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HomeMy WebLinkAboutCC Reso No 2005-038RESOLUTION NO. 2005 - ~R RESOLUTION OF FORMATION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DETERMIIVING THE VALIDITY OF PRIOR PROCEEDINGS AND ESTABLISHING CITY OF LAKE ELSINORE COMMLINITY FACILITIES DISTRICT NO. 2004-3 (ROSETTA CANYOl~ WHEREAS, the City Council (the "Council") of the City of Lake Elsinore (the "Cit~') has heretofare adopted Resolution No. 2004-77 ("Resolution of Intention") stating its intenrion to form City of Lake Elsinore Community Facilities District No. 2004-3 (Rosetta Canyon) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), and designating portions of the CFD as Improvement Area No. 1 and Improvement Area No. 2; 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 by the CFD for Improvement Area No. 1 and Improvement Area No. 2; 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 by the CFD for Improvement Area No. 1 and Improvement Area No. 2 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 i. Pursuant to Section 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. 45559795.1 Section 2. A community facilities district to be designated "City of Lake Elsinore Communiry Facilities District No. 2004-3 (Rosetta Canyon)" is hereby established pursuant to the Act. Section 3. The description and map of the boundaries of the CFD on file in the 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 pages 46 through 47 and as Insriument No. 2005- 0006006). Section 4. The facilities proposed to be financed by each improvement area of the CFD are public infrastnzcture 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, storm drain, water and sewer facilities, 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, connecrion 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 t~ (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 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 taac 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 Tax is levied, the levy shall 45559795.1 indude 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 collection of the Special Tax is described in detail iri Elchibit A attached hereto and by this reference incorporated herein. The Special TaJC 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 an improvement area 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 the same improvement area of 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 same improvement area of the CFD by more than 10 percent. Furthermore, the maximum special taY 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. 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 Ta7c shall attach to all nonexempt real property in the CFD, and this lien shall continue in force and effect until the Special Tax obligation is prepaid or otherwise permanently satisfied and the lien canceled in accordance wiCh law or until collection of the Special Tax by the CFD ceases. Secrion 7. The proposed Special Tax to be levied in each improvement area of the CFD has not been precluded by protests by owners of one-half or more of the land in the territory included in the same improvement area of 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 Tax: A. Such Special Tax shall be levied for the specific purposes set forth herein. 45559795.1 B. The proceeds of the levy of such Special Tax shall be applied only to the specific purposes set forth herein. C. The CFD shall establish an account or accounts into which the prooeeds of such Special Tax shall be deposited. D. The City Manager, or his or here designee, acting for and on behalf of the CFD, shall annually file a report with the Council as required pursuant to Government Code Section 500753. Section 9. The City Manager, or his designee, is designated to be responsible for preparing or causing to be prepared annually a current roll of Special Taac levy obligarions by assessor's parcel number and for estimating future Special Tax levies pursuant to Section 533401 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 limit with respect to each improvement area of the CFD shall be by hand delivered ballot election. Secrion 11: 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 ele'ctions on the incurring bonded indebtedness, the levy of the Special Tax, and the establishment of the appropriatiori limit. 45559795.1 PASSED, APPROVED AND ADOPTE~ this 9~nd day of March , 2005. CITY OF LAKE ELSINORE By: TitlE A EST: 2~ Ciiy Clerk of the City of Lake Elsinore APPROVED AS TO Attorney 45559795.1 EXHIBIT A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX 45559795.1 City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page B-1 Rate and Method of Apportionment of Special Taxes RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAKE ELSINORE COMMITrIITY FACILITIES DISTRICT No. 2004-3 IMPROVEMENT AREA No. 1(ROSETTA CANYON) A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Communiry Faciliries District IVo. 2004-3 (Improvement Area No. 1) (Rosetta Canyon) ("CFD No. 2004-3 (IA No. I)") and collected each Fiscal Year commencing in Fiscal Year 2005-2006, in an amount determined through the applicarion of the Rate and Method of Apportionment as described below. All of the real properry in CFD No. 2004-3 (IA No. 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. A. DEFINTTIONS The terms hereinafter set forth have the following meanings "Acre or Acreage" means the land azea of an Assessor's Parcel as shown on an Assessor's Pazcel Map, or if the land azea is not shown on an Assessor's Pazcel Map, the land azea shown on the applicable final map, pazcel map, condominium plan, or other recorded County parcel map. "Act" means the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5, Division 2 of Title 5 of the Califomia Govemment Code. "Administrative Expenses" means the following actual or reasonably esrimated costs direcfly related to the administration of CFD No. 2004-3 (IA No. 1): the wsts of computing the Special Talces and preparing the annual Special Ta7c collecuon schedules (whether by the City or designee thereof or both); the costs of collecting the Special Tases (whether by the City or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the T~ustee (including its legal counsel) in the dischazge of the duties required of it under the Indenture; the costs to the Ciry, CFD No. 2004-3 (IA No. 1) or any designee thereof of complying with arbitrage rebaYe requirements; the costs to the City, CFD No. 2004-3 (IA No. 1) or any designee thereof of complying with disclosure requirements of the City, CFD No. 2004-3 (IA No. 1) or obligated persons associated with applicable federa( and state securities laws and the Act; the costs associated with prepazing Special Tax disclosure statements and responding to public inquiries regarding die Special Taxes; the costs of the City, CFD No. 2004-3 (IA No. 1) or any designee thereof related to an appeal of the Special Taac; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third parry expenses. Administrarive Expenses shall also include amounts esrimated by the CFD Administrator or advanced by the City or CFD No. 2004-3 (IA No. 1) for any other administrative purposes of CFD No. 2004-3 (IA No. 1), including attomey's fees and other wsts related to commencing and pursuing to complerion any foreclosure of delinquent Special Tases. "Assessor's Parcel" means a lot or pazcel shown in an Assessor's Pazcel Map with an assigned Assessor's Pazcel number. City ojLake ELsinare ~ CFD No. 2004-3 (Rosetta Canyon) -ImprovementArea No. 1 ~ City of Lake Elsinwe Exhibit "B" Oecember 76, 2004 CFD No. 2004-3 (Rosetta Canyon) Page B-2 Rate and Method of Apportionment of Special Taxes "Assessor's Parcel Map" means an official map of the County Assessor of the County designating pazcels by Assessor's Pazcel number. "Assigned Special Tax" means the Special Tax for each Land Use Class of Developed Properry in each Zone, as detemrined in accordance with Section C1. b. betow. "Authorized Facilities" means those authorized improvements, as listed on E~ibit "A" to the Resolurion of Formation. "Backup Special Tax" means the Special Taac applicable to each Assessor's Pazcel of Developed Property, as determined in accordance with Secrion C.l.d. below. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special TaY Requirement and providing for the levy and collecrion of the Special Taxes. "CFD No. 20043" means City of Lake Elsinore Community Faciliries District No. 2004-3 (Rosetta Canyon). "CF`D No. 2004-3 (IA No. 1)" means Improvement Area No. 1 of CFD No. 2004-3, as idenrified on the boundary map for CFD No. 2004-3. "CFD No. 2004-3 (IA No. 1) 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 properiy within the boundaries of CFD No. 2004-3 (IA No. 1) under the Act. °Cily" means the City of Lake Elsinore. "City Council" means the City Council of the City of Lake Elsinore, acring as the legislarive body of CFD No. 2004-3 (IA No. 1). "County" means the County of Riverside. "Developed Property" means, for each Fiscal Yeaz, all Taxable Properiy, exclusive of Taxable Public Properiy and Taxable Property Owner Association Property, for which the Final Subdivision was recorded on or before January 1 of the prior Fiscal Yeaz and a building pemut for new construcrion was issued after January 1, 2004 and on or before May 1 of the Fiscal Year preceding the Fiscal Yeaz for which the Special Tazes aze being levied. "Final Subdivision" means a subdivision of properry by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (Califomia Government Code Secrion 66410 et seq.) or recordarion of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which building pernuts may be issued without further subdivision. crty ojLake Elsinom ~ CFD No. 2004-3 (Rosetta Canyon) - Improvement Area No. 1 City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page &3 Rate and Method of Apportionment of Special Taxes "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 instrument pursuant to which CFD No. 2004-3 (IA No. 1) Bonds are issued, as modified, amended and/or supplemented from time to time, and any instminent replacing or supplemenring the same. "Land Use Ciass" means any of the classes listed in Table 1 "Maximum Special T~" means the masimum Special Tax, deternuned in accordance with Secrion C below, that can be levied in any Fiscal Yeaz on any Assessor's Parcel. "Non-Residential Property" means all Assessor's Pazcels of Developed Property for which a building pemut pernritting the construction of one or more non-residenrial units or faciliries has been issued by the City. "Outstanding Bonds" means all CFD No. 2004-3 (IA No. 1) Bonds which aze deemed to be outstanding under the Indenture. "PropeMy Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2004-3 (IA No. 1) that was owned by a properiy owner associarion, including any master or sub-association, as of January 1 of the prior Fiscal Year. "Proportionately" means for Developed Properry that the rario of the actual Special Tax levy to ihe Assigned Special Tax is equal for all Assessor's Pazcels of Developed Properry, or where the Backup Special Ta~c is being levied, that the rario of the actual Special Tax levy to the Maa~imum Special Tuc is equal for all Assessor's Pazcels upon which a Backup Special Tax is being levied. For Undeveloped Properiy; "Proportionately" means that the ratio of the actual Special TaY levy per Acre to the Maximum Specia[ Tax per Acre is equal for all Assessor's Pazcels of Undeveloped Properry. The term "Proportionately" may similazly be applied to other categories of Talcable Properry as listed in Secrion D below. "Public Property" means properiy within the boundaries of CFD No. 2004-3 (IA No. 1) 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 govemment, the State, the County, the City, or any local govemment or other public agency, provided that any properry leased by a public agency to a private entiry and subject to taxarion under Section 53340.1 of the Act shall be tazed and classified according to its use. "Residenfial Floor Area" means all of the squaze footage of living azea within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similaz area The determinarion of Residential Floor Area for an Assessor's Parcel shall be made by reference to the building pernut(s) issued for such Assessor's Pazcel. City ojLake Elsinore ~ CFD No. 2004-3 (Rosetta Canyon) -ImprovemetitArea No. I City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page B-0 Rate and Method of Apportionment of Special Taxes "Residential Property" means all Assessor's Pazcels of Developed Property for which a building pernat pernutting the construction thereon of one or more residenrial dwelling units has been issued by the City. "Resolufion of Formation" means the Resolurion of Formarion for CFD No. 2004-3 (IA No. 1). "Special Tax" means the special tax to be levied in each Fiscal Yeaz on each Assessor's Pazcel of Developed Property, Talcable Properry Owner Association Properry, Taxable Public Property, and Undeveloped Property to fund the Special Tau Requirement. "Speciai Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2004-3 (IA No. 1) to: (i) pay debt service on all Outstanding Bonds due in the calendaz yeaz commencing in such Fiscal Yeaz; (ii) pay periodic costs on the CFD No. 2004-3 (IA No. 1) Bonds, including but not limited to, credit enhancement and rebate payments on the CFD No. 2004-3 (IA No. i) Bonds due in the calendaz yeaz commencing in such Fiscai 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 ihe delinquency rate for the Special Tax levy in the previous Fiscal Year; (vi) pay directly for acquisirion or construction of Authorized Facilities to the extent that the inciusion of such amount does not increase the Special TaY levy on Undeveloped Property; less (vii) a credit for funds available to reduce the annual Special Tax levy, as deternuned by the CFD Adminish~ator pursuant to the Indenture. "State" means the State of California "Taxable Property" means all of the Assessor's Pazcels within the boundaries of CFD No. 2004-3 (IA No. 1) which aze not exempt from the Special Tax pursuant to law or Section E below. "Taxable Property Owner Association Property" means all Assessor's Pazcels of Properiy Owner Associarion Properiy that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Pazcels of Public Property that aze not exempt pursuant to Section E below. "Trustee" means the hustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means, for each Fiscal Yeaz, all Taacable Properly not classified as Developed Property, Taacable Property Owner Associarion Property, or Taxable Public Property. "Zone" means Zone 1 or Zone 2, as applicable. "Zone 1" means the land geographically identified within the boundaries of zone 1 as delineated in E~ibit A to this Rate and Method of Apportionment. City ojLake Elsinore CFD No. 2004-3 (Rosetta Canyon) - ImpravemenlArea Nn. 1 City of Lake Elsinore Exhibit "B" December 16, 2004 CF~ No. 20043 (Rosetta Canyon) Page B-5 Rate and Method of Apportionment of Special Taxes "Zone 2" means the land geographically identified within the boundaries of zone 2 as delineated in Elchibit A to this Rate and Method of Apportionment. B. AS5IGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Tasable Properry within CFD No. 2004-3 (IA No. 1) shall be assigned to a Zone and further classified as Developed Properry, Tasable Public Property, Tasable Properry Owner Association Properry, or Undeveloped Property, and shall be subject to Special Tases in accordance with this Rate and Method of Apportionment determined pursuant to Sections C and D below. Residenrial Properry 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-Residenrial Properry shall be assigned to Land Use Class 12. C. MAXIMUM SPECIAL TAX RATE 1. Devetoped Property a Maximum Special Tax The Maximum Special Tar for each Assessor's Pazcel classified as Developed Properry shall be the greater of (i) the amount derived by applicarion of the Assigned Special Taac or (ii) the amount derived by applicarion of the Backup Special Tas. b. Assianed Soecial Taac The Assigned Special Tas for each Land Use Class is shown below in Table 1. City of Lake ELsinore ~ CFD No. 2004-3 (Rosetta Canyon) - Improvement Area No. 1 City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page B-6 Rate and Method of Apportionment of Special Taxes TABLE 1 Assigned Special Taxes for Developed Property Community Facilities District No. 2004-3 Improvement Area No. 1 Fiscal Year 2005-2006 The Assigned Special Tases 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 Tas for the previous Fiscal Year. d. Backun Special Taa~ The Fiscal Year 2005-2006 Backup Special Tas attributable to a Final Subdivision in Zone 1 or Zone 2 will equal $16,285 multiplied by the Acreage of all Ta7cable Properry, exclusive of any Ta7cable Properiy Owner Association Properiy and Tazcable Public Property, therein. The Backup Special Taz for each Assessor's Parcel of Residential Properiy 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 pernuts for residential construction have or may be issued City ojLake Elsinore CFD No. 2004-3 (RoseKa Canyon) - ImprovementArea No. 1 c. Increase in the Assigned Snecial Tax City of Lake Elsinwe Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page &7 Rate and Method of Apportionment of Special Taxes (i.e., the number or residenrial lots). The Backup Special Tas for each Assessor's Pazcel of Non-Residenrial Properry therein shall equal $16,285 multiplied by the Acreage of such Assessor's Pazcel. If a Final Subdivision includes Assessor's Pazcels of Taacable Properry for which building pernuts for both residenrial and non-residential construcrion may be issued, exclusive of TaYable Properry Owner Associarion Properry and Taxable Public Properry, then the Backup Special Taac for each Assessor's Parcel of Residential Property shall be computed exclusive of the Acreage and Assessor's Pazcels of properiy for which building pemuts 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 Taac for each Assessor's Parcel of Developed Properry in such Final Subdivision area that is changed or modified shall be a rate per square foot of Acreage calculated as follows: l. Deternune the total Backup Special Tases anticipated to apply to the changed or modified Final Subdivision azea prior to the change or modificarion. 2. The result of pazagraph 1 above shall be divided by the Acreage of Tasable Property which is ultimately expected to e~st in such changed or modified Final Subdivision area, as reasonably determined by the CFD Administrator. 3. The result of pazagraph 2 above shall be divided by 43,560. The result is the Backup Special Ta7c per square 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 Yeazs in which the Special Tax may be levied. Release of Obligation to Pay and Disclose Backup Special Ta~c All Assessors' Parcels within CFD No. 2004-3 (IA No. 1) will be relieved simultaneously and permanently from the obligarion to pay and disclose the Backup Special Ta1c if the CFD Administrator determines that the annual debt service required for the Outstanding Bonds, when compared to the Assigned Special Taxes that may be levied against all Assessors' Pazcels of Developed Property result in 110% debt service coverage (i.e., the Assigned Special Taxes that may be levied against all Developed Properry in each remaining Fiscal Yeaz based on then elcisting development in CFD No. 2004-3 (IA No. 1) is at least equal to the sum of (i) the City ojLake Elsinore CFD No. 2004-3 (Roselta Cariyon) - Improvemext Area No. I City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Canyon) Page B-S Rate and Method of Apportionment of Special Taxes Administrative Expenses and (ii) 1.10 times ma~cimum annual debt service, in each remaining Fiscal Yeaz on the Outstanding Bonds). e. Increase in the Backun Snecial Tax On each July 1, commencing on July 1, 2006, the Backup Special Ta~c shall be increased by an amount equal to two percent (2%) of the Backup Special Taac for the previous Fiscal Yeaz. f. Multiple Land Use Classes In some instances an Assessor's Pazcel of Developed Properry may contain more than one Land Use Class. The Maicimum Special Taz levied on an Assessor's Pazcel shall be the sum of the Ma~cimum Special Tas for a11 Land Use Classes located on that Assessor's Parcel. The CFD Adminislrator's allocation to each type of properry shall be final. 2. Taxable Property Owner Associafion Property, T~able Public Property, and Undeveloped Property The Fiscal Yeaz 2005-2006 Malcimum Special Tax for Taxable Properry Owner Association Properry, Taxable Public Properry, and Undeveloped Properry in Zone 1 or Zone 2 shall be $16,285 per Acre, and shall increase thereafter, commencing on July 1, 2006 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Mazcimum Speciai Tax for the previous Fiscal Yeaz. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Yeaz 2005-2006 and for each following Fiscal Yeaz, the City Council shall levy the Special Tax until the amount of Special Taxes levied equals the Special Taac Requirement. The Special Taz shall be levied each Fiscal Yeaz as follows: First: The Special Tas shall be levied on each Assessor's Pazcel of Developed Properry in Zone 1 and Zone 2 in an amount equal to 100% of the applicable Assigied Special Ta1c; Second: If additional monies aze needed to satisfy the Special Tax Requirement after the first step has been completed, the Speciai Tax shall be levied Proportionately on each Assessor's Pazcel of Undeveloped Properry in Zone 1 and Zone 2 at up to 100% of the applicable Maximum Special Tas for Undeveloped Property; Third: If addirional monies ue needed to satisfy the Special Tax Requirement after the first two steps have been completed, then the levy of the Special Tax on each Assessor's Parcel of Developed Properry in Zone 1 and Zone 2 whose Maacimum Special Taac is determined through the application of the Backup Special Tax shall be increased Proportionately from the Assigied Speciat Tax up to the Maacimum Special Tax for each such Assessor's Parcel; City ojLake E(sinore _ CFD No. 2004-3 (Rosetta Canyon) - Improvement Area No. 1 City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Carryon) Page &9 Rate and Method of Apportionment of Special Taxes Fourth: If additional monies aze needed to satisfy the Special Tas Requirement after the first three steps have been completed, then the Special Taac shall be levied Proportionately on each Assessor's Parcel of Tasable Properry Owner Association Properry and TaYable Public Properry in Zone 1 and Zone 2 at up to the applicable Mu~imum Special Ta~c for Ta~cable Properry Owner Association Properry or Tasable Public Properry. Notwithstanding the above the City Council may, in any Fiscal Yeaz, levy Proportionately less than 100% of the Assigned Special TaJC in step one (above), when (i) the City Council is no longer required to levy the Special Tas pwsuant to steps two tluough four above in order to meet the Special Taac Requirement; and (ii) all authorized CFD No. 2004-3 (IA No. 1) Bonds have aiready been issued or the City Council has covenanted that it will not issue any addirional CFD No. 2004-3 (IA No. 1) Bonds (except refunding bonds) to be supported by the Special Tas. Further notwithstanding the above, under no circumstances will the Special Tas levied against any Assessor's Parcel of Residential Property for which an occupancy permit for private residenrial use has been issued be increased by more than ten percent as a wnsequence of delinquency or default by the owner of any other Assessor's Pazcel within CFD No. 2004-3 (IA No. 1). E: EXEMPTIONS No Special Tas shall be levied on up to 127.43 Acres of Properry Owner Association Properry and/or Public Property m CFD No. 2004-3 (IA No. 1). Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which properry becomes Properiy Owner Associarion Properiy or Public Property. However, should an Assessor's Pazcel no longer be classified as Properiy Owner Associarion Properiy or Public Property, its taac-exempt status will be revoked. Properry Owner Association Properry or Public Property that is not exempt from Special Tases under this section shall be subject to the levy of the Special Tax and shall be talced Proportionately as part of the fourth step in Secrion D above, at up to 100% of the applicable Mazcimum Special Tax for Tasable Properiy Owner Association Properry or Tasable Public Properly. F. MANNER OF COLLECTION The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem properly tases; provided, however, that CFD No. 2004-3 (IA No. 1) may directly bill the Special Tas, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as percnitted by the Act. City ojLake ELsinore ~ CFD No. 2004-3 (Xoselta Canyon) - ImprovementArea No. 1 City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetia Canyon) Page B-10 Rate and Method of Apportionment of Special Taxes G. APPEALS Any landowner or resident who feels that the amount of the Special Tas levied on theii Assessor's Pazcel is in error may submit a written appeal to CFD No. 2004-3 (IA No. 1). The CFD Administcator shall review the appeal and if the CFD Adminisuator concws, the amoimt of the Special Tax levied shall be appropriately modified. The City Council may interpret this Rate and Method of Apportionmen{ 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 Secrion H: "Buildout" means, for CFD No. 2004-3 (IA No. 1), that all expected building pernuts have been issued. "CFD Public Facilities" means either $16,190,781 in 2004 dollazs, which shall increase by the Construction Inflation Index on July 1, 2005, and on each July 1 thereafter, or such lower number as (i) shall be deternuned by the CFD Adminislrator as sufficient to provide the public facilities to be provided by CFD No. 2004-3 (IA No. 1) under the authorized bonding program for CFD No. 2004-3 (IA No. 1), or (ii) sha11 be determined by the City Council concurrently with a covenant that it will not issue any more CFD No. 2004-3 (IA No. 1) Bonds (except refunding bonds) to be supported by the Special Taaces levied under this Rate and Method of Apportionment as described in Secrion D. "ConstrucHon Inflafion Indes" 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 Yeaz. In the event this index ceases to be published, the Conslruction Inflation Index shali be another index as detemuned by the CFD Administrator that is reasonably compazable to the Engineering News Record Building Cost Index for the Ciry of Los Angeles. "Future Facilities Costs" means the CFD Public Faciliries 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 ~pected to be available to finance the cost of CFD Public Faciliries. "Lnprovement Fund" means an account specifically idenrified in the Indenture to hold funds which aze currently available for expenditure to acquire or construct CFD Public Faciliries eligible under the Act. City of Lake ELsinore CFD No. 2004-3 (RoseKa Canyon) - Improvement Area No. I City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Canyon) Page &11 Rate and Method of Apportionment of Special Taxes "Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that aze deemed to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Yeaz. 1. Prepayment in Full Only an Assessor's Pazcel of Developed Property, or Undeveloped Properiy for which a building pemut has been issued, may be prepaid. The obligarion of the Assessor's Parcel to pay any Special Tas may be permanently sarisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor's Pazcel only if there aze no delinquent Special Taxes with respect to such Assessor's Parcel at the rime of prepayment. An owner of an Assessor's Pazcel intending to prepay the Special Tax 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 norify such owner of the prepayment amount for such Assessor's Pazcei. The CFD Administrator may charge a reasonable fee for providing ttus 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. 1) Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture. The Speciai Tax Prepayment Amount (defined below) shall be calculated as sumuiarized below (capitalized terms as defined below): Bond Redemprion Amount plus plias plus plus less less Total: equals Redemption Premium Future Facilities Amount Defeasance Amount Administrative Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Prepayment Amount As of the proposed date of prepayment, the Special Tax Prepayment Amount shall be calculated as follows: Parasraah No.• l. Confirm that no Special Ta~c delinquencies apply to such Assessor's Parcel. 2. For Assessor's Parcels of Developed Properly, compute the Assigned Special Tas and Backup Special TaY. For Assessor's Pazcels of Undeveloped Properry for which a building pemut has been issued, compute the Assigned Special Tax and Backup Special Tax for that Assessor's Pazcel as though it was already designated as Developed Properry, based upon the building pernut which has already been issued for that Assessor's Pazcel. City ajLake ELsinore ~ CFD No. 2004-3 (Rosefta Canyon) - Improvement Area No. ] City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No.20043(Rosetta Canyon) Page &12 Rate and Method of Apportionment of Special Taxes 3. (a) Divide the Assigned Special Taz computed pursuant to pazagraph 2 by ihe total estimated Assigned Special Ta7ces for the entire CFD No. 2004-3 (IA No. 1) 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. 1), excluding any Assessor's Pazcels which have been prepaid, and (b) Divide the Backup Special TaY computed pursuant to pazagraph 2 by the total estimated Backup Special Tases at Buildout for the entire CFD No. 2004-3 (IA No. 1), excluding any Assessor's Parcels which have been prepaid. 4. Multiply the lazger quorient computed pursuant to pazagraph 3(a) or 3(b) by the Previously Issued Bonds to compute the amount of Previously Issued Bonds to be rerired and prepaid (the "Bond Redemption AmounP'). 5. Multiply the Bond Redemprion Amount computed pursuant to pazagraph 4 by the applicable redemprion premium (e.g., the redemprion price-100%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Faciliries Costs. 7. Multiply the lazger quotient computed pursuant to pazagraph 3(a) or 3(b) by the amount detemuned pursuant to paragraph 6 to compute the amount of Fuiure Faciliries Costs to be prepaid (the "Future Facilities AmounP'). 8. 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 Yeaz until the earliest redemprion date for the Previously Issued Bonds. 9. Deternune the Special TaY levied on the Assessor's Pazcel in the current Fiscal Yeaz which has not yet been paid. 10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Special Tas Prepayment Amount less the Future Faciliries Amount and the Administrative Fees and Expenses (defined below) from the date of prepayment unril the redemption date for the Previously Issued Bonds to be redeemed with the prepayment. 11. Add the amounts computed pursuant to pazagraphs 8 and 9 and subtract the amount computed pursuant to pazagraph 10 (the "Defeasance AmounP'). 12. "It~e administrative fees and expenses of CFD No. 2004-3 (IA No. i) aze as calculated by the CFD Administrator and include the costs of computarion of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming CFD No. 2004-3 {IA No. 1) Bonds, and the costs of recording any norices to evidence the prepayment and the redemption (the "Administrative Fees and Frpenses"). City of Lake Elsinore ~.. CFD Na. 2004-3 (Rosetta Canyon) - Improvement Area No. 1 ~~.. City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Canyon) Page B-13 Rate and Method of Apportionment of Special Taxes 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 subtracring the new reserye requirement (as de£uied 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 mterest credit shall be calculated by multiplying the lazger quorient 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 CrediP'). 15. The Special TaY prepayment is equal to the sum of the amounts computed pursuant to pazagraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to pazagraphs 13 and 14 (the "PrepaymentAmounP'). From the Prepayment Amount, the amounts computed pursuant to pazagraphs 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. 1) Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The amount computed pursuant to pazagraph 12 shall be retained by CFD No. 2004-3 (IA No. 1). The Special Taac Prepayment Amount may be insufficient to redeem a full $5,000 increment of CFD No. 2004-3 (IA No. 1) Bonds. In such cases, the increment above $5,000 or integral mulriple 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. 1) Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as deternuned under pazagraph 9(above), the CFD Administrator shall remove the current Fiscal Yeaz's Speciai Tas levy for such Assessor's Pazcel from the County talc rolls. With respect to any Assessor'S Parcel that is prepaid, the City Council shall cause a suitable norice to be recorded in compliance with the Act, to indicate the prepayment of the Special Taz and the release of the Special Tazc lien on such Assessor's Pazcel, and the obligation of such Assessor's Pazcel to pay the Special Tax shall cease. City ajLake Elsinore ~ CFD No. 2004-3 (Rosetta Canyon) - ImprovementArea No. l ~. City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page B-14 Rate and Method of Apportionment of Special Taxes Notwithstanding the foregoing, no Special Tax prepayment shall be allowed uniess, at the time of such proposed prepayment, the amount of Maximum Special Tases that may be levied on Taxable Properiy within CFD No. 2004-3 (IA No. 1) (after excluding 127.43 Ac~es of Properiy Owner Association Properiy andLor Public Property in CFD No. 2004- 3(IA No. 1) 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 and (ii) 1.10 times maximum annual debt service, in each remaining Fiscal Year on the Outstanding Bonds. 2. Prepayment in Part The Special Tax on an Assessor's Pazcel of Developed Property or an Assessor's Parcel of Undeveloped Pcoperiy for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculaYed as in Secrion H.1; except that a partial prepayment shall be calculated according to the following formula: PP=[(PE-A)xFj+A These terms have the following meaning PP = the partial prepayment. PE = the Special Taac 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 pcepaying the Special Tax. A= the Administrative Fees and Expenses calculated according to Secrion 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 Tas and the percentage by which the Special Tax shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Ta1c for an Assessor's Pazcel within 30 days of the request and may chazge a reasonable fee for providing this service. With respect to any Assessor's Pazcel that is partially prepaid, the City Council shall (i) distribute the funds remitted to it according to Section H.l, and (ii) indicate in the records of CFD No. 2004-3 (IA No. 1) that there has been a partial prepayment of the Special Tas and that a portion of the Special Tax with respect to such Assessor's Pazcel, equal to the outstanding percentage (1.00 - F) of the Yema;ning Masimum Special Tax, shall conrinue to be levied on such Assessor's Parcel pursuantto Secrion D. City ojLake Elsinare ~ CFD No. 2004-3 (Rosetta Canyon) - Improvement Area No. I City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page &15 Rate and Method of Apportionment of Special Taxes I. TERMAF SPECIAL TAX The Special TaY shall be levied for a period not to exceed forry yeazs commencing with Fiscal Year 2005-2006, provided however that Special Tases will cease to be levied in an earlier Fiscal Year if the CFD Administrator has deternuned (i) that a11 required interest and principal payments on the CFD No. 2004-3 (IA No. 1) Bonds have been paid; and (ii) all Authorized Facilities have been constructed. ciey of Lake Blsinar ' CFD No. 2004-3 (Rose1[a Canyon) - ImprovementArea No. I . City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Canyon~ Page B-16 Rate and Method of Apportionment of Special Taxes ~ d ~ _ ~ ~ ~~~ ~. ~~~ ~~~ ~ ~~~ ~ ~ ~~~~~~ . ~a ~ ~ . ~~ ~~ . ~ yry N U N ! v ~ W 1 ' ~' Q ~ ,d. rm. a d . . N ~ ~ ~-- i ~ ~ ~~ ~ ~ ~ tl~~~ O ~ ~ a ~ ~~~ ~~ ~ ~ ~~ ~ ~ ~.i ¢ W''"'° z ~y~~Q 4 fl3 ~ ~i1 ic ~ C]~s~.~r~a ~ L~C~~~`~ ~ ~~~~~ ~~ ~ ~ L~~. LJ ~ ~ w ~ '~ `'~ ~~ ~4 ~Q ~ ~ ~ ~~ U ~ ~ ~ ~~ ~ w ~ a r 2 w ~ ~ 0 ~ g CityojLake Elsinore CFD No. 2004-3 (RoseUa Canyon) - Improveme~nt Area Na.1 City of Lake Elsinore Exhibit "B" December 76, 2004 CFD No. 2004-3 (Rosetta Canyon) Page B-17 Rate and Method of Apportio~ment of Special Taxes RATE AND METHOD OF APPORTIONMENT FOR CITY OF LAI{E ELSINORE COMMIJNITY FACILITIES DISTRICT No. 20043 IMPROVEMENT AREA No. 2(ROSETTA CANYON) A Special Tas shall be levied on all Assessor's Pazcels in City of Lake Elsinore Community Faciliries District No. 2004-3 (Improvement Area No. 2) (Rosetta Canyon) ("CFD No. 2004-3 (IA No. 2)") and collected each Fiscal Yeaz commencing in Fiscal Year 2005-2006, in an amount detemrined through the applicarion 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, shall be tased 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 azea of an Assessor's Pazcel as shown on an Assessor's Pazcel Map, or if the land area is not shown on an Assessor's Pazcel Map, the land azea shown on the applicable final map, parcel map, condominium plan, or other recorded County pazcel map. "Act" means the Mello-Roos Community Faciliries Act of 1982, being Chapter 2.5, Division 2 of Title 5 of the California Govemment Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administrarion of CFD No. 2004-3 (IA No. 2): the costs of compuring the Special Taaces and preparing the annual Special Ta~c collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taices (whether by the City or otherwise); the costs of remitting the Special Tases to the Trustee; the costs of the Trustee (including its legal counsel) in the dischazge of the duties required of it under the Indenhue; the costs to the City, CFD No. 2004-3 (IA No. 2) or any designee'thereof of complying with azbitrage rebate requirements; the costs to the City, CFD No. 2004-3 (IA No. 2) or any designee thereof of complying with disclosure reqairements of the City, CFD No. 2004-3 (IA No. 2) or obligated persons associated with applicable federal and state securities laws and the AcY, the costs associated with preparing Special Taic disclosure statements and responding to public inquiries regarding the Special Ta~ies; the costs of the City, CFD No. 2004-3 (IA No. 2) or any designee thereof related to an appeal of the Special TaY; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third pariy expenses. Administrarive 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 attomey's fees and other costs related to commencing and pursuing to complerion any foreclosure of delinquent Special Tases. "Assessor's Parcel" means a lot or parcei shown in an Assessor's Pazcel Map with an assigned Assessor's Pazcel number. City ojLake Elsinore CFD No. 2004-3 (RoseKa Canyon) - Improvement Area No. 2 City of Lake Elsinore Exhibit "B" Decem6er 16, 2004 CFD No. 2004•3 ~Rosetta Canyon) Page &18 Rate and Method of Apportionment of Special Taxes "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's Pazcel number. "Assigned Special Tax" means the Special Taac for each Land Use Class of Developed Properry in each Zone, as detemuned in accordance with Section C.l.b. below. "Authorized Facitifies" means those authorized improvements, as listed on Exhibit "A" to the Resolurion of Formarion. "Backup Special T~" means the Special Tas applicable to each Assessor's Pazcel of Developed Properiy, as deternuned in accordance with Secrion C.l.d. below. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Ta1c Requirement and providing for the levy and collecrion of the Special Tases. "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 idenrified on the boundary map for CFD No. 2004-3. "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 secared solely by Special Tases levied on properiy 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 of the City of Lake Elsinore, acring as the legislarive body of CFD No. 2004-3 (IA No. 2). "County" means the County of Riverside. "Developed Property" means, for each Fiscal Year, all Ta~cable Properiy, exclusive of T~able Public Properry and Ta~cable Properiy Owner Association Properiy, for which the Final Subdivision was recorded on or before January 1 of the prior Fiscal Year and a building pemut for new construction was issued after January l, 2004 and on or before May 1 of the Fiscal Yeaz preceding the Fiscal Year for which the Special Tases aze being levied. "Final Subdivision" means a subdivision of properry by recordation of a final map, pazcel map, or lot line adjustment, pursuant to the Subdivision Map Act (Califomia Govemment Code Secrion 66410 et seq.) or recordarion of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which building pemuts may be issued without further subdivision. City ojLake E7sinore CFD No. 2004-3 (Rosetta Canyon) - Improvement Area No. 2 City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Canyon) Page &19 Rate and Method of Apportionment of Special Taxes "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 instrument pursuant 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 supplemenring the same. "Land Use Class" means any of the classes listed in Table 1 "Maximum Special Tax" means the maYimum Special Taac, deterrnined in accordance with Secrion C below, that can be levied in any Fiscal Yeaz on any Assessor's Pazcel. "Non-ResidenHal Property" means all Assessor's Pazcels of Developed Properiy for which a building pemut pernutting the construction of one or more non-residenrial units or faciliries has been issued by the City. "Outstanding Bonds" means all CFD No. 2004-3 (IA No. 2) Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any properly within the boundaries of CFD No. 2004-3 (IA No. 2) that was owned by a properry owner association, including any master or sub-association, as of January 1 of the prior Fiscal YOaz. "Propordonately° means for Developed Properry that the ratio of the actual Special TaY levy to the Assigned Special Tas is equal for all Assessor's Pazcels of Developed Property, or where the Backup Special Tax is being levied, that the ratio of the actual Special Tax levy to the Maximum Special TaY is equal for all Assessor's Pazcels upon wtuch a Backup Special Tax is being levied. For Undeveloped Properry, "Proportionately" means thaY the ratio of the actuat Special Tax levy per Acre to the MaYimum Special Tax per Acre is equal for all Assessor's Pazcels of Undeveloped Properly. The term "Proportionately" may similazly be applied to other categories of Tazcable Properiy 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 govemment or other public agency, provided that any properry leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taYed and classified according to its use. "Residential Floor Area" means ail of the squaze footage of living azea within the perimeter of a residential struchue, not including any carport, walkway, gazage, overhang, patio, enclosed pario, or similaz azea. The determinarion of Residential Floor Area for an Assessor's Pazcel shall be made by reference to the building permit(s) issued for such Assessor's Parcel. cily of zake Elsinore CFD No. 2004-3 (Roset[a Cunyon) - Improvement Area No. 2 City of Lake Elsinore Exhibit "B" December 16, 2004 CFO No. 20043 (Rosetta Canyon) Page &20 Rate and Method of Apportionment of Special Taxes "Residential Property" means all Assessor's Parcels of Developed Properiy for which a building permit pemutting 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. 20043 (IA No. 2). "Special Tag" means the special taY to be levied in each Fiscal Year on each Assessor's Pazcel of Developed Properiy, Tasable Properry Owner Association Properry, Tasable Public Properiy, and Undeveloped Properry to fund the Special Ta1c Requirement. "Special Tax RequiremenP' means that amount required in any Fiscal Year for CFD No. 2004-3 (IA No. 2) to: (i) pay debt service on all Outstanding Bonds due in the calendaz year 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 yeaz 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 Taac delinquencies based on the delinquency rate for the Special Tas levy in the previous Fiscal Year; (vi) pay directly for acquisirion or construction of Authorized Faciliries to the elctent that the inclusion of such amount does not increase the Special Taac levy on Undeveloped Properry; less (vii) a credit for funds available to reduce the annual Special Tax levy, as determined by the CFD Adminisirator pursuant to the Indenture. "State" means the State of Califomia "Taxable Property" means all of the Assessor's Pazcels within the boundaries of CFD No. 2004-3 (IA No. 2) which are not exempt from the Special Tax pursuant to law or Section E below. "Tasable Property Owner Associadon Property" means all Assessor's Pazcels of Properry Owner Associarion Properry that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Pazcels of Public Property that aze not exempt pursuant to Secrion E below. "Trustee" means the trustee, fiscal agent, or paying agent wider the Indenture. "Undeveloped Property" means, for each Fiscal Yeaz, all Taxable Properiy not classified as Developed Properiy, Taxable Properly Owner Associarion Properiy, or Taxable Public Properiy. "Zone" means Zone 1 or Zone 2, as applicable. °Zone 1" means the land geographically idenrified within the boundaries of zone 1 as delineated in Exhibit A to this Rate and Method of Apportionment. Cily of Lake Elsrreore CFD IVo. 2004-3 (Roselta Canyon) - Improvement Area No. 2 City of Lake Elsinwe Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page B-21 Rate and Method of Apportionment of Special Taxes "Zone 2" means the land geographically identified within the boundaries of zone 2 as delineated in Exhibit A to this Rate and Method of AppoRionment. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Yeu, all Tazable Property within CFD No. 2004-3 (IA No. 2) shall be assigned to a Zone and further classified as Developed Properry, Ta7cable Public Properiy, Taxable Properry Owner Associarion Properiy, or Undeveloped Properry, and shall be subject to Special Tases in accordance with this Rate and Method of Apportionment detemuned pursuant to Sections C and D below. Residenrial Properry 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-Residenrial Properry shall be assigned to Land Use Class 12. C. MAXIMUM SPECIAL TAX RATE 1. Developed Property a Maximum Special Taac The Maximum Special Tax for each Assessor's Pazcel classified as Developed Properiy shall be the greater of (i) the amount derived by application of the Assigned Special Tax or (ii) the amount derived by application of the Backup Special Taz. b. Assigned Suecial Taac The Assigned Special Talc for each Land Use Class is shown below in Table 1. ciry ojLake ELsinore CFD No. 2004-3 (Rosetta Canyon) - ImprovementArea No. 2 City of Lake Elsinore Ezhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page 8-22 Rate and Method of Apportionment of Special Taxes TABLE 1 Assigned Special Taxes for Developed Property Community Facilities District No. 2004-3 Improvement Area No. 2 Fiscal Year 2005-2006 The Assigned Special Taaces 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 Yeaz. d. Backun Snecial Ta7c The Fiscal Yeaz 2005-2006 Backup Special Tax attributable to a Final Subdivision in Zone 1 or Zone 2 will equal $19,868 mulriplied by the Acreage of all Taacable Property, exclusive of any Taxable Properry Owner Associarion Property and Tasable Public Properiy, therein. The Backup Special Tax for each Assessor's Parcel of Residential Properry shall be computed by dividing the Backup Special Tas attributable to the applicable Final Subdivision by the number of Assessor's Pazcels for which buiiding pernuts for residential consuucrion have or may be issued City of Lake Elsinore CFD No. 2004-3 (Rosetta Canyon) - Improvement Area No. 2 a Increase in the Assi~ned Special Tax City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page &23 Rate and Method of Apportionment of Special Taxes (i.e., the number or residential lots). The Backup Special Tax for each Assessor's Pazcel of Non-Residenrial Properiy therein shall equal $19,868 mulriplied by the Acreage of such Assessor's Parcel. If a Final Subdivision includes Assessor's Pazcels of TaYable Property for which building permits for both residential and non-residential construction may be issued, exclusive of Taxable Properry Owner Associarion Property and Tazable Public Properry, then the Backup Special Tas for each Assessor's Parcel of Residenrial Property shall be computed exclusive of the Acreage and Assessor's Pazcels of properry for which building pernuts for non-residential construction may be issued. Notwithstanding the foregoing, if all or any portion of the Final Subdivision(s) described in the preceding paragcaphs is subsequently changed or modified, then the Backup Special Taic for each Assessor's Pazcel of Developed Properry in such Final Subdivision azea that is changed or modified shall be a rate per squaze foot of Acreage calculated as follows: 1. Deternrine 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 paragraph 1 above shall be divided by the Acreage of Taxable Properry which is ultimately expected to eacist in such changed or modified Final Subdivision azea, as reasonably detemrined by the CFD Administrator. 3. The result of pazagraph 2 above shall be divided by 43,560. The result is the Backup Special Tax per square foot of Acreage which shall be applicable to Assessor's Parcels of Developed Properry in such changed or modified Final Subdivision area for all remaining Fiscal Yeazs in which the Special Tax may be levied. i. Release of Obligation to Pay and Disclose Backup Special Tas city of Lake ELsinore CFD No. 2004-3 (RoseKa Canyon) - Improvement Area No. 2 . 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 Tax 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' Pazcels of Developed Property result in 110% debt service coverage (i.e., the Assigned Special Taxes that may be levied against all Developed Properly in each remaining Fiscal Yeaz based on then elcisting development in CFD No. 2004-3 (IA No. 2) is at least City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon~ Page B-24 Rate and Method of Apportionment of Special Taxes equal to the sum of (i) the Administrative Expenses and (ii) 1.10 times maacimum annual debt service, in each remaining Fiscal Year on the Outstanding Bonds). e. Increase in the Backup Special Tas On each July l, commencing on July 1, 2006, the Backup Spe~ial Tas shall be increased by an amount equal to two percent (2%) of the Backup Special Ta1c for the previous Fiscal Yeaz. Multiple Land Use Classes In some instances an Assessor's Pazcel of Developed Properry may contain more than one Land Use Class. The Ma~cimum Special Taz levied on an Assessor's Parcel shall be the sum of the MaYimum Special TaY for all Land Use Classes located on that Assessor's Pazcel. The CFD Administrator's allocarion to each type of properry shall be final. 2. Taxable Property Owner Associafion Property, Taxable Public Property, and Undeveloped Property The Fiscal Year 2005-2006 Maximum Special Ta1c for TaYable Property Owner Association Properiy, Tazable Public Properry, and Undeveloped Properiy in Zone 1 or Zone 2 shall be $19,868 per Acre, and shall increase ~ereafter, commencing on July 1, 2006 and on July 1 of each Fiscal Year thereafter, by an amount equal to rivo percent (2%) of the MaYimum Special Tax for the previous Fiscal Yeaz. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Yeaz 2005-2006 and for each following Fiscal Yeaz, the City Council shall levy the Special Tax unril the amount of Special Taxes levied equals the Special Tas Requirement. The Special Taac shall be levied each Fiscal Yeaz as follows: First: The Special Tas 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 Tas; Second: If additional monies aze needed to satisfy the Special TaY Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Pazcel of Undeveloped Properiy in Zone 1 and Zone 2 at up to 100% of the applicable Maximum Special Ta:c for Undeveloped Properiy; Third: If addirional monies aze needed to satisfy the Special Tax Requirement after the first iwo steps have been completed, then the levy of the Special Taac on each Assessor's Parcel of Developed Properiy in Zone 1 and Zone 2 whose Maximum Special Ta1c is deternrined through the appiicarion of the Backup Special Taac shall be increased Proportionately from the Assigied Special Tax up to the Maximum Special Tu~ for each such Assessor's Parcel; Crty ojLake E/srreore CFD No. 2004-3 (Rose[ta Canyon) - Improvement Area No. 2 City of Lake Elsinore Ezhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Canyon) Page &25 Rate and Method of Apportionment of Special Taxes Fourth: If addirional monies are needed to sarisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Pazcel of Talcable Properry Owner Associarion Properry and Taxable Public Properiy in Zone 1 and Zone 2 at up to the applicable MaYimum Special Tas for Taacable Properly Owner Association Properry or Ta~cable Public Properry. Notwithstanding the above the City Council may, in any Fiscal Yeaz, levy Proportionately less than 100% of the Assigned Special Tas in step one (above), when (i) the City Council is no longer required to levy the Special Tas 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 ha~e already been issued or the CiTy Council has covenanted that it will not issue any addirional CFD No. 2004-3 (IA No. 2) Bonds (except refunding bonds) to be supported by the Special Tas. , Further notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Properiy for which an occupancy pemut for private residenrial 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 Pazcel within CFD No: 2004-3 {IA No. 2). E. EXEMPTIONS No Special Tax shall be levied on up to 74.81 Acres of Properry Owner Association Properry and/or Public Properry in CFD No. 2004-3 (IA No. 2). Ta~c-exempt status will be assigied by the CFD Administrator in the chronological order in which property becoines Properry Owner Associarion Property or Public Properiy. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or Public Properiy, its taac-exempt status will be revoked. Property Owner Association Properry or Public Properry that is not exempt from Special Tases under this section shall be subject to the levy of the Special TaY and shall be taxed Proportionately as part of the fourth step in Secrion D above, aT up to 100% of the applicable Maximum Special Tax for Taxable Properiy Owner Associarion Property or Talcable Public Properry. F. MANNER OF COLLECTION The Special Taz~ shall be collected in the same manner and at the same rime as ordinary ad valorem ptoperiy talces; provided, however, that CFD No. 2004-3 (IA No. 2) may directly bill the Special Tax, may collect Special Taxes at a different rime or in a different manner if necessary to meet its financial obligarions, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Pazcels as pemutted by the Act. City of Lake E(sinore - . . CFD No. 2004-3 (Roseita Canyon) - ImprovementArea No. 2 ~.. City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Canyon) Page &26 Rate and Method of Apportionment of Special Taxes G. APPEALS Any landowner or resident who feels that the amount of the Special Ta~c levied on their Assessor's Parcel is in error 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 Councii may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguiry and make detemunarions relarive 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 definirions apply to this Section H: "Buildout" means; for CFD No. 2004-3 (IA No. 2), that ali expected building permits have been issued. "CFD Public Facilifies" means either $17,514,938 in 2004 dollazs, wtuch shall increase by the Construcrion Inflation Index on July l, 2005, and on each July 1 thereafter, or such lower number as(i) shall be detemuned 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 Tazces levied under this Rate and Method of Apportionment as described in Section D. "Construction Inflation Iudex" 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 Construcrion 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 Ciry 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 idenrified in the Indenture to hold funds which aze ciurently available for expenditure to acquire or construct CFD Public Faciliries eligible under the Act. City ojLoke E/sinore CFD No. 2004-3 (RoseUa Canyon) - Improvement Area No. 2 City of Lake Elsinore fxhibit "B" Decem6er 16, 2004 CFD No. 20043 (Rosetta Canyon) Page &27 Rate and Method of Apportionment of Special Taxes "Previousty Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds thaY 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 Full Only an Assessor's Parcel of Developed Properry, or Undeveloped Properry for which a building permit has been issued, may be prepaid. The obligarion of the Assessor's Pazcel to pay any Special Tax may be permanently sarisfied as described herein, provided that a prepayment may be made with respect to a particulai Assessor's Pazcel only if there aze no delinquent Special Tazes with respect to such Assessor's Parcel at tlie rime of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax obligarion shall provide the CFD Admiiusttator with cvritten 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 for such Assessor's Pazcel. 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 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 Ta~c Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemprion Amount plus plus plus plus less less Total: equals Redemption Premium Future Facilities Amount Defeasance Amount Administrative Fees and Expenses Reserve Fund Credit Canitalized Interest Credit Prepayment Amount As of the proposed date of prepayment, the Special TaY Prepayment Amount sha11 be calculated as follows: Parasraah No: 1. Conf'irm that no Special Tax delinquencies apply to such Assessor's Pazcel. 2. For Assessor's Pazcels of Developed Properry, compute the Assigned Special Taac and Backup Special Taac. For Assessor's Pazcels of Undeveloped Properiy for which a building pemut has been issued, compute the Assigned Special Ta~c and Backup Special Taz for that Assessor's Parcel as though it was already designated as Developed Properiy, based upon the building pernut which has already been issued for that Assessor's Pazcel. City of Lake ELsinore CFD~No. 2004-3 (Rosetta Canynn) -ImprovementAma No. 2 City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page B-28 Rate and Method of Apportionment of Special Taxes 3. (a) Divide the Assi~ed Special Tax computed pursuant to paragraph 2 by the total esrimated Assigned Special Tazes for the entire CFD No. 2004-3 (IA No. 2) based on the Developed Properry Special Talces which could be levied in the current Fiscal Year on all expected development through Buildout of CFD No. 20043 (IA No. 2), excluding any Assessor's Pazcels which ha~e been prepaid, and (b) Divide the Backup Special Tax computed pursuant to pazagraph 2 by the total esrimated Backup Special Taxes at Buildout for the enrire CFD No. 2004-3 (IA No. 2), excluding any Assessor's Pazcels which have been prepaid. 4. Multiply the lazger quotient computed pursuant to pazagraph 3(a) or 3(b) by the Previously Issued Bonds to compute the amount of Previously Issued Bonds to be rerired and prepaid (the "Bond Redemption Amount"). 5. Multiply the Bond Redemption Amount computed pursuant to pazagraph 4 by the applicable redemption premium (e.g., the redemprion price-100%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Faciliries Costs. Mulriply the larger quorient computed pursuant to pazagraph 3(a) or 3(b) by the amount deternuned pursuant to pazagraph 6 to compute the aznount of Future Facilities Costs to be prepaid (the "Future Facilities AmounP'): 8. 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 Yeaz until the earliest redemprion date for the Previously Issued Bonds. 9. Detemune the Special Tax 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 unril 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 pazagraph 10 (the "Defeasance AmounP'). 12. The administrarive fees and expenses of CFD No. 2004-3 (IA No. 2) are as calculated by the CFD Administrator and include the costs of computarion of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming CFD No. 2004-3 (IA No. 2) Bonds, and the costs of recording any norices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). City of Lake ELsinore ~~ CFD No. 2004-3 (Rosetta Canyon) - ImprovementArea No. 2 City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Carryon) Page 8-29 Rate and Method of Apportionment of Special Taxes 13. The reserve fund credit (the "Reserve Fund CrediP') shall equal the lesser o£ (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemprion 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 redemprion 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 t 00% 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 Yeaz, a capitalized interest credit shall be calculated by multiplying the lazger quorient 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 CrediP'). 15. The Special Taac prepayment is equal to the sum of the amounts computed pursuant to pazagraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "PrepaymentAmounP'). From the Prepayment Amount, ttie amounts computed pursuant to pazagraphs 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 pazagraph 7 sha11 be deposited into the Improvement Fund. The amount computed pursuant to pazagraph 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 seruice payments. As a result of the payment of the current Fiscal Yeaz's Special Tax levy as determined under paragraph 9(above), the CFD Administrator shall remove the current Fiscal Yeaz's Special Taac levy for such Assessor's Parcel from the County tas rolls. With respect to any Assessor's Pazcel that is prepaid, the City Council shall cause a suitable notice to be tecorded in compliance with the Act, to indicate the prepayment of the Special Taac and the release of the Special Tax lien on such Assessor's Pazcel, and the obligation of such Assessor's Pazcel to pay the Special TaY shall cease. . City ojLake ELsinore CFD No. 2004-3 (Rosetta Canyon) - Improvemen[Area No. 2 City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Rosetta Canyon) Page 8-30 Rate and Method of Apportionment of Special Taxes Notwithstanding the foregoing, no Special Talc prepayment sha11 be allowed u~iless, at the rime of such proposed prepayment, the amount of Maximum Special Taaces that may be levied on Tasable Properiy within CFD No. 2004-3 (IA No. 2) (after excluding 74.81 Acres of Propecty Owner Association Properiy and/or Public Properiy in CFD No. 2004- 3(IA No. 2) as set forth in Section E) both pdor to and after the proposed prepayment is at least equal to the sum of (i) the Administrative Expenses and (ii) 1.10 rimes maicimum annual debt service, in each remaining Fiscal Yeaz on the Outstanding Bonds. 2. Prepayment in Part The Special Tas on an Assessor's Parcel of Developed Properry or an Assessor's Parcel of Undeveloped Properly for which a building pernut has been issued may be partially prepaid. The amount of the prepayment shall be catculated as in Secrion H.1; except that a partial prepayment shall be calculated according to the following formu(a: PP=I(PE-A)xF}+A These terms have the following meaning PP = the partial prepayment. PE = the Special Tas Prepayment Amount calculated according to Secrion H.1. F= the percentage, expressed as a decimal, by which the owner of the Assessor's Pazcel is partially prepaying the Special Tax. A= the Administrative Fees and Expenses calculated according to Secrion H.1. The ownet of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax and the percentage by which the Special Tax shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Ta~c for an Assessor's Pazcel within 30 days of the request and may chazge a reasonable fee for providing this service. With respect to any Assessor's Pazcel 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) that there has been a partial prepayment of the Special T~ and that a portion of the Special Tax with respect to such Assessor's Pazcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Special Tax, shall conrinue to be levied on such Assessor's Pazcel pursuant to Section D. City ojLake ELsueore CFD No. 2004-3 (RoseUa Canyon) - Improvement Area Na. Z City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 20043 (Ros~ta Canyon) Page B-31 Rate and Method of Apportionment of Special Taxes I. TERM OF SPECIAL TAX The Special Taac shall be levied for a period not to exceed forly yeazs commencing with Fiscal Yeaz 2005-2006, provided however that Special Taxes 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) all Authorized Faciliries have been constructed. City ofLake ELsinore . CFD No. 2004-3 (Rosetta Canyon) - Improvement Area No. 2 ~ City of Lake Elsinore Exhibit "B" December 16, 2004 CFD No. 2004-3 (Rosetta Canyon) Page ~32 Rate and Method of Apportionment of Special Taxes ~ ~ ~ ~ ~ g~~~ ~ ~ ~ ~~~ ~a ~ ~ ~~~~~ h W ~ ~ ~ g O U N 4 ~ ~ N J~ ~ Y- ~ . ... ' ^q} y W ~ ~ Q ~ ~ ~#` ~ ~ ~~ ~ # ~ p j ~ ~ ~~' ~ ~ A i [ g ~i7# J ~ r- ~~ eu¢ ~~~~~ ~ ~7 ~ Es. U? ~ ~ fJ~s.`~i~a 0 ~ ~ ~~ ~~ ~~~ ~ ~ (~ `'`~ N ~ ~y. . __ '~ G~. L~J ~~ # ~ ~ ~c~ .............~ ~ ~~ ........ ~ ' ~ ~ ~ ~ ~ n ~ ~ ~ r ~ w Q ~ v ~ 4 F 2 W ~~p 3 O ~ ~ City ojLake Elsinore CFD No. 2003-2 (Canyon Hrlls) - Improvement Area No. 2 City of Lake Elsinore EXHIBIT "C" CFD No. 2004-3 (Rosetta Canyon) Owner List City of Lake Elsinore Community Facilities District No. 2004-3 (Rosetta Canyon~ Property Owner List APN Owner Acreage 347-110-027 CEN"I'EX HOMES 3735 347-120-017 CENT'EXHOMES 6.54 347-120-018 CENTEX HOMES 5.69 347-120-020 CENTEX HOMES 62.10 347-120-021 CEN"I'EX HOMES 12.94 347-120-023 CENTEXHOMES 935 347-330-025 CENTEX HOMES 0.60 347-330-048 CENTEX HOMES 9.05 347-340-002 CEN`I'EX HOMES 20.14 347-340-006 CENT'EX HOMfiS 033 347-340-007 CENTEX HOMES 18.51 347-340-010 CENTEX HOMES 0.64 347-340-013 CEN1'EX HOMES 2121 349-240-069 CENTEX HOMES 0.25 349-400-020 CENTEX HOMES 14.69 349-400-021 CENTEX HOMES 5.00 349=410-001 CENTEX HOMES 3.43 349-410-002 CENTEX HOMES 4.51 349-410-003 CENTEX HOMES 2.36 349-410-004 CENT`EX HOMES 2.06 349-410-016 CENTEX HOMES 16.47 349-420-001 CENT'EX HOMES 6.52 349-420-002 CENTEX HOMES 11.19 349-430-006 CENTEX HOMES 8.94 349-430-014 CENTEX HOMES 16.60 349-430-016 CENTEX HOMES 1.74 349-430-018 CENTEX HOMES 55.04 Grand Total 353.25 March 15, 2005 Page C-1 Q:~ELSINORE\CFD 7A043 Rosetta Canyon (Cent~)Uteportsutosetta Cyn cfd 20043 cp4finaLdoc STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) SS: CITY OF LAKE ELSINORE ) I, VICHI 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 Elsinore at a Regular Meeting of said Council on the 22°d of March, 2005, and that it was so adopted by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: A.S, 'R.£~?~ COUNCILMEMBERS: - . (/~'~0~.40-~ ` _ ~AD, !CMC, CITY CLERK/ N'~J:l~AN I2ES~URCES DIRECTOR CITY DF LAKE ELSINORE (SEAL) STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) SS: CITY OF LAK~ ELSINORE) HICKMAN, KELLEY, SCHIFFNER, MAGEE NONE BUCKI.EY 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. 2005-38 of said Council, and that the same has not been amended or repealed. DA 14, 2005 `:n'~HI ~A~AD, ~MC, CITY CLERK/ IiT.i'~VIAN RESOUitCES DIRECTOR CT`3'I' QF :.:~1KE ELSINORE (SEAL}