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Home My WebLink About2013/12/10 Item 16 � _.:°� - �=�1� ` CITY COUNCIL � � -�� AGENDA STATEMENT - _ - ti� �� \�� CITY OF CHULA VISfA 12/10/13, Item �b ITE1'I TITLE: PUBLIC HEARII�'G TO COI�TSIDER THE ESTABLISHA4ENT OF A CLEAN E\rERG1' CO\4�4UI�iITY FACIL[TIES DISTRICT AND APPROVAL OF RELATED DOCU�4ENTS RESOLUTION OF THE CITI' CO[T\iCIL OF THE CIT1' OF CHULA VISTA ESTABLISHI\TG CO\4I�4UI�TIT1' FACILITIES DISTRICT I�iO. 2013-1 (CLEAN E\'ERGI' PROGRAM); CITY OF CHLJLA VISTA, COiTNTY OF SAN DIEGO. STATE OF CALIFORi\'IA r�iD PROVIDIi`'G FOR THE LEVY OF A SPECIAL TAY THEREIN TO FINANCE OR REFNANCE THE ACQUISITION, II��STALLATIOI�', AND IMPROVEMENT OF ENERGY EFFICIENCY. �VATER CONSERVATION. AND REI�iE\�%ABLE ENERGY IMPROVEMENTS PERI�4ANENTLY AFFIXED TO OR ON REAL PROPERTY AI�TD IiV BUILDINGS: AND AUTHORIZI1�iG VALIDATION ACTION ORDIN.Ai�ICE LEVYII�'G A SPECIAL TAX FOR FISCAL YEAR 2013-2014 .4i\TD FOLLO�'�'I\G FISCAL YEARS SOLELY \\TITHIN AND RELATIi�iG TO COn4MlJNITY FACILITIES DISTRICT NO. 20li-1 (CLEAN ENERGY PROGRAi�4); CtTY OF CHULA VIST COUi`'TY OF SAN DIEGO. STATE OF CALIFORi\TIA SUBA4ITTED BI': DIRECTOR OF PUBLIC �VORKS AD�4Ii�'ISTRATIVE VICES M.<u\?AGER REVIE�'1'ED BY: CITY MANAGER ASSISTAI�'T CIT 4ANAGE� 4/STHS VOTE: 1'ES � NO � SU�41'IARY As part of its Clrmate.4c�ion Plan implementation; the City is pursuine the establishment of a Chula Vista-specific Propeny Assessed Clean Energv (PACE) proeram; in partnership ��ith Ygrene Enerev Fund. PACE proerams help provide financine to propertv o�i�ners interested in energ�� efficiency; water conservation; and renewable energ�� improvements. One of the final steps in enabline a local PACE pro�ram is for the 16-1 12/10/13, Item �� Page 2 of� City; through a public hearing process, to adopt a resolution formall}� establishing a "Clean Energy' Community Facilities District (CFD) and pass an ordinance levying a special tax for properties, ��hich choose to annex into the CFD and receive financing for energy and ��ater upgrades. Based on the review of federal and state law on PACE programs including guidance and actions by the Federal Housing Finance Authority, staff recommends that all residential properties, as well as all non-residential properties; be allo�ved to participate in the voluntary program. ENVIRONMENTAL REVIEW The De��elopment Services Director has revie��,�ed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity qualifies for a Class 8 categorical exemption pursuant to Section 15308 [Actions by Regulator}� Agencies for Protection of the Environment] of the State CEQA Guidelines. Thus, no further environmental review is necessary. RECOP'IMENDATION Council adopt the resolution and place the ordinance on first reading. BOARDS/COMMISSION RECOMMENDATION At their November 4`h meeting, the Resource Conservation Commission unanimously recommended that City Council establish the new,"Clean Energy" Community Facilities District and levy special taxes, as appropriate, for participating properties. DISCUSSION As part of its Climate Action Plan implementation (Mitigation Measures #2, 3, 5; & 7 and Adaptation Strategies #4 & 11), the City has been pursuing the establishment of a Chula Vista-specific "Property Assessed Clean Energy" program over the last 10 months. PACE programs allow property-owners to voluntarilv finance energy and water-saving improvements through a special tax on their property and the resulting utility savines are used to help offset the new tax. Special ta�c obligations generally transfer with the property upon sale, because the new o�vner continues to benefit from the efficiency improvements. The creation of a local PACE program �vas also prioritized within the City's recent Strategic Plan under the "Healthy Community" core goal. PACE programs ��ere authorized under California Assembly Bill 811, Assembly Bill 474, and Senate Bill 55� and have successfully facilitated building energy and water upgrades in a number of California communities (such as Sonoma County, western Riverside County, City of Palm Desert, and City of Sacramento), while creating local economic development benefits. Typically; third-party administrators; on behalf of the host jurisdictions; manage the creation of the PACE district and da}�-to-day operations including contractor outreach, property-owmer enrollment, and private financing coordination. Through a competitive solicitation process, the City of Chula Vista entered into a no-cost contract ��ith Ygrene Energy Fund to administer a Chula Vista-specific PACE program on August 6, 20li (Resolution #20li-161). 16-2 12/10/13, Item �6 Page 3 of 5 As outlined in SB»> (�ihich amended the Mello-Roos Communin� Facilities Act of 1982); the Cih� of Chula Vista must complete a variet}� of steps in order to form a local PACE program. On November �, 20li the Cin� Council passed initial resolutions amendina the Cit�� s Communih� Facilities District Goals R Policies document to allo�� "clean energy" improvements, declarine its intent to form a clean enere�-focused CFD, and setting a formal public hearing for December ]0, 20li for consideration of the new CFD during the normal City Council meetine (Resolutions n20li-22� & 2013-226). The public hearine ��ill allow vettine of the proposed list of authorized improvements, CFD boundaries. and anv other related matter. After the public hearine, the Cirv Council will immediatel}� consider t�vo actions regazding the PACE program. First, it �ill consider a resolution formail}� establishine CFD 20li-I (Clean Enerev District) and declarine that less than �0 percent of reeistered ��oters ��Rthin its jurisdictional boundaries (or o«mers of less than one-half of the area) submined a �aritten protest. The resolution «ill also approve the form of a Unanimous Approval Aereement that ��ill be used to specif}� a panicipatine propem�'s selected enerey and �vater uperades, principal amount; financing rate, and debt service. The Unanimous Approval Aereement and other proeram widelines are contained in the attached Heazine Report. Secondh�, the Cin� Council ��ill consider an ordinance levyine a special ta� associated wRth the Clean Energv District. The special tax ��ll only be recorded aeainst a parcel once all of its o�vners have siened a Unanimous Approval Agreement and voluntaril}� enrolled in the Clean Enerey CFD. ' If City Council approves the abovementioned resolution and ordinance, the City �i�ill file a validation action in San Diego Superior Court seekins a judement that the Clean Energv District is valid and bindine. This validation process provides additional leeal assurances to 1'2rene Energy Fund, and their pm�ate investor partners, who ultimately finance the participatine properties' enerey efficienc��, ��ater consen�ation, and renewable energy improvements. Since the validation process can typically take '2-3 months to complete; it is expected that the launch of a Chula Vista-specific PACE proeram �vould potentially occur in March 2014. Orrick, Herrineton, & Sutcliffe LLP is joint counsel for the City and Ygrene on this matter, has prepared all related documents, and �vill handle the validation proceedines (at Yerene-s expense). One outstandine consideration is �vhether the ne« PACE proeram should include residential properties �vith Fannie Mae or Freddie �4ac-backed moneaees (i.e. "conformine" mortgages), ��hich are regulated b} the Federal Housing Finance Authority (FHFA). Although jurisdictions have a lons history and le�al precedent for usine Community Facilities District to finance public improvements. the FHFA issued a directive in 2010 statine that it considered PACE-related propert}� liens to be a threat due to their senior narure (i.e. delinquent propem� ta�es are paid before morteaees in case of foreclosure). The FHFA outlined three potential responses to residential PACE proerams: (1) increasine undernriting standards for all properties �i�ithin a jurisdiction; (2) requiring propenies �vith PACE liens to repav their mortgages immediately; or (3) requirin2 a PACE lien to be repaid ��hen the propem� is transferred or refinanced. After re��ie��ine federal and state la�i� and e�periences from eaisting residential PACE proerams operating in other California jurisdictions, staff believe that there is minimal . 16-3 12/10/13, Item /6 Page � of 5 risk associated with FHFA's three responses. First, banks and lenders are required, through the Uniform California Deed of Trust, to allow borrowers to impound property taxes and senior assessment liens �vith normal monthly mortgage payments, ��hich is an option for all Chula Vista PACE program participants. According to the Deed of Trust, impounding these taaes satisfies the bonower's commitment to protect the lenders interest in the propeR}� aeainst potential risks from senior liens. Secondly, the Ninth Circuit Appeals CouR in ZOli ruled that the FHFA, acting as Freddie Mac and Fannie Mae's conservator; could only direct its lending institutions to not finance a conforming residential propem� and; thus, require a PACE lien to be repaid when the property is transferred or refinanced. Recent information from other existing residential PACE programs indicates that lenders typically do not require PACE liens to be paid-off. Nonetheless, existing residential PACE programs (as well as the City's proposed program) include disclosures to property-owners about the possibility that their special tax lien may need to be repaid in full during property transfer or refinancing. Therefore, staff recommends allowing parcels with FHFA-backed conforming mortgages, along with all other residential and non-residential properties, to participate in the City's voluntary PACE program. If the current `'status quo" with the FHFA changes in the future, the City of Chula Vista could administratively alter the property types eligible under its PACE program, if necessary. Finally, the following California communities have also authorized full residential PACE programs and have not been negatively impacted by FHFA-related issues: Ciry of Adelanro Cit}�of Indian Wells Ciry of Rialto City of Apple Valley Ciq�of Indio City of Riverside Ciry of Auburn City of Jurupa Riverside County Cip�of Banning City of La Quinta City of Rochlin Cin�of Big Bear City of Lake Elsinore City of Rohnert Park City of BI}4he Cih�of Lemon Grove City of Roseville City of Calimesa City of Lincoln City of Sacramento Ciry of Cam�on Lake City of Loma Linda Sacramento Counry Ciq�of Cathedral Ciry To��n of Loomis City of San Bernardino City of Chino City of Menifee San Bernardino Count�� City of Chino Hills Cit}�of Montclair Ciry of San Jacinto City of Cloverdale City of Moreno Valley Ciry of Santa Rosa City of Coachella City of Murrieta City of Sebastopol City of Colfax City of Needles City of Solana Beach Cit}�of Colton Ciq� of Norco City of Sonoma City of Corona City of Oceanside Sonoma County City of Cotati Cit}�of Ontario City of Temecula City of Desert Hot Springs Cih�of Palm Desert City of T�venty Nine Palms Cit}�of Eastvale City of Palm Springs Cih�of Upland City of Fontana City of Perris City of Victorville City of Grand Terrace City of Petaluma City of Vista City of Healdsburg Placer Count}� City of Wildomar City of I-Iemet Cit}�of Rancho Cucamonga City of Windsor City of Hesperia Cit}�of Rancho Mirage City of Yucaipa City of Hiehland City of Redlands City of Yucca Valley 16-4 12/10l13, Item �lo Page 5 ot� DECISION A'L4KER CO\'FLICT Staff has revie�+�ed the decision contemplated b�� this action and has determined that it is not site specific and consequentl}�, the �00-foot rule found in Califomia Code of Reeulations section 18704.2(a)(1), is not applicable to this decision. Staff is not independently awaze, and has not been informed b}� any City Council member, of an�� other fact that mav constitute a basis for a decision maker conflict of interest in this matter. RELATIONSHIP TO CITY'S STRATEGIC PLAN The creation of a local PACE program suppons the Healthy Communit}� eoal ��ithin the Ciq�'s Strategic Plan. Specifically, the ne�v program �vill allo�� the City to expand community enerey and ��ater retrofit sen�ices, ��hich is a key objective under Initiati��e 3?.l. — "Desien and implement innovative em�ironmental & conservation programs.` CURRENT YEAR FISCAL I17PACT There ��ould be no impact to the City's General Fund caused by the proposed Clean Enereti� CFD. Yerene Energy Fund covers all costs associated ��ith desianing and administerine the PACE proeram; including district formation; mazketine, and project financin2. In addition; the Ciri� is able to recover any costs associated ��•ith staff time related to the proeram. O\�GOING FISCAL IMPACT There N�ould be no ongoine impact to the City's General Fund caused by the establishment and operation of a Chula Vista-specific PACE proeram. ATTACHA'IENTS Clean Energy Communiry Facilities District - Hearing Report Prepared by:Brendan Reed Em�ironmenwl Resmure Manager,Public If'orks-Cansenvtion K�PUBLC tf'ORi:.S-E�\'Gl4GE.\`DAICAS?01311?-10-13�P.9CE Durnn FosmatianlREPORT-PW-PACE Farmatron_FfN.4L doc 16-5 City of Chula Vista � �`� �� CITY OF � �� Community Facilities District No. 2013-1 (Clean Energy Program) City of Chula Vista County of San Diego State of California Hearing Report December 10, 2013 � 6-6 Page 1 of 62 Contents 1. Introdudion 2. Program Requirements & Parameters 3. Eligible Improvements 4. Surveys, Site Checks, and Documentation of Energy Savings 5. The Financial Stretegy 6. Consumer Protection 7. Changes to the Report Appendix A: Map of the Program Area Appendix B: Eligible Improvements Appendix C: Summary of Financing Process Appendix D: Program Charges Appendix E: Form of Unanimous Approval Agreement Appendix F: Form of Notice to Lender of Proposed Special Tax Appendix G: Form of Master Assignment Agreement Appendix H: Property Owner's Acknowledgment of Sole Responsibility to Deal with Lenders Appendix I: Notice of Special Tax Lien Page 2 of 62 � 6-� 1. Introduction Senate Bill 555 (Statutes of 2011, chapter 493) amended the Mello-Roos Community Facilities Act of 1982 (Government Code sections 53311 and following) (the "ACt") to enable public agencies in California to establish voluntary special-tax programs to reduce the upfront costs associated with energy-e�ciency, renewable-energy, and water-conservation projects that are affixed to real property • and proposed by property owners. The California Legislature declared that programs that authorize local governments to finance the installation of such improvements that are permanently affixed to real property would serve a public purpose. The City of Chula Vista (the "City") intends to use this financing authority to establish Community Facilities District No. 2013-1 (Clean Energy Program), City of Chula Vista, State of California (the "DistricY'). The City will use the District to implement its Clean Energy Chula Vista Program (the "Progrem'). The District and Program were formed and will be judicially validated to serve all properties legally permitted pursuant to Government Code Section 53313.5(I). In this report, eligible energy-efficiency, renewable-energy improvements, and water-conservation measures are collectively referred to as"Eligible Improvements." The District and Program will include the entire jurisdictional area of the City of Chula Vista consistent with the terms and conditions adopted by the City Council. The Progrem is voluntary and requires the full consent of all of the owners of any property seeking to finance the installation of Eligible Improvements using voluntary special taxes. As with other types of - land-secured public-financing programs (such as sewer-assessment districts), property owners will repay the cost of the Eligible Improvements advanced through the Program, and the costs of the Program, by means of an annual special tax levied against their properties. This special tax is payable in semi-annual installments and appears as a separate line item on the property-tax bills of the participating parcels. Goals The Program will help owners of improved real property make principled investments in the long-term health of the local, state, and national economies, as well as in the global environment, by providing a voluntary long-term financing mechanism for Eligible Improvements. Program Benefits The Program is a strategic investment opportunity that can assist the region in achieving significant benefits, primarily in two categories: (1) economic development and (2) quality of life.The economic- development benefits of the Program are multifaceted. By enabling property owners to take responsible energy- and water-conservation actions,the Program promotes reduced utility usage that translates into direct consumer savings and an increase in discretionary income. The multiplier effect attributable to such savings will benefit businesses and households throughout the region, encouraging job growth and bolstering local-government revenues. In addition,extrapolations from the most recent ECONorthwest study have shown that investment in energy efficiency leads to direct job growth: the study estimates that up to 60 new jobs are created for every 54 million invested in energy-efficiency improvements. Moreover, the Progrem provides an innovative form of financing for property owners. Particulariy in economic cycles where credit and lending standards are very restrictive,the ability to obtain alternative sources of capital is extremely important. Accordingly, the Program provides a safe, Page 3 of 62 16-8 no-money-down means of financing Eligible Improvements, with a fixed interest rate and terms that may not readily be available through equity loans and other traditional means. The Program catalyzes broader impacts to the regional quality of life through speeding investments into smarter energy- and water-conservation practices. For example,the Program financing complements the myriad of other incentives, including utility rebates, federal credits, and state programs, aimed at lowering the upfront costs of Eligible Improvements. This leveraging of resources will accelerate a reduction in communitywide energy and water use, translating directly into reduced GHG emissions and helping to secure our collective energy and water future. This enables the region to address climate change while also ensuring that scarce resources remain available for future generations. On a very tangible level, improvements to the building stock enabled through the Program will increase building comfort and safety,thereby promoting public health,employee productivity, and overall wellbeing. Additionally, the possibility remains that carbon offsets and credits attributable to energy improvements financed by the Program may be available. In this case, unless the improvements qualify for an incentive program that requires transfer of credits to the participating property owner, the offsets and credits would be owned by the City and could generate revenue that would be used in coordination with participants to promote the Program's sustainability. Program Administration The City is contrecting with Ygrene Energy Fund California, LLC(the "Progrem Administretor') to administer and fund the Program. The City Manager or his/her designee will be authorized to enter into "Unanimous Approval Agreements" on behalf of the City. The Program Administrator will oversee personnel associated with implementation of the Program, including staff, contractors,and any other organizations assisting in the implementation. The Program Administrators duties include, but are not limited to, the following: • Setting up the Progrem and coordinating with City staff • Selecting the site for an outreach center and opereting the center • Providing a source of financing for the Program • Developing marketing plans and programs • Providing an interactive website for the Progrem • Reaching out to the community and marketing the Program • Processing and validating applications • Certifying contractors • Coordinating administration of the Program • Managing Program data • Acting as a liaison between the City,the proper[y owners, and the contractors hired by property owners to install the Eligible Improvements 2. Program Requirements & Parameters Hearing Report Page 4 of 62 16-9 The City of Chula Vista stated its intention to establish the Program on November 5, 2013 by adopting its Resolution No. 2013-226 (the "Resolution of Intention") that directed preparation of this report. This Hearing Report explains how the Program will function (the "Hearing Report") and includes the following: • A map showing the boundaries of the territory proposed for annexation to the District in the future and within which voluntary special taxes may be implemented (attached as Appendix A). This territory is exactly the entire jurisdictional limits of the City. • Policies concerning participation in the District (see this Section 2), including a list of the Eligible Improvements (attached as Appendix B); identification of the City official authorized to enter into Unanimous Approvai Agreements on behalf of the City(see the paragraph titled "Unanimous Approval Agreement" in Appendix C that summarizes the Program's financing process); and the maximum aggregate dollar amount of Eligible Improvements that may be financed under the Progrem (see "Eligible Property Owners and Eligible Properties" below in this Section 2). • Information on the City's incidental, financing, and administretive costs and the cost of placing special taxes on the tax roll (see Appendix D). • A plan for funding the Program (see Section 5). • A draft Unanimous Approval Agreement (the"Unanimous Approval AgreemenY') between a property owner and the City (attached as Appendix E�. • A draft Notice to Lender of Proposed Special Tax (the "Lender Notification Letter") to be sent to all secured lenders with a recorded lien on a property at the time its owners apply to participate in the Program (attached as Appendix F). • A draft Assignment Agreement (attached as Appendix G). • A draft Property Owners Acknowledgment of Sole Responsibility to Deal with Lenders (attached as Appendix H). • A draft Notice of Special Tax Lien (attached as Appendix I). Boundaries of Program Area A map showing the City boundaries is attached as Appendix A. Pursuant to 56 555, the District initially contains the entire City territory designated as Future Annexation Area (FAA). Property owners within the FAA interested in obtaining financing would voluntarily request, and under the Mello-Roos law effectively vote, to be annexed to the CFD via the unanimous written approval of the parcel owner(s). Property owners not interested in obtaining financing will not be annexed into the CFD. Eligible Property Owners and Eligible Properties Page 5 of 62 � 6-� � Property owners eligible to participate in the Progrem include, but are not necessarily limited to, individuals, associations, business entities, and cooperatives. Certain eligibility or underwriting criteria must be satisfied and property owners should consult with the Program Administrator for current information. Financing may be approved only if the following criteria are met: • The property is located within the City. • Property taxes and other special taxes on the tax bill are current. • There are no involuntary liens on the property, including construction liens. • No notices of default or other evidence of debt delinquency have been recorded during the preceding three years or the entire term of ownership of the current owner,whichever is shorter. • Payments on all mortgage debt secured by the property are current. • The total of all existing secured indebtedness on the property does not exceed 85%of the value of the property(determined using assessed or appraised value or an estimate of value based upon data supplied by a reputable real estate information service) at the time Notice to Proceed is issued. • The proposed principal amount to be financed does not exceed the percentage of the value of the property(determined using assessed or appreised value or an estimate of value based upon data supplied a reputable real estate information service) provided in the Ad. • Each holder of a fee-simple interest in the property has signed the Unanimous Approval Agreement and any other documents required by the Program. • The total annual proper[y taxes and assessments ori the property(including the Program special taxes)will not exceed 5%of the value of the property(determined using assessed or appraised value or an estimate of value based upon data supplied by a reputable real estate information service.) • Each lender with a recorded lien on the property has been sent a Lender Notification Letter. Eligible Improvements The Program enables owners of qualified property within the City to finance a wide range of Eligible Improvements consistent with the following provisions: • Program financing is intended principally for retrofit activities to replace outdated, inefficient equipment and to install new equipment that reduces energy consumption, produces renewable energy, or increases water conservation. However, Program financing is also available for improvements on new commercial construction, and on new residential construction if the property will be occupied by the owner. Page 6 of 62 � 6-� � • The Program provides financing only for Eligible Improvements that are permanently affixed to the real property. • The Program provides financing for Eligible Improvements specified in Appendix B which groups the improvements into three categories: Energy-efficiency improvements Renewable-energy improvements Water-conservation improvements • Program financing is also available for projects that combine Eligible Improvements or bundle energy efficiency, water conservation, and renewable energy improvements. For instance, a property owner may choose to install weather stripping, replace an aging and inefficient furnace, install low-flow toilets, and install a solar photovoltaic system. • Program participants will be required to obtain and submit necessary building permits and inspections before receiving financing. • Only contractors certified by the Progrem Administrator for participation in the Program (each, a "Certified Contrector") are authorized to install Eligible Improvements financed through the Program. Eligible Project Costs and Administrative Costs Project Costs Financeable costs for the Eligible Improvements include the costs of equipment, materials, supplies and installation. Installation costs may include the costs of energy and water-survey consultations and audits; labor, design, drafting, and engineering costs; permit fees; and inspection charges. Cash rebates and incentives received by or approved for the project at the time of funding will be deducted from the amount disbursed through the Program. Property owners will be required to select a Certified Contractor for installation of their Eligible Improvements if they wish to finance labor costs. Projects installed by the property owner are eligible for equipment financing only. Property owners who elect to include general remodeling, or measures other than Eligible Improvements, in their projects can receive Program financing for only that portion of the cost expended for Eligible Improvements. General repairs, unless required for a specific Eligible Improvement, do not qualify for Program financing. Administrative Costs The intent of the Program is to minimize upfront costs associated with the application process while also supporting program sustainability. Accordingly,the Program may impose charges in accordance with the schedule attached as Appendix D. Any annual charges will be included in the annual special tax. All other fees will be added into the amount to be financed by the property owner or may be paid directly when incurred. Page 7 of 62 � 6—� 2 Minimum Financing Amount The minimum amount that can be financed under the Program is 52,500. Unless progress disbursements are authorized, Program financing will be disbursed directly to the property owner or to the property owner's designee after Eligible Improvements are completed and final inspection and other documentation is submitted to the Program Administrator. Duration of Special Tax Unanimous Approval Agreements are available for up to 20-year terms to accommodate a wide range of energy-e�ciency, water-conservation, and renewable-energy investments. The duration of special taxes will be governed by the weighted average lives of project components defined using industry standards. Program Interest Rate The Program Administrator will set the interest rate to determine the maximum special-tax at the time the City and a property owner enter into a Unanimous Approval Agreement. The interest rate will be fixed at that point for a period of time dictated by the size of the project and interest rate volatility, and will not go up unless the property owner fails to submit a valid funding request within this rate-lock period. The Program Administrator will make periodic changes to the Program interest rates and lock periods in response to conditions in the financial markets—and current policies will be available on the Clean Energy Chula Vista web site. Special Tax Liens All property owners must sign a Unanimous Approval Agreement and have their signatures notarized. Execution of the Unanimous Approval Agreement will authorize a lien on the property that secures the payment of the special taxes levied in accordance with the agreement. See Appendices C, E, F, H,and I for more information on the special tax lien, the property owners obligation to notify its lenders of the tax lien, and the property owners sole responsibility to deal with its lenders regarding the special tax lien. Delinquent Special Tax Collections Delinquent special taxes will be collected using the laws and powers authorized under California law for collecting property taxes and special taxes. While unlikely, one remedy available to collect any delinquent installment of the special tax is accelerated judicial foreclosure of the special tax lien against the delinquent property. First Levy of Special Tax If funds are disbursed to property owners before June 30 of any year,then the first years special taxes will appear on the neM proper[y tax bill. For disbursements made on or after July 1 of any year, the first levy of the special tax will not appear on the tax bill until the following tax year. In this case, interest on Page 8 of 62 16-13 deferred installments will be capitalized and added to the amount to be financed under the Unanimous Approval Agreement. 3. Eligible Improvements There are three categories of Eligible Improvements that may be financed through the Program. A sample list of Eligible Improvements is set out in Appendix B. Energy Efficiency Improvements Energy-efficiency improvements comprise a wide range of energy-efficiency fixtures from windows and doors to attic insulation and HVAC equipment. Such measures will help facilitate achievement of City targets, including a reduction in building-energy use through energy-efficiency measures. Renewable Energy Improvements Renewable energy improvements primarily include solar photovoltaic installations designed to replace utility-genereted electrical power with renewable solar power for all or a major portion of a property's energy needs. Also included are wind generation, solar thermal,geothermal, and hydroelectric installations, as well as emerging technologies for renewable energy generation. Water Conservation Improvements Water conservation improvements comprise a wide range of water-conservation measures designed to reduce demand. Included, among many other measures, are recirculation systems, gray-water systems, rainwater harvesting systems, low-flow fixtures, waterless urinals, deionization equipment, and filter upgrades. Custom Improvements The Program encourages the development of innovative technologies and ideas that will diversify and expand the City's energy and water resources. Applicants who seek program financing for improvements that are not shown on the list of Eligible Improvements should consult with the Program Administrator to determine eligibility. The Program Administrator, in consultation with the City, will approve such projects on a case-by-case basis. While applicants would be expected to bear the up-front cost of outside consultations, such costs can likely be financed through the Program. 4. Surveys, Site Checks, and Documentation of Energy Savings Property owners who participate in the Program are investing in the community's future by helping to reduce energy usage or by conserving water. The same owners are making financial investments in their properties, and careful consideration of the costs and benefits of Eligible Improvements is important to ensure cost-effectiveness and satisfactory outcomes. Page 9 of 62 16-14 An energy audit for commercial projects is required under the Program. For small projects ($2,500 to 5249,999) audits will be performed at modest cost to the property owner by contractors or local utility companies. Large projects ($250,000 to$499,999) and very large projects($500,000 or more)will require more formal audit procedures. The cost of audits may be financed through the annual special tax. Water conservation improvements do not require an audit. 5. The Financial Strategy The annual special taxes will be authorized in accordance with the Act and the Unanimous Approval Agreements and collected through the County property-tax system. The City will assign the special-tax revenues to a Trustee designated by the Program Administrator. The Program Administrator may enter into agreements with multiple funding sources to provide both interim and long-term financing for the Program. The Program Administrator will purchase, hold, repackage, and remarket (or any combination thereofl the Program securities to provide financial resources to fund the property improvements contemplated by the Program. The Program Administrator will manage the Program, establish the program budget, and be responsible for funding program operations. The Program Administrator will indemnify and hold harmless the City from and against any claims to the special-tax revenues associated with the Unanimous Approval Agreements. City staff designated by the City will have audit authority over the accounting strudure developed by the Program Administrator to run the Program. 7he City will conduct yearly audits of the Program. The Program Administrator will reimburse the City for all costs related to program administration, including cost of any audit performed. 6. Consumer Protection The Program Administrator will disclose relevant financing information to property owners and give participating residential property owners the opportunity to cancel their Unanimous Approval Agreements, without penalty, during the three-day period following execution. Each single-family residential property owner will be required to sign an acknowledgment that includes the substance of the following disclosure: Many banks that make home loans desire to preserve the option to sell those loans to U.S. government-sponsored enterprises (called "GSEs°)that are regulated by the Federel Housing Finance Agency("FHFA"). The FHFA may have instructed its GSES not to purchase home loans where there is a superior lien for clean-energy improvements, such as the special-tax lien. Thus, in order to refinance your home loan, or for a prospective purchaser of your property to obtain a loan secured by the property,you may need to remove the special-tax lien by prepaying the special-tax obligation in full. You thus should consider the likelihood and timing of a possible refinancing or sale of your property, and the costs to prepay the special-tax obligation, in deciding whether to annex your property to the district. Appendix C includes information on prepayment penalties. The Program Administrator, on behalf of the City,will comply with all applicable state and federal laws, including but not limited to consumer protection laws in connedion with the operation of the Program. Page 10 of 62 16-15 7. Changes to Report The City designee may make changes to this Hearing Report that the City and the Program Administrator reasonably determine are necessary to clarify its provisions or to effectuate the purposes of the Program. Changes to this Hearing Report that materialiy modify the Program will require approval by the City Council. Whether approved by the City designee or approved by the City Council, changes may not affect the special taxes payable under then-existing Unanimous Approval Agreements between property owners and the City. Page 11 of 62 � 6-� 6 Appendix A: Map of Program Area The Program is available to owners of residential, multi-family residential, commercial, or industrial property.within the City,the boundaries of which are depicted below. .�,..,...�� hoV�dBOUMaWesofTarlNrYaW�mfaM�WOn —'°—� in Me FRUrt m[wnmuniry Fatllitles DistriR Na IAlil �•� (Oean Eneryy veop,r/am)� .�...o'. �.�'�'/ �_ _�e.e� // ��.��✓��\ �s....��s.�m. `:` ' l�+�' •/ ` l\` l i� _�—`��\ � ` �� '�t,\ !� l �—"�� \� i',��,,�._ � ; � ; � i ,..-^. : i r i ` �;��,-'';�� ° . !� ^�Y r:�`°. .i" ~� � _ i t � � �V . '. � � ��!". i-t ti'_,` .- t � i ` �,�'. �i. �-\., _� . /: ` «.Jf t t( ( ��O. �,.��. r//'�_�ti�:l i � / `` 1 ` �1�� \ :i i�ti�. l� �^\ :�. `} i=� —�-�_i _� / ��, . �\ �i 1"'�� ;.�'___-'� �/ ' }-i j ��'�/`r � ±- � 1, �'",, '� ` '�i�'� �S`-°.%�'� � 3� �/ �'� ' �� 1�v' �i,.�,��;.- % ; �',�' :;=.��;� �. ��--=� . � 1 '�,�'";�t i � '�� ; Qvsrwcreawvwa� 0 "—•� �` 0 '�- � I I ,� (/ � / � i ; -°- - 1 '�. Page 12 of 62 � 6-� � Appendix B: Eligible Improvements The Program offers financing for a variety of energy-efficiency improvements, water conservation improvements, solar energy systems, and other distributed generation systems. In each case, any rebates received by or approved for property owners prior to funding must be deducted from the amount of financing requested. In addition, property owners are encouraged to pursue the most cost effective improvements (or combination of improvements)to maximize their long-term utility savings and return on investment. This list is not intended to be comprehensive. Any projects that measurably save energy beyond the level required by legislation, or that generate renewable energy or add to the conservation of water resources, can be financed through the program. Consult the Program Administrator for details. Energy Efficiency • Air Sealing and Ventilation • Air Filtration • Building Envelope • Duct Leakage and Sealing • Bathroom, ceiling, attic, and whole house fans • Insulation • Defed Correction • Attic, floor, walls, roof,ducts • Weather-Stripping • Home Sealing • Geothermal Exchange Heat Pumps • HVAC Systems • Evaporative Coolers • Cooler must have a separate ducting system from air conditioning and heating ducting system • Natural gas storage water heater • Energy Star listed • Tank-less water heater • Solar water heater system • Reflective insulation or radiant barriers • Cool roof • Windows and glass doors • U value of 0.40 or less and solar heat gain coefficient of 0.40 or less • Window filming • Skylights • Solar tubes • Additional building openings to provide addition natural light • Lighting • Energy Star listed (no bulb, only retrofits) • Pool equipment • Pool circulating pumps Non-residential Energy Efficiency • Occupancy-Sensor Lighting Fixtures • SMART Parking Lot Bi-Level Fixture Page 13 of 62 � 6-� $ • SMART Parking Garage Bi-Level Fixtures • SMART Pathway Lighting • SMART Wall Pack Fixtures • Task Ambient Office Lighting • Classroom Lighting • Refrigerator Case LED Lighting with Occupancy Sensors • Wireless, daylight lighting controls • Kitchen Exhaust Variable Air Volume Controls • Wireless HVAC Controls& Fault Detection Renewable Energy • Solar thermal hot water systems • Solar thermal systems for pool heating • Photovoltaic systems(electricity) • Wind generation systems(electricity) _ • Geothermal systems • Hydroelectric systems • Emerging technologies—following the Custom Measures Track Water Conservation • Faucet aerators • Core-plumbing system • Gray-water rystem • Instantaneous hot-water heater • Recirculation hot-water system • Demand initiated hot-water system • Hot-water pipe insulation • Irrigation-control system •• Irrigation system • Rainwater harvesting system • Low-flow showerhead • High-efficiency toilets • Demand water softener • Whole-house water-manifold system • Cooling-condensate reuse • Cooling-tower conductivity controllers • Deionization • Filter upgrades • Foundation drain water • Industrial-process water-use reduction • Pre-rinsesprayvalves • Recycled water source • Urinals • waterless urinals Page 14 of 62 � 6-� 9 I Custom Improvements The Program Administrator can evaluate and approve financing for Eligible Improvements that are not "off the shelY' ("Custom Improvements"). Custom Improvements may involve large-scale industrial or commercial energy-efficiency projects, processing or industrial mechanicai systems, and renewable energy generation from sources such as geothermal and fuel cells. They may also include innovative or large-scale agricultural water conservation measures. Custom Improvements that will be considered for City Program funding include, but are expressly not limited to, the following: • Building energy-management controls • HVAC duct zoning-control systems • Irrigation pumps and controls • Lighting controls • Industrial-and process-equipment motors and controls • Fuel cells • Wind-turbine power system • Naturalgas • Hydrogen fuel • Electric Vehicle chargers • Other fuel sources (emerging technologies) • Co-generation (heat and energy) Page 15 of 62 � 6-2� Appendix C: Summary of Financing Process The Program provides financing for the installation of Eligible Improvements on qualifying property within the City. A participating property owner will repay the financing through the payment of special taxes levied against the owner's property that are payable in semi-annual installments on property tax bills. Project Scoping Property owners work directly with Certified Contractors to determine the scope of their projects. As a project is defined,the property owner obtains a Certified Contractors bid to determine the cost of the Eligible Improvements. Application Process The application process can be completed on-line or through paper forms. It is a two-step process to (i) qualify for funding and then, after installation of the improvements, (ii)to request the release of funds. All approved or denied applicants will receive written confirmation of the status of their applications. Initial Application Property owners considering the Program must submit an application, either through the Program Administrators on-line system or by submission of the written application form. The following information must be provided at the time an application is submitted: 1. Property owner(s) name(s). 2. Property address. 3. Assessols parcel number. Application Fee The Program Administrator will collect an application fee at the time of submittal with the amount of the fee designated in the fee table provided in Appendix D. The application fee may be reimbursed through the financing at the time of funding. Lender Notification Concurrently with submitting the application to the Program Administrator,the applicant must send a Lender Notification Letter to each secured lender of record (Appendix F). The applicant must also sign a Property Owners Acknowledgment of Sole Responsibility to Deal with Lenders(Appendix H). Application Review Within three business days of receipt of an application, the Progrem Administrator will review the application; determine its status (approved, incomplete, denied, or requires additional approval)and notify the applicant in writing of that determination. Page 16 of 62 � 6-2� 1. Approved. An application will be approved if the Program Administrator has verified that the application is complete and meets all applicable eligibility and underwriting criteria. Once an application is approved, the property owner will execute a Unanimous Approval Agreement authorizing the City to record a Notice of Special Tax Lien (Appendix I)on the subject property. Once the Notice of Special Tax Lien is recorded, the Program Administrator will issue a Notice to Proceed to the property owner. Upon receipt of this notice,the property owner may sign construdion contracts and authorize commencement of the project. If installation begins prior to receipt of a Notice to Proceed, the property owner bears the risk of not receiving financing under the Program. 2. Incomplete. An application will be deemed incomplete if it is missing any required information or attachments. Incomplete applications may be resubmitted. The Program Administrator will process resubmitted ap'plications on a first-come, first-served basis following re-submittal. 3. Denied. An application will be denied if the Program Administrator cannot verify that it meets all of the requirements for approval. In the event of denial, the Program Administrator will provide a written denial notice outlining the reasons for the action. Property owners may resubmit denied applications. 4. Additionol Approvols. With respect to an application to finance Custom Improvements, the Progrem Administrator reserves the right to require appropriate engineering documentation and energy studies verifying the energy savings and energy generation capabilities of the proposed project. If allowed by law, the Program Administrator may also charge an additional administrative fee to review technical reports but will discuss any such fee with the property owner before proceeding. Unanimous Approval Agreement All property owners of record must sign the Unanimous Approval Agreement, the current form of which is attached as Appendix E, and have their signatures notarized. The City designee will sign the Unanimous Approval Agreement on behalf of the City. Permits After receiving the Notice to Proceed, and before commencing installation,the property owner(or Certified Contractor) must obtain a building permit and other necessary permits from the appropriate jurisdiction. Finai inspection by the designated building official for the property's jurisdiction will be required to ensure that the Eligible Improvements were completed, and a valid, signed-off building permit is required before the Program Administrator will approve release of financing. Time Limit Except for large projects (5250,000 or more), installation of the Eligible Improvements must be completed within 180 days after the date of recording of the Notice of Special Tax Lien on the property. Projects not completed within the 180 day period may be subject to additional underwriting prior to funding. Prior to expiration of the 180-day period, property owners may request an extension for good cause. Schedules for large projects, known to exceed a 180 day construction cycle, must be determined and agreed upon before issuance of a Notice to Proceed. Page 17 of 62 is-2z A property owner may cancel a funding reservation during the 180 day period. The property owner will thereafter be ineligible for funding under that application, but may reapply. In the event of a cancellation, the property owner may be liable for inspection and other direct costs incurred by the Program Administrator or the City in accordance with the terms of the Unanimous Approval Agreement. Special Tax Lien Upon execution of the Unanimous Approval Agreement, the Program Administrator will record a Notice of Special Tax Lien against the subject property. If funds are disbursed to property owners by June 30 of any year, then the first special tax levy will appear on the next tax bill. For disbursements beginning July 1, the first years interest on the amount financed will be capitalized at the Program interest rate from the funding date to the tax roll date, and the special tax levies will not begin until the following year. The lien will secure each annual special tax levy. The Unanimous Approval Agreement uses a principal amount to be financed, an interest rate on that principal amount, and an ongoing administrative amount, to arrive at the maximum annual special tax as illustrated below: 1. Financed Principol Amount. The principal amount to be financed may include the following: a. Eligible Costs. The Program may finance the costs of installing Eligible Improvements and conducting energy and water-survey consultations. All federal, state, and local cash incentives and rebates approved for and/or received by the property owner at the time of funding will be deducted from the principal amount to be financed. b. Copitolized Interest on the Finonced Principol Amount. Because the County Tax Collector has established a deadline for placing special taxes on the County properiy-tax bill,the principal amount to be financed may also include necessary capitalized interest thereon as described above. c. Administrative Costs and Costs of Issuonce. Initial administrative costs may include, but are not limited to, (i)the fee charged by the County to record the Notice of Special Tax Lien in the real property records, (ii)financing origination and bond costs, and (iii)financing closing costs, including the costs specified in Appendix D. 2. Interest Rote. The rate of interest paid by the property owner on the principal amount to be financed will be a fixed rete. The rate offered to property owners will vary from time to time depending on the Program Administrator's cost of funds. The interest rate in the Unanimous Approval Agreement will be fixed for the term of the special tax levy. Assignment of Special Tax Revenues As each project is fully funded through financing arranged by the Program Administrator, the City will assign to the Program Administrator or its designee the special tax revenues and foreclosure rights described in the Unanimous Approval Agreement for the project. The current forms of the assignment documents are attached as Appendix G. Installatian of Improvements Property owners enter into contractual arrangements directly with Certified Contractors for the installation of the Eligible Improvements. All work is subject to appropriate County and/or City Building Department permit requirements and inspections, and all other applicable federal, state, and local laws and regulations. ' Page 18 of 62 16-23 Final Inspections & Disbursement of Progrem Financing Contractors installing improvements must be Certified Contractors registered through the Program Administrator for participation in the Program, must comply with all state and local licensing laws, and must obtain building permits and arrange all required inspections. After Eligible Improvements are completed, the Certified Contractor must obtain final inspection and permit sign-off from the City Building Department and fulfill any required permit-completion requirements prior to submitting the project for funding. The Certified Contractor then notifies the Program Administrator that all work has been completed and submits final documentation, including verification of permit completion, invoices reflecting all costs less rebates and incentives, and any applicable survey documentation. Disbursement of the Program financing will be in accordance with the disbursement procedures set forth in the Unanimous Approvai Agreement. If financing is canceled for any reason after recordation of the Notice of Special Tax Lien—whether at the property owner's request or because the project is not completed—then all expenses incurred by the Program Administrator, the City and the County for recording and removing the Special Tax Lien and any other incurred costs will be the responsibility of the property owner. The Program Administrator will arrange for removal of the lien evidenced by recordation of the Notice of Special Tax Lien upon receipt of payment from the property owner for these expenses. Payment Terms Payment of the Program annuat special taxes is made through the addition of a line item on the property-tax bill. The Program offers standard payment terms of 10 and 20 years, depending on the preference of the property owner and the expected weighted average useful life of the installed Eligible Improvements. The Program Administrator may approve other payment terms on a case-by-case basis. Depending on market conditions, a five percent (5%) prepayment penalty, clearly identified in the Unanimous Approval Agreement and included in all disciosures to property owners, may apply. Page 19 of 62 � 6-24 Appendix D: Program Charges The following charges will apply to the Program. The Program Administretor, with the consent of the City, may change these charges from time to time in response to increases or decreases in the cost of providing Program services. Description Amount Collected I Application $50 for residential I Upon application submittal $100-$250 for commercial Processing& underwriting � Not to exceed $250 � At disbursement � City cost recovery ( Estimated to be $100 At disbursement Recording &disbursement � Not to exteed $250 � At disbursement Escrow Third-party cost based on At disbursement project size Title insurance Third-party cost based on At disbursement project size All Program charges may be included in the principal amount to be financed. County Auditor-Controller The County Auditor-Controllers normal fees for placing direct levies on the property-tax roll will apply. (Remainder of Page Intentionally Left Blank) Page 20 of 62 16-25 Appendix E - Form of Unanimous Approval Agreement Community Facilities District No. 2013-1 (Clean Energy Program�, City of Chula Vista, County of San Diego, State of California Unanimous Approval Agreement This Unanimous Approval Agreement, dated 20_, is between the City of Chula Vista, a California municipal corporation (the "Cit�'), and all of the persons or entities identified on the signature page below as owners of the real property identified in Background paragraph E (collectively,the "Owner'). Background A. In connection with its Clean Energy Program (the "Program"), the City has established its Community Facilities District No. 2013-1 (Clean Energy ProgramJ, City of Chula Vista, County of Son Diego, Stote of Colifornia (the "CFD") for the purpose of levying special taxes against certain developed properties in the City. The tax revenues will be used to finance, refinance, or lease the acquisition and installation on those properties of qualifying renewable-energy systems and energy- and water-efficiency improvements. B. The CFD was formed by the City under the Mello-Roos Community Facilities Act of 1982, set forth in sections 53311 through 53368.3 of the California Government Code (the "Act"), and particularly under sections 53313.5(I) and 53328.1; which the California Legislature added to the Act in 2011 to promote energy- and water-efficiency improvements needed to address global climate change (see Statutes 2011, chapter 493 (Senate Bill No. 555)). As the Legislature declared in the Act, "a public purpose will be served by providing the legislative body of a local agency with the authority to use special taxes pursuant to the Mello-Roos Community Facilities Act of 1982 to finance the installation of energy efficiency and renewable energy improvements that are affixed, as specified in section 660 of the Civil Code,to residential, commercial, industrial, or other property." The purpose and method of administration of the special taxes under the CFD are further described in the CFD Hearing Report submitted to the City Clerk (the "Clerk") in conjunction with the public hearing concerning the formation of the CfD held by the City Council (the "City Council") on December 10, 2013, as it may be amended from time to time (the "Report"). C. The City has initially contracted with Ygrene Energy Fund California, LLC (the "Progrem Administretor") to administer the Program and to arrange financing for the acquisition and installation of qualifying renewable-energy systems and energy- and water-efficiency improvements through the CFD. Page 21 of 62 � 6-26 D. To participate in the Program, a property must annex to the CFD. The Act permits annexation to the CFD only with the unanimous approval of all of the property's owners. One purpose of this Unanimous Approval Agreement is to memorialize the unanimous approval required by the Act, but this agreement also specifies the terms under which the Property (as defined in paragraph E below) will participate in the Program. E. Owner holds title to the real property described in Exhibit A to this agreement (the "Property") and has submitted an application to participate in the Program, dated , 20_, (the "Application"). The Application is incorporated in this agreement and made a part hereof by this reference. Among other things, the Application directs the Owner to review the list of renewable-energy systems, water- efficiency improvements, and energy-efficiency improvements set forth in the Report and authorized to be financed through the Program, and Owner will-seleci from the list the systems and improvements to be installed on the Property. The selected systems and improvements, together with their acquisition and installation on the Property, are referred to as the "Improvements." F. The Owner wishes to participate in the Program by entering into this agreement with the City and using the moneys obtained through the Program Administrator to finance, refinance, or lease the Improvements. The City and the Owner agree as follows: 1. Contrect Documents.This agreement and the documents attached to it as exhibits, together with the Application, are collectively referred to as the "Contract Documents." All of the Owner's declarations and warranties in the Application are incorporeted into this agreement. 2. Term. The term of this agreement begins on the date, after the City and the Owner have signed this agreement, when the Notice of Special Tax Lien substantially in the form attached to this agreement as Exhibit B (the "Notice of Special Tax Lien") is recorded against the Property (the "Effective Date") in the records of the County Recorder of the County of San Diego. The term of this agreement ends when the entire special-tax obligation (as described in section 7(a), below), plus any applicable penalties, costs, fees, and other charges, has been paid in full. 3. Special Tax and Lien. (a) As of the Effective Date,the Property will be annexed to the CFD for all purposes and will be subject to the annual special tax that will be levied against the Property in accordance with the terms of the CFD, this agreement, the Act, and any other applicable law and will be secured by the special-tax lien imposed by the recorded Notice of Special Tax Lien (the "Special Tax"). The Owner hereby consents to the Page 22 of 62 � 6-2� levy of the Special Tax on, and to the recordation of the Notice of Special Tax Lien against, the Property. (b) Failure to pay any installment of the Special Tax, like failure to pay any property taxes on the Property, will result in penalties and interest accruing on the amounts due. In addition, the lien of any delinquent Special Tax plus penalties, interest, and costs, as set forth in section 7(d) below may be foreclosed upon as provided in the Act. In that regard, the City and the Owner hereby agree that the obligation to pay the Special Tax is for the purpose of repaying funds disbursed under the Program to the Owner or on the Owner's behalf; that this agreement constitutes the Owner's binding obligation to pay or repay a sum of money through the payment of the Special Tax; and that upon disbursement of the Disbursement Amount (defined in section 4 below) a "debY' will be "outstanding" for purposes of sections 53317(d) and 53356.1 of the Act. The maximum principal amount of.the debt used to originally finance the Improvements wili not exceed the Maximum Disbursement (defined in Section 4 below). 4. Disbursement Amount. The City shall authorize disbursement of moneys to the Owner or on the Owner's behalf based on the amount of the actual cost of the Improvements (the "Disbursement AmounY'), subject to this limit: the Disbursement Amount may not exceed $ (the "Maximum Disbursement"). The Program Administrator will determine the Disbursement Amount based on invoices and other relevant documents submitted by the Owner. The Owner's use of the Disbursement Amount is limited as described in section 8, below. If the actual cost of the Improvements exceeds the Maximum Disbursement, then the Owner will be solely responsible for the payment of all improvement-completion costs that exceed the Maximum Disbursement and shall complete the Improvements and fund all costs that exceed the Maximum Disbursement. 5. Authorization of Special Tax, Indebtedness, and Appropriations Limit. The Owner acknowledges that this agreement constitutes the Owner's election to annex the Property to the CFD, to authorize the Special Tax and the debt described in section 3(b) above, and to establish the contribution of the Property towards the appropriations limit for the CFD (as defined by section 8(h) of Article XIIIB of the California Constitution). The Owner hereby waives any notice, protest, and hearing procedures and provisions of any law other than the Act with respect to the annexation of the Property, the levy and collection of the Special Tax, the authorization of debt, or the establishment of the appropriations limit. The Owner further acknowledges that the annexation, the Special Tax, the debt, and the appropriations limit are being authorized on the Property at the Owner's request, and the Owner waives any right to contest the annexation, the authorization of the Special Tax or the debt, the establishment of the appropriations limit, or the imposition of the Special Tax in accordance with this egreement. Page 23 of 62 � 6-28 6. Commencement and Completion of Improvements. (a) Consent ond Authorizotion. This agreement constitutes consent and authorization for the Owner to purchase diredly the related equipment and materials for the Improvements and to contract directly for the installation of the Improvements on the Property. (b) Date of completion of the Improvements. Subject to section 17(g) below, the Owner shall complete installation of the Improvements no later than 180 days after the Effective Date unless the Improvements cost $500,000 or more and the Owner and the Program Administrator have agreed on a later completion date. The Owner and the Program Administrator may agree to an extension of the completion date for good cause shown. 7. Colledion of Special Tax on Property Tax Bill; Other Remedies. (a) Annual installments of the Special Tax will be collected through the property-tax bill for the Property. The Special Tax will be payable and become delinquent and will bear the same penalties and interest after delinquency, at the same times and in the same manner, and in the same installments, as general taxes on real property within the County of San Diego are payable. The maximum amount of the Special Tax that will be placed on the tax roll each year is set forth in Exhibit C to this � agreement. In accordance with California Law, delinquent Special Taxes bear late charges and interest at the same rates that apply to delinquent ad valorem taxes. (b) The Special Tax lien will be coequal to, and independent of, the lien for general taxes and, except as provided in California Government Code section 53936, will not be subject to extinguishment by the sale of the Property on account of the nonpayment of any taxes. The Special Tax lien will be prior and superior to all liens, claims, and encumbrances on or against the Property except (i)the lien for general taxes or ad valorem assessments in the nature of taxes that are levied and collected by the State of California or by any county, city, special district, or other local agency; (ii) the lien of any special assessment or assessments; (iii) easements constituting servitudes upon or burdens to the Property; (iv) water rights,the record title to which is held separately from the title to the Property; and (v) restrictions of record. (c) The Special Tax may include an amount to pay costs that are incurred by the City or the Program Administrator including, but not limited to, the following: administration and collection of the Special Tax; administration of the CFD; administration of the debt or financing arrangement as described in the Report; or administration of any reserve fund and other related funds. Page 24 of 62 16-29 (d) As a cumulative remedy, if any installment of the Speciai Tax or any related interest, penalties, costs (including reasonable attorneys' fees), or other charges accruing under applicable taxation provisions are not paid when due, then an action may be brought in the Superior Court of San Diego County to foreclose the lien of the Special Tax to the extent permitted by, and in the manner provided by, the Act and applicable law. (e) The City intends to have all Special Tax revenues that are collected applied in accordance with a Master Assignment Agreement, a form of which is set forth in the Report. 8. Use of Proceeds. The Owner shall use the Disbursement Amount in compliance with all requirements of the Contract Documents and for the sole purpose of paying the reasonable costs and expenses of the Improvements, including the costs of energy audits, architectural and engineering fees, insurance costs, prepaid or amortized interest, Program costs, and other costs as may be approved by the City and the Program Administrator. 9. Disbursement Procedures. (a) Notwithstanding anything to the contrary elsewhere in this agreement, no funds will be disbursed to the Owner or on the Owner's behalf unless and until the Program Administrator determines that each of the foliowing conditions has been satisfied, except that the Program Administrator may expressly waive one or more of these conditions in writing on the City's behalf: (1) The Program Administrator has received a written request to disburse the Disbursement Amount. (2) The Program Administrator (i) has received a building permit with respect to the Improvements signed by the applicable jurisdiction; or (ii) has established criteria for processing progress disbursements, and those criteria have been satisfied. (3) If requested, the Program Administrator has received from the, Owner and, if applicabie, from the contractor or contractors that installed the Improvements, a document certifying that installation is complete and setting forth the actual cost of the Improvements. The certification must be acceptable to the Program Administrator in form and substance. (4) The Program Administrator has received such other documents as the Program Administrator may require, including, if applicable, documents required by consumer-protection laws, the sworn statements of contractors, and releases or waivers of liens, all in compliance with applicable law. Page 25 of 62 16-30 (5) The Owner has, as app�opriate, signed and delivered to the Program Administrator the Contract Documents and such other documents pertaining to the Disbursement Amount or the Improvements as the Program Administrator may reasonably require. (6) The Program Administrator has determined that, as of the date of disbursement, the Owner's representations in the Contract Documents are true and that no Default (defined in section 17 below) has occurred and is continuing. (7) As of the date of the disbursement, no stop payment or mechanic's lien notice pertaining to the Improvements has been filed and remains in effed, except such as will be removed through a close of an escrow that includes the payment of some or all of the Disbursement Amount. (8) If required, the Program Administrator has received a title policy with regard to the funds to be disbursed to the Owner. (b) The Program Administrator will notify the City when all of the conditions described in section 9(a) above have been satisfied or waived, and the City will have three business days after receipt to review the notice. The Program Administrator will disburse the funds as soon as practicable following the end of the three-day review period unless the City has objected to one or more of the determinations or waivers set out in the notice. 30. Prepayment of Special Tax Obligation. The Owner may prepay the entire Special Tax obligation by paying the present value of the future scheduled installments of the Special Tax using a discount rate of 5%, plus reasonable administrative costs and a prepayment premium that may not exceed 5% of the calculated present value. Interest on the calculated present value may accrue only for the first ten years of the Special Tax obligation. The redemption date may not be later than the end of the fiscal year in which the prepayment notice is provided to the Program Administrator. The Owner shall notify the Program Administrator in writing of the Owner's determination to prepay the Special Tax obligation at least 10 business days before the date the Owner intends to make prepayment. The Special Tax obligation may only be prepaid in full. 11. The Owner's Representations and Warranties. Based on the Owner's actual knowledge after a reasonable investigation, the Owner represents and warrants that each of the statements set forth in sections 11(a) through 11(fl below is true and complete as of the Effective Date. By accepting the Disbursement Amount, the Owner is deemed to have reaffirmed, as of the date of disbursement, the truth and completeness of the statements in sections 11(a) through 11(f) and of each declaration the Owner makes in the Page 26 of 62 16-31 Application. If the Owner is one or more trustees of a trust, then the following statements also pertain to the trustor or trustors of the trust. (a) Formation;Authority. Each person who signs this agreement (other than the City's signatory) represents the following: (1) The signature page of this agreement identifies all persons and entities holding title to the Property. (2) The Contract Documents are binding upon, and enforceable against, the Owner in accordance with their terms. (3) No consent or approval of any third party is required for the Owner's execution of the Contract Documents or the Owner's performance of its obligations under the Contract Documents except for the consents and approvals, if any, that the Owner has already obtained. (4) If the person is signing for himself or herself, then he or she is authorized and able to perform the Owner's obligations under the Contract Documents and under all other documents the Owner delivers to the City or the Program Administrator in connection with the Contract Documents. (5) If the person is signing on behalf of a corporation, partnership, limited-liability company, or other entity that is not a natural person, then (i) he or she is authorized to sign and deliver this agreement on that entity's behalf; (ii)the entity for which he or she signs is authorized and able to perform the Owner's obligations under the Contract Documents and under all other documents the Owner delivers to the City or the Program Administrator in connection with the Contract Documents; and (iii) the entity has complied with ali laws and regulations concerning its organization and existence and the transaction of its business and is in good standing in each state in which it conducts its business. (b) Compliance with Low. Neither the Owner nor the Property is in violation of, and the terms and provisions of the Contract Documents do not conflict with, any regulation or ordinance, any order of any court or governmental entity, or any building restrictions or governmental requirements affecting the Property. (c) Other Info�motion. All documents, information, and forms of evidence that have been delivered to the Program Administrator in connection with the Owner's application for Program funding are accurate and sufficiently complete to provide accurate and compiete knowledge of their subject matter. Page 27 of 62 16-32 (d) Lawsuits. There are no lawsuits, tax claims, actions, proceedings, investigations, or other disputes pending or threatened against the Owner or the Property that may impair the Owner's ability to perform its obligations under this agreement or may impair the Cit�/s ability to levy and collect the Special Tax or any other amounts owing under the Program. (e) No Event of Defoult. There is no event that is, or with notice or lapse of time or both would be, a Default (defined in section 17 below) under this agreement. (f) Accurocy of Declarotions. The Owner's declarations in the Application are true and complete. 12. The Owners Covenants. (a) Instollotion ond Maintenonce of Improvements. The Improvements must be installed by contractors on the Program Administrator's list of Certified Contractors unless the Program Administrator, in writing and with the Cit�s approval, authorizes the Owner to install the Improvements. The Owner shall cause its contractor or contradors to do the following: promptly obtain all required building permits;thereafter promptly begin installation of the Improvements and diligently continue the work to completion, in a good and workmanlike manner and in accordance with sound installation practices. The same standard applies if the Owner installs the Improvements. The Owner shall maintain the Improvements in good condition and repair. (b) Complionce with Law. The Owner shall complete all Improvements, or cause the Improvements to be completed, in conformity with all applicable laws, including all applicable federal, state, and local occupation, safety, and health laws, rules, regulations, and standards. The Owner shall comply with and keep in effect all permits, licenses, and approvals required to install and operate the Improvements. (c) Site Visits. The Owner hereby grants to the City's and the Program Administrator's agents and representatives the right to enter and visit the Property at any reasonable time during construction, after giving reasonable notice to the Owner, for the purpose of observing the Improvements. The agents and representatives will make reasonable efforts, during any site visit, to avoid interfering with Owner's use of the Property. The Owner shall also allow the Cit�/s and the Program Administrator's agents and representatives to examine and copy the Owner's records and other documents that relate to the Improvements. Any site visit, observation, or examination under this section 12(c) shall not result in any responsibility or obligation of the City with respect to the Improvements. (d) Protection Agoinst Lien Cloims. The Owner shall promptly pay or otherwise discharge any claims and liens for labor done and materials and services furnished Page 28 of 62 16-33 to the Property in connection with the Improvements. The Owner may contest in good faith any claim or lien but must do so diligently and without delay in completingthe Improvements. (e) Notice to Successors in Interest. The Owner shall provide any subsequent purchaser of the Property with written notice that the Property is subject to the Special Tax lien. (f) Insurance. If the Maximum Disbursement exceeds $60,000, then the Owner shall provide, maintain, and keep in force at all times until the Improvements are completed, a policy of builder's "all risk" property-damage insurance on the Property, with a policy limit equal to the amount of the Maximum Disbursement. Alternatively, the Owner may require that each Certified Contrector installing the Improvements provides, maintains, and keeps such insurance in force. Upon request,the Owner shall provide the Program Administrator with documents (e.g., a certificate of insurance) confirming compliance with this section 12(f). (g) Notices. Owner shall promptly notify Progrem Administrator in writing of any Default (defined in section 17 below) under this agreement and of any event that, with notice or lapse of time or both, would constitute a Default. 13. Mechanic's Lien and Stop Notices. If a stop notice or a mechanic's lien related to the Improvements is filed or recorded in accordance with California law, then the Program Administrator may summarily refuse to disburse any funds to the Owner. In addition, if the Owner fails to furnish the Program Administrator with a bond causing such notice or lien to be released within ten days of notice from the Program Administrator to do so, then that failure will constitute a Default under this agreement (see section 17 below). The Owner shall promptly deliver to the Program Administrator copies of all such notices or liens. 14. Owner Responsibility; Indemnification. (a) The Owner acknowiedges that the City has estabiished the Program solely for the purpose of assisting the owners of property in the City with financing for the acquisition and installation of qualifying renewable-energy systems and energy- and water-efficiency improvements. The Program is a financing program only. The City; the City's officers, employees, or agents; and the Program Administrator are not responsible for the selection of the Improvements or for the instaliation, performance, or maintenance of the Improvements. Any issues related to installation, performance, or maintenance of the Improvements should be - discussed with the Owner's contractors and with the manufacturers or distributors ofthe Improvements. Page 29 of 62 16-34 (b) To the maximum extent permitted by law, the Owner shall indemnify, defend, protect, and hold harmless the City and the Cit�/s officers, employees, and agents (collectively, the "City Parties"), as well as the Program Administrator, from and against all liabilities, claims, demands, damages (including consequential damages), and costs (including all reasonable out-of-pocket litigation costs and reasonable attorneys' fees through final resolution on appeal) that are related directly or indirectly to, or arise in any way out of, or in connection with, any fact, circumstance, or event related to the approval of the Disbursement Amount or the payment to the Owner of the Disbursement Amount, including any of the following: the Contract Documents; the Owner's performance of(or failure to perform) its obligations under the Contract Documents; the Owner's breach or Default (see section 17 below) under the Contract Documents; disbursement of the Disbursement Amount; the selection, acquisition, installation, operation, or maintenance of the Improvements; the levy and collection-of the Special Tax; and the imposition of the Special Tax lien. The Owner's obligations under this section 14(b) apply whether they accrue or are discovered before or after the disbursement of the Disbursement Amount to the Owner or the Owner's designee. (c) The indemnity obligations described in this section 14 will survive the disbursement of the Disbursement Amount to the Owner or the Owner's designee,the payment of the Special Tax obligation in full,the transfer or sale of the Property by Owner, and the termination of this agreement. 15. Waiver of Claims. (a) Aciing for itself; for its successors-in-interest to the Property; and for anyone claiming by,through, or under the Owner, the Owner hereby waives the right to recover from, and fully and irrevocably releases the City Parties and the Program Administrator from, all claims, obligations, liabilities, causes of adion, or damages, including attorneys' fees and court costs,that the Owner may now have or later acquire against any of the City Parties or the Program Administretor, and accruing from, or related to, any of the following: (1) the Contract Documents; (2) the advance of or failure to advance the Disbursement Amount; (3) the levy and collection of the Special Tax; (4) the imposition of the Special Tax lien; (5) the issuance and sale of any bonds or other evidences of indebtedness, or other financial arrangements entered into by the City or the Program Administrator pursuant to the Program; Page 30 of 62 16-35 (6) the performance of the Improvements; (7) the Improvements; (8) any damage to or diminution in value of the Property that may result from installation or operation of the Improvements; (9) any personal injury or death that may result from installation or operation of the Improvements; (10) the selecYion of manufacturers, dealers, suppliers, contractors, or installers, or their action or inaction with respect to the Improvements; (11) the merchantability and fitness of the Improvements for any particular purpose, use, or application; (12) the amount of energy or water savings resulting from the Improvements; (13) the workmanship of any third parties; and (14) any other matter with respect to the Program. (b) This release includes claims, obligations, liabilities, causes of action, and damages of which the Owner is not currently aware or which the Owner does not suspect to exist, and which, if known by the Owner, would materially affect the Owner's release of the City Parties or the Program Administrator or both. (c) The Owner hereby acknowledges that it has read and is familiar with California Civil Code section 1542 ("Section 1542"), which is set forth below: "A generel release does not extend to claims which the creditor does not know or susped to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." By initialing below,the Owner hereby waives the provisions of Section 1542 solely in connedion with the matters that are the subject of the foregoing waivers and releases. Owners initials: (d) The Owner's waivers and releases in this section 15 will survive the disbursement of the Disbursement Amount, the payment of the Special Tax obligation in full, the Page 31 of 62 16-36 Owner's transfer or sale of the Property, and the termination of this agreement. The Owner's waivers and releases in this section 15 apply to the Owner's successors-in-interest to the Property and to anyone claiming by, through, or under the Owner. 16. Further Assurances. The Owner shall execute any additional documents that are consistent with this agreement, including documents in recordable form, as the City or the Program Administrator may from time to time find necessary or appropriate to effectuate its purposes in entering into this agreement and disbursing funds to the Owner. 17. Events of Default. (a) Remedies with respect to the nonpayment of the Special Tax or any other amounts payable by the Owner under this agreement are governed by section 3 above and California law, including the Act. (b) The failure of any of the Owner's representations or warranties to be correct in all material respects, or the Owner's failure to perform or delay in performing any of its obligations under the Contract Documents (other than failures or delays with respect to payment of the Special Tax or any other amount payable by the Owner), will each constitute a non-monetary default (each, a "DefaulY'). Upon receiving a notice of Default given under section 17(c) below, the Owner shall immediately start to cure the Default and shall complete the cure with reasonable diligence, but in any event no later than the time set forth in section 17(c). (c) If a Default occurs, then before exercising any rights or remedies under the Contract Documents or California law, including the Act, the Program Administrator, on the City's behalf, must give the Owner a written notice of Default. If the Default is reasonably capable of being cured within 30 days, then the Owner will have 30 days after receiving the notice to affect a cure before the City may exercise any rights or remedies. If the Default is reasonably capable of being cured, but not within 30 days, and if the Owner begins corrective action within 30 days after receiving the notice and diligently, continually, and in good faith works to complete the cure as soon as is practicable, then the Owner will have such additional time as is reasonably necessary to cure the Default before the City may exercise any rights or remedies. In no event, however, will the City be precluded from exercising any rights or remedies if its security becomes or is about to become materially jeopardized by the Owner's failure to cure a Default or if the Default is not cured within 120 days after the first notice of Default is given. (d) If a Default occurs, then, subject to section 17(c) above, the City may exercise any or all of the rights and remedies available to it under applicable law, at equity, or as otherwise provided in this agreement. If, at the time of the Default, there has been Page 32 of 62 16-37 no disbursement of the Disbursement Amount, then the City may elect to terminate this agreement, and, except as otherwise expressly provided in this agreement, upon such termination the parties will have no further obligations or rights under this agreement. (e) All costs and expenses the City or the Program Administrator incurs in pursuing its remedies under this agreement will be additional indebtedness ofthe Owner. (f) Except as otherwise expressly stated in this agreement or as otherwise provided by applicable law, the City's rights and remedies are cumulative, and the exercise of one or more of those rights or remedies wili not preclude the exercise, at the same time or different times, of any other rights or remedies for the same Default or any other Default. The City's failure or delay in asserting any of its rights and remedies as to any Default will not operate as a waiver of any Default or of any such rights or remedies and will not deprive the City of its rights to institute and maintain any actions or proceedings it may consider necessary to protect, assert, or enforce its rights or remedies. (g) With respect to the installation of the Improvements only, the performance of the Owner's covenants under this agreement and the compliance of conditions imposed upon the Owner by this agreement will be excused while and to the extent that the Owner, through no fault or negiigence of its own, is prevented from performing or complying by war, riots, strikes, lockouts, action of the elements, accidents, or acts of nature beyond the Owner's reasonable control. But the excused covenants or conditions will be restored to full force as soon as the cause or event preventing compliance is removed or ceases to exist, and the Owner shall immediately resume installation of the Improvements. 18. Severability. Each provision of this agreement is a separate and independent covenant and agreement. If any non-material provision of this agreement or the application of that provision is held to be invalid or unenforceable in whole or part,then the remainder of this agreement, or the application of that provision to circumstances other than those to which it is invalid or unenforceable, will remain valid and fully enforceable. 19. Notices. Any notice or demand under this agreement must be in writing and will be considered properiy given and effective only when mailed or delivered in the manner provided by this section 19 to the persons identified below. A mailed notice or demand will be effective or will be considered to have been given on the second business day after it is deposited in the United States Mail, as certified mail, addressed as set forth below and with postage prepaid. A notice or demand sent in any other manner will be effective or will be considered properly given when actually delivered. A party may change its address for these purposes by giving written notice of the change to the other party in the manner provided in this section 19. Notwithstanding anything set forth in this . Page 33 of 62 16-38 section, after disbursement of funds to the Owner, all notices regarding the Special Tax must be sent as provided by California law. To City: To Owner: 20. No Waiver.A disbursement of the Disbursement Amount based upon inadequate or incorrect information will not constitute a waiver of the City's right to receive a refund of the Disbursement Amount from the Owner. 21. Interpretation. This agreement is to be interpreted and applied-in accordance with . California law. Exhibits A, B, and C are part of this agreement. "Include" and its variants are terms of enlargement rather than of limitation. For example, "includes" means "includes but not limited to," and "including" means "including but not limited to." 22. Venue. Any legal action brought under this agreement must be instituted in the Superior Court of the County of San Diego, State of California. 23. Assignment by City. The City, at its option, may do either or both of the following without obtaining the Owner's consent: (a) Sell and assign any or all of its rights and obligations under this agreement, including the right to file and prosecute any foreclosure action regarding delinquent Special Taxes or any other amounts payable by the Owner under this agreement. (b) Sell and assign its right to receive the Special Tax collections and any other amounts payable by the Owner under this agreement. 24. Owner Assignment Prohibited. The Owner shall not assign or transfer any portion of this agreement or of the Owner's rights or obligations under the agreement without the Cit�/s prior express written consent, which the City may withhold, grant, or condition in its sole and absolute discretion. The sale,transfer, or rental of the Property is not an assignment or trensfer of this agreement. 25. Carbon Credits. Any carbon credits, renewable-energy credits, solar-renewable-energy credits, offsets, refrigerant gasses, or other tradable environmental certificate or permit attributable to the Improvements will be owned by the City except as follows: if installation of the Improvements qualifies for a monetary incentive or rebate program that requires transfer of carbon credits to the provider of the monetary incentive or rebate, then the City shall provide for the transfer of the appropriate carbon credits in conjunction with the provision of the monetary incentive or rebate to the Owner. Page 34 of 62 16-39 26. Entire Agreement; Counterparts; Amendment. This agreement contains the parties' entire understanding regarding the matters addressed and is intended to be their final, complete, and exciusive expression of those matters. It supersedes all prior or contemporaneous agreements, representations, and negotiations, whether written, oral, express, or implied. Any amendment to this agreement must be in writing and signed by both parties. If the Owner consists of more than one person or entity, then all such persons and entities will be jointly and severally obligated by this agreement. This agreement may be executed in several counterparts, each of which will be considered an original, but all of which together will constitute the same agreement. 27. Special Termination. Notwithstanding anything to the contrary above, this agreement will terminate and be of no further force if, on or before the date and time provided by applicable law, including the federal Truth In Lending Act and California Business and Professions Code section 7163 and described in the Notice of Right to Cancel delivered to the Owner when the Owner signed this agreement, the Owner submits to the Program. Administrator a notice of the Owner's decision to cancel this agreement. (Signature page follows) Page 35 of 62 16-40 Owner Print Name of Owner No.1 Print Name of Owner No.2 . Print Sireet Address of Owner No.1 Prini Sireet Address of Owner No.2 Print Ciry,State,and ZIP Code of Owner No.1 Prini Ciry,State,and ZIP Code of Owner No.2 By: By: Signamre of Authorized Perwn Signamre of Authorized Person Print Name and T'itle of Authorized Person Prini Name and"frtle of Authorized Person Date: 20 Date: - 20 Print Name of Owner No.3 Print Name of Owner No.4 Print Street Address or P.O.Boz of Owner No.3 Print Sireet Address of Owner No.4 Print Ciry,Siate,and ZIP Code of Owner No.3 Print Ciry,State,and ZIP Code of Owner No.4 By: By: Signature of Auihorized Person Signature of Auihorized Person � Print Name and Title of Authorized Person Print Name arid 7itle of Authorized Person Date: 20 Date: , 20 City of Chula Vista By: Signature of Authorized Person Print Name and Title of Authorized Person Date: 20 Page 1 of 62 16-41 Appendix F - Form of Notice to Lender of Proposed Special Tax Lender Address: Notice Date: Property Address: Loan Number: APN: To Whom It May Concern: The undersigned (the "Property Owner") owns the property located at the above-referenced address (the "Property"). You are the lender (the "Lender") with respect to a loan secured by a private lien on the Property (the"Loan"). Background. In connection with its Clean Energy Chula Vista Program (the "Program"), the City of Chula Vista has established its "Community Facilities District No. 2013-1 (Clean Energy Program), City of Chula Vista, County of San Diego, State of California" (the "District") to assist property owners with financing the installation of renewable-energy, energy-e�ciency, and water-efficiency improvements that are permanently affixed to their properties (the "Authorized Improvements"). The District was formed under California's Mello-Roos Community Facilities Act of 1982, set forth in sections 53311 through 53368.3 of the California Government Code (the"AcY') See in particular sections 53313.5(I) and 53328.1. Under the Act, but only if the owners unanimously consent, the Property will be annexed to the District and an annual special tax will be levied to finance the installation of Authorized Improvements on the Property. Under the Act and the California constitution, the unanimous consent of the owners of the Property constitutes a vote of the owners of the Property in favor of annexing the Property to the District and authorizing the levy of the annual special tax on the Property. Section 53340(e) of the Act provides that the speaal tax will be collected on the property-tax bill in the same manner as, and subject to the same penalties, remedies, and lien priorities as, ad valorem real-property taxes. Undenvriting requirements for participation in the Program include a written application signed by all owners of the PropeRy and verification of the following: • The Property is located within the jurisdictional boundaries of the City. • Property taxes and other special taxes on the tax bill are current. • There are no involuntary liens on the Property, including construction liens. • No notices of default or other evidence of debt delinquency have been recorded during the preceding three years or the entire term of ownership of the current owners, whichever is shorter. • Payments on all mortgage debt secured by the Property are current. • The total of all existing secured indebtedness on the Property does not exceed 85% of the value of the Property (determined using assessed or appraised value or an estimate of value based Page 2 of 62 16-42 upon data supplied by a reputable real estate information service) at the time Notice to Proceed is issued. • Each holder of a fee-simple interest in the Property has signed a Unanimous Approval Agreement (see below) and any other documents required by the Program. • The total annual properry taxes and assessments on the Property, including the special tax imposed through the Program, will not exceed five percent (5%) of the value of the Property (determined using assessed or appraised value or an estimate of value based upon data supplied by a reputable real estate information service). • Each lender with a recorded lien on the Property has been sent this notice. Participation of the PropeRyOwner in the District. The Property Owner has appiied to annex the Property to the District and intends to enter into a Unanimous Approval Agreement with the City, under which the City will levy a special tax on the Property to finance the installation of Authorized Improvements. The maximum annual special tax to be levied, which includes an amount to pay the costs of administering the Program and the District, will be as shown on the attached Exhibit A. Estimated Benefits of the Authorized Improvements. The Property Owner believes it will realize financial benefits from the Authorized Improvements that exceed their cost over their useful life. Purpose of this Notice. The Property Owner is sending this Notice of Proposed Special Tax to the Lender to (1) provide notice of the Property's proposed annexation to the District; (2) provide notice that the annual special taxes will be collected on the property-tax bill in the same manner as, and subject to the same penalties, remedies, and lien priorities as, general ad valorem real-property taxes; and (3) declare the Property Owner's agreement to pay on a timely basis both the existing obligations secured by the Property (including the Loan) and the proposed special tax. Execution and Return of Consent. Although the Lenders consent is not a requirement for the Property's annexation to the District, the Property Owner would appreciate your signing this notice in the space provided below and then returning it to the Property Owner as soon as possible. If you do not respond, then the Property Owner will rely on your non-response as indicating that you do not object to the Property's annexation to the District or the levying of the special tax. For further information, please call �-__) or email ( ). Very truly yours, ig .um mpe y er ame o mpe y er . Mailing Address: If Ddfe2nt/rom Property Add2ss PnM TNe ol LeNet Offual Page 3 of 62 16-43 LENDER CONSENT TO PROPOSED SPECIAL TAX The above-referenced Lender consents to the foregoing. Dated: By: igna ure o en er iaa nn ame o en er icia 1 6-44 Page 4 of 62 Appendix G - Form of Assignment Agreement MASTER ASSIGNMENT AGREEMENT This Master Assignment Agreement, dated , 20� for reference (the "Master Agreement"), is between the CITY OF CHULA VISTA, a California municipal corporation (the "City"); YGRENE ENERGY FUND CALIFORNIA, LLC, a California limited-liability company ("Ygrene"); and , a national banking association organized and existing under and by virtue of the laws of the United States of America, as trustee, including its successors and assigns hereunder (the 'Trustee"). Background A. In connection with its Clean Energy Program (the "Progrem"), the City has established its Community Facilities District No. 2013-1 (Clean Energy Program), City of Chula Vista, County of San Diego, State of California (the "CFD") in accordance with the Mello-Roos Community Facilities Act of 1982 (California Government Code Sections 53311 through 53368.3) (the "Act"), and particularly under Sections 53313.5(I) and 53328.1. The CFD authorizes the City to levy, secure, and collect special taxes on any parcel when all the owners of the parcel sign an agreement consenting to have the parcel annexed to the CFD (a "Unanimous Approval Agreement"). In this Master Agreement, "Special Taz" means the special tax described in, and authorized by, a Unanimous Approval Agreement. . B. A Unanimous Approval Agreement has been entered into for each of the parcels described in supplemental assignments substantially in the form attached to this Master Agreement as Exhibit A (each a "Supplemental AssignmenY'). In this Master Agreement, the "Property" refers to the parcel described in a Supplemental Assignment. C. Under the Act, the Special Tax authorized by a Unanimous Approval Agreement is to be levied and collected as a separate line item on the County of San Diego's secured property-tax bill for the Property in the same manner as the Treasurer-Tax Collector of the County of San Diego collects the general property-tax revenues. D. In exchange for Ygrene's arrangement of financing through the Program for energy- efficiency, water-conservation, and renewable-energy improvements on the Property (the "Improvements'), the City desires to sell and assign to Ygrene, without recourse to the City except as expressly provided herein, the Cit�/s right to receive the Special Tax collectible for each Property, and any penalties and interest on and other proceeds of any delinquent installment of the Special Tax (the "Special Tax Revenues"). E. Also in exchange for Ygrene's arrangement of financing for the Improvements through the Program, the City desires to sell and assign certain enforcement rights with respect to the Special Tax Revenues to the Trustee, in trust, for the benefit of Ygrene upon the terms set forth in this Master Agreement. Page 5 of 62 16-45 F. The City is willing to sell and assign the City's right to receive Special Tax Revenues upon the terms set forth in this Master Agreement. G. The City is willing to sell and assign certain enforcement rights with respect to the Special Tax Revenues upon the terms set forth in this Master Agreement. The City, Ygrene, and the Trustee agree as follows: 1. Agreement to Sell and Assign Special Tax Revenues; Agreement to Sell and Assign Enforcement Rights; Repurchase of Delinquent Installments. (a� The City shall sell and assign to Ygrene, without recourse to the City except as expressly provideil herein, all of the City's rights to receive the Special Tax Revenues collectible for the Property identified in each Supplemental Assignment. The consideration for each sale and assignment is Ygrene's arrangement of financing for the Improvements through the Program. (b) The City shall sell and assign to the Trustee, in trust, for the benefit of Ygrene, without recourse to the City except as expressly provided herein, all present or future rights of the City to enforce or cause the enforcement of the payment of any delinquent Special Tax collectible for the Property through judicial foreclosure. The Trustee hereby agrees that it will not initiate any such judicial foreclosure proceeding against any Property to enforce a delinquent installment of the Special Tax if the County of San Diego shall have paid, and the Trustee shall have received, one hundred percent (100%) of the amount of such delinquent installment of the Special Tax through the County of San Diego's so-called "Teeter Plan." The consideration for each sale and assignment is Ygrene's arrangement of financing for the Improvements through the Program. (c) Any delinquent installment of the Special Tax, the right to receive the Special Tax Revenues collectible with respect to any such delinquent installment of the Special Tax, and the enforcement rights described in Section 1(b) of this Master Agreement with respect to such delinquent installment of the Special Tax, shall be automatically sold to the County of San Diego upon the Trustee receiving one hundred percent (100%) of the amount of such delinquent installment of the Special Tax through the County of San Diego's so-called "Teeter Plan" as set forth in Section 5(b) of this Master Agreement. Upon the sale to the County of San Diego of any delinquent installment of the Special Tax and the rights with respect thereto pursuant to the immediately preceding sentence, Ygrene and the Trustee shall have no further right to the enforcement rights described in Section 1(b) of this Master Agreement with respect to such delinquent installment of the Special Tax or to receive such delinquent installment of the Speciai Tax or the Special Tax Revenues collectible with respect to such delinquent instaliment of the Special Tax and the City shall have no further obligation to pay the Special Tax Revenues collectible with respect to such delinquent installment of the Special Tax to the Trustee as set forth in Section 5(a) of this Master Agreement. 2. Ygrene's Representations and Warranties. Ygrene hereby represents and warrants to the City and the Trustee that the following statements are true as of the effedive date of this Page 6 of 62 16-46 Master Agreement and, with respect to the right to receive Special Tax Revenues conveyed by a Supplemental Assignment, as of the effective date of the Supplemental Assignment: (a) Ygrene is duly organized, validly existing, and in good standing in the State of California. (b) Ygrene has full power and authority to enter into, and to perform its obligations under, this Master Agreement. (c) Ygrene's execution and delivery of, and performance under, this Master Agreement does not conflici with, or cause a breach or default by it under, any of its organizational documents; any law, rule, regulation,judgment, order, or decree to which it is subject; or any agreement or instrument to which it is a party. (d) Ygrene has duly authorized the terms, execution, delivery, and performance of this . Master Agreement, and Ygrene has duly executed and delivered this Master Agreement. (e) This Master Agreement constitutes a legal, valid, and binding obligation of Ygrene, enforceable against Ygrene and its successors and assignees in accordance with its terms, subject to laws relating to or affecting creditors' rights generally (including laws pertaining to bankruptcy, insolvency, reorganization, moratorium, and fraudulent conveyance) and to the application of equitable principles in any- proceeding, whether at law or in equity. (fl No consent, approval, authorization, order, registration, or qualification by, of, or with any court, regulatory body, administrative agency, or other governmental instrumentality havingjurisdiction over Ygrene is required for Ygrene's consummation of the transactions contemplated by this Master Agreement or any Supplemental Assignment, except for those that have been obtained and are in full effect. (g) Ygrene believes that the consummation of the transactions contemplated by this Master Agreement and each Supplemental Assignment will not violate any law, order, rule, or regulation of any court, regulatory body, administrative agency, or other governmental instrumentality havingjurisdiction over Ygrene. (h) Ygrene has not been served with process in, and has not been overtly threatened by a governmental entity or financial institution in a substantive matter with, any court proceeding that— (1) asserts the invalidity of this Master Agreement,.any Supplemental Assignment, or any aspect of the CFD; Page 7 of 62 16-47 (2) seeks to prevent the consummation of any of the transactions contemplated by this Master Agreement, any Supplemental Assignment, or the CFD; or (3) seeks any determination or ruling that would materiaily and adversely affect the validity or enforceability of this Master Agreement, any Supplemental Assignment, or the authority conferred upon the City by the CFD. (i) Ygrene is providing reasonably equivalent value for each right to receive Special Tax Revenues sold and assigned to Ygrene under this Master Agreement and a Supplemental Assignment. 3. The City's Representations and Warrenties. The City hereby represents and warrants to Ygrene and the Trustee that the following statements are true as of the effective date of this Master Agreement and, with respect to the right to receive Special Tax Revenues conveyed by a Supplemental Assignment, as of the effective date of the Supplemental Assignment: (a) The City validly exists as a chartered municipal corporation under California law. (b) The City has duly authorized the execution, delivery, and performance of this Master Agreement and of each Supplemental Assignment. (c) The City has duly executed and delivered this Master Agreement and each Supplemental Assignment. Assuming that Ygrene and the Trustee duly authorize, execute, and deliver this Master Agreement, the City believes that this Master Agreement and each Suppiemental Assignment constitute legal, valid, and binding obligations of the City, enforceable against the City in accordance with their terms, subject to laws relating to or affecting creditors' rights generally (including laws pertaining to bankruptcy, insolvency, reorganization, moratorium, and fraudulent conveyance); to the application of equitable principles in any proceeding, whether at ' law or in equity; and to the limitations on remedies against cities in California. (d) No consent, approval, authorization, order, registration, or qualification by, of, or with any court, regulatory body, administrative agency, or other governmental instrumentality havingjurisdiction over the City is required for the City's consummation of the transactions contemplated by this Master Agreement or any Supplemental Assignment, except for those that have been obtained and are in full effect. (e) The City's consummation of the transactions contemplated by this Master Agreement and each Supplemental Assignment, and the fulfillment of the terms of those agreements, do not— � 6-48 Page 8 of 62 (1) in any material way conflict with, or result in the Count�s material breach of, any of the material terms and provisions of any agreement to which the County is a party or by which it is bound; or (2) constitute a material default by the County (with or without notice or lapse of time) under any agreement to which the County is a party or by which it is bound. (� The City believes that the consummation of the transactions contemplated by this Master Agreement and each Supplemental Assignment will not violate any law, order, rule, or regulation of any court, regulatory body, administrative agency, or other governmental instrumentality having jurisdiction over the City. (g) The City has not been served with process in, and has not been overtly threatened by a governmental entity or financial institution in a substantive matter with, any court proceedingthat— (1) asserts the invalidity of this Master Agreement, any Supplemental Assignment, or any aspect of the CFD; (2) seeks to prevent the consummation of any of the transactions contemplated by this Master Agreement, any Supplemental Assignment, or the CFD; or (3) seeks any determination or ruling that would materially and adversely effect the validity or enforceability of this Master Agreement, any Supplemental Assignment, or the authority conferred upon the City by the CFD. (h) No voter initiatives are pending that would affect the Cit�/s sale and assignment of the right to receive any Special Tax Revenues or would affed the Program. (i) With respect to each Supplemental Assignment, when the City sells and assigns to Ygrene the right to receive Special Tax Revenues collectible for a Property, the City will have the sole right to levy the related Special Tax on the Property and to collect and receive the Special Tax Revenues, as provided in the Act. From and after the City's sale and assignment to Ygrene of the right to receive those Special Tax Revenues, the City will retain and shall exercise the right to levy the related Special Taxes but will have no interest in the Special Tax Revenues or the right to receive them, provided, that, solely to the extent that the City is not separately reimbursed for such charges and costs by a third-party administrator of the CFD or from another source,the City may first deduct from the amounts collected its reasonable and agreed charges for collecting the Special Tax and its reasonable costs for administering the CFD. (j) With respect to each Supplemental Assignment— Page 9 of 62 16-49 (1) when the City sells and assigns to Ygrene the right to receive any Special Tax Revenues collectible for a Property,the City will hold title to that right free and clear of all liens, pledges, charges, security interests, or other impediments of any nature; and (2) except as set forth in this Master Agreement, the City has not sold, transferred, assigned, set over, or otherwise conveyed and wili not sell, transfer, assign, set over, or otherwise convey any right, title, or interest of any kind in all or any portion of the right to receive the Special Tax Revenues, and has not created and will not have created or to its knowledge permitted the creation of any lien on that right or any portion of it. (k) The City's principal place of business and chief executive office is located at 276 Fourth Avenue, Chula Vista, California 91910. (I) The City shall treat each sale and assignment of the right to receive Special Tax Revenues as a sale for purposes of tax reporting and accounting, and the City will not take the position that the right to receive Special Tax Revenues is a part of the debtor's estate if the City files a bankruptcy petition or has such a petition filed against it under any bankruptcy law. (m) The City has received reasonably equivalent value for each right to receive Special Tax Revenues sold and assigned to Ygrene under this Master Agreement and a Supplemental Assignment. 4. The City's Covenants. (a) The City shall not knowingly take any action if taking such action would adversely affect Ygrene's rights to receive Special Tax Revenues that have been conveyed to Ygrene by the Supplemental Assignments or the ability of Ygrene to receive the Special Tax Revenues conveyed to Ygrene by the Supplemental Assignments. The City shall not knowingly omit to take any action if omitting to take such action would adversely affed Ygrene's rights to receive Special Tax Revenues that have been conveyed to Ygrene by the Supplemental Assignments or the ability of Ygrene to receive the Special Tax Revenues conveyed to Ygrene by the Supplemental Assignments. (b) The City shall not knowingly take any action or omit to take any action, and, to the extent the City knows of any such action, shall use reasonable efforts to prevent any action by others, that would release the lien that secures payment of the Special Tax on a Property until the Special Tax has been paid in full. Without the prior written consent of Ygrene, the City shall not do any of the following if the effect would be materially adverse to Ygrene: amend, modify, terminate, waive, or surrender a Unanimous Approval Agreement; agree to any amendment, modification, termination, waiver, or surrender of any provision in a Unanimous Approval Page 10 of 62 16-50 . Agreement; or waive timely performance or observance of any provision in a Unanimous Approval Agreement. (c) Subject to Section 1(c) of this Master Agreement, upon request of Ygrene or the Trustee, the City shall take all actions necessary to preserve, maintain, and proted Ygrene's title to the Special Tax Revenues and the Trustee's title to the enforcement rights described in Section 1(b) of this Master Agreement. S. Payment of Special Tax Revenues. (a) Subject to Section 1(c) of this Master Agreement, the City will endeavor to secure the agreement of the County of San Diego to pay the Special Tax Revenues directly to the Trustee, so that the Special Tax Revenues will not come, even temporarily, into the Cit�/s possession; provided that, solely to the extent that the City is not separately reimbursed for such charges and costs by a third-party administrator of the CFD or from another source, the City will be entitled to request from the County of San Diego its reasonable costs for administering the CFD. Except as permitted by the preceding sentence, if any Special Tax Revenues come into the City's possession, then the City shall immediately pay such Special Tax Revenues to the Trustee. (b) If any delinquent installment of the Special Tax is sold to the County of San Diego through the County of San Diego's Teeter Plan as set forth in Section 1(c) of this Master Agreement, the City will endeavor to secure the agreement of the County of San Diego to pay directly to the Trustee an amount equal to one hundred percent (100%) of the amount of such delinquent installment of the Special Tax. 6. Notices of Breach. If the City or Ygrene discovers that the City has breached any of its covenants or that any of the Cit�/s or Ygrene's representations or warranties is materially false or misleading, and if the breach or false or misleading representation or warranty materially and adversely affects the value of the rights to receive Special Tax Revenues that have been conveyed to Ygrene by the Supplemental Assignments, then the discovering party shall promptly notify the other party and the Trustee in writing. 7. Indemnification. (a) To the extent permitted by law, the City shall indemnify, defend, and hold harmless Ygrene and Ygrene's officers, directors, employees, and agents from and against all liabilities, claims, demands, damages, and costs to the eutent they arise out of the City's breach of any of its covenants in this Master Agreement or out of any representation or warranty of the City in Sedion 3 of this Master Agreement that is materially false or misleading. (b) Ygrene shall indemnify, defend, and hold harmless the City, its City Council, officers, directors, agents, employees and volunteers from and against any and all claims, demands, actions, losses, liabilities, damages, and costs, including reasonable attorneys' fees, arising out of or resulting from the performance of this Master Agreement or any Supplemental Assignment, except to the extent they arise out of the - Page 11 of 62 16-51 City's breach of any of its covenants in this Master Agreement or out of any representation or warranty of the City in Section 3 of this Master Agreement that is materially false or misleading. 8. Limitation on Liability. Regarding any matter arising under this Master Agreement, the City and the City's elected officials, officers, employees and agents may rely in good faith on the advice of counsel and on any document that reasonably appears to be properly authorized and signed. The City's elected officials, officers, and employees of the City are not personally liable for the City's representations, warranties, covenants, agreements, or other obligations under this Master Agreement or for any certificates, notices, or agreements delivered under this Master Agreement. 9. Assignment. (a) Ygrene is entitled to assign (including granting a security interest) (i) its rights under this Master Agreement, (ii) its rights under each Supplemental Assignment, and (iii) its rights to receive Special Tax Revenues. Any assignee of any such rights may further assign such rights. Notwithstanding the foregoing, (I) Ygrene shall not assign its rights and obligations set forth in Sections 12(h), 12(k), and 12(n) of this Master Agreement, and such rights and obligations shall remain those of Ygrene notwithstanding any attempted assignment, and (II) references in Sections 12(i), 12(j), 12(I), 14, and 15 of this Master Agreement to Ygrene shall refer to Ygrene Energy Fund California, LLC or any successor thereto, notwithstanding any assignment. (b) Except as provided in Section 9(a) of this Master Agreement, Ygrene may not assign, transfer, or delegate any of its obligations under this Master Agreement or any Supplemental Assignment without the City's prior written consent. Any attempted assignment, trensfer, or delegation in violation of the terms of the preceding sentence shall be void. (c) The City may not assign, transfer, or delegate any of its rights or obligations under this Master Agreement without Ygrene's prior written consent. Any attempted assignment, transfer, or delegation in violation of the terms of the preceding sentence shall be void. (d) If Ygrene assigns (including granting a security interest) any of its rights under this Master Agreement, its rights under any Supplemental Assignment, or its rights to receive Special Tax Revenues, then Ygrene shall promptly notify the Trustee in writing of such assignment and shall provide a copy of such assignment to the Trustee. The notice shall include at least the following information: (i) the effective date of the assignment, (ii) the identity and relevant contact information for the assignee, and (iii) a description of the specific rights assigned, including information identifying the Property for which the rights have been assigned. From and after the date set forth in such notice as the effective date of the assignment, the Trustee shall in ali respects treat the assignee, and not Ygrene, as the beneficiary of the trusts created by this Page 12 of 62 16-52 Master Agreement and the relevant Supplemental Assignments with respect to the assigned rights that are identified in the notice and the Property specified in the notice, and such assignee shall be entitled to all of the rights that have been assigned to it. The provisions of this paragraph shall also apply to any further assignment by an assignee. Notwithstanding any other provision, should any assignee make a further assignment, then, to the extent of such further assignment, such assignee shall no longer be considered to be an assignee hereunder. 10. Reliance on Representations, Warrenties, and Covenants; Survival. The City and Ygrene agree and acknowledge that the Trustee, the City and Ygrene have relied on, will continue to rely on, and are entitled to rely on the Cit�s and Ygrene's representations and warranties in Sedions 2 and 3 of this Master Agreement and the City s covenants in Section 4 of this Master Agreement. The City's and Ygrene's representations and warranties in Sections 2 and 3 of this Master Agreement and the Cit}/s covenants in Section 4 of this Master Agreement— (a) will survive (i) the sale and assignment of rights to receive Special Tax Revenues to Ygrene, (ii) the sale and assignment to the Trustee set forth in Sedion 1(b) of this Master Agreement, and (iii) any assignment (including any grant of a security interest) of rights under this Master Agreement, rights under any Supplemental Assignment, or rights to receive Special Tax Revenues by Ygrene to any assignee, or by any assignee to a further assignee; (b) will continue in full force notwithstanding any change in the authority conferred upon the City by the CFD; and (c) will inure to the benefit of Ygrene and any assigns. 11. Ygrene's Acknowledgment. Ygrene agrees and acknowledges that, the City is irrevocably selling and assigning (i) to Ygrene the rights to receive Special Tax Revenues, without recourse to the City and without any representation or warranty, except as expressly set forth herein, and (ii) to the Trustee the enforcement rights described in Section 1(b) of this Master Agreement, without recourse to the City and without any representation or warranty, except as expressly set forth herein. 12. Trustee Provisions. (a) The City and Ygrene hereby appoint the Trustee to ad as trustee for the benefit of Ygrene with respect to the enforcement rights described in Section 1(b) of this Master Agreement, and the Trustee accepts such appointment. (b) The Trustee is hereby instructed by Ygrene and the City to, and the Trustee hereby agrees to, accept and hold in trust for the benefit of Ygrene the Special Tax Revenues transferred to the Trustee under Section 5 of this Master Agreement or collected by it Page 13 of 62 16-53 through judicial foreclosure and distribute the Special Tax Revenues for each Property as directed in writing by Ygrene. (c) The Trustee is hereby instructed by Ygrene and the City to, and the Trustee hereby agrees to, accept and hold in trust for the benefit of Ygrene all present or future rights of the City to enforce or cause the enforcement of the payment of any delinquent Special Tax collectible for each Property through judicial foreclosure, in trust, for the benefit of Ygrene. The Trustee hereby agrees that it will not initiate any such judicial foreclosure proceeding against any Property to enforce a delinquent installment of the Special Tax if the County of San Diego shall have paid, and the Trustee shail have received, one hundred percent (100%) of the amount of such delinquent installment of the Special Tax through the County of San Diego's so-called "Teeter Plan." (d) Except as otherwise provided in Sections 1(b) and 12(c) of this Master Agreement, if directed in writing by Ygrene and upon receiving indemnification satisfactory to it, the Trustee will initiate foreclosure proceedings as authorized by the Ad in order to enforce the lien of each delinquent installment of the Special Tax for any Property and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale. (e) The recitals of fact herein shali not be taken as statements of the Trustee, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Master Agreement or any _ Supplemental Assignment and the Trustee shall incur no liability in respect thereof. The Trustee shall be under no responsibility or duty with respect to the application of any moneys properly paid to it except as provided herein or as otherwise expressly agreed by the Trustee. The Trustee shall be under no obligation or duty to perform any act that would involve it in expense or liability or to institute or defend any suit in respect of this Master Agreement or any Supplemental Assignment or to advance any of its own moneys, unless indemnified to its reasonable satisfaction. The Trustee shall not be liable in connection with the performance of its duties under this Master Agreement or any Supplemental Assignment except for its own negligence or willful misconduct. (f) The Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Master Agreement and each Supplemental Assignment. The Trustee shall not take any discretionary action under this Master Agreement or any Supplemental Assignment without the written approvai of Ygrene and shall take such ' discretionary action permitted or required under the Master Agreement and any Supplemental Assignment, as may be directed in writing by Ygrene. (g) The Trustee, upon receipt of any notice, resolution, request, consent, order, certificate, report, opinion, bond, or other paper or document furnished to it pursuant to any provision of this Master Agreement or any Supplemental Assignment, shall examine such instrument to determine whether it conforms to the requirements of Page 14 of 62 16-54 this Master Agreement or any Supplemental Assignment and shall be proteded in acting upon any such instrument believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel selected by it in respect of any action taken or suffered by the Trustee under this Master Agreement or any Supplemental Assignment. Specifically, and without limiting the foregoing,the Trustee may rely upon diredions, instructions and information given or provided to it by Ygrene or persons or entities acting on its behalf, as set forth in this Master Agreement or any Supplemental Assignment, without further review thereof(other than examining such instrument to determine whether it conforms to the requirements of this Master Agreement and any Supplemental Assignment), and shall not be liable or responsible for the accuracy of the contents contained in such directions, instructions and information or for taking any actions on the basis thereof. (h) Ygrene has agreed to pay, or provide for payment of, the Trustee's fees and expenses from time to time as set forth in a separate agreement between Ygrene and the Trustee as compensation for all services rendered by the Trustee under this Master Agreement and any Supplemental Assignment. The Trustee shall not have a lien on any moneys or other assets at any time held or received by it under this Master Agreement or any Supplemental Assignment. (i) The Trustee may resign at any time and be discharged of the duties and obligations created by this Master Agreement and all Supplemental Assignments by giving not less than sixty (60) days' written notice to the City,Ygrene, and all assignees with respect to which the Trustee has received notice pursuant to Section 9(d) of this Master Agreement. No resignation shall become effective until the acceptance of appointment by a successor Trustee. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee v�ithin 60 days after the giving of such notice of resignation, the retiring Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (j) The Trustee may be removed at any time by an instrument or concurrent instruments in writing, signed by Ygrene and all assignees with respect to which the Trustee has received notice pursuant to Section 9(d),of this Master Agreement and filed with the Trustee; provided that no removal shall become effective until the acceptance of appointment by a successor Trustee. (k) In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee, or of its property, shall be appointed, or if any public officer shall take charge or control of the Trustee, or of its property or affairs, Ygrene shall appoint a successor Trustee. (I) Any successor Trustee appointed under this Master Agreement shall execute, acknowledge and deliver to its predecessor, and also to the City, Ygrene and all assignees with respect to which notice has been provided to the predecessor Trustee Page 15 of 62 16-55 pursuant to Section 9(d) of this Master Agreement, an instrument accepting such appointment and thereupon such successor Trustee, without any further act, deed or conveyance, shall become fully vested with all moneys, estates, properties, rights, powers, duties and obiigations of such predecessor Trustee, with like effect as if originally named; but the Trustee ceasing to act nevertheless, shall execute, acknowledge and deliver such instruments of conveyance and further assurance and do such other things as reasonably may be required for more fully and certainly vesting and confirming in such successor all the right, title and interest of the predecessor Trustee in and to any property held by it under this Master Agreement and any Supplemental Assignment, and shall pay over, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions set forth in or pursuant to this Master Agreement and all Supplemental Assignments. Should any deed, conveyance or instrument in writing from the City or Ygrene be required by such successor Trustee for more fully and certainly vesting in and confirming any such estates, rights, powers and duties, any and all such deeds, conveyances and instruments in writing, on request and so far as may be authorized by law, shall be executed, acknowledged and delivered by the City and Ygrene. (m) Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it may be party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be a bank or trust company organized under the laws of any state of the United States or a national banking association, and shall be authorized by law to perform all the duties imposed upon it by this Master Agreement and all Supplemental Assignments, shall be the successor to the Trustee without the execution or filing of any paper or the performance of any further act. (n) Ygrene shall indemnify, defend, and hold harmless the Trustee against ariy loss, damages, liability, or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of the trusts created by this Master Agreement and all Supplemental Assignments, including costs and expenses (including attorneys' fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers under this Master Agreement or any Supplemental Assignment. The rights of the Trustee and the obligations of Ygrene under this paragraph shall survive the resignation or removal of the Trustee. 13. Notices. Any notice or other communication under this Master Agreement must be in writing and will be considered properly given and effective only when mailed or delivered in the manner provided by this Section 13 to the persons identified below. A notice or other communication that is mailed will be effective or will be considered to have been given on the third day after it is deposited in the U.S. Mail (certified mail and return receipt requested), addressed as set fortti below, with postage prepaid. A notice or other Page 16 of 62 16-56 . communication sent in any other manner will be effective or will be considered properly given when actually delivered. A party may change its address for these purposes by giving written notice of the change to the other party in the manner provided in this Section 13. If to the City: If to Ygrene: City of Chula Vista Ygrene Energy Fund California, LLC 276 Fourth Avenue P.O. Box 5150 Chula Vista, CA 91910 Santa Rosa, CA 95402 Attention: City Manager pnd Ygrene Energy Fund California, LLC 1006 Street—SU 210 Santa Rosa, CA 95401 If to the Trustee: - 14. Amendments. The City, Ygrene, and the Trustee may amend this Master Agreement, without the consent of any assignee, to cure any ambiguity or to correct any provision in this Master Agreement. Except as set forth in the preceding sentence, this Master Agreement may not be amended without the written consent of the City,the Trustee, Ygrene, and each assignee with respect to which the Trustee has received notice pursuant to Section 9(d) of this Master Agreement. 15. Third Party Rights. Each assignee of rights to receive Special Tax Revenues is an express and intended third-party beneficiary of this Master Agreement. This Master Agreement does not give any person or entity other than the City, Ygrene, the Trustee, and each assignee with respect to which the Trustee has received notice pursuant to Section 9(d) of this Master Agreement, any benefit or legal or equitable right, remedy, or claim. 16. Severebility. If any court with jurisdiction rules that any part of this Master Agreement is invalid, unenforceable, or contrary to law or public policy, then the rest of this Master Agreement remains valid and fully enforceable. 17. Interpretation. This Master Agreement is to be interpreted and applied in accordance with California law. Exhibit A is part of this Master Agreement. 18. Venue. Any legal action brought under this Master Agreement must be instituted in the Superior Court of the County of San Diego, State of California. Page 17 of 62 16-57 19. Effective Date. This Master Agreement is effective when all parties have signed it. 20. Counterparts. The parties may sign this Master Agreement in counterparts, each of which will be considered an original, but all of which wili constitute the same agreement. 21. Entire Agreement. This Master Agreement sets forth the parties' entire understanding regarding the matters set forth above and is intended to be their final, complete, and exclusive expression of those matters. (Signature page follows) Page 18 of 62 16-58 City of Chula Vista Ygrene Energy Fund Califomia,-LLC By: By: Signamre of authorized person Signature of authorized perwn Pnnt signatorys name - Print signatorys name Printsignatorys title Printsignatorys title f 1, as trustee By: - Signature of authorized person Print signatorys name Printsignator�s tiHe Page 19 of 62 16-59 EXHIBIT A FORM OF SUPPLEMENTAL ASSIGNMENT SUPPLEMENTAL ASSIGNMENT This Supplemental Assignment, dated , 20_, for reference, is made by the CITY OF CHULA VISTA, a California municipal corporation (the "City"), in favor of(i) YGRENE ENERGY FUND CALIFORNIA, LLC, a California limited-liability company ("Ygrene"), and (ii) , a national banking association organized and existing under and by virtue of the laws of the United States of America, as trustee, including its successors and assigns under the Master Agreement (defined below) (the "Trustee°). 1. The City, Ygrene and the Trustee have entered into a Master Assignment Agreement dated � 20_ (the "Master Agreement") pertaining to Community Facilities District No. 2013-1 (Clean Energy Program), City of Chula Vista, County of San Diego, State of California (the "CFD°). 2. This is a "Supplemental AssignmenY' as that term is defined in the Master Agreement, and all of the terms of the Master Agreement are incorporated herein. If there are inconsistencies between the terms of the Master Agreement and this Supplemental Assignment, the terms of the Master Agreement shall control. 3. This Supplemental Assignment applies to the following real property within the CFD (the „Property°): Street Address: Assessor's Parcel Number: 4. In consideration of the arrangement by Ygrene of financing for the Improvements for the Property in accordance with the procedures and authority of the CFD and the provisions of the Unanimous Approval Agreement, and subject to the terms of the Master Agreement, the County does hereby— (a) sell and assign to Ygrene, without recourse to the City except as expressly provided in the Master Agreement, all of the City's rights to receive the Special Tax Revenues collectible for the Property; and (b) sell and assign to the Trustee, in trust, for the benefit of Ygrene, without recourse to the City except as expressly provided in the Master Agreement, all present or future rights of the City to enforce or cause the enforcement of the payment of any delinquent Special Tax collectible for the Property through judicial foreclosure. 5. This Suppiemental Assignment is effective upon execution and delivery hereof by the City. (Signature page follows) Page i of 62 � 6-6� Ciry of Chula Vista By: Signature of authorized person Prini signator�'s name Print signatorys title Page 2 of 62 � 6-6� � Appendix H: Property Owner's Acknowledgment of Sole Responsibility to Deal with Lenders Community Facilities District No. 2013-1 (Clean Energy Program), City of Chula Vista, County of San Diego, State of California PROPERTY OWNER'S ACKNOWLEDGEMENT OF SOLE RESPONSIBILITY TO DEAL WITH LENDERS PropeRy Address: Assessor's Parcel Number: You have been provided with a Notice to LenderolProposed SpecialTax that you must send to each mortgage lender that holds a note or alternative debt instrument secured by a recorded lien on your property(the"Notice"). It will notify the lender(s)that you inlend to authorize the recordation of a special-tax lien on your property. Please note the following: 1. When you annex your property to the City of Chula Vista Community Facilities District No.2013-1 (Clean Energy Program)and enter into a Unanimous Approval Agreement with the City of Chula Vista ("the City"),a special-tax lien will be recorded on your property. 2. By law,the special-tax lien will be co-equal with the lien for generel property taxes It thus will be superior to the lien of any exisling deed of trust you may have previously executed in favor of a mortgage lender. 3. Your existing mortgage lenders may contend that by entering into the Unanimous Approval Agreement you will violate your loan agreements or deeds of trust. 4. The Notice asks your mortgage lenders to confirm that they do not object to your participation in Community Facilities District No. 2013-1 (Clean Energy Program).The Notice also states that if the lenders do nof respond to the Notice,then you will rely on their silence as indicating that they have no objection. But if the lenders do not sign the Notice and return it,then the fad that you sent the Notice will not preclude the lenders from later alleging that you have violated your loan agreements with them, and there is a risk that the lenders may prevail in any litigation over the alleged violation. 5. Neither the City nor the administrator of the City's Clean Energy Chula Vista Program can advise you about your loan agreements with your lenders. Your contractual relationships with your lenders are your sole responsibility. Please understand that your use of the Notice does not mean— (a) that any issue regarding your obligations under your private loan documents has been resolved; (b) that your lenders cannot take action against you if they believe that you have violated your loan agreements; (c) that the City or the administrator of the City's Clean Energy Chula Vista Program will assist you in any way if your lenders take such action. 6. Many banks that make home loans desire to preserve the option to sell those loans to U.S.government- sponsored enterprises (called"GSEs")that are regulated by the Federal Housing Finance Agency("FHFA"). - The FHFA appears to have instrucled its GSEs not to purchase home loans where there is a superior lien for clean-energy improvements, such as the special-tax lien. Thus, in order to refnance your home loan, or for a Page 3 of 62 76-62 prospedive purchaser of your property to obtain a loan secured by the property, you may need to remove the � special-tau lien by prepaying the special-tax obligation in full.You should consider the likelihood and timing of a possible refinance or sale of your property, and the costs lo prepay the speaal-tax obligation, in deciding whether to annex your property to the district. I have read and understand the foregoing (all owners must sign this acknowledgment): Y Owner t Sgnature Owner 2 Signature Owner 7 Pnnt Name Owner 2 Pnnt Name Date: , 20_ Date: , 20_ Ovmer 3 Sgna;ure Owner a SignaWre Ovmer 3 Print Name Owner 4 Pnnt Name Date: , 20_ Date: , 20_ Owner 5 Signature Owner 6 Sgnature � Owner 5 Print Name Owner 6 Pnnt Name Date: , 20_ Date: ,20_ Ovmer 7 Signamre Owner 8 Signature Owner 7 Pnnt Name ' Owner B Pnnt Name Oate: , 20_ Date: , 20_ Page 4 of 62 16-63 Appendix I: Notice of Special Tax Lien Recording Requested by and When recorded, retum document and tax statement to— NEED ADDRE55 NOTICE OF SPECIAL TAX LIEN Community Facilities District No. 2013-01 (Clean Energy Progrem) City of Chula Vista, County of San Diego, State of California Pursuant to sections 53328.1(a)(4) and 53328.3 of the California Government Code, which are part of the "Mello-Roos Community Facilities Act of 1982" (chapter 2.5, part 1, division 2, title 5 of the California Government Code) (the "AcY'), and to section 3114.5 of the California Streets and Highways Code, the undersigned, as the City Clerk of the City of Chula Vista, hereby gives notice that a lien to secure payment of a special tax is hereby imposed by the City of Chula Vista, State of California, upon the parcel listed on Attachment A to this notice (the "Property"). The special tax secured by this lien is authorized to be levied for the purpose of paying the cost to acquire and install qualifying renewable-energy systems and energy- and water-effciency improvements, including paying principal and interest on debt (as that term is defined in the Act), the proceeds of which are used to finance all or a portion of the cost of the systems and improvements. The special tax is authorized to be levied within the Community'Facilities District No. 2013-1 (Clean Energy Program), City of Chula Vista, County of San Diego; State of California to which the Property has been annexed with the unanimous consent of all of its owners by means of a Unanimous Approval Agreement (to which reference is made for further particulars and which, under section 53329.6 of the Act, constitutes the vote of the qualified electors required by the California Constitution). The lien of the special tax is a continuing lien that secures each annual levy of the special tax and continues in effect until the special-tax obligation is prepaid, permanently satisfed; or canceled in accordance with law. The names of the owners of the propeRy, the parcel number and the maximum annual amounts of the special tax are shown on Attachment A to this notice. Following completion of the installation of the qualifying improvements described above, Attachment B will be submitted as notice of the fnal special tax lien amounts. The conditions under which the obligation to pay the special tax may be prepaid and permanently satisfied and the lien of the special tax canceled, and the procedures for calculating the amount required for prepayment of the special tax, are set forth in the Unanimous Approval Agreement. Notice is further given that upon the recording of this notice in the offce of the San Diego County Recorder, the obligation to pay the speaal-tax levy will become a lien upon the Property in accordance with section 3115.5 of the California Streets and Highways Code. For fuRher information concerning the current and estimated future special-tax liability of owners or purchasers of the Property sub�ect to this special-tax lien, interested persons should contact contact the _ , , Suite_, Chula Vista, California 9_, telephone___ Page 5 of 62 16-64 e � I ;; ;�_ ;f n Y�r City Clerk -1- City of Chula Vista .': �:; :� _ ��= Date: , 2013 �4 s.. i= :5_ Page 6 of 62 16-65 Attachment A Maximum Special Tax Lien Names of Owners Owner No. 1 Owner No. 3 Owner No. 2 Owner No. 4 Assessor's Parcel Number Maximum Annual Special Tax Map Number: Page 7 of 62 16-66 Attachment B Final Special Tax Lien Names of Owners Owner No. 1 Owner No. 3 _ Owner No. 2 Owner No. 4 Assessor's Parcei Number Final Actual Annual Special Tax Map Number: Page 8 of 62 � 6-6� RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2013-1 (CL�AN ENERGY PROGRAA�), CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA AND PROVIDING FOR TH� LEVY OF A SPECIAL TAX THEREIN TO FINANCE OR REFINANCE THE ACQUISITION, 1NSTALLATION, AND 1MPROVEMENT OF ENERGY EFFICIENCY, WATER CONSERVATION, AND RENEWABLE EI��ERGY IMPROVEMENTS PERMANENTLY AFFIXED TO OR ON , REAL PROPERTI' AND IN BUILDINGS; AND AUTHORIZING VALIDATION ACTION WHEREAS, on November �, 2013, the City Council (the "City Council") of the City of Chula Vista (the "City") duly adopted Resolution No. 2013-226 (the "Resolution of Intention") declaring its intent to establish a community facilitics district within the City's jurisdictional boundaries in accordance �vith the Mello-Roos Community Facilities Act of 1982, set forth in sections 53311 through 53368.3 of the California Government Code (the "Act"), and particularly in accordance with sections �3313.5(I) and 53328.1(a) (the "District'). The District is to be named `'Community Facilities District No. 2013-1 (Clean Energy Program), City of Chula Vista, County of San Diego, State of California" and its purpose is to finance or refinance (including the payment of interest) the acquisition, installation, and improvement of energy efficiency, �vater conservation, and renewable energy improvements permanently affixed to privately or publicly owned real property (the "Authorized Improvements"); reference is made to the Resolution of Intention for further particulars and for additional defined terms; and WHEREAS, in the Resolution of Intention, the City Council approved the boundary map showing the territory proposed for annexation to the District in the future (the "Territory"), in accordance «�ith section �3328.1(a) of the Act and California Streets and Highways Code section 3110 (the "Boundary Map'), which Boundary Map is entitled "Proposed Boundaries of Territory Proposed for Annexation in the Future to Community Facilities District No. 2013-1 (Clean Energy Program), City of Chula Vista, County of San Diego, State of California," is attached to the Resolution of Intention as Exhibit A and was recorded on I�'ovember 19, 2013, in the Book of Maps of Assessment and Community Facilities Districts maintained by the County Recorder of the County of San Diego in Book 44 at Page 34; and R�HEREAS, the Resolution of Intention fiaed 2:00 p.m. on Tuesday, December 10; 2013 in the regular meeting place of the City Council; City Council Chambers, City Hall —Building A; 276 Fourth Avenue, Chula Vista, California 91910 as the time and place far the City Council to hold a public hearing (the "Public Hearing `) to consider the establistunent of the District, the specification of Authorized Improvements, the extent of the Territory, the establishment of the appropriations limit for the District, and all other matters set fortli in the Resolution of Intention; and 1:Wttomey�FINAL RESOS AND ORDIi�'ANCES\?013\I? 17 13V545888fi(7)_City of Chula Vista Resolution oTPormation (Clean Energy Program).doc 12/4/2013 9:18 AM 16-68 Resolution No. Paee 2 WHEREAS; the Cit}� A4anaeer of the Cirv or such officer's desisnee (the "Cit�� A4anaeer) has submitted a report to the office of the City Clerk (the "Clerk") as directed by the Resolution of Intention describing: the Authorized Impro��ements; the incidental, financing; and adminisuative costs of the District; the form of the proposed Unanimous Approval Agreement; recommendations for appropriate procedures and criteria for processina and evaluatin� applications for participation and inclusion in the District from the o�vners of propeny within the Territon; and an estimate of the related incidental expenses (the "Hearine Report"), ��fiich Hearing Report is incorporated herein bv this reference and made a part of the record of the Public Hearing; and WTIEREAS, at or shortly afrer the time set for the Public Hearing the Citv Council conducted the Public Heazine and all persons interested; including all ta.�pavers, propem• o�vners, and registered voters ��ithin the Territory; ��ere given an opportunit�� to appear and to be heard; and the City Council heard and considered the testimony for and aeainst the matters set forth in the Resolution of Intention, including the establishment of the District; the le�ry of the special tar, the extent of the Temton�, the financine of am� of the Authorized Improvements, and the establishment of the appropriations limit for the District; and �'�'HEREAS, all registered voters residine ��ithin the boundaries of the Temtorv, and all o��mers of land «�ithin the boundaries of the Territor}�, were alio�ved to submit ��ritten protests to any matter set forth in the Resolution of Intentio� and were permitted to withdra�� their protests before the close of the Public Hearine: and \'JHEREAS; there is on file �vith the Clerk a proof of publication of the Notice of Public Hearine in the Sr�2�\'E�is; and WHEREAS; the City Council also desires to authorize the Cit��'s special counsel; Orrick, Hemneton & Sutcliffe LLP, working with the City Attomey's office; to file a validation action on behalf of the City to seek a judgment of the San Diego County Superior Court that the special tax, contracts, obligations; or evidences of indebtedness arising out of the establishment and implementation of the District; and all matters; aereements, and procedures related thereto; are in all respects legal, ��alid, and binding; and �VHEREAS; the City Council is fully advised in this matter. . NOW, THEREFORE, BE IT RESOLVED BY THE CITY COU1'CIL OF THE CITI' OF CHULA VISTA. AS FOLL0�1'S: Section 1. The above recitals are true and correct. and the Citv Council so finds and determines. Section 2. Except to the extent it is inconsistent �i�ith this resolution, the Resolution of Intention is reaffirmed; and its provisions and findines aze incorporated herein b}� this reference. • � J:WttomeyU�'I�AL RESOS AND ORDINANCES�2013\12 1 i 13V5458887�(7)_Cin•of Chula\'ista Resolution of Forma[ion (Clean Enerey Proeram).doc I?/4/?013 9:18 rU1 16-69 Resolution No. Page 3 Section 3. The City Council accepts the proof of publication of the Notice of Public Hearing and finds, based thereon, that proper notice of the Public Heazing has been given in accordance N�ith the Act and that the Public Hearing was conducted with proper and ]egal notice in all respects. Section 4. The City Council finds and determines that, at the close of the Public Hearing, the ��ritten protests, if any, to any of the matters set forth in the Resolution of Intention—induding the establishment of the District; the levy of the special taa and the � incurrence of debt (as defined in the Act); the extent of the Territory; the acquisition, construction, or installation of any of the Authorized Improvements; and the establishment of the appropriations limit for the District—were submitted by less than 50 percent of the registered voters residing within the Territor}� and by the o��mers of less than one-half of the area of land in the Territory. Thus, the City Council finds that it is not precluded by the Act from proceeding further in this matter, and it determines and orders that al] protests to the matters set forth in the Resolution of Intention are hereby overruled. Section 5. The City Council hereb}� establishes the District in accordance with the Act and particularly in accordance with sections 53313.5(1) and 53328.1(a). Section 6. The City Council orders (a) that a parcel within the Territory may be annesed to the Community Facilities District and subjected to the special tax only �vith the unanimous w�itten approval of the owner or o�mers of the parcel when it is annexed (the "Unanimous Approval AgreemenP'); which, as provided in section 53329.6 of the Act, shall constitute the election required by the California Constitution; (b) that the rate of special tah for each parcel will be established in an amount required to finance or refinance (including the payment of interest and the funding and replenishment of any reserve fund for debt) the Authorized Improvements approved for the parcel and to pay the parcel s appropriate share of the DistricYs incidental, financing and administrative Pxpenses; (c) that the maximum annual rate, method of apportionment, and manner of collection of the special tax must be specified in the Unanimous Approval Aereement for each parcel; (d) that the maximum principal amount of the debt to be incurred to fnance or refinance the Authorized Improvements for the parcel �vill be the amount approved in the Unanimous Approval Agreement for each parcel; and (e) that the special-tax revenues may also be used to repay the appropriate portion of any funds the City advances for the District and to repay under any agreement (which will not constitute a City debt or liability) any advances of funds or reimbursement for the lesser of the value or cost of�vork in-kind provided by any person for the purposes of the District. Section 7. Once a Unanimous Approval Agreement for one or more parcels has been signed by all of the parcel owners and by the City, City staff are authorized and directed to record or cause to be recorded a Notice of Special Tax Lien against the parcels with the County Recorder of the County of San Diego in accordance with section 3ll4.5 of the Streets and Highways Code. Upon recordation of the Notice of Specia] Tax ]ien, a continuing lien to secure each levy of the special tax will attach to the affected parcels. The lien will continue in force until the special-tax obligation is prepaid and permanently satisfied and the lien canceled in 1:\Attomey�FINAL RESOS AND ORDihANCES\2013\I2 17 13V5458A875(7)_Citq of Chula V ista Resolution of Formation (Clcan Ener�y Program).doc 12/4/2013 9:18 An1 � 6-7� Resolution No. PaQe � accordance with la�� or until le�� and collection of the taY ceases. Section 8. The special ta� is to be collected in the same manner as ordinazv ad valorem propem� ta�:es aze collected and is to be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as aze provided for ad valorem ta�es collected on the secured properey-ta� roll of the County of San Dieeo, except that the City Council hereby reserves the rieht to enforce the collection of delinquent special taxes through judicial foreclosure; includine throueh the assignment of the ability to pursue judicial foreclosure as provided in the Act. Section 9. The Citv A4anaeer; 276 Fourth A��enue; Chula Vista; Califomia 91910 (telephone 619/691-�031) or any officer or staff member of the Citv succeedine to the duties of the City �4anaeer, is designated to prepare or cause to be prepazed annuallp the current roll of special-tax le�� oblieations for each pazcel within the District that is subject to the special tax and to estimate future special-ta� levies. Section 10. The Ciq� Councii hereby approves the form of Unanimous Approval Agreement contained in the Heazing Report and directs its use «�ith such chanees as the Cit}� Manaeer may appro��e after consultation �i�ith the City Attomey. The City �4anager is hereby authorized to execute one or more Unanimous Approval Aereements from time to time in substantially said form with such chanees thereto as the City A4anager mav approve afrer consultation with the Cirv Attomev. Section 11. The City Council hereb�� approves the form of Assienment Aereement contained in the Hearine Report and directs its use with such chanees as the City Manaeer may appro��e afrer consultation «�th the Ciri� Attomey. The Cit}� A4anaeer is hereb}� authorized to execute one or more Assienment Asreements from time to tune in substantiallv said form with such chanses thereto as the City �4anager may approve after consultation with the Cit�� Attome��. Section 12. In accordance with sections �332�.7 and �2238.1(a)(2) of the Act, the City Council herebv establishes the appropriations limit (as defined bv section 8(h) of article XIIIB of the California Constitution) for the District for the 20li-2014 fiscal }�ear and for subsequent fiscal }�ears as the sum of the amounts stated as the appropriations limit in each appro��ed Unanimous Approval Aereement. The amount contributing to��ard the appropriations limit of the District in each Unanimous Approval A�reement �+�ill be subject to adjustment followine the fiscal year in which the Unanimous Approval Agreement is fully subscribed: as provided in section �332�.7 of the Act. Section 13. The authorization to finance or refinance the acquisition; construction. and installation of Authorized Improvements covers all costs incidental to the acquisition, construction; and installation, including the costs of plannina and design; the costs of a�y environmental evaluations, all costs associated with establishine the District and financins the Authorized Improvements, the costs of determinine the amount of special taxes, the costs of collecting or payins the special ta�es, and costs otherw�ise incurred to carr�� out the authorized purposes of the District. J:Wttome}�1FINAI.RESOS AND ORDINANCES�013U 2 1 i 13\i�4i88875(7)_Cit}�of Chula V�sta Resolution of Formation (Clean Energy Program).doc � 12/4l2013 9:18 M1 � 6-�� Resolution I�io. Page � Section 14. The City Council finds and detcrmines that all proceedin�s it has conducted and approved with respect to the establishment of the District, up to and includina the adoption of this resolution, are valid and in conformity with the Act. As provided in the Act,this determination is final and condusive for all purposes and is binding upon all persons. Section 15. The City's special counsel, Orrick, Herrington & Sutdiffe LLP; workine with the City Attorney's office, is hereby authorized and directed to file and prosecute on the Citys behalf, against all persons interested in the matter, a civil validation action under California Government Code sections 53511 and 53328.1(c) and Califomia Code of Civil Procedure section 860 and following, seeking a judgment of the San Diego County Superior Court that the special tax, contracts, obligations, or evidences"of indebtedness arisine out of the establishment and implementation of the District, and all matters, agreements, and procedures related thereto; are in all respects legal, valid, and binding. Section 16. This resolution shall take effect immediately upon its passage and adoption. Presented by: Approved as to form: ' , ,� Richard A. Hopkins Glen-R�G6o�gin'� Director of Public Works �ity Attq�ey 1:�Attorney�F'INAL RESOS AND ORDINANCES�2013\I? ll 13V54588875(7)_City of Chula Vista Resolution of Formation (Clean Gnergy Program).doc 12/4/ZOI3 9:18 AD1 � 6-�2 o�n��ar�icE�.jo. ORDIi�'AI�'CE OF THE CIT1' OF CHLJLA ��ISTA LEVYI1vG A SPECIAL TA7� FOR FISCAL I'EAR 2013-2014 AND FOLLO�T�'Ii�'G FISCAL YEARS SOLELY �i%ITHTiV .Ai\iD RELATIl�rG TO COn4i�4UI`TITY FACILITIES DISTRICT NO. 2013-1 (CLEAi\' E\'ERGl' PROGRAM), CITY OF CHULA VISTA. COUI�TTY OF SAI�' DIEGO. STATE OF CALIFORNIA WHEREAS; on December 10; 2013, the Cirv Council (the "Cit}� Council") of the City of Chula Vista (the "City") duh� adopted Resolution No. _ (the "Resolution of Formation") establishing "Communin� Facilities District No. 2013-1 (Clean Energ�� Program): City of Chula Vista, County of San Die�o; State of Califomia" in accordance �i�ith the Mello-Roos Community Facilities Act of 1982. set forth in sections �3311 throueh �3368.3 of the Califomia Govemment Code (the "Act'), and paniculazly in accordance ��ith sections �33li.�(1) and �3328.1(a) (the "District '); and �VHEREAS. Califomia Govemment Code section �3328.1(b) and the Resolution of Formation authorize the Cin� Council to provide for the levy of a special tax on each tarable pazcel within the District For the 2013-2014 fiscal yeaz and for each subsequent fiscal veaz; in each case in the amount of the specia] ta� specified for the fiscal ti�eaz in the Unanimous Appro��al Aereement (the "Agreement-') pertainina to the parcel; NOW. THEREFORE, THE CITY COiTi�TCIL OF THE CITY OF CHliLA \'ISTA DOES ORDAII�' AS FOLLO\'��S: Section 1. Pursuant to California Go��emment Code section 53328.1(b) and the Resolution of Formation; a special ta� is hereb�� levied on each taYable pazcel within the District for the 20li-2014 fiscal year and for each subsequent fiscal }�eaz; in each case in the amount of the special tax specified for the fiscal year in the Aereement pertainine to the parcel. Section 2. The City Manaser of the Ciri- or such officer's designee (the ��City Mar�aeei '), 276 Fourth Avenue; Chula Vista, Califomia 91910 (telephone 619/691-�031) or any officer or staff inember of the Ciri� succeedine to the duties of the Ciri� Manaser. is authorized and directed, ��ith the aid of the appropriate officers and agents of the City, to do the follo��ing: (a) determine or cause to be determined each year, �+�ithout further action of the City Council, the appropriate amount of special ta� to be le��ied on each pazcel in the District: (b) prepaze or cause to be prepared the annual special-tax roll for the parcels in the District in accordance «ith the Resolution of Formation and this ordinance: and (c) provide or cause to be pro�ided all necessary and appropriate information to the Countv of San Diego Auditor-Controller; in proper form and in proper time, to effect the correct and timel�� billing and collection of the special ta� on the J:l4nomey�F'INAL RESOS�\D ORDiNp\`CES�OLi\I? l7 13V54588882(7)_City of Chula Yista Ordinance Levrin�Special Tax(Clean Enerey).doc 12/4/2013 9:16 AM 16-73 Ordinance No. Page 2 secured property-ta� roll of the County of San Diego, except that; as stated in the Resolution of Formation and in California Government Code section �3340(e), the City Council hereby reserves the right to enforce the collection of delinquent special taxes through judicial foreclosure, including through the assignment of the ability to pursue judicial foreclosure as provided in the Act. Section 3. The appropriate officers and agents of the City are authorized, if needed to match the special-tax levy with the assessor's parcel numbers ihe County of San Diego uses in sending out property-ta}, bills, to make adjustments to the special-tax roll before the final posting of the special ta�es to the tax roll each fiscal year. Section 4. If a cour[ with jurisdiction finds, for any reason, that any portion of this ordinance is invalid or that the special tax does not apply to any particular parcel, the balance of this ordinance, and the application of the special ta� to all other parcels, will not be affected. Section 5. Upon completion of the payment of the entire special-tax obligation for a parcel within the District, as specified in the Agreement pertaining to that parcel, the appropriate officers of the Ciry are authorized and directed, ��ith the aid of the appropriate agents of the City and without further action of this City Council, to record or cause to be recorded a Notice of Cessation of Special Taa: for such pazcel in accordance with California Government Code section 53.i30.5. This ordinance ��as introduced at the regular meeting of the City Council on December 10, 2013. At the regular meeting of the Cit}� Council on December 17, 2013, the title of this ordinance �=as read and further reading �vas waived by the unanimous consent of the City Council members present. This ordinance shall take effect and be in full force thirty (30) days after its final passage and before the expiration of fifteen (1�) days from the date of its passage, it shall be published once with the names of the members of the Cit}� Council voting for and against the same, said publication to be made in a newspaper of general circulation published in the City of Chula Vista. Presented by: Approved as to form: , - �- � ,�� / Richard A. Hopkins r\�,G�en'R. Goo� Director of Public Works �� rty /�ttorney J:�.4ttomeyUMAL RESOS AT'D ORDINANCES�2013\I2 17 13\75458888?(7)_City otChula Vista Ordinance Levymg Special Tax(Clean Energy).doc 12/4/2013 9:16 M1 16-74