HomeMy WebLinkAboutCC Reso No 2006-097RESOLUTION NO. 2006-96
RESOLUTION OF INTENTION OF THE CITY COUNCIL OF
THE CITY OF LAKE ELSINORE, CALIFORNIA, TO INCUR
BONDED INDEBTEDNESS IN THE AMOUNT NOT TO
EXCEED $5,000,000 WITHIN THE PROPOSED CITY OF
LAKE ELSINORE COMMUNITY FACILTTIES DISTRICT NO.
2006-6 (TESSERA,)
WHEREAS, the City Council (the "Council") of the City of Lake Elsinore
(the "City") has heretofare adopted Resolution No. 2006- 95 , stating the
Council's intention to form Community Facilities District No. 2006-6 (Tessera)
(the "CFD"), pursuant to the Mello-Roos Community Facilities Act of 1982, as
amended, (the "AcY'), to finance the purchase, construction, expansion or
rehabilitation of certain real and other tangible property with an estimated useful
life of five years or longer, including public infrastructure facilities and other
governmental facilities, which are necessary to meet increased demands placed
upon the City as a result of development or rehabilitation occurring within the
proposed CFD (the "Facilities"); and
WHEREAS, in order to finance the Facilities it is necessary to incur bonded
indebtedness in the amounts not to exceed $5,000,000, the repayment of which is
to be secured by special taxes levied in accordance with Section 53340 et seq. of
the Act on all property within the CFD, other than those properties exempted from
taxation as provided in the respective rate and method of apportionxnent attached
as E~ibit A to Resolution No. 2006-95.
NOW, THEREFORE, THE CITY COUNCIL OF THE CTTY OF
LAI~ ELSINORE DOES HEREBY RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
SECTION 1. The above recitals are true and correct.
SECTION 2. It is necessary to incur bonded indebtedness within the
proposed CFD in the amounts not to exceed $5,000,000 to finance the costs of the
Facilities.
SECTION 3. The indebtedness will be incurred far the purpose of financing
the costs of designing, constructing and acquiring the Facilities, the acquisition of
necessary equipment and property therefor and fulfilling contractual commitments
CITY COUNCIL RESOLUTION NO. 2006-96
Page 2 of 3
and carrying out the powers and purposes of the CFD, including, but not limited to,
the financing of the costs associated with the issuance of the bonds and all other
costs necessary to finance the Facilities which are permitted to be financed
pursuant to the Act.
SECTION 4. It is the intent of the Council to authorize the sale of bonds in
one or mare series, in the maximum aggregate principal amounts not to exceed
$5,000,000 at a maximum interest rate not in excess of 12 percent per annum or
such rate not in excess of the maximum rate pernutted by law at the time the bonds
are issued. The term of the bonds shall be determined pursuant to a resolution of
the Council authorizing the issuance of the bonds, but such term shall in no event
exceed 40 years or such longer term as is then permitted by law.
SECTION 5. A public hearing (the "Hearing") on the proposed debt issue
sha11 be held August 8, 2006 at 7:00 p.m. or as soon thereafter as practicable, at the
Lake Elsinore Cultural Center located at 183 North Main Street, Lake Elsinore,
California 92530.
SECTION 6. At the Hearing at the time and place set forth above, any
interested persons, including all persons owning land within the proposed CFD,
may appear and be heard at the Hearing.
SECTION 7. The proposition to incur bonded indebtedness in the maximum
aggregate principal amounts not to exceed $5,000,000 shall be submitted to the
qualified electors of the CFD. A special community facilities district election shall
be conducted on August 8, 2006. The special election shall be conducted by hand
delivered or mailed ballot election. The ballots shall be returned to the office of
the election officer no later than ll:00 dclock p.m. on August 8, 2006.
SECTION 8. The Clerk is hereby directed to publish a copy of this
resolution, which shall serve as notice ("Notice") of the Hearing and the special
bond elecrion, pursuant to Section 6061 of the Government Code in a newspaper of
general circulation in the proposed CFD.
SECTION 9. The Clerk may send a copy of the Notice of the Hearing by
first-class mail, postage prepaid, to each registered voter and to each landowner
within the proposed CFD as shown on the last equalized assessment roll.
SECTION 10. This Resolution shall take effect from and after the date of its
passage and adoption.
CITY COUNCIL RESOLUTION NO. 2006-96
Page 3 of 3
PASSED, APPROVED AND ADOPTED this 27th day of June, 2006.
AYES: COiJNCILMEMBERS: Buckley, Hickman; Kelley,
Schiffner, Magee
NOES: COiJNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ABSTAIN: COiJNCILMEMBERS: None
ATTEST:
~
Frederick y, City Clerk
City of Lake Elsinore
City of Lake
APPROVED AS TO FORM:
RESOLUTION NO. 2006-97
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE DETERMINING THE VALIDITY OF
PRIOR PROCEEDINGS
WHEREAS, the City Council (the "Council") of the City of Lake Elsinore
(the "City") has heretofore adopted Resolution No. 2006-72 ("Resolution of
Intention") stating its intention to incur bonded indebtedness in the amount not to
exceed $33,000,0000 within Improvement Area No. 2 of the City of Lake Elsinare
Community Facilities District No. 2004-3 (Rosetta Canyon) (the "CFD") and to
consider alteration of the existing rate and method of apportion of special taaces, all
pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the
"Act"); and
WHEREAS, a copy of the Resolution of Intention is on file with the City
Clerk and incorporated herein by reference; and
WHEREAS, pursuant to the Act and in accordance with applicable laws,
this Council held a public hearing on the incurring of bonded indebtedness with
respect to Improvement Area No. 2 of the CFD and the alteration of the rate and
method of apportionment of the special taxes; and
WHEREAS, at said hearing all persons not exempt from the Special Tax
desiring to be heard on a11 matters pertaining to the incurring of bonded
indebtedness and alteration of the rate and method of apportionment of special
taxes were heard and a full and fair hearing was held; and
WHEREAS, at said hearing evidence was presented to the Council on said
matters before it, and this Council at the conclusion of said hearing is fully advised
in the premises.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
SECTION 1. Pursuant to Section 53325.1(b) of the Government Code, the
Council finds and determines that the proceedings prior hereto were valid and in
conformity with the requirements of the Act.
CITY COUNCIL RESOLUTION NO. 2006-97
Page 2 of 5
SECTION 2. The map of the boundaries of the CFD has been recorded in
the Office of the County Recorder of Riverside County, California (Book 60 of
Maps of Assessment and Community Facilities District at pages 46 through 47 and
as Instrument No. 2005-0006006).
SECTION 3. 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 Improvement Area
No. 2 of the CFD, including but not limited to streets, streetscape, storm drain,
water and sewer faciliries, fire station, fire equipment, City fees and fees of the
Elsinore Valley Municipal Water District, and related costs including designs,
inspections, professional fees, annexation fees, connection fees and acquisition
costs (the "Facilities"). Such Faciliries need not be physically located within
Improvement Area No. 2 of the CFD.
SECTION 4. Except where funds are otherwise available, it is the intenrion
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 proposed to be issued to finance the Faciliries 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 t~ levy and bond issue. The Special Tax will be
secured by recordation of a continuing lien against all real property in
Improvement Area No. 2 of the CFD. In the first year 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 pursuant to Section 53314 of the Act and interest
thereon. The schedule of the rate and method of apportionment and manner of
CITY COUNCIL RESOLUTION NO. 2006-97
Page 3 of 5
collection of the Special Tax is described in detail in Exhibit A attached hereto and
by this reference incorporated herein. The Special Taa~ 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 53325.3 of the Act. In the event that a portion of the property
within Improvement Area No. 2 of the CFD shall become for any reason exempt,
wholly or partially, from the levy of the Special T~, the Council shall, on behalf
of the CFD, increase the levy to the extent necessary upon the remaining property
within Improvement Area No. 2 of the CFD which is not delinquent or exempt in
order to yield the required payments, subject to the m~imum 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 ar parcels within Improvement Area No. 2
of the CFD by mare than 10 percent. Furthermore, 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 5. Upon recordation of a Notice of Special Tax Lien pursuant to
Section 3114.5 of the Streets and Highways Code, a continuing lien to secure each
levy of the Special Tax shall attach to all real properiy in Improvement Area No. 2
of the CFD, and this lien shall continue in farce and effect unril the Special Tax
obligation is prepaid or otherwise permanently satisfied and the lien canceled in
accardance with law or until collection of the Special TaY by the CFD ceases.
SECTION 6. The proposed Special Tax to be levied in Improvement Area
No. 2 of the CFD has not been precluded by protests by owners of one-half or
more of the land in the territory included in Improvement Area No. 2 of the CFD
pursuant to Government Code Section 53324.
SECTION 7. Pursuant to and in compliance with the provisions of
Government Code Section 50075.1, the Council hereby establishes the following
accountability measures pertaining to the levy by the CFD of the Special T~:
CITY COUNCIL RESOLUTION NO. 2006-97
Page 4 of 5
(a) Such Special Tax shall be levied for the specific purposes set forth
herein.
(b) The proceeds of the levy of such Special T~ shall be applied only to
the specific purposes set forth herein.
(c) The CFD shall establish an account or accounts into which the
proceeds of such Special Tax shall be deposited.
(d) The City Manager, or his or her designee, acting far and on behalf of
the CFD, shall annually file a report with the Council as required pursuant to
Government Code Section 50075.3.
SECTION 8. The City Manager, 130 S. Main Street, Lake Elsinore;
California 92530, (951) 674-3124, or his designee, is designated to be responsible
for preparing or causing to be prepared annually a current roll of the Special Tax
levy obligations by assessor's parcel number and for estimating future Special Tax
levies pursuant to Section 53340.1 of the Government Code.
SECTION 9. The voting procedure with respect to the imposition of the
Special Tax, incurring bonded indebtedness and establishing an appropriations
limit of the CFD shall be by hand delivered or mailed ballot election.
SECTION 10. The City Clerk is directed to certify and attest to this
Resolution and to take any and all necessary acts to call, hold, canvass and certify
an election or elections on the incurring bonded indebtedness, the levy of the
Special Tax, and the establishment of the appropriation limit.
SECTION 11. This Resolution shall take effect from and after the date of
its passage and adoprion.
CITY COUNCIL RESOLUTION NO. 2006-97
Page 5 of 5
PASSED, APPROVED AND ADOPTED this 27th day of June, 2006, by
the following vote:
AYES: COUNCILMEMBERS: guckley, Nickman, Keltey,
Schiffner, Magee
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ABSTAIN: COUNCILMEMBERS: None
v~ ~ ~ ~
Robert E. M~
City of Lake
Frederick Ra~ City Clerk
City of Lake Elsinore
AP OVED AS O .
Barbara Zeid L bold, City Attorney
City of Lake Elsinore
EXHIBIT A
RATE AND METHOD OF APPORTIONMENT
AMENDED RATE AND METHOD OF APPORTIONMENT FOR
CITY OF LAKE ELSINORE COMMUPTITY FACTLITIES DISTRICT No. 2004-3
IMPROVEMENT AREA No. 2(ROSETTA CANYOl~
A Special Taac shall be levied on all Assessor's Parcels in Ciry of Lake Elsinore Community
Facilities District No. 2004-3 (Improvement Area No. 2) (Rosetta Canyon) ("CFD No. 2004-3 (IA
No. 2)") and collected each Fiscal Year commencing in Fiscal Year 2005-2006, in an amount
deternuned through the application of the Rate and Method of Apportionment as described below.
All of the real properiy in CFD No. 2004-3 (IA No. 2), unless exempted by law or by the provisions
hereof, sha11 be taxed for the purposes, to the extent and in the manner herein provided.
A.
The terms hereinafter set forth haue 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'Assessar's Parcel Map, the land area
shown on the applicable final map, pazcel map, condominium plan, or other recorded County
pazcel map.
"AcY' means the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5,
Division 2 of Title 5 of the California Government Code.
"Administrative Expenses" means the following,actual or reasonably estimated costs
directly related to the administration of CFD No. 2004-3 (IA No. 2): the costs of computing
the Special Taxes and preparing the annual Special Taac 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 to the Trustee; the costs of the
Trustee (including its legal counsel) in the discharge of the duties required of it under the
Indenture; the costs to the City, CFD No. 2004-3 (IA No. 2) or any designee thereof of
complying with arbitrage rebate requirements; the costs to the City, CFD No. 2004-3 (IA No.
2) or any designee thereof of complying with disclosure requirements of the City, CFD No.
2004-3 (IA No. 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 Tases; the costs of the City, CFD No.
2004-3 (IA No. 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. Administrative Expenses shall also include
amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2004-3
(IA No. 2) for any other administrative purposes of CFD No. 2004-3 (IA No. 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 pazcel shown in an Assessor's Parcel Map with an
assigned Assessor's Parcel number.
Ciry of Lake Elsinore December I6, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (7A No. 2) page I
"Assessor's Parcel Map" means an official map of the County Assessor of the County
designating parcels by Assessor's Parcel number.
"Assigned Special Tax" means the Special Tas for each Land Use Class of Developed
Properiy in each Zone, as determined in accordance with Section C.l.b. below.
"Authorized Facilities" means those authorized improvements, as listed on Exhibit "A" to
the Resolution of Formation.
"Backup Special Tax" means the Special Tax applicable to each Assessor's Parcel of
Developed Properiy, as deternuned in accordance with Section C.l.d. below.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special T~ Requirement and providing for the levy and collection of the
Special Taxes.
"CFD No. 2004-3" means City of Lake Elsinore Community Facilities District No. 2004-3
(Rosetta Canyon).
"CFD No. 2004-3 (IA No. 2)" means Improvement Area No. 2 of CFD No. 2004-3, as
identified on the boundary map for CFD No. 20043.
"CFD No. 2004-3 (IA No. 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. 2004-3 and secured
solely by Special Taxes levied on property within the boundaries of CFD No. 2004-3 (IA No.
2) under the Act.
"City" means the City of Lake Elsinore.
"City Council" means the City Council ofthe City ofLake Elsinore, acting as the legislative
body of CFD No. 2004-3 (IA No. 2).
"County" means the County of Riverside.
"Developed Property" means, for each Fiscal Yeaz, all TaYable Property, exclusive of
Taxable Public Properry and Taatable Properry Owner Association Property, for which the
Final Subdivision was recorded on or before January 1 of the prior Fiscal Yeaz and a building
permit for new construction was issued after January 1, 2004 and on or before May 1 of the
Fiscal Year preceding the Fiscal Year for which the Special Taaces are being levied.
"Final Subdivision" means a subdivision of property by recordation of a final map, pazcel
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 1352 that creates individual lots for which building permits may be issued
without fiu•ther subdivision.
Ciry of Lake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (IA No. 2) page Z
"Fiscal Year" means the period starting July 1 and ending on the following June 30.
"Indenture" means the indenture, fiscal agent agreement, resolution or other inshlunent
pwsuant to which CFD No. 2004-3 (IA No. 2) Bonds aze issued, as modified, amended
and/or supplemented from time to time, and any instrument replacing or supplementing the
same.
"Land Use Class" means any of the classes listed in Table 1.
"Maximum Special Tax" means the maximum Special Tax, determined in accordance with
Section C below, that can be levied in any Fiscal Yeaz on any Assessor's Pazcel.
"Non-Residential Property" means all Assessor's Parcels of Developed Properry for which
a building permit permitting the construction of one or mare non-residential units or facilities
has been issued by the City.
"Outstanding Bonds" means all CFD No. 2004-3 (IA No. 2) Bonds which aze deemed to be
outstanding under the Indenture.
"Property Owner Association Property" means, for each Fiscal Yeaz, any property within
the boundaries of CFD No. 2004-3 (IA No. 2) that was owned by a property owner
association, including any master or sub-association, as of January 1 of the prior Fiscal Year.
"Proportionately" means for Developed Property that the ratio of the actual Special Tas
levy to the Assigned Special Tax is equal for all Assessor's Parcels of Developed Property,
or where the Backup Special Taac is being levied, that the ratio ofthe actual Special Tax levy
to the Maximum Special Tax is equal for all Assessor's Parcels upon which a Backup
Special Taac is being levied. Far Undeveloped Property, "Proportionately" means that the
ratio of the actual Special Tax levy per Acre to the Maximtun Special Tax per Acre is equal
for all Assessor's Pazcels of Undeveloped Property. The term "Proportionately" may
similazly be applied to other categories of Taxable Property as listed in Section D below.
"Public Property" means properiy within the boundaries of CFD No. 2004-3 (IA No. 2)
owned by, irrevocably offered or dedicated to, 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
properiy leased by a public agency to a private entity and subject to tasation 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 similaz area. The determination of Residential Floor Area for an
Assessor's Pazcel shall be made by reference to the building pernut(s) issued for such
Assessor's Pazcel.
Ciry of Lake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (/A No. 2) pqge 3
"Residential Property" 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.
"Resolution of Formation" means the Resolution of Formation for CFD No. 2004-3 (IA
No. 2).
"Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's
Parcel of Developed Properry, T~able Property Owner Association Property, Taxable Public
Property, and Undeveloped Property to fund the Special TaY Requirement.
"Special Tax Requirement" means that amount required in any Fiscal Yeaz for CFD No.
2004-3 (IA No. 2) to: (i) pay debt service on all Outstanding Bonds due in the calendar yeaz
commencing in such Fiscal Year; (ii) pay periodic costs on the CFD No. 2004-3 (IA No. 2)
Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No.
2004-3 (IA No. 2) Bonds due in the calendar year commencing in such Fiscal Yeaz; (iii) pay
Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve
funds for all Outstanding Bonds; (v) pay for reasonably anticipated Special Tax
delinquencies based on the delinquency rate for the Special Tax levy in the previous Fiscal
Yeaz; (vi) pay directly for acquisition or construction of Authorized Facilities to the extent
that the inclusion of such amount does not increase the Special Tax levy on Undeveloped
Property; less (vii) a credit for funds available to reduce the annual Special Tax levy, as
determined by the CFD Administrator pursuant to the Indenture.
"State" means the State of California.
"Taxable Property" means all ofthe Assessor's Pazcels within the boundaries of CFD No.
2004-3 (IA No. 2) which aze not exempt from the Special Taac pursuant to law or Section E
below.
"Taxable Property Owner Association Property" means all Assessor's Parcels of
Properiy 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, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means, for each Fiscal Yeaz, all T~able Property not classified as
Developed Property, Taxable Property Owner Association Property, or Ta~cable Public
Property.
"Zone" means Zone 1 or Zone 2, as applicable.
"Zone 1" means the land geographically identified within the boundazies of zone 1 as
delineated in Exhibit A to this Rate and Method of Apportionment.
Ciry of Lake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (L4 Na. 2) Page 4
"Zone 2" means the land geographically identified within the boundaries of zone 2 as
delineated in E~ibit A to this Rate and Method of Apportionment.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, all Taacable Property within CFD No. 2004-3 (IA No. 2) shall be assigned
to a Zone and further classified as Developed Properry, Taxable Public Properry, Taxable
Properiy Owner Association Property, or Undeveloped Property, and shall be subject to
Special Ta~ces in accordance 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 11 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 12.
C. MAXIMUM SPECIAL TAX RATE
1. Developed Property
a. Maximum Snecial Taac
The Maacimum Special Tax for each Assessor's Parcel classified as
Developed Property shall be the gieater of (i) the amount derived by
application of the Assigned Special Tax ar(ii) the amount derived by
application of the Backup Special Taa~.
b. Assigned Snecial Tax
The Assigned Special Tas for each Land Use Class is shown below in Table
1.
City ofLake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (IA No. 2) page 5
TABLE 1
c. Increase in the Assigned Snecial Tax
The Assigned Special Taxes identified in Table 1 above shall be applicable
for Fiscal Year 2005-2006, and shall increase thereafter, commencing on July
1, 2006 and on July 1 of each Fiscal Yeaz thereafter, by an amount equal to
two percent (2%) of the Assigned Special Tax for the previous Fiscal Year.
d. Backun Snecial Tax
The Fiscal Yeaz 2005-2006 Backup Special Taac attributable to a Final
Subdivision in Zone 1 or Zone 2 will equal $19,868 multiplied by the
Acreage of all Taxable Property, exclusive of any Taacable Property Owner
Association Property and Tasable Public Property, therein. The Backup
Special Taac for each Assessor's Parcel of Residential Property shall be
computed by dividing the Backup Special Taac 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
Ciry of Lake E(sinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (IA No. 2) Page 6
Assigned Special Taxes for Developed Property
Community Facilities District No. 2004-3
Improvement Area No. 2
Fiscal Year 2005-2006
residentiallots). The Backup Special Tax for each Assessor's Parcel ofNon-
Residential Property therein shall equal $19,868 multiplied by the Acreage of
such Assessor's Parcel.
If a Final Subdivision includes Assessor's Pazcels of Taacable Property for
which building permits for both residential and non-residential conshuction
may be issued, exclusive of Taxable Property Owner Association Properry
and Taxable Public Property, then the Backup Special Tax for each
Assessor's Parcel ofResidential Properry sha11 be computed exclusive ofthe
Acreage and Assessor's Pazcels of property for which building permits for
non-residential construction may be issued.
Notwithstanding the foregoing, if all or any portion of the Final
Subdivision(s) described in the preceding pazagraphs is subsequently changed
or modified, then the Backup Special Tax for each Assessor's Parcel of
Developed Property in such Final Subdivision area that is changed or
modified shall be a rate per square foot of Acreage calculated as follows:
1. Determine the total Backup Special Tases anticipated to apply to the
changed or modified Final Subdivision area prior to the change or
modification.
2. The result of pazagraph 1 above shall be divided by the Acreage of
T~able Properry which is ultimately expected to eacist in such changed or
modified Final Subdivision area, as reasonably determined by the CFD
Administrator.
3. The result of paragraph 2 above shall be divided by 43,560. The result is
the Backup Special Tax per squaze foot of Acreage which shall be
applicable to Assessor's Parcels of Developed Property in such changed
or modified Final Subdivision area for all remaining Fiscal Years in
which the Special Taa~ may be levied.
i. Release of Obligation to Pay and Disclose Backup Special Tax
All Assessors' Pazcels within CFD No. 2004-3 (IA No. 2) will be
relieved simultaneously and permanently from the obligation to pay
and disclose the Backup Special T~ if the CFD Administrator
determines that the annual debt service required for the Outstanding
Bonds, when compared to the Assigned Special Tases that may be
levied against all Assessors' Parcels of Developed Property result in
110% debt service coverage (i.e., the Assigned Special Taxes that
may be levied against all Developed Property in each remaining
Fiscal Yeaz based on then existing development in CFD No. 2004-3
(IA No. 2) is at least equal to the sum of (i) the Administrative
City of Lake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (7A No. 2) page 7
Expenses and (ii) 1.10 times maacimum annual debt service, in each
remaining Fiscal Year on ttte Outstanding Bonds).
e. Increase in the Backuro Snecial Tax
On each July 1, commencing on July 1, 2006, the Backup Special Tas shall
be increased by an amount equal to two percent (2%) of the Backup Special
T~ for the previous Fiscal Year.
f. Multiule Land Use Classes
In some instances an Assessor's Pazcel of Developed Property may contain
more than one Land Use Class. The Maximum Special Tas levied on an
Assessor's Pazcel shall be the sum of the Maximum Special T~ for all Land
Use Classes located on that Assessor's Pazcel. The CFD Administrator's
allocation to each type of property sha11 be final.
2. Taxable Property Owner Association Property, Taxable Public Property, and
Undeveloped Property
The Fiscal Yeaz 2005-2006 Maacimum Special Taac for Taxable Property Owner
Association Property, Taxable Public Property, and Undeveloped Property in Zone 1
or Zone 2 shall be $19,868 per Acre, and shall increase thereafter, commencing on
July 1, 2006 and on July 1 of each Fiscal Yeaz thereafter, by an amount equal to two
percent (2%) of the M~imum Special Taac for the previous Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2005-2006 and for each following Fiscal Year, the City
Council shall levy the Special Tax until the amount of Special Taaces levied equals the
Special Taac Requirement. The Special Taa~ shall be levied each Fiscal Yeaz as follows:
First: The Special Tax shall be levied on each Assessor's Pazcel of Developed Property in
Zone 1 and Zone 2 in an amount equal to 100% of the applicable Assigned Special Taac;
Second: If additional monies are needed to satisfy the Special Tazc Requirement after the
first step has been completed, the Special TaY shall be levied Proportionately on each
Assessor's Pazcel of Undeveloped Property in Zone 1 and Zone 2 at up to 100% of the
applicable Maximum Special Taac for Undeveloped Property;
Third: If additional monies are needed to satisfy the Special Taac Requirement after the first
two steps have been completed, then the levy ofthe Special Tax on each Assessor's Pazcel of
Developed Property in Zone 1 and Zone 2 whose Masimum Special Ta~c is determined
through the application of the Backup Special Tax sha11 be increased Proportionately from
the Assigned Special Taac up to the Masimum Special Tax for each such Assessor's Parcel;
Ciry of Lake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (L4 No. 2) page g
Fourth: If additional monies aze needed to satisfy the Special Taac Requirement after the first
three steps have been completed, then the Special Tax shall be levied Proportionately on each
Assessor's Pazcel of Taxable Property Owner Association Property and Taxable Public
Properiy in Zone 1 and Zone 2 at up to the applicable M~imuxn Special Tas for Taacable
Property Owner Association Property or Taxable Public Property.
Notwithstanding the above the City Council may, in any Fiscal Year, lery Proportionately
less than 100% of the Assigned Special T~ in step one (above), when (i) the City Council is
no longer required to levy the Special Tax pursuant to steps two through four above in order
to meet the Special Tax Requirement; and (ii) all authorized CFD No. 2004-3 (IA No. 2)
Bonds have already been issued or the City Council has covenanted that it will not issue any
additional CFD No. 2004-3 (IA No. 2) Bonds (except refunding bonds) to be supported by
the Special Tax.
Further notwithstanding the above, under no circumstances will the Special Taac levied
against any Assessor's Parcel of Residential Properiy far which an occupancy permit for
private residential use 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. 2004-3 (IA No. 2).
E.
The City sha11 classify Property Owner Association P.roperly and/ar Public Property in CFD
No. 2004-3 (IA No. 2) as exempt property, provided that no such classification would reduce
the Acreage of all Taxable Property to less than 75.86 Acres. Tas-exempt status will be
assigned by the CFD Administrator in the chronological order in which property becomes
Property Owner Association Properiy or Public Properiy. However, should an Assessor's
Parcel no longer be classified as Properry Owner Association Property or Public Property, its
tazc-exempt status will be revoked.
Property Owner Association Properiy or Public Properiy that is not exempt from Special
Taxes under this section shall be subject to the levy of the Special Taac and shall be taxed
Proportionately as part of the fourth step in Section D above, at up to 100°/a of the applicable
Maacimum Special T~ for Taacable Property Owner Association Property or Taa~able Public
Property.
F. MANNER OF COLLECTION
The Special TaY shall be collected in the same manner and at the same time as ordinary ad
valorem property tases; provided, however, that CFD No. 2004-3 (IA No. 2) may direcUy bill
the Special Tax, 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 achxally
foreclose on delinquent Assessor's Parcels as pernutted by the Act.
City of Lake E[sinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (IA No. 2) page g
G. APPEALS
Any landowner or resident who feels that the amount of the Special Taac levied on their
Assessor's Pazcel is in errar may submit a written appeal to CFD No. 2004-3 (IA No. 2).
The CFD Administrator shall review the appeal and if the CFD Administrator concurs, the
amount of the Special Tas levied shall be appropriately modified.
The City Council may interpret this Rate and Method of Apportionment for purposes of
clazifying any ambiguity and make determinations relative to the annual administration of the
Special Tax and any landowner or resident appeals. Any decision of the City Council shall
be final and binding as to all persons. '
H. PREPAYMENT OF SPECIAL TAX
The following definitions apply to this Section H:
"Buildout" means, for CFD No. 2004-3 (IA No. 2), that all expected building permits have
been issued.
"CFD Public Facilities" means either $27,000,000 in 2006 dollars, which shall increase by
the Construction Inflation Index on July 1, 2007, 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. 2004-3 (IA No. 2) under the authorized bonding
program for CFD No. 2004-3 (IA No. 2), or (ii) shall be determined by the City Council
concurrently with a covenant that it will not issue any more CFD No. 2004-3 (IA No. 2)
Bonds (except refunding bonds) to be supported by the Special Tases levied under this Rate
and Method of Apportionment as described in Section D.
"Construction Inflation Index" means the annual percentage change in ttte Engineering
News Record Building Cost Index for the City of Los Angeles, measured as of the calendaz
year which ends in the previous Fiscal Year. In the event this index ceases to be published,
the Conshuction Inflation Index shall be another index as determined by the CFD
Administrator that is reasonably compazable 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 the Improvement Fund, (ii) moneys currently on deposit in the
Improvement Fund, and (iii) moneys currently on deposit in an escrow fund that aze 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 aze currently available for expenditure to acquire or construct CFD Public
Facilities eligible under the Act.
Ciry of Lake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (IA No. 2) Page 10
"Previously Issued Bonds" means, for any Fiscal Year, a11 Outstanding Bonds that are
deemed to be outstanding under the Indenture after the first interest and/or principal payment
date following the current Fiscal Year.
1. Prepayment in Futl
Only an Assessor's Pazcel of Developed Properry, or Undeveloped Property for which
a building permit has been issued, may be prepaid. The obligation of the Assessor's
Parcel to pay any Special Tax may be permanently satisfied as described herein,
provided that a prepayment may be made with respect to a particulaz Assessor's
Parcel only if there aze 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 Tas obligation shall provide the CFD Administrator with written
notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD
Administrator shall notify such owner of the prepayment amount far such Assessor's
Parcel. The CFD Administrator may chazge a reasonable fee for providing this
service. Prepayment must be made not less than 45 days prior to the next occurring
date that notice of redemption of CFD No. 2004-3 (IA No. 2) Bonds from the
proceeds of such prepayment may be given by the Trustee pursuant to the Indenture.
The Special Taac Prepayment Amount (defined below) shall be calculated as
summarized below (capitalized terms as defined below):
Bond Redemption Amount
plus
plus
plus
plus
less
less
Redemption Premium
Future Facilities Amount
Defeasance Amount ,
Administrative Fees and Expenses
Reserve Fund Credit
Caoitalized Interest Credit
Total: equals Prepayment Amount
As of the proposed date of prepayment, the Special Tax Prepayxnent Amount shall be
calculated as follows:
Paraeraph No.:
Confirm that no Special TaY delinquencies apply to such Assessor's Pazcel.
For Assessor's Parcels of Developed Property, compute the Assigned Special Tax
and Backup Special Tas. For Assessor's Pazcels of Undeveloped Property for which
a building pernut has been issued, compute the Assigned Special Tatc and Backup
Special Tax for that Assessor's Parcel as though it was already designated as
Developed Property, based upon the building permit which has already been issued
for that Assessor's Parcel.
City of Lake Elsinore December 16, 2009 (Amended May 23, 2006)
CFD No. 2004-3 (IA No. 2) page ]]
(a) Divide the Assigned Special Tax computed pursuant to pazagraph 2 by the total
estimated Assigned Special Tases for the entire CFD No. 2004-3 (IANo. 2) based on
the Developed Properry Special Taaces which could be levied in the current Fiscal
Yeaz on all expected development through Buildout of CFD No. 2004-3 (IA No. 2),
excluding any Assessor's Parcels which have been prepaid,and
(b) Divide the Backup Special Tas computed pursuant to paragraph 2 by the total
estimated Backup Special Ta~ces at Buildout far the entire CFD No. 2004-3 (IA No.
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').
Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the
applicable redemption premium (e.g., the redemption price-100%), 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 pazagraph 3(a) or 3(b) by the
amount determined pursuant to paragraph 6 to compute the amount of Future
Facilities Costs to be prepaid (the "Future Facilities AmounP').
Compute 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 Previously Issued Bonds.
9. Determine the Special Taac levied on the Assessor's Pazcel in the current Fiscal Year
which has not yet been paid.
10. Compute the minimum amount the CFD Administrator reasonably expects to derive
from the reinvestment of the Special Tax 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.
11. 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. 2004-3 (IANo. 2) aze as calculated
by the CFD Administrator and include the costs of computation of the prepayment,
the costs to invest the prepayment proceeds, the costs of redeeming CFD No. 2004-3
Ciry of Lake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (IA No. 2) page l2
(IA No. 2) Bonds, and the costs of recording any notices to evidence the prepayment
and the redemption (the "Administrative 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 subtracting the new reserve requirement (as
defined in the Indenture) in effect after the redemption of Previously Issued 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. 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% of the 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 current Fiscal Year, a capitalized interest credit shall be
calculated by multiplying the lazger quotient computed pursuant to pazagraph 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
Credit").
15. The Special Taac 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 "Prepayment AmounP').
From the Prepayment Amount, the amounts computed pursuant to 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. 2004-3 (IA No. 2) Bonds or make debt service payments. The
amount computed pursuant to paragraph 7 sha11 be deposited into the Improvement Fund.
The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2004-3 (IA
No. 2).
The Special Tas Prepayment Amount may be insufficient to redeem a full $5,000 increment
of CFD No. 2004-3 (IA No. 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. 2004-3 (IA No. 2) Bonds or to make debt service
payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined under
pazagraph 9(above), the CFD Administrator shall remove the current Fiscal Yeaz's Special
TaY levy for such Assessor's Parcel from the County ta~c rolls. With respect to any
Assessor's Parcel that is prepaid, the City Council shall cause a suitable notice to be recorded
in compliance with the Act, to indicate the prepayment of the Special Taa~ and the release of
the Special Tas lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel
to pay the Special Tax shall cease.
Ciry af Lake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (lA No. 2) page Ig
Notwithstanding the foregoing, no Special Taac prepayment shall be allowed unless, at the
time of such proposed prepayment, the amount of Maxnnum Special Taxes that may be
levied on Taxable Property within CFD No. 2004-3 (IA No. 2) both prior to and after the
proposed prepayment is at least equal to the sum of (i) the Administrative Expenses and (ii)
1.10 times maximum annual debt service, in each remaining Fiscal Yeaz on the Outstanding
Bonds.
2. Prepayment in Part
The Special Tax on an Assessor's Parcel of Developed Property or an Assessor's Pazcel of
Undeveloped Property for which a building perxnit has been issued may be partially prepaid.
The amount of the prepayment shall be calculated as in Section H.1; except that a partial
prepayment shall be calculated according to the following formula:
PP=[(PE-A)xF]+A
These terms have the following meaning
PP = the partial prepayment.
PE = the Special Tax Prepayment Amount calculated according to Section H.1.
F= the percentage, expressed as a decimal, by which the owner of the Assessor's Parcel
is partially prepaying the Special Taac.
A= the Administrative Fees and Expenses calculated accarding to Section H.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 TaY and the percentage
by which the Special T~ shall be prepaid. The CFD Administrator shall provide the owner
with a statement of the amount required for the partial prepayment of the Special Tax for an
Assessor's Parcel within 30 days of the request and may chazge a reasonable fee for
providing this service. With respect to any Assessor's Parcel that is partially prepaid, the
City Council shall (i) distribute the funds remitted to it according to Section H.1, and (ii)
indicate in the records of CFD No. 2004-3 (IA No. 2) thaf there has been a partial
prepayment of the Special Ta~c and that a portion of the Special Tax with respect to such
Assessor's Pazcel, equal to the outstanding percentage (1.00 - F) ofthe remaining Maacimum
Special Tax, shall continue to be levied on such Assessor's Parcel pursuant to Section D.
I. TERM OF SPECIAL TAX
The Special Tax shall be levied for a period not to exceed forty years commencing with
Fiscal Year 2005-2006, provided however that Special T~es will cease to be levied in an
earlier Fiscal Yeaz if the CFD Administrator has determined (i) that all required interest and
principal payments on the CFD No. 2004-3 (IA No. 2) Bonds have been paid; and (ii) a11
Authorized Facilities have been constructed.
Ciry of Lake Elsinore December 16, 2004 (Amended May 23, 2006)
CFD No. 2004-3 (IA No. 2) Page 14
RATE AND METHOD OF APPORTIONMENT FOR
CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT No. 2004-3
IMPROVEMENT AREA No. 2(ROSETTA CANYOl~
EXHIBIT A
MAP OF ZONE 1 AND ZONE 2