HomeMy WebLinkAboutItem No. 25 CFD No. 2021-1 Tuscany Valley/CrestCity Council Agenda Report
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
www.lake-elsinore.org
File Number: ID# 21-160
Agenda Date: 4/27/2021 Status: Approval FinalVersion: 1
File Type: Council Public
Hearing
In Control: City Council / Successor Agency
Agenda Number: 25)
Establishment of Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest)
1.Adopt A RESOLUTION ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE
CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST);
2.Adopt A RESOLUTION DETERMINING THE NECESSITY TO INCUR BONDED INDEBTEDNESS
FOR COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE
(TUSCANY VALLEY/CREST);
3.Adopt A RESOLUTION CERTIFYING ELECTION RESULTS FOR COMMUNITY FACILITIES
DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST); and
4.Introduce by title only and waive further reading of AN ORDINANCE AUTHORIZING THE LEVY OF
SPECIAL TAXES WITHIN COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE
ELSINORE (TUSCANY VALLEY/CREST).
Page 1 City of Lake Elsinore Printed on 4/22/2021
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Jason Simpson, City Manager
Prepared by: Shannon Buckley, Assistant Administrative Services Director
Date: April 27, 2021
Subject: Establishment of Community Facilities District No. 2021-1 of the City of
Lake Elsinore (Tuscany Valley/Crest)
Recommendations
adopt A RESOLUTION ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF
THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST); and,
adopt A RESOLUTION DETERMINING THE NECESSITY TO INCUR BONDED
INDEBTEDNESS FOR COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF
LAKE ELSINORE (TUSCANY VALLEY/CREST); and,
adopt A RESOLUTION CERTIFYING ELECTION RESULTS FOR COMMUNITY FACILITIES
DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST); and,
introduce by title only and waive further reading AN ORDINANCE AUTHORIZING THE LEVY
OF SPECIAL TAXES WITHIN COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY
OF LAKE ELSINORE (TUSCANY VALLEY/CREST).
Background and Discussion
The developer, SPT- AREP III Tuscany Associates, LLC, a Delaware limited liability company
(the “Developer”), owns property containing 335 proposed residential lots within the City. Such
property is located to the south of Highway 74 at Greenwald Avenue and Little Valley Road, in
the northeastern part of the City. The Developer has requested that the City form a Community
Facilities District (“CFD” or “District”) and designate two improvement areas therein on such
property to finance the costs of certain public improvements through the levy of a special tax
and the issuance of bonds in an amount not to exceed $14,000,000 for Improvement Area No. 1
and $10,000,000 for Improvement Area No. 2.
The Developer has requested that: (1) the area shown in Attachment A of Resolution No. 2021-
25 adopted by the City Council on March 23, 2021 (the “Resolution of Intention”) be the
boundaries of the CFD and Improvement Area Nos. 1 and 2 therein, (2) special taxes be levied
within Improvement Area No. 1 in accordance with the rate and method of apportionment of
special taxes as described in Attachment C to the Resolution of Intention; and (3) special taxes
be levied within Improvement Area No. 2 in accordance with the rate and method of
apportionment of special taxes as described in Attachment D to the Resolution of Intention.
CFD 2021-1 (Tuscany Valley/Crest) Formation
Page 2 of 3
Such rate and method of apportionment of special taxes are referred to herein each as an
“RMA.”
The Resolution of Intention called for a public hearing to be held on April 27, 2021. The
purpose of the public hearing is for the City Council to formally consider the approval of the
formation of the CFD, the designation of Improvement Area Nos. 1 and 2 therein and the
approval of the levy of the special taxes within Improvement Area Nos. 1 and 2. Notice of the
public hearing was published in the Press Enterprise and mailed to the property owner in
accordance with the Mello-Roos Act.
In connection with the public hearing, Spicer Consulting Group has prepared a CFD Public
Hearing Report which describes and analyzes the facilities to be financed by the CFD and the
estimated costs of such facilities. Following the close of the public hearing, the City Council will
be asked to adopt the Resolution of Formation and the Resolution Determining the Necessity to
Incur Debt which, together, approves the formation of the CFD and the designation of the
Improvement Areas therein, the levy of the special taxes in each Improvement Area in
accordance with the applicable RMA and determines the necessity for the CFD to issue bonds
in an amount not to exceed $14,000,000 for Improvement Area No. 1 and $10,000,000 for
Improvement Area No. 2. Such resolutions call for elections to submit to the qualified voters in
Improvement Area No. 1 and in Improvement Area No. 2 ballot measures on the approval of the
special taxes, the issuance of the bonds for each Improvement Area and an appropriations limit
for the CFD.
In addition, the Resolution of Formation, approves the execution and delivery of the following
agreements in the forms presented to the City Council: (i) the Acquisition, Construction and
Funding Agreement with the Developer (the “Funding Agreement”); and (ii) the Joint Community
Facilities Agreement with the Developer and Elsinore Valley Municipal Water District (the
“JCFA”). The Funding Agreement sets forth the terms, among others, pursuant to which the
CFD will finance improvements to be constructed by the Developer and acquired by the City or
to be constructed by the City. In accordance with the Mello-Roos Act, the approval and
execution of the JCFA allows for the CFD to finance improvements to be owned and operated
by Elsinore Valley Municipal Water District which benefit the development within the District.
On file with the City Clerk is a Certificate of the Registrar of Voters of Riverside County certifying
that there are no registered voters residing within the boundaries of the CFD. Accordingly, under
the Mello-Roos Act, only property owners owning land in each Improvement Area are eligible to
vote at the election for such Improvement Area with each owner having one vote for each acre
(or portion thereof) that they own within such Improvement Area. The Developer has executed a
consent and waiver of certain election procedures with respect to the election for each
Improvement Area, including certain timing requirements with respect to the elections, and the
City Clerk has executed certificates concurring to the holding of the elections on this date, all in
accordance with the Mello-Roos Act. Accordingly, if the City Council approves the Resolution of
Formation and the Resolution Determining the Necessity to Incur Debt, the City Clerk will
conduct the elections. The City Clerk will announce the elections results and the City Council
will be asked to adopt the Resolution Certifying the Election Results. Based on upon certification
that 2/3rds of the votes cast are in favor of the propositions voted upon in each Improvement
Area, the Resolution Certifying the Election Results directs the City Clerk to record a notice of
special tax lien on the property within each Improvement Area. The City Council will then be
asked to introduce the Ordinance authorizing the levy of the special tax within each
Improvement Area in accordance with the applicable Rate and Method.
CFD 2021-1 (Tuscany Valley/Crest) Formation
Page 3 of 3
Fiscal Impact
The District will be required to annually levy special taxes on all of the taxable property within
each Improvement Area in order to pay for the costs of facilities, debt service on bonds and
administration of the CFD. Any bonds issued by the District are NOT obligations of the City and
will be secured solely by the special taxes levied in the Improvement Area relating to such
bonds. The Developer has made a deposit to pay for the costs of forming the CFD. The Funding
Agreement provides the terms under which the Developer may be reimbursed for these costs if
and when bonds are issued for CFD.
Exhibits
A – Res. Establishing of Formation
B – Res. Necessity to Incur Debt
C – Res. Certifying the Election Results
D - Ordinance
E - Certificate of the Registrar of Voters
F - Landowner Waivers CFD 2021-1 IA 1
G - Landowner Waivers CFD 2021-1 IA 2
H – CFD Report
I – Funding Agreement
J - Joint Community Facilities Agreement
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF
THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST) AND IMPROVEMENT
AREAS THEREIN, AUTHORIZING THE LEVY OF A SPECIAL TAX THEREIN,
CALLING AN ELECTION WITHIN EACH IMPROVEMENT AREA AND APPROVING
AND AUTHORIZING CERTAIN ACTIONS RELATED THERETO
Whereas, the City Council (the “City Council”) of the City of Lake Elsinore (the “City”) has
heretofore adopted Resolution No. 2021-25 stating its intention to form Community Facilities
District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (“Community Facilities
District No. 2021-1” or the “District”) pursuant to the Mello-Roos Community Facilities Act of
1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code
of the State of California (the “Act”) and to form two improvement areas within the proposed
Community Facilities District No. 2021-1 to be known as “Improvement Area No. 1 of
Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)
(“Improvement Area No. 1”) and “Improvement Area No. 2 of Community Facilities District No.
2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)” (“Improvement Area No. 2” and
together with Improvement Area No. 1, the “Improvement Areas” and each individually an
“Improvement Area”); and,
Whereas, a copy of Resolution No. 2021-25 setting forth a description of the proposed
boundaries of Community Facilities District No. 2021-1 and each of the Improvement Areas, the
facilities and incidental expenses to be financed by the District and the rate and method of
apportionment of the special tax proposed to be levied within each Improvement Area is on file
with the City Clerk; and,
Whereas, notice was published and mailed to all landowners of the land proposed to be
included within the District as required by law relative to the intention of this City Council to form
proposed Community Facilities District No. 2021-1 and the Improvement Areas and to levy a
special tax (the “Special Tax”) within each Improvement Area and to incur bonded indebtedness
in the amount of up to $14,000,000 within proposed Improvement Area No. 1 and $10,000,000
within proposed Improvement Area No. 2 therein to finance the facilities and incidental
expenses described in Resolution No. 2021-25; and,
Whereas, on April 27, 2021, this City Council conducted a noticed public hearing as required by
law relative to the proposed formation of Community Facilities District No. 2021-1 and the
Improvement Areas, the levy of the Special Tax within each Improvement Area and the
issuance of bonded indebtedness by the District for each Improvement Area; and,
Whereas, at the April 27, 2021 public hearing there was filed with this City Council a report
containing a description of the facilities necessary to meet the needs of the District and an
estimate of the cost of such facilities as required by Section 53321.5 of the Act (the “Engineer’s
Report”); and,
Whereas, at the April 27, 2021 public hearing all persons desiring to be heard on all matters
pertaining to the formation of Community Facilities District No. 2021-1 and the Improvement
Areas, the levy of the Special Tax within each Improvement Area and the issuance of bonded
indebtedness by the District for each of the Improvement Areas were heard and full and fair
hearings were held; and,
CC Res. No. 2021-_____
Page 2 of 10
Whereas, following the public hearing, this City Council has determined to authorize the
formation of the District to finance the types of facilities (the “Facilities”) and the incidental
expenses (the “Incidental Expenses”) set forth in Attachment A hereto, which are described in
more detail in the Engineer’s Report; and,
Whereas, at the public hearing evidence was presented to this City Council on the matters
before it, and the proposed Special Tax to be levied within each of the Improvement Areas was
not precluded by a majority protest of the type described in Section 53324 of the Act, and this
City Council at the conclusion of the hearing was fully advised as to all matters relating to the
formation of the District and the Improvement Areas, the levy of the Special Tax and the
issuance of bonded indebtedness within each of the Improvement Areas; and,
Whereas, this City Council has determined, based on a Certificate of Registrar of Voters of the
County of Riverside on file in the office of the City Clerk, that no registered voters have been
residing in the proposed boundaries of Community Facilities District No. 2021-1 for each of the
90 days prior to April 27, 2021 and that the qualified electors in Community Facilities District No.
2021-1 are the landowners within the District; and,
Whereas, on the basis of all of the foregoing, this City Council has determined to proceed with
the establishment of Community Facilities District No. 2021-1 and the Improvement Areas and
to call an election within each Improvement Area to authorize (i) the levy of a Special Tax within
Improvement Area No. 1 pursuant to the rate and method of apportionment of the special tax,
as set forth in Attachment C to Resolution No. 2021-25 (the “Improvement Area No. 1 Rate and
Method”), (ii) the levy of a Special Tax within Improvement Area No. 2 pursuant to the rate and
method of apportionment of the special tax, as set f orth in Attachment D to Resolution No.
2021-25 (the “Improvement Area No. 2 Rate and Method”) (iii) the issuance of bonds within
each of the Improvement Areas to finance the Facilities and Incidental Expenses, and (iv) the
establishment of an appropriations limit for Community Facilities District No. 2021-1; and,
Whereas, in order to facilitate the funding of the Facilities, the legislative body of the District
desires to enter into an Acquisition, Construction and Funding Agreement (the “Funding
Agreement”) with SPT- AREP III Tuscany Associates, LLC, a Delaware limited liability company
(the “Developer”) and the form of the Funding Agreement is on file with the City Clerk; and,
Whereas, in connection with the proposed formation of the District, the City proposes to enter
into a Joint Community Facilities Agreement (the “JCFA”) with the Elsinore Valley Municipal
Water District (the “Water District”) and the Developer, relating to certain facilities proposed to
be financed by the District and owned and operated by the Water District and the form of the
JCFA is on file with the City Clerk.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Each of the above recitals is true and correct.
Section 2. A community facilities district to be designated “Community Facilities District No.
2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)” is hereby established pursuant to
the Act and Improvement Area No. 1 and Improvement Area No. 2 are hereby designated withi n
the District in accordance with 53350 of the Act. The City Council hereby finds and determines
that all prior proceedings taken with respect to the establishment of the District were valid and in
CC Res. No. 2021-_____
Page 3 of 10
conformity with the requirements of law, including the Act. This finding is made in accordance
with the provisions of Section 53325.1(b) of the Act.
Section 3. The boundaries of Community Facilities District No. 2021-1 and each of the
Improvement Areas are established as shown on the map designated “Proposed Boundary Map
of Community Facilities District No. 2021-1 (Tuscany Valley/Crest) City of Lake Elsinore, County
of Riverside, State of California”, which map is on file in the office of the City Clerk and was
recorded pursuant to Sections 3111 and 3113 of the Streets and Highways Code in the County
Book of Maps of Assessment and Community Facilities Districts in the Assessor-County Clerk-
Recorder’s office of the County of Riverside in Book No. 86 Page No. 53 on April 1, 2021 as
Instrument No. 2021-0204162.
Section 4. The types of Facilities and Incidental Expenses authorized to be provided for
Community Facilities District No. 2021-1 are those set forth in Attachment A attached hereto.
The estimated cost of the Facilities and Incidental Expenses to be financed is set forth in the
Engineer’s Report, which estimates may change as the Facilities are designed and bid for
construction and acquisition, as applicable.
The City is authorized by the Act to contribute revenue to, or to construct or acquire the
Facilities, all in accordance with the Act. The City Council finds and determines that the
proposed Facilities are necessary to meet the increased demand that will be placed upon local
agencies and public infrastructure as a result of new development within the District and that the
Facilities to be financed, including those to be financed pursuant to the JCFA to be entered into
with the Water District, benefit residents of the City and the future residents of the District.
Section 5. Except where funds are otherwise available, it is the intention of this City Council,
subject to the approval of the eligible voters within each Improvement Area, to levy annually a
Special Tax at the rates set forth in the Improvement Area No. 1 Rate and Method and the
Improvement Area No. 2 Rate and Method, on all non-exempt property within Improvement
Area No. 1 and Improvement Area No. 2, respectively, sufficient to pay for (i) the portion of the
Facilities and Incidental Expenses to be financed by such Improvement Area; and (ii) the
establishment and replenishment of reserve funds, any remarketing, credit enhancement and
liquidity facility fees and other expenses of the type permitted by Section 53345.3 of the Act.
The District expects to incur, and in certain cases has already incurred, Incidental Expenses in
connection with the creation of the District, the issuance of bonds, the levying and collecting of
the Special Tax, the completion and inspection of the Facilities and the annual administration of
the bonds and the District. The Improvement Area No. 1 Rate and Method is described in detail
in Attachment C to Resolution No. 2021-25 and is incorporated herein by this reference, and the
City Council hereby finds that the Improvement Area No. 1 Rate and Method contains sufficient
detail to allow each landowner within Improvement Area No. 1 to estimate the maximum amount
that may be levied against each parcel. The Improvement Area No. 2 Rate and Method is
described in detail in Attachment D to Resolution No. 2021-25 and is incorporated herein by this
reference, and the City Council hereby finds that the Improvement Area No. 2 Rate and Method
contains sufficient detail to allow each landowner within Improvement Area No. 2 to estimate the
maximum amount that may be levied against each parcel. As described in greater detail in the
Engineer’s Report, which is incorporated by reference herein, the Special Tax to be levied within
the respective Improvement Areas is based on the expected demand that each parcel of real
property within the respective Improvement Areas will place on the Facilities and on the benefit
that each parcel will derive from the right to access the Facilities and, accordingly, is hereby
determined to be reasonable. The Special Tax within each of the Improvement Areas shall be
levied on each assessor’s parcel in accordance with the Improvement Area No. 1 Rate and
CC Res. No. 2021-_____
Page 4 of 10
Method and the Improvement Area No. 2 Rate and Method, as applicable, provided, however,
that the Special Tax within each of the Improvement Areas shall not be levied after Fiscal Year
2060-61. The Special Tax is apportioned to each parcel within the respective Improvement
Areas on the foregoing bases pursuant to Section 53325.3 of the Act and such Special Tax is
not on or based upon the ownership of real property or the assessed value of real property.
If Special Taxes of an Improvement Area are levied against any parcel used for private
residential purposes, (i) the maximum Special Tax rate shall be specified as a dollar amount
which shall be calculated and established not later than the date on which the parcel is first
subject to the Special Tax because of its use for private residential purposes and shall not be
increased over time except as authorized under the rate and method of apportionment of the
Special Tax for such Improvement Area; (ii) the Special Tax within each of the Improvement
Areas shall not be levied after Fiscal Year 2060-61, and (iii) under no circumstances will the
Special Tax levied in any fiscal year against any such parcel used for private residential uses be
increased as a consequence of delinquency or default by the owner or owners of any other
parcel or parcels within such Improvement Area by more than ten percent above the amount
that would have been levied in that fiscal year had there never been any such delinquencies or
defaults.
The City Manager of the City of Lake Elsinore will be responsible for preparing annually, or
authorizing a designee to prepare, a current roll of special tax levy obligations by assessor’s
parcel number and will be responsible for estimating future special tax levies pursuant to
Section 53340.2 of the Act.
Section 6. In the event that a portion of the property within Improvement Area No. 1 shall
become for any reason exempt, wholly or partially, from the levy of the Special Tax specified in
the Improvement Area No. 1 Rate and Method, or in the event of delinquencies in the payment
of Special Taxes levied, the City Council shall, on behalf of Community Facilities District No.
2021-1, increase the levy to the extent necessary and permitted by law and these proceedings
upon the remaining property within Improvement Area No. 1 which is not exempt or delinquent
in order to yield the required debt service payments on any outstanding bonds issued by the
District for Improvement Area No. 1, or to prevent the District from defaulting on any other
obligations or liabilities payable from Improvement Area No. 1 special taxes; provided, however,
under no circumstances will the Special Tax levied against any parcel in Improvement Area No.
1 used for private residential uses be increased as a consequence of delinquency or default by
the owner or owners of any other parcel or parcels within Improvement Area No. 1 by more than
ten percent above the amount that would have been levied in that fiscal year had there never
been any such delinquencies or defaults. The amount of the Special Tax for parcels within
Improvement Area No. 1 will be set in accordance with the Improvement Area No. 1 Rate and
Method. The obligation to pay Special Taxes may be prepaid only as set forth in Section G of
the Improvement Area No. 1 Rate and Method.
In the event that a portion of the property within Improvement Area No. 2 shall become for any
reason exempt, wholly or partially, from the levy of the Special Tax specified in the Improvement
Area No. 2 Rate and Method, or in the event of delinquencies in the payment of Special Taxes
levied, the City Council shall, on behalf of Community Facilities District No. 2021-1, increase the
levy to the extent necessary and permitted by law and these proceedings upon the remaining
property within Improvement Area No. 2 which is not exempt or delinquent in order to yield the
required debt service payments on any outstanding bonds issued by the District for
Improvement Area No. 2, or to prevent the District f rom defaulting on any other obligations or
liabilities payable from Improvement Area No. 2 special taxes; provided, however, under no
CC Res. No. 2021-_____
Page 5 of 10
circumstances will the Special Tax levied against any parcel in Improvement Area No. 2 used
for private residential uses be increased as a consequence of delinquency or default by the
owner or owners of any other parcel or parcels within Improvement Area No. 2 by more than ten
percent above the amount that would have been levied in that fiscal year had there never been
any such delinquencies or defaults. The amount of the Special Tax for parcels within
Improvement Area No. 2 will be set in accordance with the Improvement Area No. 2 Rate and
Method. The obligation to pay Special Taxes may be prepaid only as set forth in Section G of
the Improvement Area No. 2 Rate and Method.
Section 7. Upon recordation of a notice of special tax lien for each of the Improvement
Areas 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 each Improvement
Area and this lien shall continue in force and effect until the Special Tax obligation is prepaid
and permanently satisfied and the lien canceled with respect to such Improvement Area in
accordance with law or until collection of the Special Tax for such Improvement Area by the
District ceases.
Section 8. Consistent with Section 53325.6 of the Act, the City Council finds and determines
that the land within Community Facilities District No. 2021-1, if any, devoted primarily to
agricultural, timber or livestock uses and being used for the commercial production of
agricultural, timber or livestock products is contiguous to other land within Community Facilities
District No. 2021-1 and will be benefited by the Facilities proposed to be provided within
Community Facilities District No. 2021-1.
Section 9. It is hereby further determined that there is no ad valorem property tax currently
being levied on property within proposed Community Facilities District No. 2021-1 for the
exclusive purpose of paying the principal of or interest on bonds or other indebtedness incurred
to finance the construction of capital facilities which provide the same services to the territory of
Community Facilities District No. 2021-1 as are proposed to be provided by the Facilities to be
financed by Community Facilities District No. 2021-1.
Section 10. Written protests against the establishment of the District and the designation of
the Improvement Areas have not been filed by one-half or more of the registered voters within
the boundaries of the District or either Improvement Area or by the property owners of one-half
(1/2) or more of the area of land within the District or either Improvement Area. The City
Council hereby finds that the proposed Special Tax has not been precluded by a majority
protest pursuant to Section 53324 of the Act.
Section 11. An election is hereby called for Improvement Area No. 1 on the propositions of
levying the Special Tax on the property within Improvement Area No. 1 and establishing an
appropriations limit for the District pursuant to Section 53325.7 of the Act and shall be
consolidated with the election on the proposition of incurring bonded indebtedness for
Improvement Area No. 1, pursuant to Sections 53351 and 53353.5 of the Act. The language of
the propositions to be placed on the ballot is attached hereto as Attachment B.
An election is hereby called for Improvement Area No. 2 on the propositions of levying the
Special Tax on the property within Improvement Area No. 2 and establishing an appropriations
limit for the District pursuant to Section 53325.7 of the Act and shall be consolidated with the
election on the proposition of incurring bonded indebtedness for Improvement Area No. 2.
Pursuant to Section 53351 and 53353.5 of the Act. The language of the propositions to be
placed on the ballot is attached hereto as Attachment C.
CC Res. No. 2021-_____
Page 6 of 10
Section 12. The date of the elections for each of the Improvement Areas on the propositions
of incurring the bonded indebtedness, authorizing the levy of the Special Tax and establishing
an appropriations limit for the District shall be April 27, 2021, or such later date as is consented
to by the City Clerk or Deputy City Clerk (referred to herein as the “City Clerk”) of the City of
Lake Elsinore; provided that, if the election is to take place sooner than 90 days after April 27,
2021, then the unanimous written consent of each qualified elector within such Improvement
Area to such election date must be obtained. The polls shall be open for said election
immediately following the close of the public hearing on April 27, 2021. The election shall be
conducted by the City Clerk. Except as otherwise provided by the Act, the election shall be
conducted in accordance with the provisions of law regulating elections of the City of Lake
Elsinore insofar as such provisions are determined by the City Clerk to be applicable. The City
Clerk is authorized to conduct the election following the adoption of this resolution, and all
ballots shall be received by, and the City Clerk shall close the election by, 11:00 p.m. on the
election day; provided the election shall be closed at such earlier time as all qualified electors
have voted as provided in Section 53326(d) of the Act. Pursuant to Section 53326 of the Act,
the ballots for the special election shall be distributed in person or by mail with return postage
prepaid, to the qualified electors within each of the Improvement Areas. The City Clerk has
secured a certificate from the Registrar of Voters of the County of Riverside certifying that there
were no registered voters within the District as of March 24, 2021. Accordingly, since there
were fewer than 12 registered voters within the District for each of the 90 days preceding April
27, 2021, the qualified electors shall be the landowners within each of the Improvement Areas
and each landowner, or the authorized representative thereof, shall have one vote for each acre
or portion thereof that such landowner owns within the respective Improvement Areas, as
provided in Section 53326 of the Act. The sole landowner within Improvement Area No. 1 has
executed and delivered a waiver of certain election law requirements and consenting to the
holding of the election on April 27, 2021, which waiver is on file with the City Clerk. The sole
landowner within Improvement Area No. 2 has executed and delivered a waiver of certain
election law requirements and consenting to the holding of the election on April 27, 2021, which
waiver is on file with the City Clerk.
Section 13. The preparation of the Engineer’s Report is hereby ratified. The Engineer’s
Report, as submitted, is hereby approved and was made a part of the record of the public
hearing regarding the formation of Community Facilities District No. 2021-1. The Engineer’s
Report is ordered to be kept on file with the transcript of these proceedings and open for public
inspection.
Section 14. The form of the Funding Agreement on file with the City Clerk is approved as to
form, and each of the City Manager and his written designees, is authorized to execute the
Funding Agreement in substantially the form on file with the City Clerk, together with such
changes as are approved by the officer executing the same, with the approval of such changes
to be conclusively evidenced by the execution and delivery thereof.
Section 15. The form of the JCFA on file with the City Clerk is approved as to form, and each
of the City Manager and his written designees, is authorized to execute the JCFA in
substantially the form on file with the City Clerk, together with such changes as are approved by
the officer executing the same, with the approval of such changes to be conclusively evidenced
by the execution and delivery thereof.
Section 16. This Resolution shall be effective upon its adoption.
CC Res. No. 2021-_____
Page 7 of 10
Passed and Adopted on this 27th day of April, 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 April 27, 2021 and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Candice Alvarez, MMC
City Clerk
A-1
4816-7810-7620v3/022042-0035
ATTACHMENT A
Types of Facilities to Be
Financed by Community
Facilities District No. 2021-1
The proposed types of public facilities and expenses to be financed by the District
include:
The construction, purchase, modification, expansion, rehabilitation and/or improvement
of (i) drainage, library, park, 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
(the “City Facilities”) and (ii) water and sewer facilities including the acquisition of capacity in the
sewer system and/or water system of the Elsinore Valley Municipal Water District which are
included in Elsinore Valley Municipal Water District’s water and sewer capacity and connection
fee programs (the “Water District Facilities” and together, with the City Facilities, the “Facilities”),
and all appurtenances and appurtenant work in connection with the foregoing Facilities,
including the cost of engineering, planning, designing, materials testing, coordination,
construction staking, construction management and supervision for such Facilities, and to
finance the incidental expenses to be incurred, including:
a. The cost of engineering, planning and designing the Facilities;
b. All costs, including costs of the property owner petitioning to form the District,
associated with the creation of the District, the issuance of the bonds, the determination of the
amount of special taxes to be levied and costs otherwise incurred in order to carry out the
authorized purposes of the District; and
c. Any other expenses incidental to the construction, acquisition, modification,
rehabilitation, completion and inspection of the Facilities.
Capitalized terms used and not defined herein shall have the meaning set forth in the
Rate and Method of Apportionment of Special Taxes Improvement Area No. 1 and Improvement
Area No. 2.
B-1
4816-7810-7620v3/022042-0035
ATTACHMENT B
BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 1
SPECIAL TAX AND SPECIAL BOND ELECTION
April 27, 2021
PROPOSITION A: Shall Community Facilities District
No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (the “District”) incur an indebtedness and
issue bonds in the maximum principal amount of
$14,000,000 for Improvement Area No. 1 therein (the
“Improvement Area”) with interest at a rate or rates not to
exceed the maximum interest rate permitted by law, to
finance the Facilities and the Incidental Expenses
described in Resolution No. 2021-25 of the City Council
of the City of Lake Elsinore?
PROPOSITION B: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2021-25 of the City Council of
the City of Lake Elsinore be levied to pay for the
Facilities, Incidental Expenses and other purposes
described in Resolution No. 2021-25, including the
payment of the principal of and interest on bonds issued
by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with
Fiscal Year 2020-2021, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2021-1 be an amount equal to $3,000,000?
YES______
NO_______
C-1
4816-7810-7620v3/022042-0035
ATTACHMENT C
BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 2
SPECIAL TAX AND SPECIAL BOND ELECTION
April 27, 2021
PROPOSITION D: Shall Community Facilities District
No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (the “District”) incur an indebtedness and
issue bonds in the maximum principal amount of
$10,000,000 for Improvement Area No. 2 therein (the
“Improvement Area”) with interest at a rate or rates not to
exceed the maximum interest rate permitted by law, to
finance the Facilities and the Incidental Expenses
described in Resolution No. 2021-25 of the City Council
of the City of Lake Elsinore?
PROPOSITION E: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2021-25 of the City Council of
the City of Lake Elsinore be levied to pay for the
Facilities, Incidental Expenses and other purposes
described in Resolution No. 2021-25, including the
payment of the principal of and interest on bonds issued
by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION F: For each year commencing with
Fiscal Year 2020-2021, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2021-1 be an amount equal to $3,000,000?
YES______
NO_______
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. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY
VALLEY/CREST) DETERMINING THE NECESSITY TO INCUR BONDED
INDEBTEDNESS WITHIN IMPROVEMENT AREA NOS. 1 AND 2 OF COMMUNITY
FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY
VALLEY/CREST) IN AN AMOUNT NOT TO EXCEED $14,000,000 WITHIN
IMPROVEMENT AREA NO. 1 AND $10,000,000 WITHIN IMPROVEMENT AREA NO.
2, AND CALLING ELECTIONS THEREIN
Whereas, on March 23, 2021, the City Council of the City of Lake Elsinore (the “City Council”)
adopted Resolution No. 2021-25 stating its intention to form Community Facilities District No.
2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (“Community Facilities District No.
2021-1” or the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as
amended (the “Act”) and to form two improvement areas within proposed Community Facilities
District No. 2021-1 to be known as “Improvement Area No. 1 of Community Facilities District
No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)” (“Improvement Area No. 1”) and
“Improvement Area No. 2 of Community Facilities District No. 2021-1 of the City of Lake
Elsinore (Tuscany Valley/Crest)” (“Improvement Area No. 2” and together with Improvement
Area No. 1, the “Improvement Areas” and each individually an “Improvement Area”); and,
Whereas, on March 23, 2021, the City Council also adopted Resolution No. 2021-26 stating its
intention to incur bonded indebtedness in the amount of up to $14,000,000 within proposed
Improvement Area No. 1 and $10,000,000 within proposed Improvement Area No. 2 to finance
(1) the purchase, construction, modification, expansion, improvement and/or rehabilitation of
public facilities identified in Attachment B to Resolution No. 2021-25, and (2) the incidental
expenses to be incurred in financing such public facilities and services and forming and
administering the District, as identified in Attachment B to Resolution No. 2021-25; and,
Whereas, notice was published as required by law relative to the intention of the City Council to
form proposed Community Facilities District No. 2021-1, to designate the Improvement Areas
and to incur bonded indebtedness in the amount of up to $14,000,000 within the boundaries of
proposed Improvement Area No. 1 and $10,000,000 within the boundaries of proposed
Improvement Area No. 2; and,
Whereas, on April 27, 2021, this City Council conducted a noticed public hearing to determine
whether it should proceed with the formation of Community Facilities District No. 2021-1 and the
designation of the Improvement Areas, issue bonds within the Improvement Areas to pay for the
facilities and incidental expenses described in Resolution No. 2021-25 and authorize a rate and
method of apportionment of a special tax for each of the Improvement Areas to be levied within
such Improvement Area for the purposes described in Resolution No. 2021-25; and,
Whereas, at said hearing all persons desiring to be heard on all matters pertaining to the
formation of Community Facilities District No. 2021-1, the designation of the Improvement
Areas, the levy of a special tax and the issuance of bonds with respect to each Improvement
Area to pay for the cost of the proposed facilities and incidental expenses were heard and a full
and fair hearing was held; and,
CC Res. No. 2021-___
Page 2 of 6
Whereas, the City Council subsequent to such hearing adopted Resolution No. 2021-___
establishing Community Facilities District No. 2021-1 (the “Resolution of Formation”),
designating the Improvement Areas and authorizing the financing of the public facilities (the
“Facilities”) and the incidental expenses (the “Incidental Expenses”) described in Attachment A
thereto; and,
Whereas, the City Council desires to make the necessary findings to incur bonded
indebtedness within each of the Improvement Areas, to declare the purpose for said debt, and
to authorize the submittal of a proposition to issue bonded indebtedness to the voters of each of
the Improvement Areas, being the landowners therein, all as authorized and required by law.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE HEREBY
FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS:
Section 1. It is necessary to incur bonded indebtedness in a maximum aggregate principal
amount not to exceed $14,000,000 within Improvement Area No. 1 and $10,000,000 within
Improvement Area No. 2.
Section 2. The indebtedness is to be incurred for the purpose of financing the costs of
purchasing, constructing, modifying, expanding, improving, and/or rehabilitating the Facilities
and financing the Incidental Expenses, as described in the Resolution of Formation, and
carrying out the powers and purposes of Community Facilities District No. 2021-1, including, but
not limited to, financing the costs of selling the bonds, establishing and replenishing bond
reserve funds and paying remarketing, credit enhancement and liquidity facility fees and other
expenses of the type authorized by Section 53345.3 of the Act.
Section 3. The whole of the property within Improvement Area No. 1, other than property
exempted from the special tax pursuant to the provisions of the rate and method of
apportionment attached to Resolution No. 2021-25 as Attachment C, shall pay for the bonded
indebtedness issued by the District for Improvement Area No. 1 pursuant to the levy of the
special tax for Improvement Area No. 1 authorized by the Resolution of Formation.
The whole of the property within Improvement Area No. 2, other than property exempted from
the special tax pursuant to the provisions of the rate and method of apportionment attached to
Resolution No. 2021-25 as Attachment D, shall pay for the bonded indebtedness issued by the
District for Improvement Area No. 2 pursuant to the levy of the special tax for Improvement Area
No. 2 authorized by the Resolution of Formation.
Section 4. The maximum term of the bonds to be issued shall in no event exceed thirty-five
(35) years.
Section 5. The bonds shall bear interest at the rate or rates not to exceed the maximum
interest rate permitted by law, payable annually or semiannually, or in part annually and in part
semiannually, except the first interest payment may be for a period of less than six months, with
the actual rate or rates and times of payment to be determined at the time or times of sale
thereof.
Section 6. The bonds may bear a variable or fixed interest rate, provided that such variable
rate or fixed rate shall not exceed the maximum rate permitted by Section 53531 of the
California Government Code, or any other applicable provision of law limiting the maximum
interest rate on the bonds.
CC Res. No. 2021-___
Page 3 of 6
Section 7. Pursuant to Section 53351 of the Act, a special election is hereby called for
Improvement Area No. 1 on the proposition of incurring the bonded indebtedness therein. The
proposition relative to incurring bonded indebtedness in the maximum aggregate principal
amount of $14,000,000 shall be in the form of Proposition A set forth in Attachment A hereto. In
accordance with Sections 53351(h) and 53353.5 of the Act, the election shall be consolidated
with the special election called on the proposition of levying a special tax within Improvement
Area No. 1 as described in the Resolution of Formation, which proposition shall be in the form of
Proposition B set forth in Attachment A, and on the proposition of establishing an appropriations
limit for the District, which proposition shall be in the form of Proposition C set forth in
Attachment A.
Pursuant to Section 53351 of the Act, a special election is hereby called for Improvement Area
No. 2 on the proposition of incurring the bonded indebtedness therein. The proposition relative
to incurring bonded indebtedness in the maximum aggregate principal amount of $10,000,000
shall be in the form of Proposition D set forth in Attachment B hereto. In accordance with
Section 53351(h) and 53353.5 of the Act, the election shall be consolidated with the special
election called on the proposition of levying a special tax within Improvement Area No. 2 as
described in the Resolution of Formation, which proposition shall be in the form of Proposition E
set forth in Attachment B, and on the proposition of establishing an appropriations limit for the
District, which proposition shall be in the form of Proposition F set forth in Attachment B.
Section 8. The date of the special elections for the Improvement Areas on the propositions
of incurring the bonded indebtedness, authorizing the levy of the special tax and setting an
appropriations limit shall be April 27, 2021, or such later date as is consented to by the City
Clerk, or a Deputy City Clerk of the City (referred to herein as the “City Clerk”); provided that, if
the election for an Improvement Area is to take place sooner than 90 days after April 27, 2021,
then the unanimous written consent of each qualified elector within such Improvement Area to
such election date must be obtained. The polls shall be open for said election immediately
following the public hearing on April 27, 2021. The election shall be conducted by the City
Clerk. Except as otherwise provided by the Act, the election shall be conducted in accordance
with the provisions of law regulating elections of the City of Lake Elsinore insofar as such
provisions are determined by the City Clerk to be applicable. The City Clerk is authorized to
conduct the election following the adoption of the Resolution of Formation, and this resolution
and all ballots shall be received by and the City Clerk shall close the election by 11:00 p.m. on
the election day; provided the election shall be closed at such earlier time as all qualified
electors have voted as provided in Section 53326(d) of the Act. Pursuant to Section 53326 of
the Act, the ballots for the special elections shall be distributed in person, or by mail with return
postage prepaid, to the qualified electors within each of the Improvement Areas. The City Clerk
has secured a certificate of the Registrar of Voters of the County of Riverside certifying that
there were no registered voters within the District as of March 24, 2021. Accordingly, since
there were fewer than 12 registered voters within the District for each of the 90 days preceding
April 27, 2021, the qualified electors shall be the landowners within each of the Improvement
Areas and each landowner, or the authorized representative thereof, shall have one vote for
each acre or portion thereof that such landowner owns within the respective Improvement
Areas, as provided in Section 53326 of the Act. The sole landowner within Improvement Area
No. 1 has executed and delivered a waiver of certain election law requirements and consenting
to the holding of the election on April 27, 2021, which waiver is on file with the City Clerk. The
sole landowner within Improvement Area No. 2 has executed and delivered a waiver of certain
election law requirements and consenting to the holding of the election on April 27, 2021, which
waiver is on file with the City Clerk.
CC Res. No. 2021-___
Page 4 of 6
Section 9. This Resolution shall be effective upon its adoption.
Passed and Adopted on this 27th day of April, 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 her eby certify
that Resolution No. 2021-___ was adopted by the City Council of the City of Lake Elsinore,
California, at the Regular meeting of April 27, 2021 and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Candice Alvarez, MMC
City Clerk
A-1
4840-7948-6948v3/022042-0035
ATTACHMENT A
BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 1
SPECIAL TAX AND SPECIAL BOND ELECTION
April 27, 2021
PROPOSITION A: Shall Community Facilities District
No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (the “District”) incur an indebtedness and
issue bonds in the maximum principal amount of
$14,000,000 for Improvement Area No. 1 therein (the
“Improvement Area”) with interest at a rate or rates not to
exceed the maximum interest rate permitted by law, to
finance the Facilities and the Incidental Expenses
described in Resolution No. 2021-25 of the City Council
of the City of Lake Elsinore?
PROPOSITION B: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2021-25 of the City Council of
the City of Lake Elsinore be levied to pay for the
Facilities, Incidental Expenses and other purposes
described in Resolution No. 2021-25, including the
payment of the principal of and interest on bonds issued
by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with
Fiscal Year 2020-2021, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2021-1 be an amount equal to $3,000,000?
YES______
NO_______
B-1
4840-7948-6948v3/022042-0035
ATTACHMENT B
BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 2
SPECIAL TAX AND SPECIAL BOND ELECTION
April 27, 2021
PROPOSITION D: Shall Community Facilities District
No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (the “District”) incur an indebtedness and
issue bonds in the maximum principal amount of
$10,000,000 for Improvement Area No. 2 therein (the
“Improvement Area”) with interest at a rate or rates not to
exceed the maximum interest rate permitted by law, to
finance the Facilities and the Incidental Expenses
described in Resolution No. 2021-25 of the City Council
of the City of Lake Elsinore?
PROPOSITION E: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2021-25 of the City Council of
the City of Lake Elsinore be levied to pay for the
Facilities, Incidental Expenses and other purposes
described in Resolution No. 2021-25, including the
payment of the principal of and interest on bonds issued
by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION F: For each year commencing with
Fiscal Year 2020-2021, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2021-1 be an amount equal to $3,000,000?
YES______
NO_______
RESOLUTION NO. 2021-___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE
ELSINORE (TUSCANY VALLEY/CREST) CERTIFYING ELECTION RESULTS
Whereas, the City Council of the City of Lake Elsinore called and duly held elections on April
27, 2021 within the boundaries of Improvement Area No. 1 (“Improvement Area No. 1”) and
within the boundaries of Improvement Area No. 2 (“Improvement Area No. 2”) of Community
Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (“Community
Facilities District No. 2021-1” or the “District”) pursuant to Resolution Nos. 2021-__ and 2021-__
for the purpose of presenting to the qualified electors within Improvement Area No. 1,
Propositions A, B and C, attached hereto as Attachment A, and to the qualified electors within
Improvement Area No. 2, Propositions D, E and F, attached hereto as Attachment B; and,
Whereas, there has been presented to this City Council a certificate of the City Clerk or Deputy
City Clerk (referred to herein as the “City Clerk”) canvassing the results of the election within
Improvement Area No. 1 and the results of the election within Improvement Area No. 2, copies
of which are attached hereto as Attachment C.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE HEREBY
FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS:
Section 1. Each of the above recitals is true and correct and is adopted by the legislative
body of the District.
Section 2. Propositions A, B and C set forth in Attachment A hereto presented to the
qualified electors of Improvement Area No. 1 on April 27, 2021, were approved by more than
two-thirds of the votes cast at said election and Propositions A, B and C each has carried. The
City Council, acting as the legislative body of the District, is hereby authorized to levy on the
land within Improvement Area No. 1 the special tax described in Proposition B set forth in
Attachment A hereto for the purposes described therein and to take the necessary steps to levy
the special tax authorized by Proposition B and to issue bonds in an amount not to exceed
$14,000,000 specified in Proposition A set forth in Attachment A hereto.
Section 3. Propositions D, E and F set forth in Attachment B hereto presented to the
qualified electors of Improvement Area No. 2 on April 27, 2021, were approved by more than
two-thirds of the votes cast at said election and Propositions D, E and F each has carried. The
City Council, acting as the legislative body of the District, is hereby authorized to levy on the
land within Improvement Area No. 2 the special tax described in Proposition E set forth in
Attachment B hereto for the purposes described therein and to take the necessary steps to levy
the special tax authorized by Proposition E and to issue bonds in an amount not to exceed
$10,000,000 specified in Proposition D set forth in Attachment B hereto.
Section 4. The City Clerk is hereby directed to record in the Assessor-County Clerk-
Recorder’s office of the County of Riverside within fifteen days of the date hereof a notice of
special tax lien with respect to Improvement Area No. 1 and a notice of special tax lien with
respect to Improvement Area No. 2, 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 5
Section 5. This Resolution shall be effective upon its adoption.
Passed and Adopted on this 27th day of April, 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 April 27, 2021 and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Candice Alvarez, MMC
City Clerk
A-1
4820-8083-5044v3/022042-0035
ATTACHMENT A
BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 1
SPECIAL TAX AND SPECIAL BOND ELECTION
April 27, 2021
PROPOSITION A: Shall Community Facilities District
No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (the “District”) incur an indebtedness and
issue bonds in the maximum principal amount of
$14,000,000 for Improvement Area No. 1 therein (the
“Improvement Area”) with interest at a rate or rates not to
exceed the maximum interest rate permitted by law, to
finance the Facilities and the Incidental Expenses
described in Resolution No. 2021-25 of the City Council
of the City of Lake Elsinore?
PROPOSITION B: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2021-25 of the City Council of
the City of Lake Elsinore be levied to pay for the
Facilities, Incidental Expenses and other purposes
described in Resolution No. 2021-25, including the
payment of the principal of and interest on bonds issued
by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with
Fiscal Year 2020-2021, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2021-1 be an amount equal to $3,000,000?
YES______
NO_______
B-1
4820-8083-5044v3/022042-0035
ATTACHMENT B
BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 2
SPECIAL TAX AND SPECIAL BOND ELECTION
April 27, 2021
PROPOSITION D: Shall Community Facilities District
No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (the “District”) incur an indebtedness and
issue bonds in the maximum principal amount of
$10,000,000 for Improvement Area No. 2 therein (the
“Improvement Area”) with interest at a rate or rates not to
exceed the maximum interest rate permitted by law, to
finance the Facilities and the Incidental Expenses
described in Resolution No. 2021-25 of the City Council
of the City of Lake Elsinore?
PROPOSITION E: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2021-25 of the City Council of
the City of Lake Elsinore be levied to pay for the
Facilities, Incidental Expenses and other purposes
described in Resolution No. 2021-25, including the
payment of the principal of and interest on bonds issued
by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION F: For each year commencing with
Fiscal Year 2020-2021, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2021-1 be an amount equal to $3,000,000?
YES______
NO_______
C-1
4820-8083-5044v3/022042-0035
ATTACHMENT C
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 I
have examined the returns of the Special Tax and Bond Election for Improvement Area No. 1 of
Community Facilities District No. 2021-1 (Tuscany Valley/Crest) of the City of Lake Elsinore (the
“City”). The election was held in the Lake Elsinore Cultural Center at 183 North Main Street,
Lake Elsinore, California, on April 27, 2021. I caused to be delivered ballots to each qualified
elector. ___ (_) ballots were returned.
I further certify that the results of said election and the number of votes cast for and
against Propositions A, B and C for Improvement Area No. 1 are as follows:
PROPOSITION A PROPOSITION B PROPOSITION C
YES: YES: YES:
NO: NO: NO:
TOTAL: TOTAL: TOTAL:
I further certify that I have examined the returns of the Special Tax and Bond Election for
Improvement Area No. 2 of Community Facilities District No. 2021-1 (Tuscany Valley/Crest) of
the City. The election was held in the Lake Elsinore Cultural Center at 183 North Main Street,
Lake Elsinore, California, on April 27, 2021. I caused to be delivered ballots to each qualified
elector. ___ (_) ballots were returned.
I further certify that the results of said election and the number of votes cast for and
against Propositions D, E and F for Improvement Area No. 2 are as follows:
PROPOSITION D PROPOSITION E PROPOSITION F
YES: YES: YES:
NO: NO: NO:
TOTAL: TOTAL: TOTAL:
Dated this 27th day of April, 2021.
Candice Alvarez
Candice Alvarez, MMC
City Clerk
City of Lake Elsinore
ORDINANCE NO. 2021-___
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE
(TUSCANY VALLEY/CREST) AUTHORIZING THE LEVY OF SPECIAL TAXES
WITHIN IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2
Whereas, on March 23, 2021, the City Council (the “City Council”) of the City of Lake Elsinore
(the “City”) adopted Resolution No. 2021-25 declaring its intention to form Community Facilities
District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”) and
Improvement Area No. 1 (“Improvement Area No. 1”) and Improvement Area No. 2
(“Improvement Area No. 2” and together with Improvement Area No. 1, th e “Improvement
Areas” and each an “Improvement Area”) therein pursuant to the Mello-Roos Community
Facilities Act of 1982, as amended, comprising Chapter 2.5 of Part 1 of Division 2 of Title 5 of
the Government Code of the State of California (the “Act”), and its Resolution No. 2021-26
declaring its intention to incur bonded indebtedness for each of Improvement Area No. 1 and
Improvement Area No. 2; and,
Whereas, on April 27, 2021, after providing all notice required by the Act, the City Council
conducted a noticed public hearing required by the Act relative to the proposed formation of the
District, the designation of the Improvement Areas, the proposed levy of a special tax therein to
finance certain public facilities described in Resolution No. 2021-25 and to secure the payment
of any bonded indebtedness of the District for the Improvement Areas, and the proposed
issuance of up to $14,000,000 of bonded indebtedness for Improvement Area No. 1 and up to
$10,000,000 of bonded indebtedness for Improvement Area No. 2, as described in Resolution
No. 2021-26; and,
Whereas, at the April 27, 2021 public hearing, all persons desiring to be heard on all matters
pertaining to the formation of the District, the designation of the Improvement Areas and the
proposed levy of the special tax to finance the facilities described in Resolution No. 2021-25 and
to secure the payment of up to $14,000,000 of bonded indebtedness for Improvement Area No.
1 and of up to $10,000,000 of bonded indebtedness for Improvement Area No. 2 as described in
Resolution No. 2021-26 (together, the “Bonds”) were heard and a full and fair hearing was held;
and,
Whereas, on April 27, 2021, the City Council adopted Resolution Nos. 2021-___ and 2021-___
which formed the District, designated the Improvement Areas and called a special election
within each of Improvement Area No. 1 and Improvement Area No. 2 on April 27, 2021 in each
case on three propositions relating to the levy of a special tax within such Improvement Area,
the issuance of the Bonds by the District for such Improvement Area and the establishment of
an appropriations limit within the District; and,
Whereas, on April 27, 2021, a special election was held within Improvement Area No. 1 at
which the qualified electors therein approved by more than a two-thirds vote Propositions A, B
and C set forth in Attachment B to Resolution No. 2021-___ authorizing the levy of a special tax
within Improvement Area No. 1 for the purposes described in Resolution No. 2021-25, the
issuance of the Bonds as described in Resolution No. 2021-26 and establishing an
appropriations limit for the District; and,
Ord. No. 2021-____
Page 2 of 5
Whereas, on April 27, 2021, a special election was held within Improvement Area No. 2 at
which the qualified electors therein approved by more than a two-thirds vote Propositions D, E
and F set forth in Attachment C to Resolution No. 2021-___ authorizing the levy of a special tax
within Improvement Area No. 2 for the purposes described in Resolution No. 2021-25, the
issuance of the Bonds as described in Resolution No. 2021-26 and establishing an
appropriations limit for the District.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE ACTING IN
ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO.
2021-1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST) ORDAINS AS
FOLLOWS:
Section 1. The above recitals are all true and correct.
Section 2. By the passage of this Ordinance, the City Council authorizes and levies special
taxes within Improvement Area No. 1 and Improvement Area No. 2 pursuant to Sections 53328
and 53340 of the Act at the rates and in accordance with the applicable rate and method of
apportionment set forth in Attachment C to Resolution No. 2021-25 as to Improvement Area No.
1 and the rate and method of apportionment set forth in Attachment D to Resolution No. 2021-
26 as to Improvement Area No. 2, which are incorporated by reference herein (each a “Rate
and Method”). The special taxes are hereby levied commencing in the fiscal year specified in
the Rate and Method for such Improvement Area and in each fiscal year thereafter until
payment in full of the Bonds issued by the District for such Improvement Area (including any
bonds issued to refund the Bonds), payment of all costs of the public facilities and services
authorized to be financed by the District for such Improvement Area, and payment of all costs of
administering the District allocable to such Improvement Area.
Section 3. Each of the Mayor, the City Manager, the Assistant City Manager, or their written
designees (each, an “Authorized Officer”), acting alone, is hereby authorized and directed each
fiscal year to determine the specific special tax rates and amounts to be levied in such fiscal
year on each parcel of real property within Improvement Area No. 1 and Improvement Area No.
2, in the manner and as provided in the Rate and Method applicable to such Improvement Area.
The special tax rate levied on a parcel pursuant to each Rate and Method shall not exceed the
maximum rate set forth in the Rate and Method for such parcel, but the special tax may be
levied at a lower rate. Each Authorized Officer is hereby authorized and directed to provide all
necessary information to the Treasurer-Tax Collector of the County of Riverside and to
otherwise take all actions necessary in order to effect proper billing and collection of the special
tax within each Improvement Area, so that the special tax shall be levied and collected in
sufficient amounts and at times necessary to satisfy the financial obligations of the District for
such Improvement Area in each fiscal year, and with respect to Special Tax, until the Bonds
issued by the District for such Improvement Area are paid in full, the facilities financed for such
Improvement Area have been paid for, and provision has been made for payment of all of the
administrative costs of the District.
Section 4. Properties or entities of the state, federal or other local governments shall be
exempt from the special tax for each Improvement Area, except as otherwise provided in
Sections 53317.3 and 53317.5 of the Act and Section F of each Rate and Method. No other
properties or entities within each of the Improvement Areas are exempt from the special tax
unless the properties or entities are expressly exempted in Resolution No. 2021-___ or in a
resolution of consideration to levy a new special tax or special taxes or to alter the applicable
Rate and Method or an existing special tax as provided in Section 53334 of the Act.
Ord. No. 2021-____
Page 3 of 5
Section 5. All of the collections of the special tax within each Improvement Area shall be
used as provided for in the Act, the Rate and Method for such Improvement Area and
Resolution No. 2021-___.
Section 6. The special tax within each Improvement Area 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 the Bonds issued by the District for an Improvement Area (including any
bonds issued to refund such Bonds), together with any penalties and other charges accruing
under this Ordinance, are not paid when due, the City Council may, not later than four years
after the due date of the last installment of principal on such Bonds (including any bonds issued
to refund such Bonds), order that the same be collected by an action brought in the superior
court to foreclose the lien of such special tax within the applicable Improvement Area, as
authorized by the Act.
Section 8. The Mayor of the City shall sign this Ordinance and the City Clerk or Deputy City
Clerk (referred to herein as the “City Clerk”) shall attest to the Mayor’s signature and then cause
the same to be published within fifteen (15) days after its passage at least once in The Press
Enterprise, a newspaper of general circulation published and circulated in the City of Lake
Elsinore.
Section 9. The specific authorization for adoption of this Ordinance is pursuant to the
provisions of Section 53340 of the Act.
Section 10. The City Clerk is hereby authorized to transmit a certified copy of this ordinance
to the Treasurer-Tax Collector of the County of Riverside, and to perform all other acts which
are required by the Act, this Ordinance or by law in order to accomplish the purpose of this
Ordinance.
Section 11. A full reading of this Ordinance is dispensed with prior to its final passage, a
written or printed copy having been available to the City Council and the public a day prior to its
final passage.
Section 12. This Ordinance shall take effect thirty days after its final passage.
Ord. No. 2021-____
Page 4 of 5
Passed and Adopted on this ___ day of May, 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 Ordinance No. 2021-______ was introduced at the Regular meeting of the City Council of
April 27, 2021, and adopted by the City Council of the City of Lake Elsinore, California, at the
Regular meeting of May ___, 2021 and that the same was adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Candice Alvarez, MMC
City Clerk
REBECCA SPENCER
Registrar of Voters
REGISTRAR OF VOTERS
COUNTY OF RIVERSIDE
CERTIFICATE OF REGISTRAR OF VOTERS
State of California
) ss
County of Riverside )
ART TINOCO
Assistant Registrar of Voters
i, Rebecca Spencer, Registrar of Voters of said County, hereby certify that:
(A) I have been furnished a map describing the proposed boundary of Community
Facilities District No. 2021-1 (Tuscany Valley/Crest), of the City of Lake Elsinore, of the County
of Riverside, State of California.
(B) On March 24, 2021 i 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. 2021-1
(Tuscany Valley/Crest), 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. 2021-1 (Tuscany Valley/Crest), of the City of Lake Elsinore, of the County
of Riverside.
IN WITNESS WHEREOF, I have executed this Certificate on this 241 day of March 2021.
Rebecca Spencer
Registrar of Voters
%'
Assistant Registrar of Voters
2720 Gateway Drive 1 Riverside, CA 92507-0921
Mailing address: 2724 Gateway Drive I Riverside, CA 92507-0918
(951) 486-7200 1 TfY (951) 697-8966 1 FAX (951) 486-7272
www.voteinfo.net
1
4849-0622-6916v3/022042-0035
WAIVER OF CERTAIN ELECTION PROCEDURES
WITH RESPECT TO LANDOWNER ELECTION FOR
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 1
The undersigned, Brian Rupp, acting on behalf of SPT- AREP III Tuscany Associates,
LLC, a Delaware limited liability company (the “Owner”), hereby certifies to the City of Lake
Elsinore (the “City”), with respect to the proposed formation of Community Facilities District No.
2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”) and Improvement Area
No. 1 (the “Improvement Area”) therein, 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 Improvement Area. The
Owner hereby appoints Brian Rupp 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 Brian Rupp: __________________________________
2. The Owner is the present owner of 46.42 acres of land located within the
proposed boundaries of the Improvement Area. There are no registered voters residing within
the territory owned by the Owner and have been none during the 90-day period preceding April
27, 2021.
3. The Owner has received notice of the April 27, 2021 public hearing to be held by
the City Council of the City regarding the levy of a special tax in the Improvement Area and the
incurring of bonded indebtedness by the District for the Improvement Area. The Owner agrees
that it received adequate notice of the April 27, 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 formation of the District and
the the Improvement Area and the imposition of the special tax and the issuance of bonded
indebtedness, as set forth in Resolutions No. 2021-25 and 2021-26 adopted by the City Council
on March 23, 2021 (together, the “Resolutions”) to finance the facilities as set forth in the
Resolutions.
5. The undersigned understands that if the District and the Improvement Area are
formed on or after April 27, 2021, an election will be held by the District for the Improvement
Area on the propositions set forth in the sample ballot attached hereto as Exhibit “A” less than
90 days after the close of the April 27, 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 April 27, 2021 public hearing and consents to the closing
of the election as soon as all ballots are received by the City Clerk or Deputy City Clerk.
2
4849-0622-6916v3/022042-0035
6. The undersigned hereby represents that compliance with the procedural
requirements for conducting the election, including the receipt of any ballot arguments and
impartial analysis and the time limitations which apply in connection with scheduling, mailing
and publishing notices for such an election, are unnecessary in light of the fact that the
undersigned has received sufficient information regarding the imposition of the special tax and
the issuance of bonded indebtedness as set forth in the Resolutions to allow it to properly
complete the attached ballot. The Owner further waives its right to make any protest or
complaint or undertake any legal action challenging the validity of the election, the validity of any
bonded indebtedness issued by the District for the Improvement Area as approved at the
election, or the validity of the authorization of the special tax to finance facilities for the benefit of
the District or to repay bonded indebtedness issued by the District for the Improvement Area in
accordance with the rate and method of apportionment of special taxes provided in Resolution
No. 2021-25 of the City Council of the City.
Dated: April __, 2021
SPT- AREP III Tuscany Associates, LLC
a Delaware limited liability company
By:
Name: Brian Rupp
Title: Executive Vice President, Real Estate
A-1
4849-0622-6916v3/022042-0035
EXHIBIT A
SAMPLE
OFFICIAL BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 1
SPECIAL TAX AND SPECIAL BOND ELECTION
April 27, 2021
PROPOSITION A: Shall Community Facilities District
No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (the “District”) incur an indebtedness and
issue bonds in the maximum principal amount of
$14,000,000 for Improvement Area No. 1 therein (the
“Improvement Area”) with interest at a rate or rates not to
exceed the maximum interest rate permitted by law, to
finance the Facilities and the Incidental Expenses
described in Resolution No. 2021-25 of the City Council
of the City of Lake Elsinore?
PROPOSITION B: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2021-25 of the City Council of
the City of Lake Elsinore be levied to pay for the
Facilities, Incidental Expenses and other purposes
described in Resolution No. 2021-25, including the
payment of the principal of and interest on bonds issued
by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with
Fiscal Year 2020-2021, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2021-1 be an amount equal to $3,000,000?
YES______
NO_______
1
4818-1620-4772v3/022042-0035
WAIVER OF CERTAIN ELECTION PROCEDURES
WITH RESPECT TO LANDOWNER ELECTION FOR
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 2
The undersigned, Brian Rupp, acting on behalf of SPT- AREP III Tuscany Associates,
LLC, a Delaware limited liability company (the “Owner”), hereby certifies to the City of Lake
Elsinore (the “City”), with respect to the proposed formation of Community Facilities District No.
2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest) (the “District”) and Improvement Area
No. 2 (the “Improvement Area”) therein, 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 Improvement Area. The
Owner hereby appoints Brian Rupp 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 Brian Rupp: __________________________________
2. The Owner is the present owner of 37.53 acres of land located within the
proposed boundaries of the Improvement Area. There are no registered voters residing within
the territory owned by the Owner and have been none during the 90-day period preceding April
27, 2021.
3. The Owner has received notice of the April 27, 2021 public hearing to be held by
the City Council of the City regarding the levy of a special tax in the Improvement Area and the
incurring of bonded indebtedness by the District for the Improvement Area. The Owner agrees
that it received adequate notice of the April 27, 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 formation of the District and
the the Improvement Area and the imposition of the special tax and the issuance of bonded
indebtedness, as set forth in Resolutions No. 2021-25 and 2021-26 adopted by the City Council
on March 23, 2021 (together, the “Resolutions”) to finance the facilities as set forth in the
Resolutions.
5. The undersigned understands that if the District and the Improvement Area are
formed on or after April 27, 2021, an election will be held by the District for the Improvement
Area on the propositions set forth in the sample ballot attached hereto as Exhibit “A” less than
90 days after the close of the April 27, 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 April 27, 2021 public hearing and consents to the closing
of the election as soon as all ballots are received by the City Clerk or Deputy City Clerk.
2
4818-1620-4772v3/022042-0035
6. The undersigned hereby represents that compliance with the procedural
requirements for conducting the election, including the receipt of any ballot arguments and
impartial analysis and the time limitations which apply in connection with scheduling, mailing
and publishing notices for such an election, are unnecessary in light of the fact that the
undersigned has received sufficient information regarding the imposition of the special tax and
the issuance of bonded indebtedness as set forth in the Resolutions to allow it to properly
complete the attached ballot. The Owner further waives its right to make any protest or
complaint or undertake any legal action challenging the validity of the election, the validity of any
bonded indebtedness issued by the District for the Improvement Area as approved at the
election, or the validity of the authorization of the special tax to finance facilities for the benefit of
the District or to repay bonded indebtedness issued by the District for the Improvement Area in
accordance with the rate and method of apportionment of special taxes provided in Resolution
No. 2021-25 of the City Council of the City.
Dated: April __, 2021
SPT- AREP III Tuscany Associates, LLC
a Delaware limited liability company
By:
Name: Brian Rupp
Title: Executive Vice President, Real Estate
A-1
4818-1620-4772v3/022042-0035
EXHIBIT A
SAMPLE
OFFICIAL BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2021-1
OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST)
IMPROVEMENT AREA NO. 2
SPECIAL TAX AND SPECIAL BOND ELECTION
April 27, 2021
PROPOSITION D: Shall Community Facilities District
No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (the “District”) incur an indebtedness and
issue bonds in the maximum principal amount of
$10,000,000 for Improvement Area No. 2 therein (the
“Improvement Area”) with interest at a rate or rates not to
exceed the maximum interest rate permitted by law, to
finance the Facilities and the Incidental Expenses
described in Resolution No. 2021-25 of the City Council
of the City of Lake Elsinore?
PROPOSITION E: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2021-25 of the City Council of
the City of Lake Elsinore be levied to pay for the
Facilities, Incidental Expenses and other purposes
described in Resolution No. 2021-25, including the
payment of the principal of and interest on bonds issued
by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION F: For each year commencing with
Fiscal Year 2020-2021, shall the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XIII B of
the California Constitution, for Community Facilities
District No. 2021-1 be an amount equal to $3,000,000?
YES______
NO_______
CITY OF LAKE ELSINORE
Public Hearing Report
TM
CFD NO. 2021-1 (TUSCANY VALLEY/CREST)
APRIL 27, 202
SPICER CONSULTING
G R O U P
Table of Contents
Sections
1 Introduction 1
2 Description of Facilities 2
3 Cost Estimate 3
4 Proposed Development 4
5 Rate and Method of Apportionment 5
6 Certifications 6
Tables
3-1 Cost Estimate 3
Appendices
A Rate and Method of Apportionment
B Boundary Map
C Resolution of Intention
C
SPICER CONSULTING
G R O U P
1 Introduction 1
Background
On March 23, 2021, the City Council (the "City Council") of the City of Lake Elsinore (the "City"), adopted a Resolution of
Intention to form Community Facilities District No. 2021-1 (Tuscany Valley/Crest) Improvement Areas 1 and 2 of the City of
Lake Elsinore (the"CFD No. 2021-1 IA 1 and 2"or the"District"), Resolution No. 2021-25, pursuant to the provisions of the
"Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the
State of California, (the"Act").
The District is currently comprised of 15 parcels and approximately 83.95 gross acres to include a total of 335 residential
properties at buildout. There are two separate Improvement Areas included within the boundaries of CFD No. 2021-1.
Improvement Area 1 includes Tract Map 33725 with a total of 204 proposed detached residential properties and
Improvement Area 2 includes Tract Map 25475 with a total of 131 proposed detached residential properties. The properties
are located east of Grassy Meadow Drive, south of Little Valley Road, west of Greenwald Avenue, and on both the north
and south sides of Scenic Crest Drive.
For a map showing the boundaries of CFD No. 2021-1 IA 1 and 2 please see Appendix B.
Purpose of Public Hearing Report
WHEREAS, this Community Facilities District Report("Report") is being provided to the City Council and generally contains
the following:
1. A brief description of CFD No. 2021-1 IA 1 and 2;
2. A brief description of the Facilities required at the time of formation to meet the needs of CFD No. 2021-1 IA 1 and 2.
3. A brief description of the Boundaries of CFD No. 2021-1 IA 1 and 2; and
4. An estimate of the cost of financing the bonds used to pay for the Facilities, including all costs associated with formation
of the District, issuance of bonds, determination of the amount of any special taxes, collection of any special taxes, or costs
otherwise incurred in order to carry out the authorized purposes of the City with respect to the District, and any other
incidental expenses to be paid through the proposed financing.
For particulars, reference is made to the Resolution of Intention as previously approved and adopted and is included in
Appendix C.
C City of Lake Elsinore
CFD No.2021-1 (Tuscany Valley/Crest)
SPICER CONSULTING
G R O U P Public Hearing Report
2 Description of Facilities 1 2
NOW, THEREFORE, the undersigned, authorized representative of Spicer Consulting Group, LLC, the appointed
responsible officer, or person directed to prepare this Report, does hereby submit the following data:
Description of the Facilities
A Community Facilities District may pay for facilities which may include all amounts necessary to eliminate any fixed special
assessment liens or to pay, repay, or defease any obligation to pay for any indebtedness secured by any tax, fee, charge,
or assessment levied, provide for the purchase, construction, expansion, or rehabilitation for any real or other tangible
property with an estimated useful life of five (5) years or longer, which is necessary to meet increased demands placed
upon local agencies as a result of development and/or rehabilitation occurring within the District.
The types of facilities that are proposed by CFD No. 2021-1 IA 1 and 2 and financed with the proceeds of special taxes and
bonds issued by CFD No. 2021-1 IA 1 and 2 consist of the construction, purchase, modification, expansion, rehabilitation
and/or improvement of(i)drainage, library, park, 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(the"City Facilities")and (ii)water and sewer facilities including the acquisition of capacity
in the sewer system and/or water system of the Elsinore Valley Municipal Water District which are included in Elsinore Valley
Municipal Water District's water and sewer capacity and connection fee programs(the"Water District Facilities"and together,
with the City Facilities, the "Facilities"), and all appurtenances and appurtenant work in connection with the foregoing
Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking,
construction management and supervision for such Facilities.
Incidental Expenses
The Incidental Expenses to be paid from bond proceeds and/or special taxes include:
a) The cost of engineering, planning and designing the Facilities; and
b) All costs, including costs of the property owner petitioning to form the District, associated with the creation
of the District,the issuance of the bonds,the determination of the amount of special taxes to be levied and
costs otherwise incurred in order to carry out the authorized purposes of the District; and
c) Any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and
inspection of the Facilities.
Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of
Special Taxes for the District.
All costs associated with the creation of CFD No.2021-1 IA 1 and 2,the issuance of bonds,the determination of the amount
of special taxes to be levied, costs incurred in order to carry out the authorized purposes of CFD No. 2021-1 IA 1 and 2,
including legal fees,fees of consultants,engineering, planning,designing and the annual costs to administer CFD No.2021-
1 IA 1 and 2 and any obligations.
The description of the eligible public facilities, services and incidental expenses above are preliminary and general in nature.
The final plans and specifications approved by the applicable public agency may show substitutes or modifications in order
to accomplish the work or serve the new development and any such substitution or modification shall not constitute a change
or modification in the proceedings relating to CFD No. 2021-1 IA 1 and 2.
<C�� City of Lake Elsinore
� CFD No.2021-1 (Tuscany Valley/Crest)
SPICER CONSULTING
G R O U P Public Hearing Report
3 Cost rc}imate 3
Below is the estimated cost of facilities to be provided to the District.
a) The cost estimate of facilities, including incidental expenses,to be financed through the issuance of CFD No. 2021-
1 Bonds is estimated to be $8,395,979 for Improvement Area 1 and $5,660,892 for Improvement Area 2 based
upon current dollars (Fiscal Year 2021-22).
b) For further particulars please reference Table 3-1 below and incorporated herein by reference.
c) Pursuant to Section 53340 of the Act, the proceeds of any special tax levied and collected by CFD No. 2021-1 IA 1
and 2 may be used only to pay for the cost of providing public facilities, services, and incidental expenses. As
defined by the Act, incidental expenses include, but are not limited to, the annual costs associated with
determination of the amount of special taxes, collection of special taxes, payment of special taxes, or costs
otherwise incurred in order to carry out the authorized purposes of the District. The incidental expenses associated
with the annual administration of CFD No. 2021-1 IA 1 and 2 are estimated to be $25,000 per Improvement Area
in the initial Fiscal Year. However, it is anticipated that the incidental expenses will vary due to inflation and other
factors that may not be foreseen today, and the actual incidental expenses may exceed these amounts accordingly.
Table 3-1
Cost Estimate
Improvement Area 1 Improvement Area 2
City of Lake Elsinore M Bond Allocation(') Bond Allo Tot
City Fees
Traffic Impact Fee $279,276 $179,339 $458,615
Library $30,600 $19,650 $50,250
City Hall&Public Works Facilities $165,036 $105,979 $271,015
Community Center $111,180 $71,395 $182,575
Marina Facilities $158,916 $102,049 $260,965
Animal Shelter $70,992 $45,588 $116,580
Fire Facility $153,204 $98,381 $251,585
Park Capital Improvement Fund $326,400 $209,600 $536,000
Drainage Fee $195,517 $138,383 $333,900
Total City Fees $1,491,121 $970,364 $2,461,485
City Facilities
Street Improvements $2,344,297 $1,505,406 $3,849,703
Storm Drain Improvements $2,387,427 $1,533,102 $3,920,529
Total City Facilities $4,731,724 $3,038,508 $7,770,232
Total City Fees and Facilities $6,222,844 $4,008,873 $10,231,717
Improvement Area 1 Improvement Area 2
Elsinore Valley Municipal Water District Bond Allocation(') Bond Allocation(')
Water Connection Fee $1,608,744 $1,033,066 $2,641,810
Sewer Connection Fee $2,857,224 $1,834,786 $4,692,010
Irrigation Meter $46,307 $46,307 $92,614
Offsite Water Improvements $708,846 $455,191 $1,164,037
Offsite Sewer Improvements $1,418,735 $911,050 $2,329,785
Total EVMWD Fees and Facilities $6,639,856 $4,280,400 0,920,256
Total Eligible Fees/Improvements $12,862,701 $8,289,272 $21,151,973
Incidental Financing Costs $1,419,021 $1,049,108 $2,468,129
Total Funded by Bond Proceeds $8,395,979 $5,660,892 $14,056,871
Total Fees/Improvements to be Funded by Developer $4,466,721 $2,628,380 $7,095,102
(1) Amounts are allocated based upon estimated bond sizing and may change abased upon market conditions at the time
of bond issuance.
C S01 City of Lake Elsinore
CFD No.2021-1 (Tuscany Valley/Crest)
SPICER CONSULTING G R O U P Public Hearing Report
4 Proposer+ n--Inpmert Pac 1 4
The CFD No. 2021-1 IA 1 and 2 includes approximately 83.95 gross acres on 11 undeveloped assessor's parcels in Tract
33725 for Improvement Area 1 and four undeveloped assessor's parcels in Tract 25475 for Improvement Area 2, both
located in the City. The property within CFD No. 2021-1 IA 1 and 2 is expected to be developed with 335 single family
residential properties, including 204 residential properties in Tract 33725 and 131 residential properties in Tract 25475. The
District is located east of Grassy Meadow Drive, south of Little Valley Road, west of Greenwald Avenue, and on both the
north and south sides of Scenic Crest Drive. As of Fiscal Year 2020-21 the proposed CFD No. 2021-1 IA 1 and 2 includes
the following Assessor's Parcel Numbers:
Improvement Area 1 Improvement Area 2
APN Acres APN Acres
349-380-024 5.42 349-240-034 10.98
349-380-025 5.35 349-240-075 7.55
349-240-043 2.06 349-240-038 8.34
349-240-044 2.05 349-240-072 10.66
349-240-056 6.11
349-240-054 3.74
349-240-047 3.85
349-240-046 4.55
349-240-045 4.55
349-240-006 5.00
349-240-055 3.74
otal 46.42 VIRtal
A map showing the boundaries of CFD No. 2021-1 IA 1 and 2 is included in Appendix B.
City of Lake Elsinore
CFD No.2021-1 (Tuscany Valley/Crest)
SPICER CONSULTING Public Hearing Report
G R O U P
5 Rate and Method of Apportionment 1 5
The Rate and Method of Apportionment allows each property owner within CFD No. 2021-1 Improvement Area 1 and
Improvement Area 2 to estimate the annual Special Tax amount that would be required for payment.The Rate and Method
of Apportionment of the Special Tax established pursuant to these proceedings, is attached hereto as Appendix A (the
"Rate and Method"). The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem
property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of
delinquency; provided, however, that the CFD Administrator may directly bill the Special Taxes, may collect Special Taxes
at a different time or in a different manner if necessary to meet the financial obligations of CFD No. 2021-1 IA 1 and 2, and
provided further that CFD No. 2021-1 IA 1 and 2 may covenant to foreclose and may actually foreclose on parcels having
delinquent Special Taxes as permitted by the Act.
All of the property located within CFD No. 2021-1 IA 1 and 2, unless exempted by law or by the Rate and Method proposed
for CFD No. 2021-1 IA 1 and 2, shall be taxed for the purpose of providing necessary facilities to serve the District. The
Boundary Map for CFD No. 2021-1 IA 1 and 2 is attached hereto as Appendix B. Pursuant to Section 53325.3 of the Act,
the tax imposed "is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned
on the basis of benefit to any property." The Special Tax may be based on the benefit received by property, the cost of
making facilities or authorized services available or other reasonable basis as determined by the City, although the Special
Tax may not be apportioned on an ad valorem basis pursuant to Article XI I IA of the California Constitution.A property owner
within the District may choose to prepay in whole or in part the Special Tax. The available method for so doing is described
in Section G of the Rate and Method ("Prepayment of Special Tax").
For each year that any Bonds are outstanding the Special Tax shall be levied on all parcels subject to the Special Tax. If
any delinquent Special Taxes remain uncollected prior to or after all Bonds are retired,the Special Tax may be levied to the
extent necessary to reimburse CFD No. 2021-1 IA 1 and 2 for uncollected Special Taxes associated with the levy of such
Special Taxes, but the Special Tax shall not be levied after 2060-2061 Fiscal Year.
For particulars as to the Rate and Method for CFD No. 2021-1 IA 1 and 2, see the attached and incorporated in Appendix
A.
<&;10-
City of Lake Elsinore
CFD No.2021-1 (Tuscany Valley/Crest)
SPICER CONSULTING
G R O U P Public Hearing Report
6 Certificali— 1 6
Based on the information provided herein, it is my opinion that the described services herein are those that are necessary
to meet increased demands placed upon the City of Lake Elsinore as a result of development occurring within the CFD No.
2021-1 IA 1 and 2 and benefits the lands within said CFD No. 2021-1 IA 1 and 2. Further, it is my opinion that the special
tax rates and method of apportionment, as set forth herein, are fair and equitable, uniformly applied and not discriminating
or arbitrary.
Date: April 27, 2021 SPICER CONSULTING GROUP, LLC
- HAN SPICER
SPECIAL TAX CONSULTANT FOR
CITY OF LAKE ELSINORE
RIVERSIDE COUNTY
STATE OF CALIFORNIA
City of Lake Elsinore
CFD No.2021-1 (Tuscany Valley/Crest)
SPICER CONSULTING Public Hearing Report
G R O U P
APPENDIX A
Rate and Method of Apportionment
O
SPICER CONSULTING
G R O U P
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (TUSCANY VALLEY/CREST)
OF THE CITY OF LAKE ELSINORE
IMPROVEMENT AREA NO. 1
A Special Tax (all capitalized terms are defined in Section A, "Definitions", below) shall be applicable to
each Assessor's Parcel of Taxable Property located within the boundaries of the City of Lake Elsinore
Community Facilities District No. 2021-1 (Tuscany Valley/Crest) ("CFD No. 2021-1 IA 1"). The amount of
Special Tax to be levied in each Fiscal Year on an Assessor's Parcel shall be determined by the City Council
of the City of Lake Elsinore,acting in its capacity as the legislative body of CFD No.2021-1 IA 1, by applying
the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and
Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property,
unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the
extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or
if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final
map, parcel map, condominium plan, or other recorded County parcel map or instrument. The square
footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560.
"Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311)of Part 1 of Division 2 of Title 5 of the Government Code of the State of
California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to
the administration of CFD No. 2021-1 IA 1: the costs of computing the Special Taxes and preparing the
Special Tax collection schedules (whether by the City or designee thereof or both);the costs of collecting
the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee;
the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the
Indenture; the costs to the City, CFD No. 2021-1 IA 1 or any designee thereof of complying with arbitrage
rebate requirements;the costs to the City,CFD No. 2021-1 IA 1 or any designee thereof of complying with
disclosure requirements of the City, CFD No. 2021-1 IA 1 or obligated persons associated with applicable
federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure
statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No.
2021-1 IA 1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the
release of funds from an escrow account; and the City's annual administration fees and third party
expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or
advanced by the City or CFD No. 2021-1 IA 1 for any other administrative purposes of CFD No. 2021-1 IA
1, including attorney's fees and other costs related to commencing and pursuing to completion any
foreclosure of delinquent Special Taxes.
"Approved Property" means all Assessor's Parcels of Taxable Property: (i)that are included in a Final Map
that was recorded prior to the January 15Y 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
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 1
the individual lot included on the Final Map, and (iii) that have not been issued a building permit on or
before May 1"preceding the Fiscal Year in which the Special Tax is being levied.
"Assessor's Parcel" means a lot or parcel of land designated on an Assessor's Parcel Map with an assigned
Assessor's Parcel Number.
"Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by
Assessor's Parcel Number.
"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the County for
purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below.
"Backup Special Tax" means the Special Tax of that name described in Section D below.
"Boundary Map" means a recorded map of the CFD which indicates the boundaries of the CFD.
"Building Permit" means the first legal document issued by a local agency giving official permission for
new construction. For purposes of this definition, "Building Permit" may or may not include any
subsequent building permit document(s) authorizing new construction on an Assessor's Parcel that are
issued or changed by the City after the first original issuance, as determined by the CFD Administrator as
necessary to fairly allocate Special Tax to the Assessor's Parcel, provided that following such
determination the Maximum Special Tax that may be levied on all Assessor's Parcels of Taxable Property
will be at least 1.1 times maximum annual debt service on all outstanding CFD No. 2021-1 IA 1 Bonds plus
the estimated annual Administrative Expenses.
"Building Square Footage" or "BSF" means the square footage of assessable internal living space,
exclusive of garages or other structures not used as living space, as determined by reference to the
Building Permit for such Assessor's Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the following December
31.
"CFD Administrator" means an official of the City, or designee thereof, responsible for determining the
Special Tax Requirement, and providing for the levy and collection of the Special Taxes.
"CFD" or "CFD No. 2021-1 IA 1" means Improvement Area No. 1 of CFD No. 2021-1 as identified on the
boundary map for CFD No. 2021-1.
"CFD No. 2021-1" means Community Facilities District No. 2021-1 (Tuscany Valley/Crest) established by
the City under the Act.
"CFD No. 2021-1 IA 1 Bonds" means any obligation to repay a sum of money, including obligations in the
form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or
loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts,
or any refunding thereof,to which Special Tax of CFD No. 2021-1 IA 1 have been pledged.
"City" means the City of Lake Elsinore.
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 2
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD
No. 2021-1 IA 1.
"Condominium Plan" means a condominium plan as set forth in the California Civil Code, Section 4285.
"County" means the County of Riverside.
"Developed Property" means all Assessor's Parcels that: (i)are included in a Final Map that was recorded
prior to the January 15t preceding the Fiscal Year in which the Special Tax is being levied, and (ii) has an
Assessor's Parcel Number from the County shown on an Assessor's Parcel Map for the individual lot
included on the Final Map, and (iii) a Building Permit for new construction was issued on or before May
1st preceding the Fiscal Year in which the Special Tax is being levied.
"Exempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes as
provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line
adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or
recordation of a Condominium Plan pursuant to California Civil Code Section 4285 that creates individual
lots for which Building Permits may be issued without further subdivision.
"Fiscal Year" means the period commencing on July 15t of any year and ending the following June 30t".
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to
which Bonds are issued, as modified, amended and/or supplemented from time to time, and any
instrument replacing or supplementing the same.
"Land Use Category" means any of the categories listed in Table 1 of Section D.
"Maximum Special Tax" means for each Assessor's Parcel, the maximum Special Tax, determined in
accordance with Section D below, that can be levied by CFD No. 2021-1 IA 1 in any Fiscal Year on such
Assessor's Parcel.
"Multifamily Property" means all Assessor's Parcels of Developed Property for which a Building Permit
has been issued for the purpose of constructing a building or buildings comprised of attached Residential
Units available for rental by the general public, not for sale to an end user, and under common
management, as determined by the CFD Administrator.
"Non-Residential Property"or"NR"means all Assessor's Parcels for which a building permit(s)was issued
or will be issued for a non-residential use. The CFD Administrator shall make the determination if an
Assessor's Parcel is Non-Residential Property.
"Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax
obligation for an Assessor's Parcel, as described in Section G.2.
"Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an
Assessor's Parcel, as described in Section G.1.
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 3
"Proportionately" means for Taxable Property that is (i) Developed Property, that the ratio of the actual
Special Tax levy to the Assigned Special Tax is the same for all Assessor's Parcels of Developed Property,
(ii)Approved Property,that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same
for all Assessor's Parcels of Approved Property, and (iii) Undeveloped Property, or Provisional
Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax
per Acre is the same for all Assessor's Parcels of Undeveloped Property, or Provisional Undeveloped
Property, as applicable.
"Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that would
otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be
classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property
below the required minimum Acreage set forth in Sections F.
"Residential Property" means all Assessor's Parcels of Developed Property for which a building permit
has been issued for purposes of constructing one or more Residential Units.
"Residential Unit" or "RU" means a residential unit that is used or intended to be used as a domicile by
one or more persons, as determined by the CFD Administrator.
"Single Family Residential Property" means all Assessor's Parcels of Residential Property other than
Multifamily Property.
"Special Tax" means any of the special taxes authorized to be levied within CFD No. 2021-1 IA 1 pursuant
to the Act to fund the Special Tax Requirement.
"Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or
the periodic costs on all outstanding CFD No. 2021-1 IA 1 Bonds due in the Calendar Year that commences
in such Fiscal Year, (ii)Administrative Expenses, (iii)the costs associated with the release of funds from an
escrow account, (iv) any amount required to replenish any reserve funds established in association with
the CFD No. 2021-1 IA 1 Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax
delinquencies, and (vi) for the collection or accumulation of funds for the acquisition or construction of
facilities authorized by CFD No. 2021-1 IA 1 or the payment of debt service on CFD No. 2021-1 IA 1 Bonds
anticipated to be issued, provided that the inclusion of such amount does not cause an increase in the
levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of
Section E., less(vii)any amounts available to pay debt service or other periodic costs on the CFD No. 2021-
1 IA 1 Bonds pursuant to the Indenture.
"Taxable Property" means all Assessor's Parcels within CFD No. 2021-1 IA 1, which are not Exempt
Property.
"Taxable Unit" means either a Residential Unit or an Acre.
"Tract(s)" means an area of land within a subdivision identified by a particular tract number on a Final
Map approved for the subdivision.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not Developed
Property,Approved Property, Provisional Undeveloped Property.
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 4
B.SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year,the City Council shall levy Special
Taxes on all Taxable Property, up to the applicable Maximum Special Tax, to fund the Special Tax
Requirement.
C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2021-2022, each Assessor's Parcel within CFD No. 2021-1 IA 1
shall be classified as Taxable Property or Exempt Property. In addition, each Assessor's Parcel of Taxable
Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or
Provisional Undeveloped Property.
Assessor's Parcels of Developed Property shall further be classified as Residential Property or Non-
Residential Property. Each Assessor's Parcel of Residential Property shall further be classified as Single
Family Residential Property or Multifamily Property. Each Assessor's Parcel of Single Family Residential
Property shall be further categorized into Land Use Categories based on its Building Square Footage and
assigned to its appropriate Assigned Special Tax rate.
In the event that an Assessor's Parcel for which one or more Building Permits have been issued and the
County has not yet assigned final Assessor's Parcel Number(s) to the Residential Unit(s) (in accordance
with the Final Map or Condominium Plan) on such Assessor's Parcel, the amount of the Special Tax levy
on such Assessor's Parcel for each Fiscal Year shall be determined as follows: (1) the CFD Administrator
shall first determine an amount of the Maximum Special Tax levy for such Assessor's Parcel, based on the
classification of such Assessor's Parcel as Undeveloped Property; (2) the amount of the Special Tax levy
for the Residential Units on such Assessor's Parcel for which Building Permits have been issued shall be
determined based on the Developed Property Special Tax rates and shall be taxed as Developed Property
in accordance with Step 1 of Section E below; and (3) the amount of the Special Tax levy on the Taxable
Property in such Assessor's Parcel not subject to the Special Tax levy in clause(2)shall be equal to: (A)the
percentage of the Maximum Special Tax rate levied on all other Undeveloped Property multiplied by the
total of the amount determined in clause (1), less the amount determined in clause (2).
D. MAXIMUM SPECIALTAX
1. Developed Property
The Maximum Special Tax for each Assessor's Parcel of Single Family Residential Property in any Fiscal
Year shall be the greater of(i)the Assigned Special Tax or(ii)the Backup Special Tax.
The Maximum Special Tax for each Assessor's Parcel of Non-Residential or Multifamily Residential
Property shall be the applicable Assigned Special Tax described in Table 1 of Section D.
a. Assigned Special Tax
Each Fiscal Year, each Assessor's Parcel of Single Family Residential Property, Multifamily Property or
Non-Residential shall be subject to an Assigned Special Tax. The Assigned Special Tax applicable to an
Assessor's Parcel of Developed Property shall be determined pursuant to Table 1 below.
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 5
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
Assigned
Taxable Special Tax Per
Land Use Category Unit Building Square Footage Taxable Unit
1. Single Family Residential Property RU Less than 1,850 sq.ft $2,282.00
2. Single Family Residential Property RU 1,851 sq.ft to 2,050 sq. ft $2,401.00
3. Single Family Residential Property RU 2,051 sq.ft to 2,250 sq. ft $2,520.00
4. Single Family Residential Property RU 2,251 sq.ft to 2,450 sq. ft $2,575.00
5. Single Family Residential Property RU 2,451 sq.ft to 2,650 sq. ft $2,648.00
6. Single Family Residential Property RU Greater than 2,650 sq.ft $2,758.00
7. Multifamily Property Acre N/A $19,859.00
8. Non-Residential Property Acre N/A $19,859.00
On each July 1, commencing July 1, 2022, the Assigned Special Tax rate for Developed Property shall
be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
b. Multiple Land Use Categories
In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use
Type.The Maximum Special Tax levied on an Assessor's Parcel shall be the sum of the Maximum Special
Tax for all Land Use Categories located on the Assessor's Parcel. The CFD Administrator's allocation to
each type of property shall be final.
c. Backup Special Tax
The Backup Special Tax for an Assessor's Parcel within a Final Map classified or to be classified as Single
Family Property shall calculated according to the following formula.
B = (UxA)/L
The terms above have the following meanings:
B= Backup Special Tax per per Assessor's Parcel within the Final Map
U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below
A=Acreage of Single Family Residential Property expected to exist in such Final Map at the time
of calculation, as determined by the Administrator
L= Number of Residential Units expected to exist in such Final Map at the time of calculation, as
determined by the Administrator.
In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all
Assessor's Parcels within such changed or modified area shall be $19,859 per Acre.
In the event any superseding Final Map is recorded as a Final Map within the Boundaries of the CFD,
the Backup Special Tax for all Assessor's Parcels within such Final Map shall be $19,859 per Acre. The
Backup Special Tax shall not apply to Multifamily Residential Property, or Non-Residential Property.
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 6
On each July 1,commencing July 1,2022,the Backup Special Tax rate shall be increased by two percent
(2.00%) of the amount in effect in the prior Fiscal Year.
2. Approved Property
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be classified as
Single Family Property shall be the Backup Special Tax computed pursuant to Section D.1.c above.
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be classified as
Multifamily Residential Property or Non-Residential Property shall be$19,859 per Acre.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Approved Property shall
be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
3. Undeveloped Property and Provisional Undeveloped Property that is not Exempt Property
pursuant to the provisions of Section F
The Maximum Special Tax for each Assessor's Parcel of Undeveloped Property and Provisional
Undeveloped Property that is not Exempt Property shall be equal to the product of$19,859 multiplied
by the Acreage of such Assessor's Parcel.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Undeveloped and
Provisional Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect
in the prior Fiscal Year.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year,the City Council shall levy Special
Taxes on all Taxable Property in accordance with the following steps:
Step One: The Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed
Property at up to 100% of the applicable Assigned Special Tax rates in Table 1 to satisfy
the Special Tax Requirement.
Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the first step
has been completed, the Special Tax shall be levied Proportionately on each Assessor's
Parcel of Approved Property at up to 100%of the Maximum Special Tax applicable to each
such Assessor's Parcel as needed to satisfy the Special Tax Requirement.
Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the first two
steps have been completed, the Annual Special Tax shall be levied Proportionately on
each Assessor's Parcel of Undeveloped Property up to 100%of the Maximum Special Tax
applicable to each such Assessor's Parcel as needed to satisfy the Special Tax
Requirement.
Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the first
three steps have been completed, then the Special Tax levy on each Assessor's Parcel of
Developed Property for which the Maximum Special Tax is the Backup Special Tax shall
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 7
be increased Proportionately from the Assigned Special Tax up to 100% of the Backup
Special Tax as needed to satisfy the Special Tax Requirement.
Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the first four
steps have been completed, the Special Tax shall be levied Proportionately on each
Assessor's Parcel of Provisional Undeveloped Property up to 100% of the Maximum
Special Tax applicable to each such Assessor's Parcel as needed to satisfy the Special Tax
Requirement.
Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year against
any Assessor's Parcel of Residential Property as a result of a delinquency in the payment of the Special
Tax applicable to any other Assessor's Parcel be increased by more than ten percent (10%) above the
amount that would have been levied in that Fiscal Year had there never been any such delinquency or
default.
F. EXEMPTIONS
The City shall classify as Exempt Property, in the following order of priority, (i) Assessor's Parcels which
are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of
California, Federal or other local governments, including school districts, (ii) Assessor's Parcels which are
used as places of worship and are exempt from ad valorem property taxes because they are owned by a
religious organization, (iii) Assessor's Parcels which are owned by, irrevocably offered for dedication,
encumbered by or restricted in use by a homeowners' association, (iv) Assessor's Parcels with public or
utility easements making impractical their utilization for other than the purposes set forth in the
easement, (v) Assessor's Parcels which are privately owned and are encumbered by or restricted solely
for public uses, or (vi) Assessor's Parcels restricted to other types of public uses determined by the City
Council, provided that no such classification would reduce the sum of all Taxable Property to less than
28.89 Acres.
Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt Property if
such classification would reduce the sum of all Taxable Property to less than 28.89 Acres. Assessor's
Parcels which cannot be classified as Exempt Property because such classification would reduce the
Acreage of all Taxable Property to less than 28.89 Acres will be classified as Provisional Undeveloped
Property, and will be subject to Special Tax pursuant to Step Five in Section E.
G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
"CFD Public Facilities" means $11,000,000 expressed in 2021 dollars, which shall increase by the
Construction Inflation Index on July 1, 2022, and on each July 1 thereafter, or such lower amount (i)
determined by the City Council as sufficient to provide the public facilities under the authorized bonding
program for CFD No. 2021-1 IA 1, or(ii) determined by the City Council concurrently with a covenant that
it will not issue any more Bonds to be supported by Special Tax levied under this Rate and Method of
Apportionment.
"Construction Fund" means an account specifically identified in the Indenture or functionally equivalent
to hold funds,which are currently available for expenditure to acquire or construct public facilities eligible
to be financed by CFD No. 2021-1 IA 1.
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"Construction Inflation Index" means the annual percentage change in the Engineering News-Record
Building Cost Index for the City of Los Angeles, measured as of the Calendar Year which ends in the
previous Fiscal Year. In the event this index ceases to be published,the Construction Inflation Index shall
be another index as determined by the City that is reasonably comparable to the Engineering News-
Record Building Cost Index for the City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities minus public facility costs available to be funded
through existing construction or escrow accounts funded by the Outstanding Bonds, and minus public
facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of
prepayment.
"Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of Special Tax
which will remain outstanding after the first interest and/or principal payment date following the current
Fiscal Year,excluding CFD No. 2021-1 IA 1 Bonds to be redeemed at a later date with the proceeds of prior
prepayments of Special Tax.
1. Prepayment in Full
The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor's Parcels
of Developed Property, (ii) Assessor's Parcels of Approved Property or Undeveloped Property for which a
Building Permit has been issued, (iii) Approved Property or Undeveloped Property for which a Building
Permit has not been issued and (iv)Assessor's Parcels of Public Property or Property Owner's Association
Property, or Provisional Undeveloped Property that are not Exempt Property pursuant to Section F. The
Maximum Special Tax obligation applicable to an Assessor's Parcel may be fully prepaid and the obligation
to pay the Special Tax for such Assessor's Parcel permanently satisfied as described herein; provided that
a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's
Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum
Special Tax obligation for such Assessor's Parcel shall provide the CFD Administrator with written notice
of intent to prepay,and within 5 business days of receipt of such notice,the CFD Administrator shall notify
such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by
the CFD in calculating the Prepayment Amount (as defined below) for the Assessor's Parcel. Within 15
days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the
Prepayment Amount for the Assessor's Parcel. Prepayment must be made not less than 60 days prior to
the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes.
The Prepayment Amount (defined below) shall be calculated as follows (capitalized terms are defined
below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
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2. For an Assessor's Parcel of Developed Property, compute the Maximum Special Tax for the
Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property for which
a Building Permit has been issued, compute the Maximum Special Tax for the Assessor's Parcel as
though it was already designated as Developed Property, based upon the Building Permit which has
been issued for the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped
Property for which a Building Permit has not been issued, Public Property, Property Owner's
Association Property, or Provisional Undeveloped Property to be prepaid compute the Maximum
Special Tax for the Assessor's Parcel.
3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount of Special
Taxes that could be levied at the Maximum Special Tax at build out of all Assessor's Parcels of Taxable
Property based on the applicable Maximum Special Tax for Assessor's Parcels of Developed Property
not including any Assessor's Parcels for which the Special Tax obligation has been previously prepaid.
4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the
Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the
Prepayment Amount (the "Bond Redemption Amount").
5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the
Outstanding Bonds to be redeemed (the "Redemption Premium").
6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to
paragraph 6 to determine the amount of Future Facilities Costs for the Assessor's Parcel (the "Future
Facilities Amount").
8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first
bond interest and/or principal payment date following the current Fiscal Year until the earliest
redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax
prepayments.
9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which
have not yet been paid.
10. Determine the amount the CFD Administrator reasonably expects to derive from the investment
of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until
the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount.
11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived
pursuant to paragraph 10 (the "Defeasance Amount").
12. Verify the administrative fees and expenses of the CFD,including the cost of computation of the
Prepayment Amount, the cost to invest the Prepayment Amount, the cost of redeeming the
Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Maximum
Special Tax obligation for the Assessor's Parcel and the redemption of Outstanding Bonds (the
"Administrative Fees and Expenses").
13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected
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reduction in the reserve requirement (as defined in the Indenture), if any, associated with the
redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by
subtracting the new reserve requirement(as defined in the Indenture) in effect after the redemption
of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the
prepayment date, but in no event shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount,the Redemption
Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and
Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and
Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture
and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities
Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall
be retained by the CFD.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such
event,the increment above$5,000 or an integral multiple thereof will be retained in the appropriate fund
established under the Indenture to be used with the next redemption from other Special Tax prepayments
of Outstanding Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined pursuant to
paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for the
Assessor's Parcel from the County tax roll. With respect to any Assessor's Parcel for which the Maximum
Special Tax obligation is prepaid,the City Council shall cause a suitable notice to be recorded in compliance
with the Act,to indicate the prepayment of Maximum Special Tax obligation and the release of the Special
Tax lien for the Assessor's Parcel, and the obligation to pay the Special Tax for such Assessor's Parcel shall
cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of
Maximum Special Tax that may be levied on all Assessor's Parcels of Taxable Property after the proposed
prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain
outstanding after the prepayment plus the estimated annual Administrative Expenses.
Tenders of Bonds in prepayment of the Maximum Special Tax obligation may be accepted upon the terms
and conditions established by the City Council pursuant to the Act. However, the use of Bond tenders
shall only be allowed on a case-by-case basis as specifically approved by the City Council.
2. Prepayment in Part
The Maximum Special Tax obligation for an Assessor's Parcel of Developed Property, Approved Property
or Undeveloped Property may be partially prepaid. For purposes of determining the partial prepayment
amount,the provisions of Section G.1 shall be modified as provided by the following formula:
PP= ((PE—A) x F) +A
These terms have the following meaning:
PP= Partial Prepayment Amount
PE=the Prepayment Amount calculated according to Section G.1
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F=the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the
Maximum Special Tax obligation
A=the Administrative Fees and Expenses determined pursuant to Section GA
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax obligation for
the Assessor's Parcel shall notify the CFD Administrator of(i) such owner's intent to partially prepay the
Maximum Special Tax obligation, (ii) the percentage of the Maximum Special Tax obligation such owner
wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within
5 days of receipt of such notice,the CFD Administrator shall notify such property owner of the amount of
the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the
amount of a partial prepayment. Within 15 business days of receipt of such non-refundable deposit, the
CFD Administrator shall notify such owner of the amount of the Partial Prepayment Amount for the
Assessor's Parcel. A Partial Prepayment Amount must be made not less than 60 days prior to the
redemption date for the Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment
Amount.
With respect to any Assessor's Parcel for which the Maximum Special Tax obligation is partially prepaid,
the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in Paragraph 15 of
Section G.1, and (ii) indicate in the records of the CFD that there has been a Partial Prepayment for the
Assessor's Parcel and that a portion of the Maximum Special Tax obligation equal to the remaining
percentage (1.00 - F) of the Maximum Special Tax obligation will continue to be levied on the Assessor's
Parcel pursuant to Section E.
H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor's Parcels
subject to the Special Tax. The Special Tax shall cease not later than the 2060-2061 Fiscal Year, however,
Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i)that
all the required interest and principal payments on the CFD No. 2021-1 IA 1 Bonds have been paid; (ii) all
authorized facilities of CFD No. 2021-1 IA 1 have been acquired and all reimbursements to the developer
have been paid, (iii) no delinquent Special Tax remain uncollected and (iv) all other obligations of CFD No.
2021-1 IA 1 have been satisfied.
I.MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem
property taxes, provided, however,that CFD No. 2021-1 IA 1 may collect Special Taxes at a different time
or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and
may actually foreclose on delinquent Assessor's Parcels as permitted by the Act.
J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes on his/her Assessor's Parcel(s) with the CFD
Administrator, provided that the appellant is current in his/her payments of Special Taxes. During
pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date
established when the levy was made. The appeal must specify the reasons why the appellant claims the
Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD
Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator
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agrees with the appellant,the CFD Administrator shall grant a credit to eliminate or reduce future Special
Taxes on the appellant's Assessor's Parcel(s). No refunds of previously paid Special Taxes shall be made.
The CFD Administrator shall interpret this Rate and Method of Apportionment and make determinations
relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as
herein specified.
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RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (TUSCANY VALLEY/CREST)
OF THE CITY OF LAKE ELSINORE
IMPROVEMENT AREA NO. 2
A Special Tax (all capitalized terms are defined in Section A, "Definitions", below) shall be applicable to
each Assessor's Parcel of Taxable Property located within the boundaries of the City of Lake Elsinore
Community Facilities District No. 2021-1 (Tuscany Valley/Crest) ("CFD No. 2021-1 IA 2"). The amount of
Special Tax to be levied in each Fiscal Year on an Assessor's Parcel shall be determined by the City
Council of the City of Lake Elsinore, acting in its capacity as the legislative body of CFD No. 2021-1 IA 2,
by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped
Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of
the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the
purposes,to the extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or
if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final
map, parcel map, condominium plan, or other recorded County parcel map or instrument. The square
footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560.
"Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State
of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to
the administration of CFD No. 2021-1 IA 2: the costs of computing the Special Taxes and preparing the
Special Tax collection schedules (whether by the City or designee thereof or both);the costs of collecting
the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee;
the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the
Indenture; the costs to the City, CFD No. 2021-1 IA 2 or any designee thereof of complying with
arbitrage rebate requirements; the costs to the City, CFD No. 2021-1 IA 2 or any designee thereof of
complying with disclosure requirements of the City, CFD No. 2021-1 IA 2 or obligated persons associated
with applicable federal and state securities laws and the Act; the costs associated with preparing Special
Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of
the City, CFD No. 2021-1 IA 2 or any designee thereof related to an appeal of the Special Tax; the costs
associated with the release of funds from an escrow account; and the City's annual administration fees
and third party expenses. Administration Expenses shall also include amounts estimated by the CFD
Administrator or advanced by the City or CFD No. 2021-1 IA 2 for any other administrative purposes of
CFD No. 2021-1 IA 2, including attorney's fees and other costs related to commencing and pursuing to
completion any foreclosure of delinquent Special Taxes.
"Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in a Final
Map that was recorded prior to the January 15Y 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
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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" preceding the Fiscal Year in which the Special Tax is being levied.
"Assessor's Parcel" means a lot or parcel of land designated on an Assessor's Parcel Map with an
assigned Assessor's Parcel Number.
"Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by
Assessor's Parcel Number.
"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the County for
purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below.
"Backup Special Tax" means the Special Tax of that name described in Section D below.
"Boundary Map" means a recorded map of the CFD which indicates the boundaries of the CFD.
"Building Permit" means the first legal document issued by a local agency giving official permission for
new construction. For purposes of this definition, "Building Permit" may or may not include any
subsequent building permit document(s) authorizing new construction on an Assessor's Parcel that are
issued or changed by the City after the first original issuance, as determined by the CFD Administrator as
necessary to fairly allocate Special Tax to the Assessor's Parcel, provided that following such
determination the Maximum Special Tax that may be levied on all Assessor's Parcels of Taxable Property
will be at least 1.1 times maximum annual debt service on all outstanding CFD No. 2021-1 IA 2 Bonds
plus the estimated annual Administrative Expenses.
"Building Square Footage" or "BSF" means the square footage of assessable internal living space,
exclusive of garages or other structures not used as living space, as determined by reference to the
Building Permit for such Assessor's Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the following
December 31.
"CFD Administrator" means an official of the City, or designee thereof, responsible for determining the
Special Tax Requirement, and providing for the levy and collection of the Special Taxes.
"CFD" or "CFD No. 2021-1 IA 2" means Improvement Area No. 2 of CFD No. 2021-1 as identified on the
boundary map for CFD No. 2021-1.
"CFD No. 2021-1" means Community Facilities District No. 2021-1 (Tuscany Valley/Crest) established by
the City under the Act.
"CFD No. 2021-1 IA 2 Bonds" means any obligation to repay a sum of money, including obligations in
the form of bonds, notes, certificates of participation, long-term leases, loans from government
agencies, or loans from banks, other financial institutions, private businesses, or individuals, or
long-term contracts, or any refunding thereof, to which Special Tax of CFD No. 2021-1 IA 2 have been
pledged.
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"City" means the City of Lake Elsinore.
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD
No. 2021-1 IA 2.
"Condominium Plan" means a condominium plan as set forth in the California Civil Code, Section 4285.
"County" means the County of Riverside.
"Developed Property" means all Assessor's Parcels that: (i) are included in a Final Map that was
recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and
(ii) has an Assessor's Parcel Number from the County shown on an Assessor's Parcel Map for the
individual lot included on the Final Map, and (iii) a Building Permit for new construction was issued on or
before May 1"preceding the Fiscal Year in which the Special Tax is being levied.
"Exempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes as
provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line
adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or
recordation of a Condominium Plan pursuant to California Civil Code Section 4285 that creates individual
lots for which Building Permits may be issued without further subdivision.
"Fiscal Year" means the period commencing on July 1't of any year and ending the following June 30th.
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to
which Bonds are issued, as modified, amended and/or supplemented from time to time, and any
instrument replacing or supplementing the same.
"Land Use Category" means any of the categories listed in Table 1 of Section D.
"Maximum Special Tax" means for each Assessor's Parcel, the maximum Special Tax, determined in
accordance with Section D below, that can be levied by CFD No. 2021-1 IA 2 in any Fiscal Year on such
Assessor's Parcel.
"Multifamily Property" means all Assessor's Parcels of Developed Property for which a Building Permit
has been issued for the purpose of constructing a building or buildings comprised of attached
Residential Units available for rental by the general public, not for sale to an end user, and under
common management, as determined by the CFD Administrator.
"Non-Residential Property" or "NR" means all Assessor's Parcels for which a building permit(s) was
issued or will be issued for a non-residential use. The CFD Administrator shall make the determination if
an Assessor's Parcel is Non-Residential Property.
"Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax
obligation for an Assessor's Parcel, as described in Section G.2.
"Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an
Assessor's Parcel, as described in Section G.I.
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"Proportionately" means for Taxable Property that is (i) Developed Property, that the ratio of the actual
Special Tax levy to the Assigned Special Tax is the same for all Assessor's Parcels of Developed Property,
(ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the
same for all Assessor's Parcels of Approved Property, and (iii) Undeveloped Property, or Provisional
Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax
per Acre is the same for all Assessor's Parcels of Undeveloped Property, or Provisional Undeveloped
Property, as applicable.
"Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that would
otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be
classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property
below the required minimum Acreage set forth in Sections F.
"Residential Property" means all Assessor's Parcels of Developed Property for which a building permit
has been issued for purposes of constructing one or more Residential Units.
"Residential Unit" or "RU" means a residential unit that is used or intended to be used as a domicile by
one or more persons, as determined by the CFD Administrator.
"Single Family Residential Property" means all Assessor's Parcels of Residential Property other than
Multifamily Property.
"Special Tax" means any of the special taxes authorized to be levied within CFD No. 2021-1 IA 2
pursuant to the Act to fund the Special Tax Requirement.
"Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or
the periodic costs on all outstanding CFD No. 2021-1 IA 2 Bonds due in the Calendar Year that
commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of
funds from an escrow account, (iv) any amount required to replenish any reserve funds established in
association with the CFD No. 2021-1 IA 2 Bonds, (v) an amount equal to any anticipated shortfall due to
Special Tax delinquencies, and (vi) for the collection or accumulation of funds for the acquisition or
construction of facilities authorized by CFD No. 2021-1 IA 2 or the payment of debt services on CFD No.
2021-1 IA 2 Bonds anticipated to be issued, provided that the inclusion of such amount does not cause
an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in
Steps Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic
costs on the CFD No. 2021-1 IA 2 Bonds pursuant to the Indenture.
"Taxable Property" means all Assessor's Parcels within CFD No. 2021-1 IA 2, which are not Exempt
Property.
"Taxable Unit" means either a Residential Unit or an Acre.
"Tract(s)" means an area of land within a subdivision identified by a particular tract number on a Final
Map approved for the subdivision.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not Developed
Property,Approved Property, Provisional Undeveloped Property.
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B.SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year, the City Council shall levy
Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax, to fund the Special Tax
Requirement.
C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2021-2022, each Assessor's Parcel within CFD No. 2021-1 IA
2 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor's Parcel of
Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped
Property or Provisional Undeveloped Property.
Assessor's Parcels of Developed Property shall further be classified as Residential Property or
Non-Residential Property. Each Assessor's Parcel of Residential Property shall further be classified as
Single Family Residential Property or Multifamily Property. Each Assessor's Parcel of Single Family
Residential Property shall be further categorized into Land Use Categories based on its Building Square
Footage and assigned to its appropriate Assigned Special Tax rate.
In the event that an Assessor's Parcel for which one or more Building Permits have been issued and the
County has not yet assigned final Assessor's Parcel Number(s) to the Residential Unit(s) (in accordance
with the Final Map or Condominium Plan) on such Assessor's Parcel, the amount of the Special Tax levy
on such Assessor's Parcel for each Fiscal Year shall be determined as follows: (1) the CFD Administrator
shall first determine an amount of the Maximum Special Tax levy for such Assessor's Parcel, based on
the classification of such Assessor's Parcel as Undeveloped Property; (2) the amount of the Special Tax
levy for the Residential Units on such Assessor's Parcel for which Building Permits have been issued shall
be determined based on the Developed Property Special Tax rates and shall be taxed as Developed
Property in accordance with Step 1 of Section E below; and (3)the amount of the Special Tax levy on the
Taxable Property in such Assessor's Parcel not subject to the Special Tax levy in clause (2) shall be equal
to: (A) the percentage of the Maximum Special Tax rate levied on all other Undeveloped Property
multiplied by the total of the amount determined in clause (1), less the amount determined in clause (2).
D. MAXIMUM SPECIALTAX
1. Developed Property
The Maximum Special Tax for each Assessor's Parcel of Single Family Residential Property in any
Fiscal Year shall be the greater of(i)the Assigned Special Tax or(ii)the Backup Special Tax.
The Maximum Special Tax for each Assessor's Parcel of Non-Residential or Multifamily Residential
Property shall be the applicable Assigned Special Tax described in Table 1 of Section D.
a. Assigned Special Tax
Each Fiscal Year, each Assessor's Parcel of Single Family Residential Property, Multifamily Property or
Non-Residential shall be subject to an Assigned Special Tax. The Assigned Special Tax applicable to an
Assessor's Parcel of Developed Property shall be determined pursuant to Table 1 below.
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Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 5
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
Assigned
Taxable Special Tax Per
Land Use Category Unit Building Square Footage Taxable Unit
1. Single Family Residential Property RU Less than 1,850 sq.ft $2,382.00
2. Single Family Residential Property RU 1,851 sq.ft to 2,050 sq. ft $2,501.00
3. Single Family Residential Property RU 2,051 sq.ft to 2,250 sq. ft $2,620.00
4. Single Family Residential Property RU 2,251 sq.ft to 2,450 sq. ft $2,675.00
5. Single Family Residential Property RU 2,451 sq.ft to 2,650 sq. ft $2,748.00
6. Single Family Residential Property RU Greater than 2,650 sq.ft $2,858.00
7. Multifamily Property Acre N/A $20,593.00
8. Non-Residential Property Acre N/A $20,593.00
On each July 1, commencing July 1, 2022, the Assigned Special Tax rate for Developed Property shall
be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
b. Multiple Land Use Categories
In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use
Type. The Maximum Special Tax levied on an Assessor's Parcel shall be the sum of the Maximum
Special Tax for all Land Use Categories located on the Assessor's Parcel. The CFD Administrator's
allocation to each type of property shall be final.
c. Backup Special Tax
The Backup Special Tax for an Assessor's Parcel within a Final Map classified or to be classified as
Single Family Property shall calculated according to the following formula.
B = (UxA)/L
The terms above have the following meanings:
B = Backup Special Tax per per Assessor's Parcel within the Final Map
U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below
A=Acreage of Single Family Residential Property expected to exist in such Final Map at the time
of calculation, as determined by the Administrator
L= Number of Residential Units expected to exist in such Final Map at the time of calculation, as
determined by the Administrator.
In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all
Assessor's Parcels within such changed or modified area shall be $20,593 per Acre.
In the event any superseding Final Map is recorded as a Final Map within the Boundaries of the CFD,
the Backup Special Tax for all Assessor's Parcels within such Final Map shall be $20,593 per Acre. The
Backup Special Tax shall not apply to Multifamily Residential Property, or Non-Residential Property.
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 6
On each July 1, commencing July 1, 2022, the Backup Special Tax rate shall be increased by two
percent(2.00%) of the amount in effect in the prior Fiscal Year.
2. Approved Property
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be classified
as Single Family Property shall be the Backup Special Tax computed pursuant to Section D.1.c above.
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be classified
as Multifamily Residential Property or Non-Residential Property shall be$20,593 per Acre.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Approved Property shall
be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
3. Undeveloped Property and Provisional Undeveloped Property that is not Exempt Property
pursuant to the provisions of Section F
The Maximum Special Tax for each Assessor's Parcel of Undeveloped Property and Provisional
Undeveloped Property that is not Exempt Property shall be equal to the product of $20,593
multiplied by the Acreage of such Assessor's Parcel.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Undeveloped and
Provisional Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect
in the prior Fiscal Year.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year, the City Council shall levy
Special Taxes on all Taxable Property in accordance with the following steps:
Step One: The Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed
Property at up to 100% of the applicable Assigned Special Tax rates in Table 1 to satisfy
the Special Tax Requirement.
Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the first
step has been completed, the Special Tax shall be levied Proportionately on each
Assessor's Parcel of Approved Property at up to 100% of the Maximum Special Tax
applicable to each such Assessor's Parcel as needed to satisfy the Special Tax
Requirement.
Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the first
two steps have been completed, the Annual Special Tax shall be levied Proportionately
on each Assessor's Parcel of Undeveloped Property up to 100% of the Maximum Special
Tax applicable to each such Assessor's Parcel as needed to satisfy the Special Tax
Requirement.
Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the first
three steps have been completed, then the Special Tax levy on each Assessor's Parcel of
Developed Property for which the Maximum Special Tax is the Backup Special Tax shall
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 7
be increased Proportionately from the Assigned Special Tax up to 100% of the Backup
Special Tax as needed to satisfy the Special Tax Requirement.
Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the first
four steps have been completed, the Special Tax shall be levied Proportionately on each
Assessor's Parcel of Provisional Undeveloped Property up to 100% of the Maximum
Special Tax applicable to each such Assessor's Parcel as needed to satisfy the Special Tax
Requirement.
Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year
against any Assessor's Parcel of Residential Property as a result of a delinquency in the payment of the
Special Tax applicable to any other Assessor's Parcel be increased by more than ten percent(10%) above
the amount that would have been levied in that Fiscal Year had there never been any such delinquency
or default.
F. EXEMPTIONS
The City shall classify as Exempt Property, in the following order of priority, (i) Assessor's Parcels which
are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of
California, Federal or other local governments, including school districts, (ii) Assessor's Parcels which are
used as places of worship and are exempt from ad valorem property taxes because they are owned by a
religious organization, (iii) Assessor's Parcels which are owned by, irrevocably offered for dedication,
encumbered by or restricted in use by a homeowners' association, (iv) Assessor's Parcels with public or
utility easements making impractical their utilization for other than the purposes set forth in the
easement, (v) Assessor's Parcels which are privately owned and are encumbered by or restricted solely
for public uses, or (vi) Assessor's Parcels restricted to other types of public uses determined by the City
Council, provided that no such classification would reduce the sum of all Taxable Property to less than
19.51 Acres.
Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt Property if
such classification would reduce the sum of all Taxable Property to less than 19.51 Acres. Assessor's
Parcels which cannot be classified as Exempt Property because such classification would reduce the
Acreage of all Taxable Property to less than 19.51 Acres will be classified as Provisional Undeveloped
Property, and will be subject to Special Tax pursuant to Step Five in Section E.
G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
"CFD Public Facilities" means $7,500,000 expressed in 2021 dollars, which shall increase by the
Construction Inflation Index on July 1, 2022, and on each July 1 thereafter, or such lower amount (i)
determined by the City Council as sufficient to provide the public facilities under the authorized bonding
program for CFD No. 2021-1 IA 2, or (ii) determined by the City Council concurrently with a covenant
that it will not issue any more Bonds to be supported by Special Tax levied under this Rate and Method
of Apportionment.
"Construction Fund" means an account specifically identified in the Indenture or functionally equivalent
to hold funds, which are currently available for expenditure to acquire or construct public facilities
eligible to be financed by CFD No. 2021-1 IA 2.
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 8
"Construction Inflation Index" means the annual percentage change in the Engineering News-Record
Building Cost Index for the City of Los Angeles, measured as of the Calendar Year which ends in the
previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index
shall be another index as determined by the City that is reasonably comparable to the Engineering
News-Record Building Cost Index for the City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities minus public facility costs available to be funded
through existing construction or escrow accounts funded by the Outstanding Bonds, and minus public
facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of
prepayment.
"Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of Special Tax
which will remain outstanding after the first interest and/or principal payment date following the
current Fiscal Year, excluding CFD No. 2021-1 IA 2 Bonds to be redeemed at a later date with the
proceeds of prior prepayments of Special Tax.
1. Prepayment in Full
The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor's Parcels
of Developed Property, (ii) Assessor's Parcels of Approved Property or Undeveloped Property for which
a Building Permit has been issued, (iii) Approved Property or Undeveloped Property for which a Building
Permit has not been issued and (iv) Assessor's Parcels of Public Property or Property Owner's
Association Property, or Provisional Undeveloped Property that are not Exempt Property pursuant to
Section F. The Maximum Special Tax obligation applicable to an Assessor's Parcel may be fully prepaid
and the obligation to pay the Special Tax for such Assessor's Parcel permanently satisfied as described
herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with
respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending
to prepay the Maximum Special Tax obligation for such Assessor's Parcel shall provide the CFD
Administrator with written notice of intent to prepay, and within 5 business days of receipt of such
notice, the CFD Administrator shall notify such owner of the amount of the non-refundable deposit
determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as
defined below) for the Assessor's Parcel. Within 15 days of receipt of such non-refundable deposit, the
CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor's Parcel.
Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be
redeemed with the proceeds of such prepaid Special Taxes.
The Prepayment Amount (defined below) shall be calculated as follows (capitalized terms are defined
below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 9
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For an Assessor's Parcel of Developed Property, compute the Maximum Special Tax for the
Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property for which
a Building Permit has been issued, compute the Maximum Special Tax for the Assessor's Parcel as
though it was already designated as Developed Property, based upon the Building Permit which has
been issued for the Assessor's Parcel. For an Assessor's Parcel of Approved Property or
Undeveloped Property for which a Building Permit has not been issued, Public Property, Property
Owner's Association Property, or Provisional Undeveloped Property to be prepaid compute the
Maximum Special Tax for the Assessor's Parcel.
3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount of
Special Taxes that could be levied at the Maximum Special Tax at build out of all Assessor's Parcels
of Taxable Property based on the applicable Maximum Special Tax for Assessor's Parcels of
Developed Property not including any Assessor's Parcels for which the Special Tax obligation has
been previously prepaid.
4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the
Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the
Prepayment Amount (the "Bond Redemption Amount").
5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the
Outstanding Bonds to be redeemed (the "Redemption Premium").
6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to
paragraph 6 to determine the amount of Future Facilities Costs for the Assessor's Parcel (the
"Future Facilities Amount").
8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first
bond interest and/or principal payment date following the current Fiscal Year until the earliest
redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax
prepayments.
9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which
have not yet been paid.
10. Determine the amount the CFD Administrator reasonably expects to derive from the
investment of the Bond Redemption Amount and the Redemption Premium from the date of
prepayment until the redemption date for the Outstanding Bonds to be redeemed with the
Prepayment Amount.
11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived
pursuant to paragraph 10 (the "Defeasance Amount").
12. Verify the administrative fees and expenses of the CFD, including the cost of computation of
the Prepayment Amount, the cost to invest the Prepayment Amount, the cost of redeeming the
Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Maximum
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 10
Special Tax obligation for the Assessor's Parcel and the redemption of Outstanding Bonds (the
"Administrative Fees and Expenses").
13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected
reduction in the reserve requirement (as defined in the Indenture), if any, associated with the
redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by
subtracting the new reserve requirement (as defined in the Indenture) in effect after the
redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve
fund on the prepayment date, but in no event shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the
Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative
Fees and Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and
Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture
and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities
Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall
be retained by the CFD.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such
event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate
fund established under the Indenture to be used with the next redemption from other Special Tax
prepayments of Outstanding Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined pursuant to
paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for the
Assessor's Parcel from the County tax roll. With respect to any Assessor's Parcel for which the Maximum
Special Tax obligation is prepaid, the City Council shall cause a suitable notice to be recorded in
compliance with the Act, to indicate the prepayment of Maximum Special Tax obligation and the release
of the Special Tax lien for the Assessor's Parcel, and the obligation to pay the Special Tax for such
Assessor's Parcel shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of
Maximum Special Tax that may be levied on all Assessor's Parcels of Taxable Property after the
proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will
remain outstanding after the prepayment plus the estimated annual Administrative Expenses.
Tenders of Bonds in prepayment of the Maximum Special Tax obligation may be accepted upon the
terms and conditions established by the City Council pursuant to the Act. However, the use of Bond
tenders shall only be allowed on a case-by-case basis as specifically approved by the City Council.
2. Prepayment in Part
The Maximum Special Tax obligation for an Assessor's Parcel of Developed Property, Approved Property
or Undeveloped Property may be partially prepaid. For purposes of determining the partial prepayment
amount,the provisions of Section G.1 shall be modified as provided by the following formula:
PP= ((PE—A) x F) +A
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 11
These terms have the following meaning:
PP= Partial Prepayment Amount
PE=the Prepayment Amount calculated according to Section G.1
F=the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the
Maximum Special Tax obligation
A=the Administrative Fees and Expenses determined pursuant to Section G.1
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax obligation
for the Assessor's Parcel shall notify the CFD Administrator of(i) such owner's intent to partially prepay
the Maximum Special Tax obligation, (ii) the percentage of the Maximum Special Tax obligation such
owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any.
Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the
amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in
calculating the amount of a partial prepayment. Within 15 business days of receipt of such
non-refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial
Prepayment Amount for the Assessor's Parcel. A Partial Prepayment Amount must be made not less
than 60 days prior to the redemption date for the Outstanding Bonds to be redeemed with the proceeds
of the Partial Prepayment Amount.
With respect to any Assessor's Parcel for which the Maximum Special Tax obligation is partially prepaid,
the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in Paragraph 15 of
Section G.1, and (ii) indicate in the records of the CFD that there has been a Partial Prepayment for the
Assessor's Parcel and that a portion of the Maximum Special Tax obligation equal to the remaining
percentage (1.00 - F) of the Maximum Special Tax obligation will continue to be levied on the Assessor's
Parcel pursuant to Section E.
H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor's
Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2060-2061 Fiscal Year,
however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has
determined (i) that all the required interest and principal payments on the CFD No. 2021-1 IA 2 Bonds
have been paid; (ii) all authorized facilities of CFD No. 2021-1 IA 2 have been acquired and all
reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected and
(iv) all other obligations of CFD No. 2021-1 IA 2 have been satisfied.
I.MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem
property taxes, provided, however, that CFD No. 2021-1 IA 2 may collect Special Taxes at a different
time or in a different manner if necessary to meet its financial obligations, and may covenant to
foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act.
J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes on his/her Assessor's Parcel(s) with the CFD
Administrator, provided that the appellant is current in his/her payments of Special Taxes. During
pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 12
established when the levy was made. The appeal must specify the reasons why the appellant claims the
Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the
CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD
Administrator agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or
reduce future Special Taxes on the appellant's Assessor's Parcel(s). No refunds of previously paid
Special Taxes shall be made.
The CFD Administrator shall interpret this Rate and Method of Apportionment and make determinations
relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as
herein specified.
City of Lake Elsinore
Community Facilities District No. 2021-1(Tuscany Valley/Crest) Page 13
APPENDIX B
Boundary Map
O
SPICER CONSULTING
G R O U P
g3
I HEREBY CERTIFY THAT THE WITHIN MAP SHOWING PROPOSED
PROPOSED BOUNDARY MAP SHEET 1 OF 1 SHEET
BOUNDARIES OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 COMMUNITY FACILITIES DISTRICT NO. 2021-1
(TUSCANY VALLEY/CREST), CITY OF LAKE ELSINORE,COUNTY Of (TUSCANY VALLEY/CREST)
RIVERSIDE, STATE OF CALIFORNIA, WAS APPROVED BY THE
CITY COUNCIL OF THE CITY OF LAKE ELSINORE AT A REGULAR CITY OF LAKE ELSINORE,
MEETING THEREOF,HELD ON 4te 21W DAY OF Maroh 2021 COUNTY OF RIVERSIDE, STATE OF CALIFORNIA
BY RESOLUTION NO. 7-02-1-2S.
CITY CLER CITY OF LAKE ELSINORE o JI Il
3: LITTLE VALLEY RD
FILED IN THE OFFICE OF THE CITY CLERK,CITY OF LAKE ELSINORE,
THIS 2,LPH DAY OF Mardi ,202A < �lr9
L� w �p0 349-380-024
(AD flp (AO (�O (AO OAt2
CITY C ,„ N N ru n1 n> 349-240-056
L A A A A A
CITY OfRKELSINORE A A A O `'Sr2F0
349-380-025
FILED THIS ��DAY OF 20,9A AT 19A>z
THE HOUR OF J_(:03 O'CLOCK R_M IN BOOK _'R6
OF MAPS OF ASSESSMENT AND COMMUNITY FACILITIES SCENIC CREST DR
DISTRICTS AT PAGE -&3 , IN THE OFFICE OF THE
COUNTY RECORDER,IN THE COUNTY OF RIVERSIDE,STATE OF o 349-240-006
CALIFORNIA. G,
oa z 349-240-038
FEE: .�CI' NO.: ckal-0-104I6a z 2
PETER ALDANA, ASSESSOR, COUNTY CLERK, RECORDER 349-240-034 �z
BY: O 7G�
DEPUTY z
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ARRELL, RD c
349-240-072
349-240-075
15 -_ i 14 74
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CFD 2021-1
i
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LAKE ELSINORE 4 ...............
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74 TZ
LEGEND
CFD BOUNDARY
PARCEL LINE N
THIS BOUNDARY MAP CORRECTLY SHOWS THE BOUNDARIES
OF THE COMMUNITY FACILITIES DISTRICT. FOR DETAILS
C5 c7 XXX-XXX-XXX ASSESSOR PARCEL NUMBER w E
CONCERNING THE LINES AND DIMENSIONS OF LOTS OR
SPICER CONSULTING PARCEL REFER TO THE COUNTY ASSESSOR'S MAPS FOR 0 375 750 1,500 Feet
G R O U P FISCAL YEAR 2020-21. 1 1 1 1 1 O IMPROVEMENT AREA s
APPENDIX C
Resolution of Intention
y
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SPICER CONSULTING
G R O U P
DocuSign Envelope ID:2D50D458-4900-4E01-98AB-A2ADDOCC4007
RESOLUTION NO. 2021-25
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, STATING THE INTENTION TO ESTABLISH COMMUNITY
FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE
(TUSCANY VALLEY/CREST) AND IMPROVEMENT AREAS THEREIN, TO
AUTHORIZE THE LEVY OF A SPECIAL TAX TO PAY THE COSTS OF
ACQUIRING OR CONSTRUCTING CERTAIN FACILITIES AND TO PAY DEBT
SERVICE ON BONDED INDEBTEDNESS
Whereas, the City of Lake Elsinore (the "City") has received a petition from SPT-AREP III
Tuscany Associates, LLC, a Delaware limited liability company (the "Developer"), the owner of
more than ten percent of the land within the boundaries of the territory which is proposed for
inclusion in a proposed community facilities district, which petition meets the requirements of
Sections 53318 and 53319 of the Government Code of the State of California; and,
Whereas, the City Council of the City (the "City Council") desires to adopt this resolution
of intention as provided in Section 53321 of the Mello-Roos Community Facilities Act of 1982 (the
"Act")to establish a community facilities district consisting of the territory described in Attachment
"A" hereto and incorporated herein by this reference which the City Council hereby determines
shall be known as "Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) ("Community Facilities District No. 2021-1" or the "District') to finance (1) the
purchase, construction, modification, expansion, improvement or rehabilitation of certain real or
other tangible property described in Attachment "B" hereto and incorporated herein by this
reference, including all furnishings, equipment and supplies related thereto (collectively, the
"Facilities"), which Facilities have a useful life of five years or longer, and (2) the incidental
expenses to be incurred in connection with financing the Facilities and forming and administering
the District (the "Incidental Expenses"); and,
Whereas, in accordance with the request submitted by the Developer, the City Council
has been asked to consider the formation of two improvement areas within proposed Community
Facilities District No. 2021-1 with the boundaries described in Attachment "A" to be known as
"Improvement Area No. 1 of Community Facilities District No. 2021-1 of the City of Lake Elsinore
(Tuscany Valley/Crest)" and "Improvement Area No. 2 of Community Facilities District No. 2021-
1 of the City of Lake Elsinore (Tuscany Valley/Crest)" (each individually an "Improvement Area"
and together the "Improvement Areas"); and,
Whereas, the City Council further intends to approve an estimate of the costs of the
Facilities and the Incidental Expenses for Community Facilities District No. 2021-1; and,
Whereas, it is the intention of the City Council to consider financing the Facilities and the
Incidental Expenses through the formation of Community Facilities District No. 2021-1, the
designation of the Improvement Areas and the issuance of bonded indebtedness in an amount
not to exceed $14,000,000 within proposed Improvement Area No. 1 and $10,000,000 within
proposed Improvement Area No. 2 and the levy of a special tax within each Improvement Area to
pay for the Facilities and the Incidental Expenses (the "Special Tax") and to pay debt service on
the bonded indebtedness to be incurred by such Improvement Area, provided that the bond sales
and such Special Tax levies are approved at a separate election to be held within the boundaries
of each proposed Improvement Area;
DocuSign Envelope ID:2D50D458-4900-4E01-98AB-A2ADDOCC4007
CC Res. No. 2021-25
Page 2 of 6
Whereas, the District, the Developer and the Elsinore Valley Municipal Water District (the
"Water District") propose to enter into a Joint Community Facilities Agreement (the "JCFA")
relating to certain facilities proposed to be financed by the District and owned and operated by
the Water District, and the District expects to enter into the JCFA prior to the approval of the
issuance of bonds pursuant to the Act.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The above recitals are true and correct.
Section 2. A community facilities district is proposed to be established under the terms
of the Act with two separate improvement areas designated pursuant to Section 53350 of the Act.
It is further proposed that the boundaries of the District and of each Improvement Area shall be
the legal boundaries as described in Attachment "A" hereto, which boundaries shall, upon
recordation of the boundary map for the District, include the entirety of any parcel subject to
taxation by the District, and as depicted on the map of the proposed Community Facilities District
No. 2021-1 which is on file with the City Clerk. The City Clerk is hereby directed to sign the
original map of the District and record it with all proper endorsements thereon with the Assessor-
County Clerk-Recorder of the County of Riverside (the "County Recorder") within 15 days after
the adoption of this resolution, all as required by Section 3111 of the Streets and Highways Code
of the State of California.
Section 3. The name of the proposed community facilities district shall be"Community
Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)" and the two
proposed Improvement Areas shall be designated as "Improvement Area No. 1 of Community
Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany Valley/Crest)" and
"Improvement Area No. 2 of Community Facilities District No. 2021-1 of the City of Lake Elsinore
(Tuscany Valley/Crest)."
Section 4. The Facilities proposed to be provided within Community Facilities District
No. 2021-1 and to be financed, in part, by each Improvement Area are public facilities as defined
in the Act, which the City and the Water District, with respect to certain water and sewer facilities,
are authorized by law to construct, acquire, own and operate. The City Council hereby finds and
determines that the description of the Facilities herein is sufficiently informative to allow taxpayers
within the proposed District and each proposed Improvement Area to understand what the funds
of each Improvement Area may be used to finance. The Incidental Expenses expected to be
incurred include the cost of planning and designing the Facilities, the costs of forming the District,
issuing bonds and levying and collecting the Special Tax within each Improvement Area of the
District. The Facilities may be acquired from one or more of the property owners within the District
as completed public improvements or may be constructed from bond or Special Tax proceeds.
All or a portion of the Facilities may be purchased with District funds as completed public
facilities pursuant to Section 53314.9 or as discrete portions or phases pursuant to Section
53313.51 of the Act and/or constructed with District funds pursuant to Section 53316.2 of the Act.
Any portion of the Facilities may be financed through a lease or lease-purchase arrangement if
the District hereafter determines that such arrangement is of benefit to the District.
Section 5. Except where funds are otherwise available, it is the intention of the City
Council to levy annually in accordance with the procedures contained in the Act the Special Tax
within each Improvement Area, secured by recordation of a continuing lien against all nonexempt
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real property in such Improvement Area, sufficient to pay for: (i) the portion of the Facilities and
Incidental Expenses to be financed by such Improvement Area; and (ii) the principal and interest
and other periodic costs on bonds or other indebtedness issued to finance the Facilities and
Incidental Expenses, including the establishment and replenishment of any reserve funds deemed
necessary by the District, and any remarketing, credit enhancement and liquidity facility fees
(including such fees for instruments which serve as the basis of a reserve fund in lieu of cash).
The rate and method of apportionment and manner of collection of the Special Tax for
Improvement Area No. 1 are described in detail in Attachment "C" attached hereto, which
Attachment "C" is incorporated herein by this reference. Attachment "C" allows each landowner
within proposed Improvement Area No. 1 to estimate the maximum amount of the Special Tax
that may be levied against each parcel. The rate and method of apportionment and manner of
collection of the Special Tax for Improvement Area No. 2 are described in detail in Attachment
"D" attached hereto, which Attachment "Y is incorporated herein by this reference. Attachment
"D" allows each landowner within proposed Improvement Area No. 2 to estimate the maximum
amount of the Special Tax that may be levied against each parcel. In the first year in which such
Special Tax is levied in an Improvement Area, the levy shall include an amount sufficient to repay
to the District all amounts, if any, transferred to the District pursuant to Section 53314 of the Act
and interest thereon.
If the Special Taxes of an Improvement Area are levied against any parcel used for private
residential purposes, (i)the maximum Special Tax rate shall be specified as a dollar amount which
shall be calculated and established not later than the date on which the parcel is first subject to
the Special Tax because of its use for private residential purposes and shall not be increased
over time, except to the extent permitted in the rate and method of apportionment of the Special
Tax for such Improvement Area as set forth in Attachment "C" and Attachment "D" hereto, as
applicable, (ii) such Special Tax shall not be levied after fiscal year 2060-61, as described in
Attachment "C" and "Attachment "D" hereto, as applicable, and (iii) under no circumstances will
the Special Tax levied in any fiscal year against any such parcel used for private residential uses
be increased as a consequence of delinquency or default by the owner or owners of any other
parcel or parcels within such Improvement Area by more than ten percent (10%) above the
amount that would have been levied in that fiscal year had there never been any such
delinquencies or defaults.
The Special Tax within each proposed Improvement Area is based on the expected
demand that each parcel of real property within such Improvement Area will place on the Facilities
and on the benefit that each parcel derives from the right to access the Facilities. The City Council
hereby determines that the proposed Facilities are necessary to meet the increased demand
placed upon the City and the existing infrastructure in the City as a result of the development of
the land proposed for inclusion in the District. The City Council hereby determines the rate and
method of apportionment of the special tax applicable to each proposed Improvement Area with
respect to the Special Tax set forth in Attachment "C" and "Attachment "D", respectively, to be
reasonable. The Special Tax is apportioned to each parcel on the foregoing basis pursuant to
Section 53325.3 of the Act and such special tax is not on or based upon the value or ownership
of real property. In the event that a portion of the property within Community Facilities District No.
2021-1 shall become for any reason exempt, wholly or partially, from the levy of the Special Tax
specified on Attachment "C" or Attachment "D," respectively, the City Council shall, on behalf of
Community Facilities District No. 2021-1, cause the levy to be increased, subject to the limitation
of the maximum Special Tax for a parcel as set forth in Attachment "C" or Attachment "D,"
respectively, to the extent necessary upon the remaining property within the applicable
Improvement Area which is not exempt in order to yield the Special Tax revenues required for the
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purposes described in this Section 5. The obligation to pay the Special Tax may be prepaid only
as set forth in Section G of Attachment "C" or Attachment "D," as applicable.
Section 6. A public hearing (the "Hearing") on the establishment of the proposed
Community Facilities District No. 2021-1 and each Improvement Area, the proposed rate and
method of apportionment of the Special Tax and the proposed issuance of bonds for each
Improvement Area to finance the Facilities and the Incidental Expenses shall be held at 7:00 p.m.,
or as soon thereafter as practicable, on April 27, 2021, at the City Cultural Center, 183 North Main
Street, Lake Elsinore, California. Notwithstanding the foregoing, consistent with the Governor of
the State of California's Executive Order N-29-20 or other applicable directives, the Hearing may
be held remotely with public participation via methods to be set forth in the City Council's agenda.
Should the City Council determine to form the District and establish the Improvement Areas, a
special election will be held within each Improvement Area to authorize the issuance of bonds of
such Improvement Area and the levy of a special tax within such Improvement Area in accordance
with the procedures contained in Government Code Section 53326. If held, the proposed voting
procedure at the elections will be a landowner vote with each landowner who is the owner of
record of land within an Improvement Area at the close of the Hearing, or the authorized
representative thereof, having one vote for each acre or portion thereof owned within such
proposed Improvement Area. Ballots for the special elections may be distributed by mail or by
personal service.
Section 7. At the time and place set forth above for the Hearing, the City Council will
receive testimony as to whether the proposed Community Facilities District No. 2021-1 and the
proposed Improvement Areas shall be established and as to the method of apportionment of the
special tax within each proposed Improvement Area and shall consider:
(a) if an ad valorem property tax is currently being levied on property within proposed
Community Facilities District No. 2021-1 for the exclusive purpose of paying principal of or interest
on bonds, lease payments or other indebtedness incurred to finance construction of capital
facilities; and
(b) if the capital facilities to be financed and constructed by Community Facilities
District No. 2021-1 will provide the same services as were provided by the capital facilities
mentioned in subsection (a); and
(c) if the City Council makes the findings specified in subsections (a) and (b) above, it
will consider appropriate action to determine whether the total annual amount of ad valorem
property tax revenue due from parcels within Community Facilities District No. 2021-1, for
purposes of paying principal and interest on the debt identified in subsection (a) above, shall not
be increased after the date on which Community Facilities District No. 2021-1 is established, or
after a later date determined by the City Council with the concurrence of the legislative body which
levied the property tax in question.
Section 8. At the time and place set forth above for the Hearing, any interested
person, including all persons owning lands or registered to vote within proposed Community
Facilities District No. 2021-1, may appear and be heard.
Section 9. Each City officer who is or will be responsible for providing the Facilities
within proposed Community Facilities District No. 2021-1, if it is established, is hereby directed to
study the proposed District and, at or before the time of the above-mentioned Hearing,file a report
with the City Council containing a brief description of the public facilities by type which will in his
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Page 5 of 6
or her opinion be required to meet adequately the needs of Community Facilities District No. 2021-
1 and an estimate of the cost of providing those public facilities, including the cost of
environmental evaluations of such facilities and an estimate of the fair and reasonable cost of any
Incidental Expenses to be incurred.
Section 10. The District may accept advances of funds or work-in-kind from any source,
including, but not limited to, private persons or private entities, for any authorized purpose,
including, but not limited to, paying any cost incurred in creating Community Facilities District No.
2021-1. The District may enter into an agreement with the person or entity advancing the funds
or work-in-kind, to repay all or a portion of the funds advanced, or to reimburse the person or
entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City
Council, with or without interest.
Section 11. The City Clerk is hereby directed to publish a notice (the "Notice") of the
Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation
published in the area of proposed Community Facilities District No. 2021-1. The City Clerk is
further directed to mail a copy of the Notice to each of the landowners within the boundaries of
the District at least 15 days prior to the Hearing. The Notice shall contain the text or a summary
of this Resolution, the time and place of the Hearing, a statement that the testimony of all
interested persons or taxpayers will be heard, a description of the protest rights of the registered
voters and landowners in the proposed district and a description of the proposed voting procedure
for the elections required by the Act. Such publication shall be completed at least seven (7) days
prior to the date of the Hearing.
Section 12. The reasonably expected maximum principal amount of the bonded
indebtedness to be incurred by Improvement Area No. 1 for the Facilities and Incidental Expenses
is Fourteen Million Dollars ($14,000,000) and by Improvement Area No. 2 is Ten Million Dollars
($10,000,000).
Section 13. Except to the extent limited in any bond resolution or trust indenture related
to the issuance of bonds, the City Council hereby reserves to itself all rights and powers set forth
in Section 53344.1 of the Act (relating to tenders in full or partial payment).
Section 14. This Resolution shall be effective upon its adoption.
Passed and Adopted at a regular meeting of the City Council of the City of Lake Elsinore,
California, this 23rd day of March 2021.
ned by:
EL .. hav,
Robert E. Magee
Mayor
Attest:
DocuSigned by:
2941B149748C400...
Candice Alvarez, MMC
City Clerk
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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. 2021-25 was adopted by the City Council of the City of Lake Elsinore, California,
at the Regular meeting of March 23, 2021 and that the same was adopted by the following vote:
AYES: Council Members Tisdale, Johnson, and Manos; Mayor Pro Tern Sheridan; and
Mayor Magee
NOES: None
ABSENT: None
ABSTAIN: None
DocuSigned by:
2941B149748C400...
Candice Alvarez, MMC
City Clerk
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ATTACHMENT A
BOUNDARY MAP
1 HEPEUf CENTIPY THAT THE riRHIH MAP THDWIHG PROPOSED
PROPOSED BOUNDARY MAP SHEET OF T g rtET
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ATTACHMENT B
Types of Facilities To Be
Financed By Community
Facilities District No. 2021-1
The proposed types of public facilities and expenses to be financed by the District
include:
The construction, purchase, modification, expansion, rehabilitation and/or improvement of
(i) drainage, library, park, 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
(the "City Facilities") and (ii) water and sewer facilities including the acquisition of capacity in the
sewer system and/or water system of the Elsinore Valley Municipal Water District which are
included in Elsinore Valley Municipal Water District's water and sewer capacity and connection
fee programs (the "Water District Facilities" and together, with the City Facilities, the "Facilities"),
and all appurtenances and appurtenant work in connection with the foregoing Facilities, including
the cost of engineering, planning, designing, materials testing, coordination, construction staking,
construction management and supervision for such Facilities, and to finance the incidental
expenses to be incurred, including:
a. The cost of engineering, planning and designing the Facilities;
b. All costs, including costs of the property owner petitioning to form the District,
associated with the creation of the District, the issuance of the bonds, the determination of the
amount of special taxes to be levied and costs otherwise incurred in order to carry out the
authorized purposes of the District; and
C. Any other expenses incidental to the construction, acquisition, modification,
rehabilitation, completion and inspection of the Facilities.
Capitalized terms used and not defined herein shall have the meaning set forth in the Rate
and Method of Apportionment of Special Taxes for the District.
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ATTACHMENT C
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (TUSCANY VALLEY/CREST)
OF THE CITY OF LAKE ELSINORE
IMPROVEMENT AREA NO. 1
A Special Tax (all capitalized terms are defined in Section A, "Definitions", below) shall be
applicable to each Assessor's Parcel of Taxable Property located within the boundaries of the
City of Lake Elsinore Community Facilities District No. 2021-1 (Tuscany Valley/Crest) ("CFD No.
2021-1 IA 1"). The amount of Special Tax to be levied in each Fiscal Year on an Assessor's
Parcel shall be determined by the City Council of the City of Lake Elsinore, acting in its capacity
as the legislative body of CFD No. 2021-1 IA 1, by applying the appropriate Special Tax for
Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped
Property that is not Exempt Property as set forth below. All of the real property, unless exempted
by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and
in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown
on the applicable final map, parcel map, condominium plan, or other recorded County parcel map
or instrument. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by
43,560.
"Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the
State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly
related to the administration of CFD No. 2021-1 IA 1: the costs of computing the Special Taxes
and preparing the Special Tax collection schedules (whether by the City or designee thereof or
both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of
remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the
discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2021-1
IA 1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the
City, CFD No. 2021-1 IA 1 or any designee thereof of complying with disclosure requirements of
the City, CFD No. 2021-1 IA 1 or obligated persons associated with applicable federal and state
securities laws and the Act; the costs associated with preparing Special Tax disclosure
statements and responding to public inquiries regarding the Special Taxes; the costs of the City,
CFD No. 2021-1 IA 1 or any designee thereof related to an appeal of the Special Tax; the costs
associated with the release of funds from an escrow account; and the City's annual administration
fees and third party expenses. Administration Expenses shall also include amounts estimated by
the CFD Administrator or advanced by the City or CFD No. 2021-1 IA 1 for any other
administrative purposes of CFD No. 2021-1 IA 1, including attorney's fees and other costs related
to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
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"Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in
a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the
Special Tax is being levied, (ii) and has an assigned Assessor's Parcel Number from the County
shown on an Assessor's Parcel Map for the individual lot included on the Final Map, and (iii) that
have not been issued a building permit on or before May 1st preceding the Fiscal Year in which
the Special Tax is being levied.
"Assessor's Parcel" means a lot or parcel of land designated on an Assessor's Parcel Map with
an assigned Assessor's Parcel Number.
"Assessor's Parcel Map" means an official map of the Assessor of the County designating
parcels by Assessor's Parcel Number.
"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the
County for purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below.
"Backup Special Tax" means the Special Tax of that name described in Section D below.
"Boundary Map" means a recorded map of the CFD which indicates the boundaries of the CFD.
"Building Permit" means the first legal document issued by a local agency giving official
permission for new construction. For purposes of this definition, "Building Permit" may or may not
include any subsequent building permit document(s) authorizing new construction on an
Assessor's Parcel that are issued or changed by the City after the first original issuance, as
determined by the CFD Administrator as necessary to fairly allocate Special Tax to the Assessor's
Parcel, provided that following such determination the Maximum Special Tax that may be levied
on all Assessor's Parcels of Taxable Property will be at least 1.1 times maximum annual debt
service on all outstanding CFD No. 2021-1 IA 1 Bonds plus the estimated annual Administrative
Expenses.
"Building Square Footage" or "BSF" means the square footage of assessable internal living
space, exclusive of garages or other structures not used as living space, as determined by
reference to the Building Permit for such Assessor's Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the following
December 31.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement, and providing for the levy and collection of the Special
Taxes.
"CFD" or"CFD No. 2021-1 IA 1" means Improvement Area No. 1 of CFD No. 2021-1 as identified
on the boundary map for CFD No. 2021-1.
"CFD No. 2021-1" means Community Facilities District No. 2021-1 (Tuscany Valley/Crest)
established by the City under the Act.
"CFD No. 2021-1 IA 1 Bonds" means any obligation to repay a sum of money, including
obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from
government agencies, or loans from banks, other financial institutions, private businesses, or
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individuals, or long-term contracts, or any refunding thereof, to which Special Tax of CFD No.
2021-1 IA 1 have been pledged.
"City" means the City of Lake Elsinore.
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative
Body of CFD No. 2021-1 IA 1.
"Condominium Plan" means a condominium plan as set forth in the California Civil Code,
Section 4285.
"County" means the County of Riverside.
"Developed Property" means all Assessor's Parcels that: (i) are included in a Final Map that
was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being
levied, and (ii) has an Assessor's Parcel Number from the County shown on an Assessor's Parcel
Map for the individual lot included on the Final Map, and (iii)a Building Permit for new construction
was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being
levied.
"Exempt Property" means all Assessor's Parcels designated as being exempt from Special
Taxes as provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line
adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et
seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 4285 that
creates individual lots for which Building Permits may be issued without further subdivision.
"Fiscal Year" means the period commencing on July 1st of any year and ending the following
June 30tn
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to
time, and any instrument replacing or supplementing the same.
"Land Use Category" means any of the categories listed in Table 1 of Section D.
"Maximum Special Tax" means for each Assessor's Parcel, the maximum Special Tax,
determined in accordance with Section D below, that can be levied by CFD No. 2021-1 IA 1 in
any Fiscal Year on such Assessor's Parcel.
"Multifamily Property" means all Assessor's Parcels of Developed Property for which a Building
Permit has been issued for the purpose of constructing a building or buildings comprised of
attached Residential Units available for rental by the general public, not for sale to an end user,
and under common management, as determined by the CFD Administrator.
"Non-Residential Property" or"NR" means all Assessor's Parcels for which a building permit(s)
was issued or will be issued for a non-residential use. The CFD Administrator shall make the
determination if an Assessor's Parcel is Non-Residential Property.
"Partial Prepayment Amount" means the amount required to prepay a portion of the Special
Tax obligation for an Assessor's Parcel, as described in Section G.2.
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"Prepayment Amount" means the amount required to prepay the Special Tax obligation in full
for an Assessor's Parcel, as described in Section G.1.
"Proportionately" means for Taxable Property that is (i) Developed Property, that the ratio of the
actual Special Tax levy to the Assigned Special Tax is the same for all Assessor's Parcels of
Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the
Maximum Special Tax is the same for all Assessor's Parcels of Approved Property, and (iii)
Undeveloped Property, or Provisional Undeveloped Property, that the ratio of the actual Special
Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor's Parcels of
Undeveloped Property, or Provisional Undeveloped Property, as applicable.
"Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that
would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but
cannot be classified as Exempt Property because to do so would be reduce the Acreage of all
Taxable Property below the required minimum Acreage set forth in Sections F.
"Residential Property" means all Assessor's Parcels of Developed Property for which a building
permit has been issued for purposes of constructing one or more Residential Units.
"Residential Unit" or "RU" means a residential unit that is used or intended to be used as a
domicile by one or more persons, as determined by the CFD Administrator.
"Single Family Residential Property" means all Assessor's Parcels of Residential Property
other than Multifamily Property.
"Special Tax" means any of the special taxes authorized to be levied within CFD No. 2021-1 IA
1 pursuant to the Act to fund the Special Tax Requirement.
"Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt
service or the periodic costs on all outstanding CFD No. 2021-1 IA 1 Bonds due in the Calendar
Year that commences in such Fiscal Year, (ii)Administrative Expenses, (iii) the costs associated
with the release of funds from an escrow account, (iv) any amount required to replenish any
reserve funds established in association with the CFD No. 2021-1 IA 1 Bonds, (v) an amount
equal to any anticipated shortfall due to Special Tax delinquencies, and (vi) for the collection or
accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2021-
1 IA 1 or the payment of debt service on CFD No. 2021-1 IA 1 Bonds anticipated to be issued,
provided that the inclusion of such amount does not cause an increase in the levy of Special Tax
on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E.,
less (vii) any amounts available to pay debt service or other periodic costs on the CFD No. 2021-
1 IA 1 Bonds pursuant to the Indenture.
"Taxable Property" means all Assessor's Parcels within CFD No. 2021-1 IA 1, which are not
Exempt Property.
"Taxable Unit" means either a Residential Unit or an Acre.
"Tract(s)" means an area of land within a subdivision identified by a particular tract number on a
Final Map approved for the subdivision.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
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"Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not
Developed Property, Approved Property, Provisional Undeveloped Property.
B. SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year, the City Council shall
levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax, to fund
the Special Tax Requirement.
C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2021-2022, each Assessor's Parcel within CFD No.
2021-1 IA 1 shall be classified as Taxable Property or Exempt Property. In addition, each
Assessor's Parcel of Taxable Property shall be further classified as Developed Property,
Approved Property, Undeveloped Property or Provisional Undeveloped Property.
Assessor's Parcels of Developed Property shall further be classified as Residential Property or
Non-Residential Property. Each Assessor's Parcel of Residential Property shall further be
classified as Single Family Residential Property or Multifamily Property. Each Assessor's Parcel
of Single Family Residential Property shall be further categorized into Land Use Categories based
on its Building Square Footage and assigned to its appropriate Assigned Special Tax rate.
In the event that an Assessor's Parcel for which one or more Building Permits have been issued
and the County has not yet assigned final Assessor's Parcel Number(s)to the Residential Unit(s)
(in accordance with the Final Map or Condominium Plan) on such Assessor's Parcel, the amount
of the Special Tax levy on such Assessor's Parcel for each Fiscal Year shall be determined as
follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax
levy for such Assessor's Parcel, based on the classification of such Assessor's Parcel as
Undeveloped Property; (2) the amount of the Special Tax levy for the Residential Units on such
Assessor's Parcel for which Building Permits have been issued shall be determined based on the
Developed Property Special Tax rates and shall be taxed as Developed Property in accordance
with Step 1 of Section E below; and (3)the amount of the Special Tax levy on the Taxable Property
in such Assessor's Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A)
the percentage of the Maximum Special Tax rate levied on all other Undeveloped Property
multiplied by the total of the amount determined in clause (1), less the amount determined in
clause (2).
D. MAXIMUM SPECIAL TAX
1. Developed Property
The Maximum Special Tax for each Assessor's Parcel of Single Family Residential Property in
any Fiscal Year shall be the greater of (i) the Assigned Special Tax or (ii) the Backup Special
Tax.
The Maximum Special Tax for each Assessor's Parcel of Non-Residential or Multifamily
Residential Property shall be the applicable Assigned Special Tax described in Table 1 of
Section D.
a. Assigned Special Tax
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Each Fiscal Year, each Assessor's Parcel of Single Family Residential Property, Multifamily
Property or Non-Residential shall be subject to an Assigned Special Tax. The Assigned
Special Tax applicable to an Assessor's Parcel of Developed Property shall be determined
pursuant to Table 1 below.
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
Assigned
Special Tax
Taxable Per Taxable
Land Use Category Unit Building Square Footage Unit
1. Single Family Residential Property RU Less than 1,850 sq. ft $2,282.00
2. Single Family Residential Property RU 1,851 sq. ft to 2,050 sq. ft $2,401.00
3. Single Family Residential Property RU 2,051 sq. ft to 2,250 sq. ft $2,520.00
4. Single Family Residential Property RU 2,251 sq. ft to 2,450 sq. ft $2,575.00
5. Single Family Residential Property RU 2,451 sq. ft to 2,650 sq. ft $2,648.00
6. Single Family Residential Property RU Greater than 2,650 sq. ft $2,758.00
7. Multifamily Property Acre N/A $19,859.00
8. Non-Residential Property Acre N/A $19,859.00
On each July 1, commencing July 1, 2022, the Assigned Special Tax rate for Developed
Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal
Year.
b. Multiple Land Use Categories
In some instances an Assessor's Parcel of Developed Property may contain more than one
Land Use Type. The Maximum Special Tax levied on an Assessor's Parcel shall be the sum
of the Maximum Special Tax for all Land Use Categories located on the Assessor's Parcel.
The CFD Administrator's allocation to each type of property shall be final.
c. Backup Special Tax
The Backup Special Tax for an Assessor's Parcel within a Final Map classified or to be
classified as Single Family Property shall calculated according to the following formula.
B = (UxA) / L
The terms above have the following meanings:
B = Backup Special Tax per per Assessor's Parcel within the Final Map
U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below
A = Acreage of Single Family Residential Property expected to exist in such Final Map at
the time of calculation, as determined by the Administrator
L = Number of Residential Units expected to exist in such Final Map at the time of
calculation, as determined by the Administrator.
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In the event any portion of the Final Map is changed or modified, the Backup Special Tax for
all Assessor's Parcels within such changed or modified area shall be $19,859 per Acre.
In the event any superseding Final Map is recorded as a Final Map within the Boundaries of
the CFD, the Backup Special Tax for all Assessor's Parcels within such Final Map shall be
$19,859 per Acre. The Backup Special Tax shall not apply to Multifamily Residential Property,
or Non-Residential Property.
On each July 1, commencing July 1, 2022, the Backup Special Tax rate shall be increased by
two percent (2.00%) of the amount in effect in the prior Fiscal Year.
2. Approved Property
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Single Family Property shall be the Backup Special Tax computed pursuant to
Section D.1.c above.
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Multifamily Residential Property or Non-Residential Property shall be $19,859 per
Acre.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Approved
Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal
Year.
3. Undeveloped Property and Provisional Undeveloped Property that is not Exempt
Property pursuant to the provisions of Section F
The Maximum Special Tax for each Assessor's Parcel of Undeveloped Property and
Provisional Undeveloped Property that is not Exempt Property shall be equal to the product of
$19,859 multiplied by the Acreage of such Assessor's Parcel.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Undeveloped
and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the
amount in effect in the prior Fiscal Year.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year, the City Council
shall levy Special Taxes on all Taxable Property in accordance with the following steps:
Step One: The Special Tax shall be levied Proportionately on each Assessor's Parcel of
Developed Property at up to 100% of the applicable Assigned Special Tax rates in
Table 1 to satisfy the Special Tax Requirement.
Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the
first step has been completed, the Special Tax shall be levied Proportionately on
each Assessor's Parcel of Approved Property at up to 100% of the Maximum
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Special Tax applicable to each such Assessor's Parcel as needed to satisfy the
Special Tax Requirement.
Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the
first two steps have been completed, the Annual Special Tax shall be levied
Proportionately on each Assessor's Parcel of Undeveloped Property up to 100%
of the Maximum Special Tax applicable to each such Assessor's Parcel as needed
to satisfy the Special Tax Requirement.
Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the
first three steps have been completed, then the Special Tax levy on each
Assessor's Parcel of Developed Property for which the Maximum Special Tax is
the Backup Special Tax shall be increased Proportionately from the Assigned
Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special
Tax Requirement.
Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the
first four steps have been completed, the Special Tax shall be levied
Proportionately on each Assessor's Parcel of Provisional Undeveloped Property
up to 100% of the Maximum Special Tax applicable to each such Assessor's
Parcel as needed to satisfy the Special Tax Requirement.
Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal
Year against any Assessor's Parcel of Residential Property as a result of a delinquency in the
payment of the Special Tax applicable to any other Assessor's Parcel be increased by more than
ten percent (10%) above the amount that would have been levied in that Fiscal Year had there
never been any such delinquency or default.
F. EXEMPTIONS
The City shall classify as Exempt Property, in the following order of priority, (i)Assessor's Parcels
which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the
State of California, Federal or other local governments, including school districts, (ii) Assessor's
Parcels which are used as places of worship and are exempt from ad valorem property taxes
because they are owned by a religious organization, (iii) Assessor's Parcels which are owned by,
irrevocably offered for dedication, encumbered by or restricted in use by a homeowners'
association, (iv) Assessor's Parcels with public or utility easements making impractical their
utilization for other than the purposes set forth in the easement, (v) Assessor's Parcels which are
privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor's
Parcels restricted to other types of public uses determined by the City Council, provided that no
such classification would reduce the sum of all Taxable Property to less than 28.89 Acres.
Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt
Property if such classification would reduce the sum of all Taxable Property to less than 28.89
Acres. Assessor's Parcels which cannot be classified as Exempt Property because such
classification would reduce the Acreage of all Taxable Property to less than 28.89 Acres will be
classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to
Step Five in Section E.
G. PREPAYMENT OF SPECIAL TAX
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The following additional definitions apply to this Section G:
"CFD Public Facilities" means $11,000,000 expressed in 2021 dollars, which shall increase by
the Construction Inflation Index on July 1, 2022, and on each July 1 thereafter, or such lower
amount (i) determined by the City Council as sufficient to provide the public facilities under the
authorized bonding program for CFD No. 2021-1 IA 1, or (ii) determined by the City Council
concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax
levied under this Rate and Method of Apportionment.
"Construction Fund" means an account specifically identified in the Indenture or functionally
equivalent to hold funds, which are currently available for expenditure to acquire or construct
public facilities eligible to be financed by CFD No. 2021-1 IA 1.
"Construction Inflation Index" means the annual percentage change in the Engineering News-
Record Building Cost Index for the City of Los Angeles, measured as of the Calendar Year which
ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction
Inflation Index shall be another index as determined by the City that is reasonably comparable to
the Engineering News-Record Building Cost Index for the City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities minus public facility costs available
to be funded through existing construction or escrow accounts funded by the Outstanding Bonds,
and minus public facility costs funded by interest earnings on the Construction Fund actually
earned prior to the date of prepayment.
"Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of
Special Tax which will remain outstanding after the first interest and/or principal payment date
following the current Fiscal Year, excluding CFD No. 2021-1 IA 1 Bonds to be redeemed at a later
date with the proceeds of prior prepayments of Special Tax.
1. Prepayment in Full
The Maximum Special Tax obligation may be prepaid and permanently satisfied for(i)Assessor's
Parcels of Developed Property, (ii) Assessor's Parcels of Approved Property or Undeveloped
Property for which a Building Permit has been issued, (iii) Approved Property or Undeveloped
Property for which a Building Permit has not been issued and (iv) Assessor's Parcels of Public
Property or Property Owner's Association Property, or Provisional Undeveloped Property that
are not Exempt Property pursuant to Section F. The Maximum Special Tax obligation applicable
to an Assessor's Parcel may be fully prepaid and the obligation to pay the Special Tax for such
Assessor's Parcel permanently satisfied as described herein; provided that a prepayment may be
made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the
time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Special
Tax obligation for such Assessor's Parcel shall provide the CFD Administrator with written notice
of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator
shall notify such owner of the amount of the non-refundable deposit determined to cover the cost
to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the
Assessor's Parcel. Within 15 days of receipt of such non-refundable deposit, the CFD
Administrator shall notify such owner of the Prepayment Amount for the Assessor's Parcel.
Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to
be redeemed with the proceeds of such prepaid Special Taxes.
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The Prepayment Amount (defined below) shall be calculated as follows (capitalized terms are
defined below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For an Assessor's Parcel of Developed Property, compute the Maximum Special Tax for
the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped
Property for which a Building Permit has been issued, compute the Maximum Special Tax for
the Assessor's Parcel as though it was already designated as Developed Property, based
upon the Building Permit which has been issued for the Assessor's Parcel. For an Assessor's
Parcel of Approved Property or Undeveloped Property for which a Building Permit has not
been issued, Public Property, Property Owner's Association Property, or Provisional
Undeveloped Property to be prepaid compute the Maximum Special Tax for the Assessor's
Parcel.
3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount
of Special Taxes that could be levied at the Maximum Special Tax at build out of all Assessor's
Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor's
Parcels of Developed Property not including any Assessor's Parcels for which the Special Tax
obligation has been previously prepaid.
4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the
Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the
Prepayment Amount (the "Bond Redemption Amount").
5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on
the Outstanding Bonds to be redeemed (the "Redemption Premium").
6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined
pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor's
Parcel (the "Future Facilities Amount").
8. Determine the amount needed to pay interest on the Bond Redemption Amount from
the first bond interest and/or principal payment date following the current Fiscal Year until the
earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from
Special Tax prepayments.
9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year
which have not yet been paid.
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10. Determine the amount the CFD Administrator reasonably expects to derive from the
investment of the Bond Redemption Amount and the Redemption Premium from the date of
prepayment until the redemption date for the Outstanding Bonds to be redeemed with the
Prepayment Amount.
11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount
derived pursuant to paragraph 10 (the "Defeasance Amount").
12. Verify the administrative fees and expenses of the CFD, including the cost of
computation of the Prepayment Amount, the cost to invest the Prepayment Amount, the cost
of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the
prepayment of the Maximum Special Tax obligation for the Assessor's Parcel and the
redemption of Outstanding Bonds (the "Administrative Fees and Expenses").
13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the
expected reduction in the reserve requirement(as defined in the Indenture), if any, associated
with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount
derived by subtracting the new reserve requirement(as defined in the Indenture) in effect after
the redemption of Outstanding Bonds as a result of the prepayment from the balance in the
reserve fund on the prepayment date, but in no event shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the
Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the
Administrative Fees and Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption
Premium, and Defeasance Amount shall be deposited into the appropriate fund as established
under the Indenture and be used to redeem Outstanding Bonds or make debt service
payments. The Future Facilities Amount shall be deposited into the Construction Fund. The
Administrative Fees and Expenses shall be retained by the CFD.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds.
In such event, the increment above $5,000 or an integral multiple thereof will be retained in the
appropriate fund established under the Indenture to be used with the next redemption from other
Special Tax prepayments of Outstanding Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined pursuant
to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax
levy for the Assessor's Parcel from the County tax roll. With respect to any Assessor's Parcel for
which the Maximum Special Tax obligation is prepaid, the City Council shall cause a suitable
notice to be recorded in compliance with the Act, to indicate the prepayment of Maximum Special
Tax obligation and the release of the Special Tax lien for the Assessor's Parcel, and the obligation
to pay the Special Tax for such Assessor's Parcel shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount
of Maximum Special Tax that may be levied on all Assessor's Parcels of Taxable Property after
the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds
that will remain outstanding after the prepayment plus the estimated annual Administrative
Expenses.
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Tenders of Bonds in prepayment of the Maximum Special Tax obligation may be accepted upon
the terms and conditions established by the City Council pursuant to the Act. However, the use
of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the
City Council.
2. Prepayment in Part
The Maximum Special Tax obligation for an Assessor's Parcel of Developed Property, Approved
Property or Undeveloped Property may be partially prepaid. For purposes of determining the
partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the
following formula:
PP = ((PE—A) x F) + A
These terms have the following meaning:
PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1
F = the percent by which the owner of the Assessor's Parcel(s) is partially
prepaying the Maximum Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax
obligation for the Assessor's Parcel shall notify the CFD Administrator of (i) such owner's intent
to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum
Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be
acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator
shall notify such property owner of the amount of the non-refundable deposit determined to cover
the cost to be incurred by the CFD in calculating the amount of a partial prepayment. Within 15
business days of receipt of such non-refundable deposit, the CFD Administrator shall notify such
owner of the amount of the Partial Prepayment Amount for the Assessor's Parcel. A Partial
Prepayment Amount must be made not less than 60 days prior to the redemption date for the
Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment Amount.
With respect to any Assessor's Parcel for which the Maximum Special Tax obligation is partially
prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in
Paragraph 15 of Section G.1, and (ii) indicate in the records of the CFD that there has been a
Partial Prepayment for the Assessor's Parcel and that a portion of the Maximum Special Tax
obligation equal to the remaining percentage (1.00 - F) of the Maximum Special Tax obligation
will continue to be levied on the Assessor's Parcel pursuant to Section E.
H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all
Assessor's Parcels subject to the Special Tax. The Special Tax shall cease not later than the
2060-2061 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if
the CFD Administrator has determined (i) that all the required interest and principal payments on
the CFD No. 2021-1 IA 1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2021-1 IA
1 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent
Special Tax remain uncollected and (iv) all other obligations of CFD No. 2021-1 IA 1 have been
satisfied.
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I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad
valorem property taxes, provided, however, that CFD No. 2021-1 IA 1 may collect Special Taxes
at a different time or in a different manner if necessary to meet its financial obligations, and may
covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted
by the Act.
J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes on his/her Assessor's Parcel(s) with
the CFD Administrator, provided that the appellant is current in his/her payments of Special
Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or
before the payment date established when the levy was made. The appeal must specify the
reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review
the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the
appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD
Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant's
Assessor's Parcel(s). No refunds of previously paid Special Taxes shall be made.
The CFD Administrator shall interpret this Rate and Method of Apportionment and make
determinations relative to the annual levy and administration of the Special Taxes and any
taxpayer who appeals, as herein specified.
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ATTACHMENT D
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (TUSCANY VALLEY/CREST)
OF THE CITY OF LAKE ELSINORE
IMPROVEMENT AREA NO. 2
A Special Tax (all capitalized terms are defined in Section A, "Definitions", below) shall be
applicable to each Assessor's Parcel of Taxable Property located within the boundaries of the
City of Lake Elsinore Community Facilities District No. 2021-1 (Tuscany Valley/Crest) ("CFD No.
2021-1 IA 2"). The amount of Special Tax to be levied in each Fiscal Year on an Assessor's
Parcel shall be determined by the City Council of the City of Lake Elsinore, acting in its capacity
as the legislative body of CFD No. 2021-1 IA 2, by applying the appropriate Special Tax for
Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped
Property that is not Exempt Property as set forth below. All of the real property, unless exempted
by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and
in the manner herein provided.
B. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown
on the applicable final map, parcel map, condominium plan, or other recorded County parcel map
or instrument. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by
43,560.
"Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the
State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly
related to the administration of CFD No. 2021-1 IA 2: the costs of computing the Special Taxes
and preparing the Special Tax collection schedules (whether by the City or designee thereof or
both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of
remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the
discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2021-1
IA 2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the
City, CFD No. 2021-1 IA 2 or any designee thereof of complying with disclosure requirements of
the City, CFD No. 2021-1 IA 2 or obligated persons associated with applicable federal and state
securities laws and the Act; the costs associated with preparing Special Tax disclosure
statements and responding to public inquiries regarding the Special Taxes; the costs of the City,
CFD No. 2021-1 IA 2 or any designee thereof related to an appeal of the Special Tax; the costs
associated with the release of funds from an escrow account; and the City's annual administration
fees and third party expenses. Administration Expenses shall also include amounts estimated by
the CFD Administrator or advanced by the City or CFD No. 2021-1 IA 2 for any other
administrative purposes of CFD No. 2021-1 IA 2, including attorney's fees and other costs related
to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
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"Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in
a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the
Special Tax is being levied, (ii) and has an assigned Assessor's Parcel Number from the County
shown on an Assessor's Parcel Map for the individual lot included on the Final Map, and (iii) that
have not been issued a building permit on or before May 1st preceding the Fiscal Year in which
the Special Tax is being levied.
"Assessor's Parcel" means a lot or parcel of land designated on an Assessor's Parcel Map with
an assigned Assessor's Parcel Number.
"Assessor's Parcel Map" means an official map of the Assessor of the County designating
parcels by Assessor's Parcel Number.
"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the
County for purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below.
"Backup Special Tax" means the Special Tax of that name described in Section D below.
"Boundary Map" means a recorded map of the CFD which indicates the boundaries of the CFD.
"Building Permit" means the first legal document issued by a local agency giving official
permission for new construction. For purposes of this definition, "Building Permit" may or may not
include any subsequent building permit document(s) authorizing new construction on an
Assessor's Parcel that are issued or changed by the City after the first original issuance, as
determined by the CFD Administrator as necessary to fairly allocate Special Tax to the Assessor's
Parcel, provided that following such determination the Maximum Special Tax that may be levied
on all Assessor's Parcels of Taxable Property will be at least 1.1 times maximum annual debt
service on all outstanding CFD No. 2021-1 IA 2 Bonds plus the estimated annual Administrative
Expenses.
"Building Square Footage" or "BSF" means the square footage of assessable internal living
space, exclusive of garages or other structures not used as living space, as determined by
reference to the Building Permit for such Assessor's Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the following
December 31.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement, and providing for the levy and collection of the Special
Taxes.
"CFD"or"CFD No. 2021-1 IA 2" means Improvement Area No. 2 of CFD No. 2021-1 as identified
on the boundary map for CFD No. 2021-1.
"CFD No. 2021-1" means Community Facilities District No. 2021-1 (Tuscany Valley/Crest)
established by the City under the Act.
"CFD No. 2021-1 IA 2 Bonds" means any obligation to repay a sum of money, including
obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from
government agencies, or loans from banks, other financial institutions, private businesses, or
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individuals, or long-term contracts, or any refunding thereof, to which Special Tax of CFD No.
2021-1 IA 2 have been pledged.
"City" means the City of Lake Elsinore.
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative
Body of CFD No. 2021-1 IA 2.
"Condominium Plan" means a condominium plan as set forth in the California Civil Code,
Section 4285.
"County" means the County of Riverside.
"Developed Property" means all Assessor's Parcels that: (i) are included in a Final Map that
was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being
levied, and (ii) has an Assessor's Parcel Number from the County shown on an Assessor's Parcel
Map for the individual lot included on the Final Map, and (iii)a Building Permit for new construction
was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being
levied.
"Exempt Property" means all Assessor's Parcels designated as being exempt from Special
Taxes as provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line
adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et
seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 4285 that
creates individual lots for which Building Permits may be issued without further subdivision.
"Fiscal Year" means the period commencing on July 1st of any year and ending the following
June 30tn
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to
time, and any instrument replacing or supplementing the same.
"Land Use Category" means any of the categories listed in Table 1 of Section D.
"Maximum Special Tax" means for each Assessor's Parcel, the maximum Special Tax,
determined in accordance with Section D below, that can be levied by CFD No. 2021-1 IA 2 in
any Fiscal Year on such Assessor's Parcel.
"Multifamily Property" means all Assessor's Parcels of Developed Property for which a Building
Permit has been issued for the purpose of constructing a building or buildings comprised of
attached Residential Units available for rental by the general public, not for sale to an end user,
and under common management, as determined by the CFD Administrator.
"Non-Residential Property" or"NR" means all Assessor's Parcels for which a building permit(s)
was issued or will be issued for a non-residential use. The CFD Administrator shall make the
determination if an Assessor's Parcel is Non-Residential Property.
"Partial Prepayment Amount" means the amount required to prepay a portion of the Special
Tax obligation for an Assessor's Parcel, as described in Section G.2.
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"Prepayment Amount" means the amount required to prepay the Special Tax obligation in full
for an Assessor's Parcel, as described in Section G.1.
"Proportionately" means for Taxable Property that is (i) Developed Property, that the ratio of the
actual Special Tax levy to the Assigned Special Tax is the same for all Assessor's Parcels of
Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the
Maximum Special Tax is the same for all Assessor's Parcels of Approved Property, and (iii)
Undeveloped Property, or Provisional Undeveloped Property, that the ratio of the actual Special
Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor's Parcels of
Undeveloped Property, or Provisional Undeveloped Property, as applicable.
"Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that
would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but
cannot be classified as Exempt Property because to do so would be reduce the Acreage of all
Taxable Property below the required minimum Acreage set forth in Sections F.
"Residential Property" means all Assessor's Parcels of Developed Property for which a building
permit has been issued for purposes of constructing one or more Residential Units.
"Residential Unit" or "RU" means a residential unit that is used or intended to be used as a
domicile by one or more persons, as determined by the CFD Administrator.
"Single Family Residential Property" means all Assessor's Parcels of Residential Property
other than Multifamily Property.
"Special Tax" means any of the special taxes authorized to be levied within CFD No. 2021-1 IA
2 pursuant to the Act to fund the Special Tax Requirement.
"Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt
service or the periodic costs on all outstanding CFD No. 2021-1 IA 2 Bonds due in the Calendar
Year that commences in such Fiscal Year, (ii)Administrative Expenses, (iii) the costs associated
with the release of funds from an escrow account, (iv) any amount required to replenish any
reserve funds established in association with the CFD No. 2021-1 IA 2 Bonds, (v) an amount
equal to any anticipated shortfall due to Special Tax delinquencies, and (vi) for the collection or
accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2021-
1 IA 2 or the payment of debt services on CFD No. 2021-1 IA 2 Bonds anticipated to be issued,
provided that the inclusion of such amount does not cause an increase in the levy of Special Tax
on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E.,
less (vii) any amounts available to pay debt service or other periodic costs on the CFD No. 2021-
1 IA 2 Bonds pursuant to the Indenture.
"Taxable Property" means all Assessor's Parcels within CFD No. 2021-1 IA 2, which are not
Exempt Property.
"Taxable Unit" means either a Residential Unit or an Acre.
"Tract(s)" means an area of land within a subdivision identified by a particular tract number on a
Final Map approved for the subdivision.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
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"Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not
Developed Property, Approved Property, Provisional Undeveloped Property.
B. SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year, the City Council shall
levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax, to fund
the Special Tax Requirement.
C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2021-2022, each Assessor's Parcel within CFD No.
2021-1 IA 2 shall be classified as Taxable Property or Exempt Property. In addition, each
Assessor's Parcel of Taxable Property shall be further classified as Developed Property,
Approved Property, Undeveloped Property or Provisional Undeveloped Property.
Assessor's Parcels of Developed Property shall further be classified as Residential Property or
Non-Residential Property. Each Assessor's Parcel of Residential Property shall further be
classified as Single Family Residential Property or Multifamily Property. Each Assessor's Parcel
of Single Family Residential Property shall be further categorized into Land Use Categories based
on its Building Square Footage and assigned to its appropriate Assigned Special Tax rate.
In the event that an Assessor's Parcel for which one or more Building Permits have been issued
and the County has not yet assigned final Assessor's Parcel Number(s)to the Residential Unit(s)
(in accordance with the Final Map or Condominium Plan) on such Assessor's Parcel, the amount
of the Special Tax levy on such Assessor's Parcel for each Fiscal Year shall be determined as
follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax
levy for such Assessor's Parcel, based on the classification of such Assessor's Parcel as
Undeveloped Property; (2) the amount of the Special Tax levy for the Residential Units on such
Assessor's Parcel for which Building Permits have been issued shall be determined based on the
Developed Property Special Tax rates and shall be taxed as Developed Property in accordance
with Step 1 of Section E below; and (3)the amount of the Special Tax levy on the Taxable Property
in such Assessor's Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A)
the percentage of the Maximum Special Tax rate levied on all other Undeveloped Property
multiplied by the total of the amount determined in clause (1), less the amount determined in
clause (2).
D. MAXIMUM SPECIAL TAX
4. Developed Property
The Maximum Special Tax for each Assessor's Parcel of Single Family Residential Property in
any Fiscal Year shall be the greater of (i) the Assigned Special Tax or (ii) the Backup Special
Tax.
The Maximum Special Tax for each Assessor's Parcel of Non-Residential or Multifamily
Residential Property shall be the applicable Assigned Special Tax described in Table 1 of
Section D.
b. Assigned Special Tax
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Each Fiscal Year, each Assessor's Parcel of Single Family Residential Property, Multifamily
Property or Non-Residential shall be subject to an Assigned Special Tax. The Assigned
Special Tax applicable to an Assessor's Parcel of Developed Property shall be determined
pursuant to Table 1 below.
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
Assigned
Special Tax
Taxable Per Taxable
Land Use Category Unit Building Square Footage Unit
1. Single Family Residential Property RU Less than 1,850 sq. ft $2,382.00
2. Single Family Residential Property RU 1,851 sq. ft to 2,050 sq. ft $2,501.00
3. Single Family Residential Property RU 2,051 sq. ft to 2,250 sq. ft $2,620.00
4. Single Family Residential Property RU 2,251 sq. ft to 2,450 sq. ft $2,675.00
5. Single Family Residential Property RU 2,451 sq. ft to 2,650 sq. ft $2,748.00
6. Single Family Residential Property RU Greater than 2,650 sq. ft $2,858.00
7. Multifamily Property Acre N/A $20,593.00
8. Non-Residential Property Acre N/A $20,593.00
On each July 1, commencing July 1, 2022, the Assigned Special Tax rate for Developed
Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal
Year.
b. Multiple Land Use Categories
In some instances an Assessor's Parcel of Developed Property may contain more than one
Land Use Type. The Maximum Special Tax levied on an Assessor's Parcel shall be the sum
of the Maximum Special Tax for all Land Use Categories located on the Assessor's Parcel.
The CFD Administrator's allocation to each type of property shall be final.
c. Backup Special Tax
The Backup Special Tax for an Assessor's Parcel within a Final Map classified or to be
classified as Single Family Property shall calculated according to the following formula.
B = (UxA) / L
The terms above have the following meanings:
B = Backup Special Tax per Assessor's Parcel within the Final Map
U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below
A = Acreage of Single Family Residential Property expected to exist in such Final Map at
the time of calculation, as determined by the Administrator
L = Number of Residential Units expected to exist in such Final Map at the time of
calculation, as determined by the Administrator.
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In the event any portion of the Final Map is changed or modified, the Backup Special Tax for
all Assessor's Parcels within such changed or modified area shall be $20,593 per Acre.
In the event any superseding Final Map is recorded as a Final Map within the Boundaries of
the CFD, the Backup Special Tax for all Assessor's Parcels within such Final Map shall be
$20,593 per Acre. The Backup Special Tax shall not apply to Multifamily Residential Property,
or Non-Residential Property.
On each July 1, commencing July 1, 2022, the Backup Special Tax rate shall be increased by
two percent (2.00%) of the amount in effect in the prior Fiscal Year.
5. Approved Property
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Single Family Property shall be the Backup Special Tax computed pursuant to
Section D.1.c above.
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Multifamily Residential Property or Non-Residential Property shall be $20,593 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.
6. Undeveloped Property and Provisional Undeveloped Property that is not Exempt
Property pursuant to the provisions of Section F
The Maximum Special Tax for each Assessor's Parcel of Undeveloped Property and
Provisional Undeveloped Property that is not Exempt Property shall be equal to the product of
$20,593 multiplied by the Acreage of such Assessor's Parcel.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Undeveloped
and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the
amount in effect in the prior Fiscal Year.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year, the City Council
shall levy Special Taxes on all Taxable Property in accordance with the following steps:
Step One: The Special Tax shall be levied Proportionately on each Assessor's Parcel of
Developed Property at up to 100% of the applicable Assigned Special Tax rates in
Table 1 to satisfy the Special Tax Requirement.
Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the
first step has been completed, the Special Tax shall be levied Proportionately on
each Assessor's Parcel of Approved Property at up to 100% of the Maximum
Special Tax applicable to each such Assessor's Parcel as needed to satisfy the
Special Tax Requirement.
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Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the
first two steps have been completed, the Annual Special Tax shall be levied
Proportionately on each Assessor's Parcel of Undeveloped Property up to 100%
of the Maximum Special Tax applicable to each such Assessor's Parcel as needed
to satisfy the Special Tax Requirement.
Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the
first three steps have been completed, then the Special Tax levy on each
Assessor's Parcel of Developed Property for which the Maximum Special Tax is
the Backup Special Tax shall be increased Proportionately from the Assigned
Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special
Tax Requirement.
Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the
first four steps have been completed, the Special Tax shall be levied
Proportionately on each Assessor's Parcel of Provisional Undeveloped Property
up to 100% of the Maximum Special Tax applicable to each such Assessor's
Parcel as needed to satisfy the Special Tax Requirement.
Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal
Year against any Assessor's Parcel of Residential Property as a result of a delinquency in the
payment of the Special Tax applicable to any other Assessor's Parcel be increased by more than
ten percent (10%) above the amount that would have been levied in that Fiscal Year had there
never been any such delinquency or default.
F. EXEMPTIONS
The City shall classify as Exempt Property, in the following order of priority, (i)Assessor's Parcels
which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the
State of California, Federal or other local governments, including school districts, (ii) Assessor's
Parcels which are used as places of worship and are exempt from ad valorem property taxes
because they are owned by a religious organization, (iii) Assessor's Parcels which are owned by,
irrevocably offered for dedication, encumbered by or restricted in use by a homeowners'
association, (iv) Assessor's Parcels with public or utility easements making impractical their
utilization for other than the purposes set forth in the easement, (v) Assessor's Parcels which are
privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor's
Parcels restricted to other types of public uses determined by the City Council, provided that no
such classification would reduce the sum of all Taxable Property to less than 19.51 Acres.
Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt
Property if such classification would reduce the sum of all Taxable Property to less than 19.51
Acres. Assessor's Parcels which cannot be classified as Exempt Property because such
classification would reduce the Acreage of all Taxable Property to less than 19.51 Acres will be
classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to
Step Five in Section E.
G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
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"CFD Public Facilities" means $7,500,000 expressed in 2021 dollars, which shall increase by
the Construction Inflation Index on July 1, 2022, and on each July 1 thereafter, or such lower
amount (i) determined by the City Council as sufficient to provide the public facilities under the
authorized bonding program for CFD No. 2021-1 IA 2, or (ii) determined by the City Council
concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax
levied under this Rate and Method of Apportionment.
"Construction Fund" means an account specifically identified in the Indenture or functionally
equivalent to hold funds, which are currently available for expenditure to acquire or construct
public facilities eligible to be financed by CFD No. 2021-1 IA 2.
"Construction Inflation Index" means the annual percentage change in the Engineering News-
Record Building Cost Index for the City of Los Angeles, measured as of the Calendar Year which
ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction
Inflation Index shall be another index as determined by the City that is reasonably comparable to
the Engineering News-Record Building Cost Index for the City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities minus public facility costs available
to be funded through existing construction or escrow accounts funded by the Outstanding Bonds,
and minus public facility costs funded by interest earnings on the Construction Fund actually
earned prior to the date of prepayment.
"Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of
Special Tax which will remain outstanding after the first interest and/or principal payment date
following the current Fiscal Year, excluding CFD No. 2021-1 IA 2 Bonds to be redeemed at a later
date with the proceeds of prior prepayments of Special Tax.
1. Prepayment in Full
The Maximum Special Tax obligation may be prepaid and permanently satisfied for(i)Assessor's
Parcels of Developed Property, (ii) Assessor's Parcels of Approved Property or Undeveloped
Property for which a Building Permit has been issued, (iii) Approved Property or Undeveloped
Property for which a Building Permit has not been issued and (iv) Assessor's Parcels of Public
Property or Property Owner's Association Property, or Provisional Undeveloped Property that
are not Exempt Property pursuant to Section F. The Maximum Special Tax obligation applicable
to an Assessor's Parcel may be fully prepaid and the obligation to pay the Special Tax for such
Assessor's Parcel permanently satisfied as described herein; provided that a prepayment may be
made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the
time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Special
Tax obligation for such Assessor's Parcel shall provide the CFD Administrator with written notice
of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator
shall notify such owner of the amount of the non-refundable deposit determined to cover the cost
to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the
Assessor's Parcel. Within 15 days of receipt of such non-refundable deposit, the CFD
Administrator shall notify such owner of the Prepayment Amount for the Assessor's Parcel.
Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to
be redeemed with the proceeds of such prepaid Special Taxes.
The Prepayment Amount (defined below) shall be calculated as follows (capitalized terms are
defined below):
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Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For an Assessor's Parcel of Developed Property, compute the Maximum Special Tax for
the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped
Property for which a Building Permit has been issued, compute the Maximum Special Tax for
the Assessor's Parcel as though it was already designated as Developed Property, based
upon the Building Permit which has been issued for the Assessor's Parcel. For an Assessor's
Parcel of Approved Property or Undeveloped Property for which a Building Permit has not
been issued, Public Property, Property Owner's Association Property, or Provisional
Undeveloped Property to be prepaid compute the Maximum Special Tax for the Assessor's
Parcel.
3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount
of Special Taxes that could be levied at the Maximum Special Tax at build out of all Assessor's
Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor's
Parcels of Developed Property not including any Assessor's Parcels for which the Special Tax
obligation has been previously prepaid.
4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the
Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the
Prepayment Amount (the "Bond Redemption Amount").
5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on
the Outstanding Bonds to be redeemed (the "Redemption Premium").
6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined
pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor's
Parcel (the "Future Facilities Amount").
8. Determine the amount needed to pay interest on the Bond Redemption Amount from
the first bond interest and/or principal payment date following the current Fiscal Year until the
earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from
Special Tax prepayments.
9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year
which have not yet been paid.
10. Determine the amount the CFD Administrator reasonably expects to derive from the
investment of the Bond Redemption Amount and the Redemption Premium from the date of
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prepayment until the redemption date for the Outstanding Bonds to be redeemed with the
Prepayment Amount.
11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount
derived pursuant to paragraph 10 (the "Defeasance Amount").
12. Verify the administrative fees and expenses of the CFD, including the cost of
computation of the Prepayment Amount, the cost to invest the Prepayment Amount, the cost
of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the
prepayment of the Maximum Special Tax obligation for the Assessor's Parcel and the
redemption of Outstanding Bonds (the "Administrative Fees and Expenses").
13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the
expected reduction in the reserve requirement(as defined in the Indenture), if any, associated
with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount
derived by subtracting the new reserve requirement(as defined in the Indenture) in effect after
the redemption of Outstanding Bonds as a result of the prepayment from the balance in the
reserve fund on the prepayment date, but in no event shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the
Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the
Administrative Fees and Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption
Premium, and Defeasance Amount shall be deposited into the appropriate fund as established
under the Indenture and be used to redeem Outstanding Bonds or make debt service
payments. The Future Facilities Amount shall be deposited into the Construction Fund. The
Administrative Fees and Expenses shall be retained by the CFD.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds.
In such event, the increment above $5,000 or an integral multiple thereof will be retained in the
appropriate fund established under the Indenture to be used with the next redemption from other
Special Tax prepayments of Outstanding Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined pursuant
to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax
levy for the Assessor's Parcel from the County tax roll. With respect to any Assessor's Parcel for
which the Maximum Special Tax obligation is prepaid, the City Council shall cause a suitable
notice to be recorded in compliance with the Act, to indicate the prepayment of Maximum Special
Tax obligation and the release of the Special Tax lien for the Assessor's Parcel, and the obligation
to pay the Special Tax for such Assessor's Parcel shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of
Maximum Special Tax that may be levied on all Assessor's Parcels of Taxable Property after the
proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that
will remain outstanding after the prepayment plus the estimated annual Administrative Expenses.
Tenders of Bonds in prepayment of the Maximum Special Tax obligation may be accepted upon
the terms and conditions established by the City Council pursuant to the Act. However, the use
of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the
City Council.
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2. Prepayment in Part
The Maximum Special Tax obligation for an Assessor's Parcel of Developed Property, Approved
Property or Undeveloped Property may be partially prepaid. For purposes of determining the
partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the
following formula:
PP = ((PE —A) x F) + A
These terms have the following meaning:
PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1
F = the percent by which the owner of the Assessor's Parcel(s) is partially
prepaying the Maximum Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax
obligation for the Assessor's Parcel shall notify the CFD Administrator of (i) such owner's intent
to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum
Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be
acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator
shall notify such property owner of the amount of the non-refundable deposit determined to cover
the cost to be incurred by the CFD in calculating the amount of a partial prepayment. Within 15
business days of receipt of such non-refundable deposit, the CFD Administrator shall notify such
owner of the amount of the Partial Prepayment Amount for the Assessor's Parcel. A Partial
Prepayment Amount must be made not less than 60 days prior to the redemption date for the
Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment Amount.
With respect to any Assessor's Parcel for which the Maximum Special Tax obligation is partially
prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in
Paragraph 15 of Section G.1, and (ii) indicate in the records of the CFD that there has been a
Partial Prepayment for the Assessor's Parcel and that a portion of the Maximum Special Tax
obligation equal to the remaining percentage (1.00 - F) of the Maximum Special Tax obligation
will continue to be levied on the Assessor's Parcel pursuant to Section E.
H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all
Assessor's Parcels subject to the Special Tax. The Special Tax shall cease not later than the
2060-2061 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if
the CFD Administrator has determined (i)that all the required interest and principal payments on
the CFD No. 2021-1 IA 2 Bonds have been paid; (ii) all authorized facilities of CFD No. 2021-1
IA 2 have been acquired and all reimbursements to the developer have been paid, (iii) no
delinquent Special Tax remain uncollected and (iv) all other obligations of CFD No. 2021-1 IA 2
have been satisfied.
I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad
valorem property taxes, provided, however, that CFD No. 2021-1 IA 2 may collect Special Taxes
at a different time or in a different manner if necessary to meet its financial obligations, and may
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covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted
by the Act.
J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes on his/her Assessor's Parcel(s) with
the CFD Administrator, provided that the appellant is current in his/her payments of Special
Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or
before the payment date established when the levy was made. The appeal must specify the
reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review
the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the
appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD
Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant's
Assessor's Parcel(s). No refunds of previously paid Special Taxes shall be made.
The CFD Administrator shall interpret this Rate and Method of Apportionment and make
determinations relative to the annual levy and administration of the Special Taxes and any
taxpayer who appeals, as herein specified.
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TM
SPICER CONSULTING
G R O U P
4812-8073-2134v2/022042-0035
COMMUNITY FACILITIES DISTRICT NO. 2021-1 OF THE CITY OF LAKE ELSINORE
(TUSCANY VALLEY/CREST)
ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT
THIS AGREEMENT is made and entered into by and between CITY OF LAKE ELSINORE
(the “City”), acting for and on behalf of itself and COMMUNITY FACILITIES DISTRICT NO. 2021-
1 OF THE CITY OF LAKE ELSINORE (TUSCANY VALLEY/CREST) (the “Community Facilities
District” or “CFD”) and SPT- AREP III Tuscany Associates, LLC (the “Developer”), each
individually a “Party” and collectively the “Parties.”
WHEREAS, the City has established the CFD and designated Improvement Area No. 2
and Improvement Area No. 2 therein (each an “Improvement Area” and together the
“Improvement Areas”) pursuant to the provisions of the Mello-Roos Community Facilities Act of
1982, as amended (the “Act”), and has undertaken proceedings for the authorization of special
taxes and issuance of bonded indebtedness for the payment of the construction and/or acquisition
of certain public improvements to be owned, operated or maintained by the City and the Elsinore
Valley Municipal Water District (the “Water District”) and incidental expenses in accordance with
the Act; and
WHEREAS, in order to proceed in a timely way with development of its property within the
CFD which is described in the attached Exhibit “A” (the “Developer Property”), Developer
desires to fund through the Community Facilities District (i) the City’s acquisition or construction
of certain public improvements that are to be owned, operated and maintained by the City (“City
Improvements”), as more particularly set forth and described in the Description of Cost Estimates
of the Improvements attached hereto as Exhibit “B,” (ii) improvements included in the City’s fee
programs (the “City Fee Facility Improvements”), as more particularly set forth and described in
Exhibit “B” and (iii) the improvements of the Water District described in Exhibit “E” hereto (the
“Miscellaneous Improvements”) (collectively the “Improvements”); and
WHEREAS, the City is authorized by the Act to form the CFD and to issue bonds to fund
the Improvements; and
WHEREAS, the City Council has adopted the City’s policies and procedures concerning
the use of special district financing programs to finance City facilities (the “Policy”); and
WHEREAS, the purpose of this Agreement is to constitute a formal understanding
between Developer and the City (pursuant to the requirements of Government Code
Section 53313.51 and other provisions of the Act and the Policy) concerning financial and other
obligations and responsibilities related to the Improvements to be financed by the Community
Facilities District to the extent funds are available, and to set forth the conditions upon which (1)
the Community Facilities District will reimburse Developer or its designee for the cost of the City
Improvements constructed by or on behalf of the Developer and (2) the Community Facilities
District will fund the City Fee Facility Improvements and the City will grant credit against applicable
City fees; and (3) the Community Facilities District will also fund Miscellaneous Improvements, if
any, which will be described in Exhibit “E,” if applicable.
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NOW, THEREFORE, it is mutually agreed between the respective Parties as follows:
SECTION 1. DEVELOPER ADVANCES
The City has retained and may retain, at the Developer’s expense, the necessary
consultants to analyze the formation proceedings and any future change proceedings with respect
to the CFD (the “Proceedings”), including a special tax consultant, bond counsel, appraiser and
other consultants deemed necessary by the City. The Developer has advanced to the City a sum
of money for such expenses, part of which may be eligible for reimbursement from the CFD. From
time to time, Developer will make additional advances, within 10 days following receipt from the
City of a request for an additional advance, to cover the costs of the Formation Proceedings. The
City will provide to Developer on request a summary of how the advances have been spent and
the unexpended balance remaining. The amounts advanced by the Developer and, to the extent
determined reasonable and appropriate by the City, expenses incurred by the Developer for
engineering consultant costs in connection with the Proceedings and the issuance of bonds, will
be reimbursable to the Developer, without interest, from the proceeds of bonds (the “Bonds”)
issued by the Community Facilities District. In the event that Bonds are not issued to provide a
source of reimbursement to Developer, the City shall not have any liability to Developer to
reimburse it for any of the amounts previously advanced by Developer and expended by the City.
Prior to the issuance of the Bonds, the City will request a final advance for any unpaid
expenses incurred during preparatory technical, financial and legal work; and following payment
of such expenses, the City shall promptly release the balance, if any, of the advance to the
Developer. Should the City’s expenses exceed the remaining balance, the City will bill the
Developer for the difference, which the Developer agrees to pay within 10 days following receipt
of such billing, subject to the conditions of paragraph one of this section.
SECTION 2. SALE OF BONDS
2.1 City Policies. The City Council has adopted the Policy, setting forth the City’s
policies and procedures concerning the use of special district financing programs to finance the
Improvements. Pursuant to the Policy, the total annual amount of the special taxes to be collected
with respect to a parcel within an Improvement Area 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 an Improvement Area upon the completion of all expected
structural improvements to such parcel. Prior to or in connection with the issuance of Bonds for
an Improvement Area, in the event the sum of the special taxes and assessments exceed 2% of
the expected assessed value of a parcel within such Improvement Area, the City may require that
the Developer or its assignees prepay a portion of the special tax obligation such that sum of the
special taxes and assessments does not exceed 2% of such expected assessed value.
The Parties hereby agree that, unless waived by the City, at the time of issuance of the
Bonds for an Improvement Area, 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 such Improvement Area shall have been completed and conveyed to
individual homeowners. The fair market value of the property within an Improvement Area for
purposes of determining the foregoing ratio will be determined based on the assessed value of
the property or the appraised value of the property based on the appraisal made by an appraiser
selected by the City with a valuation date within three (3) months of the issuance of the Bonds.
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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 for an Improvement Area 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 for an Improvement Area, the owner of any land within such
Improvement Area, 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 such Improvement Area (each a “Rate and Method”), such Special Tax referred to herein
as the “Special Tax” or “Special Taxes”) in the fiscal year following the fiscal year in which the
Bonds are issued are equal to or exceed 20% of the total Maximum Special Tax for such fiscal
year, shall deliver to the City either (i) a renewable, irrevocable instrument of credit from a financial
institution (rated “A” or better) or (ii) cash in-lieu thereof (a “Security”). The Security shall be in an
amount equal to two times the expected Special Tax levy on the property in the Improvement
Area owned by such Account Party (the “Stated Amount”). The Security shall be maintained by
the Account Party in each fiscal year until terminated in accordance with Section 2.2(c) below.
While the Security is still required, the Stated Amount of such Security shall be reduced as set
forth in a “Certificate of Reduction or Termination” (as defined in Section 2.2(c) below).
The Security shall name the City, or its designee, as a beneficiary and shall provide that
the City, or its designee, may draw an amount equal to any delinquencies in payment of
semiannual installments of the Special Taxes levied on property owned by the Account Party in
the Improvement Area. 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
Improvement Area 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.
(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) for the applicable series of
Bonds or in such account established with a financial institution selected by the City. Thereafter,
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amounts in such account shall be held as security, and if Special Taxes owed by the Account
Party with respect to property within the Improvement Area 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 within the
Improvement Area 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
Improvement Area 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 Improvement Area 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 Improvement Area 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
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 Improvement Area. Any applicable purchase and sale agreement and/or escrow
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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 within an
Improvement Area 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 a series of 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 an Improvement Area 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. The proceeds of a series of Bonds
shall be used in the following priority to (1) fund a reserve fund for the payment of principal and
interest with respect to the Bonds in an amount equal to the least of (i) ten percent (10%) of the
total bond issue, (ii) maximum annual debt service on Bonds, or (iii) 125% of average annual debt
service; (2) fund up to eighteen (18) months of capitalized interest; (3) reimburse the Developer
or its designee pursuant to Section 1 and hereof for the costs described therein which have not
already been reimbursed to the Developer from collected Special Tax; (4) pay for costs of
issuance of the Bonds including, without limitation, underwriter’s discount, bond counsel and
disclosure counsel fees, appraisal and special tax consultant fees, printing, and fiscal agent fees;
and (5) pay for the actual costs of the Improvements. The Community Facilities District shall
maintain records relating to the disbursements of proceeds of the sale of the Bonds. The
Indenture or Resolution (hereinafter “Indenture”) for a series of 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. Each 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:
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(a) An amount sufficient to fund the reasonable, current estimated cost of the
City Fee Facility Improvements anticipated to be funded out of the Bonds being issued shall be
deposited in the City Fee Facility Improvements Account (any Special Taxes levied in the CFD
and collected by the CFD remaining after the payment of administrative expenses of the CFD and
the reimbursement of the Developer for costs pursuant to Section 1 hereof shall be deposited into
the City Fee Facility Improvements Account at the time of Bond issuance, unless otherwise
directed in writing by the Developer);
(b) If applicable, an amount to be agreed upon between Developer and the
CFD prior to the issuance of a series of Bonds sufficient to fund the reasonable, current estimated
costs of the City Improvements shall be deposited, or later transferred, to the City Improvements
Account; and
(c) If applicable, an amount to be agreed upon between Developer and the
CFD prior to the issuance of a series 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 related series of Bonds and/or to call such Bonds in advance
of maturity.
SECTION 3. ALLOCATION OF SPECIAL TAXES
Prior to the issuance of a series of Bonds for any Improvement Area, the City Council of
the City, acting as the legislative body of the Community Facilities District, may levy Special Taxes
on all parcels classified as Developed Property within such Improvement Area pursuant to the
applicable Rate and Method. Such Special Taxes collected by the City shall first be applied to
fund annual administrative expenses of the Community Facilities District allocated to such
Improvement Area 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 for an Improvement Area, 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 for an Improvement Area, the City shall have no
obligation to levy Special Taxes with such Improvement Area to reimburse the Developer for the
costs of any Improvements not paid for from Bond proceeds of such Improvement Area. The
entire amount of any Special Tax levied by the Community Facilities District within an
Improvement Area to repay the Bonds for such Improvement Area and recover costs and
expenses allowable pursuant to Government Code Section 53313.5, shall be allocated to such
Improvement Area.
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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. All plans,
specifications and bid documents for the City Improvements (“Plans”) constructed or to be
constructed by the Developer shall be prepared by the Developer at the Developer’s initial
expense, subject to approval by the applicable public agency. Costs for preparation of the Plans
will be eligible for reimbursement, conditioned upon the final approval of the applicable public
agency and the availability of funds. Reimbursement of costs for plan revisions will be considered
on a case by case basis. All facilities shall be bid in accordance with “public works” requirements
of Section 6.4 to be eligible for reimbursement. The Developer shall not award bids for
construction, or commence or cause commencement of construction, of a City Improvement until
the Plans and bidding documents have been approved by the City. The bid opening for City
Improvements shall be coordinated with and take place at the City’s facilities, with City personnel
in attendance.
SECTION 6. CONSTRUCTION OF IMPROVEMENTS
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements.
6.1 Construction or Acquisition Election. Upon the approval of Plans for a City
Improvement, the Developer and the City shall determine whether the Developer will provide for
construction of such City Improvement in accordance with Sections 6.2, 6.4 and 7 of this
Agreement (the “Acquisition Election”) or whether the City will provide for construction of such
City Improvement in accordance with Section 6.3 of this Agreement (the “Construction Election”).
Sections 6.2, 6.4 and 7 specify the requirements for construction of the City Improvements
pursuant to the Acquisition Election that the City believes are necessary to ensure that such City
Improvements are constructed as if they had been constructed under the direction and
supervision, or under the authority of the City.
6.2 Acquisition Election. If the Acquisition Election is selected with respect to City
Improvements in accordance with the provisions of Section 7 hereof, a qualified engineering firm
(the “Field Engineer”) shall be employed by the Developer to provide all field engineering surveys
determined to be necessary by the City’s inspection personnel. Field Engineer shall promptly
furnish to City a complete set of grade sheets listing all locations, offsets, etc., in accordance with
good engineering practices, and attendant data and reports resulting from Field Engineer’s
engineering surveys and/or proposed facility design changes. City shall have the right, but not
the obligation, to review, evaluate and analyze whether such results comply with applicable
specifications.
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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
reimbursement from funds in the City Improvements Account of any actual costs of the City
Improvements incurred by the Developer at that time.
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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 may be properly and readily acquired by the City, the Developer shall comply
with all of the following requirements with respect to any such City Improvements to be acquired
with funds in the City Improvements Account, and the Developer shall provide such proof to the
City as the City may reasonably require and at such intervals and in such form as the City may
reasonably require, that the following requirements have been satisfied as to all such City
Improvements:
(a) The Developer shall prepare a bid package for review, comment and
approval by the City Manager of the City or his designee (the “City Representative”).
(b) The Developer shall, after obtaining at least three sealed bids for the
construction of the City Improvements in conformance with the procedures and requirements of
the City, submit to the City written evidence of such competitive bidding procedure, including
evidence of the means by which bids were solicited, a listing of all responsive bids and their
amounts, and the name or names of the contractor or contractors to whom the Developer
proposes to award the contracts for such construction, which shall be the lowest responsible
bidder.
(c) The City Representative shall attend the bid opening. If unable to attend
the bid opening, the City Representative shall approve or disapprove of a contractor or
contractors, in writing, within five (5) business days after receipt from the Developer of the name
or names of such contractor or contractors recommended by the Developer. If the City
Representative disapproves of any such contractor; the Developer shall select the next lowest
responsible bidder from the competitive bids received who is acceptable to the City
Representative.
(d) The specifications and bid and contract documents shall require all such
contractors to pay prevailing wages and to otherwise comply with applicable provisions of the
Labor Code, the Government Code and the Public Contract Code relating to public works projects
and as required by the procedures and standards of the City with respect to the construction of
its public works projects.
(e) The Developer shall submit faithful performance and payment bonds with
respect to the City Improvements for which the Acquisition Election is made and t he following
documents shall be submitted to the City along with the performance and payment bonds:
(i) The original, or a certified copy, of the unrevoked appointment,
power of attorney, bylaws, or other instrument entitling or authorizing the person who executed
the bond to do so;
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(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, dur ing 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.
The City shall have primary responsibility for inspecting the City Improvements to assure
that the work is being accomplished in accordance with the Plans. Such inspection does not
include inspection for compliance with safety requirements by the Developer’s contractor(s). The
City’s personnel shall be granted access to each construction site at all reasonable times for the
purpose of accomplishing such inspection. Upon satisfaction of the City’s inspectors, the
Developer shall notify the City in writing that a City Improvement has been completed in
accordance with the Plans. Any actual costs reasonably incurred by the City for inspection not
previously paid by the Developer shall be reimbursed from funds in the City Improvements
Account.
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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 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;
(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;
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(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
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.
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Upon completion of the construction of a City Improvement, the Developer shall deliver or
cause to be delivered to the City a Disbursement Request Form in substantially the form of
Exhibit “D,” attached hereto, copies of the contract(s) with the contractor(s) who have
constructed the City Improvement and other relevant documentation with regard to the payments
made to such contractor(s) and each of them for the construction of the City Improvement,
documentation evidencing payment of prevailing wages, and shall also provide to the City
invoices and purchase orders with respect to all equipment, materials and labor purchased for
the construction of the City Improvements. The City shall require the Engineer to complete its
determination of the acquisition price of the City Improvements as promptly as is reasonably
possible.
Notwithstanding the preceding provisions of this Section, the source of funds for the
acquisition of the City Improvements or any portion thereof shall be funds in the City
Improvements Account. If for any reason beyond the City’s control the Bonds are not sold, the
City shall not be required to acquire the City Improvements from the Developer, except to the
extent of funds from the collection of Special Taxes. In such event, the Developer shall complete
the design and construction and offer to the City ownership of such portions of the City
Improvements as are required to be constructed by the Developer as a condition to recordation
of subdivision maps for the Developer Property (but only at such times as required by such
condition), but need not construct any portion of the City Improvements which it is not so required
to construct. Reimbursement for these facilities would be made from the collection of Special
Taxes.
In addition to the foregoing, the City shall have the right to withhold payment for acquisition
of a City Improvement, if:
(a) the Developer or any of its affiliates is delinquent in the payment of any
Special Taxes levied by the Community Facilities District on properties then owned by the
Developer or any of its affiliates within the CFD, or
(b) the Developer is not then in substantial compliance with a condition or
obligation imposed upon the Developer Property by the City, including but not limited to, payment
of all applicable fees, dedication of all applicable rights-of-way or other property and construction
requirements.
The City shall immediately provide written notice to the Developer of the decision to
withhold any such payment and shall specify the reason for such decision. If the payment is
withheld as a result of the delinquency in the payment of Special Taxes, the notice shall identify
the delinquent parcels and the amount of such delinquency. If the payment is withheld as a result
of substantial non-compliance with a condition or obligation, the notice shall specify such condition
or obligation and what action will be necessary by the Developer to substantially comply with such
condition or obligation. Upon receipt of evidence reasonably satisfactory to the City that the
Developer has paid the delinquent Special Taxes or complied with the subject condition or
obligation, the City shall forthwith make all payments which have been withheld pursuant to the
provisions of this Section.
SECTION 10. EASEMENTS AND/OR FEE TITLE OWNERSHIP DEEDS
Without limiting the Developer’s rights to reimbursement for such grants pursuant to
Section 9 above, the Developer shall, at the time the City acquires the City Improvements as
provided in Section 9 hereof, grant or cause to be granted to the City, by appropriate instruments
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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 Deve loper. The
Developer shall have the right to review all books and records of the City pertaining to costs and
expenses incurred by the City for services of the Engineer by making arrangements with the City.
SECTION 14. OWNERSHIP OF IMPROVEMENTS
Notwithstanding the fact that some or all of the City Improvements may be constructed in
dedicated street rights-of-way or on property which has been or will be dedicated to the City, each
City Improvement shall be and remain the property of the Developer until acquired by the City as
provided in this Agreement.
SECTION 15. MATERIALS AND WORKMANSHIP WARRANTY
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements.
Upon the completion of the acquisition of a City Improvement by the City, the performance
bond related to such individual City Improvement provided by the Developer pursuant to Section
6.4(e) hereof, shall be reduced by 90%, and the remaining 10% shall serve as a maintenance
bond to guarantee that such City Improvement will be free from defects due to faulty workmanship
or materials for a period of one year.
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SECTION 16. CITY FEE FACILITY IMPROVEMENTS
The Developer may be required pursuant to the conditions of development or the fee
ordinance to pay certain City fees (the “City Fees”) relating to the City Fee Facility Improvements
prior to the availability of proceeds of the Bonds to pay for such City Fee Facility Improvements.
In the event such City Fees are paid prior to the availability of Bond proceeds, the amounts paid
to the City shall be deemed to be deposits (each a “Deposit”) that are subject to refund by the
City to the Developer in accordance with this Agreement. The City shall place each Deposit in a
capital facilities account(s). If the Developer has made any Deposits to the City, then following
deposit of Bond proceeds in the City Fee Facility Improvements Account, the City shall return to
the Developer, from the capital account in which the Deposits were deposited the Deposits not
previously returned, without interest or other earnings thereon. The City shall be so obligated to
return such Deposits only to the extent that an equiva lent amount of the Deposits to be returned
is deposited in the City Fee Facility Improvements Account from Bond proceeds or Special Tax
collections prior to the issuance of Bonds.
Bond proceeds used to finance City Improvements which relate to the City Fees shall be
allocated first for return of all Deposits prior to being allocated to the payment of City Fees not
previously deposited by the Developer. Any Deposits that have not been returned to the
Developer at the time it is determined that there will be no further Bond proceeds available (i.e.
the final series of Bonds to finance the Improvements have been issued) shall be retained by the
City and may be used for the purposes for which the City Fee was required, and the unrefunded
Deposits shall constitute full and final payment for such City Fees, without any increase of any
kind.
SECTION 17. MISCELLANEOUS IMPROVEMENTS.
Improvements unrelated to the City Improvements and the City Fee Facility
Improvements, if applicable, will be supplemented by the terms contained in an addendum which
will appear as Exhibit “E” hereto. The amounts deposited in the applicable Miscellaneous
Improvement Account(s), if any, will be disbursed for the acquisition or construction of
Miscellaneous Improvements in accordance with the provisions in the applicable Joint Community
Facilities Agreement, if any. Any amounts in the applicable Miscellaneous Improvement
Account(s) shall be disbursed at the written direction of the City upon Developer’s submittal of an
addendum which will appear as the applicable entity’s Disbursement Request Form provided for
in the Joint Community Facilities Agreement. Upon receipt of the Disbursement Request Form,
the City shall submit a written requisition for payment of the requested amount to the trustee for
the Bonds, who shall directly pay the amount requested to the applicable entity.
SECTION 18. INDEPENDENT CONTRACTOR
In performing this Agreement, Developer is an independent contractor and not the agent
of the City. The City shall not have any responsibility for payment to any contractor or supplier of
Developer. It is not intended by the Parties that this Agreement create a partnership or joint
venture among them and this Agreement shall not otherwise be construed.
SECTION 19. INDEMNIFICATION
Developer shall assume the defense of, indemnify and save harmless, the City, its officers,
employees and agents, and the Community Facilities District, its officers, employees and agents,
from and against all actions, damages, claims, losses or expenses of every type and description
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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 harm less any
person or entity as to actions, damages, claims, losses or expenses resulting from the breach of
this Agreement, the negligence or willful misconduct of such person or entity or their officers,
agents, consultants or employees.
SECTION 20. INSURANCE REQUIREMENTS
Neither the Developer nor its contractor shall commence work on a City Improvement
under this Agreement prior to obtaining insurance with a company or companies acceptable to
the City, nor shall the Developer’s contractor allow any subcontractor to commence work on its
subcontract until all insurance required of the subcontractor has been obtained.
The Developer shall, during the life of this Agreement, notify the City in writing of any
incident giving rise to any potential bodily injury or property damage claim and any resultant
settlements, whether in conjunction with this or any other project which may affect the limits of
the required coverage, as soon as is reasonable and practical.
SECTION 21. CONFLICT WITH OTHER AGREEMENTS
Except as specifically provided herein, nothing contained herein shall be construed as
releasing Developer from any condition of development or requirement imposed by any other
agreement with City. In the event of a conflicting provision, such other agreement shall prevail
unless such conflicting provision is specifically waived or modified in writing by City.
SECTION 22. TERMINATION
The provisions of this Agreement related to the financing of the Improvements shall
terminate and be of no further force or effect on December 31, 2031. Notwithstanding the
foregoing, this Agreement shall not terminate pursuant to the previous sentence if, on December
31, 2031, 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.
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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: City Manager. Any notice to Developer shall be addressed to 2 Park Plaza, Suite 700,
Irvine, CA 92614 Attention: Tom Bitney.
Each Party may change its address for delivery of notice by delivering written notice of
such change of address to the other Party hereto.
SECTION 24. NO GIFT OR WAIVER.
24.1 No Gift or Waiver for City Improvements. The Developer and the City acknowledge
that:
(a) The Developer or its predecessor may have constructed or may be
constructing City Improvements before funds that will be used to acquire them are available with
the expectation that the Developer will be reimbursed for such City Improvements to the extent
and in the manner set forth in this Agreement.
(b) The City may inspect City Improvements and process Disbursement
Request Forms even if funds from the proceeds of Bonds available at the time of such inspection
and processing do not exist or are not then sufficient to satisfy the Disbursement Request in full.
(c) The Developer may convey City Improvements to the City and the City may
accept such City Improvements even if funds from the proceeds of Bonds available at the time of
such conveyance and acceptance do not exist or are not then sufficient to satisfy the
Disbursement Request in full.
(d) If the City accepts City Improvements before a Disbursement Request is
paid in full, the unpaid balance of the Disbursement Request will be paid from time to time, in any
number of installments and irrespective of the length of time payment is deferred, as funds from
the proceeds of Bonds become available.
(e) The Developer’s conveyance or dedication of City Improvements to the City
before the availability of funds from the proceeds of Bonds to acquire the City Improvements is
not, and shall not be deemed, a gift or a waiver of the Developer’s right to payment of the purchase
price of such City Improvements pursuant to this Agreement.
24.2 No Gift or Waiver for City Fees. The Developer and the City acknowledge that:
(a) Prior to the availability of funds from the proceeds of Bonds, the Developer
or its predecessor may have been or may be required to deposit funds to assure payment of
applicable fees of the City.
(b) The Developer or its predecessor has deposited or will be depositing such
funds with the expectation that the Developer will be reimbursed for these deposits to the extent
and in the manner set forth in this Agreement.
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(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
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
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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.
(j) Governing Law. This Agreement and any dispute arising hereunder shall
be governed by and interpreted in accordance with the laws of the State of California.
(k) Construction of Agreement. This Agreement has been reviewed by legal
counsel for both the City and Developer and shall be deemed for all purposes to have been jointly
drafted by the City and Developer. No presumption or rule that ambiguities shall be construed
against the drafting Party shall apply to the interpretation or enforcement of this Agreement.
(l) Attorneys’ Fees. In the event of any action or proceeding, including an
arbitration or a reference pursuant to Section 638, et seq., of the Code of Civil Procedure brought
by any Party against any other under this Agreement, the prevailing Party shall be entitled to
recover its actual attorneys’ fees and all fees, costs and expenses incurred for prosecution,
defense, consultation, or advice in such action or proceeding. In addition to the foregoing, the
prevailing Party shall be entitled to its actual attorneys’ fees and all fees, costs and expenses
incurred in any post-judgment proceedings to collect or enforce the judgment. This provision is
separate and several and shall survive the merger of this Agreement into any judgment on this
Agreement.
(m) Venue and Forum. Any action at law or in equity arising under this
Agreement brought by any Party hereto for the purpose of enforcing, construing or determining
the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the
County of Riverside, State of California, and the Parties waive all provisions of law providing for
the filing, removal or change of venue to any other Court.
(n) Entire Agreement. Except as provided in an addendum, which if
applicable, will appear as Exhibit “E” hereto, this Agreement sets forth and contains the entire
understanding and agreement of the Parties. There are no oral or written representations,
understandings, undertaking or agreements, which are not contained or expressly referred to
herein, and any such representations, understandings or agreements are superseded by this
Agreement. No evidence of any such representations, understandings or agreements shall be
admissible in any proceeding of any kind or nature relating to the terms or conditions of this
Agreement, its interpretation or breach.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year written below.
Dated: April 27, 2021 CITY OF LAKE ELSINORE, a political subdivision of
the State of California
By:
City Manager
ATTEST:
By:
Candice Alvarez, MMC, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY OF THE CITY OF LAKE ELSINORE
By:
Barbara Leibold, City Attorney
[SIGNATURES CONTINUED ON NEXT PAGE.]
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[SIGNATURE PAGE CONTINUED]
SPT- AREP III Tuscany Associates, LLC
By: _________________________________
Name: Brian Rupp
Title: Executive Vice President, Real Estate
4812-8073-2134v2/022042-0035
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’s Parcel Nos:
349-240-006
349-380-024
349-380-025
349-240-043
349-240-044
349-240-045
349-240-046
349-240-047
349-240-054
349-240-055
349-240-056
349-240-034
349-240-038
349-240-072
349-240-075
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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.”
I. CITY FEE FACILITY IMPROVEMENTS.
City facilities included in the City’s development fee programs used to finance expansion
projects, exclusive of in-tract facilities constructed by a property owner, but including and not
limited to the following:
Estimated Cost of the City Fee Improvements
Description Estimated Cost
Traffic Improvements $ 458,615
Library Facilities 50,250
City Hall and Public Works Facilities 271,015
Community Center Facilities 182,575
Marina Facilities 260,965
Animal Shelter Facilities 116,580
Fire Facilities 251,585
Park Improvements 536,000
Storm Drain Improvements 333,900
Total Fees $ 2,461,485
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
Street Improvements1 $ 3,849,703
Storm Drain Improvements 2 3,920,529
Total Improvements $ 7,770,232
1 [Add description]
2 [Add description]
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EXHIBIT C
NOTICE OF SPECIAL TAX
[TO COME FROM DEVELOPER]
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EXHIBIT D
CITY OF LAKE ELSINORE
CFD NO. 2021-1 (TUSCANY VALLEY/CREST)
DISBURSEMENT REQUEST FORM
1. Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (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 (Improvement Area No. __) (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 Improvement Area No. ___ (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 SPT- AREP III Tuscany Associates, LLC (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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Dated: DEVELOPER:
SPT- AREP III Tuscany Associates, LLC
By:
Name:
Title: Authorized Representative
Dated: CITY OF LAKE ELSINORE
By:
Its:
[ATTACH WIRING INSTRUCTIONS]
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EXHIBIT E
ADDENDUM
DESCRIPTION OF THE MISCELLANEOUS IMPROVEMENT
Estimated Cost of the Water District Improvements
Description Estimated Cost
Water Connection Improvements $ 2,641,810
Sewer Connection Improvements 4,692,010
Irrigation Meters 92,614
Offsite Water Improvements3 1,164,037
Offsite Sewer Improvements3 2,329,785
Total $ 10,920,256
3 See Exhibit B to the Joint Community Facilities Agreement by and among the Developer, the City and the
Elsinore Valley Municipal Water District.
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JOINT COMMUNITY FACILITIES AGREEMENT
BY AND AMONG
CITY OF LAKE ELSINORE
AND
ELSINORE VALLEY MUNICIPAL WATER DISTRICT
AND
SPT- AREP III TUSCANY ASSOCIATES, LLC
(City of Lake Elsinore Community Facilities District No. 2021-1 (Tuscany Valley/Crest)
THIS JOINT COMMUNITY FACILITIES AGREEMENT (“Agreement”) is dated ____,
2021, by and among the ELSINORE VALLEY MUNICIPAL WATER DISTRICT, County of
Riverside, State of California, a municipal water district (“EVMWD”) organized and operating
pursuant to the Municipal Water District Law of 1911 as set forth in the California Water Code,
the CITY OF LAKE ELSINORE, a municipal corporation (“City”), and SPT- AREP III Tuscany
Associates, LLC (“Property Owner”).
R E C I T A L S:
A. Property Owner is the owner of certain real property located within the boundaries
of the EVMWD and the City and described in Exhibit “A” hereto (the “Property”).
B. Property Owner intends to develop the Property for residential purposes and has
obtained or intends to obtain the necessary development approvals to construct approximately
335 dwelling units on the Property, as such development may be modified from time to time (the
“Project”).
C. The Project will require the payment, pursuant to the rules and regulations of
EVMWD, as amended from time to time (“EVMWD Rules and Regulations”), of certain EVMWD
Charges (defined below). The EVMWD Charges may be paid directly to EVMWD, or paid and
then reimbursed to the paying party, when Bond Proceeds (defined below) are available to fund
an equal amount of such EVMWD Charges so paid.
D. The Project will also benefit, in whole or in part, from the construction of certain
Acquisition Facilities (defined below and described on Exhibit “B” attached hereto). EVMWD
and the Property Owner agree that any Acquisition Facilities to be constructed by Property Owner
shall be eligible for acquisition by EVMWD and the costs thereof shall be eligible for
reimbursement out of Bond Proceeds pursuant to this Agreement.
E. In conjunction with the recording of the final subdivision map(s) for the Project, the
issuance of building permits for the construction of homes within the Project and/or re ceipt of
water meters for such homes, it may be necessary for Property Owner, or its successors or
assigns, to advance EVMWD Charges to EVMWD (the “Advances”) before any Bond Proceeds
are available to pay for EVMWD Charges. In such case, Property Owner shall be entitled to
(i) reimbursement of such Advances and (ii) credit for payments made to the EVMWD from Bond
Proceeds for EVMWD Charges which would otherwise be due to the EVMWD in conjunction with
the Project, all as further described herein.
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F. The Project will also require certain public improvements to be owned, operated or
maintained by the City (the “City Improvements”) which will also be eligible for financing through
the CFD (defined below).
G. Pursuant to the request of the Property Owner, the City Council of the City has
formed the CFD pursuant to the Act (defined below) to provide financing of the EVMWD Charges,
Acquisition Facilities and City Improvements.
H. The City and EVMWD are authorized by Section 53313.5 of the Act to pay for or
finance, by means of the CFD, the EVMWD Charges, Acquisition Facilities and City
Improvements. This Agreement constitutes a “joint community facilities agreement” within the
meaning of Section 53316.2 of the Act by and among EVMWD, the City and Property O wner,
pursuant to which the CFD is authorized to finance the City Improvements and EVMWD Charges
and to finance the construction and acquisition of Acquisition Facilities. As provided by
Section 53316.6 of the Act, responsibility for providing and operating the Acquisition Facilities is
delegated to EVMWD to the extent set forth herein and responsibility for constructing, providing
and operating the City Improvements is delegated to the City.
I. The provision of the City Improvements, Acquisition Facilities and EVMWD
Charges is necessitated by the Project, and the parties hereto find and determine that the
residents of the City and EVMWD will be benefited by the payment of EVMWD Charges and
construction and acquisition of the Acquisition Facilities and the City Improvements and that this
Agreement is beneficial to the interests of such residents.
ARTICLE I
GENERAL PROVISIONS
Section 1.1 Recitals. The above recitals are true and correct and are hereby
incorporated by this reference.
Section 1.2 Definitions. Unless the context clearly otherwise requires, the terms
defined in this Section shall, for all purposes of this Agreement, have the meanings herein
specified.
(a) “Act” means the Mello-Roos Community Facilities Act of 1982, as
amended, commencing with California Government Code Section 53311, et seq.
(b) “Acquisition Facility or Facilities” means those sewer and water facilities
listed on Exhibit “B” hereto, which are eligible to be constructed by the Property Owner, acquired
by EVMWD and paid for with Bond Proceeds.
(c) “Acquisition Price” means the amount to be paid out of Bond Proceeds for
an Acquisition Facility.
(d) “Actual Costs” with respect to an Acquisition Facility includes: (i) the actual
hard construction costs including labor, materials and equipment costs, (ii) the costs incurred in
design, engineering and preparation of plans, (iii) the fees paid to consultants and government
agencies in connection with and for obtaining permits, licenses or other required governmental
approvals, (iv) a construction management fee of 5% of the costs described in clause (i) above,
(v) professional costs such as engineering, legal, accounting, inspection construction staking,
materials testing and similar professional services, (vi) costs of payment, performance of
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maintenance bonds, and insurance costs (including the costs of any title insurance) and (vii) the
value of any real property or interests therein that (1) are required for the construction of the
Acquisition Facility such as temporary construction easements, haul roads, etc. and (2) are
required to be conveyed with such Acquisition Facility in an amount equal to the fair market value
of such real property or interests therein.
(e) “Advances” means an amount paid by Property Owner for EVMWD
Charges prior to the issuance and sale of Bonds and which are eligible for reimbursement upon
availability of Bond Proceeds to fund an equal amount of such Advances.
(f) “Agreement” means this Joint Communities Facilities Agreement.
(g) “Bond Proceeds” or “Proceeds of the Bonds” shall mean those net funds
generated by the sale of the Bonds for an Improvement Area.
(h) “Bond Resolution” means that Resolution, Resolution Supplement, Fiscal
Agent Agreement, Indenture of Trust or other equivalent document(s) providing for the issuance
of a series of Bonds.
(i) “Bonds” shall mean those bonds, or other securities, issued by, or on behalf
of the CFD, as authorized by the qualified electors within the CFD.
(j) “CFD” means Community Facilities District No. 2021-1 of the City of Lake
Elsinore (Tuscany Valley/Crest).
(k) “Engineer” means the engineering firm or in-house personnel used by
EVMWD to determine the value of an Acquisition Facility to be acquired with Bond Proceeds.
(l) “EVMWD Charges” means water connection fees, sewer connection fees,
annexation fees and all components thereof of the EVMWD imposed upon the Project to pay for
the provision of water and sewer services to and the construction of EVMWD water and sewer
facilities required to serve the Project.
(m) “EVMWD Facilities Fund” means the fund, account or sub-account of the
CFD (regardless of its designation within the Bond Resolution) into which a portion of the Bond
Proceeds may be deposited, in accordance with the Bond Resolution and Funding Agreement to
finance the construction and acquisition of the Acquisition Facilities and to pay EVMWD Charges.
(n) “EVMWD Representative” means the EVMWD Chief Engineer or his
Designee.
(o) “Facilities” means the City Improvements, Acquisition Facilities and
EVMWD Charges.
(p) “Field Engineer” shall have the meaning ascribed to the term in Section 3.
(q) “Funding Agreement” shall mean the Acquisition, Construction and
Funding Agreement between City and Property Owner relating to the CFD, as it may be amended
from time to time.
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(r) “Improvement Area” shall mean an improvement area within the CFD
designated in accordance with the Act.
(s) “Party” or “Parties” shall mean any one or all of the parties to this
Agreement.
(t) “Plans and Specifications” shall mean the plans and specifications for the
design and construction of an Acquisition Facility as approved by EVMWD, which approval shall
not be unreasonably withheld.
(u) “Rate and Method” means the Rate and Method of Apportionment of the
Special Tax for an Improvement Area authorizing the levy and collection of special taxes pursuant
to proceedings undertaken for the formation of the CFD pursuant to the Act.
(v) “State” means the State of California.
(w) “Special Taxes” means the special taxes authorized to be levied and
collected pursuant to a Rate and Method.
(x) “Substantially Complete,” “Substantially Completed” or “Substantial
Completion” with respect to an Acquisition Facility means that such Acquisition Facility is
substantially complete in accordance with its Plans and Specifications and is available for use by
the public for its intended purpose, notwithstanding any final “punch list” items still r equired to be
completed, unless such items are required for the safe operation of such Acquisition Facility, and
shall be based upon approval of EVMWD’s inspectors, which shall not be unreasonably withheld.
ARTICLE II
ISSUANCE OF BONDS
Section 2.1 Issuance and Sale of Bonds. The City Council of the City, acting as the
legislative body of the CFD, may, in its sole discretion, in accordance with its adopted policies
and the Funding Agreement adopt the Bond Resolution and issue the Bonds to finance the
Facilities.
Section 2.2 Bond Proceeds. Upon the issuance and sale of each series of Bonds,
and receipt of the Bond Proceeds, the City shall determine the amount of the Bond Proceeds
allocable to finance construction and acquisition of Acquisition Facilities and to pay EVMWD
Charges in accordance with the Funding Agreement, and shall deposit such amount in the
EVMWD Facilities Fund.
In conjunction with the recording of the final subdivision maps for the Property, the
issuance of building permits for the construction of homes within the Property and/or receipt of
water meters for such homes, it may be necessary for Property Owner, or its successors of
assigns, to make Advances before Bonds are issued. Upon the issuance and sale of the Bonds,
Property Owner may execute and submit a payment request to the CFD requesting disbursement
of an amount equal to all Advances from the EVMWD Facilities Fund. The Property Owner shall
only be entitled to receive reimbursement of the Advances if Bond Proceeds equal to the amount
of such Advances to be reimbursed are deposited in the EVMWD Facilities Fund.
From time to time following the issuance and sale of the Bonds, Property Owner shall
authorize EVMWD in writing to request a disbursement from the EVMWD Facilities Fund to fund
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EVMWD Charges. Upon such notice and EVMWD’s receipt of such disbursement, Property
Owner shall be deemed to have satisfied the applicable EVMWD Charges with respect to the
number of dwelling units or lots for which the EVMWD Charges would otherwise have been
required in an amount equal to such disbursement.
EVMWD agrees that it will request a disbursement of Bond Proceeds only for costs related
to the EVMWD facilities that are eligible for financing under the Act. With respect to the
Acquisition Facilities, EVMWD agrees that prior to requesting payment from the CFD it shall
review and approve all costs included in its request. With respect to all EVMWD Charges,
EVMWD agrees that prior to requesting payment from the CFD it shall review and approve all
costs included in its request. EVMWD will submit a request for disbursement of Bond Proceeds
along with adequate supporting documentation to the District which shall be in the form attached
hereto as Exhibit “C.”
EVMWD agrees that in processing the above disbursements with respect to EVMWD
facilities, it will comply with all legal requirements for the expenditure of Bond Proceeds under the
Act and the Internal Revenue Code of 1986 and any amendments thereto. As a condition to
receiving any Bond Proceeds, EVMWD agrees that it shall provide to the CFD, a certificate to the
effect that EVMWD confirms the representations contained in Section 2.2 hereof, EVMWD agrees
to comply with the provisions of the tax certificate delivered by the CFD in connection with the
Bonds, and such other matters as the CFD may reasonably request upon which the CFD and its
bond counsel may rely in connection with the issuance of such Bonds and their conclusion that
interest on such Bonds is not included in gross income for federal income tax purposes.
Section 2.3 Responsibility for EVMWD Charges and Acquisition Facilities.
(a) The Parties hereto acknowledge and agree that the final responsibility for
the payment of the EVMWD Charges and the design, construction and dedication of Acquisition
Facilities to be constructed by Property Owner lies with the Property Owner.
(b) If the amounts derived from Bond Proceeds deposited in the EVMWD
Facilities Fund, including investment earnings thereon, if any, are not sufficient to fund the total
cost of the EVMWD Charges and Acquisition Facilities to be constructed by Property Owner, the
parties hereto agree that all responsibility and liability for the amount of such shortfall shall be and
remain with the Property Owner and shall not lie with the City, CFD or EVMWD.
(c) In addition to financing the EVMW D Charges described above, the Parties
acknowledge that EVMWD may require the Property Owner, pursuant to the EVMWD Rules and
Regulations, to design, construct and dedicate to EVMWD Acquisition Facilities as a condition to
providing water and sewer service to the Property. The Parties also agree and acknowledge that
all responsibility and obligation for the design, construction and dedication of such Acquisition
Facilities to EVMWD, in accordance with all applicable statutes and the EVMWD Rules and
Regulations, shall be and remain the responsibility of the Property Owner.
(d) EVMWD agrees to utilize or apply funds provided to it by the CFD, in
accordance with the Act and other applicable law, and as set forth herein, for the EVMWD
Charges and Acquisition Facilities to be constructed by Property Owner.
(e) Property Owner shall indemnify, defend, and hold harmless, the City, CFD,
and EVMWD, their respective officers, employees and agents, and each and every one of them
from and against all actions, damages, claims, losses or expenses of every type and description
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to which they may be subjected or put, by reason of or resulting from the design, engineering,
construction, and transfer of ownership of the Acquisition Facilities constructed by Property
Owner.
(f) EVMWD shall indemnify, defend, and hold harmless, the City, CFD and
Property Owner, their respective officers, employees and agents, and each and every one of them
from and against all actions, damages, claims, losses or expenses of every type and description
to which they may be subjected or put, by reason of or resulting from the design, engineering,
construction, and acquisition of the Acquisition Facilities constructed by EVMWD and the facilities
constructed with the proceeds of the EVMWD Charges.
Section 2.4 Responsibility for Debt Service or Special Taxes. EVMWD shall have
no obligation, responsibility, or authority with respect to the issuance and sale of the Bonds, the
Bond Proceeds available to finance the construction and acquisition of the Acquisition Facilities
and to pay EVMWD Charges, the payment of the principal and interest on the Bonds, or for the
levy of the Special Taxes to provide for the payment of principal and interest thereon. The CFD
shall have the sole authority and responsibility for all such matters.
The Parties hereto specifically agree that the liabilities of the CFD, including liabilities, if
any, of the CFD pursuant to the documents providing for the issuance of Bonds, including the
Bond Resolution, shall not be or become liabilities of EVMWD.
Section 2.5 Administration of the CFD. The City shall have the power and duty to
provide for the administration of the CFD once it is formed, subject to the terms hereof and the
Funding Agreement, including employing and compensating all consultants and providing for the
various other administration duties set forth in this Agreement. It is understood and agreed by
Parties hereto that EVMWD will not be considered a participant in the proceedings relative to
formation of the CFD or the issuance of the Bonds, other than as a Party to this Agreement.
ARTICLE III
CONSTRUCTION AND ACQUISITION OF ACQUISITION FACILITIES
Section 3.1 Construction of Acquisition Facilities by Property Owner. The
following provisions of this Article III shall apply solely with respect to those Acquisition Facilities
to be constructed by the Property Owner and acquired by EVMWD with Bond Proceeds:
(a) The Property Owner will complete the Plans and Specifications for such
Acquisition Facilities. The Plans and Specifications shall include EVMWD’s standard
specifications and shall be subject to EVMWD approval, which shall not be unreasonably
withheld. EVMWD agrees to process any Plans and Specifications for approval with reasonable
diligence and in a timely manner. The Property Owner may proceed with the construction of any
such Acquisition Facilities in accordance with the provisions of Section 3.2 hereof. A qualified
engineering firm (the “Field Engineer”) shall be employed by Property Owner to provide all field
engineering surveys determined to be necessary by the EVMWD inspection personnel. Field
Engineer shall promptly furnish to EVMWD a complete set of grade sheets listing all locations,
offsets, etc., in accordance with good engineering practices, and attendant data and reports
resulting from the Field Engineer’s engineering surveys and/or proposed facility design changes.
EVMWD shall have the right, but not the obligation, to review, evaluate and analyze whether such
results comply with applicable specifications.
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(b) A full-time soils testing firm, approved by EVMWD, shall be employed by
Property Owner to conduct soil compaction testing and certification. Property Owner shall
promptly furnish results of all such compaction testing to the EVMWD for its review, evaluation
and decision as to compliance with applicable specifications. In the event the compaction is not
in accordance or compliance with applicable specifications, Property Owner shall be fully liable
and responsible therefore. A final report shall be required fully certifying trench compaction efforts
prior to acceptance of each of the Acquisition Facilities.
(c) The cost of all surveying, compaction testing and report costs associated
with such Acquisition Facilities furnished and constructed by any contractors or sub-contractors
(collectively, “Contractors”) shall be included among the costs which are eligible to be paid from
the EVMWD Facilities Fund.
(d) EVMWD shall not be responsible for conducting any environmental,
archaeological, biological, or cultural studies or any mitigation requirements related to the
Acquisition Facilities to be constructed by Property Owner that may be requested by appropriate
Federal, State, and/or local agencies. Any such work shall be paid for and such work shall be
conducted by, or on behalf of Property Owner and the costs of such wo rk shall be eligible to be
paid from the EVMWD Facilities Fund.
Section 3.2 Public Works Requirements. In order to insure that the Acquisition
Facilities to be constructed by the Property Owner, completed after formation of the CFD and
acquired with Bond Proceeds will be constructed as if they had been constructed under the
direction and supervision, or under the authority of, the EVMWD, so that they may be acquired
by the EVMWD pursuant to Government Code Section 53313.5, the Property Owner shall comply
with all of the following requirements:
(a) The Property Owner shall obtain bids for the construction of such
Acquisition Facilities in conformance with the standard procedures and requirements of the
EVMWD with respect to its public works projects or in a manner which is approved by the EVMWD
Representative.
(b) The contract or contracts for the construction of such Acquisition Facilities
shall be awarded to the responsible bidder(s) submitting the lowest responsive bid(s) for the
construction of such Acquisition Facilities.
(c) The Property Owner shall require, and the specifications and bid and
contract documents shall require all such Contractors to pay prevailing wages and to otherwise
comply with applicable provisions of the Labor Code, the Government Code and the Public
Contract Code relating to public works projects and as required by the procedures and standards
of the EVMWD with respect to the construction of its public works projects.
(d) Said Contractors shall be required to furnish labor and material payment
bonds and contract performance bonds in an amount equal to 100 percent of the contract price
naming the Property Owner and the EVMWD as obligees and issued by insurance or surety
companies approved by the EVMWD. All such bonds shall be in a form approved by the EVMWD
Representative. Rather than requiring its Contractors to provide such bonds, the Property Owner
may elect to provide the same for the benefit of its Contractors.
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(e) All such Contractors shall be required to provide proof of insurance
coverage throughout the term of the construction of such Acquisition Facilities which they will
construct in conformance with EVMWD’s standard procedures and requirements.
(f) The Property Owner and all such Contractors shall comply with such other
requirements relating to the construction of such Acquisition Facilities which the EVMWD may
impose by written notification delivered to the Property Owner and each such Contractor at any
time either prior to the receipt of bids by the Property Owner for the construction of such
Acquisition Facilities or, to the extent required as a result of changes in applicable laws, during
the progress of construction thereof. In accordance with this Section 3.2, the Property Owner
shall be deemed the awarding body and shall be solely responsible for compliance and
enforcement of the provisions of the Labor Code, Government Code, and Public Contract Code
of the State of California.
The Property Owner shall provide proof to the EVMWD, at such intervals and in such form
as the EVMWD Representative may require, that the foregoing requirements have been satisfied
as to all of the Acquisition Facilities constructed by Property Owner, acquired by EVMWD and
paid for with Bond Proceeds.
Section 3.3 Inspection; Completion of Construction. EVMWD shall have primary
responsibility for providing inspection of the construction of the Acquisition Facilities constructed
by the Property Owner to insure that the construction is accomplished in accordance with the
Plans and Specifications. EVMWD’s personnel shall have access to the site of the work at all
reasonable times for the purpose of accomplishing such inspection. Upon Substantial Completion
of the construction of such Acquisition Facilities by Property Owner, the Property Owner shall
notify the EVMWD in writing that the construction of such Acquisition Facilities has been
Substantially Completed.
Upon receiving such written notification from the Property Owner, and upon receipt of
written notification from its inspectors that construction of any of the Acquisition Facilities by
Property Owner has been Substantially Completed, the EVMWD shall in a timely manner notify
the Property Owner in writing that the construction of such Acquisition Facilities has been
satisfactorily completed. Upon receiving such notification, the Property Owner shall forthwith file
with the County Recorder of the County of Riverside a Notice of Completion in accordance with
procedures of the County of Riverside. The Property Owner shall furnish to the EVMWD a
duplicate copy of each such Notice of Completion showing thereon the date of filing with the
County Recorder. Any actual costs reasonably incurred by the EVMWD in inspecting and
approving the construction of any Acquisition Facilities by Property Owner not previously paid by
the Property Owner shall be eligible to be reimbursed from the EVMWD Facilities Fund or paid
directly by Property Owner.
Section 3.4 Liens. The Property Owner shall provide to the EVMWD such evidence or
proof as the EVMWD shall require that all persons, firms and corporations supplying work, labor,
materials, supplies and equipment on behalf of Property Owner for the construction of any
Acquisition Facilities have been paid, and that no claims of liens have been recorded by or on
behalf of any such person, firm or corporation.
Section 3.5 Acquisition, Acquisition Price; Source of Funds. Provided the Property
Owner has complied with the requirements of this Agreement, EVMWD agrees to acquire the
Acquisition Facilities from the Property Owner. The price to be paid by the CFD for the acquisition
of such Acquisition Facilities by EVMWD (the “Acquisition Price”) shall be the lesser of (i) the
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value of the Acquisition Facilities or (ii) the total of the Actual Costs of the Acquisition Facilities.
The Property Owner shall transfer ownership of the Acquisition Facilities to the EVMWD by grant
deed, bill of sale or such other documentation as the EVMWD may require. Upon the transfer of
ownership of the Acquisition Facilities or any portion thereof from the Property Owner to EVMWD,
EVMWD shall be responsible for the maintenance of the Acquisition Facilities or the portion
transferred.
For purposes of determining the Acquisition Price to be paid by the CFD for the acquisition
of the Acquisition Facilities by EVMWD, the value of such improvements shall be the amount
determined by the Engineer, to be the value of the Acquisition Facilities based on the Actual Costs
submitted by the Property Owner, as hereinbefore specified; provided, however, that if the
Engineer determines that such Actual Costs, or any of them, are excessive and that the value of
the Acquisition Facilities is less than the total amount of such Actual Costs, the Acquisition Price
to be paid by the CFD for the acquisition of the Acquisition Facilities shall be the value thereof as
determined by the Engineer.
Upon completion of the construction of any Acquisition Facilities by Property Owner, the
Property Owner shall deliver to EVMWD copies of the contract(s) with the Contractor(s) who have
constructed the Acquisition Facilities or other relevant documentation with regard to the payments
made to such Contractor(s) and each of them for the construction of such Acquisition Facilities,
and shall also provide to EVMWD copies of all invoices and purchase orders with respect to all
supplies and materials purchased for the construction of such Acquisition Facilities. EVMWD
shall require the Engineer to complete its determination of the value of the Acquisition Facilities
as promptly as is reasonably possible.
The Acquisition Price of any Acquisition Facilities may be determined and paid out of the
EVMWD Facilities Fund prior to transfer of ownership of the Acquisition Facilities to EVMWD upon
a determination of Substantial Completion of such Acquisition Facility. Upon transfer of ownership
of an Acquisition Facilities to EVMWD, Property Owner may submit a second reimbursement
request for “punch list” items and any other eligible costs not included in the initial request.
Property Owner shall submit a payment request form to the CFD in the format and with the
information required by the Funding Agreement, which must also contain therewith approval of
EVMWD, which approval shall not be unreasonably withheld.
Notwithstanding the preceding provisions of this section, the sole source of funds for the
acquisition by EVMWD of the Acquisition Facilities or any portion thereof shall be the Bond
Proceeds made available by the CFD pursuant to Section 2.3 above. If for any reason beyond
EVMWD’s control, the Bonds are not sold, EVMWD shall not be required to acquire any
Acquisition Facilities from the Property Owner. In such event, the Property Owner shall complete
the design and construction and offer to the EVMWD ownership of such portions of Acquisition
Facilities as are required to be constructed by the Property Owner as a condition to recordation
of subdivision maps for the Property or any other agreement between Property Owner and
EVMWD, but need not construct any portion of the Acquisition Facilities which it is not so required
to construct.
Section 3.6 Easements. The Property Owner shall, at the time EVMWD acquires the
Acquisition Facilities as provided in Section 3.2 hereof, grant to EVMWD, by appropriate
instruments prescribed by EVMWD, all easements on private property which may be reasonably
necessary for the proper operation and maintenance of such Acquisition Facilities, or any part
thereof.
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Section 3.7 Maintenance. Prior to the transfer of ownership of an Acquisition Facility
by the Property Owner to the EVMWD, as provided in Section 3.5 hereof, the Property Owner
shall be responsible for the maintenance thereof and shall maintain and transfer such Acquisition
Facility to EVMWD in as good condition as the Acquisition Facility was in at the time the Property
Owner notified the EVMWD that construction of same had been completed in accordance with
the Plans and Specifications.
The Parties agree that the construction and acquisition of the Acquisition Facilities to be
constructed by Property Owner is a matter between Property Owner and EVMWD only, and that
the City and the CFD shall have no responsibility for on-site inspection or monitoring or for
certifying that the provisions of Article III of this Agreement be satisfied.
ARTICLE IV
TERM AND TERMINATION
Section 4.1 Effective Date. This Agreement shall become effective and of full force
and effect as of the date (“Effective Date”) it is approved by the Property Owner, the City Council
of the City and governing board of the EVMWD, to be confirmed by the execution hereof by the
authorized representatives of the Parties hereto.
Section 4.2 Termination. This Agreement shall terminate and be of no further force or
effect upon the earlier of (i) ten (10) years following the issuance of building permits for all dwelling
units expected to be built within the CFD, (ii) the funding of all EVMWD Facilities pursuant to this
Agreement, or (iii) December 31, 2031. Notwithstanding the foregoing, this Agreement shall not
terminate pursuant to (iii) of the previous sentence if, on December 31, 2031, all of the building
permits within the CFD have been pulled, construction within the CFD, as contemplated by the
parties hereto, is ongoing, and the Property Owner has not yet has not been fully reimbursed for
Advances or has not been paid the Acquisition Price of any Acquisition Facilities pursuant to
Section 3.5 above.
ARTICLE V
ADDITIONAL GENERAL PROVISIONS
Section 5.1 Recordkeeping; Inspection of Records. EVMWD hereby agrees to keep
and maintain full and accurate records of all amounts, and investment earnings, if any, paid to
EVMWD for the EVMWD Charges and the City hereby agrees to keep and maintain full and
accurate records of all amounts, and investment earnings, if any, expended from the EVMWD
Facilities Fund. Each Party further agrees to make such records available to any other Party
hereto, including Property Owner, during normal business hours upon reasonable prior notice.
All such records shall be kept and maintained by the appropriate Party as provided by applicable
law and their respective policies.
Section 5.2 Partial Invalidity. If any part of this Agreement is held to be illegal or
unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given
effect to the fullest extent reasonably possible.
Section 5.3 Successors and Assigns. Property Owner may assign its rights pursuant
to this Agreement to a purchaser of the Property, or any portion thereof who shall be the owner
of any Acquisition Facilities as payer of any EVMWD Charges and to whom Property Owner shall
assign the right to receive payment of the Acquisition Price for such Acquisition Facilities or other
rights under this Agreement with respect to EVMWD Charges. Such a purchaser and assignee
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shall enter into an assignment agreement with the Property Owner, in a form acceptable to the
EVMWD and the City, whereby such purchaser agrees, except as may be otherwise specifically
provided therein, to assume the obligations of Property Owner pursuant to this Agreement and to
be bound thereby. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Parties hereto.
Section 5.4 Notice. Any notice, payment or instrument required or permitted by this
Agreement to be given or delivered to any Party or ether person shall be deemed to have been
received when personally delivered or upon deposit of the same in the United States Post Office
registered or Certified, postage prepaid, addressed as follows:
City: City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
Attention: City Manager
EVMWD: Elsinore Valley Municipal Water District
31315 Chaney Street
Lake Elsinore, CA 92530
Attention: General Manager
Property Owner: SPT- AREP III Tuscany Associates, LLC
2 Park Plaza, Suite 700
Irvine, CA 92614
Attention: Tom Bitney
Each Party can change its address for delivery of notice by delivering written notice of
such change or address to the other parties within ten (10) calendar days prior to such change.
Section 5.5 Captions. The captions to Sections used herein are for convenience
purposes only and are not part of this Agreement.
Section 5.6 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California applicable to contracts made and performed
in such State.
Section 5.7 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the matters provided for herein and supersedes all prior
agreements and negotiations between the Parties with respect to the subject matter of this
Agreement.
Section 5.8 Amendments. This Agreement may be amended or modified only in
writing executed by the authorized representative(s) of each of the Parties hereto.
Section 5.9 Waiver. The failure of any Party hereto to insist on compliance within any
of the terms, covenants or conditions of this Agreement by any other Party hereto, shall not be
deemed a waiver of such terms, covenants or conditions of this Agreement by such other Party,
nor shall any waiver constitute a relinquishment of any other right or power, for all or any other
times.
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Section 5.10 Cooperation and Execution of Documents. The Parties hereto agree to
complete and execute any further or additional documents which may be necessary to complete
or further the terms of this Agreement.
Section 5.11 Attorneys’ Fees. In the event of the bringing of any action or suit by any
Party against any other Party arising out of this Agreement, the Party in whose favor final
judgment shall be entered shall be entitled to recover from the losing Party all costs and expenses
of suit, including reasonable attorneys’ fees.
Section 5.12 Exhibits. The following exhibits attached hereto are incorporated into this
Agreement by reference.
Exhibit Description
“A” Property Description
“B” Acquisition Facilities Description
“C” Disbursement Request Form
Section 5.13 Signatories. The signatories hereto represent that they have been
appropriately authorized to enter into this Agreement on behalf of the party for whom they sign.
Section 5.14 Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original.
[Remainder of this page is blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
first year written above.
CITY OF LAKE ELSINORE, a political subdivision
of the State of California
By:
City Manager
ATTEST:
By:
Candice Alvarez, MMC, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY OF THE CITY OF LAKE ELSINORE
By:
Barbara Leibold, City Attorney
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
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4820-1532-4902v2/022042-0035
[SIGNATURE PAGE CONTINUED]
ELSINORE VALLEY MUNICIPAL WATER
DISTRICT
By:
Its: Greg Thomas, General Manager
ATTEST:
By:
Its: Terese Quintanar, Board Secretary
APPROVED AS TO FORM:
By:
Its: Steve Anderson, General Counsel
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[SIGNATURE PAGE CONTINUED]
SPT- AREP III Tuscany Associates, LLC
By: _________________________________
Name: Brian Rupp
Title: Executive Vice President, Real Estate
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EXHIBIT A
PROPERTY DESCRIPTION
Real property in the City of Lake Elsinore, County of Riverside, State of California, described
as follows:
Assessor’s Parcel Nos:
349-240-006
349-380-024
349-380-025
349-240-043
349-240-044
349-240-045
349-240-046
349-240-047
349-240-054
349-240-055
349-240-056
349-240-034
349-240-038
349-240-072
349-240-075
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EXHIBIT B
ACQUISITION FACILITIES DESCRIPTION
1. SEWER LIFT STATION $1,994,508 + contingency 10%
a. A Sewer lift station is proposed to the southern portion of the site. cost includes:
i. Lift station facility
ii. 4,380 LF On site - off site force main
iii. Jack-N- bore force main under Wasson creek.
iv. Gravity sewer line to connection-
2. OFF SITE WATER LINE $1,485,048 + contingency 10%
a. Off - site domestic water is required to serve the project site in Greenwald
Avenue
i. 4,300 LF 16” DIP water line
ii. 2,160 LF 20” DIP water line
iii. Includes valves, bends, blow offs, Tee’s, Air –Vac’s, fire hydrants, minor
street work, patch paving, traffic control,
Note: The description and estimated costs of the Acquisition Facilities is preliminary in
nature. The final nature and location of the Acquisition Facilities will be determined upon
preparation of final plans and specifications, and the Actual Costs may ultimately be higher
than estimated herein.
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EXHIBIT C
DISBURSEMENT REQUEST FORM
1. Community Facilities District No. 2021-1 of the City of Lake Elsinore (Tuscany
Valley/Crest) (“CFD No. 2021-1”) is hereby requested to pay from the EVMWD Facilities Fund
established by the City Council of the City of Lake Elsinore (the “City”) in connection with its CFD
No. 2021-1 Series _____ Special Tax Bonds (Improvement Area __) (the “Bonds”), to the Elsinore
Valley Municipal Water District (the “Water District”), as Payee, the sum set forth below in payment
of project costs described below.
2. The undersigned certifies that the amount requested has been expended or
encumbered for the purposes of constructing and completing [Acquisition Facilities] [facilities
relating to the EVMWD Charges]. The amount requested is due and payable under, or is
encumbered for the purpose of funding, a purchase order, contract or other authorization with
respect to the project costs described below and has not formed the basis of a prior request or
payment.
3. Description of [Acquisition Facilities] [EVMWD Charges]:
4. Amount requested: $______________.
5. The amount set forth is authorized and payable pursuant to the terms of the Joint
Community Facilities Agreement among the City, SPT- AREP III Tuscany Associates, LLC and
the Elsinore Valley Municipal Water District dated as of ________, 2021 (the “Agreement”).
Capitalized terms not defined herein shall have the meaning set forth in the Agreement.
6. Total payments to the Water District for the [Acquisition Facilities] [facilities relating
to the EVMWD Charges] from CFD No. 2021-1, including the amounts to be paid under paragraph
4 above, will not exceed the maximum amount to be disbursed for [Acquisition Facilities] [facilities
relating to the EVMWD Charges] under the Agreement.
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Executed by an authorized representative of the Elsinore Valley Municipal Water District.
By:
Name:
Title:
Date:
Request No.
CONCURRED BY:
___________