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HomeMy WebLinkAboutCC Reso No 2006-020RESOLUTI;ON NO. 2006-20 RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, TO ESTABLISH CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-2 (VISCAYA) WHEREAS, the City Council (the "Council") of the City of Lake Elsinore (the "City") has received a petition (the "Petition") requesting the institution of proceedings for (i) formation of a community facilities district (the "CFD") pursuant to the Mello- Roos Community Facilities Act of 1982, as amended (the "Act"), (ii) autharization of issuance of bonds far the CFD, and (iii) establishment of an appropriations limit for the CFD; and WHEREAS, the Council has determined that the Petition complies with the requirements of Government Code Section 53318(c) r:~nd now intends to initiate such proceedings; and WHEREAS, it is the intention of the Council to finance parks, open space and storm drain maintenance services that are in addition to those provided in the territory within the CFD prior to the formation oF the CFD and do not supplant services already available within the territory proposed to be included in the CFD through the formation of the CFD, subject to the levy of a special tax to pay for such services being approved at an election to be held within the boundaries of the CFD; and WHEREAS, it is also the intention of the Council to finance the acquisition and construction of the Facilities (as defined below) or any combination thereof through the formation of the CFD, subject to the authorization of bonds and the levy of a special tax to pay lease payments, installment purchase payinents or other payments, or principal and interest on bonds, being approved at an election to be held within the boundaries of the CFD. NOW, THEREFORE, THE CITX COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, 1)~:TERMINE AND ORDER AS FOLLOWS: SECTION 1. The Council hereby determines to institute proceedings far the formation of a community facilities district under the terms of the Act. The exterior boundaries of the CFD are hereby specified and described to be as shown on that certain map now on file in the office of the Clerk entitled "Proposed Boundary of Community Facilities District No. 2006-2 of the City of Lake Elsinore (Viscaya)," which map indicates by a boundary line the extent of the territory included in the proposed , community facilities district and shall govern for all details as to the extent of the CFD. CITY COUNCIL RESOLUTION NO. 2006-20 Page 2 of 6 On the original and one copy of the map of such CFD on file in the City Clerk's office, the City Clerk shall endorse the certificate evidencing the date and adoption of this resolution. The City Clerk shall file the original of such map in his office and, within fifteen (15) days after the adoption of this Resolution; the City Clerk shall file a copy of such map so endorsed in the records of the County Recorder, County of Riverside, State of California. SECTION 2. The name of the proposed CFD shall be "City of Lake Elsinore Community Facilities District No. 2006-2 (Viscaya)." SECTION 3. Except where funds are otherwise available, it is the intention of the Council to levy annually in accordance with procedures contained in the Act a special tax (the "Services Special Tax") sufficient to finance a portion of the cost of providing parks, open space and storm drain maintenance services (the "Services") that are in addition to those provided in the territory within the CFD prior to the formation of the CFD and do not supplant services already available within the territory proposed to be included in the CFD, the costs of administering the levy and collection of the Services Special Tax and all other costs of the levy of the Services Special Tax, including any foreclosure proceedings, legal, fiscal, and financial consultant fees, election costs, and all other administrative costs of the tax levy. The Services Special Tax will be secured by recordation of a continuing lien against all real property in the CFD. The schedule of the rate and method of apportionment and manner of collection of the Services Special TaY is described in detail in E~ibit A attached hereto and by this reference incorporated herein. The Services Special Tax is apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act. SECTION 4. The facilities proposed to be financed by the CFD are public infrastructure facilities and other governmental facilities with an estimated useful life of five years or longer, which the CFD is authorized by law to construct, own or operate and that are necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within the proposed CFD, including but not limited to City street and storm drain improvements, City Capital Facilities Fees, EVMWD Water and Sewer facilities, EVMWD Water and Sewer Capital Facilities Fees, and related costs including designs, inspections, professional fees, annexation fees, connection fees and acquisition costs (the "Facilities"). Such Facilities need not be physically located within the CFD. SECTION 5. Except where funds are otherwise available, it is the intention of the Council to levy annually in accordance with procedures contained in the Act a special tax (the "Special Tax") sufficient to pay for the costs of financing the acquisition and/or construction of the Facilities, including the principal of and interest on the bonds CITY COUNCIL RESOLUTION NO. 2006-20 Page 3 of 6 proposed to be issued to finance the Facilities and other periodic costs, the establishment and replenishment of reserve funds, the remarketing, credit enhancement and liquidity fees, the costs of administering the levy and collection of the Special Tax and all other costs of the levy of the Special Tax and issuance of the bonds, including any foreclosure proceedings, architectural, engineering, inspection, legal, fiscal, and financial consultant fees, discount fees, interest on bonds due and payable prior to the expiration of one year from the date of completion of facilities (but not to exceed two years), election costs and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel, disclosure counsel, financing consultants and printing costs, and all other administrative costs of the tax levy and bond issue. The Special Tax will be secured by recardation of a continuing lien against all real property in the CFD. In the first yeax in which such a Special Tax is levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred to the CFD parsuant to Section 53314 of the Act and interest thereon. The schedule of the rate and method of apportionment and manner of collection of the Special Tax is described in detail in Eachibit A attached hereto and by this reference incorporated herein. The Special Tax is based upon the cost of financing the Facilities in the CFD, the demand that each parcel will place on the Facilities and the benefit (direct and/or indirect) received by each parcel from the Facilities. The Special Tax is apportioned to each parcel on the foregoing basis pursuant to Section 533253 of the Act. In the event that a portion of the property within the CFD shall become for any reason exempt; wholly or partially, from the levy of the Special Tax, the Council shall, on behalf of the CFD, increase the levy to the extent necessary upon the remaining property within the CFD which is not delinquent or exempt in order to yield the required payments, subject to the maximum tax. Under no circumstances, however, shall the Special Tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the CFD by more than 10 percent. Furthermare, the maximum special tax authorized to be levied against any parcel used for private residential purposes shall not be increased over time in excess of 2 percent per year. SECTION 6. The Council hereby finds that the proposed Facilities are necessary to meet increased demands put upon the City as a result of the new development or rehabilitation within the proposed CFD. SECTION 7. A public hearing (the "Hearing") on the establishment of the CFD and the proposed rate and method of apportionment of the Services Special Tax and the Special Tax shall be held on March 28, 2006, at 7:00 p.m., or as soon thereafter as practicable, at the chambers of the Council, 130 S. Main Street, Lake Elsinore, California 92530. CITY COUNCIL RESOLUTION NO. 2006-20 Page 4 of 6 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 the proposed CFD, may appear and be heard. SECTION 9. Each City officer who is or will be responsible for the Services and the Facilities to be financed by the CFD, if it is established, is hereby directed to study the proposed CFD and, at or before the time of the above-mentioned Hearing, file a report with the Council, and which is to be made a part of the record of the Hearing, containing a brief description of the Services and the Facilities by type which will in his or her opinion be required to adequately meet the needs of the CFD and his or her estimate of the cost of providing the Services and the Facilities. The City Manager is directed to estimate the fair and reasonable cost of all incidental expenses, including the cost of planning and designing the Facilities to be financed pursuant to the Act, including the cost of environmental evaluations of such facilities, all costs associated with the creation of the CFD, issuance of bonds, determination of the amount of any special taxes, collection of any special taxes; or costs otherwise incurred in arder to carry out the autharized purposes of the City with respect to the CFD, and any other expenses incidental to the construction, completion and inspection of the authorized work to be paid through the proposed financing. SECTION 10. The City may accept advances of funds from any sources, including private persons or private entities, and is authorized and directed to use such funds for any authorized purpose, inchiding any cost incurred by the City in creating the CFD. The City may enter into an agreement to repay all of such funds as are not expended or committed for any authorized purpose at the time of the election on the levy of the Services Special Tax and the Special Tax, if the proposal to levy such tax should fail, and to repay all of such funds advanced if the levy of the Services Special Tax and the Special Tax shall be approved by the qualified electors of the CFD. SECTION 11. The City Clerk is hereby directed to publish a notice ("Notice") of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the proposed CFD. Such Notice shall contain information set forth in Section 53322 of the Act. Such publication shall be completed at least 7 days prior to the date of the Hearing. SECTION 12. The Clerk may send a copy of the Notice by first-class mail, postage prepaid, to each registered voter and to each landowner within proposed CFD as shown on the last equalized assessment roll. Said mailing shall be completed not less than fifteen (15) days prior to the date of the Hearing. SECTION 13. Pursuant to Section 53344.1 of the Act, the Council hereby reserves to itself, in its sole discretion, the right and authority by subsequent resolution to CITY COUNCIL RESOLUTION NO. 2006-20 Page 5 of 6 allow any owner of property within the CFD, subject to the provisions of Section 53344.1 of the Act and those conditions as it may impose, and any applicable prepayment penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the CFD treasurer in full payment or part payment of any installment of the special taxes or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bond or other obligation to be taken at par and credit to be given far the accrued interest shown thereby computed to the date of tender. SECTION 14. The voting procedure with respect to the establishment of the CFD and the imposition of the special tax shall be by hand delivered or mailed ballot election. SECTION 15. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 9th day of February, 2006 by the following vote: AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: ..~~y ~~ Lanr ~~~~~~~~c ATT Frederick R , City Clerk City of Lake Elsinore _ ^ ara Zeid L~ibold,"City Attorney of Lake ~/lsinore EXHIBIT A RATE AND METHOD OF APPORTIONMENT FINAL RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT No. 2006-2 (VISCAYA) A Special Ta~c shall be levied on all Assessor's Parcels in City of Lake Elsinore Community Facilities District No. 2006-2 (Viscaya) ("CFD No. 2006-2") and collected each Fiscal Year commencing in Fiscal Year 2005-2006, in an amount determined through the application ofthis Rate and Method of Apportionment as described below. All of the real property in CFD No. 2006-2, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parce] 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. "Act" means the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5, Part l, Division 2 of Title 5 of the Califomia Government Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration ofCFD No. 2006-2: the wsts ofcomputing the Special Taxes and preparing the annual Special Ta~c 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 the Special Taxes [o the Trustee; the costs of the Trustee (including its legal counsel) in the discharge ofthe duties required of it under the Indenture; the costs to the City, CFD No. 2006-2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-2 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2006-2 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 cosu of the City, CFD No. 2006-2 or any designee thereof related to an appeal ofthe Special Tax; the costs associated with the release offunds from an escrow account; and the City's annual adminisVation fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2006-2 for any other administrative purposes of CFD No. 2006-2, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County City of Lake E(sinore Jattuary 30, 2006 Communiry Frsci[ities Dtstrict No. 2006-2 (Viscnya) Puge I designating parcels by Assessor's Parcel number "Assigned Special Tax for Facilities" means the Special Tax for Facilities for each Land Use Class of Developed Property, as determined~in accordance with Section C.L(b) below. "Authorized Facilities" means those authorized improvements, as listed in an exhibitto the Resolution of Formation. "Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.l.(c) below. "Certificate of Occupancy" means a certificate issued by the City that authorizes the actual occupancy of a dwelling unit for habitation by one or more residents. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Ta7c Requirement for Facilities, the Special Tax Requirement for Services as determined in accordance with Section I below, and providing for the lery and collection of the Special Ta~ces. "CFD No. 2006-2" means City of Lake Elsinore Community Facilities District No. 2006-2 (Viscaya). ~ "CFD No. 2006-2 Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 2006-2 and secured solely by the Special Tax for Facilities levy on proper[y within the boundaries of CFD No. 2006-2 under the Act. "City" means the City of Iake Elsinore "Council" means the City Council of the City of Lake Elsinore, acting as the legislative body of CFD No. 2006-2. "County" means the County of Riverside. "Developed ProperTy" means, with respect to the Special Tax for Facilities, for each Fiscal Year, all Taxable Property, exclusive of Taxable Public Property and Taxable Property Owner Association Property, for which the Final Subdivision was recorded on or before January 1 of the prior Fiscal Year and a building pertnit for new construction was issued on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Tax for Facilities is being levied. "b7nal Subdivision" means (i) a final map, or portion thereof, approved by the City pursuan[ to the Subdivision Map Act (Califomia Government Code Section 66410 et seq.) that creates individual lots for which building permits may be issued, or (ii) for condominiums, a final map, or portion thereof, approved by the City and a condominium Crty ojLnke Elsinore January 30, 2006 Community Facilities Dislrict No. 2006-2 (Viscayn) Page 2 plan recorded pursuant to California Civil Code Section 1352 that creates individual lots for which building permits may be issued. "~scal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which CFD No. 2006-2 Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any ofthe classes listed in Table 1 below. ~ ~ "Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, determined in accordance with Section C below, that can be levied in any Fiscal Year on any Assessor's Parcel. "Non-Residential Property" means all Assessor's Parcels of Developed Property for which a building permit permitting the construction of one or more non-residential units or facilities has been issued by the City. "Outstanding Bonds" means all CFD No. 2006-2 Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any proper[y within [he boundaries of CFD No. 2006-2 that was owned by a property owner association, including any master or sub-association, as of January I of the prior Fisca] Year. "Proportionately" means for Developed Property that the ratio ofthe actual Special Tax for Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property. For Undeveloped Property,'Proportionately" means that the ratio of the actual Special Tax for Facilities levy per Acre to the Mvcimum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of Undeveloped Proper[y. The term "Proportionately" may similarly be applied to other categories of Taxable Property as listed in Section D below. "Public Property" means property within the boundaries of CFD No. 2006-2 owned by, irrevocably offered or dedicated tq or over, through or under which an easement for purposes of public right-of-way has been granted, to the federal government, the State, the County, the City, or any local government or other public agency, provided that any proper[y leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use. ~ "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area for an Assessor's Parcel shall be made by reference to the building permi[(s) issued for such Assessor's Parcel. City ajLake Elsinore Jammry 30, 2006 Communiry Faci[ities District No. 2006-2 (Viscnyn) Page 3 "Residential PropeHy" means all Assessor's Parcels of Developed Property for which a building permit permitting the construction thereon of one or more residential dwelling units has been issued by the City. "Resolutiou of Formation" means the resolution of formation for CFD No. 2006-2. "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2006-2 pursuant to the Act. "Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property, Taxable Property Owner Association Proper[y, Taxable Public Property, and Undeveloped Property to fund the Special Ta~c Requirement for Facilities. "Special Tax Requirement for Facilities" means that amount required in any Fiscal Year for CFD No. 2006-2 to: (i) pay debt service on all Outstanding Bonds due in the calendar yearcommencing in such Fiscal Year; (ii) pay periodic costs on the CFD No. 2006-2 Bonds, including but not limited to, credit enhancement and rebate payments on the CFDNo.2006-2 Bonds due in the calendar year wmmencing in such Fiscal Year, (iii) pay a proportionate share of Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay for reasonably anticipated Special Ta~c for Facilities delinquencies based on the delinquency rate for the Special Ta~c for Facilities levy in the previous Fiscal Year; (vi) pay direcUy for acquisition or construction of Authorized Facilities to the extent that the inclusion of such amount does not increase the Special Tax for Facilities levy on Undeveloped Property; less (vii) a credit for funds available to reduce the annual Special Tax for Facilities levy, as determined by the CFD Administrator pursuant to the Indenture. "State" means the State of Califomia. "Taxable Property" means all ofthe Assessor's Parcels within the boundaries of CFD No. 2006-2 which are not exempt from the Special Tax for Facilities pursuantto law or Section E below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section E below. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taacable Property not classified as Developed Property, Ta~cable Property Owner Association Property, or Taxable Public Property. City ajLake E[sinore January 3Q 2006 Community Facifities District No. 2006-2 (I~iscayrsJ . Page 4 B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2006-2 shall be classified as Developed Property, Taxable Public Property, Ta~cable Property Owner Association Property, or Undeveloped Property, and shall be subject to Special Tases in acwrdance with this Rate and Method of Apportionment determined pursuant to Sections C and D below. Residential Property shall be assigned to Land Use Classes 1 through 4 as listed in Table 1 below based on the Residential Floor Area for each unit. Non-Residential Property shall be assigned to Land Use Class 5. With respect to Residential Property, the Residential Floor Area shall be determined from the most recent building permit issued prior to the issuance of a Certificate of Occupancy for such Assessor's Parcel. C. MAXIMUM SPECIAL TAX FOR FACILITIES Prior to the issuance of CFD No. 2006-2 Bonds, the Assigned Special Tax for Facilities on Developed Property (set forth in Table 1), and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced in accordance with, and subject to the conditions set forth in this paragraph. If it is reasonably determined by the CFD Administrator that the overlapping debt burden (as defined in the Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982 adopted by the Council, the "Goals and Policies") calculated pursuant to the Goals and Policies exceeds the City's maximum level objective set forth in such document, the Assigned Special Tax for Facilities on Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision, may be reduced to the amount necessary to satisfy the City's objec[ive with respect to the maximum ovedapping debt burden level with the written consent of the CFD Administratoc The reductions permitted pursuant to this paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to be recorded by executing a certificate in substantially the form attached hereto as Exhibit "A°. Develooed Propertx (a) Maximum Special Tax for Facilities The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax for Facilities or (ii) the amount derived by application of [he Backup Special Tax for Facilities. (b) Assigned Special Tax for Facilities The Fiscal Year 2005-2006 Assigned Special Tax for Facilities for each Land Use Class is shown below in Table 1. TABLE 1 City ojLake Elsinore Jattmary 3Q 2006 Community Facili[ies District No. 2006-2 (Viscayn) Page S Assigned Special Tax for Facilities for Developed Property Community Facilities District No. 2006-2 Fiscal Year 2005-2006 LandUse `;~ ~-, ~a ~ ~}~ ~ ~,f ~'~ -~~"~ ~ssr~P'~e~~~S~~ec[~I~. Class 3i : ~('-3PY s~ ~ ~DescTiptian i h- S if .S #s,.g Re~tdential~laarAie~`~ ', °~ 'iu'~' .h' ~I'~~o~Faetl~~i~h _ ; ~ . 1 Residential Property More than 2,349 sq. ft. $2,908 per unit Z Residential Property 1,950 - 2,349 sq. ft. $2,711 per unit 3 Residential Property 1,550 -1,949 sq. ft. $2,577 per unit 4 Residential Property Less than 1,550 sq. R. $2,398 per unit 5 Non-Residential Property NA $29,060 per Acre City ojGake Elsinore January 30, 2006 Commursity Faci[ities Distric[ Na. 2006-2 (Viscayn) Page 6 (c) Backup Special Tax for Facilities The Fiscal Year 2005-2006 Backup Special Tax for Facilities attributable to a Final Subdivision will equal $30,575 multiplied by the Acreage of all Taxable Property, exclusive of any Taxable Property Owner Association Property and Taxable Public Property, therein. The Backup Special Tax for Facilities for each Assessor's Parcel of Residential Property shall be computed by dividing the Backup Special Tax for Facilities attributable to the applicable Final Subdivision by the number of Assessor's Parcels for which building permits for residential construction have or may be issued (i.e., the number or residential lots). The Backup Special Tax for Facilities for each Assessor's Parcel ofNon-Residential Property therein shall equal $30,575 multiplied by the Acreage of such Assessor's Parcel. If a Final Subdivision includes Assessor's Parcels of Taxable Property for which building permits for both residential and non-residential construction may be issued, exclusive of Taxable Property Owner Association Property and Taxable Public Property, then the Backup Special Tax for Facilities for each Assessor's Parcel of Residential Property shall be computed exclusive of the Acreage and Assessor's Parcels of property for which building pertnits for non-residen[ial construction may be issued. Notwithstanding the foregoing, if all or any portion of the Final Subdivision(s) described in the preceding paragraphs is subsequently changed or modified by recordation of a lot line adjustment or similar instrument, and only if the CFD Administrator determines that such change or modification results in a decrease in the number of Assessor's Parcels ofTaxable Property for which building permits for residential construction have or may be issued within such Final Subdivision, then the Backup Special Tax for Facilities for each Assessor's Parcel of Developed Property that is part of the lo[ line adjustment or similar instrument for such Final Subdivision shall be a rate per Acre as calculated below. The Backup Special Tax for Facilities previously determined for an Assessor's Parcel ofDeveloped Properiy that is not a part of the lot line adjustment or similar instrument for such Final Subdivision shall not be recalculated. ~ Determine the total Backup Special Tax for Facilities anticipated to apply to the changed or modified poRion of the Final Subdivision area prior to the change or modification. 2. The result of paragraph I above shall be divided by the Acreage of Taxable Property which is ultimately expected to exist in such changed or modified portion of the Final Subdivision area, as reasonably determined by the CFD Administrator. City of Lake Elsinore Jqnuary 30,1006 Communiry Facriities Drstrict No. 200b2 (Viscaya) Page 7 The result of paragraph 2 above shall be the Backup Special Tax for Facilities per Acre which shall be applicable to Assessor's Parcels of Developed Property in such changed or modified portion ofthe Final Subdivision area for all remaining Fiscal Years in which the Special Tax for Facilities may be levied. (d) Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities The Fiscal Year 2005-2006 Assigned Special Tax for Facilities, identified in Table 1 above, and Backup Special Tax for Facilities shall increase thereafter, commencing on July l, 2006 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (e) Multiple Land Use Classes In some instances an Assessor's Parcel ofDeveloped Property may contain more tha~i one Land Use Class. The Ma;cimum Special Tax for Facilities levied on an Assessor's Parcel shall be the sum ofthe Maximum Special Tax for Facilities for all Land Use Classes located on that Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. 2. Taxable Property Owner Association Property..Taacable Public Property, and Undeveloned Property The Fiscal Year 2005-2006 Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $30,602 per Acre and shall increase thereafter, commencing on July l, 2006 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) ofthe Maximum Special Ta~c for FaciliYies in effect for the previous Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing with Fiscal Year 2005-2006 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement for Facilities and levy the Special Tax for Facilities until the amount of Special Tax for Facilities levy equals the Special Tax Requirement for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows: First The Special Tax for Facilities shall be levied on each Assessor's Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Special Tax for Facilities; Second: If additional monies are needed to satisfy the Special Taac Requirement for Facilities - after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Facili[ies for Undeveloped Property; City ojLake Elsittore Jpnuary 3Q 1006 Communi[y Facilities Dishict No. 2006-2 (Viscaya) Page 8 Third: If additional monies are needed to satisfy the Special Ta~ Requirement for Facilities afrer the first two steps have been completed, then the levy of the Special Tax for Facilities on each Assessor's Parcel ofDeveloped Property whose Maximum Special Tar forFacilities is determined through the application of the Backup Special Ta~c for Facilities shall be increased in equal percen[ages from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for each such Assessor's Parcel; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facili[ies after the first three s[eps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property and Taxable Public Property at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Public Property. Notwithstanding the above, the Council may, in any Fiscal Year, levy Proportiona[ely less than 100% of the Assigned Special Tax for Facilities in step one (above), when (i) the Council is no longer required to levy the Special Tax for Facilities pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-2 Bonds have already been issued or the Council has covenanted that it will not issue any additional CFD No. 2006-2 Bonds (except refunding bonds) to be supported by the Special Tax for Facilities; and (iii) all Authorized Facilities have been cons[ructed and/or acquired. Further notwithstanding the above, under no circumstances will the Special Tax for Facilities levied against any Assessor's Parcel of Residential Property for which a Certificate of Occupancy has been issued be increased by more than ten percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2006-2. E. No Special Tax for Eacilities shall be levied on up to 8.] Acres of Property Owner Association Property and/or Public Property in CFD iVo. 2006-2. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Proper[y or Public Property. However, should an Assessor's Parcel no longer be classified as Proper[y Owner Association Property or Public Proper[y, its tax-exempt status will be revoked. Proper[y Owner Association Property or Public Property that is not exempt from Special Tax for Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed Proportionately as part of the fourth step in Section D above, at up to 100% of the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Ta~cable Public Property. F. MANNER OF COLLECTION Ciry ojLnke Elsinare January 3Q 2006 Cammunity Faci[ities Destrict No. 2006-2 (Viscaya) Pag¢ 9 The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property ta~ces; provided, however, that CFD No. 2006-2 may directty ~ bill the Special Tax for Facilities, may collect Special Taxes at a different time or in a '~. i 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. G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following additional definitions apply to this Section G: "Buildout" means, for CFD No. 2006-2, that all expected building permits have been issued. "CFD Public Facilities" means either $5,650,000 in 2005 dollars, which shall increase by the Construction Inflation Index on July 1, 2006, and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2006-2 under the authorized bonding program for CFD No. 2006-2, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more CFD No. 2006-2 Bonds (except refunding bonds) to be supported by the Special Tax for Facilities levy under this Rate and Method of Apportionment as described in Section D above. "Construction Inilation Index" means the annual percentage change in the Engineering News Record Building Cost Index for the City of Los Mgeles, measured as ofthe 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 CFD Administrator 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 (i) public facility costs previously paid from [he Improvement Fund, (ii) moneys currently on deposit in the Lnprovement Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance the cost of CFD Public Facilities. "Improvement Fund" means an account specifically identified in the Indenture to hold funds which are wrrently available for expenditure to acquire or construct CFD Public Facilities eligible under the Act. . "Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are deemed to be outstanding under the Indenture after the 5rst in[erest and/or principal payment date following the current Fiscal Year. 1. Prepayment in Full Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may be prepaid. The obligation ofthe Assessor's Parcel to City of Lake Elsinore Jattuary 3Q 2006 Community Facilities District No. 200b2 (Viscaya) Pnge 10 pay the Special Tax for Facilities may be permanently satisfied as described herein, provided that a prepayment may be made with respect to a particulazAssessor's Parcel only ifthere 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 Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to prepay. W ithin 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount for such Assessor's ParceL The CFD Administrator may charge a reasonable fee for providing this service. Prepayment must be made not less than 45 days prior to the next occurring date [hat notice of redemption of CFD No. 2006-2 Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capita.lized Interest Credit Total: equals Special Tax for Facilities Prepayment Amount As of the proposed date of prepayment, the Special Tax for Facilities Prepayment Amount shall be calculated as follows ~ Paraeraph No.• Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. ForAssessor'sParcelsofDevelopedProperty,computetheAssignedSpecialTazcfor Facilities and Backup Special Tax for Facilities. For Assessor's Pazcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has aUeady been issued for that Assessor's Parcel. (a) Divide the Assigned Special Tax for Facilities computed pursuant to pazagraph 2 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-2 based on the Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all expected development [hrough Buildout of CFD No. 2006-2, excluding any Assessor's Parcels which have been prepaid, and City of Lake Elsinore Jqnuary 30, 2006 Community Fucilities District No. 2006-2 (Viscnya) P¢ye 11 (b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-2, excluding any Assessor's Parcels which have been prepaid. 4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Previously Issued Bonds to compute the amount of Previously Issued Bonds to be retired and prepaid (the "Bond Redemption AmounP'). 5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium (e.g., the redemption price-100%a), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount de[ermined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date followingthe curzent Fiscal Year until the earliest redemption date for the Previously Issued Bonds. 9. Determine the Special Tax for Facilities levied on the Assessor's Parcel in the curzent Fiscal Year which has not yet been paid. ~~~~ 10. Compute [he minimum amount the CFD Administrator reasonably expects to derive ' from the reinvestment of the Special Tax for Facilities Prepayment Amount less the ~ ~ Future Facilities Amount and the Administrative Fees and Expenses (defined below) . ~~ from the date of prepayment until the redemption date for the Previously Issued ~. ~ Bonds to be redeemed with the prepayment. I 1. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the amount computed pursuant to paragraph 10 (the "Defeasance AmounP'). 12. The administrative fees and expenses of CFD No. 2006-2 are as calculated by the CFD Administrator and include the costs of computa[ion of the prepayment, the wsts to invest the prepayment proceeds, the costs of redeeming CFD No. 2006-2 Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Adminrstratrve Fees and Expenses"). ~ 13. The reserve fund credit (the "Reserve Fund CrediP') 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 Previously Issued Bonds as a result of the prepayment, or (b) the amount derived by subffac[ingthe new reserverequirement(as defined in the Inden[ure) in effect after the redemption ofPreviously Issued Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment City of Lake E[sinore January 3Q 2006 Community Facilities Disfrict No. 2006-2 (Viscayn) Page !2 date, but in no event shall such amount be less than zero. No Reserve Fund Credit shall be granted if the amount then on deposit in the reserve fund for the Previously Issued Bonds is below 100% ofthe reserve requirement (as defined in the Indenture). 14. If any capitalized interest for the Previously Issued Bonds will not have been expended as of the date immediately following the first interest and/or principal payment following the curzent Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the expected balance in the capitalized interest fund or account under the Indenture after such first interest and/or principal payment(the "Capitalized Interest CrediP'). I5. The Special Tax for Facilities prepayment is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Special Tax for Facilities Prepayment Ama:~nP'). From the Special Tax for Facilities Prepayment Amount, the amounts computed pursuantto paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as established under the Indenture and be used to retire CFD No. 2006-2 Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposi[ed into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2006-2. The Special Ta~c for Facilities Prepayment Amoun[ may be insufficient to redeem a full $5,000 increment of CFD No. 2006-2 Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of CFD No. 2006-2 Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined under paragraph 9(above), the CFD Administrator shall remove the current Fiscal Year's Special Tax for Facilities levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax for Facilities and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax for Facilities shall cease. Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be allowed unless, at the time of such proposed prepayment, the amount of Maximum Special Tax for Facilities that may be levied on Ta~cable Property within CFD No. 2006-2 (after excluding 8.1 Acres of Property Owner Association Property and/or Public Property in CFD No. 2006- 2 as set forth in Section E) both prior to and after the proposed prepayment is at least equal to the sum of (i) the Administrative Expenses, as defined in Section A above, and (ii) 1.10 [imes maximum annual debt service, in each remaining Fiscal Year on the Outstanding Ci[y ojLake EGsinore January 3Q 1006 Communiry Fncilfties District No. 2006-2 (Viscaya) Puge 13 Bonds. 2. Prepaymentin Part The Special Tax for Facilities on an Assessor's Parcel of Developed Property or an Assessor's Parcel ofUndeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section G.1; except that a partial prepayment shall be calculated according to the following formula: .. PP = I(Pe - A) x F] + A These terms have the following meaning PP = the partial prepayment. PE = the Special Tax for Facilities Prepayment Amount calculated according to Section G.1. F= the percentage, expressed as a decimal, by which the owner ofthe Assessor's Parcel is partially prepaying the Special Tax for Facilities. A= the Administrative Fees and Expenses calculated according to Section G.1. The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tmc for Facilities and the percentage by which the Special Tax for Facilities shall be prepaid. The CFD Administrator shall provide the owner with a statement ofthe amount required forthe partial prepayment of the Special Ta~c for Facilities for an Assessor's Parcel within 30 days ofthe request and may charge a reasonable fee for providing this service. With respectto any Assessor's Pazcel that is partially prepaid, the Council shall (i) distribute the funds remitted to it according to Section G.l, and (ii) indicate in the records of CFD No. 2006-2 that there has been a partial prepayment of the Special Tax for Facilities and that a portion of the Special Tax for Facilities with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) ofthe remaining Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to Section D above. H. TERM OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be levied for a period not to exceed forty yeazs commencing with Fiscal Year 2005-2006, provided however that the Special Tax for Facilities will cease to be levied in an earlier Fiscal Year if the CFD Adminisfrator has determined (i) that all required interest and principal payments on the CFD No. 2006-2 Bonds have been paid; (ii) all Authorized Facilities have been acquired and all reimbursements to the developer have been paid; and (iii) all other obligations of CFD No. 2006-2 have been sa[isfied. I. SPECIAL TAX FOR SERVICES The following additional definitions apply to this Section I: Crty ojLake E[sinore Ja~eunry 3Q 2006 Community Fnci(ities Distric! No. 2006-2 (Viscaya) Page 14 "Developed Multifamily Unit" means a residential dwelling unit within a building in which each ofthe individual dwelling units has or shall have at least one common wall with another dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied. "Developed Single Family UniN' means a residential dwelling unit other than a Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1 preceding the Fiscal Year in which the Special Ta~c for Services is being levied. "Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by CFD No. 2006-2 in any Fiscal Year on any Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2006-2 for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Yeac ~ "Service Area" means parks, open space, and storm drains. ~ "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-2 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No. 2006-2 equal to (i) the budgeted costs directly related to the Service Area, including maintenance, repair and replacement of certain components of the Service Area which have been accepted.and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii) pay a proportionate share of Administrative Expenses, and (iii) anticipated Special Tax for Services delinquencies based on the delinquency rate for the Special Tax for Services levy in CFD No. 2006-2 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 1. Rate and Method of Apportionment of the Special Tax for Services Commencing with Fiscal Year 2005-2006 and for each subsequent Fiscal Yeaz, the Council shall levy the Special Ta~c for Services on (i) all Assessor's Parcels wntaining a Developed Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non- Residential Property, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. Ciry ojLake E[sinore January 30, 2006 Community Fnci(ities District No. 2006-2 (l~iscaynJ Pqge JS The Ma~cimum Special~ Tax~ for Services for Fiscal Year 2005-2006 shall be $242 per Developed Single Family Unit, $121 per Developed Multifamily Unit, and $545 per Acre for each Assessor's Parcel ofNon-Residential Property. On each July 1, commencing July 1, 2006, the Maximum Special Tax for Services shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Yeaz. 2. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the Council. 3. Collection of the Special Tax for Services The Special Tax for Services shal I be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2006-2 may collectthe Special Tax for Services at a different time or in a different manner if necessary to meet its funding requirements. J. APPEALS AND INTERPRETATIONS Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error may submit a written appeal to CFD No. 2006-2. The CFD Administrator shall review the appeal and ifthe CFD Administrator concurs, the amount of the Special Tax levied shall be appropriately modified. The Council may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration ofthe Special Tax and any landowner or resident appeals. Any decision of the Council shall be final and binding as to all persons. Kr~ci.ixn~a~r~ci c~~~,Ak~ r;c.;n~.~vwuiv;.,~~anu_r~~~.do~ ne„r~~d: a~=~_ .. _ ._.____.._._..._..------- - Deletetl_I/3o/ob_________.______~ City ojLake E[sinore J¢nuary 30, 2006 Community Faci[itiu District No. 2006-1(ViscayaJ Page 16 EXHIBIT A CERTIFICATE TO AMEND SPECIAL TAX FOR FACILITIES CITY OF LAI{E ELSINORE AND CFD No. 2006-2 CERTIFICATE Pursuant to Section C of the Rate and Method of Apportionment, the City of Lake Elsinore ("City") and City of Lake Elsinore Community Facilities District No. 2006-2 ("CFD No. 2006- 2") hereby agree to a reduction in the Assigned Special Taac for Facilities for Developed Property, and the Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 2006-2: (a) The information in Table 1 relating [o the Assigned Special Tax for Facilities for Developed Property within CFD No. 2006-2 shall be modified as follows: _ , :r S , ~- ~ : n, '~'Ik ~ " ~ ~ F s~ : ,~ ~ -r ~r ,,y `4-?'L ~' h-~ ~ ~ [ ~ t F~ '~ ~ ' nq ~ ~ ,~ ... .. ,h.-~~3-H`3"~ '~, ~ d ~ g T rnn3 Use ` ~ , ~, ~ r~, 7u~ ~ ~~ , ~ ~ ~ ~t~~gne sp e~ Class - Descr'rpko~+ ' _"' ~ ~es ~loor~Aiea~ ¢e~it~I 'i` a~C"fo~~c~t~tres'~~ .._ , r..... ~~~ . :,., '..{ -vn.,.. `r .:s...:..... ,d ~ ~ ~ ...~. .. w~v.c^~.... S5}} '4l.}.. ~ ~ ~ .s^?. ...: i ' {LV.i.. 1 Residential Property More than 2,349 sq. ft. $_ per unit Z Residential Property 1,950 - 2,349 sq. ft. $_ per unit 3 Residential Property 1,550 -1,949 sq. R. $_ per unit 4 Residential Property Less than 1,550 sq. ft. $_ per unit 5 Non-Residential Property NA $_ per Acre (b) The Backup Special Tax for Facilities attributable to a Final Subdivision within CFD No. 2006-2, as stated in Section C.l .(c), shall be reduced from $30,575 per Acre to $_ per Acre. 2. The Special Tax for Facilities may only be modified prior to the first issuance of CFD No. 2006- 2 Bonds. Upon execution of the Certificate by the City and CFD No. 2006-2, the City shall cause an amended notice of Special Tax lien for CFD No. 2006-2 to be recorded reflecting the modifications set forth herein. By execution hereof, the undersigned acknowledges, on behalf of the City and CFD No. 2006-2, receipt of this Certificate and modification ofthe Rate and Method of Apportionment as set forth in this Certificate. ~ ~ - CITY OF LAKE ELSINORE CFD Administrator Date: COMMLJNITY FACILITIES DISTRICT NO. 2006-2 OF THE CITY OF LAKE ELSINORE Date: