
Section 4.The maximum term of the bonds to be issued shall in no event exceed forty (40)
years.
Section 5.The bonds shall bear interest at the rate or rates not to exceed the maximum
interest rate permitted by law, payable annually or semiannually, or in part annually and in part
semiannually, except the first interest payment may be for a period of less than six months, with
the actual rate or rates and times of payment to be determined at the time or times of sale
thereof.
Section 6.The bonds may bear a variable or fixed interest rate, provided that such variable
rate or fixed rate shall not exceed the maximum rate permitted by Section 53531 of the Act, or
any other applicable provision of law limiting the maximum interest rate on the bonds.
Section 7.Pursuant to Section 53351 of the Act, a special election is hereby called for
Community Facilities District No. 2018-1 on the proposition of incurring the bonded
indebtedness. The proposition relative to incurring bonded indebtedness in the maximum
aggregate principal amount of $12,000,000 shall be in the form of Proposition A set forth in
Attachment A hereto. In accordance with Sections 53351(h) and 53353.5 of the Act, the
election shall be consolidated with the special election called on the proposition of levying a
special tax within the District as described in the Resolution of Formation, which proposition
shall be in the form of Proposition B set forth in Attachment A, and on the proposition of
establishing an appropriations limit for the District, which proposition shall be in the form of
Proposition C set forth in Attachment A.
Section 8.The date of the special election for CFD No. 2018-1 on the propositions of
incurring the bonded indebtedness, authorizing the levy of the special tax and setting an
appropriations limit shall be March 27, 2018, or such later date as is consented to by the City
Clerk of the City; provided that, if the election is to take place sooner than 90 days after March
27, 2018, then the unanimous written consent of each qualified elector within the District to such
election date must be obtained. The polls shall be open for said election immediately following
the public hearing on March 27, 2018. The election shall be conducted by the City Clerk.
Except as otherwise provided by the Act, the election shall be conducted in accordance with the
provisions of law regulating elections of the City of Lake Elsinore insofar as such provisions are
determined by the City Clerk to be applicable. The City Clerk is authorized to conduct the
election following the adoption of the Resolution of Formation, and this resolution and all ballots
3
shall be received by and the City Clerk shall close the election by 11:00 p.m. on the election
day; provided the election shall be closed at such earlier time as all qualified electors have
voted as provided in Section 53326(d) of the Act. Pursuant to Section 53326 of the Act, the
ballots for the special election shall be distributed in person, or by mail with return postage
prepaid, to the qualified electors within Community Facilities District No. 2018-1. The City Clerk
has secured a certificate of the Registrar of Voters of the County of Riverside certifying that
there were no registered voters within the District as of February 15, 2018. Accordingly, since
there were fewer than 12 registered voters within the District for each of the 90 days preceding
March 27, 2018, the qualified electors shall be the landowners within the District and each
landowner, or the authorized representative thereof, shall have one vote for each acre or portion
thereof that such landowner owns within Community Facilities District No. 2018-1, as provided
in Section 53326 of the Act. The sole landowner within the District has executed and delivered
a waiver of certain election law requirements and consenting to the holding of the election on
March 27, 2018, which waiver is on file with the City Clerk.
Section 9.This Resolution shall be effective upon its adoption.
Passed and Adopted on this 27th day of March, 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 March 27, 2018 and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Susan M. Domen, MMC City Clerk
ATTACHMENT A
BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE (WASSON CANYON II)
SPECIAL TAX AND SPECIAL BOND ELECTION
March 27, 2018
PROPOSITION A: Shall Community Facilities District
No. 2018-1 of the City of Lake Elsinore (Wasson Canyon
II) (the “District”) incur an indebtedness and issue bonds
in the maximum principal amount of $12,000,000, with
interest at a rate or rates not to exceed the maximum
interest rate permitted by law, to finance the Facilities
and the Incidental Expenses described in Resolution No.
2018-032 of the City Council of the City of Lake
Elsinore?
PROPOSITION B: Shall a special tax with a rate and
method of apportionment as provided in Resolution No.
2018-032 of the City Council of the City of Lake Elsinore
be levied to pay for the Facilities, Incidental Expenses
and other purposes described in Resolution No. 2018-
032, including the payment of the principal of and
interest on bonds issued to finance the Facilities and
Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with
Fiscal Year 2017-18, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2018-1 be an amount equal to $5,000,000?
YES______
NO_______
RESOLUTION NO. 2018 - ___
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 2018-1 OF THE CITY OF LAKE ELSINORE
(WASSON CANYON II) CERTIFYING ELECTION RESULTS
Whereas, the City Council (Council) of the City of Lake Elsinore (City) called and duly held an
election on March 27, 2018, within the boundaries of Community Facilities District No. 2018-1 of
the City of Lake Elsinore (Wasson Canyon II) (CFD No. 2018-1 or the District) pursuant to
Resolution Nos. 2018-__ and 2018-__ for the purpose of presenting to the qualified electors
within the District Propositions A, B and C, attached hereto as Attachment A; and
Whereas, there has been presented to this Council a certificate of the City Clerk canvassing the
results of the election, a copy of which is attached hereto as Attachment B.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE HEREBY
FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS:
Section 1.Each of the above recitals is true and correct and is adopted by the legislative
body of the District.
Section 2.Propositions A, B and C presented to the qualified electors of the District on
March 27, 2018 were approved by more than two-thirds of the votes cast at said election and
Propositions A, B and C each has carried. The City Council, acting as the legislative body of
the District, is hereby authorized to levy on the land within the District the special tax described
in Proposition B for the purposes described therein and to take the necessary steps to levy the
special tax authorized by Proposition B and to issue bonds in an amount not to exceed
$12,000,000 specified in Proposition A.
Section 3.The City Clerk is hereby directed to record in the Assessor-County Clerk-
Recorder’s office of the County of Riverside within fifteen days of the date hereof a notice of
special tax lien with respect to the District which Bond Counsel to the District shall prepare in
the form required by Streets and Highways Code Section 3114.5.
Section 4. This Resolution shall be effective upon its adoption.
Passed and Adopted on this 27th day of March, 2018.
_____________________________
Natasha Johnson, Mayor
Attest:
_____________________________
Susan M. Domen, MMC City Clerk
2
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 March 27, 2018 and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Susan M. Domen, MMC
City Clerk
ATTACHMENT A
BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE (WASSON CANYON II)
SPECIAL TAX AND SPECIAL BOND ELECTION
March 27, 2018
PROPOSITION A: Shall Community Facilities District
No. 2018-1 of the City of Lake Elsinore (Wasson Canyon
II) (the “District”) incur an indebtedness and issue bonds
in the maximum principal amount of $12,000,000, with
interest at a rate or rates not to exceed the maximum
interest rate permitted by law, to finance the Facilities
and the Incidental Expenses described in Resolution No.
2018-032 of the City Council of the City of Lake
Elsinore?
PROPOSITION B: Shall a special tax with a rate and
method of apportionment as provided in Resolution No.
2018-032 of the City Council of the City of Lake Elsinore
be levied to pay for the Facilities, Incidental Expenses
and other purposes described in Resolution No. 2018-
032, including the payment of the principal of and
interest on bonds issued to finance the Facilities and
Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with
Fiscal Year 2017-18, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2018-1 be an amount equal to $5,000,000?
YES______
NO_______
ATTACHMENT B
CERTIFICATE OF CITY CLERK
AS TO THE RESULTS OF THE CANVASS OF THE ELECTION RETURNS
I, Susan M. Domen, City Clerk of the City of Lake Elsinore, do hereby certify that I have
examined the returns of the Special Tax and Bond Election for Community Facilities District
No. 2018-1 (Wasson Canyon II) of the City of Lake Elsinore (the “City”). The election was held
in the Lake Elsinore Cultural Center at 183 North Main Street, Lake Elsinore, California, on
March 27, 2018. I caused to be delivered ballots to each qualified elector. ____ (__) ballots
were returned.
I further certify that the results of said election and the number of votes cast for and
against Propositions A, B and C are as follows:
PROPOSITION A PROPOSITION B PROPOSITION C
YES:YES:YES:
NO:NO:NO:
TOTAL:TOTAL:TOTAL:
Dated this 27th day of March, 2018.
Susan M. Domen, MMC
Susan M. Domen, MMC, City Clerk
City of Lake Elsinore
ORDINANCE NO. 2018 - ___
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 2018-1 OF THE CITY OF LAKE ELSINORE
(WASSON CANYON II) AUTHORIZING THE LEVY OF SPECIAL TAXES
Whereas, on February 13, 2018, the City Council (Council) of the City of Lake Elsinore (City)
adopted Resolution No. 2018-032, declaring its intention to form Community Facilities District
No. 2018-1 of the City of Lake Elsinore (Wasson Canyon II) (District) pursuant to the
Mello-Roos Community Facilities Act of 1982, as amended, comprising Chapter 2.5 of Part 1 of
Division 2 of Title 5 of the Government Code of the State of California (Act), and its Resolution
No. 2018-033 declaring its intention to incur bonded indebtedness for the District; and,
Whereas, on March 27, 2018, after providing all notice required by the Act, the Council
conducted a noticed public hearing required by the Act relative to the proposed formation of the
District, the proposed levy of a special tax therein to finance certain public facilities described in
Resolution No. 2018-032, and to secure the payment of any bonded indebtedness of the
District, and the proposed issuance of up to $12,000,000 of bonded indebtedness as described
in Resolution No. 2018-033; and,
Whereas, at the March 27, 2018, public hearing, all persons desiring to be heard on all matters
pertaining to the formation of the District and the proposed levy of the special tax to finance the
facilities described in Resolution No. 2018-032 and to secure the payment of up to $12,000,000
of bonded indebtedness of the District as described in Resolution No. 2018-033 (Bonds) were
heard and a full and fair hearing was held; and,
Whereas, on March 27, 2018, the Council adopted Resolution Nos. 2018-___ and 2018-___
which formed the District and called a special election within the District on March 27, 2018, on
three propositions relating to the levy of a special tax within the District, the issuance of the
Bonds and the establishment of an appropriations limit within the District; and,
Whereas, on March 27, 2018, a special election was held within the District at which the
qualified electors approved by more than a two-thirds vote Propositions A, B and C authorizing
the levy of a special tax within the District for the purposes described in Resolution No. 2018-
___, the issuance of the Bonds as described in Resolution No. 2018-___ and establishing an
appropriations limit for the District.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE ACTING IN
ITS CAPACITY AS THE LEGISLATIVE BODY OF THE DISTRICT OF THE CITY OF LAKE
ELSINORE (WASSON CANYON II) ORDAINS AS FOLLOWS:
Section 1. The above recitals are all true and correct.
Section 2. By the passage of this Ordinance, the City Council authorizes and levies special
taxes within the District pursuant to Sections 53328 and 53340 of the Act at the rates and in
accordance with the rate and method of apportionment set forth in Attachment C to Resolution
No. 2018-032, which is incorporated by reference herein (the “Rate and Method”). The special
taxes are hereby levied commencing in the fiscal year specified in the Rate and Method and in
each fiscal year thereafter until payment in full of the Bonds (including any bonds issued to
2
refund the Bonds), payment of all costs of the public facilities and services authorized to be
financed by the District, and payment of all costs of administering the District.
Section 3. Each of the Mayor, the City Manager, the Assistant City Manager, or their written
designees (each, an “Authorized Officer”), acting alone, is hereby authorized and directed each
fiscal year to determine the specific special tax rates and amounts to be levied in such fiscal
year on each parcel of real property within the District, in the manner and as provided in the
Rate and Method. The special tax rate levied on a parcel pursuant to the Rate and Method
shall not exceed the maximum rate set forth in the Rate and Method for such parcel, but the
special tax may be levied at a lower rate. Each Authorized Officer is hereby authorized and
directed to provide all necessary information to the Treasurer-Tax Collector of the County of
Riverside and to otherwise take all actions necessary in order to effect proper billing and
collection of the special tax, so that the special tax shall be levied and collected in sufficient
amounts and at times necessary to satisfy the financial obligations of the District in each fiscal
year, and with respect to Special Tax, until the Bonds are paid in full, the facilities have been
paid for, and provision has been made for payment of all of the administrative costs of the
District.
Section 4. Properties or entities of the state, federal or other local governments shall be
exempt from the special tax, except as otherwise provided in Sections 53317.3 and 53317.5 of
the Act and Section F of the Rate and Method. No other properties or entities are exempt from
the special tax unless the properties or entities are expressly exempted in Resolution No. 2018-
___ or in a resolution of consideration to levy a new special tax or special taxes or to alter the
rate or method of apportionment or an existing special tax as provided in Section 53334 of the
Act.
Section 5. All of the collections of the special tax shall be used as provided for in the Act, the
Rate and Method and Resolution No. 2018-___.
Section 6. The special tax shall be collected in the same manner as ordinary ad valorem
property taxes are collected and shall be subject to the same penalties and the same
procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes
(which such procedures include the exercise of all rights and remedies permitted by law to make
corrections, including, but not limited to, the issuance of amended or supplemental tax bills), as
such procedure may be modified by law or by this City Council from time to time.
Section 6. As a cumulative remedy, if any amount levied as a special tax for payment of the
interest or principal of the Bonds (including any bonds issued to refund the Bonds), together
with any penalties and other charges accruing under this Ordinance, are not paid when due, the
City Council may, not later than four years after the due date of the last installment of principal
on the Bonds (including any bonds issued to refund the Bonds), order that the same be
collected by an action brought in the superior court to foreclose the lien of such special tax, as
authorized by the Act.
Section 7. The Mayor of the City shall sign this Ordinance and the City Clerk shall attest to the
Mayor’s signature and then cause the same to be published within fifteen (15) days after its
passage at least once in The Press Enterprise, a newspaper of general circulation published
and circulated in the City of Lake Elsinore.
Section 8. The specific authorization for adoption of this Ordinance is pursuant to the
provisions of Section 53340 of the Act.
3
Section 9.The City Clerk is hereby authorized to transmit a certified copy of this ordinance to
the Treasurer-Tax Collector of the County of Riverside, and to perform all other acts which are
required by the Act, this Ordinance or by law in order to accomplish the purpose of this
Ordinance.
Section 10. A full reading of this Ordinance is dispensed with prior to its final passage, a
written or printed copy having been available to the City Council and the public a day prior to its
final passage.
Section 11. This Ordinance shall take effect thirty days after its final passage.
Passed and Adopted on this 27
th day of March, 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 Ordinance No. 2018- ______ was introduced at the Regular meeting of the City Council of
March 27, 2018, and adopted by the City Council of the City of Lake Elsinore, California, at the
Regular meeting of March 27, 2018 and that the same was adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Susan M. Domen, MMC
City Clerk
1
WAIVER OF CERTAIN ELECTION PROCEDURES
WITH RESPECT TO LANDOWNER ELECTION FOR
COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE (WASSON CANYON II)
The undersigned, Emad Bolous, acting on behalf of the AVA Karas, LLC, a California
limited liability company (the “Owner”), hereby certifies to the City of Lake Elsinore (the “City”),
with respect to the proposed formation of Community Facilities District No. 2018-1 of the City of
Lake Elsinore (Wasson Canyon II) (the “District”), as follows:
1.The undersigned has been duly authorized by the Owner and possesses all
authority necessary to execute this Waiver on behalf of the Owner in connection with the
election to be called by the City Council of the City with respect to the District. The Owner
hereby appoints Emad Bolous to act as its authorized representative to vote in the election
referred to herein and certifies that his true and exact signature is set forth below:
Signature of Emad Bolous: __________________________________
2.The Owner is the present owner of 74.52 acres of land located within the
proposed boundaries of the District. There are no registered voters residing within the territory
owned by the Owner and have been none during the 90-day period preceding March 27, 2018.
3.The Owner has received notice of the March 27, 2018 public hearing to be held
by the City Council of the City regarding the levy of a special tax in the District and the incurring
of bonded indebtedness by the District. The Owner agrees that it received adequate notice of
the March 27, 2018 hearing.
4.The Owner has received from the City and the City has made available to the
Owner necessary and relevant information regarding the proposed formation of the District and
the imposition of the special tax and the issuance of bonded indebtedness, as set forth in
Resolutions No. 2018-032 and 2018-033 adopted by the City Council on February 13, 2018
(together, the “Resolutions”) to finance the facilities as set forth in the Resolutions.
5.The undersigned understands that if the District is formed on or after March 27,
2018, an election will be held by the District on the propositions set forth in the sample ballot
attached hereto as Exhibit “A” less than 90 days after the close of the March 27, 2018 public
hearing as in accordance with Section 53326 of the Government Code, without the preparation
of an impartial analysis, arguments or rebuttals concerning the election as provided for by
Elections Code Sections 9160 to 9167, inclusive, and 9190 and without preparation of a tax rate
statement as provided in Section 9401 of the Elections Code and without further notice of such
election as required pursuant to the Elections Code or the Government Code. Having been fully
advised with respect to the election, in accordance with the authority contained in Government
Code Sections 53326 and 53327, the Owner waives compliance with the foregoing provisions of
the Elections Code and Government Code, with any time limits or other procedural
requirements pertaining to the conduct of the election which are not being complied with and
consents to having the election on any date on or after the close of the March 27, 2018 public
hearing and consents to the closing of the election as soon as all ballots are received by the
City Clerk.
2
6.The undersigned hereby represents that compliance with the procedural
requirements for conducting the election, including the receipt of any ballot arguments and
impartial analysis and the time limitations which apply in connection with scheduling, mailing
and publishing notices for such an election, are unnecessary in light of the fact that the
undersigned has received sufficient information regarding the imposition of the special tax and
the issuance of bonded indebtedness as set forth in the Resolutions to allow it to properly
complete the attached ballot. The Owner further waives its right to make any protest or
complaint or undertake any legal action challenging the validity of the election, the validity of any
bonded indebtedness issued by the District as approved at the election, or the validity of the
levy of the special tax to finance facilities for the benefit of the District or to repay bonded
indebtedness issued by the District.
Dated: March __, 2018
AVA KARAS, LLC, a California limited
liability company
By:
Emad Bolous, Managing Member
A-1
EXHIBIT A
SAMPLE
OFFICIAL BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2018-1
OF THE CITY OF LAKE ELSINORE (WASSON CANYON II)
SPECIAL TAX AND SPECIAL BOND ELECTION
March 27, 2018
PROPOSITION A: Shall Community Facilities District No.
2018-1 of the City of Lake Elsinore (Wasson Canyon II) (the
“District”) incur an indebtedness and issue bonds in the
maximum principal amount of $12,000,000, with interest at a
rate or rates not to exceed the maximum interest rate
permitted by law, to finance the Facilities and the Incidental
Expenses described in Resolution No. 2018-032 of the City
Council of the City of Lake Elsinore?
PROPOSITION B: Shall a special tax with a rate and method
of apportionment as provided in Resolution No. 2018-032 of
the City Council of the City of Lake Elsinore be levied to pay
for the Facilities, Incidental Expenses and other purposes
described in Resolution No. 2018-032, including the payment
of the principal of and interest on bonds issued to finance the
Facilities and Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with Fiscal
Year 2017-18, shall the appropriations limit, as defined by
subdivision (h) of Section 8 of Article XIII B of the California
Constitution, for Community Facilities District No. 2018-1 be
an amount equal to $5,000,000?
YES______
NO_______
REBECCA SPENCER
Registrar of Voters
State of California
REGISTRAR OF VOTERS
COUNTY OF RIVERSIDE
CERTIFICATE OF REGISTRAR OF VOTERS
) ss
County of Riverside )
ART TINOCO
Assistant Registrar of Voters
I, Rebecca Spencer, Registrar of Voters of said County, hereby certify that:
(A) I have been furnished a map describing the proposed boundary of Community
Facilities District No. 2018-1, (Wasson Canyon II), of the City of Lake Elsinore, of the County of
Riverside, State of California;
(B) On February 15, 2018, 1 conducted, or caused to be conducted, a review of the
voter registration records of the County of Riverside for the purpose of determining the number of
voters registered to vote within the proposed boundary of Community Facilities District No. 2018-
1, (Wasson Canyon 11), of the City of Lake Elsinore, of the County of Riverside.
(C) There are 0 registered voters residing within the proposed boundary of Community
Facilities District No. 2018-1, (Wasson Canyon II), of the City of Lake Elsinore, of the County of
Riverside.
IN WITNESS WHEREOF, I have executed this Certificate on this 15th day of February
2018.
Rebecca Spencer
Registrar of Voters
M
Christopher Neubauer
Chief Deputy Registrar of Voters
2724 Gateway Drive I Riverside, CA 92507-0918
(951) 486-7200 1 TTY (951) 697-8966 1 FAX (951) 486-7272
www.voteinfo.net
CITY OF LAKE ELSINORE
Public Hearing Report
CFD NO. 2018-1 (WASSON CANYON II)
MARCH 27, 2018
Table of Contents
Sections Page _____________________________________________
1 Introduction ________________________________________________ 1
2 Description of Facilities _____________________________________________ 2
3 Cost Estimate ________________________________________________ 3
4 Proposed Development _____________________________________________ 4
5 Rate and Method of Apportionment ____________________________________ 5
6 Certifications ________________________________________________ 6
Tables Page
3-1 Cost Estimate ________________________________________________ 3
Appendices Page _____________________________________________
A Rate and Method of Apportionment _____________________________________
B Boundary Map _________________________________________________
C Resolution of Intention _______________________________________________
1 Introduction Page | 1
City of Lake Elsinore
CFD No. 2018-1 (Wasson Canyon II)
Public Hearing Report
Background
On February 13, 2018, the City Council of the City of Lake Elsinore (the “City”), adopted a Resolution of Intention to form
Community Facilities District No. 2018-1 (Wasson Canyon II) of the City of Lake Elsinore, Resolution No. 2018-032, pursuant
to the provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the
Government Code of the State of California, (the “Act”).
The CFD No. 2018-1 is currently comprised of a parcel map that includes 24 parcels and approximately 74.52 gross acres.
Two tract maps including TR 37381 and TR 37382 include 272 proposed detached single family residential properties. The
properties are located approximately one mile east of the Central Avenue and I-15 Interchange west of the corner of Conrad
Ave and 3rd Street.
For a map showing the boundaries of CFD No. 2018-1 please see Appendix B.
Purpose of Public Hearing Report
WHEREAS, this Community Facilities District Report (“Report”) is being provided to the City Council and generally contains
the following:
1. A brief description of CFD No. 2018-1;
2. A brief description of the Facilities required at the time of formation to meet the needs of CFD No. 2018-1.
3. A brief description of the Boundaries of CFD No. 2018-1; and
4. An estimate of the cost of financing the bonds used to pay for the Facilities, including all costs associated with formation
of the District, issuance of bonds, determination of the amount of any special taxes, collection of any special taxes, or costs
otherwise incurred in order to carry out the authorized purposes of the City with respect to the District, and any other
incidental expenses to be paid through the proposed financing.
For particulars, reference is made to the Resolution of Intention as previously approved and adopted and is included in
Appendix C.
2 Description of Facilities Page | 2
City of Lake Elsinore
CFD No. 2018-1 (Wasson Canyon II)
Public Hearing Report
NOW, THEREFORE, the undersigned, authorized representative of Spicer Consulting Group, LLC, the appointed
responsible officer, or person directed to prepare the Public Hearing Report, does hereby submit the following data:
Description of the Facilities
A Community Facilities District may pay for facilities which may include all amounts necessary to eliminate any fixed special
assessment liens or to pay, repay, or defease any obligation to pay for any indebtedness secured by any tax, fee, charge,
or assessment levied, provide for the purchase, construction, expansion, or rehabilitation for any real or other tangible
property with an estimated useful life of five (5) years or longer, which is necessary to meet increased demands placed
upon local agencies as a result of development and/or rehabilitation occurring within the District.
The types of facilities that are proposed by CFD No. 2018-1 and financed with the proceeds of special taxes and bonds
issued by CFD No. 2018-1 consist of 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; and
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.
Incidental Expenses
The Incidental Expenses to be paid from bond proceeds and/or special taxes include:
All costs associated with the creation of CFD No. 2018-1, the issuance of bonds, the determination of the amount of special
taxes to be levied, costs incurred in order to carry out the authorized purposes of CFD No. 2018-1, including legal fees, fees
of consultants, engineering, planning, designing and the annual costs to administer CFD No. 2018-1 and any obligations.
The description of the eligible public facilities, services and incidental expenses above are preliminary and general in nature.
The final plans and specifications approved by the applicable public agency may show substitutes or modifications in order
to accomplish the work or serve the new development and any such substitution or modification shall not constitute a change
or modification in the proceedings relating to CFD No. 2018-1.
3 Cost Estimate Page | 3
City of Lake Elsinore
CFD No. 2018-1 (Wasson Canyon II)
Public Hearing Report
Below is the estimated cost of facilities to be provided to the District.
a) The cost estimate of facilities, including incidental expenses, to be financed through the issuance of CFD No. 2018-
1 Bonds is estimated to be $9,420,100 based upon current dollars (Fiscal Year 2017-18).
b) For further particulars please reference Table 3-1 below and incorporated herein by reference.
c) Pursuant to Section 53340 of the Act, the proceeds of any special tax levied and collected by CFD No. 2018-1 may
be used only to pay for the cost of providing public facilities, services, and incidental expenses. As defined by the
Act, incidental expenses include, but are not limited to, the annual costs associated with determination of the amount
of special taxes, collection of special taxes, payment of special taxes, or costs otherwise incurred in order to carry
out the authorized purposes of the Community Facilities District. The incidental expenses associated with the annual
administration of CFD No. 2018-1 are estimated to be $30,000 in the initial Fiscal Year. However, it is anticipated
that the incidental expenses will vary due to inflation and other factors that may not be foreseen today, and the
actual incidental expenses may exceed these amounts accordingly.
Table 3-1
Cost Estimate
City of Lake Elsinore Total Bond Allocation(1)
City Facilities $649,765 $649,765
Traffic Impact Fee $372,368 $372,368
Fire Facilities 204,272 204,272
Park Fee 435,200 435,200
City Hall & Public Works Facilities 220,048 220,048
Community Center Facilities 148,240 148,240
Marina Facilities 211,888 211,888
Animal Shelter Facility 94,656 94,656
Library Capitol Improvement Fund Fee 40,800 40,800
Storm Drain Capital Impact Fund Fee $533,763 $533,763
Total City Fees $2,911,000 $2,911,000
Elsinore Valley Municipal Water District Total Bond Allocation(1)
Water & Sewer Connection Fee (3/4” Meter) $2,662,608 $2,662,608
Sewer Capacity Fee $2,437,392 $2,437,392
Total EVMWD $5,100,000 $5,100,000
Total Eligible Fees/Improvements $8,011,000 $8,011,000
Incidental Financing Costs $1,409,100
Total Funded by Bond Proceeds $9,420,100
Total Fees/Improvements to be Funded by Developer $0
(1) Amounts are allocated based upon estimated bond sizing and may change abased upon market conditions at the time
of bond issuance.
4 Proposed Development Page | 4
City of Lake Elsinore
CFD No. 2018-1 (Wasson Canyon II)
Public Hearing Report
The CFD No. 2018-1 includes approximately 74.52 gross acres on 24 undeveloped properties. CFD No. 2018-1 will develop
272 single family residential units of Tracts 37381 and 37382 located in the City. The District is located approximately one
mile east of the Central Avenue and I-15 Interchange west of the corner of Conrad Ave and 3rd Street. As of Fiscal Year
2017-18 the proposed CFD No. 2018-1 includes the following Assessor's Parcel Numbers:
Assessor Parcel Number Assessor Parcel Number Assessor Parcel Number
347-330-001 347-330-071 347-330-066
347-330-002 347-330-072 347-531-001
347-330-037 347-330-073 347-540-001
347-330-065 347-330-074 347-540-002
347-330-067 347-360-001 347-540-037
347-330-068 347-360-002 377-100-006
347-330-069 347-330-022 377-100-009
347-330-070 347-330-023 377-100-010
A map showing the boundaries of CFD No. 2018-1 is included in Appendix B.
5 Rate and Method of Apportionment Page | 5
City of Lake Elsinore
CFD No. 2018-1 (Wasson Canyon II)
Public Hearing Report
The Rate and Method of Apportionment allows each property owner within CFD No. 2018-1 to estimate the annual Special
Tax amount that would be required for payment. The Rate and Method of Apportionment of the Special Tax established
pursuant to these proceedings, is attached hereto as Appendix A (the “Rate and Method”). The Special Tax will be collected
in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties,
the same procedure, sale and lien priority in the case of delinquency; provided, however, that the CFD Administrator may
directly bill the Special Taxes, may collect Special Taxes at a different time or in a different manner if necessary to meet
the financial obligations, and provided further that CFD No. 2018-1 may covenant to foreclose and may actually foreclose
on parcels having delinquent Special Taxes as permitted by the Act.
All of the property located within CFD No. 2018-1, unless exempted by law or by the Rate and Method proposed for CFD
No. 2018-1, shall be taxed for the purpose of providing necessary facilities to serve the District. The Boundary Map for
CFD No. 2018-1 is attached hereto as Appendix B. Pursuant to Section 53325.3 of the Act, the tax imposed “is a Special
Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any
property.” The Special Tax may be based on the benefit received by property, the cost of making facilities or authorized
services available or other reasonable basis as determined by the City, although the Special Tax may not be apportioned
on an ad valorem basis pursuant to Article XIIIA of the California Constitution. A property owner within the District may
choose to prepay in whole or in part the Special Tax. The available method for so doing is described in Section G of the
Rate and Method (“Prepayment of Special Tax”).
For each year that any Bonds are outstanding the Special Tax shall be levied on all parcels subject to the Special Tax. If
any delinquent Special Taxes remain uncollected prior to or after all Bonds are retired, the Special Tax may be levied to the
extent necessary to reimburse CFD No. 2018-1 for uncollected Special Taxes associated with the levy of such Special
Taxes, but the Special Tax shall not be levied after 2057-2058 Fiscal Year.
For particulars as to the Rate and Method for CFD No. 2018-1, see the attached and incorporated in Appendix A.
6 Certifications Page | 6
City of Lake Elsinore
CFD No. 2018-1 (Wasson Canyon II)
Public Hearing Report
Based on the information provided herein, it is my opinion that the described services herein are those that are necessary
to meet increased demands placed upon the City of Lake Elsinore as a result of development occurring within the CFD No.
2018-1 and benefits the lands within said CFD No. 2018-1. Further, it is my opinion that the special tax rates and method
of apportionment, as set forth herein, are fair and equitable, uniformly applied and not discriminating or arbitrary.
Date: March 27, 2018 SPICER CONSULTING GROUP, LLC
_
SHANE SPICER
SPECIAL TAX CONSULTANT FOR
CITY OF LAKE ELSINORE
RIVERSIDE COUNTY
STATE OF CALIFORNIA
APPENDIX A
Rate and Method of Apportionment
City of Lake Elsinore
Community Facilities District No. 2018-1 (Wasson Canyon II) Page 1
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2018-1 (WASSON CANYON II)
OF THE CITY OF LAKE ELSINORE
A Special Tax (all capitalized terms are defined in Section A, “Definitions”, below) shall be applicable to
each Assessor’s Parcel of Taxable Property located within the boundaries of the City of Lake Elsinore
Community Facilities District No. 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 1st preceding the Fiscal Year in which the Special Tax is being levied,
and (ii) that have not been issued a building permit on or before March 1st preceding the Fiscal Year in
which the Special Tax is being levied.
"Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned
Assessor’s Parcel Number.
City of Lake Elsinore
Community Facilities District No. 2018-1 (Wasson Canyon II) Page 2
"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.
“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 1st preceding the Fiscal Year in which the Special Tax is being
levied, and (ii) a Building Permit for new construction was issued on or before March 1st preceding the
Fiscal Year in which the Special Tax is being levied.
City of Lake Elsinore
Community Facilities District No. 2018-1 (Wasson Canyon II) Page 3
"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
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.
City of Lake Elsinore
Community Facilities District No. 2018-1 (Wasson Canyon II) Page 4
“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 services 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
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.
City of Lake Elsinore
Community Facilities District No. 2018-1 (Wasson Canyon II) Page 5
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
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 per Assessor’s Parcel within the Final Map
City of Lake Elsinore
Community Facilities District No. 2018-1 (Wasson Canyon II) Page 6
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.
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.
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Community Facilities District No. 2018-1 (Wasson Canyon II) Page 7
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.
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.
City of Lake Elsinore
Community Facilities District No. 2018-1 (Wasson Canyon II) Page 8
“Construction Inflation Index” means the annual percentage change in the Engineering News-Record
Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the
previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall
be another index as determined by the City that is reasonably comparable to the Engineering News-
Record Building Cost Index for the city of Los Angeles.
“Future Facilities Costs” means the CFD Public Facilities minus public facility costs available to be funded
through existing construction or escrow accounts or funded by the Outstanding Bonds, and minus public
facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of
prepayment.
“Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax
which will remain outstanding after the first interest and/or principal payment date following the current
Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of
Special Tax.
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
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Community Facilities District No. 2018-1 (Wasson Canyon II) Page 9
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 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
City of Lake Elsinore
Community Facilities District No. 2018-1 (Wasson Canyon II) Page 10
of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the
prepayment date, but in no event shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption
Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and
Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and
Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture
and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities
Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall
be retained by the CFD.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such
event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate fund
established under the Indenture to be used with the next redemption from other Special Tax 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
City of Lake Elsinore
Community Facilities District No. 2018-1 (Wasson Canyon II) Page 11
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 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.
APPENDIX B
Boundary Map
APPENDIX C
Resolution of Intention
RESOLUTION NO. 2018-032
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. 2018-032
Page 2 of 20
2
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. 2018-032
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 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. 2018-032
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).
Section 15. This Resolution shall be effective upon its adoption.
Reso. No. 2018-032
Page 5 of 20
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Passed and Adopted on this 13th day of February 2018.
Natasha Johnson
Natasha Johnson
Mayor
Attest:
Susan M. Domen, MMC_
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. 2018-032 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: Council Members Hickman, Magee, Tisdale; Mayor Pro-Tem Manos and Mayor Johnson
NOES: None
ABSENT: None
ABSTAIN: None
Susan M. Domen, MMC
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 1st preceding the Fiscal Year in which the Special Tax is being levied,
C-2
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.
C-3
“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 1st preceding the Fiscal Year in which the Special Tax is being
levied, and (ii) a Building Permit for new construction was issued on or before March 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
C-4
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
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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.
F. EXEMPTIONS
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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 current
Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of
Special Tax.
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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 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.
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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.
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
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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 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
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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.
PROJECT MAP
CFD NO. 2018-1 (WASSON CANYON II)
FORMATION