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HomeMy WebLinkAboutCC Reso No 2005-010IYESOLUTION NO. 2005 - lo RESOLUTION OF FORMATION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DETERMINING THE VALIDITY OF PRIOR PROCEEDINGS AND ESTABLISHING CITY OF LAKE ELSINORE COMMIJNITY FACILITIES DISTRICT NO. 2005-1 (SERENITI~ AND APPROVING FEE DEPOSIT ANll REIIVIBURSEMENT AGREEMENTS W~IEREAS, the City Councii (the "Council") of the City of Lake Elsinore (the "City") has heretofore adopted Resolution No. 20U5~ ~i ("Resolurion of Intention") stating its intenfion to form City of Lake Elsinore Community Facilities District No. 2005-1 (Serenity) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "AcY'); 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 formation of the CFD, the proposed rate and method of apportionment of the special taxes (the "Special Taxes") and the incurring of bonded indebtedness with respect to the CFD; and WHEREAS, at said hearing all persons not exempt from the Special Tax desiring to be heard on all matters pertaining to the formation of the CFD, the proposed rate and method of apportionment of the Special Taxes and the incurring of bonded indebtedness with respect to the CFD 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 condusion 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 L Pursuant to Secrion 53325.1(b) of the Government Code, the Council finds and determines that the proceedings prior hereto were valid and in confornuty with the requirements of the Act. assav~szi 1 Section 2. A community facilities district to be designated "City of Lake Elsinore Community Facilities District No. 2005-1 (Serenity)" is hereby established pursuant to the Act. Section 3. The description and map of the boundaries of the CFD on file in the City Clerk's office and as described in the Resolution of Intention and incorporated herein by reference, shall be the boundaries of the CFD. The map of the proposed 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 page 14 and as Instrument No. 2004-1010682). Section 4. The faciliries 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, operate or finance 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 ~streets, streetscape, sidewalk, curb and gutter, traffic signal, traffic signing and striping, park, open space, landscaping improvements, dry utility improvements, storm drain, water and sewer facilities, City fees and fees of the Elsinore Valley Municipal Water District, and related costs including designs, inspecrions, professional fees, annexation fees, connection fees and acquisition costs (the "Facilities"). Such Facilities need not be physically located within the CFD. Secrion 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 proposed to be issued to fmance 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 Taac and issuance of the bonds, including any foreclosure proceedings, architectural, engineering, inspection, legal, fiscal, and fmancial consultant fees, discount fees, capitalized interest 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 printin~ costs, and all other administrarive costs of the tax levy and bond issue. The Special Tax will be secured by recordation of a continuing lien against all non-exempt real property in the CFD. In the first year in which such a Special Tu~ is levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred to the 455497571 ~ ~ 2, CFD pursuant to Section 53314 of the Act and interest thereon. The schedule of the rate and method of apportionment and inavner of coilection of the Special Tax is described in detail in E~-ibit 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 53325.3 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 TaY, 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 payrnents, subject to the maximum tax. Under no circumstances, however, shall the Special Taac 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. Furthermore, the maximum special tax autkorized to be levied against any parcel used for private residential purposes shall not be increased over rime in excess of 2 percent per year. Section 6. Upon recordarion of a Norice of Special Ta1c Lien pursuant to Section 3114.5 of the Streets and Highways Code, a continuing lien to secure each levy of the Special T~ sha11 attach to all nonexempt real properiy in the CFD, and this lien shall continue in force and effect until the Special Tax obligation is prepaid or otherwise pennanently satisfied and the lien canceled in accordance with law or until collection of the Special T~ by the CFD ceases. Section 7. The proposed Special Tax to be levied in the CFD has not been precluded by protests by owners of one-half or mare of the land in the territory included in the CFD pursuant to Government Code Section 53324. Section 8. 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 Ta~c: A. Such Special T~ shall be levied for the specific purposes set forth herein. B. The proceeds of the levy of such Special Tax shall be applied only to the specific purposes set forth herein. 4554975Z1 3 . C. The CFD shall establish an account or accounts into which the proceeds of such Special TaJC shall be deposited. D. The City Manager, or his or her designee, acring for and on behalf of the CFD, shall annually file a report with the Council as required pursuant to Government Code Section 50075.3. Section 9. The City Manager, 130 S. Main Street, Lake Elsinore, California 92530, (909) 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 esrimating future Special TaY levies pursuant to Section 53340.1 of the Government Code. Section lo. The voring procedure with respect to the imposition of the Special Tax, incurring bonded indebtedness and establishing an appropriations liinit of the CFD shall be by hand delivered ballot elecrion. Section 1 i. The City Council hereby approves the Fee Deposit and Reimbursement Agreements, in substantially the forms annexed hereto as Eachibit $. The Mayor or the City Manager is hereby authorized to execute the Fee Deposit and Reimbursement Agreements in substantially the forms annexed hereto, with such revisions, amendments and completions as shall be approved by the Mayor or the City Manager, with the advice of Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof. assavnz~ 4 . ` Section 12. 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 elecrions on the incurring bonded indebtedness, the levy of the Special Tax, and the establishment of the appropriations limit. PASSED, APPROVED AND ADOPTED this zsth day of Sanuar.y , 2~~5. AT'~EST: 2 ! ~~ City Clerk of the City of Lake Elsinore APPROVED AS TO Attorney CITY OF LAKE ELSINOI~E By: . , Title: Mayor assav~szt 5 EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX 45549757.1 City of Lake Elsinore March 23, 2004 CFD No. 20051(Serenity) Page B-1 Rate and Method of Apportionment RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2005-1 OF THE CITY OF LAKE ELSINORE (SERENITY) The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes in the City of Lake Elsinore ("City") Community Facilities District No. 2005-1 (Serenity) ("CFD No. 2005-1"). An Annual Special Tax shall be levied on and collected in CFD No. 2005-1 each Fiscal Year, in an amount determined through the applicarion of the Rate and Method of Apportionment described below. All of the real properiy within CFD No. 2005-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. SECTION A DEFIIVITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on the Assessor's Parcel Map, the land area as shown on the applicable Final Map, or if the land area is not shown on the applicable Final Map, the land area shall be calculated by the City Engineer. "Act" means the Mello-Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5, Part 1 of Division 2 of Title 5 of the Government Code of the State of Califomia. "Administrative Expenses" means any ordinary and necessary expense incurred by the City on behalf of CFD No. 2005-1 related to the determination of the amount of the levy of Special T~es, the collection of Special Taxes including the expenses of collecting delinquencies, the administration of Bonds, the payment of salaries and benefits of any City employee whose duties are direcdy related to the administration of CFD No. 2005-1, and costs otherwise incuned in otder to carry out the authorized purposes of CFD No. 2005-1 relating to CFD No. 2005-1. "Annual Special Tax" means the Special Tax actually levied in any Fiscat Year on any Assessor's Parcel. "Assessor's Parcel" means a lot or parcel of land designated on an Assessor's Parcel Map with an assigned Assessor's Parcel Number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel Number. "Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the._ County for purposes of identification. , <> City of Lake Elsinore Mazch 23, 2004 Community Facilities District No. 2005-1 Page 1 City of Lake Elsinore . March 23, 2004 CFD No. 20051 (Serenit~ Page B-2 Rate and Method of Apportionment "Assigned Annual Special Tax" means the Special Taac of that name described in Section D below. "Bact~up Annual Special Tax" means the Special TaY of that name described in Section E below. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refitnding thereof, to which Special Taxes within CFD No. 2005-1 have been pledged. "Building Square Footage" or "BSF" means the square footage of assessable intemal living space, exclusive of garages or other structures not used as living space, as determined by reference to the building permit application for such Assessor's Parcet. "Calendar Year" means the period commencing January 1 of any year and ending the following December 31. "CFD No. 2005-1" means Community Facilities District No. 2005-1 established by the City under the Act. "City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD No. 2005-1, or its designee. "County" means the County of Riverside. "Developed Property" means all Assessor's Parcels of Taxable Properry for which a building permit was issued on or before March l~` preceding the Fisca( Year in which the Special Tax is being levied. "Esempt Property" means all Assessor's Parcels designated as being exempt from Special Taxes as provided for in Section 7. "Final Map" means a subdivision of properiy 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 recordarion of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which building permits may be issued without fixrther subdivision. "Fiscal Year" means the period commencing on July 1 of any yeaz and ending the following June 30. "Lot" means all the Assessors Parcels for which a building permit has or may be issued for the purposes of constructing a residential dwelling unit. "Maximum Special Tax" means the m~imum Special Tax, determined in accordance with Section C, that can be levied by CFD No. 2005-1 in any Fiscal Year on any Assessor's Parcel. City of Lake Elsinore March 23, 2004 Community Facilities District No. 2005-1 Page 2 City of Lake Elsinore March 23, 2004 CFD No. 20051 (Serenit~ Page B-3 Rate and Method of Apportionment "Non-Residential Property" means all Assessor's Parcels of Developed Property for which a building permit was issued for any type of non-residential use. "Partial Prepayment Amount" means the amount required to prepay a portion of the Annual Special Tax obligation for an Assessor's Parcel, as described in Section H. "Prepayme~t AmounY' means the amount required to prepay the Annual Special Tax obligation in full for an Assessor's Parcel, as described in Section G. "Proportionately" means that the ratio of the Annual Special Tax levy to the applicable Assigned Annual Special Tax is equal for all applicable Assessor's Parcels. In the case of Developed Property subject to the apportionment of the Annual Special Taac under step three of Section F, "Proportionately" in step three means that the quotient of (a) Annual Special T~ less the Assigned Annual Special Tax divided by (b) the Backup Annual Special Ta~c less the Assigned Annual Special Tax, is equal for all applicable Assessor's Parcels. "Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section J, but cannot be classified as Exempt Properry because to do so would reduce the Acreage of all Ta3cable Properry below the required minimum Acreage set forth in Secrion J as applicable. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Special Tax" means any of the special taxes authorized to be levied by CFD No. 2005-1 pursuant to the Act. "Special Tax Requirement" means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, and (v) the collection or accumulation of fixnds for the acquisition or construction of facilities authorized by CFD No. 2005-1 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Undeveloped Property as set forth in step two of Section F., less (vi) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to any applicable bond indenture, fiscal agent agreement, or trust agreement. "Tasable Property" means all Assessor's Pazcels within CFD No. 2005-1, which are not Exempt Property. "Undeveloped Property" means all Assessor's Parcels of Ta3cable Properiy which are not Developed Property, or Provisional Undeveloped Properry. City of Lake Elsinore March 23, 2004 Community Facilities District No. 2005-1 Page 3 City of Lake Elsinore March 23, 2004 CFD No. 2005-1(Serenity) Page B-4 Rate and Method of Apportionment SECTION B CLASSIFICATION OF ASSESSOR'S PARCELS Each Fiscal Year, beginning with Fiscal Year 2005-06, each Assessor's Parcel within CFD No. 2005-1 shall be classified as Tasable Properry or Exempt Property. In addition, each Assessor's Parcel of Taxable Property shall be further classified as Developed Property, Undeveloped Properry or Provisional Undeveloped Property. In addition, each Assessor's Parcel of Developed Prope~ty shall further be classified as Residential Property or Non-Residenrial Property. Lastly, each Assessor's Parcel of Residenrial Properry shall be assigned to its appropriate Assigned Annual Special Tax rate based on its Building Square Footage. SECTION C MAXIMUM SPECIAL TAX 1. Develooed Pronertv The Maximum Special Ta~c for each Assessor's Parcel of Residential Property or Non- Residential Property that is classified as Developed Property in any Fiscal Yeaz shall be the greater of (i) the Assigned Annual Special Tax or (ii) the Backup Annual Special Ta~c. 2. Undeveloaed Proaertv and Provisional Undeveloued Prouertv The Masimum Special Tax for each Assessor's Parcel classified as Undeveloped Property, or Provisional Undeveloped Property in any Fiscal Yeac shall be the Assigned Annual Special Tax. SECTION D ASSIGNED ANNUAL SPEC~AL TAX L Develooed Proaertv Each Fiscal Year, each Assessor's Parcel of Residential Property or Non-Residentiai Property shall be subject to an Assigned Annual Special Tas. The Assigned Annual Special Tax applicable to an Assesso~'s Parcel of Developed Property for Fiscal Year 2005-06 shall be determined pursuant to Table 1 below. City of Lake Elsinore March 23, 2004 Community Facilities District No. 2005-1 Page 4 City of Lake Elsinore March 23, 2004 CFD No. 2005-1 ~Serenity) Page B-5 Rate and Method of Apportionment TABLE 1 ASSIGNED ANNUAL SPECIAL TAX RATES FOR DEVELOPED PROPERTY FOR FTSCAL YEAR 2005-06 2. 3. Classification Buildin S uare Foota e Rate Residential Less than 1,801 $1 946 er Unit Residenrial 1,801 - 2,050 $2,125 er Unit Residential 2,051 - 2,300 $2,598 per Unit Residenrial 2,301 - 2,550 $2,920 er Unit Residenrial 2,551 or greater $3,331 er Unit Non-Residenrial N/A $17,760 er Acre Undeveloaed Proqertv and Provisional Undevelooed Prooertv Each Fiscal Year; each Assessor's Parcel of Undeveloped Property and Provisional Undeveloped Property shall be subject to an Assigned Annual Special Ta~c. The Assigned Annual Special Taac rate for an Assessor's Parcel classified as Undeveloped Property and Provisional Undeveloped Property for Fiscal Year 2005-06 shall be $17,760 per Acre. Increase in the Assianed Annual Soecial Tax On each July l, commencing 7uly 1, 2006, the Assigned Special Taac rate for Developed Property, Undeveloped Properry and Provisional Undeveloped Properry shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. SECTION E BACKUP ANNUAL SPECIAL TAX At the time a Final Map is recorded, the Backup Annual Special Taac for a11 Lots within such Final Map uea shall be determined by dividing (a) the product of the Maacimum Special Tax rate for Undeveloped Property and the total Acreage of all Lots in such Final Map area, by (b) the total number of Lots within such Final Map area. The resulting quotient shall be the Backup Annual Special Ta7c for each Lot within such Final Map area. The Backup Annual Special Tax for all Assessor's Pazcels of Developed Properiy classified as Non-Residential Properry shall be the Maacimum Special T~ rate for Undeveloped Property multiplied by the Acreage of such Assessor's Parcel. If a Final Map includes Assessor's Parcels of Developed Property which are classified or reasonably expected to be classified as Residential Properry and Non-Residential Property, then the Backup Annual Special Tax for each Assessor's Parcel which is classified or reasonably City of Lake Elsinore Community Facilities District No. 2005-1 - ~ •:~~~-Iarch 23, 2004 Page 5 City of Lake Elsinore March 23, 2004 CFD No.2005-1(Serenit~ Page B~ Rate and Method of Apportionment expected to be classified as Residential Properry shall be computed exclusive of the allocable portion of total Acreage attributable to Assessor's Parcels classified or reasonably expected to be classified as Non-Residential Properiy. Notwithstanding the foregoing, if one or more Lots within a recorded Final Map aze subsequently changed or modified by recordation of a lot line adjustment or similar inshument, then the aggregate Backup Special T~ applicable to such changed Lots shall be reallocated in a manner consistent with the first paragraph of this section among such changed Lots so that the cumulative total of the Backup Special Ta~c generated by such changed Lots equals the cumulative total of such Backup Speciai Ta3c that would have been generated by such changed Lots if such change did not take place. On each July 1, commencing July 1, 2006, the Backup Annual Special Ta~c rate shall be increased by two percent (2.00°/a) of the amount in effect in the prior Fiscal Year. SECTION F METHOD OF APPORTIONMENT OF TIlE ANNUAL SPECIAL TAX Commencing Fiscal Year 2005-06 and for each subsequent Fiscal Year, the City Council shall levy Annual Special Taxes on all Tu~able Properly in accordance with the following steps: Step One: The Annual Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to 100% of the applicable Assigned Annual Special Taac rates in Table 1 to satisfy the Special Tasc Requirement. Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the first step has been completed, the Annual Special Taac shall be levied Proportionately on each Assessor's Parcel of Undeveloped Properiy up to 100% of the Assigned Annual Special Tax applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement. Step Three: If additional moneys are needed to sarisfy the Special Tas Requirement after the first two steps have been completed, then the Annual Special Tax on each Assessor's Parcel of Residenrial Properry whose Maximum Special Ta~c is the Backup Annual Special Taac shall be increased Proportionately from the Assigned Annual Special Taac up to 100% of the Backup Annual Special Tax as needed to satisfy the Special Tax Requirement. Step Four: If additional moneys are needed to satisfy the Special Taac Requirement after the first three steps have been completed, the Annual Special Tax shall be levied Proportionately on each Assessor's Parcel of Provisional Undeveloped Property up to 100% of the Assigned Annual Special Tax applicable to each such Assessor's Parcel as needed to satisfy the Special Tax Requirement. City of Lake Elsinore March 23, 2004 Community Facilities District No. 2005-1 Page 6 City of Lake Elsinore March 23, 2004 CFD No. 20051 (Serenit~ Page B-7 Rate and Method of Apportionment SECTION G PREPAYMENT OF ANNUAL SPECIAL TAX The following definitions apply to this Secrion G: "CFD Public Facilities" means $7,500,000 expressed in 2005 dollars, which shall increase by the Constnxction Inflation Index on July l, 2006, and on each 7uly 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2005-1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taaces levied under this Rate and Method of Apportionment. "Construction Fund" means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are cunently available for expenditure to acquire or construct public facilities eligible under CFD No. 2005-1. "Construction Intlafion Index" means the annual percentage change in the Engineering News- Record Building Cost Index for the city of Los Angeles, measured as of the calendaz yeaz which ends in the previous Fiscal Year. In the event this index ceases to be published, the Consiruction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the city of Los Angeles. "Future Facilities Costs" means the CFD Public Facilities minus public facility costs available to be fitnded through existing construction or escrow accounts or funded by the Outstanding Bonds, and minus public facility costs funded by interest earnings on the Conshuction Fund actually earned prior to the date of prepayment. "Outstanding Bonds" means a11 previously issued Bonds issued and secured by the levy of Special Taxes which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Masimum Special Ta~ces. The Special Tax obligation of an Assessor's Parcel of Developed Properiy, or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued or is expected to be issued, or an Assessor's Pazcel of Provisional Undeveloped Property may be prepaid in full, provided that there ace no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor's Pazcel at the time the Special Tax obligation would be prepaid. The Prepayment Amount for an Assessor's Pazcel eligible for prepayment shall be determined as described below. An owner of an Assessor's Parcel intending to prepay the Annual Special Tax obligation shall provide the City with written notice of intent to prepay, and within 5 days of receipt of such notice, the City shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by CFD No. 2005-1 in calculating the proper amount of a prepayment. Within 15 days of receipt of such non-refundable deposit, the City shall notify such owner of the Prepayment Amount of such Assessor's Parcel. City of Lake Elsinore March 23 2004 Community Facilities District No. 2005-1 ~ ~ Page 7 City of Lake Elsinore CFD No. 20051(Serenit» March 23, 2004 Page B-8 Rate and Method of Apportionment The Prepayment Amount for each applicable Assessor's Pazcel shall be calculated according to the following formula (capitalized terms defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Cost plus Administrative Fee less Reserve Fund Credit equals Prepayment Amount As of the date of prepayment, the Prepayment Amount shall be calculated as follows: 1. For an Assessor's Parcel of Developed Property, compute the Assigned Annual Special Tax applicable to the Assessor's Parcel. For an Assessor's Parcel of Undeveloped Property, compute the Assigned Annual Special Tax as though is was already designated as Developed Property based upon the building permit issued or expected to be issued for that Assessor's Parcel. For an Assessor's Parcel of Provisional Undeveloped Properry compute the Assigned Annual Special Tax for that Assessor's Parcel. 2. For each Assessor's Parcel of Developed Property, Undeveloped Property or Provisional Undeveloped Properry to be prepaid, divide the Assigned Annual Special T~ computed pursuant to paragraph 1 for such Assessor's Parcel by the suin of the estimated Assigned Annual Special Ta~c applicable to all Assessor's Parcels of Taxable Properiy at buildout, as reasonably determined by the City. 3.. Multiply the quotient computed pursuant to paragraph 2 by the Outstanding Bonds. The product shall be the `Bond Redemption Amount". 4. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed with the proceeds of the Bond Redemption Amount. This product is the "Redemption Premium." 5: Compute the Future Facilities Cost. 6. Multiply the quotient computed pursuant to paragraph 2 by the amount determined pursuant to paragraph 5 to deternune the Future Facilities Cost to be prepaid (the "Future Faciliries AmounY'). City of Lake Elsinore March 23, 2004 Community Facilities District No. 2005-1 Page 8 City of Lake Eisinore CFD No. 2005~1(Serenity) March 23, 2004 Page B-9 Rate and Method of Apportionment 7. Compute the amount needed to pay interest on the Bond Redemption Amount to be redeemed with the proceeds of the Prepayment Amount until the earliest call date for the Outstanding Bonds. 8. Estimate the amount of interest eamings to be derived from the reinvestment of the Bond Redemption Amount plus the Redemption Premium until the earliest call date for the Outstanding Bonds. 9. Subtract the amount computed pursuant to paragraph 8 from the amount computed pursuant to paragraph 7. This difference is the "Defeasance Cost." 10. Estimate the administrative fees and expenses associated with the prepayment, including the costs of computation of the Prepayment Amount, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption. This amount is the "Administrative Fee." 11. Calculate the "Reserve Fund Credit" as the lesser of: (a) the expected reduction in the applicable reserve requirements, if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirements in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the applicable reserve funds on the prepayment date. Notwithstanding the foregoing, if the reserve fund requirement is satisfied by a surety bond or other instrument at the time of the prepayment, then no Reseroe Fund Credit shall be given. Notwithstanding the foregoing, the Reserve Fund Credit shall in no event be less than 0. 12. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance, and the Administrative Fee, less the Reserve Fund Credit. 13. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 9, and 11 shall be deposited into the appropriate fund as established under the bond indenture and used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 6 shall be deposited into the Construction Fund. The amount computed pursuant to pazagraph 10 shall be retained by CFD No. 2005-1. With respect to Special Tu~ obligation that is prepaid pwsuant to this Section G, the Ciry Council shail indicate in the records of CFD No. 2005-1 that there has been a prepayment of the Special T~ obligarion and shall cause a suitable notice to be recorded in compliance with the Act within thirry (30) days of receipt of such prepayment to indicate the prepayment of the Special Tax obligation and the release of the Special Taac lien on such Assessor's Parcel, and the obligation of such Assessor's Pazcel to pay such Special Tases shall cease. City of Lake Elsinore Mazch 23, 2004 Community Facilities District No. 2005-i _: Page 9 City of Lake Elsinore March 23, 2004 CFD No. 20051(Serenity~ Page B-10 Rate and Method of Apportionment Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Special Taac that may be levied on Taxable Properry, net of Administrative Expenses, shall be at least 1.1 times the regulazly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Yeaz. SECTION H PARTIAL PREPAYMENT OF ANN IJAL SPECIAL TAX The Special Tas obligation of an Assessor's Parcel of Developed Property, or an Assessor's Pazcel of Undeveloped Properiy for which a building pernut has been issued or is eapected to be issued, or and Assessor's Pazcel of Provisional Undeveloped Property, as calculated in this Section H. below, may be paitially prepaid, provided that there aze no delinquent Special Taaces, penalries, or interest chazges ontstauding with respect to such Assessor's Pazcel at the rime the Special Tax obligarion would be prepaid. The Partial Prepayment Amount shall be calculated according to the following formula: PP = ((PG -A)x F)+A The terms above have the following meanings PP = the Partial Prepayment Amount. PG = the Prepayment Amount calculated according to Section G. F= the percent by which the owner of the Assessor's Parcel is partially prepaying the Special Taac obligation. A= the Administrative Fees and Expenses calculated according to Section G. With respect to any AssesSor's Pazcel that is partially prepaid, the City Council shall indicate in the records of CF'D No. 2005-1 that there has been a partial prepayment of the Special Tax obligarion and shall cause a suitable norice to be recorded in compliance with the Act within thiriy (30) days of receipt of such partial prepayment of the Special Taz~ obligation, to indicate the partial prepayment of the Special Tas obligation and the partial release of the Special Tas lien on such Assessor's Pazcel, and the obligarion of such Assessor's Pazcel to pay such prepaid portion of the Special TaY shall cease. Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Special Taac that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year. SECTION I TERMINATION OF SPECIAL TAX For each Fiscal Year that any Bonds are outstanding the Annual Special Tax sha11 be levied on all Assessor's Parcels subject to the Annual Special Tax. If any delinquent Annual Special Tases City of Lake Elsinore . March 23, 2004 Community Facilities Disfrict No. 2005-1 Page 10 City of Lake Eisinore March 23, 2004 CFD No. 20057 (Serenit~ Page B-11 Rate and Method of remain uncollected prior to or after all Bonds are retired, the Annual Special Tax may be levied to the eactent necessary to reimburse CFD No. 2005-1 for uncollected Annual Special Ta~ces associated with the levy of such Annual Special Ta3ces, but not later than the 2043-44 Fiscal Year. SECTION J EXEIVIPTIONS The City shall classify as Exempt Properry (i) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor's Parcels which are used as places of worship and aze exempt from ad valorem properiy tases because they are owned by a religious organization, (iii) Assessor's Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor's Parcels with pablic or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor's Parcels which are privately owned and aze encumbered by or restricted solely for public uses, or (vi) other types of public uses deternuned by the City Council, provided that no such ctassificarion would reduce the sum of all Taz~able Property to less than 34.08 Acres. Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taacable Property to less than 34.08 Acres. Assessor's Paicels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Tasable Properry to less than 34.08 Acres will be classified as Provisional Undeveloped Properiy, and will be subject to Special T~es pursuant to step four in Section F. SECTION K APPEALS Any properiy owner claiming that the amount or applicarion of the Special Tax is not correct may file a written notice of appeal with the City Council not later than twelve months after hauing paid the first installment of the Special Ta~c that is disputed. A representative(s) of CFD No. 2005-1 shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the representative's decision requires that the Special Tax for an Assessor's Parcel be modified or changed in favor of the properiy owner, a cash refund shall not be made (except for the last yeac of levy), but an adjustment shall be made to the Annual Special Tax on that Assessor's Parcel in the subsequent Fiscal Year(s). SECTION L MANNER OF COLLECTION The Annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taaces, provided, however, that CFD No. 2005-1 may collect Annual Special Taz[es at a different time or in a different manner if necessary to meet its financial obligations. City of Lake Elsinore -.. ~'vlazch 23, 2004 Community Facilities District No. 2005-1 Page 11 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) SS: CITY OF LAKE ELSINORE ) I, VICKI KASAD, CITY CLERK OF THE CITY OF LAKE ELSINORE, CALIFORNIA, DO HEREBY CERTIFY that the foregoing Resolution duly adopted by the City Council of the City of Lake Eisinore at a Regular Meeting of said Council on the 25h of January, 2005, and that it was so adopted by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: AB TAIN: COUNCILMEMBERS: ~ ~~ VICHI KASAD, CMC, CITY CLERK/ HUMAN RESOURCES DIRECTOR CITY OF LAKE ELSINORE (SEAL) STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) SS: CITY OF LAKE ELSINORE) BUCKLEY, ffiCKMAN, KELLEY, SCHIFFNER, MAGEE NONE NONE NONE I, VICHI KASAD, CITY CLERK OF THE CITY OF LAKE ELSINORE, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. 2005-10 of said Council, and that the same has not been amended or repealed. DA E: J uary 26, 2005 ~ VICKI KASAD, CMC, CITY CLERK/ HUMAN RESOURCES DIRECTOR CITY OF LAKE ELSINORE (SEAL)