HomeMy WebLinkAboutItem No. 17 Reso CFD No. 2006-6 TesseraCity Council Agenda Report
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
www.lake-elsinore.org
File Number: ID# 19-796
Agenda Date: 12/8/2020 Status: Approval FinalVersion: 1
File Type: Council Consent
Calendar
In Control: City Council / Successor Agency
Agenda Number: 17)
Resolution of Intention to Consider Change Proceedings for Community Facilities District No.
2006-6 (Tessera)
Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA,
ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2006-6 (TESSERA), DECLARING ITS INTENTION TO CONSIDER AN AMENDMENT
TO THE RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.
Page 1 City of Lake Elsinore Printed on 12/3/2020
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: December 8, 2020
Subject: Resolution of Intention to Consider Change Proceedings for Community
Facilities District No. 2006-6 (Tessera)
Recommendation
Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2006-6 (TESSERA), DECLARING ITS INTENTION
TO CONSIDER AN AMENDMENT TO THE RATE AND METHOD OF APPORTIONMENT OF
SPECIAL TAX.
Background
The City of Lake Elsinore (the “City”) formed the City of Lake Elsinore Community Facilities
District No. 2006-6 (Tessera) (the “District”) in 2006 pursuant to the Mello-Roos Community
Facilities District Act of 1982. The District is bounded to the north and east by Avenue 6 and by
Channing Way to the west. JLJ, L.P., a California limited partnership, is the landowner within the
District (the “Developer”). The development within the District is expected to include
approximately 90 single family homes at build-out.
While the District was formed in 2006, homebuilding has not yet commenced. Due to revisions
in the proposed product mix within the District, the Developer has requested that the District
undertake proceedings to amend the Rate and Method of Apportionment of Special Taxes with
the First Amended and Restated Rate and Method of Apportionment attached to the Resolution
of Consideration presented at this meeting (the “First Amended RMA”).
Documents to be Approved
Approval of the attached resolution is the first step in the process to effectuate the changes
discussed above. The attached resolution declares the District’s intention to consider the
proposed changes and calls a public hearing on the proposed changes.
In addition, the Resolution of Consideration, 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 “Funding Agreement”); and (ii) the Joint
Change Proceedings for Community Facilities District No. 2006-6 (Tessera)
December 8, 2020
Page 2 of 2
Community Facilities Agreement with the Developer and Elsinore Valley Municipal Water
District (the “JCFA”). The Funding Agreement sets forth the terms, among others, pursuant to
which the CFD will finance improvements to be constructed by the City and/or the Developer. In
accordance with the Mello-Roos Act, the approval and execution of the JCFA 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.
Fiscal Impact
The Developer has made a deposit to pay for the costs of the change proceedings. The Funding
Agreement provides that the Developer will be reimbursed for such costs if and when bonds are
issued for the District.
The District will annually levy special taxes on all of the taxable property within the District in
accordance with the First Amended RMA in order to pay for the costs of facilities, debt service
on bonds, the services and administration of the District. Any bonds issued by the District are
not obligations of the City and will be secured solely by the Special Taxes levied in the District.
Exhibits
A - Resolution of Consideration
B - Acquisition, Construction and Funding Agreement
C - Joint Community Facilities Agreement
D - Landowner Petition
RESOLUTION NO. 2020-___
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2006-6 (TESSERA), DECLARING ITS
INTENTION TO CONSIDER AN AMENDMENT TO THE RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAX
Whereas, on June 27, 2006, the City Council of the City of Lake Elsinore (the “City Council”)
adopted Resolution No. 2006-95 stating its intention to form City of Lake Elsinore Community
Facilities District No. 2006-6 (Tessera) (“Community Facilities District No. 2006-6” or the “District”)
pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of
Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”); and,
Whereas, on June 27, 2006, the City Council also adopted Resolution No. 2006-096 stating its
intention to incur bonded indebtedness within the District in the amount not to exceed $5,000,000
to finance the facilities and improvements identified in Resolution No. 2006-133 (collectively, the
“Improvements”); and the incidental expenses to be incurred in financing the Improvements and
forming and administering the District (the “Incidental Expenses”); and,
Whereas, pursuant to Resolution No. 2006-95, the City Council also stated its intention to finance
parks, open space and storm drain maintenance services (the “Services”) within the District
through the levy of a services special tax in accordance with the Rate and Method (as defined
below); and,
Whereas, a notice calling a public hearing on August 8, 2006, was published as required by law
relative to the intention of the City Council to establish Community Facilities District No. 2006-6
and to incur bonded indebtedness within Community Facilities District No. 2006-6; and,
Whereas, on August 8, 2006, the City Council conducted a noticed public hearing to determine
whether it should proceed with the establishment of Community Facilities District No. 2006-6,
issue bonds for the benefit of Community Facilities District No. 2006-6 to pay for the
Improvements and Incidental Expenses and authorize the rate and method of apportionment of
the special taxes in the form attached as Exhibit A to the Resolution of Formation (as defined
below) (the “Rate and Method”) to be levied within Community Facilities District No. 2006-6 for
the purposes described in the Resolution of Formation; and,
Whereas, at the August 8, 2006, public hearing all persons desiring to be heard on all matters
pertaining to the establishment of Community Facilities District No. 2006-6, the levy of the special
taxes in accordance with the Rate and Method and the issuance of bonds within Community
Facilities District No. 2006-6 to pay for the cost of the proposed Improvements and Incidental
Expenses were heard and a full and fair hearing was held; and,
Whereas, after the public hearing, on August 8, 2006, the City Council adopted Resolution Nos.
2006-133 (the “Resolution of Formation”) and 2006-134 (the “Resolution to Incur Bonded
Indebtedness”) which formed the District and called a special election on August 8, 2006, within
the District on propositions relating to the levying of the special taxes, the in curring of bonded
indebtedness and the establishment of an appropriations limit for the District, which were
approved by more than two-thirds vote by the qualified electors on August 8, 2006; and,
CC Res. No. 2020- ______
Page 2 of 18
Whereas, pursuant to Resolution No. 2006-135, adopted on August 8, 2006, the City Council,
acting as the legislative body of Community Facilities District No. 2006-6, declared the results of
the special election and directed the recording of notices of special tax liens within Community
Facilities District No. 2006-6; and,
Whereas, the District has received a petition signed by JLJ, L.P., a California limited partnership
(the “Owner”), which owns all of the land within Community Facilities District No. 2006-6, the
boundaries of which are described herein in Attachment “A,” which petition meets the
requirements of Section 53332 of the Act, requesting that the District initiate proceedings to
approve the new rate and method of apportionment for Community Facilities District No. 2006-6,
attached hereto as Attachment “B” (the “First Amended and Restated Rate and Method”); and,
Whereas, in order to facilitate the funding of the Improvements and Incidental Expenses, the
legislative body of the District desires to enter into an Acquisition, Construction and Funding
Agreement (the “Acquisition Agreement”) with the Owner and the form of the Acquisition
Agreement is on file with the City Clerk; and,
Whereas, the District, the Owner and the Elsinore Valley Municipal Water District (the “Water
District”) desire to enter into a Joint Community Facilities Agreement (the “JCFA”) 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, ACTING AS THE LEGISLATIVE BODY OF CITY
OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-6 (TESSERA), DOES
HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS:
Section 1. Each of the above recitals is true and correct and is adopted by the legislative body
of the District.
Section 2. The City Council, acting as the legislative body of the District, declares its intention to
conduct proceedings pursuant to the Act to consider amending and restating the Rate and Method
with the First Amended and Restated Rate and Method.
Section 3. The Improvements proposed to be provided within the District are public facilities
as defined in the Act. The Improvements and Incidental Expenses authorized to be financed by
the District are described in the Resolution of Formation. 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 Improvements for the benefit of the District.
Section 4. A public hearing (the “Hearing”) on the levy of special taxes in the District in
accordance with the First Amended and Restated Rate and Method, shall be held at 7:00 p.m.,
or as soon thereafter as practicable, on January 12, 2021, at the City Cultural Center, 183 North
Main Street, Lake Elsinore, California. Notwithstanding the foregoing, consistent with the
Governor of the State of California’s Executive Order N-29-20 or other applicable directives, the
Hearing may be held remotely with public participation via methods to be set forth in the City
Council’s agenda. Should the City Council determine to submit the proposed First Amended and
Restated Rate and Method to the qualified electors of the District, a special election will be held
to authorize the First Amended and Restated Rate and Method in accordance with the procedures
contained in Government Code Section 53326. If such election is held, the proposed voting
procedure at the election will be a landowner vote with each landowner who is the owner of record
of land within the District at the close of the Hearing, or the authorized representative thereof,
CC Res. No. 2020- ______
Page 3 of 18
having one vote for each acre or portion thereof owned within the District. Ballots for the special
election may be distributed by mail or by personal service.
Section 4. At the time and place set forth above for the Hearing, any interested person, including
all persons owning lands or registered to vote within the District, may appear and be heard.
Section 5. The City Clerk is hereby directed to publish a notice (the “Notice”) of the Hearing
pursuant to Section 6061 of the Government Code in a newspaper of general circulation published
in the area within Community Facilities District No. 2006-6. The City Clerk is further directed to
mail a copy of the Notice to each of the landowners within the boundaries of Community Facilities
District No. 2006-6 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 testi mony of
all interested persons or taxpayers will be heard, a description of the protest rights of the
registered voters and landowners in the proposed district and a description of the proposed voting
procedure for the election required by the Act. Such publication shall be completed at least seven
(7) days prior to the date of the Hearing.
Section 6. The form of the Acquisition 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 Acquisition 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 7. 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 8. This Resolution shall be effective upon its adoption.
Passed and Adopted on this 8th day of December, 2020.
_____________________________
Brian Tisdale, Mayor
Attest:
_____________________________
Candice Alvarez, MMC
City Clerk
CC Res. No. 2020- ______
Page 4 of 18
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF LAKE ELSINORE )
I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that
Resolution No. 2020-______ was adopted by the City Council of the City of Lake Elsinore,
California, at the Regular meeting of December 8, 2020 and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Candice Alvarez, MMC
City Clerk
CC Res. No. 2020- ______
Page 1 of 18
ATTACHMENT “A”
DESCRIPTION OF PROPERTY WITHIN THE DISTRICT
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as
follows:
Assessor’s Parcel Nos:
373-071-020
373-071-021
373-071-022
373-071-023
373-071-025
CC Res. No. 2020- ______
Page 1 of 18
ATTACHMENT “B”
PROPOSED FIRST AMENDED AND RESTATED
RATE AND METHOD OF APPORTIONMENT OF
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2006-6 (TESSERA)
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. 2006-6 (Tessera) ("CFD No. 2006-6"). 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. 2006-6, 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. 2006-6: 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. 2006 -6 or any
designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No.
2006-6 or any designee thereof of complying with disclosure requirements of the City, CFD No.
2006-6 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 t o
public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2006 -6 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. 2006-6 for any other administrative purposes of CFD No. 2006-
6, 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
CC Res. No. 2020- ______
Page 2 of 18
Special Tax is being levied, (ii) and has an assigned Assessor’s Parcel Number from the County
shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) that
have not been issued a building permit on or before May 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. 2006-6 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. 2006-6" means Community Facilities District No. 2006-6 (Tessera)
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. 2006-6.
CC Res. No. 2020- ______
Page 3 of 18
“Condominium Plan" means a condominium plan as set forth in the California Civil Code Section
4200 et seq.
"County" means the County of Riverside.
"Developed Property" means all Assessor’s Parcels 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) has an Assessor’s Parcel Number from the County shown on an Assessor’s Parcel
Map for the individual lot included on the Final Map, and (iii) a Building Permit for new construction
was issued on or before May 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 4200 et
seq. 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. 2006-6 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 for which a building permit(s)
was issued or will be 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
CC Res. No. 2020- ______
Page 4 of 18
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 actu al 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.
“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. 2006-6
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. 2006-6 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. 2006-6, 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, or Provisional Undeveloped Property.
CC Res. No. 2020- ______
Page 5 of 18
B. SPECIAL TAX
Commencing Fiscal Year 2021-2022 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 2021-2022, each Assessor’s Parcel within CFD No.
2006-6 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.
In the event that an Assessor’s Parcel for which one or more Building Permits have been issued
and the County has not yet assigned final Assessor’s Parcel Number(s) to the Residential Unit(s)
(in accordance with the Final Map or Condominium Plan) on such Assessor’s Parcel, the amount
of the Special Tax levy on such Assessor’s Parcel for each Fiscal Year shall be determined as
follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax
levy for such Assessor’s Parcel, based on the classification of such Assessor’s Parcel as
Undeveloped Property; (2) the amount of the Special Tax levy for the Residential Units on such
Assessor’s Parcel for which Building Permits have been issued shall be determined based on the
Developed Property Special Tax rates and shall be taxed as Developed Property in accordance
with Step 1 of Section E below; and (3) the amount of the Special Tax levy on the Taxable Property
in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A)
the percentage of the Maximum Special Tax rate levied on all other Undeveloped Property
multiplied by the total of the amount determined in clause (1), less the amount determined in
clause (2).
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 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 shall be subject to an Assigned Special Tax. The Assigned
CC Res. No. 2020- ______
Page 6 of 18
Special Tax applicable to an Assessor's Parcel of Developed Property 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 1,650 sq. ft $2,301.00
2. Single Family Residential Property RU 1,650 sq. ft to 1,750 sq. ft $2,380.00
3. Single Family Residential Property RU Greater than 1,750 sq. ft $2,430.00
4. Multifamily Property Acre N/A $38,622.00
5. Non-Residential Property Acre N/A $38,622.00
On each July 1, commencing July 1, 2022, the Assigned Special Tax rate for Developed
Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal
Year.
b. Multiple Land Use Categories
In some instances, an Assessor’s Parcel of Developed Property may contain more than one
Land Use Type. The Maximum Special Tax 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 $38,622 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
CC Res. No. 2020- ______
Page 7 of 18
$38,622 per Acre. The Backup Special Tax shall not apply to Multifamily Residential Property,
or Non-Residential Property.
On each July 1, commencing July 1, 2022, the Backup Special Tax rate shall be increased by
two percent (2.00%) of the amount in effect in the prior Fiscal Year.
2. Approved Property
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be
classified as Single-Family Property shall be the Backup Special Tax computed pursuant to
Section D.1.c above.
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be
classified as Multifamily Residential Property or Non-Residential Property shall be $38,622 per
Acre.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Approved
Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal
Year.
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
$38,622 multiplied by the Acreage of such Assessor’s Parcel.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Undeveloped
and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the
amount in effect in the prior Fiscal Year.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2021-2022 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.
CC Res. No. 2020- ______
Page 8 of 18
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 5.51 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 5.51
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 5.51 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 $3,900,000 expressed in 2021 dollars, 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. 2006-6, 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.
CC Res. No. 2020- ______
Page 9 of 18
“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. 2006-6.
“Construction Inflation Index” means the annual percentage change in the Engineering News-
Record Building Cost Index for the Riverside-San Bernardino-Ontario area, 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 Riverside-
San Bernardino-Ontario area.
“Future Facilities Costs” means the CFD Public Facilities minus public facility costs available
to be funded through existing construction or escrow accounts 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 Admi nistrator
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
CC Res. No. 2020- ______
Page 10 of 18
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.
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
CC Res. No. 2020- ______
Page 11 of 18
of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the
prepayment of the Maximum Special Tax obligation for the Assessor’s Parcel and the
redemption of Outstanding Bonds (the “Administrative Fees and Expenses”).
13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the
expected reduction in the reserve requirement (as defined in the Indenture), if any, associated
with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount
derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after
the redemption of Outstanding Bonds as a result of the prepayment from the balance in the
reserve fund on the prepayment date, but in no event shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the
Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the
Administrative Fees and Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption
Premium, and Defeasance Amount shall be deposited into the appropriate fund as established
under the Indenture and be used to redeem Outstanding Bonds or make debt service
payments. The Future Facilities Amount shall be deposited into the Construction 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 th e
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 de termined 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:
CC Res. No. 2020- ______
Page 12 of 18
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 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
2060-2061 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. 2006-6 Bonds have been paid; (ii) all authorized facilities of CFD No. 2006-6 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. 2006-6 have been satisfied.
I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same tim e as ordinary ad
valorem property taxes, provided, however, that CFD No. 2006-6 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
CC Res. No. 2020- ______
Page 13 of 18
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.
Stradling Yocca Carlson & Rauth
Draft of 11/25/20
4827-3975-9314v3/022042-0034
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2006-6 (TESSERA)
ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT
THIS AGREEMENT is made and entered into by and between CITY OF LAKE ELSINORE
(the “City”), acting for and on behalf of itself and CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2006-6 (TESSERA) (the “Community Facilities District” or “CFD”) and
JLJ, L.P., a California limited partnership (the “Developer”), each individually a “Party” and
collectively the “Parties.”
WHEREAS, the City has previously established the CFD pursuant to the provisions of the
Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), and has undertaken
proceedings for the authorization of special taxes and issuance of bonded indebtedness for the
payment of the construction and/or acquisition of certain public improvements to be owned,
operated or maintained by the City and the Elsinore Valley Municipal Water District (the “Water
District”) and incidental expenses in accordance with the Act; and
WHEREAS, in order to proceed in a timely way with development of its property within the
CFD which is described in the attached Exhibit “A” (the “Developer Property”), Developer
desires to fund through the Community Facilities District (i) the City’s acquisition or construction
of certain public improvements that are to be owned, operated and maintained by the City (“City
Improvements”), as more particularly set forth and described in the Description of Cost Estimates
attached hereto as Exhibit “B,” (ii) improvements included in the City’s fee programs (the “City
Fee Facility Improvements”), as more particularly set forth and described in Exhibit “B” and (iii)
the improvements of the Water District described in Exhibit “E” hereto (the “Miscellaneous
Improvements”) (collectively the “Improvements”); and
WHEREAS, the City is authorized by the Act to form the CFD and to issue bonds to fund
the Improvements; and
WHEREAS, the City Council has adopted the City’s policies and procedures concerning
the use of special district financing programs to finance City facilities (the “Policy”); and
WHEREAS, the purpose of this Agreement is to constitute a formal understanding
between Developer and the City (pursuant to the requirements of Government Code
Section 53313.51 and other provisions of the Act and the Policy) concerning financial and other
obligations and responsibilities related to the Improvements to be financed by the Community
Facilities District to the extent funds are available, and to set forth the conditions upon which (1)
the Community Facilities District will reimburse Developer or its designee for the cost of the City
Improvements constructed by or on behalf of the Developer and (2) the Community Facilities
District will fund the City Fee Facility Improvements and the City will grant credit against applicable
City fees; and (3) the Community Facilities District will also fund Miscellaneous Improvements, if
any, which will be described in Exhibit “E,” if applicable.
2
4827-3975-9314v3/022042-0034
NOW, THEREFORE, it is mutually agreed between the respective Parties as follows:
SECTION 1. DEVELOPER ADVANCES
The City will retain, at the Developer’s expense, the necessary consultants to analyze
certain change proceedings with respect to the CFD (the “Change Proceedings”), including a
special tax consultant, bond counsel, appraiser and other consultants deemed necessary by the
City. The Developer has advanced to the City a sum of money for such expenses, part of which
may be eligible for reimbursement from the CFD. From time to time, Developer will make
additional advances, within 10 days following receipt from the City of a request for an additional
advance, to cover the costs of the Change Proceedings. The City will provide to Developer on
request a summary of how the advances have been spent and the unexpended balance
remaining. The amounts advanced by the Developer and, to the extent determined reasonable
and appropriate by the City, expenses incurred by the Developer for engineering consultant costs
in connection with the Change Proceedings and the issuance of bonds, will be reimbursable to
the Developer, without interest, from the proceeds of bonds (the “Bonds”) issued by the
Community Facilities District when and if formed. In the event that Bonds are not issued to provide
a source of reimbursement to Developer, the City shall not have any liability to Developer to
reimburse it for any of the amounts previously advanced by Developer and expended by the City.
Prior to the issuance of the Bonds, the City will request a final advance for any unpaid
expenses incurred during preparatory technical, financial and legal work; and following payment
of such expenses, the City shall promptly release the balance, if any, of the advance to the
Developer. Should the City’s expenses exceed the remaining balance, the City will bill the
Developer for the difference, which the Developer agrees to pay within 10 days following receipt
of such billing, subject to the conditions of paragraph one of this section.
SECTION 2. SALE OF BONDS
2.1 City Policies. The City Council has adopted the Policy, setting forth the City’s
policies and procedures concerning the use of special district financing programs to finance the
Improvements. Pursuant to the Policy, the total annual amount of the special taxes to be collected
with respect to a parcel within the CFD and all other taxes and assessments which will be
collected with respect to such parcel must not exceed two percent (2%) of the expected assessed
value of such parcel within the Community Facilities District upon the completion of all expected
structural improvements to such parcel. In the event the sum of the special taxes and
assessments exceed 2% of the expected assessed value of a parcel within the Community
Facilities District, the City may require that the Developer or its assignees prepay a portion of the
special tax obligation of such parcel prior to or in connection with the issuance of Bonds.
The Parties hereby agree that, unless waived by the City, at the time of issuance of the
Bonds, the following requirements shall be met: (1) the ratio of the value of all parcels of property
for which the Bonds are being issued to the amount of outstanding community facilities district or
assessment district bonds attributable to such parcels (the “Value-to-Lien Ratio”) may not be less
than four-to-one (4:1) and (2) at least 50% of the proposed residential units within the Community
Facilities District shall have been completed and conveyed to individual homeowners. The fair
market value of the property within the Community Facilities District for purposes of determining
the foregoing ratio will be determined based on the assessed value of the property or the
appraised value of the property based on the appraisal made by an appraiser selected by the City
with a valuation date within three (3) months of the issuance of the Bonds. Subject to satisfaction
of the Policy and the requirements of this Agreement, the City shall use its best efforts to issue
3
4827-3975-9314v3/022042-0034
and sell the Bonds in one or more series in an amount sufficient to fund the Improvements in
accordance with the schedule for development of the Developer Property.
2.2 Security for Payment of Special Taxes. Concurrently with the issuance and sale
of each series of the Bonds, the owner of any land within the Community Facilities District,
together with land owned by any affiliate (collectively, an “Account Party”), for which the Maximum
Special Tax (as defined in the Rate and Method of Apportionment of Special Tax for the
Community Facilities District (the “Rate and Method”), such Special Tax referred to herein as the
“Special Tax” or “Special Taxes”) in the fiscal year following the fiscal year in which the Bonds are
issued are equal to or exceed 20% of the total Maximum Special Tax for such fiscal year, shall
deliver to the City either (i) a renewable, irrevocable instrument of credit from a financial institution
(rated “A” or better) or (ii) cash in-lieu thereof (a “Security”). The Security shall be in an amount
equal to two times the expected Special Tax levy on the property owned by such Account Party
(the “Stated Amount”). The Security shall be maintained by the Account Party in each fiscal year
until terminated in accordance with Section 2.2(c) below. While the Security is still required, the
Stated Amount of such Security shall be reduced as set forth in a “Certificate of Reduction or
Termination” (as defined in Section 2.2(c) below).
The Security shall name the City, or its designee, as a beneficiary and shall provide that
the City, or its designee, may draw an amount equal to any delinquencies in payment of
semiannual installments of the Special Taxes levied on property owned by the Account Party in
the Community Facilities District. The total amount to be drawn under the Security shall not
exceed an amount equal to the Special Taxes owed by the Account Party with respect to property
within the Community Facilities District that is delinquent at the time the draw is made. The
amount drawn on the Security shall be applied in the same manner and for the same purposes
as the delinquent Special Taxes would have been applied; provided, however the payment of a
draw under the Security will not be deemed to cure the delinquency in payment of t he Special
Taxes.
If, subsequent to a draw on the Security and prior to the satisfaction of any
reimbursements due to the institution providing the Security (the “Security Provider”) pursuant to
this Agreement, the City receives payment of all or a portion of the delinquent Special Taxes or
the proceeds of a sale of delinquent real property pursuant to foreclosure proceedings
(“Delinquency Proceeds”) for a parcel for which the Security has been drawn, the Security
Provider shall be reimbursed for such draws to the extent of Delinquency Proceeds net of the
City’s costs of collection, provided that the Security is or has been concurrently reinstated to, or
a Substitute Security (as defined below) provided for, the then applicable Stated Amount. The
Security Provider is intended by the Parties to be a third party beneficiary of this Section 2.2.
(a) The Security shall be renewed, or a substitute Security reasonably satisfactory to
the City (a “Substitute Security”) provided, not less than thirty (30) calendar days prior to the
expiration of the Security or Substitute Security then in effect. If the Account Party provides a
Substitute Security to the City, then the City or its designee, shall return any existing Security on
the effective date of the Substitute Security to the Security Provider.
If the Security is not renewed within thirty (30) days prior to its expiration date and the
requirements for release or termination of the Security as set forth in Section 2.2(c) below have
not then been met, the full amount of the Security may be drawn by the City and deposited in an
account established under the Indenture (as hereinafter defined) or in such account established
with a financial institution selected by the City. Thereafter, amounts in such account shall be held
as security, and if Special Taxes owed by the Account Party with respect to property within the
4
4827-3975-9314v3/022042-0034
Community Facilities District are not paid prior to delinquency, then such amounts in such account
may be applied by the City to pay the delinquent Special Taxes owed by the Account Party with
respect to such property on the same terms and conditions applicable hereunder to draws on the
Security.
At such time as the Security is renewed, or a Substitute Security is accepted by the City,
or the requirement for the Security has been terminated pursuant to this section, the City or its
designee, shall release all amounts in the Security account to the Security Provider within ten (10)
calendar days from the date of renewal or acceptance.
(b) Following the sale or transf er by the Account Party of any property to a person
other than the Account Party, or upon the prepayment of the Special Tax obligation for a parcel
owned by the Account Party, the Account Party shall notify the Community Facilities District of
such event, in writing, and, if requested by the Account Party, the Stated Amount of the Security
shall be reduced and be recalculated in accordance with this Section 2.2; provided, however, that
City shall be required to recalculate such amount and reduce the Securit y a maximum of two
times each calendar year and any costs associated with the recalculation and reduction shall be
borne by the Account Party. The Security shall be terminated when (i) the levy of Special Taxes
on the land owned by the Account Party in the Community Facilities District is less than 20% of
the Special Tax levy in the current fiscal year, (ii) the Account Party has paid all Special Taxes in
the current fiscal year and the property owned by the Account Party in the Community Facilities
District is expected to be responsible for less than 20% of the total Special Tax in the next fiscal
year, or (iii) the Account Party has paid all Special Taxes in the current fiscal year and in the
following fiscal year, the Community Facilities District will not levy the Special Tax on property
within the Community Facilities District owned by the Account Party.
Reduction or termination of a Security shall occur automatically upon submission
to the Security Provider by the City of a “Certificate of Reduction o r Termination.” The City shall
deliver to the Security Provider, such Certificate of Reduction or Termination promptly upon
receiving from the Account Party a certification which shall be made under penalty of perjury and
which shall indicate (i) the legal description of all land owned by the Account Party, and either
(ii) a recalculation of the new Stated Amount that the Account Party proposes be applicable to the
Security or (iii) if termination of the Security is requested, a statement that one of the requirements
set forth in (i) through (iii) of the preceding paragraph has been satisfied.
The Account Party shall notify the City of any events that will result in a reduction of the
Stated Amount of the Security and shall provide the City with verification of said events. The
Account Party may provide the City with a Substitute Security in the reduced amount, and the
City shall release and return to the Security Provider the Security then in effect. The Parties
expressly acknowledge that the Account Party’s failure to so notify the City or to reduce the
Security at the times prescribed herein shall in no way effect or invalidate sale or transfer of
property, or recordation of maps on property.
(c) If property is sold or transferred by an Account Party with the result that the land
owned by the transferee or any of its affiliates (“Transferee”) is responsible for twenty percent
(20%) or more of the Special Tax in the current fiscal year, a Security on the same terms specified
herein will be furnished by Transferee with respect to all land owned by such Transferee in the
Community Facilities District. Any applicable purchase and sale agreement and/or escrow
instructions shall notify the Transferee of this Security requirement and obligate the Transferee to
provide such Security, if applicable. The Security of the Account Party will not be reduced to
reflect the sale or transfer of land until a Security is furnished by the Transferee and accepted by
5
4827-3975-9314v3/022042-0034
the City. The issuing financial institution and the form and terms of said Security will be subject
to reasonable prior approval by the City. All terms provided in this Section 2.2 are applicable to
the Transferee by replacing the term “Account Party” at each place where it occurs in each section
with the term “Transferee.” Each provider of a Security for a Transferee shall be an express third
party beneficiary of the provisions of this Section 2.2.
Any costs related to the holding or maintaining the Security, including any fees of a fiscal
agent, trustee or other depository shall be borne by the Account Party.
2.3 Major Landowner Initial and Continuing Disclosure. An owner of land which is
responsible for twenty percent (20%) or more of the Special Tax in the fiscal year in which the
Bonds are issued or in the fiscal year following the fiscal year in which the Bonds are issued (a
“Major Landowner”) will be required to provide all information regarding the development of its
property, including the financing plan for such development, which is necessary to ensure that
the official statement for such Bonds complies with the requirements of Rule 15c2-12 of the
Securities and Exchange Commission (the “Rule”) and all other applicable federal and state
securities laws. Additionally, Developer acknowledges that, if it is a Major Landowner at the time
of issuance of the Bonds, it will be necessary that Developer enter into a continuing disclosure
agreement to provide such continuing disclosure pertaining to the development of the land owned
by Developer within the CFD as necessary to assist the underwriter in complying with the
continuing disclosure requirements of the Rule and/or to assist in the marketing of the Bonds.
2.4 Bond Issuance Parameters. The terms and conditions upon which each series of
the Bonds shall be issued and sold, the method of sale of the Bonds and the pricing of the Bonds
shall be determined solely by the City in its reasonable discretion in conformance with the
requirements of Government Code Section 53313.5, the Act, the Policy, and this Agreement. The
Bonds shall be issued with a term not to exceed 40 years. The proceeds of the Bonds shall be
used in the following priority to (1) fund a reserve fund for the payment of principal and interest
with respect to the Bonds in an amount equal to the least of (i) ten percent (10%) of the total bond
issue, (ii) maximum annual debt service on Bonds, or (iii) 125% of average annual debt service;
(2) fund up to eighteen (18) months of capitalized interest; (3) reimburse the Developer or its
designee pursuant to Section 1 and hereof for the costs described therein which have not already
been reimbursed to the Developer from collected Special Tax; (4) pay for costs of issuance of the
Bonds including, without limitation, underwriter’s discount, bond counsel and disclosure counsel
fees, appraisal and special tax consultant fees, printing, and fiscal agent fees; and (5) pay for the
actual costs of the Improvements. The Community Facilities District shall maintain records
relating to the disbursements of proceeds of the sale of the Bonds. The Indenture or Resolution
(hereinafter “Indenture”) for the Bonds shall establish an acquisition and construction fund or
improvement fund (herein, the “Improvement Fund”) into which shall be deposited initially the
proceeds of the Bonds net of the amount of proceeds required to fund items (1) through (5) in the
second preceding sentence. The Indenture shall also establish separate accounts of the
Improvement Fund designated the “City Improvements Account,” “City Fee Facility Improvements
Account,” and any Miscellaneous Improvement Account(s) for the Miscellaneous Improvements
described in Exhibit “E” if applicable, into which shall be deposited such portions of the
Improvement Fund as directed by the City and in writing at or subsequent to the closing of the
sale of the Bonds consistent with the following priorities, which priorities may be revised at the
City’s discretion:
(a) An amount sufficient to fund the reasonable, current estimated cost of the
City Fee Facility Improvements anticipated to be funded out of the Bonds being issued shall be
deposited in the City Fee Facility Improvements Account (any Special Taxes levied in the CFD
6
4827-3975-9314v3/022042-0034
and collected by the CFD remaining after the payment of administrative expenses of the CFD and
the reimbursement of the Developer for costs pursuant to Section 1 hereof shall be deposited into
the City Fee Facility Improvements Account at the time of Bond issuance, unless otherwise
directed in writing by the Developer);
(b) If applicable, an amount to be agreed upon between Developer and the
CFD prior to the issuance of Bonds sufficient to fund the reasonable, current estimated costs of
the City Improvements shall be deposited, or later transferred, to the City Improvements Account;
and
(c) If applicable, an amount to be agreed upon between Developer and the
CFD prior to the issuance of Bonds sufficient to fund the reasonable, current estimated cost of
any Miscellaneous Improvements, if any, described in Exhibit “E” hereto, anticipated to be
funded out of the Bonds being issued shall be deposited in the applicable Miscellaneous
Improvement Account(s).
Interest earned on moneys deposited in each of the City Fee Facility Improvements
Account, the City Improvements Account and the Miscellaneous Improvement Account(s) shall
remain in such accounts until such time as all of the Improvements have been funded.
Additionally, the Developer may direct the CFD to transfer excess moneys in any of the City Fee
Facility Improvements Account, the City Improvements Account or the Miscellaneous
Improvement Account(s) to another Account. The Indenture shall provide that amounts remaining
in the Improvement Fund after funding all proposed Improvements or sooner, as agreed by the
City and the Developer, shall be deposited in the special tax fund or bond service fund and be
applied to pay debt service on the Bonds and/or to call Bonds in advance of maturity.
SECTION 3. ALLOCATION OF SPECIAL TAXES
Prior to the issuance of Bonds, the City Council of the City, acting as the legislative body
of the Community Facilities District, may levy Special Taxes on all parcels classified as Developed
Property pursuant to the Rate and Method. Such Special Taxes collected by the City shall first
be applied to fund annual administrative expenses of the Community Facilities District and then
to fund Improvements in the same manner as the proceeds of Bonds as set forth herein. Upon
sale and delivery of the Bonds, the City shall annually levy the Special Tax as provided for in
documents pursuant to which the Bonds were issued. Following the issuance of the Bonds, the
City shall have no obligation to levy Special Taxes to reimburse the Developer for the costs of
any Improvements not paid for from Bond proceeds. The entire amount of any Special Tax levied
by the Community Facilities District to repay the Bonds and recover costs and expenses allowable
pursuant to Government Code Section 53313.5, shall be allocated to the Community Facilities
District.
SECTION 4. NOTICE OF SPECIAL TAX
Developer, or Developer’s successors or assigns, shall provide written notice to all
potential initial purchasers of lots advising of the special tax obligation applicable to the Developer
Property in the form required by Section 53341.5 of the Government Code. A sample copy as
prepared by Developer is attached as Exhibit “C.”
7
4827-3975-9314v3/022042-0034
SECTION 5. DESIGN PLANS AND SPECIFICATIONS
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements. All plans,
specifications and bid documents for the City Improvements (“Plans”) constructed or to be
constructed by the Developer shall be prepared by the Developer at the Developer’s initial
expense, subject to approval by the applicable public agency. Costs for preparation of the Plans
will be eligible for reimbursement, conditioned upon the final approval of the applicable public
agency and the availability of funds. Reimbursement of costs for plan revisions will be considered
on a case by case basis. All facilities shall be bid in accordance with “public works” requirements
of Section 6.4 to be eligible for reimbursement. The Developer shall not award bids for
construction, or commence or cause commencement of construction, of a City Improvement until
the Plans and bidding documents have been approved by the City. The bid opening for City
Improvements shall be coordinated with and take place at the City’s facilities, with City personnel
in attendance.
SECTION 6. CONSTRUCTION OF IMPROVEMENTS
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements.
6.1 Construction or Acquisition Election. Upon the approval of Plans for a City
Improvement, the Developer and the City shall determine whether the Developer will provide for
construction of such City Improvement in accordance with Sections 6.2, 6.4 and 7 of this
Agreement (the “Acquisition Election”) or whether the City will provide for construction of such
City Improvement in accordance with Section 6.3 of this Agreement (the “Construction Election”).
Sections 6.2, 6.4 and 7 specify the requirements for construction of the City Improvements
pursuant to the Acquisition Election that the City believes are necessary to ensure that such City
Improvements are constructed as if they had been constructed under the direction and
supervision, or under the authority of the City.
6.2 Acquisition Election. If the Acquisition Election is selected with respect to City
Improvements in accordance with the provisions of Section 7 hereof, a qualified engineering firm
(the “Field Engineer”) shall be employed by the Developer to provide all field engineering surveys
determined to be necessary by the City’s inspection personnel. Field Engineer shall promptly
furnish to City a complete set of grade sheets listing all locations, offsets, etc., in accordance with
good engineering practices, and attendant data and reports resulting from Field Engineer’s
engineering surveys and/or proposed facility design changes. City shall have the right, but not
the obligation, to review, evaluate and analyze whether such results comply with applicable
specifications.
A full-time soil-testing firm, approved by City, shall be employed by the Developer to
conduct soil compaction testing and certification. The Developer shall promptly furnish results of
all such compaction testing to the City for its review, evaluation and decision as to compliance
with applicable specifications. In the event the compaction is not in compliance with applicable
specifications, the Developer shall be fully liable and responsible for the costs of achieving
compliance. A final report certifying all required compaction in accordance with the specifications
shall be a condition of final acceptance of facilities.
8
4827-3975-9314v3/022042-0034
The costs of all surveying, testing and reports associated with the City Improvements
furnished and constructed by the Developer’s contractor(s) shall be eligible to be paid from funds
in the City Improvements Account.
The City shall not be responsible for conducting any environmental, archaeological,
biological, or cultural studies or any mitigation requirements that may be requested by appropriate
Federal, State, and/or local agencies. Any such work shall be paid for and conducted by the
Developer and reimbursed out of the City Improvements Account.
Notwithstanding the selection of the Acquisition Election with respect to a City
Improvement, should the Developer notify the City that the Developer is unable to complete such
City Improvement, the City shall have the right but not the obligation to require the Developer to
make an irrevocable offer of dedication to the City of the land owned by the Developer for the City
Improvement identified in the notice and to assume responsibility for the work to be performed
thereunder. In the event the City elects to assume the responsibility for any work on a previously
awarded contract as described in the preceding sentence, the following will occur: (i) the
Developer will make an irrevocable offer of dedication to the City of the land owned by the
Developer for such City Improvement identified in the notice; (ii) to the extent permitte d by law
and the applicable contract, the Developer will assign all of the contracts for the work performed
to date on the City Improvement identified in the notice to the City, if requested to do so by the
City Manager; the City will use its best efforts to complete the City Improvement within a
reasonable time frame; and upon completion of the City Improvement, to the extent there are
Special Taxes or proceeds of the Bonds available following payment to the City for the costs of
completing such City Improvement, the Developer will be reimbursed for the lesser of the cost or
value of the previously unreimbursed satisfactory work performed or paid for by the Developer.
The cost of such work will be determined by taking the unreimbursed amounts expended by t he
Developer under the contract(s) taken over by the City and deducting any incremental cost
incurred by the City to complete the work under the contracts in question. Incremental cost shall
be costs in excess of the sum of the original contract cost plus change orders approved by the
City.
6.3 Construction Election. The Developer and the City shall agree on which
Improvements shall be constructed by the Developer and which shall be constructed by the City.
If the Construction Election is selected, upon the award of a construction contract for a City
Improvement to be constructed by the City, funds in the City Improvements Account in an amount
equal to the costs of the City Improvement, shall be reserved for payments under such contract
and shall not be available for the funding of other City Improvements until all payments required
by such contract have been made. At the time of either or both (i) the execution of a contract for
the construction of a City Improvement as to which the Construction Election has been made, and
(ii) completion of construction of the City Improvement, the Developer shall be entitled to
reimbursement from funds in the City Improvements Account of any actual costs of the City
Improvements incurred by the Developer at that time.
If Bonds have not been issued or insufficient funds are reserved in the Improvement Fund,
the City agrees to accept advances of funds from the Developer (if the Developer agrees to make
such advances in its sole discretion) upon the City’s award of a construction contract for a City
Improvement to be constructed by the City in an amount equal to the difference between the
amount of reserved funds and the contract amount. The amount of such advances shall be
reimbursed to the Developer to the extent of funds in the City Improvements Account.
9
4827-3975-9314v3/022042-0034
PUBLIC WORKS REQUIREMENTS
6.4 City Requirements. In order that the City Improvements as to which the Acquisition
Election is made may be properly and readily acquired by the City, the Developer shall comply
with all of the following requirements with respect to any such City Improvements to be acquired
with funds in the City Improvements Account, and the Developer shall provide such proof to the
City as the City may reasonably require and at such intervals and in such form as the City may
reasonably require, that the following requirements have been satisfied as to all such City
Improvements:
(a) The Developer shall prepare a bid package for review, comment and
approval by the City Manager of the City or his designee (the “City Representative”).
(b) The Developer shall, after obtaining at least three sealed bids for the
construction of the City Improvements in conformance with the procedures and requirements of
the City, submit to the City written evidence of such competitive bidding procedure, including
evidence of the means by which bids were solicited, a listing of all responsive bids and their
amounts, and the name or names of the contractor or contractors to whom the Developer
proposes to award the contracts for such construction, which shall be the lowest responsible
bidder.
(c) The City Representative shall attend the bid opening. If unable to attend
the bid opening, the City Representative shall approve or disapprove of a contractor or
contractors, in writing, within five (5) business days after receipt from the Developer of the name
or names of such contractor or contractors recommended by the Developer. If the City
Representative disapproves of any such contractor; the Developer shall select the next lowest
responsible bidder from the competitive bids received who is acceptable to the City
Representative.
(d) The specifications and bid and contract documents shall require all such
contractors to pay prevailing wages and to otherwise comply with applicable provisions of the
Labor Code, the Government Code and the Public Contract Code relating to public works projects
and as required by the procedures and standards of the City with respect to the construction of
its public works projects.
(e) The Developer shall submit faithful performance and payment bonds with
respect to the City Improvements for which the Acquisition Election is made and t he following
documents shall be submitted to the City along with the performance and payment bonds:
(i) The original, or a certified copy, of the unrevoked appointment,
power of attorney, bylaws, or other instrument entitling or authorizing the person who executed
the bond to do so;
(ii) A certified copy of the certificate of authority of the insurer issued
by the State of California’s Insurance Commissioner; and
(iii) Copies of the insurer’s most recent annual and quarterly statements
filed with the Department of Insurance.
(f) The Developer and its contractor and subcontractors shall be required to
provide proof of insurance coverage throughout the term of the construction of the City
10
4827-3975-9314v3/022042-0034
Improvements, which they will construct in conformance with the City’s standard procedures and
requirements. The City’s insurance requirements are set out in Section 20 herein.
(g) The Developer and all such contractors shall comply with such other
requirements relating to the construction of the City Improvements which the City may impose by
written notification delivered to the Developer and each such contractor at the time either prior to
the receipt of bids by the Developer for the construction of such City Improvements or, to the
extent required as a result of changes in applicable laws, during the progress of construction
thereof; provided that such other requirements shall only be imposed to the extent the City
reasonably determines they are required in order to comply with applicable law. In accordance
with Section 7, the Developer shall be deemed the awarding body and shall be solely responsible
for compliance and enforcement of the provisions of the Labor Code, Government Code, and
Public Contract Code.
(h) A “Change Order” is an order from the Developer to a contractor
authorizing a change in the work to be performed. The Developer shall receive c omments from
the City Representative prior to the Developer’s approval of any Change Order. The City
Representative shall comment on or deny the Change Order request within five (5) business days
of receipt of all necessary information. The City’s comments to a Change Order shall not be
unreasonably delayed, conditioned or withheld. The Developer shall not be entitled to be
compensated for costs associated with a “Change Order” that has not been approved by the City
Representative.
Developer shall provide proof to the City, at such intervals and in such form as the City
may reasonably require, that the foregoing requirements have been satisfied as to all of the City
Improvements as to which the Acquisition Election has been made which are funded through
Bond proceeds.
SECTION 7. INSPECTION; COMPLETION OF CONSTRUCTION
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements.
The City shall have primary responsibility for inspecting the City Improvements to assure
that the work is being accomplished in accordance with the Plans. Such inspection does not
include inspection for compliance with safety requirements by the Developer’s contractor(s). The
City’s personnel shall be granted access to each construction site at all reasonable times for the
purpose of accomplishing such inspection. Upon satisfaction of the City’s inspectors, the
Developer shall notify the City in writing that a City Improvement has been completed in
accordance with the Plans. Any actual costs reasonably incurred by the City for inspection not
previously paid by the Developer shall be reimbursed from funds in the City Improvements
Account.
Within three (3) business days of receipt of written notification from City inspectors that a
City Improvement has been completed in accordance with the Plans, the City Representative
shall notify the Developer in writing that such City Improvement has been satisfactorily completed.
Upon receiving such notification, the Developer shall file a Notice of Completion with the County
of Riverside Recorders Office, pursuant to the provisions of Section 3093 of the Civil Code. The
Developer shall furnish to the City a duplicate copy of each such Notice of Completion showing
11
4827-3975-9314v3/022042-0034
thereon the date of filing with the County of Riverside (the “County”). City will in turn file a notice
with the County for acceptance.
SECTION 8. LIENS
With respect to any City Improvement that was complete (as determined by the City
Council) prior to the adoption by the City Council of the resolution forming the CFD, prior to any
payment by the CFD to the Developer for such City Improvement, the Developer shall provide to
the City such evidence or proof as the City shall require that all persons, firms and corporations
supplying work, labor, materials, supplies and equipment for the construction of the City
Improvements have been paid, and that no claims of liens have been recorded by or on behalf of
any such person, firm or corporation. With respect to City Improvements, upon the earlier of (i)
receipt of all applicable lien releases, or (ii) expiration of the time for the recording of claim of liens
as prescribed by Sections 3115 and 3116 of the Civil Code, the Developer shall provide to the
City such evidence or proof as the City shall require that all persons, firms and corporations
supplying work, labor, materials, supplies and equipment for the construction of the City
Improvements have been paid, and that no claims of liens have been recorded by or on behalf of
any such person, firm or corporation.
SECTION 9. ACQUISITION; ACQUISITION PRICE; SOURCE OF FUNDS
The acquisition price of a City Improvement that was complete (as determined by the City
Council) prior to the adoption by the City Council of the resolution forming the CFD shall be its
fair market value, as determined by the City’s Assistant General Manager or his or her designee,
as of the date of acquisition. The City shall consider input and data provided by the Developer
prior to determining the final fair market value.
The costs eligible to be included in the acquisition price of a City Improvement that is not
described in the preceding paragraph (the “Actual Costs”) shall include:
(i) The actual hard costs for the construction of such City Improvement as
established by the City-approved construction contracts and approved
Change Orders, including costs of payment, performance and
maintenance bonds and insurance costs, pursuant to this Agreement;
(ii) The design and engineering costs of such City Improvement including,
without limitation, the costs incurred in preparing the Plans. Costs for plan
revisions will be considered on a case by case basis;
(iii) The costs of environmental evaluations and public agency permits and
approvals attributable to the City Improvement;
(iv) Costs incurred by the Developer for construction management and
supervision of such City Improvement, in an amount not to exceed five
percent (5%) of the actual hard construction costs described in clause (i)
above;
(v) Professional costs associated with the City Improvement such as
engineering, inspection, construction staking, materials, testing and similar
professional services; and
12
4827-3975-9314v3/022042-0034
(vi) Costs approved by the City in accordance with the Act of acquiring any real
property or interests therein required for the City Improvement including,
without limitation, any water tank sites, temporary construction easements,
temporary by-pass road and maintenance easements.
Provided the Developer has complied with the requirements of this Agreement, the City
agrees to pay the acquisition price of a completed City Improvement to the Developer or its
designee within thirty (30) days after the Developer’s satisfaction of the preconditions to such
payment stated herein, but only to the extent there are sufficient funds available in the City
Improvements Account. Except in the case of a City Improvement described in the first paragraph
of this Section, the acquisition price to be paid from Bond proceeds for the acquisition of a City
Improvement by the City shall be the least of (1) the value of the City Improvement; or (2) the total
of the Actual Costs of the City Improvement.
As a condition to the payment of the acquisition price, the ownership of the completed City
Improvement shall be transferred to the City by grant deed, bill of sale or such other
documentation as such public agency may require free and clear of all taxes, liens,
encumbrances, and assessments, but subject to any exceptions determined by the City to not
interfere with the actual or intended use of the land or interest therein (including the lien of a
community facilities district so long as the subject property is exempt from taxation or is otherwise
not taxable by such community facilities district). Upon the transfer of ownership of City
Improvements or any portion thereof to the City, the City shall be responsible for the maintenance
of such City Improvements or the portion transferred. Notwithstanding the foregoing, the
acquisition price of a City Improvement may be paid prior to transfer of ownership and acceptance
of the City Improvement if it is substantially completed at the time of payment. The City
Improvement shall be considered “substantially complete” when it has been reasonably
determined by the City to be usable, subject to final completion of such items as the final lift or
any other items not essential to the primary use or operation of the City Improvement. If the
acquisition price of a City Improvement is paid prior to transfer of ownership and acceptance
based on it being “substantially complete”, Developer may, upon transfer of ownership of such
City Improvement to the City, submit a second reimbursement request for any unpaid portion of
the Actual Costs associated with completing such improvement.
For purposes of determining the acquisition price to be paid by the Community Facilities
District for the acquisition of the City Improvements by the City (other than City Improvements
described in the first paragraph of this Section), the value of such City Improvements shall include
the construction costs specified in the City-approved contracts and City-approved Change Orders
conforming to Section 6, as hereinbefore specified. City approval is a condition prior to initiation
of contract work. However, if the City reasonably determines that the additional Actual Costs are
excessive and that the value of the City Improvements is less than the total amount of such Actual
Costs and such construction costs, the price to be paid for the acquisition of the City
Improvements shall be the value thereof as determined by the Engineer, subject, however, to the
Developer’s right to appeal to the City’s City Council.
Upon completion of the construction of a City Improvement, the Developer shall deliver or
cause to be delivered to the City a Disbursement Request Form in substantially the form of
Exhibit “D,” attached hereto, copies of the contract(s) with the contractor(s) who have
constructed the City Improvement and other relevant documentation with regard to the payments
made to such contractor(s) and each of them for the construction of the City Improvement,
documentation evidencing payment of prevailing wages, and shall also provide to the City
invoices and purchase orders with respect to all equipment, materials and labor purchased for
13
4827-3975-9314v3/022042-0034
the construction of the City Improvements. The City shall require the Engineer to complete its
determination of the acquisition price of the City Improvements as promptly as is reasonably
possible.
Notwithstanding the preceding provisions of this Section, the source of funds for the
acquisition of the City Improvements or any portion thereof shall be funds in the City
Improvements Account. If for any reason beyond the City’s control the Bonds are not sold, the
City shall not be required to acquire the City Improvements from the Developer, except to the
extent of funds from the collection of Special Taxes. In such event, the Developer shall complete
the design and construction and offer to the City ownership of such portions of the City
Improvements as are required to be constructed by the Developer as a condition to recordation
of subdivision maps for the Developer Property (but only at such times as required by such
condition), but need not construct any portion of the City Improvements which it is not so required
to construct. Reimbursement for these facilities would be made from the collection of Special
Taxes.
In addition to the foregoing, the City shall have the right to withhold payment for acquisition
of a City Improvement, if:
(a) the Developer or any of its affiliates is delinquent in the payment of any
Special Taxes levied by the Community Facilities District on properties then owned by the
Developer or any of its affiliates within the CFD, or
(b) the Developer is not then in substantial compliance with a condition or
obligation imposed upon the Developer Property by the City, including but not limited to, payment
of all applicable fees, dedication of all applicable rights-of-way or other property and construction
requirements.
The City shall immediately provide written notice to the Developer of the decision to
withhold any such payment and shall specify the reason for such decision. If the payment is
withheld as a result of the delinquency in the payment of Special Taxes, the notice shall identify
the delinquent parcels and the amount of such delinquency. If the payment is withheld as a result
of substantial non-compliance with a condition or obligation, the notice shall specify such condition
or obligation and what action will be necessary by the Developer to substantially comply with such
condition or obligation. Upon receipt of evidence reasonably satisfactory to the City that the
Developer has paid the delinquent Special Taxes or complied with the subject condition or
obligation, the City shall forthwith make all payments which have been withheld pursuant to the
provisions of this Section.
SECTION 10. EASEMENTS AND/OR FEE TITLE OWNERSHIP DEEDS
Without limiting the Developer’s rights to reimbursement for such grants pursuant to
Section 9 above, the Developer shall, at the time the City acquires the City Improvements as
provided in Section 9 hereof, grant or cause to be granted to the City, by appropriate instruments
prescribed by the City, all easements across private property and/or fee title ownership deeds
which may be reasonably necessary for the proper operation and maintenance of such City
Improvements, or any part thereof, but only to the extent located within the Developer Property.
14
4827-3975-9314v3/022042-0034
SECTION 11. PERMITS
The Developer shall be responsible for obtaining all necessary construction permits from
the City and/or the County (as appropriate) covering construction and installation of the City
Improvement as to which the Acquisition Election has been made. If applicable, the City will
request the County to issue an “operate and maintain permit” to the City, which will become
effective upon the completion of the City Improvements and acceptance of ownership therewith
by the City.
SECTION 12. MAINTENANCE
Prior to the transfer of ownership of a City Improvement by the Developer to the City, as
provided in Section 9 hereof, the Developer shall be responsible for the maintenance thereof and
shall require its contractor(s) to repair all facilities damaged by any party other than the City, prior
to acceptance by the City and/or make corrections determined to be necessary by the City’s
inspection personnel. The City shall not be permitted to place any City Improvement in service
prior to acceptance of the same, unless the Developer otherwise consents in writing.
SECTION 13. INSPECTION OF RECORDS
The City shall have the right to review all books and records of the Developer pertaining
to the costs and expenses incurred by the Developer for the design and construction of the City
Improvements during normal business hours by making arrangements with the Developer. The
Developer shall have the right to review all books and records of the City pertaining to costs and
expenses incurred by the City for services of the Engineer by making arrangements with the City.
SECTION 14. OWNERSHIP OF IMPROVEMENTS
Notwithstanding the fact that some or all of the City Improvements may be constructed in
dedicated street rights-of-way or on property which has been or will be dedicated to the City, each
City Improvement shall be and remain the property of the Developer until acquired by the City as
provided in this Agreement.
SECTION 15. MATERIALS AND WORKMANSHIP WARRANTY
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements.
Upon the completion of the acquisition of a City Improvement by the City, the performance
bond related to such individual City Improvement provided by the Developer pursuant to Section
6.4(e) hereof, shall be reduced by 90%, and the remaining 10% shall serve as a maintenance
bond to guarantee that such City Improvement will be free from defects due to faulty workmanship
or materials for a period of one year.
SECTION 16. CITY FEE FACILITY IMPROVEMENTS
The Developer may be required pursuant to the conditions of development or the fee
ordinance to pay certain City fees (the “City Fees”) relating to the City Fee Facility Improvements
prior to the availability of proceeds of the Bonds to pay for such City Fee Facility Improvements.
In the event such City Fees are paid prior to the availability of Bond proceeds, the amounts paid
15
4827-3975-9314v3/022042-0034
to the City shall be deemed to be deposits (each a “Deposit”) that are subject to refund by the
City to the Developer in accordance with this Agreement. The City shall place each Deposit in a
capital facilities account(s). If the Developer has made any Deposits to the City, then following
deposit of Bond proceeds in the City Fee Facility Improvements Account, the City shall return to
the Developer, from the capital account in which the Deposits were deposited the Deposits not
previously returned, without interest or other earnings thereon. The City shall be so obligated to
return such Deposits only to the extent that an equivalent amount of the Deposits to be returned
is deposited in the City Fee Facility Improvements Account from Bond proceeds or Special Tax
collections prior to the issuance of Bonds.
Bond proceeds used to finance City Improvements which relate to the City Fees shall be
allocated first for return of all Deposits prior to being allocated to the payment of City Fees not
previously deposited by the Developer. Any Deposits that have not been returned to the
Developer at the time it is determined that there will be no further Bond proceeds available (i.e.
the final series of Bonds to finance the Improvements have been issued) shall be retained by the
City and may be used for the purposes for which the City Fee was required, and the unrefunded
Deposits shall constitute full and final payment for such City Fees, without any increase of any
kind.
SECTION 17. MISCELLANEOUS IMPROVEMENTS.
Improvements unrelated to the City Improvements and the City Fee Facility
Improvements, if applicable, will be supplemented by the terms contained in an addendum which
will appear as Exhibit “E” hereto. The amounts deposited in the applicable Miscellaneous
Improvement Account(s), if any, will be disbursed for the acquisition or construction of
Miscellaneous Improvements in accordance with the provisions in the applicable Joint Community
Facilities Agreement, if any. Any amounts in the applicable Miscellaneous Improvement
Account(s) shall be disbursed at the written direction of the City upon Developer’s submittal of an
addendum which will appear as the applicable entity’s Disbursement Request Form provided for
in the Joint Community Facilities Agreement. Upon receipt of the Disbursement Request Form,
the City shall submit a written requisition for payment of the requested amount to the trustee for
the Bonds, who shall directly pay the amount requested to the applicable entity.
SECTION 18. INDEPENDENT CONTRACTOR
In performing this Agreement, Developer is an independent contractor and not the agent
of the City. The City shall not have any responsibility for payment to any contractor or supplier of
Developer. It is not intended by the Parties that this Agreement create a partnership or joint
venture among them and this Agreement shall not otherwise be construed.
SECTION 19. INDEMNIFICATION
Developer shall assume the defense of, indemnify and save harmless, the City, its officers,
employees and agents, and the Community Facilities District, its officers, employees and agents,
from and against all actions, damages, claims, losses or expenses of every type and description
to which they may be subject or put, by reason of, or resulting from such person’s or entity’s
performance of its obligations under this Agreement, the issuance of the Bonds and the
construction of the City Improvements and the Miscellaneous Improvements (provided, however,
that such indemnification shall not apply to any City Improvement that the City constructs itself
pursuant to Section 6.3 of this Agreement), the failure of the Developer to provide notice of the
Special Tax to be levied by the Community Facilities District pursuant to Section 53341.5 of the
16
4827-3975-9314v3/022042-0034
Act (but only if the Developer is required by law to provide such notice), or arising out of any
alleged misstatements of fact or alleged omission of a material fa ct made by the Developer, its
officers, directors, employees or agents to the City, the Community Facilities District, the
underwriter of the Bonds and its counsel, the appraiser, the special tax consultant, the market
absorption consultant or bond counsel regarding the Developer, its proposed developments, its
property ownership, and any contractual arrangement it may enter into in a disclosure document
describing the Community Facilities District and the risks relating to the Bonds. No provision of
this Agreement shall in any way limit the extent of Developer’s responsibility for payment of
damages resulting from the operations of Developer and its contractors; provided, however that
Developer shall not be required to assume the defense or indemnify and save harmless any
person or entity as to actions, damages, claims, losses or expenses resulting from the breach of
this Agreement, the negligence or willful misconduct of such person or entity or their officers,
agents, consultants or employees.
SECTION 20. INSURANCE REQUIREMENTS
Neither the Developer nor its contractor shall commence work on a City Improvement
under this Agreement prior to obtaining insurance with a company or companies acceptable to
the City, nor shall the Developer’s contractor allow any subcontractor to commence work on its
subcontract until all insurance required of the subcontractor has been obtained.
The Developer shall, during the life of this Agreement, notify the City in writing of any
incident giving rise to any potential bodily injury or property damage claim and any resultant
settlements, whether in conjunction with this or any other project which may affect the limits of
the required coverage, as soon as is reasonable and practical.
SECTION 21. CONFLICT WITH OTHER AGREEMENTS
Except as specifically provided herein, nothing contained herein shall be construed as
releasing Developer from any condition of development or requirement imposed by any other
agreement with City. In the event of a conflicting provision, such other agreement shall prevail
unless such conflicting provision is specifically waived or modified in writing by City.
SECTION 22. TERMINATION
The provisions of this Agreement related to the financing of the Improvements shall
terminate and be of no further force or effect on December 31, 2030. Notwithstanding the
foregoing, this Agreement shall not terminate pursuant to the previous sentence if, on December
31, 2030, all of the building permits within the Community Facilities District have been pulled,
construction within the Community Facilities District, as contemplated by the parties hereto, is
ongoing, and the Developer has not yet received a full return of all Deposits or full reimbursement
for the Miscellaneous Improvements from Special Taxes.
SECTION 23. 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 (72) hours following deposit of the same in any United States Post Office in California,
registered or certified, postage prepaid. Any notice to the Community Facilities District or the City
shall be addressed to City of Lake Elsinore, 130 South Main Street, Lake Elsinore, CA 92530,
17
4827-3975-9314v3/022042-0034
Attention: Assistant City Manager. Any notice to Developer shall be addressed to 2618 San
Miguel Dr. #503, Newport Beach, CA 92660, Attention Leonard Leichnitz.
Each Party may change its address for delivery of notice by delivering written notice of
such change of address to the other Party hereto.
SECTION 24. NO GIFT OR WAIVER.
24.1 No Gift or Waiver for City Improvements. The Developer and the City acknowledge
that:
(a) The Developer or its predecessor may have constructed or may be
constructing City Improvements before funds that will be used to acquire them are available with
the expectation that the Developer will be reimbursed for such City Improvements to the extent
and in the manner set forth in this Agreement.
(b) The City may inspect City Improvements and process Disbursement
Request Forms even if funds from the proceeds of Bonds available at the time of such inspection
and processing do not exist or are not then sufficient to satisfy the Disbursement Request in full.
(c) The Developer may convey City Improvements to the City and the City may
accept such City Improvements even if funds from the proceeds of Bonds available at the time of
such conveyance and acceptance do not exist or are not then sufficient to satisfy the
Disbursement Request in full.
(d) If the City accepts City Improvements before a Disbursement Request is
paid in full, the unpaid balance of the Disbursement Request will be paid from time to time, in any
number of installments and irrespective of the length of time payment is deferred, as funds from
the proceeds of Bonds become available.
(e) The Developer’s conveyance or dedication of City Improvements to the City
before the availability of funds from the proceeds of Bonds to acquire the City Improvements is
not, and shall not be deemed, a gift or a waiver of the Developer’s right to payment of the purchase
price of such City Improvements pursuant to this Agreement.
24.2 No Gift or Waiver for City Fees. The Developer and the City acknowledge that:
(a) Prior to the availability of funds from the proceeds of Bonds, the Developer
or its predecessor may have been or may be required to deposit funds to assure payment of
applicable fees of the City.
(b) The Developer or its predecessor has deposited or will be depositing such
funds with the expectation that the Developer will be reimbursed for these deposits to the e xtent
and in the manner set forth in this Agreement.
(c) The reimbursement of such deposits pursuant to Section 16 of this
Agreement may occur from time to time, in any number of installments and irrespective of the
length of time payment is deferred, as funds become available.
18
4827-3975-9314v3/022042-0034
(d) The Developer’s deposit of such funds to the City before the availability of
funds to reimburse the Developer is not, and shall not be deemed, a gift or a waiver of the
Developer’s right to reimbursement of such deposits pursuant to this Agreement.
SECTION 25. GENERAL PROVISIONS
(a) Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the City and the Developer and their respective heirs, executors, legal
representatives, successors, and authorized assigns.
(b) Amendment. This Agreement may be amended at any time but only in
writing signed by each Party hereto.
(c) Entire Agreement. This Agreement, and the agreements referenced
herein, contains the entire understanding and 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. There are no oral or written
representations, understanding, undertakings or agreements which are not contained or
expressly referred to herein, and any such representations, understandings or agreements are
superseded by this Agreement. This Agreement shall be binding upon, and enforceable by and
against the Community Facilities District upon the establishment of the Community Facilities
District.
(d) Exhibits. All exhibits attached hereto are incorporated into this Agreement
by reference.
(e) 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.
(f) 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.
(g) No Third Party Beneficiaries. Except as provided explicitly in this
Agreement, no person or entity shall be deemed to be a third party beneficiary hereof, and nothing
in this Agreement (either express or implied) is intended to confer upon any person or entity, other
than the City, the Community Facilities District, and Developer (and their respective successors
and assigns), any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(h) 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.
(i) Assignment. Developer 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 Developer, in a form reasonably acceptable to
Developer 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 Developer
19
4827-3975-9314v3/022042-0034
pursuant to this Agreement and to be bound thereby. A company that acquires all of the assets
of the Developer, including ownership of the Developer itself, shall be deemed a successor and
shall not require an assignment or assumption agreement to be bound by, and enjoy the benefits
of, this Agreement.
(j) Governing Law. This Agreement and any dispute arising hereunder shall
be governed by and interpreted in accordance with the laws of the State of California.
(k) Construction of Agreement. This Agreement has been reviewed by legal
counsel for both the City and Developer and shall be deemed for all purposes to have been jointly
drafted by the City and Developer. No presumption or rule that ambiguities shall be construed
against the drafting Party shall apply to the interpretation or enforcement of this Agreement.
(l) Attorneys’ Fees. In the event of any action or proceeding, including an
arbitration or a reference pursuant to Section 638, et seq., of the Code of Civil Procedure brought
by any Party against any other under this Agreement, the prevailing Party shall be entitled to
recover its actual attorneys’ fees and all fees, costs and expenses incurred for prosecution,
defense, consultation, or advice in such action or proceeding. In addition to the foregoing, the
prevailing Party shall be entitled to its actual attorneys’ fees and all fees, costs and expenses
incurred in any post-judgment proceedings to collect or enforce the judgment. This provision is
separate and several and shall survive the merger of this Agreement into any judgment on this
Agreement.
(m) Venue and Forum. Any action at law or in equity arising under this
Agreement brought by any Party hereto for the purpose of enforcing, construing or determining
the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the
County of Riverside, State of California, and the Parties waive all provisions of law providing for
the filing, removal or change of venue to any other Court.
(n) Entire Agreement. Except as provided in an addendum, which if
applicable, will appear as Exhibit “E” hereto, this Agreement sets forth and contains the entire
understanding and agreement of the Parties. There are no oral or written representations,
understandings, undertaking or agreements, which are not contained or expressly referred to
herein, and any such representations, understandings or agreements are superseded by this
Agreement. No evidence of any such representations, understandings or agreements shall be
admissible in any proceeding of any kind or nature relating to the terms or conditions of this
Agreement, its interpretation or breach.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
S-1
4827-3975-9314v3/022042-0034
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year written below.
Dated: ______, 2020 CITY OF LAKE ELSINORE, a political subdivision of
the State of California
By:
Assistant City Manager
ATTEST:
By:
Candice Alvarez, MMC, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY OF THE CITY OF LAKE ELSINORE
By:
Barbara Leibold, City Attorney
[SIGNATURES CONTINUED ON NEXT PAGE.]
S-2
4827-3975-9314v3/022042-0034
[SIGNATURE PAGE CONTINUED]
JLJ, L.P., a California limited partnership, record
owner of the Property
By:
4827-3975-9314v3/022042-0034
LIST OF EXHIBITS
EXHIBIT A - DESCRIPTION OF DEVELOPER PROPERTY
EXHIBIT B - DESCRIPTION OF COST ESTIMATES
EXHIBIT C - NOTICE OF SPECIAL TAX (as prepared by Developer)
EXHIBIT D - DISBURSEMENT REQUEST FORM
EXHIBIT E - ADDENDUM
A-1
4827-3975-9314v3/022042-0034
EXHIBIT A
DESCRIPTION OF DEVELOPER PROPERTY
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as
follows:
Assessor’s Parcel Nos:
373-071-020
373-071-021
373-071-022
373-071-023
373-071-025
B-1
4827-3975-9314v3/022042-0034
EXHIBIT B
DESCRIPTION OF COST ESTIMATES OF THE IMPROVEMENTS
The Improvements consist of the City Fee Facility Improvements and the City
Improvements, as described below. Any other types of Improvements will be described in an
addendum to this Agreement appearing as Exhibit “E.”
I. CITY FEE FACILITY IMPROVEMENTS.
City facilities included in the City’s development fee programs used to finance expansion
projects, exclusive of in-tract facilities constructed by a property owner, but including and not
limited to the following:
Estimated Cost of the City Fee Improvements
Description Estimated Cost
Park Improvements $ 144,000
Storm Drain Improvements 78,061
Traffic Improvements 86,310
Library Facilities 13,500
City Hall and Public Works Facilities 36,360
Community Center Facilities 24,480
Marina Facilities 35,010
Animal Shelter Facilities 15,660
Fire Facilities 55,080
Total Fees $ 488,461
II. CITY IMPROVEMENTS.
Those facilities constructed by or on behalf of the Developer and needed by City in order
to provide services to the Developer Property and also includes any of the following:
Estimated Cost of the City Improvements
Description Estimated Cost
Offsite Storm Drainage $ 151,160
Offsite Streets 353,902
Total Improvements $ 505,062
C-1
4827-3975-9314v3/022042-0034
EXHIBIT C
NOTICE OF SPECIAL TAX
(as prepared by Developer)
D-1
4827-3975-9314v3/022042-0034
EXHIBIT D
CITY OF LAKE ELSINORE
CFD NO. 2006-6 (TESSERA)
DISBURSEMENT REQUEST FORM
1. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) (the
“CFD”) is hereby requested to pay from the ________________________ Account, or any
applicable account or sub-account thereof, established by the CFD in connection with its 20__
Special Tax Bonds (the “Bonds”) to City of Lake Elsinore (the “City”) as payee, the sum set forth
below:
$_____________________ (the Requested Amount”)
2. The Requested Amount represents the payment of City Fees for ___ lot(s) within
the boundaries of the CFD (the “Property”).
(Tract No. __________, Lot Nos. ________________).
Or, City Improvements as supported by attached documentation.
3. The Requested Amount is due and payable, has not formed the basis of any prior
request or disbursement.
4. The City, as payee, is hereby directing payment of the Requested Amount be
payable to JLJ, L.P., a California limited partnership (the “Developer”), pursuant to the wiring
instructions attached hereto.
5. The Requested Amount is authorized and payable pursuant to the terms of the
certain Acquisition, Construction and Funding Agreement (the “Agreement”) between the City of
Lake Elsinore, acting for and on behalf of itself and the CFD and Developer.
6. Capitalized undefined terms used herein shall have the meaning ascribed to them
in the Agreement.
D-2
4827-3975-9314v3/022042-0034
Dated: DEVELOPER:
JLJ, L.P., a California limited partnership
By:
Name:
Title: Authorized Representative
Dated: CITY OF LAKE ELSINORE
By:
Its:
[ATTACH WIRING INSTRUCTIONS]
E-1
4827-3975-9314v3/022042-0034
EXHIBIT E
ADDENDUM
DESCRIPTION OF THE MISCELLANEOUS IMPROVEMENT
Estimated Cost of the Water District Improvements
Description Estimated Cost
Water Connection Improvements $ 1,260,540
Sewer Capacity Improvements 709,740
Water Connection Improvements - Irrigation 92,614
Offsite Water Improvements 576,538
Offsite Sewer Improvements 272,216
Total $ 2,911,648
Stradling Yocca Carlson & Rauth
Draft of 11/25/20
4837-8786-6322v3/022042-0034
JOINT COMMUNITY FACILITIES AGREEMENT
BY AND AMONG
CITY OF LAKE ELSINORE
AND
ELSINORE VALLEY MUNICIPAL WATER DISTRICT
AND
JLJ, L.P.
(City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera)
THIS JOINT COMMUNITY FACILITIES AGREEMENT (“Agreement”) is dated ____,
2020, by and among the ELSINORE VALLEY MUNICIPAL WATER DISTRICT, County of
Riverside, State of California, a municipal water district (“EVMWD”) organized and operating
pursuant to the Municipal Water District Law of 1911 as set forth in the California Water Code,
the CITY OF LAKE ELSINORE, a municipal corporation (“City”), and JLJ, L.P., a California limited
partnership (“Property Owner”).
R E C I T A L S:
A. Property Owner is the owner of certain real property located within the boundaries
of the EVMWD and the City and described in Exhibit “A” hereto (the “Property”).
B. Property Owner intends to develop the Property for residential purposes and has
obtained or intends to obtain the necessary development approvals to construct approximately
90 dwelling units on the Property, as such development may be modified from time to time (the
“Project”).
C. The Project will require the payment, pursuant to the rules and regulations of
EVMWD, as amended from time to time (“EVMWD Rules and Regulations”), of certain EVMWD
Charges (defined below). The EVMWD Charges may be paid directly to EVMWD, or paid and
then reimbursed to the paying party, when Bond Proceeds (defined below) are available to fund
an equal amount of such EVMWD Charges so paid.
D. The Project will also benefit, in whole or in part, from the construction of certain
Acquisition Facilities (defined below and described on Exhibit “B” attached hereto). EVMWD
and the Property Owner agree that any Acquisition Facilities to be constructed by Property Owner
shall be eligible for acquisition by EVMWD and the costs thereof shall be eligible for
reimbursement out of Bond Proceeds pursuant to this Agreement.
E. In conjunction with the recording of the final subdivision map(s) for the Project, the
issuance of building permits for the construction of homes within the Project and/or receipt of
water meters for such homes, it may be necessary for Property Owner, or its successors or
assigns, to advance EVMWD Charges to EVMWD (the “Advances”) before any Bond Proceeds
are available to pay for EVMWD Charges. In such case, Property Owner shall be entitled to
(i) reimbursement of such Advances and (ii) credit for payments made to the EVMWD from Bond
Proceeds for EVMWD Charges which would otherwise be due to the EVMWD in conjunction with
the Project, all as further described herein.
2
4837-8786-6322v3/022042-0034
F. The Project will also require certain public improvements to be owned, operated or
maintained by the City (the “City Improvements”) which will also be eligible for financing through
the CFD (defined below).
G. Pursuant to the request of the Property Owner, the City Council of the City has
formed the CFD pursuant to the Act (defined below) to provide financing of the EVMWD Charges,
Acquisition Facilities and City Improvements.
H. The City and EVMWD are authorized by Section 53313.5 of the Act to pay for or
finance, by means of the CFD, the EVMWD Charges, Acquisition Facilities and City
Improvements. This Agreement constitutes a “joint community facilities agreement” (“JCFA”)
within the meaning of Section 53316.2 of the Act by and among EVMWD, the City and Property
Owner, pursuant to which the CFD is authorized to finance the City Improvements and EVMWD
Charges and to finance the construction and acquisition of Acquisition Facilities. As provided by
Section 53316.6 of the Act, responsibility for providing and operating the Acquisition Facilities is
delegated to EVMWD to the extent set forth herein and responsibility for constructing, providing
and operating the City Improvements is delegated to the City.
I. The provision of the City Improvements, Acquisition Facilities and EVMWD
Charges is necessitated by the Project, and the parties hereto find and determine that the
residents of the City and EVMWD will be benefited by the payment of EVMWD Charges and
construction and acquisition of the Acquisition Facilities and the City Improvements and that this
Agreement is beneficial to the interests of such residents.
ARTICLE I
GENERAL PROVISIONS
Section 1.1 Recitals. The above recitals are true and correct and are hereby
incorporated by this reference.
Section 1.2 Definitions. Unless the context clearly otherwise requires, the terms
defined in this Section shall, for all purposes of this Agreement, have the meanings herein
specified.
(a) “Act” means the Mello-Roos Community Facilities Act of 1982, as
amended, commencing with California Government Code Section 53311, et seq.
(b) “Acquisition Facility or Facilities” means those sewer and water facilities
listed on Exhibit “B” hereto, which are eligible to be constructed by the Property Owner, acquired
by EVMWD and paid for with Bond Proceeds.
(c) “Acquisition Price” means the amount to be paid out of Bond Proceeds for
an Acquisition Facility.
(d) “Actual Costs” with respect to an Acquisition Facility includes: (i) the actual
hard construction costs including labor, materials and equipment costs, (ii) the costs incurred in
design, engineering and preparation of plans, (iii) the fees paid to consultants and government
agencies in connection with and for obtaining permits, licenses or other required governmental
approvals, (iv) a construction management fee of 5% of the costs described in clause (i) above,
(v) professional costs such as engineering, legal, accounting, inspection construction staking,
materials testing and similar professional services, (vi) costs of payment, performance of
3
4837-8786-6322v3/022042-0034
maintenance bonds, and insurance costs (including the costs of any title insurance) and (vii) the
value of any real property or interests therein that (1) are required for the construction of the
Acquisition Facility such as temporary construction easements, haul roads, etc. and (2) are
required to be conveyed with such Acquisition Facility in an amount equal to the fair market value
of such real property or interests therein.
(e) “Advances” means an amount paid by Property Owner for EVMWD
Charges prior to the issuance and sale of Bonds and which are eligible for reimbursement upon
availability of Bond Proceeds to fund an equal amount of such Advances.
(f) “Agreement” means this Joint Communities Facilities Agreement.
(g) “Bond Proceeds” or “Proceeds of the Bonds” shall mean those net funds
generated by the sale of the Bonds.
(h) “Bond Resolution” means that Resolution, Resolution Supplement, Fiscal
Agent Agreement, Indenture of Trust or other equivalent document(s) providing for the issuance
of the Bonds.
(i) “Bonds” shall mean those bonds, or other securities, issued by, or on behalf
of the CFD, as authorized by the qualified electors within the CFD.
(j) “CFD” means City of Lake Elsinore Community Facilities District No. 2006-
6 (Tessera).
(k) “Engineer” means the engineering firm or in-house personnel used by
EVMWD to determine the value of an Acquisition Facility to be acquired with Bond Proceeds.
(l) “EVMWD Charges” means water connection fees, sewer connection fees,
annexation fees and all components thereof of the EVMWD imposed upon the Project to pay for
the provision of water and sewer services to and the construction of EVMWD water and sewer
facilities required to serve the Project.
(m) “EVMWD Facilities Fund” means the fund, account or sub-account of the
CFD (regardless of its designation within the Bond Resolution) into which a portion of the Bond
Proceeds may be deposited, in accordance with the Bond Resolution and Funding Agreement to
finance the construction and acquisition of the Acquisition Facilities and to pay EVMWD Charges.
(n) “EVMWD Representative” means the EVMWD Chief Engineer or his
Designee.
(o) “Facilities” means the City Improvements, Acquisition Facilities and
EVMWD Charges.
(p) “Field Engineer” shall have the meaning ascribed to the term in Section 3.
(q) “Funding Agreement” shall mean the Acquisition, Construction and
Funding Agreement between City and Property Owner relating to the CFD, as it may be amended
from time to time.
4
4837-8786-6322v3/022042-0034
(r) “Party” or “Parties” shall mean any one or all of the parties to this
Agreement, including the CFD.
(s) “Plans and Specifications” shall mean the plans and specifications for the
design and construction of an Acquisition Facility as approved by EVMWD, which approval shall
not be unreasonably withheld.
(t) “Rate and Method” means the Rate and Method of Apportionment of the
Special Tax authorizing the levy and collection of special taxes pursuant to proceedings
undertaken for the formation of the CFD pursuant to the Act.
(u) “State” means the State of California.
(v) “Special Taxes” means the special taxes authorized to be levied and
collected pursuant to the Rate and Method.
(w) “Substantially Complete,” “Substantially Completed” or “Substantial
Completion” with respect to an Acquisition Facility means that such Acquisition Facility is
substantially complete in accordance with its Plans and Specifications and is available for use by
the public for its intended purpose, notwithstanding any final “punch list” items still required to be
completed, unless such items are required for the safe operation of such Acquisition Facility, and
shall be based upon approval of EVMWD’s inspectors, which shall not be unreasonably withheld.
ARTICLE II
ISSUANCE OF BONDS
Section 2.1 Issuance and Sale of Bonds. The City Council of the City, acting as the
legislative body of the CFD, may, in its sole discretion, in accordance with its adopted policies
and the Funding Agreement adopt the Bond Resolution and issue the Bonds to finance the
Facilities.
Section 2.2 Bond Proceeds. Upon the issuance and sale of each series of Bonds,
and receipt of the Bond Proceeds, the City shall determine the amount of the Bond Proceeds
allocable to finance construction and acquisition of Acquisition Facilities and to pay EVMWD
Charges in accordance with the Funding Agreement, and shall deposit such amount in the
EVMWD Facilities Fund.
In conjunction with the recording of the final subdivision maps for the Property, the
issuance of building permits for the construction of homes within the Property and/or receipt of
water meters for such homes, it may be necessary for Property Owner, or its successors of
assigns, to make Advances before Bonds are issued. Upon the issuance and sale of the Bonds,
Property Owner may execute and submit a payment request to the CFD requesting disbursement
of an amount equal to all Advances from the EVMWD Facilities Fund. The Property Owner shall
only be entitled to receive reimbursement of the Advances if Bond Proceeds equal to the amount
of such Advances to be reimbursed are deposited in the EVMWD Facilities Fund.
From time to time following the issuance and sale of the Bonds, Property Owner shall
authorize EVMWD in writing to request a disbursement from the EVMWD Facilities Fund to fund
EVMWD Charges. Upon such notice and EVMWD’s receipt of such disbursement, Property
Owner shall be deemed to have satisfied the applicable EVMWD Charges with respect to the
5
4837-8786-6322v3/022042-0034
number of dwelling units or lots for which the EVMWD Charges would otherwise have been
required in an amount equal to such disbursement.
EVMWD agrees that it will request a disbursement of Bond Proceeds only for costs related
to the EVMWD facilities that are eligible for financing under the Act. With respect to the
Acquisition Facilities, EVMWD agrees that prior to requesting payment from the CFD it shall
review and approve all costs included in its request. With respect to all EVMWD Charges,
EVMWD agrees that prior to requesting payment from the CFD it shall review and approve all
costs included in its request. EVMWD will submit a request for disbursement of Bond Proceeds
along with adequate supporting documentation to the District which shall be in the form attached
hereto as Exhibit “C.”
EVMWD agrees that in processing the above disbursements with respect to EVMWD
facilities, 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 Bond Proceeds, EVMWD agrees that it shall provide to the CFD, a certificate to the
effect that EVMWD confirms the representations contained in Section 2.2 hereof, EVMWD agrees
to comply with the provisions of the tax certificate delivered by the CFD in connection with the
Bonds, and such other matters as the CFD may reasonably request upon which the CFD 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.
Section 2.3 Responsibility for EVMWD Charges and Acquisition Facilities.
(a) The Parties hereto acknowledge and agree that the final responsibility for
the payment of the EVMWD Charges and the design, construction and dedication of Acquisition
Facilities to be constructed by Property Owner lies with the Property Owner.
(b) If the amounts derived from Bond Proceeds deposited in the EVMWD
Facilities Fund, including investment earnings thereon, if any, are not sufficient to fund the total
cost of the EVMWD Charges and Acquisition Facilities to be constructed by Property Owner, the
parties hereto agree that all responsibility and liability for the amount of such shortfall shall be and
remain with the Property Owner and shall not lie with the City, CFD or EVMWD.
(c) In addition to financing the EVMWD Charges described above, the Parties
acknowledge that EVMWD may require the Property Owner, pursuant to the EVMWD Rules and
Regulations, to design, construct and dedicate to EVMWD Acquisition Facilities as a condition to
providing water and sewer service to the Property. The Parties also agree and acknowledge that
all responsibility and obligation for the design, construction and dedication of such Acquisition
Facilities to EVMWD, in accordance with all applicable statutes and the EVMWD Rules and
Regulations, shall be and remain the responsibility of the Property Owner.
(d) EVMWD agrees to utilize or apply funds provided to it by the CFD, in
accordance with the Act and other applicable law, and as set forth herein, for the EVMWD
Charges and Acquisition Facilities to be constructed by Property Owner.
(e) Property Owner shall indemnify, defend, and hold harmless, the City, CFD,
and EVMWD, their respective 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 the design, engineering,
6
4837-8786-6322v3/022042-0034
construction, and transfer of ownership of the Acquisition Facilities constructed by Property
Owner.
(f) EVMWD shall indemnify, defend, and hold harmless, the City, CFD and
Property Owner, their respective 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 the design, engineering,
construction, and acquisition of the Acquisition Facilities constructed by EVMWD and the facilities
constructed with the proceeds of the EVMWD Charges.
Section 2.4 Responsibility for Debt Service or Special Taxes. EVMWD shall have
no obligation, responsibility, or authority with respect to the issuance and sale of the Bonds, the
Bond Proceeds available to finance the construction and acquisition of the Acquisition Facilities
and to pay EVMWD Charges, the payment of the principal and interest on the Bonds, or for the
levy of the Special Taxes to provide for the payment of principal and interest thereon. The CFD
shall have the sole authority and responsibility for all such matters.
The Parties hereto specifically agree that the liabilities of the CFD, including liabilities, if
any, of the CFD pursuant to the documents providing for the issuance of Bonds, including the
Bond Resolution, shall not be or become liabilities of EVMWD.
Section 2.5 Administration of the CFD. The City shall have the power and duty to
provide for the administration of the CFD once it is formed, subject to the terms hereof and the
Funding Agreement, including employing and compensating all consultants and providing for the
various other administration duties set forth in this Agreement. It is understood and agreed by
Parties hereto that EVMWD will not be considered a participant in the proceedings relative to
formation of the CFD or the issuance of the Bonds, other than as a Party to this Agreement.
ARTICLE III
CONSTRUCTION AND ACQUISITION OF ACQUISITION FACILITIES
Section 3.1 Construction of Acquisition Facilities by Property Owner. The
following provisions of this Article III shall apply solely with respect to those Acquisition Facilities
to be constructed by the Property Owner and acquired by EVMWD with Bond Proceeds:
(a) The Property Owner will complete the Plans and Specifications for such
Acquisition Facilities. The Plans and Specifications shall include EVMWD’s standard
specifications and shall be subject to EVMWD approval, which shall not be unreasonably
withheld. EVMWD agrees to process any Plans and Specifications for approval with reasonable
diligence and in a timely manner. The Property Owner may proceed with the construction of any
such Acquisition Facilities in accordance with the provisions of Section 3.2 hereof. A qualified
engineering firm (the “Field Engineer”) shall be employed by Property Owner to provide all field
engineering surveys determined to be necessary by the EVMWD inspection personnel. Field
Engineer shall promptly furnish to EVMWD a complete set of grade sheets listing all locations,
offsets, etc., in accordance with good engineering practices, and attendant data and reports
resulting from the Field Engineer’s engineering surveys and/or proposed facility design changes.
EVMWD shall have the right, but not the obligation, to review, evaluate and analyze whether such
results comply with applicable specifications.
(b) A full-time soils testing firm, approved by EVMWD, shall be employed by
Property Owner to conduct soil compaction testing and certification. Property Owner shall
7
4837-8786-6322v3/022042-0034
promptly furnish results of all such compaction testing to the EVMWD for its review, evaluation
and decision as to compliance with applicable specifications. In the event the compaction is not
in accordance or compliance with applicable specifications, Property Owner shall be fully liable
and responsible therefore. A final report shall be required fully certifying trench compaction efforts
prior to acceptance of each of the Acquisition Facilities.
(c) The cost of all surveying, compaction testing and report costs associated
with such Acquisition Facilities furnished and constructed by any contractors or sub-contractors
(collectively, “Contractors”) shall be included among the costs which are eligible to be paid from
the EVMWD Facilities Fund.
(d) EVMWD shall not be responsible for conducting any environmental,
archaeological, biological, or cultural studies or any mitigation requirements related to the
Acquisition Facilities to be constructed by Property Owner that may be requested by appropriate
Federal, State, and/or local agencies. Any such work shall be paid for and such work shall be
conducted by, or on behalf of Property Owner and the costs of such work shall be eligible to be
paid from the EVMWD Facilities Fund.
Section 3.2 Public Works Requirements. In order to insure that the Acquisition
Facilities to be constructed by the Property Owner, completed after formation of the CFD and
acquired with Bond Proceeds will be constructed as if they had been constructed under the
direction and supervision, or under the authority of, the EVMWD, so that they may be acquired
by the EVMWD pursuant to Government Code Section 53313.5, the Property Owner shall comply
with all of the following requirements:
(a) The Property Owner shall obtain bids for the construction of such
Acquisition Facilities in conformance with the standard procedures and requirements of the
EVMWD with respect to its public works projects or in a manner which is approved by the EVMWD
Representative.
(b) The contract or contracts for the construction of such Acquisition Facilities
shall be awarded to the responsible bidder(s) submitting the lowest responsive bid(s) for the
construction of such Acquisition Facilities.
(c) The Property Owner shall require, and the specifications and bid and
contract documents shall require all such Contractors to pay prevailing wages and to otherwise
comply with applicable provisions of the Labor Code, the Government Code and the Public
Contract Code relating to public works projects and as required by the procedures and standards
of the EVMWD with respect to the construction of its public works projects.
(d) Said Contractors shall be required to furnish labor and material payment
bonds and contract performance bonds in an amount equal to 100 percent of the contract price
naming the Property Owner and the EVMWD as obligees and issued by insurance or surety
companies approved by the EVMWD. All such bonds shall be in a form approved by the EVMWD
Representative. Rather than requiring its Contractors to provide such bonds, the Property Owner
may elect to provide the same for the benefit of its Contractors.
(e) All such Contractors shall be required to provide proof of insurance
coverage throughout the term of the construction of such Acquisition Facilities which they will
construct in conformance with EVMWD’s standard procedures and requirements.
8
4837-8786-6322v3/022042-0034
(f) The Property Owner and all such Contractors shall comply with such other
requirements relating to the construction of such Acquisition Facilities which the EVMWD may
impose by written notification delivered to the Property Owner and each such Contractor at any
time either prior to the receipt of bids by the Property Owner for the construction of such
Acquisition Facilities or, to the extent required as a result of changes in applicable laws, during
the progress of construction thereof. In accordance with this Section 3.2, the Property Owner
shall be deemed the awarding body and shall be solely responsible for compliance and
enforcement of the provisions of the Labor Code, Government Code, and Public Contract Code
of the State of California.
The Property Owner shall provide proof to the EVMWD, at such intervals and in such form
as the EVMWD Representative may require, that the foregoing requirements have been satisfied
as to all of the Acquisition Facilities constructed by Property Owner, acquired by EVMWD and
paid for with Bond Proceeds.
Section 3.3 Inspection; Completion of Construction. EVMWD shall have primary
responsibility for providing inspection of the construction of the Acquisition Facilities constructed
by the Property Owner to insure that the construction is accomplished in accordance with the
Plans and Specifications. EVMWD’s personnel shall have access to the site of the work at all
reasonable times for the purpose of accomplishing such inspection. Upon Substantial Completion
of the construction of such Acquisition Facilities by Property Owner, the Property Owner shall
notify the EVMWD in writing that the construction of such Acquisition Facilities has been
Substantially Completed.
Upon receiving such written notification from the Property Owner, and upon receipt of
written notification from its inspectors that construction of any of the Acquisition Facilities by
Property Owner has been Substantially Completed, the EVMWD shall in a timely manner notify
the Property Owner in writing that the construction of such Acquisition Facilities has been
satisfactorily completed. Upon receiving such notification, the Property Owner shall forthwith file
with the County Recorder of the County of Riverside a Notice of Completion in accordance with
procedures of the County of Riverside. The Property Owner shall furnish to the EVMWD a
duplicate copy of each such Notice of Completion showing thereon the date of filing with the
County Recorder. Any actual costs reasonably incurred by the EVMWD in inspecting and
approving the construction of any Acquisition Facilities by Property Owner not previously paid by
the Property Owner shall be eligible to be reimbursed from the EVMWD Facilities Fund or paid
directly by Property Owner.
Section 3.4 Liens. The Property Owner shall provide to the EVMWD such evidence or
proof as the EVMWD shall require that all persons, firms and corporations supplying work, labor,
materials, supplies and equipment on behalf of Property Owner for the construction of any
Acquisition Facilities have been paid, and that no claims of liens have been recorded by or on
behalf of any such person, firm or corporation.
Section 3.5 Acquisition, Acquisition Price; Source of Funds. Provided the Property
Owner has complied with the requirements of this Agreement, EVMWD agrees to acquire the
Acquisition Facilities from the Property Owner. The price to be paid by the CFD for the acquisition
of such Acquisition Facilities by EVMWD (the “Acquisition Price”) shall be the lesser of (i) the
value of the Acquisition Facilities or (ii) the total of the Actual Costs of the Acquisition Facilities.
The Property Owner shall transfer ownership of the Acquisition Facilities to the EVMWD by grant
deed, bill of sale or such other documentation as the EVMWD may require. Upon the transfer of
ownership of the Acquisition Facilities or any portion thereof from the Property Owner to EVMWD,
9
4837-8786-6322v3/022042-0034
EVMWD shall be responsible for the maintenance of the Acquisition Facilities or the portion
transferred.
For purposes of determining the Acquisition Price to be paid by the CFD for the acquisition
of the Acquisition Facilities by EVMWD, the value of such improvements shall be the amount
determined by the Engineer, to be the value of the Acquisition Facilities based on the Actual Costs
submitted by the Property Owner, as hereinbefore specified; provided, however, that if the
Engineer determines that such Actual Costs, or any of them, are excessive and that the value of
the Acquisition Facilities is less than the total amount of such Actual Costs, the Acquisition Price
to be paid by the CFD for the acquisition of the Acquisition Facilities shall be the value thereof as
determined by the Engineer.
Upon completion of the construction of any Acquisition Facilities by Property Owner, the
Property Owner shall deliver to EVMWD copies of the contract(s) with the Contractor(s) who have
constructed the Acquisition Facilities or other relevant documentation with regard to the payments
made to such Contractor(s) and each of them for the construction of such Acquisition Facilities,
and shall also provide to EVMWD copies of all invoices and purchase orders with respect to all
supplies and materials purchased for the construction of such Acquisition Facilities. EVMWD
shall require the Engineer to complete its determination of the value of the Acquisition Facilities
as promptly as is reasonably possible.
The Acquisition Price of any Acquisition Facilities may be determined and paid out of the
EVMWD Facilities Fund prior to transfer of ownership of the Acquisition Facilities to EVMWD upon
a determination of Substantial Completion of such Acquisition Facility. Upon transfer of ownership
of an Acquisition Facilities to EVMWD, Property Owner may submit a second reimbursement
request for “punch list” items and any other eligible costs not included in the initial request.
Property Owner shall submit a payment request form to the CFD in the format and with the
information required by the Funding Agreement, which must also contain therewith approval of
EVMWD, which approval shall not be unreasonably withheld.
Notwithstanding the preceding provisions of this section, the sole source of funds for the
acquisition by EVMWD of the Acquisition Facilities or any portion thereof shall be the Bond
Proceeds made available by the CFD pursuant to Section 2.3 above. If for any reason beyond
EVMWD’s control, the proceedings for the formation of the CFD are not completed or the Bonds
are not sold, EVMWD shall not be required to acquire any Acquisition Facilities from the Property
Owner. In such event, the Property Owner shall complete the design and construction and offer
to the EVMWD ownership of such portions of Acquisition Facilities as are required to be
constructed by the Property Owner as a condition to recordation of subdivision maps for the
Property or any other agreement between Property Owner and EVMWD, but need not construct
any portion of the Acquisition Facilities which it is not so required to construct.
Section 3.6 Easements. The Property Owner shall, at the time EVMWD acquires the
Acquisition Facilities as provided in Section 3.2 hereof, grant to EVMWD, by appropriate
instruments prescribed by EVMWD, all easements on private property which may be reasonably
necessary for the proper operation and maintenance of such Acquisition Facilities, or any part
thereof.
Section 3.7 Maintenance. Prior to the transfer of ownership of an Acquisition Facility
by the Property Owner to the EVMWD, as provided in Section 3.5 hereof, the Property Owner
shall be responsible for the maintenance thereof and shall maintain and transfer such Acquisition
Facility to EVMWD in as good condition as the Acquisition Facility was in at the time the Property
10
4837-8786-6322v3/022042-0034
Owner notified the EVMWD that construction of same had been completed in accordance with
the Plans and Specifications.
The Parties agree that the construction and acquisition of the Acquisition Facilities to be
constructed by Property Owner is a matter between Property Owner and EVMWD only, and that
the City and the CFD shall have no responsibility for on-site inspection or monitoring or for
certifying that the provisions of Article III of this Agreement be satisfied.
ARTICLE IV
TERM AND TERMINATION
Section 4.1 Effective Date. This Agreement shall become effective and of full force
and effect as of the date (“Effective Date”) it is approved by the Property Owner, the City Council
of the City and governing board of the EVMWD, to be confirmed by the execution hereof by the
authorized representatives of the Parties hereto.
Section 4.2 Termination. This Agreement shall terminate and be of no further force or
effect upon the earlier of (i) ten (10) years following the issuance of building permits for all dwelling
units expected to be built within the CFD, (ii) the funding of all EVMWD Facilities pursuant to this
Agreement, or (iii) December 31, 2030. Notwithstanding the foregoing, this Agreement shall not
terminate pursuant to (iii) of the previous sentence if, on December 31, 2030, all of the building
permits within the CFD have been pulled, construction within the CFD, as contemplated by the
parties hereto, is ongoing, and the Property Owner has not yet has not been fully reimbursed for
Advances or has not been paid the Acquisition Price of any Acquisition Facilities pursuant to
Section 3.5 above.
ARTICLE V
ADDITIONAL GENERAL PROVISIONS
Section 5.1 Recordkeeping; Inspection of Records. EVMWD hereby agrees to keep
and maintain full and accurate records of all amounts, and investment earnings, if any, paid to
EVMWD for the EVMWD Charges and the City hereby agrees to keep and maintain full and
accurate records of all amounts, and investment earnings, if any, expended from the EVMWD
Facilities Fund. Each Party further agrees to make such records available to any other Party
hereto, including Property Owner, during normal business hours upon reasonable prior notice.
All such records shall be kept and maintained by the appropriate Party as provided by applicable
law and their respective policies.
Section 5.2 Partial Invalidity. 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.
Section 5.3 Successors and Assigns. Property Owner may assign its rights pursuant
to this Agreement to a purchaser of the Property, or any portion thereof who shall be the owner
of any Acquisition Facilities as payer of any EVMWD Charges and to whom Property Owner shall
assign the right to receive payment of the Acquisition Price for such Acquisition Facilities or other
rights under this Agreement with respect to EVMWD Charges. Such a purchaser and assignee
shall enter into an assignment agreement with the Property Owner, in a form acceptable to the
EVMWD and the City, whereby such purchaser agrees, except as may be otherwise specifically
provided therein, to assume the obligations of Property Owner pursuant to this Agreement and to
11
4837-8786-6322v3/022042-0034
be bound thereby. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Parties hereto.
Section 5.4 Notice. Any notice, payment or instrument required or permitted by this
Agreement to be given or delivered to any Party or ether person shall be deemed to have been
received when personally delivered or upon deposit of the same in the United States Post Office
registered or Certified, postage prepaid, addressed as follows:
City: City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
Attention: City Manager
EVMWD: Elsinore Valley Municipal Water District
31315 Chaney Street
Lake Elsinore, CA 92530
Attention: General Manager
Property Owner: JLJ, L.P.
2618 San Miguel Dr. #503
Newport Beach, CA 92660
Attention: Leonard Leichnitz
Each Party can change its address for delivery of notice by delivering written notice of
such change or address to the other parties within ten (10) calendar days prior to such change.
Section 5.5 Captions. The captions to Sections used herein are for convenience
purposes only and are not part of this Agreement.
Section 5.6 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California applicable to contracts made and performed
in such State.
Section 5.7 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.
Section 5.8 Amendments. This Agreement may be amended or modified only in
writing executed by the authorized representative(s) of each of the Parties hereto.
Section 5.9 Waiver. The failure of any Party hereto to insist on compliance within any
of the terms, covenants or conditions of this Agreement by any other Party hereto, shall not be
deemed a waiver of such terms, covenants or conditions of this Agreement by such other Party,
nor shall any waiver constitute a relinquishment of any other right or power, for all or any other
times.
Section 5.10 Cooperation and Execution of Documents. The Parties hereto agree to
complete and execute any further or additional documents which may be necessary to complete
or further the terms of this Agreement.
12
4837-8786-6322v3/022042-0034
Section 5.11 Attorneys’ Fees. In the event of the bringing of any action or suit by any
Party against any other Party arising out of this Agreement, the Party in whose favor final
judgment shall be entered shall be entitled to recover from the losing Party all costs and expenses
of suit, including reasonable attorneys’ fees.
Section 5.12 Exhibits. The following exhibits attached hereto are incorporated into this
Agreement by reference.
Exhibit Description
“A” Property Description
“B” Acquisition Facilities Description
Section 5.13 Signatories. The signatories hereto represent that they have been
appropriately authorized to enter into this Agreement on behalf of the party for whom they sign.
Section 5.14 Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original.
[Remainder of this page is blank]
S-1
4837-8786-6322v3/022042-0034
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:
Candice Alvarez, MMC, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY OF THE CITY OF LAKE ELSINORE
By:
Barbara Leibold, City Attorney
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
S-2
4837-8786-6322v3/022042-0034
[SIGNATURE PAGE CONTINUED]
ELSINORE VALLEY MUNICIPAL WATER
DISTRICT
By:
Its: Greg Thomas, General Manager
ATTEST:
By:
Its: Terese Quintanar, Board Secretary
APPROVED AS TO FORM:
By:
Its: Steve Anderson, General Counsel
S-3
4837-8786-6322v3/022042-0034
[SIGNATURE PAGE CONTINUED]
JLJ, L.P.,
A California limited partnership
By:
A-1
4837-8786-6322v3/022042-0034
EXHIBIT A
PROPERTY DESCRIPTION
Real property in the City of Lake Elsinore, County of Riverside, State of California, described
as follows:
Assessor’s Parcel Nos:
373-071-020
373-071-021
373-071-022
373-071-023
373-071-025
B-1
4837-8786-6322v3/022042-0034
EXHIBIT B
ACQUISITION FACILITIES DESCRIPTION
Note: The description and estimated costs of the Acquisition Facilities is preliminary in nature.
The final nature and location of the Acquisition Facilities will be determined upon preparation
of final plans and specifications, and the Actual Costs may ultimately be higher than estimated
herein.
Domestic Water Improvements (Offsite Only)
Estimated
Quantity Unit Estimated Unit
Cost Estimated Total
12. Mobilization 1 LS 3,500.00 3,500
13. 8" PVC, Mainline, w/Bedding & Backfill 94 LF 45.00 4,230
14. 12" DIP, Mainline, w/Bedding & Backfill 2,745 LF 98.00 269,010
15. 8" FxH Gate Valves 2 EA 1,600.00 3,200
16. 12" FxH Gate Valves, Includes 1 Raise, Complete 15 EA 3,800.00 57,000
17. 2" Air Vacuum Release Valves 3 EA 3,800.00 11,400
18. 6" Fire Hydrant Assembly, Includes 1 Raise, Complete 6 EA 6,600.00 39,600
19. 6" Blow off 8 EA 3,500.00 28,000
20. 12" End Cap 3 EA 550.00 1,650
21. 8" End Cap 2 EA 450.00 900
22. Remove Existing 16" Stub & Join Existing 16" Gate Valve 1 EA 2,250.00 2,250
23. Remove & Replace Existing AC 2,100 SF 15.00 31,500
24. Traffic Control 1 LS 3,500.00 3,500
25. Chlorination & Testing 2,745 LF 2.00 5,490
Subtotal - Hard Costs $ 461,230
Soft Costs (Design, Eng., Bonds, Staking, Construc. Mgmt., etc.) @ 15.0% $ 69,185
Contingency @ 10.0% $ 46,123
Total - Domestic Water $ 576,538
Sanitary Sewer Improvements (Offsite Only)
Estimated
Quantity Unit Estimated Unit
Cost Estimated Total
10. Mobilization 1 LS $ 3,500.00 $ 3,500
11. 8" C900 PVC CL 100 (DR25), Mainline, w/Bedding & Backfill 1,895 LF 52.00 98,540
13. Concrete Encase Sewer Main 420 LF 12.00 5,040
14. 60" Manhole (Includes 1 Raise)8 EA 6,800.00 54,400
15. Video Sewer Mainline 1,895 LF 3.50 6,633
16. Join Existing 60' Manhole 1 EA 7,500.00 7,500
17. Install 8" Cap 1 EA 500.00 500
18. Remove & Replace Existing AC 3,180 SF 12.00 38,160
19. Traffic Control 1 LS 3,500.00 3,500
Subtotal - Hard Costs $ 217,773
Soft Costs (Design, Eng., Bonds, Staking, Construc. Mgmt., etc.) @ 15.0% $ 32,666
Contingency @ 10.0% $ 21,777
Total - Off-Site SanitarySewer $ 272,216
C-1
4837-8786-6322v3/022042-0034
EXHIBIT C
DISBURSEMENT REQUEST FORM
1. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) (“CFD No.
2006-6”) is hereby requested to pay from the EVMWD Facilities Fund established by the City
Council of the City of Lake Elsinore (the “City”) in connection with its CFD No. 2006-6 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 [Acquisition Facilities] [facilities
relating to the EVMWD Charges]. 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.
3. Description of [Acquisition Facilities] [EVMWD Charges]:
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, JLJ, L.P., a California limited partnership and
the Elsinore Valley Municipal Water District dated as of ________, 2020 (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 [Acquisition Facilities] [facilities relating
to the EVMWD Charges] from CFD No. 2006-6, including the amounts to be paid under paragraph
4 above, will not exceed the maximum amount to be disbursed for [Acquisition Facilities] [facilities
relating to the EVMWD Charges] under the Agreement.
C-2
4837-8786-6322v3/022042-0034
Executed by an authorized representative of the Elsinore Valley Municipal Water District.
By:
Name:
Title:
Date:
Request No.
CONCURRED BY:
___________
PETITION TO THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE REQUESTING INSTITUTION OF CHANGE
PROCEEDINGS FOR CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2006-6 (TESSERA)
1. The undersigned (the "Owner") is the owner of more than 10% of the land
described in Exhibit A hereto (the "Property"), which land is all of the land included within
the boundaries of City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera)
the "District"). The Property is located within the City of Lake Elsinore (the "City") in the
County of Riverside.
2. The Owner requests, pursuant to Chapter 2.5 (commencing with Section
53311), Part 1, Division 2, Title 5, of the Government Code of the State of California,
commonly known as the "Mello -Roos Community Facilities Act of 1982" (the "Act"), that the
City Council of the City (the "City Council") institute proceedings to approve the new rate
and method of apportionment for the District, attached hereto as Exhibit B (the "First
Amended and Restated Rate and Method").
3. The Owner further requests that the City Council authorize the levy of special
taxes in accordance with the First Amended and Restated Rate and Method in the District
to pay the costs of the improvements and incidental expenses of the District previously
authorized in connection with the formation of the District (the "Facilities") and to pay
principal of, interest and premium, if any, on the bonds in order to contribute to the financing
of the Facilities and the incidental expenses.
4. The Owner further requests that, upon the sale of bonds, the City Council, as
legislative body of the District, annually levy special taxes in accordance with the Amended
and Restated Rate and Method on the property within the District for the construction,
acquisition and rehabilitation of the Facilities, for the payment of the aggregate amount of
principal of and interest owing on the bonds in each fiscal year, including the maintenance
of reserves therefor, and for the payment of administrative expenses of the District.
5. The Owner has advanced to the City the amounts necessary to pay for the
costs related to the change proceedings for the District, which amounts will be reimbursed,
without interest, from the proceeds of the first sale of the bonds, if any. The reimbursement
of such amounts is expected to be governed by the terms of that certain Acquisition,
Construction and Funding Agreement (the "Acquisition Agreement") to be entered into by
and between the City and the Owner relating to the District. If bonds are not sold, the City
will have no obligation to reimburse amounts expended for costs incurred, but will reimburse
any unexpended amounts advanced by the Owner as set forth in the Acquisition
Agreement.
1
4819-2893-5889v3/022042-0034
Dated: November23 2020
2
a California limited partne,ZT
00
By:
Name: kk V 1
Title: r' �eimw { idcAm�
A819-2893-5889v2/U22U42-0034
1�1.11-3Vr_\
LEGAL DESCRIPTION
Real property in the City of Lake Elsinore, County of Riverside, State of California,
described as follows:
Assessor's Parcel Nos:
373-071-020
373-071-021
373-071-022
373-071-023
373-071-025
A-1
4819-2893-5889v3/022042-0034
EXHIBIT B
PROPOSED FIRST AMENDED AND RESTATED
RATE AND METHOD OF APPORTIONMENT OF
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2006-6 (TESSERA)
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. 2006-6 (Tessera) ("CFD No. 2006-6").
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. 2006-6, 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 431560.
"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. 2006-6: 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. 2006-6
or any designee thereof of complying with arbitrage rebate requirements; the costs to the City,
CFD No. 2006-6 or any designee thereof of complying with disclosure requirements of the City,
CFD No. 2006-6 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. 2006-
E or any designee thereof related to an appeal of the Special Tax; the costs associated with the
release of funds from an escrow account; and the City's annual administration fees and third
party expenses. Administration Expenses shall also include amounts estimated by the CFD
Administrator or advanced by the City or CFD No. 2006-6 for any other administrative purposes
of CFD No. 2006.6, 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 15t preceding the Fiscal Year in which the
B-1
4819-2893-5889v3/022042-0034
Special Tax is being levied, (ii) and has an assigned Assessor's Parcel Number from the County
shown on an Assessor's Parcel Map for the individual lot included on the Final Map, and (iii) that
have not been issued a building permit on or before May 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. 2006-6 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
spaceI 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. 2006-6" means Community Facilities District No. 2006-6 (Tessera)
established by the City under the Act.
"City" means the City of Lake Elsinore.
B-2
4819-2893-5889v3/022042-0034
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative
Body of CFD No. 2006-6.
"Condominium Plan" means a condominium plan as set forth in the California Civil Code
Section 4200 et seq.
"County" means the County of Riverside.
"Developed Property" means all Assessor's Parcels 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) has an Assessor's Parcel Number from the County shown on an
Assessor's Parcel Map for the individual lot included on the Final Map, and (iii) a Building Permit
for new construction was issued on or before May 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
4200 et seq. 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. 2006-6 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 for which a building
permits) was issued or will be issued for anon -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.
B-3
4819-2893-5889v3/022042-0034
'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.
"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. 2006-6
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. 2006-6 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. 2006-6, 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, or Provisional Undeveloped Property.
4819-2893-5889v3/022042-0034
B. SPECIAL TAX
Commencing Fiscal Year 2021-2022 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 2021-2022, each Assessor's Parcel within CFD
No. 2006-6 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.
In the event that an Assessor's Parcel for which one or more Building Permits have been issued
and the County has not yet assigned final Assessor's Parcel Number(s) to the Residential
Units) (in accordance with the Final Map or Condominium Plan) on such Assessor's Parcel, the
amount of the Special Tax levy on such Assessor's Parcel for each Fiscal Year shall be
determined as follows: (1) the CFD Administrator shall first determine an amount of the
Maximum Special Tax levy for such Assessor's Parcel, based on the classification of such
Assessor's Parcel as Undeveloped Property; (2) the amount of the Special Tax levy for the
Residential Units on such Assessor's Parcel for which Building Permits have been issued shall
be determined based on the Developed Property Special Tax rates and shall be taxed as
Developed Property in accordance with Step 1 of Section E below; and (3) the amount of the
Special Tax levy on the Taxable Property in such Assessor's Parcel not subject to the Special
Fax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate
levied on all other Undeveloped Property multiplied by the total of the amount determined in
clause (1), less the amount determined in clause (2).
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 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 shall be subject to an Assigned Special Tax. The Assigned
B-5
4819-2893-5889v3/022042-0034
Special Tax applicable to an Assessor's Parcel of Developed Property 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 1,650 sq. ft
$2,301.00
2. Single Family Residential Property
RU
1,650 sq. ft to 1,750 sq. ft
$2,380,00
3. Single Family Residential Property
RU
Greater than 1,750 sq. ft
$21430.00
4. Multifamily Property
Acre
N/A
$387622,00
5. Non -Residential Property
Acre
N/A
$381622.00
On each July 1, commencing July 1, 2022, the Assigned Special Tax rate for Developed
Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal
Year.
b. Multiple Land Use Categories
In some instances an Assessor's Parcel of Developed Property may contain more than one
.and 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=(UxA)/L
The terms above have the following meanings:
B =Backup Special Tax per Assessor's Parcel within the Final Map
U =Maxi mum 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 $38,622 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
4819-2893-5889v3/022042-0034
$38,622 per Acre. The Backup Special Tax shall not apply to Multifamily Residential
Property, or Non -Residential Property.
On each July 1, commencing July 1, 2022, the Backup Special Tax rate shall be increased by
two percent (2.00%) of the amount in effect in the prior Fiscal Year.
2. Approved Property
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Single Family Property shall be the Backup Special Tax computed pursuant to
Section D.1.c above.
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Multifamily Residential Property or Non -Residential Property shall be $38,622
per Acre.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Approved
Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal
Year.
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 $38,622 multiplied by the Acreage of such Assessor's Parcel.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Undeveloped
and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the
amount in effect in the prior Fiscal Year,
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2021-2022 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 1009/o
of the Maximum Special Tax applicable to each such Assessor's Parcel as
needed to satisfy the Special Tax Requirement,
B-7
4819-2893-5889v3/022042-0034
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
5.51 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 5.51
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 5.51 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 $3,900,000 expressed in 2021 dollars, 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. 2006-6, 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.
4819-2893-5889v3/022042-0034
"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. 2006-6.
"Construction Inflation Index" means the annual percentage change in the Engineering
News -Record Building Cost Index for the Riverside -San Bernardino -Ontario area, 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
Riverside -San Bernardino -Ontario area.
"Future Facilities Costs" means the CFD Public Facilities minus public facility costs available
to be funded through existing construction or escrow accounts 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
Jays 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):
B-9
4819-2893-5889v3/022042-0034
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.
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
4819-2893-5889v3/022042-0034
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 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
B-11
4819-2893-5889v3/022042-0034
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:
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 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
2060-2061 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, 2006-6 Bonds have been paid; (ii) all authorized facilities of CFD No. 2006-6
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. 2006-6 have been
satisfied.
4819-2893-5889v3/022042-0034
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. 200M 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 Parcels) 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.
4819-2893-5889v3/022042-0034