HomeMy WebLinkAbout2021-025 Intent to Establish CFD No. 2021-1 Tuscany Valley-Crest
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 Cityof 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 ofthe State of California; and,
Whereas, the City Councilof the City (the “City Council”)desiresto 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 referencewhich the City Council hereby determines
shall be knownas “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 incurredin 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 proposedCommunity
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 Councilfurther intends to approve an estimate of the costs of the
Facilitiesand the Incidental Expenses for Community Facilities District No. 2021-1; and,
Whereas, it is the intention of the City Councilto consider financing the Facilitiesand the
Incidental Expenses through the formation of Community Facilities District No. 2021-1, the
designation of the Improvement Areasand the issuanceof bonded indebtedness in an amount
not to exceed $14,000,000within proposed Improvement Area No. 1 and $10,000,000within
proposed Improvement Area No. 2 and the levy of a special tax within each Improvement Area to
pay for theFacilitiesand the Incidental Expenses (the “Special Tax”) and to pay debt service on
the bonded indebtednessto be incurred by such Improvement Area, provided that the bond sales
andsuch Special Tax leviesare approved at a separateelection to be held within the boundaries
of each proposed Improvement Area;
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Whereas, the District, the Developerand the Elsinore Valley Municipal Water District(the
“Water District”) proposeto 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
theWater 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 Actwith two separate improvement areas designated pursuant to Section 53350 of the Act.
It is further proposed that the boundaries of the Districtand 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. 2021-1which 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. 2021-1of 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. 2021-1and to be financed, in part, by each Improvement Areaare public facilities as defined
in the Act, which the Cityand the Water District,with respect to certain water and sewer facilities,
are authorized by law to construct, acquire, own and operate. The City Councilhereby finds and
determines that the description of the Facilities herein is sufficiently informative to allow taxpayers
within the proposed Districtand each proposed Improvement Areato understand what the funds
of each Improvement Areamay 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 Taxproceeds.
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
Councilto 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 Expensesto 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. 1to 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 “D” 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 Taxis leviedin 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.
Ifthe Special Taxes of an Improvement Area arelevied against any parcel used for private
residential purposes, (i) the maximum Special Taxrate shall be specified as a dollar amount which
shall be calculated and established not later than the date on whichthe parcel is first subject to
the Special Taxbecause of its use for privateresidential 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 Taxshall notbe levied after fiscal year 2060-61, as described in
Attachment “C”and “Attachment “D” hereto,as applicable,and (iii) under no circumstances will
theSpecial 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 Areaby 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 Taxwithin each proposed Improvement Areais based on the expected
demand that each parcelof 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 Cityand the existing infrastructure in the Cityas a result of the development of
the land proposed for inclusion in the District. The City Councilhereby determines the rate and
method of apportionment of the special taxapplicable to each proposed Improvement Areawith
respect to the Special Taxset forth in Attachment “C”and “Attachment “D”, respectively,to be
reasonable. The Special Taxis 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.
2021-1shall 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 Councilshall, on behalf of
Community Facilities District No. 2021-1, cause the levy to be increased, subject to the limitation
of the maximum Special Taxfor 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 Taxrevenues required for the
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purposes described in this Section 5. The obligation to pay the Special Taxmay 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. 2021-1and each Improvement Area, the proposed rate and
method of apportionment of the Special Tax and the proposed issuance of bondsfor each
Improvement Areato 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 Councildetermine to form the Districtand establish the Improvement Areas, a
special election will be heldwithin each Improvement Areato authorize the issuance of bondsof
such Improvement Areaand the levy of aspecial taxwithin such Improvement Areain accordance
with the procedures contained in Government Code Section 53326. If held, the proposed voting
procedure at the electionswill be a landowner vote with each landowner who is the owner of
record of land within anImprovement Areaat 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 electionsmay be distributed by mail or by
personal service.
Section 7.At the time and place set forth above for the Hearing, the City Councilwill
receive testimony as to whether the proposed Community Facilities District No. 2021-1and 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.2021-1for 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. 2021-1will provide the same services as were provided by the capital facilities
mentioned in subsection (a); and
(c)if the City Councilmakes the findings specified in subsections (a) and (b) above, it
will consider appropriate action to determine whetherthe 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. 2021-1is established, or
after a later date determined by the City Councilwith 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 Cityofficer 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 Councilcontaining a brief description of the public facilities by type which will in his
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or her opinion be required to meet adequately the needs of Community Facilities District No. 2021-
1and 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 electionsrequired 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.1for the Facilities and Incidental Expenses
is FourteenMillion Dollars($14,000,000) and by Improvement Area No. 2 is TenMillion 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 Councilhereby 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 Adoptedat a regular meeting of the City Council of the City of Lake Elsinore,
rd
California, this 23day of March 2021.
Robert E. Magee
Mayor
Attest:
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. 2021-25was 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 Tem Sheridan; and
Mayor Magee
NOES:None
ABSENT:None
ABSTAIN:None
Candice Alvarez, MMC
City Clerk
ATTACHMENT A
BOUNDARY MAP
A-1
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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 facilitiesof 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 tocarry 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 FACILITIESDISTRICT 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 locatedwithin 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 CityCouncil 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, parcelmap, 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 costsassociated 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
st
a Final Map that was recorded prior to the January 1preceding 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
st
have not been issued a building permit on or before May 1preceding the Fiscal Year in which
the Special Tax is being levied.
"Assessor’s Parcel" means a lot or parcel of land designated onan 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 ormay 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
st
was recorded prior to the January 1preceding 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
st
was issued on or before May 1preceding 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.
st
of any year and ending the following
"Fiscal Year" means the period commencing on July 1
th
June 30.
“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 samefor 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
TaxableProperty 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 offunds 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 numberon 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 categorizedinto 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 ofthe 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 orNon-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 CategoryUnitBuilding Square FootageUnit
1. Single Family Residential PropertyRULess than 1,850 sq. ft$2,282.00
2. Single Family Residential PropertyRU1,851 sq. ft to 2,050 sq. ft$2,401.00
3. Single Family Residential PropertyRU2,051 sq. ft to 2,250 sq. ft$2,520.00
4. Single Family Residential PropertyRU2,251 sq. ft to 2,450 sq. ft$2,575.00
5. Single Family Residential Property
RU2,451 sq. ft to 2,650 sq. ft$2,648.00
6. Single Family Residential PropertyRUGreater than 2,650 sq. ft$2,758.00
7. Multifamily PropertyAcreN/A$19,859.00
8. Non-Residential PropertyAcreN/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 = (U x A) / 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 forApproved
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 shallbe 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 moneysare 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 valoremproperty 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 forthe 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 theOutstanding 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
plusRedemption Premium
plusFuture Facilities Amount
plusDefeasance Amount
plusAdministrative Fees and Expenses
lessReserve 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 Taxfor 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 reasonablyexpects 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, butin 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 debtservice 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 Countytax 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 obligationand 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 = ((P–A) x F) + A
E
These terms have the following meaning:
PP = Partial Prepayment Amount
P= the Prepayment Amount calculated according to Section G.1
E
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
valoremproperty 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 claimsthe 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 andmake
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 Division2 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
st
a Final Map that was recorded prior to the January 1preceding 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
st
have not been issued a building permit on or before May 1preceding 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 TaxRequirement, 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
st
preceding the Fiscal Year in which the Special Tax is being
was recorded prior to the January 1
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
st
was issued on or before May 1preceding 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.
st
of any year and ending the following
"Fiscal Year" means the period commencing on July 1
th
June 30.
“Indenture”means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which Bonds are issued, as modified, amended and/orsupplemented 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 samefor 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 Yearto 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 ResidentialUnits 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 orNon-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 CategoryUnitBuilding Square FootageUnit
1.Single Family Residential PropertyRULess than 1,850 sq. ft$2,382.00
2. Single Family Residential PropertyRU1,851 sq. ft to 2,050 sq. ft$2,501.00
3. Single Family Residential PropertyRU2,051 sq. ft to 2,250 sq. ft$2,620.00
4. Single Family Residential Property
RU2,251 sq. ft to 2,450 sq. ft$2,675.00
5. Single Family Residential PropertyRU2,451 sq. ft to 2,650 sq. ft$2,748.00
6. Single Family Residential PropertyRUGreater than 2,650 sq. ft$2,858.00
7. Multifamily PropertyAcreN/A$20,593.00
8. Non-Residential PropertyAcreN/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 = (U x A) / L
The terms above have the following meanings:
B = Backup Special Tax per Assessor’s Parcel within the Final Map
U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below
A = Acreage of Single Family Residential Property expected to exist in such Final Map at
the time of calculation, as determined by the Administrator
L = Number of Residential Units expected to exist in such Final Map at the time of
calculation, as determined by the Administrator.
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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 shallbe 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 moneysare 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 valoremproperty 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 forthe 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 theOutstanding 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
plusRedemption Premium
plusFuture Facilities Amount
plusDefeasance Amount
plusAdministrative Fees and Expenses
lessReserve 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 beredeemed (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 ofOutstanding 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 theredemption 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 SpecialTax
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
ofBond 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 maybe 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 = ((P–A) x F) + A
E
These terms have the following meaning:
PP = Partial Prepayment Amount
P= the Prepayment Amount calculated according to Section G.1
E
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 Taxshall 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
valoremproperty 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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