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HomeMy WebLinkAboutReso 2001-415 RESOLUTION NO. 2001-415 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA FORM1NG AND ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2001-01 (SAN MIGUEL RANCH), DESIGNATING IMPROVEMENT AREAS THEREIN AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES WITHIN EACH SUCH IMPROVEMENT AREA TO THE QUALIFIED ELECTORS THEREOF WHEREAS, the City Council has previously declared its intention to form a community facilities district and to designate improvement areas (each, an "Improvement Area") therein and ordered the preparation of a Special Tax Report relating to the initiation of proceedings to create such community facilities district pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982," being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act") and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Commtmity Facilities District Law"). This community facilities district shall hereinafter be referred to as COMMUNITY FACILITIES DISTRICT NO. 2001-01 (SAN MIGUEL RANCH) (the "District"); and WHEREAS, notice of a public hearing relating to the establishment of the District, the extent of the District, the designation of the Improvement Areas within the District, the financing of certain types of public facilities and all other related matters has been given, and a Community Facilities District Report, as ordered by this City Council, has been presented to this City Council and has been made a part of the record of the heating to establish such District; and WHEREAS, all communications relating to the establishment of the District, the designation of the Improvement Areas within the District, the financing of certain types of public facilities and the proposed rate and method of apportionment of special tax have been presented, and it has further been determined that a majority protest as defined by law has not been received against these proceedings; and WHEREAS, inasmuch as there have been less than twelve (12) registered voters residing within the territory of each Improvement Area of the District for at least the preceding ninety (90) days, the authorization to levy special taxes within each Improvement Area of the District shall be submitted to the landowners of each such Improvement Area, such landowners being the qualified electors as authorized by law. NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS: SECTION 1. RECITALS. The above recitals are all true and correct. SECTION 2. DETERMiNATIONS. It is hereby determined by this City Council that: A. All prior proceedings pertaining to the formation of the District and designation of the Improvement Areas were valid and taken in conformity with the requirements of the law, and specifically the provisions of the Community Facilities District Law, and that this Resolution 2001-415 Page 2 finding and determination is made pursuant to the provisions of Government Code Section 53325.1. B. The written protests received, if any, do not represent a majority protest as defined by the applicable provisions of the Community Facilities District Law and, therefore, the special tax proposed to be levied within each Improvement Area of the District has not been precluded by majority protest pursuant to Section 53324 of the Government Code of the State of California. C. The District as proposed conforms with the City of Chula Vista Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts (the "Goals and Policies"), as amended; provided, however, the City Council has granted an exception to the requirements of such Goals and Policies as they pertain to certain of the facilities authorized to be financed by the District. D. Less than twelve (12) registered voters have resided within the territory of each Improvement Area within the District for each of the ninety (90) days preceding the close of the public heating, therefore, pursuant to the Act the qualified electors of each of the Improvement Areas within the District shall be the landowners of such Improvement Area as such term is defined in Government Code Section 53317(f) and each such landowner who is the owner of record as of the close of the public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre of land that she or he owns within such Improvement Area. E. The time limit specified by the Community Facilities District Law for conducting an election to submit the levy of the special taxes to the qualified electors of each Improvement Area of the District and the requirements for impartial analysis and ballot arguments have been waived with the unanimous consent of the qualified electors of each such Improvement Area. F. The City Clerk, acting as the election official, has consented to conducting any required election on a date which is less than 125 days following the adoption of any resolution forming and establishing the District. SECTION 3. COMMUNITY FACILITIES DISTRICT REPORT. The Community Facilities District Report for the District (the "Report"), as now submitted by McGill Martin Self, Inc., Special Tax Consultant, shall stand as the report as required pursuant to Government Code Section 53321.5 for all future proceedings and all terms and contents are approved as set forth therein. SECTION 4. NAME OF DISTRICT. The City Council does hereby establish and declare the formation of the District known and designated as "COMMUNITY FACILITIES DISTRICT NO. 2001-01 (SAN MIGUEL RANCH)." SECTION 5. BOUNDARIES OF DISTRICT AND IMPROVEMENT AREAS. The boundaries of the District and each of the Improvement Areas are generally described as follows: Resolution 2001-415 Page 3 All property within the boundaries of COMMUNITY FACILITIES DISTRICT NO. 2001-01 (SAN MIGUEL RANCH), as shown on a boundary map as previously approved by this legislative body, such map designated by the name of this District, a copy of which is on file in the Office of the City Clerk. The boundary map of the proposed District and the Improvement Areas therein has been filed pursuant to Sections 3111 and 3113 of the Streets and Highways Code of the State of California in the Office of the County Recorder of the County of San Diego, at Page 35 of Book 43 of the Book of Maps of Assessment and Community Facilities Districts, Recorder Document Number 2001-0727839, for such County. SECTION 6. DESIGNATION OF IMPROVEMENT AREAS. For purposes of financing of, or contributing to the financing of the types of facilities described in Section 7 below, this City Council, acting pursuant to Government Code Section 53350, hereby designates portions of the District as the following Improvement Areas as shown on the Boundary Map of the District: IMPROVEMENT AREA A IMPROVEMENT AREA B SECTION7. DESCRIPTION OF TYPES OF FACILITIES AUTHORIZED TO BE FINANCED. A general description of the types of public facilities which this legislative body is authorized by law to construct, own or operation, which are the types of facilities proposed to be financed under these proceedings, are generally described in Exhibit A attached hereto and incorporated herein by this reference. The types of facilities as above-described are facilities which the City Council is authorized by law to contribute revenue to or to construct, own or operate. It is hereby further determined that the proposed types of facilities are necessary to meet increased demands placed upon the City as a result of development occurring within the District, and the costs and expenses charged to this District represent the fair share costs of the facilities attributable to this District and the Improvement Areas therein. For a full and complete description of such types of facilities, reference is made to the Report, a copy of which is on file in the Office of the City Clerk. In addition to financing the above described types of facilities, the financing of those incidental expenses described in the Report are also approved and authorized. SECTION 8. SPECIAL TAX. Except where funds are otherwise available a special tax, secured by recordation of a continuing lien against all non-exempt real property in each of the Improvement Areas within the proposed District, is hereby authorized, subject to voter approval, to be levied within the boundaries of each such Improvement Area. For particulars as to the rate and method of apportionment of the special tax proposed to be levied within each Improvement Area, reference is made to the attached and incorporated Exhibit "B" (the "Special Tax Formulas"), which sets forth in sufficient detail the method of apportionment of the special tax applicable to each Improvement Area to allow each landowner or resident within such Improvement Area to estimate the maximum amount that such person will have to pay. Such special tax shall be utilized to pay directly for the previously described types of facilities, to pay debt service on bonds issued by the District for each Improvement Area to assist in financing Resolution 2001-415 Page 4 such types of facilities, to replenish any reserve fund established for such bonds, and to pay the costs of administering the bonds, the District and each respective Improvement Area. The special taxes herein authorized, to the extent possible, shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes; provided, however, the District may utilize a direct billing procedure for any special taxes that cannot be collected on the County tax roll or may, by resolution, elect to collect the special taxes at a different time or in a different manner if necessary to meet its financial obligations. Under no cimumstances will the special tax to be levied against any parcel within an Improvement Area used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within such Improvement Area by more than 10 percent. This legislative body further authorizes that special taxes may be prepaid and satisfied by payment of the prepayment amount calculated pursuant to the Special Tax Formulas. Upon recordation of a Notice of Special Tax Lien pursuant to Section 3114.5 of the Streets and Highways Code of the State of California against the property within each Improvement Area, a continuing lien to secure each levy of the special tax shall attach to all non- exempt real property in such Improvement Area and this lien shall continue in fome and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the legislative body ceases. SECTION9. SPECIAL TAX ACCOUNTABILITY MEASURES. Pursuant to and in compliance with the provisions of Government Code Section 50075.1, this City Council hereby establishes the following accountability measures pertaining to the levy by the District of the special taxes described in Section 8 above: A. Each such special tax shall be levied for the specific purposes set forth in Section 8. above. B. The proceeds of the levy of each such special tax shall be applied only to the specific applicable purposes set forth in Section 8. above. C. The District shall establish a separate account into which the proceeds of each such special tax shall be deposited. D. The City Manager or his or her designee, acting for and on behalf of the District, shall annually file a report with the City Council as required pursuant to Government Code Section 50075.3. SECTION 10. PREPARATION OF ANNUAL TAX ROLL. The name, address and telephone number of the office, department or bureau which will be responsible for preparing annually a current roll of special tax levy obligations by Assessor's parcel number and which shall be responsible for estimating future special tax levies pursuant to Section 53340.1 of the Government Code of the State of California, are as follows: Resolution 2001-415 Page 5 Engineering Department City of Chula Vista 276 Fourth Avenue Chula Vista, CA 92010 (619) 691-5021 SECTION 11. SUBSTITUTION FACILITIES. The description of the types of public facilities, as set forth above, is general in its nature. The final nature and location of such facilities will be determined with the City's approval and upon the preparation of final plans and specifications therefor. Such final plans may show substitutes in lieu of, or modification to, the above described types of facilities and any such substitution shall not be a change or modification in the proceedings as long as the facilities provide a service substantially similar to that as set forth in this Resolution and has been approved by the City. SECTION 12. APPEALS AND INTERPRETATION PROCEDURE. Any landowner or resident who feels that the amount or formula of the special tax is in error may file a notice with the District appealing the levy of the special tax. An appeals panel of 3 members, as appointed by the District, will then meet and promptly review the appeal, and if necessary, meet with the applicant. If the findings of the appeals panel verify that the special tax should be modified or changed, a recommendation at that time will be made to the City Council, acting in its capacity as the legislative body of the District, and, as appropriate, the special tax levy shall be corrected, and if applicable in any case, a refund shall be granted. Interpretations may be made by the City Council, acting in its capacity as the legislative body of the District, by Resolution for purposes of clarifying any vagueness or ambiguity as it relates to any category, zone, rate or definition contained in the applicable Special Tax Formula. SECTION 13. ELECTION. This City Council herewith submits the levy of the special tax within each Improvement Area to the qualified electors of each such Improvement Area, such electors being the landowners in each such Improvement Area, with each landowner having one (1) voter for each acre or portion thereof of land which he or she owns within such Improvement Area. Presented by Approved as to form by Johl~P. Lippi~t ~ ~/-/~ (~~ ~/~ /,//~' ~a ~/~ J~/~.Kaheny ~? Public Works Director ~3t6~ Attorney Resolution 2001-415 Page 6 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 4th day of December, 2001, by the following vote: AYES: Councilmembers: Davis, Padilla, Rindone, Salas and Horton NAYS: Councilmembers: None ABSENT: Councilmembers: None Shirle3; Horton, ~layor ATTEST: Susan Bigelow, City Clerk ff STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITY OF CHULA VISTA ) I, Susan Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing Resolution No. 2001-415 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 4th day of December, 2001. Executed this 4th day of December, 2001. Susan Bigelow, City ClerldJ EXHIBIT A DESCRIPTION OF TYPES OF FACILITIES The types of public facilities authorized to be financed by the levy of special taxes within each Improvement Area shall include streets, landscaping within public rights-of-way, sewers and public utilities as may be authorized by the goals and policies of the City Council pertaining to the use of the Community Facilities District Law. A-1 Exhibit B COMMUNITY FACILITIES DISTRICT MELLO-ROOS COMMUNITY FACILITIES ACT 1982 SPECIAL TAX REPORT COMMUNITY FACILITIES DISTRICT NO. 2001-1 IMPROVEMENT AREAS A AND B SAN MIGUEL RANCH For the City of Chula Vista 276 Fourth Avenue Chula Vista, California 91910 CHY OF CHUIA VISTA Prepared by McGill Martin Self, Inc. 344 F Street Suite 100 Chula Vista, California 91910 November 6, 2001 TABLE OF CONTENTS Page I. INTRODUCTION ................................................................................. 1 II. PROJECT DESCRIPTION ......................................................................... 2-3 II1. DESCRIPTION AND ESTIMATED COST OF PROPOSED FACILITIES ........................ 3 A. Description of Proposed Public Improvements ................................... 3-4 B. Estimated Cost of Proposed Public Improvements .............................. 4-5 IV. BONDED INDEBTEDNESS AND INCIDENTAL EXPENSES .................................... 6 A. Projected Bond Sales ............................................................... 6 B. Incidental Bond Issuance Expenses to be Included in the Proposed Bonded Indebtedness .........................................................................6 C. Incidental Expenses to be Included in the Annual Levy of Special Taxes .. 6 ¥. RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX ..................... 7 A. Explanation for Special Tax Apportionment .................................... 7-8 B. Maximum Annual Special Tax Rates ............................................ 8 C. Backup Special Tax ................................................................ 8 D. Accuracy of Information ........................................................... 9 VI. BOUNDARIES OF COMMUNITY FACILITIES DISTRICT .................................. 9 VII. GENERAL TERMS AND CONDITIONS ....................................................... 9 A. Substitution Facilities .............................................................. 9 - B. Interim Transportation Facilities .................................................. 9 C. Appeals .............................................................................. 9 EXHIBITS Exhibit A Recorded Boundary Map Exhibit B-1 Rate and Method of Apportionment Improvement Area A Exhibit B-2 Rate and Method of Apportionment - Improvement Area B Exhibit C Assigned Maximum Special Tax Rates I. INTRODUCTION WHEREAS, the City of Chula Vista did, pursuant to the provision of the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (hereinafter referred to as the "Act"), and specifically Section 53321.5 thereof, expressly order the filing of a written "Report" with the legislative body of the propoged Community Facilities District. This Community Facilities District being Connnunity Facilities District No. 2001-1 (San Miguel Ranch) shall hereinafter be referred to as: "CFD No. 2001-1"; and WHEREAS, the Resolution Ordering and Directing the Preparation of a Report for Proposed Community Facilities District No. 2001-1 (San Miguel Ranch) did direct that said Report generally contain the following: FACILITIES: A full and complete description of the public facilities the acquisition of which are proposed to be financed through the CFD. COST ESTIMATE: A general cost estimate setting forth costs of acquiring such facilities. SPECIAL TAX: Further particulars and documentation regarding the rate and method of apportionment for the authorized special tax. NOW, THEREFORE, I, John Lippitt P.E., the Director of Public Works of the City of Chula Vista, and the appointed responsible officer directed to prepare this Special Tax Report or cause the Report to be prepared pursuant to the provisions of the Act, do hereby submit this Report. Community Facilities District No. 2001-1 Page 1 San Miguel Ranch November 2001 II. PROJECT DESCRIPTION ' CFD No. 2001-1 encompasses approximately 782.98 gross acres of land located in the portion of the south San Diego City of Chula Vista known as "San Miguel Ranch". Refer to Exhibit A for a reduced copy of the Recorded Boundary Map. Of this acreage, approximately 257.38 acres is expected to be developed by several merchant builders for residential and commercial development, 43 acres for Community Facilities and 13 acres for an Elementary school site. This Community Facilities District (CFD No. 2001-1) is divided by SR 125 into two separate areas, Improvement Area A and Improvement Area B. Improvement Area A Improvement Area A consists of approximately 474.86 gross acres of land to the east of SR 125 in CFD No. 2001-1. Of this acreage, approximately 125.61 acres is designated for residential housing. CulTently Continental Residential Inc., Pardee Construction Company and Trimark Pacific Homes have purchased Plarming Areas. Continental Residential Inc. has purchased Planning Area C and will build approximately 110 single-family attached units. Pardee Construction Company has purchased Planning Area D and will build approximately 107 single- family detached homes. Both of these areas, lots will have a minimum size of 4,000 square feet. Trimark Pacific Homes (related entity to NNP-Trimark San Miguel, LLC) have purchased Planning Area I and will build approximately 105 single-family homes. These lots will have a minimum size of 6,000 square feet. The remaining 348 single-family attached product will be built as part of Planning Areas A and B, and the remaining 496 single-family detached homes will be built as part of Planning Area E, F, G, H and 1. These lots will be built out as other merchant builders purchase units and/or NNP- Trimark San Miguel, LLC proceeds with construction. At build-out, it is expected that Improvement Area A will consist of approximately 603 Single Family Detached Units, 458 Single Family Attached Units, 9.87 acres for commercial development, 43 acres for Community Facilities and 13 acres for an Elementary school site as shown on the approved master Map No. CVT 99-04. The Single Family Uses are anticipated to generate approximately 2,101,125 square feet of residential building square footage. The total exempt acreage for this improvement area including the 10% contingency factor is 352.93 acres. Special taxes for CFD No. 2001-1 (San Miguel Ranch) Improvement Area A shall be levied to Taxable Property to satisfy the Special Tax Requirement as follows: · First, to Developed Property up to the Maximum Annual Special Tax; · Second, if necessary, to Undeveloped Property up to the Maximum Annual Special Tax for Undeveloped Property; · Third, if necessary, Maximum Annual Special Tax derived by the application of the Backup Special Tax increased proportionately from the Assigned Special Tax up to the Maximum Annual Special Tax and Community Facilities District No 200I-I Page 2 San Miguel Ranch November 2001 · Fourth, if necessary, Special Tax increased proportionately, to Undeveloped Property pursuant to Section E of Exhibit B-1 up to the Maximum Annual Special Tax for Undeveloped Property. Improvement Area B Improvement Area B consists of approximately 308.12 gross acres of land to the west of SR 125 in CFD No. 2001-1. Of this acreage, approximately 121.90 acres is designated for residential estate housing. Lots in Planning Area J range from 7,000 square feet to t2,500 square feet and lots in planning Area K and L range from 15,000 to 27,000 square feet for these Estate residences. At build-out it is expected that there will be approximately 285 Single Family Estate Residences as shown on the approved Master Map No. CVT 99-04. The Single Family Uses are anticipated to generate approximately 1,059,432 square feet of residential building square footage. The total exempt acreage for this improvement area including the 15% contingency factor is 204.5 acres. Special taxes for CFD No. 2001-1 (San Miguel Ranch) Improvement Area B shall be levied to Taxable Property to satisfy the Special Tax Requirement as follows: · First, to Developed Property up to the Maximum Annual Special Tax; · Second, if necessary, to Undeveloped Property up to the Maximum Annual Special Tax for Undeveloped Property; · Third, if necessary, Maximum Annual Special Tax derived by the application of the Backup Special Tax increased proportionately from the Assigned Special Tax up to the Maximum Annual Special Tax and · Fourth, if necessary, Special Tax increased proportionately, to Undeveloped Property pursuant to Section E of Exhibit B-2 up to the Maximum Annual Special Tax for Undeveloped Property. IlL DESCRIPTION AND ESTIMATED COST OF PROPOSED EACILITIES A. Description of Proposed Public Improvements A community facilities district may provide for the purchase, construction, expansion, or rehabilitation of any real or tangible property, including public facilities and infrastructure improvements with an estimated useful life of five (5) years or longer, which is necessary to meet increased demands placed upon local agencies as a result of development or rehabilitation occurring within the community facilities district. In addition, a community facilities district may pay in full all amounts necessary to eliminate any fixed special assessment liens or to pay, repay, or defease any obligation to pay or any indebtedness secured by any tax, fee, charge, or assessment levied within the area of the community facilities district. Community Facilities District No. 2001 I Page 3 San Miguel Ranch November 2001 The facilities described in this Report are all facilities which the legislative body creating CFD No. 2001-1 is authorized to own, construct, or finance, and which am required, in part, to adequately meet the needs of CFD No. 2001-1. In addition, the facilities meet the criteria for authorized public facilities set forth in the City's Statement of Goals and Policies regarding the establishment of Community Facilities Districts. The actual facilities described herein are those currently expected to be required to adequately meet, in part, the needs of CFD No. 2001-1. Because the actual needs of CFD No. 2001-1 arising as development progresses therein may differ from those currently anticipated, CFD No. 2001-1 reserves the fight to modify the actual facilities proposed herein to the extent CFD No. 2001-1 deems necessary, in its sole discretion to meet those needs. The Special Taxes required to pay for the construction or financing of said facilities will be apportioned as described in the Rate and Method of Apportionment (RMA) of the Special Tax for CFD No. 2001-1 Improvement Area A (Exhibit B-l) and CFD No. 2001- 1 Improvement Area B (Exhibit B-2). Proceeds of the proposed bonded indebtedness of CFD No. 2001-1 will he used to finance backbone streets and associated improvements (i.e., grading, sewer, streets, landscaping, utilities, etc.), public facilities DIF Improvements and interim transportation facilities. Following is a general description of the proposed facilities: Improvement Area A · Mount Miguel Road East · Proctor Valley Road East · Calle La Marina · Paseo Vera Cruz · CalleLa Quinta · Those Facilities to be financed from the Proceeds of Public Facilities Development Impact Fees payable as a condition of development of property within CFD 2001-1 Improvement Area B · Mount Miguel Road West · Proctor Valley Road West · Those Facilities to be financed from the Proceeds of Public Facilities Development Impact Fees payable as a condition of development of property within CFD No. 2001-1 In addition to the above improvements, this CFD's bonding capacity maybe used for certain SR125 interim transportation facilities within the greater eastern territories of Chula Vista. These transportation facilities will be traffic capacity adding improvements and could include the following projects: Community Facilities District No. 2001-1 Page 4 Son Miguel Ranch November 2001 · Interim SR-125 · 1-805/East "H" Street an additional on-ramp lane to 1-805 B. Estimated Cost of Proposed Public Improvements The facilities and the estimated costs herein are subject to review and confirmation. The costs listed in Table 1, are estimates only, based upon current construction and land costs and actual costs may differ from those estimates herein. Based on the current CFD No. 2001-1 cost estimates of approximately $19.4 million, with $11.2 million set aside for reimbursement of eligible costs for Improvement Area A and $4.1 million set aside for reimbursement of eligible costs for Improvement Area B to be financed with CFD bond proceeds, the balance will be bom by the developers. TABLE 1 IMPROVEMENT AREA A Facilities Improvements Estimated Cost · Mount Miguel Road East $5,710,906 · Proctor Valley Road East $459,153 · Calle La Marina $3,661,229 · Paseo Vera Cruz $717,259 · Calle La Quinta $974,186 ,, Those Facilities to be financed from the Proceeds of Public Facilities Development Impact Fees payable as a condition of development of property within CFD No. 2001-1 Community Facilities District No. 2001-I Page 5 San Miguel Ranch November 2001 IMPROVEMENT AREA B Facilities Improvements Estimated Cost · Mount Miguel Road West $3,824,396 · Proctor Valley Road West $1,375,454 · Those Facilities to be financed from the Proceeds of Public Facilities Development Impact Fees payable as a condition of development of property within CFD No. 2001-1 IV. BONDED INDEBTEDNESS AND INCIDENTAL EXPENSES A. Project Bond Sale For CFD No. 2001-1 there will be two separate issuance of bonds. One for Improvement Area A and one for Improvement Area B each with its own accotmting, processing, and specifics to its obligated improvements within the CFD No. 2001-1. The bond amount for CFD No. 2001-1 Improvement Area A will be $14.1 million, which will finance approximately $11.2 million in facilities. The bonds issued by CFD No. 2001-1 Improvement Area B will be $5.3 million, which will finance approximately $4.1 million in facilities. The bonds issued by CFD No. 2001-1 Improvement Areas A and B will meet the terms and conditions of special tax bonds set forth in the City's Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts. B. Incidental Bond Issuance Expenses to be Included in the Proposed Bonded Indebtedness for Improvement Areas A and B Pursuant to Section 53345.3 of the Act, bonded indebtedness may include all costs and estimated costs incidental to, or cormected with, the accomplishment of the purpose for which the proposed debt is to be incurred, including, but not limited to, the costs of legal, fiscal, and financial consultant fees; bond and other reserve funds; discount fees; interest on any bonds of the district due and payable prior to the expiration of one year from the date of completion of the facilities, not to exceed two years; election costs; and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other credit enhancement costs, and printing costs. The reserve fund is estimated to be the maximum allowable under Federal Tax Law. All other incidental bond issuance expenses am estimated at 4 percent of the face amount of the bonds. Community Facilities' District No. 2001 I Page 6 San Miguel Ranch November 2001 C. Incidental Expenses to be Included in the Annual Levy. of Special Taxes for Improvement Areas A and B Pursuant to Section 53340 of the Act, thc proceeds of any special tax may only bc used to pay, in whole or part, the cost of providing public facilities, services and incidental expenses. As defined by the Act, incidental expenses include, but are not limited to, the cost of planning and designing public facilities to be financed, including the cost of environmental evaluations of those facilities; the costs associated with the creation of the district, issuance of bonds, determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of the district; any other expenses incidental to the construction, completion, and inspection of the authorized work; and the retirement of existing bonded indebtedness. While the actual cost of administering CFD No. 2001-1 may vary, it is anticipated that the amount of special taxes, which can be collected, will be sufficient to fund at least $75,000 in annual administrative expenses prior to build-out of the project. V. RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX All of the property located within CFD No. 2001-1, unless exempted by law, shall be taxed for the purpose of providing necessary facilities to serve CFD No. 2001-1. Pursuant to Section 53325.3 of the Act, the tax imposed "is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property." The Special Tax "may be based on benefit received by parcels of real property, the cost of making facilities or authorized services available to each parcel or other reasonable basis as determined by the legislative body," although the Special Tax may not be apportioned on an ad valorem basis pursuant to Article XIIIA of the California Constitution. As shown in Exhibit B-1 and B-2, for Improvement Area A and Improvement Area B respectively, the amended Rate and Method of Apportionment provides information sufficient to allow each property owner within CFD No. 2001-1 to estimate the maximum annual Special Tax he or she will be required to pay. Sections A through C, below, provide additional information on the Rate and Method of Apportionment of the Special Tax for CFD No. 2001-1. A. Explanation for Special Tax Apportionment When a community facilities district is formed, a Special Tax may be levied on each parcel of taxable property within the CFD to pay for the construction, acquisition and rehabilitation of public facilities, to pay for authorized services or to repay bonded indebtedness or other related expenses incurred by CFD No. 2001-1. This Special Tax must be apportioned in a reasonable manner; however, the tax may not be apportioned on an ad valorem basis. When more than one type of land use is present within a community facilities district, several criteria may be considered when apportioning the Special Tax. Generally, criteria based on building square footage, acreage, and land uses are selected, and categories Community Facilities District No. 200 I-] Page 7 ,gan Miguel Ranch November 2001 based on such criteria are established to differentiate between parcels of property. These categories are a direct result of the developer's projected product mix, and are reflective of the proposed land use types within that community facilities district. Specific Special Tax levels are assigned to each land use class, with all parcels within a land use class assigned the same Special Tax rate. The Act does not require the Special Taxes to be apportioned to individual parcels based on benefit received. However, in order to insure fairness and equity, benefit principles have been incorporated in establishing the Special Tax rates for CFD No. 2001-1. The major assumption inherent in the Special Taxes rates set forth in the Rate and Method of Apportionment is that the level of benefit received fi.om the proposed public improvements is a function of land use. This assumption is borne out through an examination of commonly accepted statistical measures. For example, in measuring average weekday vehicle trip-ends, the Institute of Transportation Engineer's 1995 Trip Generation report identifies land use as the primary determinant of trip-end magnitude. Commemial land uses typically generate more trip- ends than do single family residential land use. Similarly, larger single family detached dwellings typically generate a greater number of trip-ends than do smaller single family detached homes, and therefore, will tend to receive more benefit fi.om road grading, road landscaping and road improvements. Drainage and flood control requirements generally vary with the amount of impervious ground cover per parcel. It follows that larger homes which have more impervious ground cover will create relatively more drainage flow than smaller homes. Special taxes for CFD No. 2001-1 Improvement Areas A and B (San Miguel Ranch) shall be levied to Taxable Property to satisfy the Special Tax Requirement as outlined in the CFD No. 2001-1 Improvement Area A and B RMA's. The Land Use Class Categories of Taxation have been established for CFD No. 2001-1. The categories are defined as follows: 3- Residential Developed Parcels (single and multi-family residences) are taxed on the square footage of the building; > Undeveloped Parcels are taxed based on acreage of the parcel; and Based on the types of public facilities that are proposed for CFD No. 2001-1 and the factors described above, the Special Taxes assigned to specific land uses are generally proportionate to the relative benefits received by them, and, accordingly, the Special Taxes in CFD No. 2001-1 can be considered fair and reasonable. Community Facilities District No. 2001-1 Page 8 San Miguel Ranch November 2001 B. Maximum Annual Special Tax Rates Exhibit C lists the Maximum Annual Special Tax rates that may be levied against Developed Property, and Undeveloped Property within CFD No. 2001-1. Exhibit C also lists the Backup Special Tax (described later). The City Council will annually determine the actual amount of the Special Tax levy based on the method described in RMA and subject to the maximum Special Tax rates contained in Exhibit C. The City will levy a Special Tax to the extent necessary, sufficient to meet the Special Tax Requirement. C. Backup Special Tax When a Final Map is recorded within each Improvement Area, the Backup Special Tax for Assessors Parcels of Developed Property classified as Residential Property or Commercial Property will be determined pursuant to section c.l.b of Exhibit B-1 for Improvement Area A and cA .b of Exhibit B-2 for Improvement Area B. D. Accuracy of Information In order to establish the Maximum Annual Special Tax rates and the Backup Special Tax as set forth in the Rate and Method of Apportionment for CFD No. 2001-1, McGill Martin Self, Inc. has relied on information including, but not limited to absorption, land- use types, building square footage, and net taxable acreage which were provided to McGill Martin Self, Inc. by others. McGill Martin Self, Inc. has not independently verified such data and disclaims responsibility for the impact of inaccurate data provided by others, if any, on the Rate and Method of Apportionment for CFD No. 2001-1, including the inability to meet the financial obligations of CFD No. 2001-I. VI. BOUNDARIES OF COMMUNITY FACILITIES DISTRICT The boundaries of CFD No. 2001-1 include all land on which the Special Taxes may be levied. The Recorded Map of the area included within CFD No. 2001-1 is provided as Exhibit A. VII. GENERAL TERMS AND CONDITIONS A. Substitution Facilities The description of the public facilities, as set forth herein, are general in their nature. The final nature and location of improvements and facilities will be determined upon the preparation of final plans and specifications. The final plans may show substitutes, in lieu or modifications to the proposed work in order to accomplish the work of improvement, and any such substitution shall not be a change or modification in the Community Facilities District No. 2001 I Page 9 ,gan Miguel Ranch November 2001 proceedings as long as the facilities provide a service and are of a type substantially similar to that as set forth in this Report. B. Interim Transportation Facilities The City may, in its sole discretion, elect to authorize and make the proceeds of any subsequent series of bonds available to pay the cost of construction or the purchase price for the acquisition of Improvements for Interim Transportation Facilities. This could result in the revision of the facilities priority structure for the utilization of such proceeds. C. Appeals Any landowner who feels that the amount of the Special Tax is in error may file a notice with the City Administrator, appealing the levy of the Special Tax pursuant to the procedure specified in Exhibit B-1 and B-2. As appropriate the City Administrator will then review the appeal and, if necessary, meet with the applicant. If the findings of the representative verify that the amount of the Special Tax should be modified or changed, then, as appropriate, the Special Tax levy shall be corrected. J :\Engineer\AGEN DA~SP ECIA L TAX REPORT-CFD-2001-I (I 10601 ).doc _ Cotnmunity Facilities District No. 2001-1 Page 10 San Miguel Ranch November 2001 EXHIBIT A CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1 (San Miguel Ranch) RECORDED BOUNDARY MAP J:\Engineer~AGENDA\SPECIAL TAX REPORT-CFD-2001q (110601).doc Community Facilities District No. 2001~1 Page 11 San Miguel Ranch November 2001 EXHIBIT B-1 CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1 (San Miguel Ranch) RATE AND METHOD OF APPORTIONMENT IMPROVEMENT AREA A J:\Enginccr~GENDA\S['ECIAL TAX REPORT-CFD-2001-1(110601),doc Community Facilities District No. 200l-1 Page 12 San Miguel Ranch November 2001 RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1, IMPROVEMENT AREA A (San Miguel Ranch) A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property within the City of Chula Vista Community Facilities District No. 2001-1 ("CFD No. 2001-1, Improvement Area A") and collected each Fiscal Year commencing in Fiscal Year 2002-03, in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," and "Undeveloped Property," as described below. All of the real property in CFD No. 2001-1, Improvement Area A, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner heroin provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, record of survey, or other recorded document creating or describing the parcel. If the preceding maps are not available, the Acreage shall be determined by the City Engineer. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2001-1, Improvement Area A including, but not limited to, the following: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County, the City, or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2001-1, Improvement Area A or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2001-1, Improvement Area A or any designee thereof of complying with City, CFD No. 2001-1, Improvement Area A or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2001-1, Improvement Area A or any designee thereof related to an appeal of the Special Tax; and the costs associated with the release of funds from an escrow account, if any. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2001-1, Improvement Area A for auy other administrative purposes of CFD No. 2001-1, Improvement Area A, City of Chula Vista September 6, 2001 Community Facilities District No. 200l-1 San Miguel Ranch Improvement Area A Page I including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Category of Developed Property as determined in accordance with Section C. 1.a. "Available Funds" means the balance in the reserve fund established pursuant to the terms of the Indenture in excess of the reserve requirement as defined in such Indenture, delinquent special tax payments, the Special Tax prepayments collected to pay interest on Bonds, and other sources of funds available as a credit to the Special Tax Requirement as specified in such Indenture. "Backup Special Tax" means the Special Tax amount set forth in Section C. 1 .b. below. "Bonds" means any bonds or other debt (as defined in the Act), whether in one or more series, issued by CFD No. 2001-1, Improvement Area A under the Act. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No. 2001-1, Improvement Area A" means City of Chula Vista, Community Facilities District No. 2001-1, Improvement Area A (San Miguel Ranch). "City" means the City of Chula Vista. "Commercial Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more non-residential structures, excluding Community Purpose Facility Property. "Community Purpose Facility Property" means all Assessor's Parcels which are classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2452. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2001-1, Improvement Area A. "County" means the County of San Diego. CiO/ofChula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch Improvement Area A Page 2 "Developed Property" means, for each Fiscal Year, all Taxable Property for which a building permit for new construction was issued prior to March 1 of the prior Fiscal Year. "Final Map" means a subdivision of property created by recordation of a final map, parcel map, or lot line adjustment, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which residential building permits may be issued without further subdivision of such property. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Tables 1 and 2 of Section C. "Lot(s)" means an individual legal lot created by a Final Map for which a building permit for residential construction has been or could be issued. "Master Developer" means the owner of the predominant amount of Undeveloped Property in CFD No. 200I-1, Improvement Area A. "Maximum Annual Special Tax" means the maximum annual Special Tax, determined in accordance with the provisions of Section C below, that may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property. "Occupied Residential Property" means all Assessor's Parcels of Residential Property which have closed escrow to an end user. "Outstanding Bonds" means all Bonds which remain outstanding. "Property Owner Association Property" means any property within the boundaries of CFD No. 2001-1, Improvement Area A owned by or dedicated to a property owner association, including any master or sub-association. "Proportionately" means for Developed Property that the ratio of the actual Special Tax levy to the Assigned Special Tax or Backup Special Tax is equal for all Assessor's Parcels of Developed Property within CFD No. 2001-1, Improvement Area A. For Undeveloped Property "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Annual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property within CFD No. 2001-1, Improvement Area A. "Public Property" means any property within the boundaries of CFD No. 2001-I, Improvement Area A that is used for rights-of-way or any other purpose and is owned by City of Chula Vista September 6, 2001 Community Facilities District No. 200 l-I San Miguel Ranch Improvement Area A Page 3 or dedicated to the federal government, the State of Califomia, the County, the City or any other public agency. "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. "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be made by reference to appropriate records kept by the City's Building Department. Residential Floor Area will be based on the building permit(s) issued for each dwelling unit prior to it being classified as Occupied Residential Property, and shall not change as a result of additions or modifications made after such classification as Occupied Residential Property. "Special Tax" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2001-1, Improvement Area A to: (i) pay annual debt service on all Outstanding Bonds as defined in Section A.; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture; (v) and pay directly for acquisition and/or construction of public improvements which are authorized to be financed by CFD No. 2001-1, Improvement Area A; (vi) less a credit for Available Funds. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2001-1, Improvement Area A which are not exempt from the Special Tax pursuant to law or Section E below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-I San Miguel Ranch - Improvement Area A Page 4 B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2001-1, Improvement Area A shall be classified as Developed Property or Undeveloped Property and shall be subject to the levy of annual Special Taxes determined pursuant to Sections C and D below. Furthermore, Developed Property shall be classified as Residential Property or Commercial Property. C. MAXIMUM ANNUAL SPECIAL TAX RATE 1. Developed Property The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or Commercial Property that is classified as Developed Property shall be the greater of (1) the Assigned Special Tax described in Table 1 below or (2) the amount derived by application of the Backup Special Tax. a. Assigned SpeciaITax The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in Table 1. TABLE 1 Assigned Special Tax for Developed Property Land Use Class Description Assigned Special Tax Residential Property $475.00 per unit plus $0.34 per 1 square foot of Residential Floor Area 2 Commercial Property $5,091 per Acre of Commercial Property b. Backup Special Tax When a Final Map is recorded within Improvement Area A, the Backup Special Tax for Assessor's Parcels of Developed Property classified as Residential Property or Commercial Property shall be determined as follows: For each Assessor's Parcel of Developed Property classified as Residential Property or for each Assessor's Parcel of Undeveloped Property to be classified as Residential Property within the Final Map area, the Backup Special Tax shall be the rate per Lot calculated according to the following formula: City of Chula Vista September 6, 200l Community Facilities District No. 2001- I San Miguel Ranch - Improvement Area A Page 5 $10,376 x A L The terms above have the following meanings: B = Backup Special Tax per Lot in each Fiscal Year. A = Acreage classified or to be classified as Residential Property in such Final Map. L - Lots in the Final Map which are classified or to be classified as Residential Property. For each Assessor's Parcel of Developed Property classified as Commercial Property or for each Assessor's Parcel of Undeveloped Property to be classified as Commercial Property within the Final Map area, the Backup Special Tax shall be determined by multiplying $10,376 by the total Acreage of the Commercial Property and Undeveloped Property to be classified as Commercial Property within the Final Map area. Notwithstanding the foregoing, if Assessor's Parcels of Residential Property, Commercial Property or Undeveloped Property for which the Backup Special Tax has been determined are subsequently changed or modified by recordation of a new or amended Final Map, then the Backup Special Tax applicable to such Assessor's Parcels shall be recalculated to equal the amount of Backup Special Tax that would have been generated if such change did not take place. 2. Undeveloped Property The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped Property shall be the amount shown in Table 2 below: TABLE 2 Maximum Annual Special Tax for Undeveloped Property Land Use Class Description Maximum Annual Special Tax 3 Undeveloped Property $10,376 per Acre City of Chula Vista September 6, 2001 Community Facilities District No. 200l-1 San Miguel Ranch - Improvement Area A Page 6 D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2002-03 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the mount of Special Taxes equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied on each Assessor's Parcel of Developed Property at a rate up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax Requirement. Second: If additional monies are needed to satisfy the Special Tax Requirement afl. er the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property, excluding any Assessor's Parcels classified as Undeveloped Property pursuant to Section E, at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax to be levied on each Assessor's Parcel whose Maximum Annual Special Tax is derived by the application of the Backup Special Tax shall be increased Proportionately from the Assigned Special Tax up to the Maximum Annual Special Tax for each such Assessor's Parcel. Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel classified as Undeveloped Property pursuant to Section E at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Occupied Residential Property be increased by more than ten pement per year as a consequence of delinquency or default in the payment of Special Taxes by the owner of any other Assessor's Parcel of CFD No. 2001-1, Improvement Area A. E. EXEMPTIONS The CFD Administrator shall classify as exempt property (i) Assessor's Parcels defined as Public Property, (ii) Assessor's Parcels defined as Property Owner Association Property, (iii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iv) Assessor's Parcels defined as Community Purpose Facility Property or (v) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, provided that no such classification would reduce the sum of all City of Chula Vista September 6, 2001 C'ommunity Facilities District No. 2001-1 San Miguel Ranch - Improvement Area A Page 7 Taxable Property to less than 121.93 Acres. Notwithstanding the above, the CFD Administrator shall not classify an Assessor's Parcel as exempt property if such classification would reduce the sum of all Taxable Property to less than 121.93 Acres. Assessor's Parcels which cannot be classified as exempt property because such classification would reduce the Acreage of all Taxable Property to less than 121.93 Acres will be classified as Undeveloped Property and shall be taxed as a part of the fourth step in Section D. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes exempt property. The Maximum Annual Special Tax obligation for any Public Property which cannot be classified as exempt property as described in the first paragraph of Section E shall be prepaid in full by the seller pursuant to Section H.1, prior to the transfer/dedication of such property. Until the Maximum Annual Special Tax obligation for any such Public Property is prepaid, the property shall continue to be subject to the levy of the Special Tax as Undeveloped Property pursuant to the fourth step in Section D. F. REVIEW/APPEAL COMMITTEE The Council shall establish as part of the proceedings and administration of CFD No. 2001- 1, Improvement Area A a special three-member Review/Appeal Committee. Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error may file a written notice with the Review/Appeal Committee appealing the amount of the Special Tax levied on such Assessor's Parcel. The Review/Appeal Committee may establish such procedures as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. G. MANNEROF COLLECTION The armual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2001-1, Improvement Area A may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on Assessor's Parcels which are delinquent in the payment of Special Taxes. Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch Improvement Area A Page 8 H. PREPAYMENT OF SPECIAL TAX The following definition applies to this Section H: "Outstanding Bonds" means all previously issued Bonds 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 Maximum Annual Special Taxes. 1. Prepayment in Full The Maximum Annual Special Tax obligation may only be prepaid and permanently satisfied by an Assessor's Parcel of Developed Property, Undeveloped Property for which a building permit has been issued, or Public Property. The Maximum Annual Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of the Assessor's Parcel to pay the Special Tax permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Annual 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 notify such owner of the prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Paragraph No.: l. For Assessor's Parcels of Developed Property, compute the Maximum Annual Special Tax for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property to be prepaid, compute the Maximum Annual Special Tax for . that Assessor's Parcel as though it was already designated as Developed Property, City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch - Improvement Area A Page 9 based upon the building permit which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Public Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel using the Maximum Annual Special Tax for Undeveloped Property. 2. Divide the Maximum Annual Special Tax computed pursuant to paragraph 1 by the sum of the total expected Maximum Annual Special Tax revenues excluding any Assessor's Parcels which have been prepaid. 3. Multiply the quotient computed pursuant to paragraph 2 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 4. Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 5. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 6. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 7. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. 8. Compute the amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 9. Add the amounts computed pursuant to paragraphs 5 and 7 and subtract the amount computed pursuant to paragraph 8 (the "Defeasance Amount"). 10. Verify the administrative fees and expenses of CFD No. 2001-1, Improvement Area A, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 11. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the City of Chula Vista September 6, 2001 Community Facilities District No. 2001-I San Miguel Ranch Improvement Area A Page 10 prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 12. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 2 by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit"). 13. The Maximum Annual Special Tax prepayment is equal to the sum of the amounts computed pursuant to paragraphs 3, 4, 9, and 10, less the amounts computed pursuant to paragraphs 11 and 12 (the "Prepayment Amount"). 14. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 9, 11, and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 10 shall be retained by CFD No. 2001- 1, Improvement Area A. The Prepayment Amount may be insufficient to redeem other than a $5,000 increment of 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 bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under paragraph 7 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Board shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Taxes and the release of the Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Annual Special Taxes that may be levied on Taxable Property within CFD No. 2001-1, Improvement Area A both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. Tenders of Bonds in prepayment of Maximum Annual Special Taxes may be accepted upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. City of Chula Vista September 6, 2001 Community Facilities District No. 200l-1 San Migue[ Ranch Improvement Area A Page l! 2. Prepayment in Part The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section H.1; except that a partial prepayment shall be calculated according to the following formula: PP-- (PR x F) + A These terms have the following meaning: PP - the partial prepayment PR = the Prepayment Amount calculated according to Section H. 1, minus Administrative Expenses and Fees pursuant to Step 10. F = the pement by which the owner of the Assessor's Parcel(s) is partially prepaying the Maximum Annual Special Tax. A-- the Administrative Expenses and Fees pursuant to Step 10. The owner of an Assessor's Parcel who desires to partially prepay the Maximum Annual Special Tax shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Maximum Annual Special Tax, (ii) the percentage by which the Maximum Annual Special Tax shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if applicable. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Maximum Annual Special Tax for an Assessor's Parcel within 30 days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Paragraph 14 of Section H.1, and (ii) indicate in the records of CFD No. 2001-1, Improvement Area A that there has been a partial prepayment of the Maximum Annual Special Tax and that a portion of the Maximum Annual Special Tax equal to the outstanding percentage (1.00 - F) of the remaining Maximum Annual Special Tax shall continue to be authorized to be levied on such Assessor's Parcel pursuant to Section D. I. TERM OF MAXIMUM ANNUAL SPECIAL TAX The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 9002-03 to the extent necessary to fully satis£y the Special Tax Requirement for a period no longer than 2037-38. J:\Fmgineer\AG EN DA\SanMigueI-RM A-RevisedA doc City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch Improvement Area A Page l 2 EXHIBIT B-2 CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1 (San Migu¢l Ranch) RATE AND METHOD OF APPORTIONMENT IMPROVEMENT AREA B J:XEngineer~AGEN DA\S PEC[AL TAX REPORT CFD-2001-1 ( 110601 ).doc Community Facilities District No 200I-I Page 13 San Miguel Ranch November 2001 RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1, IMPROVEMENT AREA B (San Miguel Ranch) A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property within the City of Chula Vista Community Facilities District No. 2001-1 ("CFD No. 2001-1, improvement Area B") and collected each Fiscal Year commencing in Fiscal Year 2002-03, in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," and "Undeveloped Property as described below. All of the real property in CFD No. 2001-1, Improvement Area B, 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. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, record of survey, or other recorded document creating or describing the pamel. If the preceding maps are not available, the Acreage shall be determined by the City Engineer. "Act" means the Melto-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2001-1, Improvement Area B including, but not limited to, the following: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County, the City, or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2001-1, Improvement Area B or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2001-1, Improvement Area B or any designee thereof of complying with City, CFD No. 2001-1, Improvement Area B or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 200l-1, Improvement Area B or any designee thereof related to an appeal of the Special Tax; and the costs associated with the release of funds from an escrow account, if any. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2001-1, Improvement Area B for any other administrative purposes of CFD No. 2001-l, Improvement Area B, City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch - Improvement Area B Page 1 including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Category of Developed Property as determined in accordance with Section C. 1 .a. "Available Funds" means the balance in the reserve fund established pursuant to the terms of the Indenture in excess of the reserve requirement as defined in such Indenture, delinquent special tax payments,, the Special Tax prepayments collected to pay interest on Bonds, and other sources of funds available as a credit to the Special Tax Requirement as specified in such Indenture. "Backup Special Tax" means the Special Tax amount set forth in Section C.1 .b. below. "Bonds" means any bonds or other debt (as defined in the Act), whether in one or more series, issued by CFD No. 2001-1, Improvement Area B under the Act. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No. 2001-1, Improvement Area B" means City of Chula Vista, Community Facilities District No. 2001-1, Improvement Area B (San Miguel Ranch). "City" means the City of Chula Vista. "Commercial Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more non-residential structures, excluding Cormnunity Purpose Facility Property. "Community Purpose Facility Property" means all Assessor's Parcels which are classified as community purpose facilities and meet thc requirements of City of Chula Vista Ordinance No. 2452. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2001-1, Improvement Area B. "County" means the County of San Diego. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-[ San Miguel Ranch Improvement Area B Page 2 "Developed Property" means, for each Fiscal Year, all Taxable Property for which a building permit for new construction was issued prior to March 1 of the prior Fiscal Year. "Final Map" means a subdivision of property created by recordation of a final map, parcel map, or lot line adjustment, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which residential building permits may be issued without further subdivision of such property. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Tables l and 2 of Section C. "Lot(s)" means an individual legal lot created by a Final Map for which a building permit for residential construction has been or could be issued. "Master Developer" means the owner of the predominant amount of Undeveloped Property in CFD No. 2001-1, Improvement Area B. "Maximum Annual Special Tax" means the maximum annual Special Tax, determined in accordance with the provisions of Section C below, that may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property. "Occupied Residential Property" means all Assessor's Parcels of Residential Property which have closed escrow to an end user. "Outstanding Bonds" means all Bonds which remain outstanding. "Property Owner Association Property" means any property within the boundaries of CFD No. 2001-1, Improvement Area B owned by or dedicated to a property owner association, including any master or sub-association. "Proportionately" means for Developed Property that the ratio of the actual Special Tax levy to the Assigned Special Tax or Backup Special Tax is equal for all Assessor's Parcels of Developed Property within CFD No. 2001-1, Improvement Area B. For Undeveloped Property "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Annual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property within CFD No. 2001-1, Improvement Area "Public Property" means any property within the boundaries of CFD No. 2001-1, Improvement Area B that is used for rights-of-way or any other purpose and is owned by or City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch Improvement,4rea B Page 3 dedicated to the federal government, the State of California, the County, the City or any other public agency. "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. "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be made by reference to appropriate records kept by the City's Building Department. Residential Floor Area will be based on the building permit(s) issued for each dwelling unit prior to it being classified as Occupied Residential Property, and shall not change as a result of additions or modifications made after such classification as Occupied Residential Property. "Special Tax" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2001-1, Improvement Area B to: (i) pay annual debt service on all Outstanding Bonds as defined in Section A.; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture; (v) and pay directly for acquisition and/or construction of public improvements which are authorized to be financed by CFD No. 2001-1, Improvement Area B; (vi) less a credit for Available Funds. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries ofCFD N6. 2001-1, Improvement Area B which are not exempt from the Special Tax pursuant to law or Section E below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2001-1, Improvement Area B shall be classified as Developed Property or Undeveloped Property and shall be subject to the levy of annual Special Taxes determined pursuant to Sections C and D below. Furthermore, Developed Property shall be classified as Residential Property or Commercial Property. City of Chula Vista September 6, 2001 Community Facilities' District No. 2001- l San Miguel Ranch Improvement Area B Page 4 C. MAXIMUM ANNUAL SPECIAL TAX RATE 1. Developed Property The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or Commercial Property that is classified as Developed Property shall be the greater of (1) the Assigned Special Tax described in Table I below or (2) the amount derived by application of the Backup Special Tax. a. Assigned Special Tax The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in Table 1. TABLE 1 Assigned Special Tax for Developed Property Land Use Class Description Assigned Special Tax 1 Residential Property $475.00 per unit plus $0.32 per square foot of Residential Floor Area 2 Commercial Property $2,263 per Acre of Commercial Property b. Backup SpeciaiTax When a Final Map is recorded within Improvement Area B, the Backup Special Tax for Assessor's Parcels of Developed Property classified as Residential Property or Commercial Property shall be determined as follows: For each Assessor's Parcel of Developed Property classified as Residential Property or for each Assessor's Parcel of Undeveloped Property to be classified as Residential Property within the Final Map area, the Backup Special Tax shall be the rate per Lot calculated according to the following formula: $4,578 x A L The terms above have the following meanings: B -- Backup Special Tax per Lot in each Fiscal Year. A- Acreage classified or to be classified as Residential Property in such Final Map. City of Chula Vista September 6, 2001 Community Facilities District No. 2001~1 San Miguel Ranch - Improvement Area B Page 5 L = Lots in the Final Map which are classified or to be classified as Residential Property. For each Assessor's Parcel of Developed Property classified as Commercial Property or for each Assessor's Parcel of Undeveloped Property to be classified as Commercial Property within the Final Map area, the Backup Special Tax shall be determined by multiplying $4,578 by the total Acreage of the Commercial Property and Undeveloped Property to be classified as Commercial Property within the Final Map area. Notwithstanding the foregoing, if Assessor's Parcels of Residential Property, Commercial Property or Undeveloped Property for which the Backup Special Tax has been determined are subsequently changed or modified by recordation of a new or amended Final Map, then the Backup Special Tax applicable to such Assessor's Parcels shall be recalculated to equal the amount of Backup Special Tax that would have been generated if such change did not take place. 2. Undeveloped Property The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped Property shall be the amount shown in Table 2 below: TABLE 2 Maximum Annual Special Tax for Undeveloped Property Land Use Class Description Maximum Annual Special Tax 3 Undeveloped Property $4,578 per Acre D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Cotmnencing with Fiscal Year 2002-03 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the amount of Special Taxes equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied on each Assessor's Parcel of Developed Property at a rate up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax Requirement. Second: If additional monies are needed to satisfy the Special Tax Requirement atter the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property, excluding any Assessor's Parcels classified as City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch Improvement Area B Page 6 Undeveloped Property pursuant to Section E, at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax to be levied on each Assessor's Parcel whose Maximum Annual Special Tax is derived by the application of the Backup Special Tax and shall be increased Proportionately from the Assigned Special Tax up to the Maximum Armual Special Tax for each such Assessor's Parcel. Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel classified as Undeveloped Property pursuant to Section E at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Occupied Residential Property be increased by more than ten pement per year as a consequence of delinquency or default in the payment of Special Taxes by the owner of any other Assessor's Parcel of CFD No. 2001-1, Improvement Area B. E. EXEMPTIONS The CFD Administrator shall classify as exempt property (i) Assessor's Parcels defined as Public Property, (ii) Assessor's Parcels defined as Property Owner Association Property, (iii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iv) Assessor's Parcels defined as Community Purpose Facility Property or (v) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, provided that no such classification would reduce the sum of all Taxable Property to less than 103.61 Acres. Notwithstanding the above, the CFD Administrator shall not classify an Assessor's Parcel as exempt property if such classification would reduce the sum of all Taxable Property to less than 103.61 Acres. Assessor's Parcels which cannot be classified as exempt property because such classification would reduce the Acreage of all Taxable Property to less than 103.61 Acres will be classified as Undeveloped Property and shall be taxed as a part of the fourth step in Section D. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes exempt property. The Maximum Annual Special Tax obligation for any Public Property which cannot be classified as exempt property as described in the first paragraph of Section E shall be prepaid in full by the seller pursuant to Section H.1, prior to the transfer/dedication of such property. Until the Maximum Annual Special Tax obligation for any such Public Property is prepaid, the property shall continue to be subject to the levy of the Special Tax as Undeveloped Property pursuant to the fourth step in Section D.. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-I San Miguel Ranch Improvement/~rea B Page 7 F. REVIEW/APPEAL COMMITTEE The Council shall establish as part of the proceedings and administration of CFD No. 2001- 1, Improvement Area B a special three-member Review/Appeal Committee. Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error may file a written notice with the Review/Appeal Committee appealing the amount of the Special Tax levied on such Assessor's Parcel. The Review/Appeal Committee may establish such procedures as it deems necessary to undertake the review of any such appeal. The Review/Appeal Conmaittee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. G. MANNEROF COLLECTION The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2001-1, Improvement Area B may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on Assessor's Parcels which are delinquent in the payment of Special Taxes. Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. H. PREPAYMENT OF SPECIAL TAX The following definition applies to this Section H: "Outstanding Bonds" means all previously issued Bonds 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 Maximum Annual Special Taxes. 1. Prepayment in Full The Maximum Annual Special Tax obligation may only be prepaid and permanently satisfied by an Assessor's Parcel of Developed Property, Undeveloped Property for which a building permit has been issued, or Public Property. The Maximum Annual Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of City of Chula Vista September 6, 2001 ('ommunity Facilities District No, 2001-1 San Miguel Ranch Improvement Area B Page 8 the Assessor's Parcel to pay the Special Tax permanently satisfied as described herein; provided that a prepayment may be made only if them are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Annual 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 notify such owner of the prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Paragraph No.: 1. For Assessor's Parcels of Developed Property, compute the Maximum Annual Special Tax for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Public Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel using the Maximum Annual Special Tax for Undeveloped Property. 2. Divide the Maximum Annual Special Tax computed pursuant to paragraph 1 by the sum of the total expected Maximum Annual Special Tax revenues excluding any Assessor's Parcels which have been prepaid. 3. Multiply the quotient computed pursuant to paragraph 2 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 4. Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). City of Chula Vista September 6, 2001 Community Facilities District No, 2001-1 San Miguel Ranch - Improvement Area B Page 9 5. Compute the amount needed to pay interest on the Bond Redemption Amount fi.om the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 6. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 7. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. 8. Compute the amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Administrative Fees and Expenses fi.om the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 9. Add the amounts computed pursuant to paragraphs 5 and 7 and subtract the amount computed pursuant to paragraph 8 (the "Defeasance Amount"). 10. Verify the administrative fees and expenses of CFD No. 2001-1, Improvement Area B, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 11. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 12. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 2 by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit"). 13. The Maximum Annual Special Tax prepayment is equal to the sum of the amounts computed pursuant to paragraphs 3, 4, 9, and 10, less the amounts computed pursuant to paragraphs 11 and 12 (the "Prepayment Amount"). 14. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 9, 11, and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-I San Miguel Ranch - Improvement Area B Page 10 The amount computed pursuant to paragraph I0 shall be retained by CFD No. 2001- 1, Improvement Area B. The Prepayment Amount may be insufficient to redeem other than a $5,000 increment of 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 bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under paragraph 7 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Board shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Taxes and the release of the Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Annual Special Taxes that may be levied on Taxable Property within CFD No. 2001-1, Improvement Area B both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. Tenders of Bonds in prepayment of Maximum Annual Special Taxes may be accepted upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. 2. Prepayment in Part The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section H.1; except that a partial prepayment shall be calculated according to the following formula: PP = (PE x F) +A These terms have the following meaning: PP = the partial prepayment PE -- the Prepayment Amount calculated according to Section H.1, minus Administrative Expenses and Fees pursuant to Step 10. F = the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the Maximum Annual Special Tax. A the Administrative Expenses and Fees pursuant to Step 10. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch Improvement Area B Page 11 The owner of an Assessor's Parcel who desires to partially prepay the Maximum Annual Special Tax shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Maximum Annual Special Tax, (ii) the percentage by which the Maximum Annual Special Tax shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if applicable. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Maximum Annual Special Tax for an Assessor's Parcel within 30 days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Paragraph 14 of Section 1.1, and (ii) indicate in the records of CFD No. 2001-1, Improvement Area B that there has been a partial prepayment of the Maximum Annual Special Tax and that a portion of the Maximum Annual Special Tax equal to the outstanding pementage (1.00 - F) of the remaining Maximum Annual Special Tax shall continue to be authorized to be levied on such Assessor's Parcel pursuant to Section D. I. TERM OF MAXIMUM ANNUAL SPECIAL TAX The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2002-03 to the extent necessary to fully satisfy the Special Tax Requirement for a period no longer than 2039-40. J :\Engineer~AGEN DA\SanMigu¢l-RMA~RevisedB.doc City of Chula Vista September 6, 2001 Community Facilities District No. 200l-1 San Miguel Ranch - Improvement Area B Page 12 EXHIBIT C CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1 IMPROVEMENT AREAS A AND B (San Miguel Ranch) MAXIMUM SPECIAL TAX RATES FOR DEVELOPED PROPERTY AND UNDEVELOPED PROPERTY Maximum Annual Special Tax for Developed Property in Land Use Class 1 Community Facilities District No. 2001-1 Residential Developed Parcels Maximum Annual Special Tax Land Usc Class 1 - Improvement Area A $475.00 per unit plus $.34 per square foot of Residential Floor Area Land Usc Class 1 - Improvement Area B $475.00 per unit plus $.32 per square foot of Residential Floor Area Maximum Annual Special Tax for Developed Property in Land Use Class 2 Community Facilities District No. 2001-1 Commercial Developed Parcels Maximum Annual Special Tax Land Use Class 2 - Improvement Area A $5,091 per acre of Commercial Property Land Use Class 2 - Improvement Area B $5,091 per acre of Commercial Property Maximum Annual Special Tax for Undeveloped Property in Land Use Class 3 Community Facilities District No. 2001-1 Undeveloped Property Maximum Annual Special Tax Land Use Class 3 - Improvement Area A $10,376 per acre of Undeveloped Property Land Use Class 3 - Improvement Area B $4,578 per acre of Undeveloped Property J:\EngineerLAGENDA\SPECIAL TAX REPORT-CFD-2001 -I (I 10601).doc (7ommunity Facilities District No 2001 ] Page 14 San Miguel Ranch November 2001