HomeMy WebLinkAboutItem No. 26 PH Election Change Proceedings CFD No. 2019-2 Nichols RanchCity of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
www.lake - elsinore.org
°"` In - City Council Agenda Report
File Number: TMP 20 -0024
Agenda Date: 1/12/2021 Version: 1 Status: Approval Final
In Control: City Council / Successor Aqency File Type: Council Public
Hearing
Agenda Number: 26)
Public Hearina and Election for Chanae Proceedinas for Communitv Facilities District No.
2019 -2 (Nichols Ranch
1. Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO.
2019 -2 OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH), APPROVING AMENDMENT TO
THE RATE AND METHOD OF APPORTIONMENT, INCREASING THE AMOUNT OF AUTHORIZED
BONDED INDEBTEDNESS TO BE INCURRED BY COMMUNITY FACILITIES DISTRICT NO. 2019
-2 AND CALLING AN ELECTION THEREIN;
2. Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO.
2019 -2 OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH), CERTIFYING THE RESULTS OF
THE JANUARY 12, 2021 SPECIAL ELECTION; and
3. Introduce by title only and waive further reading of AN ORDINANCE OF THE CITY COUNCIL OF
CITY OF LAKE ELSINORE, CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY
OF COMMUNITY FACILITIES DISTRICT NO. 2019 -2 OF THE CITY OF LAKE ELSINORE
(NICHOLS RANCH) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN SUCH DISTRICT.
City of Lake Elsinore Page 1 Printed on 1/7/2021
CITY OF
LADE LSIIE
, DREAM EXTREME
TN
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: January 12, 2021
Subject: Public Hearing and Election for Change Proceedings for Community
Facilities District No. 2019 -2 (Nichols Ranch)
Recommendations
Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2019 -2 OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH),
APPROVING AMENDMENT TO THE RATE AND METHOD OF APPORTIONMENT,
INCREASING THE AMOUNT OF AUTHORIZED BONDED INDEBTEDNESS TO BE
INCURRED BY COMMUNITY FACILITIES DISTRICT NO. 2019 -2 AND CALLING AN
ELECTION THEREIN;
2. Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2019 -2 OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH),
CERTIFYING THE RESULTS OF THE JANUARY 12, 2021 SPECIAL ELECTION; and
3. Introduce and waive further reading of AN ORDINANCE OF THE CITY COUNCIL OF CITY
OF LAKE ELSINORE, CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE
BODY OF COMMUNITY FACILITIES DISTRICT NO. 2019 -2 OF THE CITY OF LAKE
ELSINORE (NICHOLS RANCH) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN
SUCH DISTRICT.
Background
The City of Lake Elsinore (the "City ") formed the Community Facilities District No. 2019 -2 of the
City of Lake Elsinore (Nichols Ranch) (the "District') in 2019 pursuant to the Mello -Roos
Community Facilities District Act of 1982. The District is approximately 58 acres planned for 168
residential lots within the City. Such property is located to the east of Interstate 15 and is
bordered by Nichols Road to the south. Nichols Rd. Partners, LLC, is the landowner within the
District (the "Developer ").
CFD 2019 -2 (Nichols Ranch) Change Proceedings
January 12, 2021
Page 2 of 3
Due to revisions in the proposed product mix within the District, the Developer has requested
that the District undertake proceedings to (i) amend the Rate and Method of Apportionment of
Special Taxes with the First Amended and Restated Rate and Method of Apportionment
attached to Resolution No. 2020 -101 adopted by the City Council on December 8, 2020 (the
"Amended RMA ") and (ii) increase the maximum amount of bonded indebtedness authorized to
be incurred by the District from $10 million to $11 million.
Development within the District has not yet commenced. The Developer expects to sell the
property within the District to Meritage Homes in the near future.
The current special tax rates within the District range from $1,693, for a home less than 1,700
square feet, to $2,049 for a home greater than 2,500 square feet. If the Amended RMA is
approved, the District will have special tax rates ranging from $2,302, for a home less than
1,700 square feet, to $2,938 for a home greater than 2,900 square feet.
On December 8, 2020, the City Council adopted Resolution No. 2020 -101 stating its intention to
consider approval of the Amended RMA and increase of the maximum amount of bonded
indebtedness authorized to be issued by the District and called for a public hearing to be held
on the approval of such matters.
Documents to be Approved
Following the public hearing to be held, approval of the first resolution will call for an election to
be held with respect to the approval of the Amended RMA and the increase of the maximum
amount of bonded indebtedness authorized to be issued by the District. The first resolution also
approves the form of an Amended and Restated Funding Agreement, which amends and
restates a prior funding agreement between the City and the Developer with respect to the
District. The purpose of the Amended and Restated Funding Agreement is to: (1) include certain
facilities to be constructed by the Developer and to be funded from proceeds of bonds to be
issued by the District and (2) include additional Elsinore Valley Municipal Water District to be
funded from proceeds of bonds to be issued by the District.
The City has received a certificate of the Registrar of Voters certifying that there are less than
12 Registered Voters residing within the District during the 90 days prior to the time of the public
hearing. Accordingly, the election to be held will be a landowner election pursuant to which the
landowners are the sole eligible voters within the District. The landowner within the District
described above has executed a consent and waiver to certain election law requirements and to
allow the election to be conducted immediately following the public hearing.
Following the holding of the election, the City Council will be asked to certify the election results
and assuming approval of the Amended RMA and the increase of the maximum amount of
bonded indebtedness authorized to be issued by the District, introduce the Ordinance
authorizing the levy of the special tax in accordance with the Amended RMA.
Fiscal Impact
The Developer has made a deposit to pay for the costs of the change proceedings described
above. The District will annually levy special taxes on all of the taxable property within the
District in accordance with the 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
CFD 2019 -2 (Nichols Ranch) Change Proceedings
January 12, 2021
Page 3 of 3
District are not obligations of the City and will be secured solely by the Special Taxes levied in
the District.
Exhibits
A — Reso. Approving Amendment to Rate and Method
B — Reso. Certifying Election Results
C — Ord. Levying Special Taxes
D — Landowner Waiver
E - Certificate of Registrar of Voters
F — Amended and Restated Funding Agreement
G — Project Map
RESOLUTION NO. 2021-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2019 -2 OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH),
APPROVING AMENDMENT TO THE RATE AND METHOD OF APPORTIONMENT,
INCREASING THE AMOUNT OF AUTHORIZED BONDED INDEBTEDNESS TO BE
INCURRED BY COMMUNITY FACILITIES DISTRICT NO. 2019 -2 AND CALLING AN
ELECTION THEREIN
Whereas, on October 22, 2019, the City Council of the City of Lake Elsinore (the "City Council ")
adopted Resolution No. 2019 -083 stating its intention to form Community Facilities District No.
2019 -2 of the City of Lake Elsinore (Nichols Ranch) ( "Community Facilities District No. 2019 -2"
or the "District ") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, being
Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California
(the "Act "); and,
Whereas, on October 22, 2019, the City Council also adopted Resolution No. 2019 -084 stating
its intention to incur bonded indebtedness within the District in the amount not to exceed
$10,000,000 to finance the facilities and improvements identified in Attachment "B" to Resolution
No. 2019 -083 (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, a notice calling a public hearing on December 10, 2019, was published as required by
law relative to the intention of the City Council to establish Community Facilities District No. 2019-
2 and to incur bonded indebtedness within Community Facilities District No. 2019 -2; and,
Whereas, on December 10, 2019, the City Council conducted a noticed public hearing to
determine whether it should proceed with the establishment of Community Facilities District
No. 2019 -2, issue bonds for the benefit of Community Facilities District No. 2019 -2 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 Attachment "C" to Resolution No. 2019 -083 (the "Rate
and Method ") to be levied within Community Facilities District No. 2019 -2 for the purposes
described in Resolution No. 2019 -083; and,
Whereas, at the December 10, 2019, public hearing all persons desiring to be heard on all matters
pertaining to the establishment of Community Facilities District No. 2019 -2, the levy of the special
taxes in accordance with the Rate and Method and the issuance of bonds within Community
Facilities District No. 2019 -2 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 December 10, 2019, the City Council adopted Resolution
Nos. 2019 -095 (the "Resolution of Formation ") and 2019 -096 (the "Resolution to Incur Bonded
Indebtedness ") which formed the District and called a special election on December 10, 2019,
within the District on three propositions relating to the levying of the special taxes, the incurring of
bonded indebtedness and the establishment of an appropriations limit for the District, which were
approved by more than two - thirds vote by the qualified electors on December 10, 2019; and,
CC Res. No. 2021 -
Page 2 of 6
Whereas, pursuant to Resolution No. 2019 -097, adopted on December 10, 2019, the City
Council, acting as the legislative body of Community Facilities District No. 2019 -2, declared the
results of the special election and directed the recording of a Notice of Special Tax Lien within
Community Facilities District No. 2019 -2; and,
Whereas, the District has received a petition signed by Nichols Rd. Partners, LLC, a California
limited liability company (the "Owner "), which owns all of the land within Community Facilities
District No. 2019 -2, the boundaries of which are described in Resolution No. 2019 -083 which
petition meets the requirements of Section 53332 of the Act, requesting that the District initiate
proceedings to: (i) approve a new rate and method of apportionment for Community Facilities
District No. 2019 -2, and (ii) increase the amount of bonded indebtedness authorized to be
incurred by the District from $10,000,000 to $11,000,000, to finance the Improvements and the
Incidental Expenses (collectively, the "Changes "); and,
Whereas, on December 8, 2020, the City Council, acting as the legislative body of Community
Facilities District No. 2019 -2, adopted Resolution No. 2020 -101 (the "Resolution of Intention "),
stating its intention to consider the Changes, including the approval of a new rate and method of
apportionment for Community Facilities District No. 2019 -2, attached to the Resolution of Intention
as Attachment "B" (the "Amended and Restated Rate and Method "); and,
Whereas, a notice calling a public hearing on January 12, 2021, was published as required by
law relative to the intention of the City Council to consider the approval of the Changes; and,
Whereas, on January 12, 2021, this City Council conducted a noticed public hearing to determine
whether it should proceed with the approval of the Changes; and,
Whereas, at the January 12, 2021 public hearing all persons desiring to be heard on all matters
pertaining to the approval of the Changes were heard and a full and fair hearing was held; and,
Whereas, the City Council has determined that there have been fewer than twelve registered
voters residing in the District for the period of 90 days prior to January 12, 2021 and that the
qualified electors in the District are the landowners within the District; and,
Whereas, on the basis of all of the foregoing, the City Council has determined at this time to
proceed with the approval of change proceedings with respect to Community Facilities District
No. 2019 -2 as described herein; and,
Whereas, the City, on behalf of itself and the District, and the Owner have previously entered into
that certain Funding Agreement dated December 10, 2019, and the parties thereto now desire to
amend and restate the Funding Agreement in its entirety in the form of the Amended and Restated
Funding Agreement (the "Amended and Restated Funding Agreement ") on file with the City Clerk.
NOW, THEREFORE, THE CITY COUNCIL OF CITY OF LAKE ELSINORE, ACTING AS THE
LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2019 -2 OF THE CITY OF
LAKE ELSINORE (NICHOLS RANCH), HEREBY FINDS, DETERMINES, RESOLVES, AND
ORDERS AS FOLLOW:
Section 1. Each of the above recitals is true and correct.
Section 2. The City Council hereby adopts the Amended and Restated Rate and Method
attached as Attachment "B" to the Resolution of Intention as the rate and method for Community
CC Res. No. 2021 -
Page 3 of 6
Facilities District No. 2019 -2. Except where funds are otherwise available, it is the intention of
the City Council, subject to the approval of the eligible voters within the Community Facilities
District No. 2019 -2, to levy the proposed special taxes at the rates for Community Facilities District
No. 2019 -2 set forth in the Amended and Restated Rate and Method on all non - exempt property
within Community Facilities District No. 2019 -2 sufficient to pay for (i) the Improvements, (ii) the
principal and interest and other periodic costs on the bonds proposed to be issued by the District
to finance the Improvements and Incidental Expenses, including the establishment and
replenishment of reserve funds, any remarketing, credit enhancement and liquidity facility fees
(including such fees for instruments which serve as the basis of a reserve fund in lieu of cash),
administrative expenses and other expenses of the type permitted by Section 53345.3 of the Act;
and (iii) the Incidental Expenses. The Amended and Restated Rate and Method is described in
detail in Attachment "B" to the Resolution of Intention which is incorporated herein by this
reference, and the City Council hereby finds that the Amended and Restated Rate and Method
contains sufficient detail to allow each landowner within the District to estimate the maximum
amount that may be levied against each parcel. The Special Tax (as defined in the Amended and
Restated Rate and Method) shall be levied on each assessor's parcel for a period not to exceed
the Fiscal Year 2060 -61.
Section 3. Upon recordation of an amended and restated notice of special tax lien pursuant to
Section 3114.5 of the Streets and Highways Code, a continuing lien to secure each levy of the
special tax shall attach to all non - exempt real property in the District and this lien shall continue
in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien
canceled in accordance with law or until collection of the special tax by the District ceases.
Section 4. The City Council, acting as the legislative body of Community Facilities District No.
2019 -2, hereby determines that it is necessary increase the amount of bonded indebtedness to
be incurred by Community Facilities District No. 2019 -2 in a maximum aggregate principal amount
from $10,000,000 to $11,000,000 for the benefit of Community Facilities District No. 2019 -2.
Section 5. The indebtedness is to be incurred for the purpose of financing the costs of
purchasing, constructing, modifying, expanding, improving, or rehabilitating the Improvements, as
described in Resolution No. 2019 -095, financing the Incidental Expenses, and carrying out the
powers and purposes of Community Facilities District No. 2019 -2, including, but not limited to,
financing the costs of selling the bonds, establishing and replenishing bond reserve funds and
paying remarketing, credit enhancement and liquidity facility fees (including such fees for
instruments which serve as the basis of a reserve fund in lieu of cash), administrative expenses
and other expenses of the type authorized by Section 53345.3 of the Act.
Section 6. Written protests against the approval of the Amended and Restated Rate and Method
and the increase in the maximum principal amount of bonded indebtedness to be incurred by
Community Facilities District No. 2019 -2 have not been filed by one -half or more of the registered
voters within the boundaries of the District or by the property owners of one -half or more of the
area of land within the boundaries of the District. The City Council hereby finds that the approval
of the foregoing changes with respect to Community Facilities District No. 2019 -2 has not been
precluded by a majority protest pursuant to Section 53337 of the Act.
Section 7. An election is hereby called for Community Facilities District No. 2019 -2 on the
propositions of approving the Amended and Restated Rate and Method and the increase in the
maximum principal amount of bonded indebtedness to be incurred by Community Facilities
District No. 2019 -2. The propositions to be placed on the ballot for the District is attached hereto
as Attachment "A." Following certification of a landowner vote in favor of the adoption of the
CC Res. No. 2021-
Page 4 of 6
Amended and Restated Rate and Method, the District shall record an amended and restated
notice of special tax lien for the District.
Section 8. The date of the foregoing election for the District shall be January 12, 2021, or such
later date as is consented to by the City Clerk and the landowners within the District. The City
Clerk shall conduct the election. Except as otherwise provided by the Act, the election shall be
conducted by personally delivered or mailed ballot and, except as otherwise provided by the Act,
the election shall be conducted in accordance with the provisions of law regulating elections of
the City insofar as such provisions are determined by the City Clerk to be applicable.
Section 9. It is hereby found that there are not more than twelve registered voters within the
territory of the District, and, pursuant to Section 53326 of the Act, each landowner who is the
owner of record on the date hereof, or the authorized representative thereof, shall have one vote
for each acre or portion thereof that he or she owns within the District.
Section 10. The form of the Amended and Restated Funding Agreement on file with the City
Clerk is approved as to form, and each of the City Manager, Assistant City Manager, and their
written designees, is authorized to execute the Amended and Restated Funding Agreement in
substantially the form on file with the City Clerk, together with such changes as are approved by
the officer executing the same, with the approval of such changes to be conclusively evidenced
by the execution and delivery thereof.
Section 11. This Resolution shall be effective upon its adoption.
Passed and Adopted on this 12th day of January, 2021.
Robert E. Magee, Mayor
Attest:
Candice Alvarez, MMC
City Clerk
CC Res. No. 2021 -
Page 5 of 6
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. 2021- was adopted by the City Council of the City of Lake Elsinore,
California, at the Regular meeting of January 12, 2021 and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Candice Alvarez, MMC
City Clerk
ATTACHMENT "A"
SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2019 -2
OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH)
SPECIAL ELECTION
January 12, 2021
This ballot represents votes.
To vote, write or stamp a cross ( " +" or "X ") in the voting square after the word "YES" or
after the word "NO ". All marks otherwise made are forbidden. All distinguishing marks are
forbidden and make the ballot void.
If you wrongly mark, tear or deface this ballot, return it to the City Clerk of the City of Lake
Elsinore and obtain another.
PROPOSITION A: Shall a special tax with an amended and restated rate
and method of apportionment as provided in Attachment "B" to Resolution
No. 2020 -101 adopted by the City Council of the City of Lake Elsinore on
December 8, 2020, with respect to certain change proceedings for
Community Facilities District No. 2019 -2 of the City of Lake Elsinore
(Nichols Ranch) (the "District "), be levied to pay for the Improvements, YES
Incidental Expenses and other purposes described in Resolution No. 2019-
095, including the payment of the principal of and interest on bonds issued NO_
to finance the Improvements and Incidental Expenses for the District?
PROPOSITION B: Shall the amount of authorized indebtedness and the
issuance bonds by the District be increased in the maximum principal
amount from $10,000,000 to $11,000,000, with interest at a rate or rates not YES
to exceed the maximum interest rate permitted by law, to finance the
Improvements and the Incidental Expenses described in Resolution NO
No. 2019 -095 of the City Council of the City of Lake Elsinore for the District? —
ATTACHMENT A
4837 - 2962- 7349v3/022042 -0026
RESOLUTION NO. 2021-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2019 -2 OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH),
CERTIFYING THE RESULTS OF THE JANUARY 12, 2021 SPECIAL ELECTION
Whereas, the City Council of City of Lake Elsinore (the "City Council "), acting as the legislative
body of Community Facilities District No. 2019 -2 of the City of Lake Elsinore (Nichols Ranch) (the
"District") called and duly held elections on January 12, 2021 within the boundaries of the District
pursuant to Resolution No. for the purpose of presenting to the qualified electors within the
District the propositions attached hereto as Attachment "A "; and,
Whereas, there has been presented to the City Council a certificate of the City Clerk canvassing
the results of the election, a copy of which is attached hereto as Attachment "B."
NOW, THEREFORE, THE CITY COUNCIL OF CITY OF LAKE ELSINORE, ACTING AS THE
LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2019 -2 OF THE CITY OF
LAKE ELSINORE (NICHOLS RANCH), HEREBY FINDS, DETERMINES, RESOLVES, AND
ORDERS AS FOLLOW:
Section 1. Each of the above recitals is true and correct and is adopted by the legislative body
of the District.
Section 2. Propositions A and B presented to the qualified electors of the District on January 12,
2021 were approved by more than two - thirds of the votes cast at the election held for the District,
and Propositions A and B have carried. The City Council is hereby authorized to levy on the land
within the District the special tax described in Proposition A for the purposes described therein
and to take the necessary steps to levy the special tax authorized by Proposition A and to issue
bonds in an amount not to exceed $11,000,000 specified in Proposition B.
Section 3. The City Clerk is hereby directed to record in the Office of the County Recorder within
fifteen days of the date hereof an amended and restated notice of special tax lien which Bond
Counsel to the District shall prepare in the form required by Streets and Highways Code
Section 3114.5.
CC Res. No. 2021-
Page 2 of 4
Passed and Adopted on this 12'" day of January, 2021.
Robert E. Magee, Mayor
Attest:
Candice Alvarez, MMC
City Clerk
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. 2021- was adopted by the City Council of the City of Lake Elsinore,
California, at the Regular meeting of January 12, 2021 and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Candice Alvarez, MMC
City Clerk
2
ATTACHMENT A
SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2019 -2
OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH)
SPECIAL ELECTION
January 12, 2021
This ballot represents votes.
To vote, write or stamp a cross ( " +" or "X ") in the voting square after the word "YES" or
after the word "NO ". All marks otherwise made are forbidden. All distinguishing marks are
forbidden and make the ballot void.
If you wrongly mark, tear or deface this ballot, return it to the City Clerk of the City of Lake
Elsinore and obtain another.
PROPOSITION A: Shall a special tax with an amended and restated rate
and method of apportionment as provided in Attachment "B" to Resolution
No. 2020 -101 adopted by the City Council of the City of Lake Elsinore on
December 8, 2020, with respect to certain change proceedings for
Community Facilities District No. 2019 -2 of the City of Lake Elsinore
(Nichols Ranch) (the "District "), be levied to pay for the Improvements, YES
Incidental Expenses and other purposes described in Resolution No. 2019-
095, including the payment of the principal of and interest on bonds issued NO_
to finance the Improvements and Incidental Expenses for the District?
PROPOSITION B: Shall the amount of authorized indebtedness and the
issuance bonds by the District be increased in the maximum principal
amount from $10,000,000 to $11,000,000, with interest at a rate or rates not YES
to exceed the maximum interest rate permitted by law, to finance the
Improvements and the Incidental Expenses described in Resolution NO
No. 2019 -095 of the City Council of the City of Lake Elsinore for the District? —
ATTACHMENT A
ATTACHMENT B
CERTIFICATE OF CITY CLERK
AS TO THE RESULTS OF THE CANVASS OF THE ELECTION RETURNS
I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, do hereby certify that
have examined the returns of the Special Tax and Bond Election for Community Facilities District
No. 2019 -2 of the City of Lake Elsinore (Nichols Ranch). The election was held in the Lake
Elsinore Cultural Center at 183 North Main Street, Lake Elsinore, California, on January 12, 2021.
1 caused to be delivered ballots to each qualified elector. (_) ballots were returned.
I further certify that the results of said election and the number of votes cast for and against
Propositions A and B are as follows:
PROPOSITION A PROPOSITION B
YES: YES:
NO: NO:
TOTAL: TOTAL:
Dated this 12th day of January, 2021.
Candice Alvarez, MMC
Candice Alvarez, MMC, City Clerk
City of Lake Elsinore
ATTACHMENT B
ORDINANCE NO. 2021-
AN ORDINANCE OF THE CITY COUNCIL OF CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 2019 -2 OF THE CITY OF LAKE ELSINORE
(NICHOLS RANCH) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN SUCH
DISTRICT
Whereas, on October 22, 2019, the City Council of the City of Lake Elsinore (the "City Council ")
adopted Resolution No. 2019 -083 stating its intention to form Community Facilities District No.
2019 -2 of the City of Lake Elsinore (Nichols Ranch) ( "Community Facilities District No. 2019 -2"
or the "District ") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, being
Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California
(the "Act "); and,
Whereas, on October 22, 2019, the City Council also adopted Resolution No. 2019 -084 stating
its intention to incur bonded indebtedness within the District in the amount not to exceed
$10,000,000 to finance the facilities and improvements identified in Attachment "B" to Resolution
No. 2019 -083 (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, a notice calling a public hearing on December 10, 2019, was published as required by
law relative to the intention of the City Council to establish Community Facilities District No. 2019-
2 and to incur bonded indebtedness within Community Facilities District No. 2019 -2; and,
Whereas, on December 10, 2019, the City Council conducted a noticed public hearing to
determine whether it should proceed with the establishment of Community Facilities District
No. 2019 -2, issue bonds for the benefit of Community Facilities District No. 2019 -2 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 Attachment "C" to Resolution No. 2019 -083 (the "Rate
and Method ") to be levied within Community Facilities District No. 2019 -2 for the purposes
described in Resolution No. 2019 -083; and,
Whereas, at the December 10, 2019, public hearing all persons desiring to be heard on all matters
pertaining to the establishment of Community Facilities District No. 2019 -2, the levy of the special
taxes in accordance with the Rate and Method and the issuance of bonds within Community
Facilities District No. 2019 -2 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 December 10, 2019, the City Council adopted Resolution
Nos. 2019 -095 (the "Resolution of Formation ") and 2019 -096 (the "Resolution to Incur Bonded
Indebtedness ") which formed the District and called a special election on December 10, 2019,
within the District on three propositions relating to the levying of the special taxes, the incurring of
bonded indebtedness and the establishment of an appropriations limit for the District, which were
approved by more than two - thirds vote by the qualified electors on December 10, 2019; and,
Whereas, pursuant to Resolution No. 2019 -097, adopted on December 10, 2019, the City
Council, acting as the legislative body of Community Facilities District No. 2019 -2, declared the
Ord. No. 2021 -
Page 2 of 4
results of the special election and directed the recording of a Notice of Special Tax Lien within
Community Facilities District No. 2019 -2; and,
Whereas, the District has received a petition signed by Nichols Rd. Partners, LLC, a California
limited liability company (the "Owner "), which owns all of the land within Community Facilities
District No. 2019 -2, the boundaries of which are described in Resolution No. 2019 -083 which
petition meets the requirements of Section 53332 of the Act, requesting that the District initiate
proceedings to: (i) approve a new rate and method of apportionment for Community Facilities
District No. 2019 -2, and (ii) increase the amount of bonded indebtedness authorized to be
incurred by the District from $10,000,000 to $11,000,000, to finance the Improvements and the
Incidental Expenses (collectively, the "Changes "); and,
Whereas, on December 8, 2020, the City Council, acting as the legislative body of Community
Facilities District No. 2019 -2, adopted Resolution No. 2020 -101 (the "Resolution of Intention "),
stating its intention to consider the Changes, including the approval of a new rate and method of
apportionment for Community Facilities District No. 2019 -2, attached to the Resolution of Intention
as Attachment "B" (the "Amended and Restated Rate and Method "); and,
Whereas, a notice calling a public hearing on January 12, 2021, was published as required by
law relative to the intention of the City Council to consider the approval the Amended and Restated
Rate and Method; and,
Whereas, on January 12, 2021, this City Council conducted a noticed public hearing to determine
whether it should proceed with the approval of the Changes; and,
Whereas, at the January 12, 2021 public hearing all persons desiring to be heard on all matters
pertaining to the approval of the Changes were heard and a full and fair hearing was held; and,
Whereas, on January 12, 2021, following the close of the public hearing, the City Council adopted
Resolution No. (the "Change Resolution "), which called a special election on January 12,
2021 within Community Facilities District No. 2019 -2 on the approval of the Amended and
Restated Rate and Method and the increase of principal amount of bonded indebtedness
authorized to be issued by the District from $10,000,000 to $11,000,000; and,
Whereas, on January 12, 2021, a special election was held within Community Facilities District
No. 2019 -2 at which the qualified electors approved by more than a two - thirds vote Proposition A,
approving the Amended and Restated Rate and Method for Community Facilities District No.
2019 -2 and Proposition B, approving the increase of principal amount of bonded indebtedness
authorized to be issued by the District from $10,000,000 to $11,000,000.
NOW, THEREFORE, THE CITY COUNCIL, ACTING AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 2019 -2 OF THE CITY OF LAKE ELSINORE
(NICHOLS RANCH), ORDAINS AS FOLLOWS:
Section 1. The above recitals are all true and correct.
Section 2. By the passage of this Ordinance, the City Council authorizes the levy of a special
tax within Community Facilities District No. 2019 -2 at the maximum rates and in accordance with
the Amended and Restated Rate and Method.
Ord. No. 2021 -
Page 3 of 4
Section 3. The City Council is hereby further authorized to determine in each subsequent
fiscal year, by ordinance, or by resolution if permitted by then applicable law, on or before
August 10 of each year, or such later date as is permitted by law, the specific special tax rate and
amount to be levied on each parcel of land in the District pursuant to the Amended and Restated
Rate and Method. The special tax rates to be levied pursuant to the Amended and Restated Rate
and Method shall not exceed the applicable maximum rates set forth therein, but the special tax
may be levied at a lower rate.
Section 4. Properties or entities of the state, federal or other local governments shall be
exempt from the special tax, except as otherwise provided in Sections 53317.3 and 53317.5 of
the Act and the Amended and Restated Rate and Method. No other properties or entities are
exempt from the special tax unless the properties or entities are expressly exempted in the
Resolution of Formation and the Change Resolution, or in a resolution of consideration to levy a
new special tax or special taxes or to alter the rate or method of apportionment of an existing
special tax as provided in Section 53334 of the Act.
Section 5. All of the collections of the special tax pursuant to the Amended and Restated Rate
and Method shall be used as provided for in the Act, the Resolution of Formation and the Change
Resolution. The special tax shall be levied within the District only so long as needed for the
purposes described in the Resolution of Formation and in the Change Resolution.
Section 6. The special tax levied pursuant to the Amended and Restated Rate and Method
shall be collected in the same manner as ordinary ad valorem property taxes are collected and
shall be subject to the same penalties and the same procedure, sale and lien priority in case of
delinquency as is provided for ad valorem taxes (which such procedures include the exercise of
all rights and remedies permitted by law to make corrections, including, but not limited to, the
issuance of amended or supplemental tax bills), as such procedure may be modified by law or by
this City Council from time to time.
Section 7. As a cumulative remedy, if any amount levied as a special tax for payment of the
interest or principal of any bonded indebtedness of the District, together with any penalties and
other charges accruing under this Ordinance, are not paid when due, the City Council may, not
later than four years after the due date of the last installment of principal on the Bonds, order that
the same be collected by an action brought in the superior court to foreclose the lien of such
special tax.
Section 8. The Mayor shall sign this Ordinance and the City Clerk shall attest to the Mayor's
signature and then cause the same to be published within fifteen (15) days after its passage at
least once in a newspaper of general circulation published and circulated in City of Lake Elsinore.
Section 9. This Ordinance relating to the levy of the special tax within the District shall take
effect 30 days following its final passage, and the specific authorization for adoption is pursuant
to the provisions of Section 53340 of the Act. Upon effectiveness, this Ordinance shall supersede
Ordinance No. 2019 -1416 previously approved by the City with respect to the levy of special taxes
of the District.
Section 10. The City Clerk is hereby authorized to transmit a certified copy of this ordinance to
the Riverside County Assessor and Treasurer -Tax Collector, and to perform all other acts which
are required by the Act, this Ordinance or by law in order to accomplish the purpose of this
Ordinance.
Ord. No. 2021 -
Page 4 of 4
Passed and Adopted on this 12' day of January, 2021.
Robert E. Magee, Mayor
Attest:
Candace Alvarez, MMC
City Clerk
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF LAKE ELSINORE )
I, Candace Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that
Ordinance No. 2021- was introduced at the Regular meeting of the City Council of January
12, 2021, and adopted by the City Council of the City of Lake Elsinore, California, at the Regular
meeting of January 12, 2021 and that the same was adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Candace Alvarez, MMC
City Clerk
WAIVER OF CERTAIN ELECTION PROCEDURES
WITH RESPECT TO LANDOWNER ELECTION FOR
COMMUNITY FACILITIES DISTRICT NO. 2019 -2
OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH)
The undersigned, Eric L. Werner and Patrick Broyles, acting on behalf of Nichols Rd.
Partners, LLC, a California limited liability company (the "Owner "), hereby certify to the City of
Lake Elsinore (the "City "), with respect to the proposed change proceedings for Community
Facilities District No. 2019 -2 of the City of Lake Elsinore (Nichols Ranch) (the "District "), as
follows:
1. The undersigned has been duly authorized by the Owner and possesses all
authority necessary to execute this Waiver on behalf of the Owner in connection with the
election to be called by the City Council of the City with respect to the District. The Owner
hereby appoints Eric L. Werner to act as its authorized representative to vote in the election
referred to herein and certifies that his true and exact signature is set forth below:
Signature of Eric L. Werner:
2. The Owner is the present owner of 58.19 acres of land located within the
boundaries of the District. There are no registered voters residing within the territory owned by
the Owner and have been none during the 90 -day period preceding January 12, 2021.
3. The Owner has received notice of the January 12, 2021 public hearing to be held
by the City Council of the City regarding the approval of a new rate and method of
apportionment for the District and the increase of the maximum authorized amount of bonded
indebtedness for the District (the "Change Proceedings "). The Owner agrees that it received
adequate notice of the January 12, 2021 hearing.
4. The Owner has received from the City and the City has made available to the
Owner necessary and relevant information regarding the proposed Change Proceedings, as set
forth in Resolution No. 2020 -101 adopted by the City Council on December 8, 2020 (the
"Resolution ").
5. The undersigned understands that if the Change Proceedings are undertaken on
or after January 12, 2021, an election will be held by the District on the proposition set forth in
the sample ballot attached hereto as Exhibit "A" less than 90 days after the close of the January
12, 2021 public hearing as in accordance with Section 53326 of the Government Code, without
the preparation of an impartial analysis, arguments or rebuttals concerning the election as
provided for by Elections Code Sections 9160 to 9167, inclusive, and 9190 and without
preparation of a tax rate statement as provided in Section 9401 of the Elections Code and
without further notice of such election as required pursuant to the Elections Code or the
Government Code. Having been fully advised with respect to the election, in accordance with
the authority contained in Government Code Sections 53326 and 53327, the Owner waives
compliance with the foregoing provisions of the Elections Code and Government Code, with any
time limits or other procedural requirements pertaining to the conduct of the election which are
not being complied with and consents to having the election on any date on or after the close of
the January 12, 2021 public hearing and consents to the closing of the election as soon as all
ballots are received by the City Clerk.
4818 - 0195- 1445v2/022042 -0026
6. The undersigned hereby represents that compliance with the procedural
requirements for conducting the election, including the receipt of any ballot arguments and
impartial analysis and the time limitations which apply in connection with scheduling, mailing
and publishing notices for such an election, are unnecessary in light of the fact that the
undersigned has received sufficient information regarding the imposition of the special tax as
set forth in the Resolution to allow it to properly complete the attached ballot. The Owner further
waives its right to make any protest or complaint or undertake any legal action challenging the
validity of the election, the validity of any bonded indebtedness issued by the District, or the levy
of the special tax to finance facilities for the benefit of the District or to repay bonded
indebtedness issued by the District.
Dated: January , 2021
2
4818 - 0195- 1445v2/022042 -0026
Nichols Rd. Partners, LLC,
A California limited liability company
IN
in
Eric L. Werner, Member and Manager
Patrick Broyles, Member and Manager
EXHIBIT A
SAMPLE BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2019 -2
OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH)
SPECIAL ELECTION
January 12, 2021
This ballot represents votes.
To vote, write or stamp a cross ( " +" or "X") in the voting square after the word "YES" or
after the word "NO ". All marks otherwise made are forbidden. All distinguishing marks are
forbidden and make the ballot void.
If you wrongly mark, tear or deface this ballot, return it to the City Clerk of the City of
Lake Elsinore and obtain another.
PROPOSITION A: Shall a special tax with an amended and restated rate
and method of apportionment as provided in Attachment "B" to Resolution
No. 2020 -101 adopted by the City Council of the City of Lake Elsinore on
December 8, 2020, with respect to certain change proceedings for
Community Facilities District No. 2019 -2 of the City of Lake Elsinore
(Nichols Ranch) (the "District "), be levied to pay for the Improvements, YES
Incidental Expenses and other purposes described in Resolution No.
2019 -095, including the payment of the principal of and interest on bonds NO_
issued to finance the Improvements and Incidental Expenses for the
District?
PROPOSITION B: Shall the amount of authorized indebtedness and the
issuance bonds by the District be increased in the maximum principal
amount from $10,000,000 to $11,000,000, with interest at a rate or rates YES
not to exceed the maximum interest rate permitted by law, to finance the
Improvements and the Incidental Expenses described in Resolution NO
No. 2019 -095 of the City Council of the City of Lake Elsinore for the -
District?
A -1
4818 - 0195- 1445v2/022042 -0026
REBECCA SPENCER
Registrar of Voters
State of California
O F $ ', YFQ'
r
O *• :'� *o
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M a q
REGISTRAR OF VOTERS
COUNTY OF RIVERSIDE
CERTIFICATE OF REGISTRAR OF VOTERS
) ss
County of Riverside )
ART T1NOCO
Assistant Registrar of Voters
I, Rebecca Spencer, Registrar of Voters of said County, hereby certify that:
(A) I have been furnished a map describing the proposed boundary of Community
Facilities District No. 2019 -2 (Nichols Ranch), of the City of Lake Elsinore, of the County of
Riverside, State of California;
(B) On December 14, 2020 1 conducted, or caused to be conducted, a review of the
voter registration records of the County of Riverside for the purpose of determining the number of
voters registered to vote within the proposed boundary of Community Facilities District No. 2019-
2 (Nichols Ranch), of the City of Lake Elsinore, of the County of Riverside.
(C) There are 0 registered voters residing within the proposed boundary of Community
Facilities District No. 2019 -2 (Nichols Ranch), of the City of Lake Elsinore, of the County of
Riverside.
IN WITNESS WHEREOF, I have executed this Certificate on this 141 day of December
2020.
Rebecca Spencer
Registrar of VgteTT)
Assistant Registrar of Voters
2720 Gateway Drive I Riverside, CA 92507 -0921
Mailing address: 2724 Gateway Drive I Riverside, CA 92507 -0918
(951) 486 -7200 1 TTY (951) 697 -89661 FAX (951) 486 -7272
www.voteinfo.net
Stradling Yocca Carlson & Rauth
Draft of 115121
COMMUNITY FACILITIES DISTRICT NO. 2019 -2 OF THE
CITY OF LAKE ELSINORE ( NICHOLS RANCH)
AMENDED AND RESTATED 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. 2019 -2 ( NICHOLS RANCH) (the "Community Facilities District" or
"CFD ") and NICHOLS RD. PARTNERS, LLC, a California limited liability company (the
"Developer ") (each individually a "Party" and collectively the "Parties ") and amends and restates
in full that Funding Agreement, dated December 10, 2019 (the "Original Funding Agreement ") by
and between the City and the Developer.
WHEREAS, the City has previously established the CFD, which encompasses the
property described in the attached Exhibit "A" (the "Developer Property "), 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, the City, acting for and on behalf of itself and the CFD, have previously
entered into the Original Funding Agreement, providing for the funding, through the CFD, of
certain City and Water District improvements; and
WHEREAS, Section 12(a) of the Original Funding Agreement provides that such
agreement may be amended at any time in writing signed by each party thereto; and
WHEREAS, the City, acting for and on behalf of itself and the CFD, and the Developer
desire to amend and restate the Original Funding Agreement, in its entirety, to provide for the
funding by the CFD of certain improvements to be constructed by the Developer, to include
additional facilities of the Water District to be funded by the CFD and to amend certain other
provisions of the Original Funding Agreement as set forth herein; and
WHEREAS, the costs of the acquisition and construction of improvements to be funded
by the CFD: (i) with respect to the improvements that are to be owned, operated and maintained
by the City ( "City Improvements "), are as more particularly set forth and described in the
Description of Cost Estimates attached hereto as Exhibit "B," (ii) with respect to improvements
included in the City's fee programs (the "City Fee Facility Improvements "), are as more particularly
set forth and described in Exhibit "B" and (iii) with respect to the improvements of the Water
District, are 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
#200893 v2 9217.2
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WHEREAS, the purpose of this Agreement is amend and restate the Original Funding
Agreement and 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.
NOW, THEREFORE, it is mutually agreed between the respective Parties as follows:
SECTION 1. DEVELOPER ADVANCES
At Developer's request, the City undertook the formation of the Community Facilities
District and certain change proceedings with respect thereto. The Developer has advanced to
the City a sum of money related to the costs of such formation and change proceedings, all of
which shall be eligible for reimbursement from the CFD. 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 formation of the Community Facilities District, certain change proceedings
with respect thereto, 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. 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 and Requirements for the Issuance of Bonds. 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 and the sale
of such parcel to the initial homeowner. 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.
#200893 v2 9217.2 2
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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 ninety (90) days 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
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 100% of the expected Special Tax levy on the property owned by such Account Party in
the two fiscal years following the fiscal year in which the Bonds are issued, based on ownership
status as of a date that is within 60 days prior to the date of issuance of the Bonds (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 the 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.
#200893 v2 9217.2 3
4812- 8941 -1541 v3/022042 -0026
(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
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 transfer 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 Security 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 Maximum Special Tax
levy on the land owned by the Account Party in the Community Facilities District is responsible
for less than 20% of the Maximum Special Tax levy in the current fiscal year and the Account
Party is not delinquent in the payment of any Special Taxes, (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 Maximum
Special Tax levy 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 or 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
#200893 v2 9217.2 4
4812- 8941 -1541 v3/022042 -0026
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 Maximum 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 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 35 years and annual debt service on the Bonds
shall be permitted to escalate by two percent (2 %) per year consistent with the annual escalation
of the Special Tax. 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
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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:
(a) An amount sufficient to fund the reasonable, current estimated costs of the
City Improvements for which the Developer has or expects to submit a Disbursement Request
shall be deposited to the City Improvements Account;
(b) 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
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); 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 at the assigned special tax rate 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
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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."
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 for which the
Developer submits a Disbursement Request. 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 for which the
Developer submits a Disbursement Request.
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
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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.
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 permitted 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 the
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
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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.
PUBLIC WORKS REQUIREMENTS
6.4 City Requirements. In order that the City Improvements as to which the Acquisition
Election is made and for which a Disbursement Request is submitted 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 the following
documents shall be submitted to the City along with the performance and payment bonds:
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(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
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 comments 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 for which a
Disbursement Request is submitted.
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
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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
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 City 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;
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(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 equal to 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
(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. 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 the additional 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
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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 that the Developer intends to
fund from the City Improvement Account, 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 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
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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.
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.
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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 City's
development impact 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 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 an equal amount of 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 a
request for disbursement acceptable to the City. Upon receipt of the disbursement request, 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.
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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
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 fact 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 upon the earlier of (i) ten (10) years following the
issuance of building permits for all dwelling units expected to be built within the Community
Facilities District, (ii) the funding of all Improvements pursuant to this Agreement, or (iii) December
31, 2030. Notwithstanding the foregoing, this Agreement shall not terminate pursuant to (iii) of
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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,
Attention: Assistant City Manager. Any notice to Developer shall be addressed to Nichols Rd.
Partners, LLC, 25555 Maitri Road, Corona, CA 92883, Attention: Eric L. Werner, and Nichols Rd.
Partners, LLC, P.O. Box 77850, Corona, CA 92877, Attention: Eric L. Werner.
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:
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(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 extent
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.
(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
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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
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.
Q) 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.
(1) 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.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year written below.
Dated: January 12, 2021 CITY OF LAKE ELSINORE, a political subdivision of
the State of California
IS
ATTEST:
Candice Alvarez, MMC, City Clerk
APPROVED AS TO FORM:
Assistant City Manager
CITY ATTORNEY OF THE CITY OF LAKE ELSINORE
M
Barbara Leibold, City Attorney
[SIGNATURES CONTINUED ON NEXT PAGE.]
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[SIGNATURE PAGE CONTINUED]
Nichols Rd. Partners, LLC,
A California limited liability company
By:
Eric L. Werner, Member and Manager
By:
Patrick Broyles, Member and Manager
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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
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EXHIBIT A
DESCRIPTION OF DEVELOPER PROPERTY
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as
follows:
Assessor Parcel Nos. (as set forth in the County of Riverside Assessor's Fiscal Year 2020 -21
Roll):
389 - 200 -045
389 - 200 -047
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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."
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 Improvements
Description
Estimated Cost
Traffic Impact Fee
$ 229,992
Library Capital Improvement
25,200
City Hall & Public Works
135,912
Community Center Facilities
91,560
Marina Facilities
130,872
Animal Shelter
58,464
Fire Facility
126,168
Park Capital Improvement Fund
302,400
Park Capital Improvement Fund Credit
(302,400)
Drainage Fee
467,880
Total Fees
$ 1,266,048
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
Nichols Road Street Improvements
Ranch Road and Stovepipe Creek Crossing
Community Park (Lot 171)
Park Capital Improvement Fund Credit
Total Improvements
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$ 1,197,546
725,000
2,100,000
(302,400)
$ 3,720,146
EXHIBIT C
NOTICE OF SPECIAL TAX
NOTICE OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 2019-2
OF THE CITY OF LAKE ELSINORE (NICHOLS RANCH)
COUNTY OF RIVERSIDE, CALIFORNIA
TRACT NO. , LOT NO.
THIS IS A NOTIFICATION TO YOU PRIOR TO YOUR ENTERING INTO A CONTRACT TO
PURCHASE THIS PROPERTY. THE SELLER IS REQUIRED TO GIVE YOU THIS NOTICE AND TO
OBTAIN A COPY SIGNED BY YOU TO INDICATE THAT YOU HAVE RECEIVED AND READ A COPY
OF THIS NOTICE.
(1) This property is subject to a special tax, which is in addition to the regular property taxes and any other
charges, fees, special taxes, and benefit assessments on the parcel. The Special Tax is imposed on this property
because it is a new development, and may not be imposed generally upon property outside of this new development.
If you fail to pay this tax when due each year, the property may be foreclosed upon and sold. The tax is used to
provide public facilities or services that are likely to particularly benefit the property. YOU SHOULD TAKE THIS
TAX AND THE BENEFIT FROM THE FACILITIES AND SERVICES FOR WHICH IT PAYS INTO ACCOUNT
IN DECIDING WHETHER TO BUY THIS PROPERTY.
(2) The property you are purchasing (the "Property") is within the boundaries of Community Facilities
District No. 2019 -2 of the City of Lake Elsinore (Nichols Ranch) (the "CFD ") and is subject to an annual Special Tax
levied pursuant to the Rate and Method of Apportionment of Special Taxes for the CFD (the "RMA "). Pursuant to
the RMA, the annual Maximum Special Tax which may be levied against the Property to pay for public facilities in
any given Fiscal Year depends on whether the Property is classified as "Developed Property ", "Approved Property"
or "Undeveloped Property" during the Fiscal Year for which the Special Tax is being levied. Pursuant to the RMA,
Developed Property is defined in pertinent parts as "all Assessor's Parcels that (i) are included in a Final Map that
was recorded prior to the January I It 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 l It preceding the Fiscal
Year in which the Special Tax is being levied." Approved Property is defined in pertinent parts as "all Assessor's
Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding
the Fiscal Year in which the Special Tax is being 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 1 st preceding the Fiscal Year in which the Special Tax is being
levied. ". In each Fiscal Year prior to the first Fiscal Year in which the Property is classified as Developed Property
or Approved Property, the Property will be classified as Undeveloped Property.
Undeveloped Property
If the Property is classified as Undeveloped Property during Fiscal Year 2021 -2022, the annual Maximum
Special Tax authorized to be levied against the Property by the CFD during such Fiscal Year to pay for public facilities
shall be the $21,333 per Acre. On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for
Undeveloped Property shall be increased by two percent (2.00 %) of the amount in effect in the prior Fiscal Year.
Approved Property
If the Property is classified as Approved Property during Fiscal Year 2021 -2022, the annual Maximum
Special Tax authorized to be levied against the Property by the CFD during such Fiscal Year to pay for public facilities
shall be the $21,333 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.
#200893 v2 9217.2 C -'I
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Developed Property
If the Property is classified as Developed Property during Fiscal Year 2021 -2022, the annual Maximum
Special Tax authorized to be levied against the Property by the CFD during such Fiscal Year to pay for public facilities
shall be the greater of (i) the applicable Assigned Special Tax for Developed Property as set forth in Table 1 of the
RMA, which is reproduced in pertinent parts on the following page, or (ii) the Backup Special Tax applicable to the
Property which the seller of the Property (the "Seller ") has calculated to be approximately $ per Lot.
TABLE 1
ASSIGNED ANNUAL SPECIAL TAX
FOR DEVELOPED PROPERTY
(FISCAL YEAR 2021 -2022)
Land Use Category
Taxable
Unit
Building Square Footage
Assigned Special
Tax Per Taxable
Unit
1. Single Family Residential Property
RU
Less than 1,700 s . ft
$2,302.00
2. Single Family Residential Property
RU
1,700 s . ft to 1,900 s . ft
$2,379.00
3. Single Family Residential Property
RU
1,901 s . ft to 2,100 s . ft
$2,446.00
4. Single Family Residential Property
RU
2,101 s . ft to 2,300 s . ft
$2,523.00
5. Single Family Residential Property
RU
2,301 s . ft to 2,500 s . ft
$2,687.00
6. Single Family Residential Property
RU
2,501 s . ft to 2,700 s . ft
$2,736.00
7. Single Family Residential Property
RU
2,701 s . ft to 2,900 s . ft
$2,842.00
8. Single Family Residential Property
RU
Greater than 2,900 s . ft
$2,938.00
9. Multifamily Property
Acre
N/A
$21,333.00
10. Non - Residential Property
Acre
N/A
$21,333.00
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. In the event it is necessary to levy
the Backup Special Tax against the Property, the CFD Administrator will independently calculate the Backup Special
Tax pursuant to the methodology set forth in Section D. Lc of the RMA. It is possible that the CFD Administrator's
calculation of the Backup Special Tax may be more or less than the Seller's calculation. The Backup Annual Special
Tax shall only be levied if the total of the amount collected by virtue of the levy of the Assigned Annual Special Tax
on all Developed Property within the CFD, plus the amount collected by virtue of the levy of the annual Maximum
Special Tax applicable to all Undeveloped Property and Approved Property within the CFD, is less than the "Special
Tax Requirement ", as defined in the RMA, for the applicable Fiscal Year.
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 Bonds have been paid; (ii) all authorized facilities of the CFD 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 the CFD have been satisfied.
(3) The types of facilities which are being paid for by the Special Tax and by money received from the sale
of Bonds which are being repaid by the Special Taxes are the construction, purchase, modification, expansion,
rehabilitation and /or improvement of (i) drainage, library, park, fire, roadway, traffic, administration and community
center facilities, marina and animal shelter facilities, and other public facilities of the City, including the foregoing
public facilities which are included in the City's fee programs with respect to such facilities and authorized to be
financed under the Mello -Roos Community Facilities Act of 1982, as amended, and (ii) water and sewer facilities
including the acquisition of capacity in the sewer system and /or water system of the Elsinore Valley Municipal Water
District which are included in Elsinore Valley Municipal Water District's water and sewer capacity and connection
fee programs, and (iii) to finance incidental expenses to be incurred. These facilities may not yet have been all
constructed or acquired and it is possible that some may never be constructed or acquired.
YOU MAY OBTAIN A COPY OF THE RESOLUTION OF FORMATION WHICH AUTHORIZED
CREATION OF THE CFD, AND WHICH SPECIFIES MORE PRECISELY HOW THE SPECIAL TAX IS
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4812- 8941 -1541 v3/022042 -0026
APPORTIONED AND HOW THE PROCEEDS OF THE TAX WILL BE USED, FROM THE CITY OF LAKE
ELSINORE BY CALLING (951) 674 -3124. THERE MAY BE A CHARGE FOR THIS DOCUMENT NOT TO
EXCEED THE REASONABLE COST OF PROVIDING THE DOCUMENT.
I (WE) ACKNOWLEDGE THAT I (WE) HAVE READ THIS NOTICE AND RECEIVED A COPY OF
THIS NOTICE PRIOR TO ENTERING INTO A CONTRACT TO PURCHASE OR DEPOSIT RECEIPT WITH
RESPECT TO THE ABOVE REFERENCED PROPERTY. I (WE) UNDERSTAND THAT I (WE) MAY
TERMINATE THE CONTRACT TO PURCHASE OR DEPOSIT RECEIPT WITHIN THREE DAYS AFTER
RECEIVING THIS NOTICE IN PERSON OR WITHIN FIVE DAYS AFTER IT WAS DEPOSITED IN THE MAIL
BY GIVING WRITTEN NOTICE OF THAT TERMINATION TO THE OWNER, SUBDIVIDER, OR AGENT
SELLING THE PROPERTY.
Dated:
Dated:
#200893 v2 9217.2 C -3
4812- 8941 -1541 v3/022042 -0026
By:
Name:
By:
Name:
EXHIBIT D
CITY OF LAKE ELSINORE
CFD NO. 2019 -2 (NICHOLS RANCH)
DISBURSEMENT REQUEST FORM
1. Community Facilities District No. 2019 -2 of the City of Lake Elsinore (Nichols
Ranch) (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 Nichols Rd. Partners, LLC, a California limited liability company (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.
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4812- 8941 -1541 v3/022042 -0026
Dated: DEVELOPER:
NICHOLS RD. PARTNERS, LLC, a California
limited liability company
By:
Name:
Title: Authorized Representative
Dated: CITY OF LAKE ELSINORE
By:
Its:
[ATTACH WIRING INSTRUCTIONS]
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EXHIBIT E
AnnFNnUM
DESCRIPTION OF THE MISCELLANEOUS IMPROVEMENT
Estimated Cost of the Water District Improvements
Description Estimated Cost
Water Capacity Fees (3/4" Meter)
Temescal Valley Project CFD Credit (2021 Rate)
Temescal Valley Project CFD Credit (2020 Rate)
Water System Master Improvement Credit
Water Capacity Fees
Water Capacity Fees Credit (Estimated Credit)
Sewer Capacity Fees
Water Main Line — Nichols Road
Sewer Lift Station
Sewer Lift Station — 6" Force Main
Sewer Lift Station — Force Main Manholes
Other Construction Costs
Total Fees
E -1
4812- 8941 -1541 v3/022042 -0026
$ 2,353,008
(520,918)
(825,360)
(667,800)
92,614
(52,947)
1,324,848
1,000,000
1,500,000
175,000
55,000
432,500
$ 4,865,945
PROJECT MAP
CFD NO. 2019 -2 (NICHOLS RANCH)
CHANGE PROCEEDING
CITY OF
LAKE �LSIlYOIZE
DREAM EXTREME SPICER CONSULTING
G R O U P