HomeMy WebLinkAboutReso 2016-184 RESOLUTION NO. 2016-184
RESOLUTION OF THE CITY COUI�'CIL OF THE CITY OF
CHULA V[STA FORMIt�'G AND ESTABLISHII�'G
COMMUN[TY FACILITIES DISTRICT NO. 16-I (MILLEI�'IA).
DESIGNATING Tl�'0 [MPROVEI�4ENT AREAS THEREII�'
AND AUTHORIZII�'G SUBMITTAL OF LEVY OF SPECIAL
TAXES W[THIt�� EACH IMPROVEMENT AREA OF SUCH
COMMUI�'ITY FACILITIES DISTRIC7 TO THE QUALIFIED
ELECTORS OF EACH IMPROVEn4ENT AREA
�1'HEREAS, the Citv Council of the Citv of Chula Vista (the "Cin� Council"), has
previousl}� declared its intention to form a community facilities district and designate twro
impro��ement areas therein and ordered the prepazation of a Communit�� Facilities District Repon
relatins to the initiation of proceedines to create such community facilities district and designate
such improvement azeas pursuant to�the terms and pro��isions of the `Mello-Roos Communitv
Facilities Act of 1982;" beine Chapter 2.�, Part l, Di��ision 2; Title � of the Govemment Code of
the State of Califomia (the "Acr') and the Cinr of Chula Vista Communin� Facilities District
Ordinance enacted pursuant to the po��ers resen�ed b�� the Citv of Chula Vista under Sections 3,
� and 7 of Article XI of the Constitution of the State of Califomia (the "Ordinance `) (the Act and
the Ordinance may be referred to collecti��el�� as the "Communit�� Facilities District La«"). This
communitv facilities district shall hereinafter be referred to as Communin Facilities District No.
16-I (Millenia) (the "Districr`) and the impro��ement areas shall hereinafrer be referred to as
"Improvement Area No. 1" and "Impro��ement Area No. 2" and collectiveh, the "Improvement
Areas ': and
�1'HEREAS, notice of a public hearine relatine to the establishment of the District. the
extent of the District, the designation of the Improvement Areas_ the financine of certain t�pes of
public facilities and all other related matters has been given, and a Communih� Facilities District
Report, as ordered by this Cit�� Council, has been presented to this City Council and has been
made a part of the record of the hearine to establish such District and desienate the Improvement
Areas: and
WHEREAS. alI communications relatine to the establishment of the District. the
designation of the Improvement Areas. the financine of certain t��pes of public facilities and the
rate and method of apportionment of special tax proposed to be levied ��ithin each Improvement
Area H•ithin the District ha��e been presented, and it has further been determined that a majority
protest as defined b�� la��= has not been received asainst these proceedinss or the le��� of the
special taY within either of the Impro��ement Areas; and
�'HEREAS, inasmuch as there have been less than t�celve (12) reeistered voters residine
H�ithin the territor�� of each Impro�=emen[ Area for at least the preceding ninen� (90) da��s, the
authorization to lev�� special tases ���ithin each such Improvement Area shall be submitted to the
lando���ners of such Improvement Area. such lando�i�ners beino the qualified electors as
authorized b�� la���.
Resolution No. 2016-184
Page No. 2
NOW. THEREFORE. BE IT RESOLVED AS FOLLOWS:
SECTION 1. Recitals. The above recitals are all true and correct.
SECTION 2. Determinations. It is hereby determined by this Ciry Council that:
A. All prior proceedings pertaining to the formation of the District and the
designation of the Improvement Areas therein were valid and taken in conformity
with the requirements of the law, and specifically the provisions of the
Community Facilities District Law, and that this finding and determination is
made pursuant to the provisions of Government Code Section 53325.1.
B. The w�-itten protests received, if any, do not represent a majority protest as
defined by the applicable provisions of the Community Facilities District Law and
as applied to the District and the Improvement Areas and, therefore, the special
tax proposed to be levied within each of the Improvement Areas of the District
has not been preduded by majority protest pursuant to Section 53324 of the
Govemment Code of the State of Califomia.
C. The District as proposed, conforms to the City of Chula Vista Statement of Goals
and Policies Regarding the Establishment of Community Facilities Districts (the
"Goals and Policies'), as amended, with the exception of certain exemptions to
the Goals and Policies provided for in the terms and conditions of the "Financing
Plan'' contained within that certain Development Agreement pertaining to the
Millenia project by and between the City and McMillin Otay Ranch LLC,
predecessor in interest to SLF IV-Millenia, LLC, the current owner of the
property��ithin the District.
D. Less than twelve (12) registered voters have resided within the territory of each of
the Improvement Areas of the Distriet for each of the ninety (90) days preceding
the close of the public hearing, therefore, pursuant to the Act the qualified electors
of each Improvement Area shall be the landowners of each such Improvement
Area as such term is defined in Govemment Code Section 53317(� and each such
]andowmer who is the owner of record as of the close of the public hearing, or the
authorized representative thereof shall have one vote for each acre or portion of
an acre of land that she or he o���ns within such Improvement Area.
E. The time limit specified by the Community Facilities District Law for conducting
an election to submit the lev}� of the special taxes to the qualified electors of each
of the Improvement Areas and the requirements for impartial analysis and ballot
arguments have been waived with the unanimous consent of the qualified electors
of each such Impro��ement Area.
Resolucion No. 2016-18�
Paee No. 3
F. The Cirv Clerk. actine as the election official, has consented to conductine an��
required election on a date ti�hich is less than 12� davs follo���ing the adoption of
am� resolution formine and establishins the District.
SECTION 3. Communit�� Facilities District Report. The CFD Report for the District
(the "Report`). as no�� submitted by �b%illdan Financial Services; Special Ta� Consultant, shall
stand as the report as required pursuant to Go��ernmem Code Section �332L� for all future
proceedines and all terms and contents aze appro��ed as set forth therein.
SECTION �. I�'ame of District and Desienation of the Improvement Areas. The Ciq�
Council does herebv establish and declare the formation of the District knotim and designated as
"Communit}� Facilities District No. 16-I (1�9illenia)" and the desienation of the Improvement
Areas as "Impro��ement Area I�io. 1" and "Improvement Area I�'o. 2."
SECTIOI�' �. Boundaries oF the District and the Impro��ement Areas. The boundaries of
the District and the Improvement Areas are eeneralh� described as folloti�s:
All propert�- �i�ithin the boundaries of Communit�- Facilities District No. 16-[
(D4illenia) and the Improvement Areas; as sho��m on a boundan� map as
previoush� appro��ed by this leeislati��e bod��, such map desienated b�� the name of
this District, a copy of ���hich is on file in the Office of the Cit�� Clerk. The
boundary map of the proposed District and the Impro��ement Areas has been filed
pursuant to Sections 3111 and 3113 of the Streets and Hishwa}�s Code of the State
of California in the Office of the County Recorder oF the Count�� of San Diego, at
Paee _ of Book _ of the Book of A9aps of Assessment and Community
Facilities Districts for such Countv.
SECTION 6. Description of t��pes of facilities authorized to be financed. A general
description of the types of public facilities proposed to be financed under these proceedings. are
generally described in Exhibit A attached hereto and incorporated herein b�� this reference.
The types of facilities as above-described are facilities ���hich the City Council is
authorized by law to contribute re��enue ro or ro construct. oNm or operate. It is hereby further
determined that the proposed types of facilities are necessary to meet increased demands placed
upon the City as a result of development occurrine ���ithin the District, and the costs and
expenses charged to this District represent the fair share costs of the facilities attributable to this
District.
For a full and complete description of such types of facili[ies, reference is made to [he
Report. a copy of �vhich is on file in the Office of the Citv Clerk. In addition to financine the
above described t��pes of facilities, [he financing of those incidental espenses described in the
Report are also appro��ed and authorized.
Resolution No. 2016-184
Page No. 4
SECTION 7. Special Tax. Except w�here funds are otherwise available a sepazate special
tax, secured by recordation of a continuing lien against all non-exempt real property within each
Improvement Area, is hereby authorized, subject to voter approval, to be levied within the
boundaries of each such Improvement Area. For particulars as to the rate and method of
apportionment of the special tax proposed to be levied within each Improvement Area, reference
is made to the attached and incorporated Exhibit `B" (each, a "Rate and Method of
ApportionmenP`), which sets forth in sufficient detail the method of apportionment of the special
tax to allow each landowner or resident within each such Improvement Area to estimate the
maximum amount that such person will have to pay. Such special tax shall be utilized to pay
directly for the previously described types of facilities, to pay debt service on bonds issued by
the District for the related Improvement Area to assist in financing such types of facilities, to
replenish any reserve fund established for such bonds, and to pay the costs of administering the
bonds, the related lmprovement Area and the District.
The special taxes herein authorized, to the extent possible, shall be collected in the same
manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale
and lien priority in any case of delinquency as applicable for ad valorem taxes; provided,
however, the District may utilize a direct billing procedure for any special taxes that cannot be
collected on the County tax roll or may, by resolution, elect to collect the special taxes at a
different time or in a different manner if necessary to meet its financial obligations.
Under no circumstances will the special tax to be levied against any parcel within an
lmprovement Area used for private residential purposes be increased as a consequence of
delinquency or default by the owner of any other parcel or parcels within such Improvement
Area by more than 10 percent.
This legislative body further authorizes that special taaces may be prepaid and satisfied by
payment of the prepayment amount calculated pursuant to the related Rate and Method of
Apportionment.
Upon recordation of a Notice of Special Tax Lien related to an Improvement Area
pursuant to Section 3114.5 of the Streets and Highways Code of the State of California against
the property within such Improvement Area, a conrinuing lien to secure each levy of the special
tax shall attach to all non-exempt real property in such Improvement Area and this lien shall
continue in force and effect until the special tax obligation is prepaid and permanently satisfied
and the lien canceled in accordance with law or until collection of the tax by the legislative body
ceases.
SECTION 8. Special tax accountabilitv measures. Pursuant to and in compliance with
the provisions of Government Code Section 50075.1, this City Council hereby establishes the
following accountability ineasures pertaining to the ]evy by the District of the special taxes
described in Section 7 above:
A. Each special tax shall be levied for the specific purposcs set forth in Section 7. above.
Resolution No. 2016-184
Page No. �
B. The proceeds of the le��� of each such special ta.� shall be applied onl�� to the specific
applicable purposes set foRh in Section 7. abo��e.
C. The District shall establish a sepazate account into ���hich the proceeds of each such
special ta� shall be deposited.
D. The Ciri� Mana¢er or his or her desienee. actine for and on behalf of the District. shall
annualh� file a report ���ith the Ciri� Council�as required pursuant to Go��ernment Code Section
�007�.3.
SECTION 9. Preparation of annual tax rolL The name, address and telephone number of
the office. department or bureau ���hich �vill be responsible for preparing annuallv a current roll
of special ta� lev}� oblisations for each Improvement Area by Assessor's parcel number and
���hich shall be responsible for estimating future special tas levies pursuant to Section �3340.1 of
the Go��ernment Code of the State of California. are as follows:
Engineerine Department
Cit�� of Chula Vista
276 Fourth Avenue
Chula Vista. CA 92010
(619) 691-5021
SECTION 10. Substimtion facilities. The description of the types of public facilities, as
set forth in Eahibit A hereto. is seneral in its nature. The final nature and location of such
facilities «�ill be determined upon the preparation of final plans and specifications therefor. Such
final plans ma�� sho��� substitutes in lieu of, or modification to. the abo��e described types of
facilities and any such substitution shall not be a change or modification in the proceedinss as
long as the facilities provide a service substantiall�� similaz to [hat as set forth in this Resolution.
SECTION 11. AcquisitionlFinancina Aereement. There has been presented to the City
Council the form of an Acquistion/Financing A�reement b�� and between the City and SLF IV-
A4illenia LLC, a Delaware limited liabilit}� compan}� (the "De��eloper'), to establish the terms
and conditions pursuant to H�hich the facilities to be constructed b�� the De��eloper may, upon the
completion of the construction thereof be acquired b�- the Cit�� and the District through financing
provided bv the District at prices determined pursuant to and in accordance ���ith the provisions
of such agreement and the District ma}� issue bonds secured bv the le��y of special taxes ���ithin
each of the Improvement Areas. The Citv A4anaeer is hereb�� authorized to execute such
aereement for and on behalf of the Cit�� and the District ���ith such chanees thereto as such
officer. follo���ine consultation N�ith the Citv Attornev and Best Best R Krieeer LLP. deem to be
in the best interests of the Cit�� and the District. y
Resolution No. 2016-184
Page No. 6
SECTION 12. Election. This City Council herewith submits the levy of the special tax
within each Improvement Area to the qualified electors of such Improvement Area, such electors
being the landowners in the District, with each landowner having one (1) voter for each acre or
portion thereof of land which he or she owns within such Improvement Area.
Presented by Approved as to form by
���f� `
Kelly G. Br ughton, FASLA Glen R�CY�gins / �.
Director of Developmental Services City�y �
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
Califomia, this 13th day of September 2016 by the following vote:
AYES: Councilmembers: Aguilar, Bensoussan, McCann, Miesen; and Salas
NAYS: Councilmembers: None
ABSENT: Councilmembers: None
C�L�4�1
Mary as, Mayor
ATTEST:
�� � � ���
Donna R. Norris, C, City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
1, Donna R. Norris, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Reso]ution No. 2016-184 .��as duly passed; approved, and adopted by the City Council at a
regular meeting of the Chula Vista City Council held on the 13th day of September 2016.
Executed this 13th day of September 2016.
/'� lt.� �C �/YO,�iLc�
Donna R. Non�is, MC, City Clerk
Resolution No. 2016-18�
Pase I�To. 7
EXHIBIT A
DESCRIPTIO\' OF TYPES OF F.ACIL[TIES
The t��pes of facilities elieible to be financed b�� the District aze street (both on-site grid streets
and boundan� arterials) and bridee improvements, includine erading; pavins, curbs and gutters,
side���alks. trails. medians, traffic signalization and signage. street ]iehts, utilities; storm ��ater
drainaee, detention and treatment, and landscaping and irrigation related thereto, se�+�er
collection and conve��ance facilities. off site storm detention and treatment facilities, park and
recreation facilities (including land and impro��ements), fire facilities and equipment, librarv
facilities and equipment, transit facilities, fiber optic telecommunication s��stem facilities.
general go��emmental office. administrati��e and meeting facilities, bus and rapid transit facilities
and land; riehts of��a}� and easements necessary for any of such facilities. Notwithstandine the
foreeoine, only equipment ���ith a useful life of five (�) ��ears or more ti�ill be elieible to be
financed. �
Resolution No. 2016-184
Page No. 8
EXHIBIT B
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
1MPROVEMENT AREA NO. 1
A Special Tas shall be levied on all Taxable Property within the boundazies of Improvement
Area No. 1 of Communin- Facilities District No. 16-I (Millenia) of the Ciry of Chula Vista
("IA1") and collected each Fiscal Year commencing in Fiscal Year 2016-17; in an amount
determined by the CFD Administrator through the application of the procedures described
below. All of the real property within IAI, unless exempted by law or by the provisions hereof,
shall be taxed for the purposes;to the extent, and in tl�e manner herein provided.
l. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre° or "Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on
the applicable Final Map. An Acre means 43,560 square feet of land. If the preceding maps for a
]and area are not available, the Acreage of such land area shall be determined by the City
Engineer.
"AcN' means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5
of Part 1 of Division 2 of Title 5 of the Govemment Code of the State of Califomia.
"Administrative Expense RequiremenY' means an annual amount equal to $75,000; or such
lesser amount as may be designated by written instruction from an authorized representative of
the City to the Fiscal Agent, to be allocated as the first priority of Special Taxes received each
Fisca] Year for the payment of Administrative Expenses.
"Administrative Expenses" means the following actual or reasonably estimated costs related to
the adminisvation of IA 1 including, but not limited to: the costs of preparing and computing the
Annual Special Tax (ti�hether by the City or designee thereof or both); the costs of eollecting the
Special Taxes (whether by the City,- the County or otherwise); the costs of remitting the Special
Taxes to the Fiscal Agent the costs of the Fiscal Agent (including its legal counsel) in the
discharge of the duties required of it under the Fiscal Agent Agreement; the costs to the City,
CFD No. 16-I, or any designee thereof complying with arbitrage rebate requirements, including
without limitation rebate liability costs and periodic rebate calculations; the costs to the City,
CFD No. 16-I, or any designee thereof complying witl� disclosure or reporting requirements of
the City or CFD No. ]6-I; associated with applicable federal and State laws; the costs associated
with preparing Special Tax disclosure statements and respondino to public inquiries re�arding
the Special Taaes; the costs to the City, CFD No. 16-1, or any designee thereof related to an
appeal of the Special Taz; and tl�e City's annual administraLion fees and third party eapenses.
Administrative Eapenses shall also include amoui�ts estimatcd or advanced by the Cit}� or CFD
Resolution I�'o. 2016-184
Paee No. 9
No. 16-I for an� other administrative purposes of CFD No. 16-I. indudine attomev's fees and
other costs related to commencine and pursuing any foreclosure of delinquent Special Taxes.
"Annual Special Tax" means the Special Ta� actuallv le��ied in any Fiscal Yeaz on an��
Assessor`s Pazcel.
"Assessor" means the Assessor of the Count�� of San Die�o.
"Assessor's Parcel" means a lot or pazcel sho��m on an Assessoi s Parcel Map N ith an assiened
Assessor's Parcel Number.
"Assessor's Parcel A1ap" means an official map of the Assessor desienating parcels b}
Assessor's Parcel ?�'umber.
"Assessor's Parcel Number" means the number assiened to an Assessor's Parcel bv the Count��
for purposes of identification.
"Assigned Special Tac" means the Special Tax of that name described in Section 3.A belo��.
`Backup Special Ta�" means the Special Ta� of that name described in Section 3.B below.
`Bonds" means an�r bonds or other debt of CFD No. 16-I issued or incurred for IA1, whether in
one or more series; secured by the le��}� of Special Ta�:es.
`Building Permit" means a buildine permit for construction of a Residential Unit or non-
resideotial structure �tiithin lAl issued bv the Citv.
"Building Square Footage" means all of the square footaee of li��ing area �vithin the perimeter
of a residential structure, not induding any carport, ���alk�va.�. sarage. overhang, or similaz azea.
The determination of Buildina Square Footaoe shall be made bv the CFD Administrator by
reference to the Building Permit(s) issued for such Assessors Parcel and/or by reference to
appropriate records kept by the Cin. Building Square Footage for a Residential Unit Hill be
based on the Building Permit(s) issued for such Residential Unit prior to it beine classified as
Occupied Residential Propem�. and shall not change as a result of additions or modifications
made to such Residential Unit after such dassification as Occupied Residential Propem�.
"Caleodar Year" means the period commencing January 1 of any �ear and endine the follo�rine
December 31.
"CFD Administrator' means an authorized representative of the Cit��, or designee thereof.
responsible for determining the Special Ta� Requirement, for preparin�? the Annual Special Tat
roll and/or calculatins the Backup Special 7 a�.
"CFD \o. 16-I" means the Communih� Facilities District \o. 16-I (A4illenia) of the Citv of
Chula Vista.
Resolution No. 2016-184
Page No. ]0
"City" means the City of Chula Vista, California.
"Cit�� CounciP' means the City Council of the Ciry acting as the legislative body of CFD No.
16-] under the Act.
"Condominium" means a unit, whether attached or detached, meeting the statutory definition of
a condominium contained in the California Civil Code Section 4285.
"County" means the Count}� of San Diego, California.
"Debt Service" means for each Fiscal Year, the total amount of principal and interest payable on
any Outstanding Bonds during the Calendar Year commencing on January 1 of such Fiscal Year.
"Developed Propert��" means for each Fiscal Year, all Taxable Property, exclusive of
Provisional Property, for ti�hich a Building Permit was issued prior to March 1 of the previous
Fiscal Year. An Assessor's Parcel dassified as Developed Property but for which the Building
Permit that caused such Assessor's Parcel to be classified as Developed Property has been
cancelled and/or voided prior to the Fisca] Yeaz for which Special Taxes are being levied shall be
reclassified as Undeveloped Property, provided that the levy of the Annual Special Tax after
such reclassification shall not be less than 1.1 times the annual Debt Service less Administrative
Expenses on all Outstanding Bonds. ]f Bonds have not been issued, an Assessors Parcel
classified as Developed Property for which such a Building Permit has been cancelled and/or
voided shall be reclassified as Undeveloped Property.
"Development Agreement" means that certain Development Agreement by and between the
City of Chula Vista and McMillin Otay Ranch LLC adopted October 6, 2009 and recorded with
the County of San Diego's Recorder's office on October 27, 2009 as Document Number 2009-
0�95116, as may be amended and/or supplemented from time to time.
"Exempt Property" means for each Fiscal Year, all Assessor's Parcels designated as being
exempt from Special Taxes pursuant to Section 5 below.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot
line adjustment, pursuant to the Subdivision Map Act (California Govemment Code
Section 66410 et seq.) or recordation of a condominium plan pursuant to Califomia Civil
Code 4285 that creates individual lots for which Building Permits may be issued without further
subdivision.
"Fiscal Year" means the period starting on July 1 and ending the following June 30.
"Fiscal Agent" means the fiscal agent, trustee, or paying agent under the Fiscal Agent
Agreement.
"Fiscal Agent AgreemenY' means the fiscal agent agreement, indenture, resolution or other
instrument pursuant to N�hich Bonds are issued; as modified, amended and/or supplemented from
time to time, and any instrument replacing or supplementing the same.
Resolution No. 2016-18�
Pase I�'o. 11
"lAl" means lmprovement Area No. 1 of CFD I�TO. 16-I.
"Land Use Class" means anv of the classes listed in Table 1. 2. or 3 under Section 3A below.
Note: Land Uses Class is not in reference to a properq�`s zoning desig��atron.
"Lot(s)" means an individual leoal lot created b}� a Final Map for H�hich a buildine permit for
residential construction has been or could be issued. Not��ithstandine the foregoing. in the case
of an indi��idual legal lot created b}� such a Final D4ap upon which Condominiums are entitled to
be developed. the number of Lots allocable to such legal lot for purposes of calculatine the
Backup Special Ta� applicable to such Final Map shall equal the number of Condominiums
���hich are permitted to be constructed on such leeai lot as sho"m on such Final A4ap.
"Alaster De��eloper" means SLF TV-Millenia, LLC or its successors or assignees with as
defined in the Development Agreement.
"Ma�imum Special Ta�" means for each Assessor's Parcel. the maaimum Special Ta�,
determined in accordance ���ith Sections 3.0 and 3.D below. �vhich mav be le��ied in a ¢i��en
Fiscal Year on such Assessor s Parcel of Taxable Property.
"Non-Residential Properh" means all Assessor's Parcels of De��eloped Property for which a
Buildine Permit has been issued for the purpose of constructing one or more non-residential units
or structures.
"Occupied Residential Properh�" means all Assessor Parcels of Residential Property for ��hich
title is held b�� an end user (homeo�i�ner).
"Outstanding Bonds" means all Bonds �i�hich are deemed to be outstanding under the Fiscal
Agent Aereement.
"Prepayment Amount" means the amount required to prepay the Special Tat Obligation in full
for an Assessor's Parcel as described in Section 8.A beloti�.
"Propert�' O«�ner Association Properh�" means am� Assessors Parcel within the boundaries
of IA1 o�timed in fee b}� a propert�� o�i�ner association, including any master or sub-association.
"Proportionateh'" or "Proportionate" means for Developed Property, that the ratio of the
actual Special Ta� lev�� to the applicable Assiened Special Ta� or Backup Special Taa is equal
for all Assessors Pazcels of Developed Property. For Undeveloped Propem-. "Proportionateh•"
means that the ratio of the actual Special Tas le��� per Acre to the A4a�imum Special Taa per
Acre is equal for all Assessor's Parcels of Undeveloped Property. "Proportionately" ma}�
similarly be applied to other cate�ories of Tasable Propert�� as listed in Section 3 belo��.
"Pro�isional Properh" means all Assessors Parcels of Public Propert}=, Property O��°ner
Association Propem or propem� that ���ould othenrise be classified as Esempt Propert} pursuant
to the pro��isions of Section �. but cannot be classified as Exempt Propem because to do so
Resolution No. ?016-184 �
Page No. 12
would reduce the Acreage of all Taxable Property below the required minimum Acreage as set
forth in Section 5.
"Public Property" means any property within the boundaries of IA1, which is owned by, or
irrevocably offered for dedication to the federal government, the State of California, tbe County,
the City or any other public agency; provided however that any property owned by a public
agency and leased to a private entity and subject to taxation under Section 53340.1 of the Act
shall be taxed and classified in accordance with its use.
"Residential Property" means all Assessor's Parcels of Developed Property for which a
Building Permit has been issued for the purpose of constructing one or more Residential Units.
"Residential UniY' means each separate residential dwelling unit that comprises an independent
facility capable of conveyance or rental, separate from adjacent residential dwelling units.
"Special Tax" means any special tax levied within IA1 pursuant to the Act and this Rate and
Method of Apportionment of Special Tax.
"Special Tax Obligation" means the total obligation of an Assessor's Parcel of Taxable
Property to pay the Special Tas for the remaining life of IA1.
"Special Tax RequiremenY' means that amount required in any Fiscal Year to: (i) pay regularly
scheduled Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding
Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding
Bonds, (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish
any reserve funds for all Outstanding Bonds, (v) aecumulate funds to pay directly for acquisition
or construction of facilities provided that the inclusion of such amount does not cause an increase
in the Special Tax to be levied on Undeveloped Property; and (vi) pay for reasonably anticipated
delinquent Special Taxes based on (a) the average delinquency rate for special taxes levied in the
previous Fiscal Year in all community facilities districts within the portion of the City commonly
known as Otay Ranch for the first Fiscal Year in which Special Taxes are levied and (b) the
delinquency rate for Special Taxes levied in the previous Fiscal Yeaz within IA1 for all
subsequent Fiscal Years in which Special Taxes are levied; less (vii) a credit for funds available
to reduce the Annual Special Tax levy, as determined by the CFD Administrator pursuant to the
Fiscal Agent Agreement.
"State" means the State of California.
"Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD, which
are not eaempt From the levy of tl�e Special Tax pursuant to law or Section 5 below.
"Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as
Developed Property or Provisional Property.
"Zone A' means the specific geographic area designated as such within IA1 and as depicted in
Eahibit A attached hereto.
Resolution No. 2016-184
Paee No. 13
"Zone B" means the specific geographic azea desi�ated as such H�ithin IA1 and as depicted in
E�hibit A attached hereto.
"Zone C" means the specific geoeraphic area designated as such w�ithin lAi and as depicted in
Eahibit A attached hereto.
2. LAND USE CLASSIFICATION
Each Fiscal Year, beginning with Fiscal Yeaz 2016-17, each Assessor's Pazcel within IAl shall
be classified as Ta�able Property or Exempt Propert��. In addition. all TaYable Property shall
further be classified as Developed Property, Undeveloped Property or Provisional Property, and
all such Ta�able Propert�� shall be subject to the le��� of Special Takes in accordance ��-ith this
Rate and Method of Apportionment of Special Tac determined pursuant to Sections 3 and 4
belo�;�. Funhermore; each Assessor's Parcel of Developed Property shall be classified accordins
to its applicable Land Use Class based on its Building Square Footage. �
For Assessor's Pazcels of Non-Residential Propem developed �vith Condominiums (e.g., office
or industrial condos), the Acreage applicable to each such Condominium for purposes of levying
Special Ta�es shall be computed from the Acreage of the legal lot created bv the Final Map upon
���hich such Condominiums are entitled to be developed. �vith the Acreage of such lot allocated to
each Condominium on a pro-rata basis usine the buildine square footage of such Condominium
relati��e to the total building square footage of all Condominiums entitled to be de��eloped on
such lot. The determination of buildine square footaee for each non-residential Condominium
shall be made b�� reference to the applicable Building Permit. and to the extent a Buildine Permit
has not been issued for all Condominiums to be located on the applicable leeal lot, the buildine
square footage attributable to anv such Condominiums shall be determined from the recorded
condominium plan. or applicable site plan, plot plan, or other appropriate records kept by the
City as reasonably determined b�� the CFD Administrator. In the event the City tal:es o��mership
of a Condominium �vithin IA1 and such propem� in all other respects meets the definition of
Public Propertv as set forth in Section 1, such propert�� shall be esempt from Special Ta�es
pursuant to Section �.
3. SPECIAL TAX RATES
A. Assigned Special Tax for Developed Properh�
The Assi_ned Special Tax applicable to an Assessors Pazcel classified as Developed
Property commencing Fiscal Year 2016-17 shall be determined pursuant to Table l. 2, or
3 below: as applicable.
Resolution No. 2016-184
Page No. 14
Table 1
Assigned Special Tax Rates for
Developed Property withiu Zoue A
Land Building
Use Land Use Type Square Assigned Special
Class Footage Tax
1 Residential Property < 1,500 $1,352 per
Residential Unit
2 Residential Property 1,500-2,200 $1,661 per
Residential Unit
3 Residential Property > 2,200 $1,799 per
Residential Unit
4 Non-Residential Properiy N/A $6,000 per Acre
Tablc 2
Assigned Special Tax Rates for
Developed Property within Zone B
Land Building
Use Land Use Type Square Assigned Special
Class Footage Tax
1 Residential Property < 1,500 $>>>50 per
Residential Unit
2 Residential Property 1,500 - 2,200 $�,451 per
Residential Unit
3 Residential Property > 2,200 $�,649 per
Residential Unit
4 Non-Residential Property N/A $6,000 per Acre
Resolution No. 2016-184
Paee I�'o. 1�
Table 3
Assigned Special Tax Rates for
Developed Properh° within Zone C
Land Building
lise Land Use T�pe Square Assigned Special
Class Footage Tac
1 Residential Propem� < 1,�00 �13�0 per
Residential Unit
2 Residential Propert�� 1.�00— 2.200 �1,4>1 per
Residential Unit
3 Residential Propert�� > 2.200 ���649 per
Residential Unit
4 Non-Residential Propem� N/A �6,000 per Acre
On each Jul}� 1. commencing July 1, 2017. the Assigned Special Ta� for Developed
Propem shall be increased by t�i-o percent (2.00%) of the amount in effect in the prior
Fiscal Year.
B. Backup Special Tax for De�•eloped Properh�
When a Final Map or a condominium plan is recorded ���ithin Zone A. Zone B, or Zone C
the Backup Speciai Tax for Assessors Pazcels of Developed Property dassified as
Residential Propem� shall be determined as follo���s:
For each Assessor's Parcel of Residential Property or for each Assessors Parcel of
Undeveloped Property to be classified as Residential Property upon its de��elopment
�ti�ithin the Final Map area, the Backup Special Tax for Fiscal Year 2016-17 shall be the
rate per Lot calculated according to the following formula:
Resolution No. 2016-184
Page No. 16
Zone A
$27.�02 x A
B = ------------------------
L
Zone B
$29.057 a A
B = ------------------------
L
Zone C
$6,316 x A
B = ------------------------
L
The terms have the following meanings:
B= Backup Special Tax per Lot
A= Acreage classified ar to be classified as Residential Property in such Final
Map. The land area applicable to a Condominium shall be computed from
the Acreage of the Lot on which the Condominium is located, with the
Acreage for such Lot allocated equally among all of the Condominiums
located ar to be located on such Lot.
L = For a Final Map, the number of Lots which are classified or to be
classified as Residential ProperCy.
For each Assessors Parcel of Developed Property classified as Non-Residential Property
or for each Assessor's Parcel of Undeveloped Property to be classified as Non-
Residential Property within the Final Map area, the Backup Special Tax for Fiscal Year
2016-17 shall be determined by multiplying $27,502 for Zone A, $29,057 for Zone B and
$6,316 for Zone C by the total Acreage of any such Assessor's Pazcel.
Notwithstanding the foregoing, if Assessor's Parcels of Residential Property, Non-
Residential Property or Undeveloped Property for which the Backup Special Tax has
been determined are subsequently changed or modified by recordation of a new or
amended Final Map, then the Backup Special Tax applicable to such Assessor's Parcels
shall be recalculated to equal the total amount of Backup Special Tax that would have
been generated if such change did not take place.
Resolution No. 2016-18�
Paee ?�io. 17
On each Julv 1. commencing Juh� 1. 2017, the Backup Special Tax applicable to each
Assessors Pazcel of Tatable Propert�� shall be increased b} tu-o percent (2.00%) of the
amount in effect in the prior Fiscal Year.
C. Maximum Special Ta� for Developed Properh�
Each Fiscal Yeaz, the Ma�imum Special Ta� for an Assessor`s Pazcel of Developed
Propem� shall be the greater of the applicable Assigned Special Tax or Backup Special
Tax.
D. A7asimum Special Tax for Pro��isional Properh� aud Unde��eloped Properh�
The A4aximum Special Tax for Pro�isional Propem� and Undeveloped Property
commencing in Fiscal Year 2016-17 shall be $27,�02 per Acre for Zone A, 529,0�7 per
Acre for Zone B, and $6.316 per Acre for Zone C.
On each July ]. commencing July 1, 2017_ the Ma�imum Special Ta� for Pro��isional
Property and Undeveloped Propem shall be increased bv t���o percent (2.00%) of the
amount in effect in the prior Fiscal Year.
E. Multiple Land Use Classes
In some instances an Assessor`s Parcei of Developed Property ma�� contain more than
one Land Use Class. The Maximum Special Ta� that may be levied on such an
Assessor's Parcel shall onlv be levied on the Residential Propem� Land Use Class located
on such Assessor's Parcel.
F. Administrati��e Special Tax Reductio❑
Prior to the issuance of Bonds, the Assiened Special Ta�, Backup Special Ta�. and
Maximum Special Tax (collectivelti� the "Special Tax Rates") on Taxable Propert�� may
be reduced in accordance with. ar�d subject to the conditions set forth in this paragraph.
lipon the Cit�� s receipt of a �ti�ritten request from Master Developer and the CFD
AdminisVator. the Special Tax Rates on Taxable Propem may be reduced to a level
N�hich will provide not less than the sum of estimated Administrati�=e E�pense
Requirement and one hundred ten percent (110%) of the estimated debt service ��ith
respect to the amount of Bonds requested to be issued in such �Titten request If it is
reasonablv determined b�� the CFD Administrator that the total effective tax rate on
Residential Propem�, as determined in accordance with the Development Agreement.
esceeds the maximum level allo�i�ed in the De��elopment Agreement, the Special Ta�
Rates mav be reduced to the amount necessan� to satisfi� the maximum allo«�able
effective taa rate requirement on Residential Property with the r��ritten consent of Master
Developer, ��hich consent shall not be unreasonabl�� �vithheld. and the CFD
Administrator. It shall not be required that reductions amone each "Buildins Square
Footage" ranae of Residential Property be proportional. .Additionall��, the "CFD Public
Facilities Costs-` amount in Section 8 shall be reduced commensurate ��ith am reductions
Resolution No. 2016-184
Page No. 18
to the Special T� Rates pursuant to this paragraph, as reasonably determined by the CFD
Administrator. A certificate in substantially the form attacbed hereto as Exhibit "B" shall
be used for purposes of evidencing the required written consent and effectuating the
reduction to the Special Tax Rates. The reductions permitted pursuant to this paragraph
shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to
be recorded.
4. METHOD OF APPORTIONMENT
For each Fiscal Year, commencing Fiscal Year 2016-17, the CFD Administrator shall levy the
Special Tax on all Taxable Property in accordance with the following steps:
Step 1: The Special Tax shall be levied Proportionately on each Assessors Pazcel of
Developed Property at up to 100% of the applicable Assigned Special Tax to satisfy the
Special Tax Requirement;
Step 2: If additional monies are needed to satisfy the Special Tax Requirement afrer Step
1 has been completed, the Special Tax shall be levied Proporiionately on each Assessor's
Parcel of Undeveloped Property up to 100% of the Maximum Special Tax for
Undeveloped Property;
Step 3: If additiona] monies are needed to satisfy the Special Tax Requirement after the
first two steps have been completed, then the Special Tax amount determined in Step 1
shall be increased Proportionately on each Assessor's Parcel of Developed Property up to
100% of the Maximum Special Tax for Developed Property.
Sten 4: If additional monies are needed to satisfy the Special Tax Requirement after the
first three steps have been completed, then the Special Tax shall be levied Proportionately
on each Assessors Parcel of Provisional Property up to 100% of the Maximum Special
Tax for Provisional Property;
Notwithstanding the above, under no circumstances will the Special Tax levied in any Fiscal
Year against any Assessor's Parcel of Residential Property for which an occupancy permit for
private residential use has been issued be increased as a result of a delinquency or default in the
payment of the Special Tax applicable to any other Assessor's Parcel within IA1 by more than
ten percent (10%) above what would have been levied in the absence of such delinquencies or
defaults.
5. EXEMPTIONS �
The CFD Administrator shall classify as Exempt Property (i) Assessor's Parcels of Public
Property, (ii) Assessor's Parcels of Property Owner Association Property, (iii) Assessor's Parcels
which are used as places of N�orship and are exempt from ad valorem property taxes because thep
are owned by a religious organization, and (iv) Assessor's Parcels with public or utility
easements inaking impractical tl�eir utilization for other than the purposes set forth in the
easement, provided tl�at no such classification would reduce tl�e sum of all Taxable Property in
Resolution No. 2016-184
Paae No. 19
IA1 to less than 9.�3 Acres for Zone A. 12.67 Acres for Zone B, or 17.09 Acres for Zone C.
Assessor's Parcels ���hich cannot be dassified as Exempt Property because such classification
H�ould reduce the sum of all Taa:able Property in IA1 to less than 9.�3 Acres for Zone A, 12.67
Acres for Zone B. or 17.09 Acres for Zone C. shall be classified as Pro��isional Property and will
continue to be subject to the IA1 Special Ta�es accordinsl��. Ta� exempt status for the purpose
of this pazagraph w�ill be assigned by the CFD Administrator in the chronological order in ��hich
propert�� becomes elieible for dassification as Exempt Propem�.
If the use of an Assessors Parcel of Ezempt Propem- chanees so that such Assessors Pazcel is
no longer classified as one of the uses set forth in the first paraeraph of Section � above that
���ould make such Assessor`s Pazcel eligible to be classified as Exempt Property; such Assessor`s
Parcel shall cease to be classified as Exempt Property and shall be deemed to be Taaable
Propert��.
6. APPEALS
Any lando�+�ner ���ho pa��s the Special Tax and claims the amount of the Special Tax levied on his
or her Assessors Parcel is in error shall first consult ���ith the CFD Adminisvator reearding such
error not later than thim--six (36) months afrer first havine paid the first installment of the
Special Tax that is disputed. If follo���ina such consultation the CFD Administrator determines
that an error has occurred. then the CFD Adminisvator shal] tal:e anv of the follo���ine actions. in
order of priorit��. in order to correct the error: �
(i) Amend the Special Tak levy on the lando���ners Assessor`s Pazcel(s) for the
current Fiscal Yeaz prior to the payment date,
(ii) Require the CFD to reimburse the lando��mer for the amount of the o��erpa��ment
to the estent of a��ailable CFD funds. or
(iii) Grant a credit against. eliminate or reduce the fumre Special Taies on the
lando�tiner`s Assessor`s Parcel(s) in the amount of the overpayment.
If follo���ine such consultation and action b�� the CFD Administrator the lando�ti�ner believes such
error still esists, such person ma�� file a ���ritten notice of appeal ���ith the City Council. Upon the
receipt of such notice. the City Council or desienee may establish such procedures as deemed
necessary to undertal:e the re��ie�v of any such appeaL [f the City Council or desienee
determines an error still exists. the CFD Administrator shall take anv of the actions described as
(i), (ii) and (iii) above, in order of priorit��, in order to correct the error.
The Cirv Council or desienee thereof shall interpret this Rate and Method of Apportionment of
Special Ta� for purposes of clarif}�ine any ambieuities and make detem�inations relative to the
administration of the Special Ta� and am� lando��mer appeals. The decision of the City Council
or desienee shall be final and binding as to all persons.
Resolution No. 2016-184
Page No. 20
7. COLLECTION OF SPECIAL TAXES
Collection of the Annual Special Tax shall be made by the County in the same manner as
ordinary ad valorem property taxes are collected and the Annual Special Tax shall be subject to
the same penalties and the same lien priority in the case of delinquency as ad valorem taxes;
provided, however, that the City Council may provide for (i) other means of collecting the
Special Tax, including direct billings thereof to the property owners; and (ii)judicial foredosure
of delinquent Annual Special Taxes.
8. PREPAYMENT OF SPECIAL TAX OBLIGATION
A. Prepay�meut in Full
Propertv o�mers may prepay and permanently salisfy the Special Tax Obligation by a
cash settlement ��ith the City as permitted under Govemment Code Section 53344. The
following definitions apply to this Section 8:
"CFD Public Facilities Costs" means $12,550,000 or such lower number as (i) shall be
determined by the CFD Administrator as sufficient to acquire or construct the facilities to
be financed under the Act and financing program for IA1, or (ii) shall be determined by
the City Council concurrently with a covenaut that it will not issue any more Bonds
(except refunding bonds).
"Construction Fund" means the fund (regardless of its name) established pursuant to
the Fiscal Agent Agreement to hold funds; which are currenUy available for expenditure
to acquire or construct the facilities or pay fees authorized to be funded by CFD No. 16-I
for IA1.
"Future Facilities Costs" means the CFD Public Facilities Costs minus (i) costs
previously paid from the Construction Fund to acquire or construct the facilities, (ii)
monies currently on deposit in the Construction Fund, and (iii) monies currently on
deposit in an escrow or other designated fund that are expected to be available to finance
CFD Public Facilities Costs.
"Outstanding Bonds" means all Previously Issued Bonds, which remain outstandine as
of the first interest and/or principal payment date following the current Fiscal Year
excluding Bonds to be redeemed at a later date with proceeds of prior Special Tax
prepayments.
"Previously Issued Bonds" means all Bonds that have been issued prior to the date of
prepa}�ment.
The Special Tas Oblieation applicable to an Assessors Parcel of Developed Property, or
Undeveloped Propert�� for which a I3uilding Pennit has been issued may be prepaid and
the obligation to pay the Special Tas for such Assessor's Parcel permanently satisfied as
described herein; pro��ided that a prepayment may be made with respect to a particular
Resolution No. 2016-184
Page No. 21
Assessor`s Pazcel onlv if there are no delinquent Special Taxes with respect to such
Assessor's Pazcel at the time of prepa��ment. An oNmer of an Assessor's Parcel elieible to
prepay the Special Tax Oblieation shall pro��ide the CFD Administrator with written
notice of intent to prepay, and designate or identif}� the company or agency that �°ill be
acting as the escrow agent, if an}�. The CFD Administrator shall provide the oH�ner with a
statement of the Prepayment Amount for such Assessor`s Pazcel w�ithin thim- (30) da��s
of the request, and may charae a reasonable fee for pro�iding this service. Prepayment
must be made at least 60 da}�s prior to anv redemption date for the Bonds to be redeemed
with the proceeds of such prepaid Special rales, unless a shorter period is acceptable to
the Fiscal Aaent and the Ciri-.
The Prepa��ment Amount (defined belo���) shall be calculated for each applicable
Assessors Pazcel or group of Assessors Parcels as summarized below (capitalized terms
as defined belo��):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Prepa��ment Amount
plus Defeasance Amount
plus Prepa}�ment Administrati��e Fees and Expenses
less Resen�e Fund Credit
less Capitalized Interest Credit
7ota1: equals Prepayment Amount
As of the proposed date of prepa}�ment, the Prepa��ment Amount (defined in Step 14
below) shall be calculated as follows:
Step No.:
1. Confirm that no Special Taa delinquencies apply to such Assessor`s Parcel.
2. For Assessor's Parcels of Developed Property. determine the Maeimum
Special Tax. For Assessors Parcels of Unde��eloped Property for which a
Building Permit has been issued; compute the Matimum Special TaY for that
Assessor's Parcel as though it «-as already designated as Developed Propert��.
based upon the Building Permit which has aiready been issued for that
Assessor`s Pazcel.
3. Divide the Maiimum Special Ta� computed pursuant to paravraph 2 b�� the
total expected Ma�imum Special Ta� re��enue for IA1 assumine all Buildine
Permits ha��e been issued (build-out) «�ithin IA1, e�dudin_ am� Assessor's
Parcels for ���hich the Special Ta� Oblieation has been previousl�� prepaid.
4. A4ultiply the quotient computed pursuant to para�raph 3 6}� the Outstandin_
Bonds and round that number up to the nearest ��.000 increment to compute
Resolution No. 2016-184
Paee No. 22
the amount of Outstanding Bonds to be retired and prepaid for all applicable
Assessors Parcels (the "Bond Redemption AmounY').
�. Multipl�� the Bond Redemption Amount computed pursuant to paragraph 4 by
the applicable redemption premium (expressed as a percentage), if any, on the
Outstanding Bonds to be redeemed at the first available call date (the
"Redemption Premium").
6. Compute the Future Facilities Costs.
7. Multiply the quotient computed pursuant to paragraph 3 by the amount
determined pursuant to pazagraph 6 to coinpute the amount of Future
Facilities Costs to be prepaid (the"Future Facilities Prepayment Amount ').
8. Compute the amount needed to pay interest on the Bond Redemption Amount
from the first bond interest and/or principal payment date following the
current Fiscal Year until the expected redemption date for the Outstanding
Bonds which, depe�ding on the Fiscal Agent Agreement, may be as eazly as
the next interest payment date.
9. Compute the amount the CFD Administrator reasonably expects to derive
from the reinvestment of the Prepayment Amount less the Future Facilities
Prepayment Amount and the Prepayment Administrative Fees from the date of
prepayment until the redemption date for the Outstanding Bonds to be
redeemed with the prepayment.
10. Subtract the amount computed in paragraph 9 from the amount computed in
paragraph 8 (the "Defeasance AmounY').
11. Calculate the administrative fees and expenses of CFD No. 16-I for IAl,
including the costs of computation of the prepayment, the costs to invest the
prepayment proceeds, the costs of redeeming the Outstanding Bonds to be
redeemed with the prepayment, and the costs of recording any notices to
evidence the prepay�nent and the redemption (the "Prepayment Administrative
Fees").
12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the
reserve requirement (as defined in the Fiscal Agent Agreement) on the
prepayment calculation date, a reserve fund credit shall be calculated as a
reduction in the applicable reserve fund for the Outstanding Bonds to be
redeemed pursuant to the prepayment (the "Reserve Fund CrediY'). No
Reserve Fund Credit sl�all be granted if, afrer the Prepayment Amount is
calculated, reserve funds are below 100% of the reserve requirement after
taking into account such prepayment.
Resolution I��o. 2016-184
Pase No. 23
13. If anv capitalized interest for the Outstandine Bonds will not have been
e�pended at the time of the first interest and/or principal pa�ment folloN�ins
the current Fiscal Year. a capitalized interest credit shall be calculated by
multiph�ing the quotient computed pursuant to pazagraph 3 b�� the expected
balance in the capitalized interest fund afrer such first interest and/or principal
pa��ment (the "Capitalized Interest Credir').
14. The amount to prepa�� the Special Tax Oblieation is equal to the sum of the
amounts computed pursuant to paragraphs 4, �, 7, ]0. and ll. less the amounts
computed pursuant to paragraphs 12 and 13 (the "Prepa}�ment .Amounr').
1�. From the Prepayment Amount. the sum of the amounts computed pursuant to
pazagraphs 4, �, and 10, less the amounts computed pursuant to pazagraphs 12
and li shall be deposited into the appropriate fund as established under the
Fiscal Agent Aereement and be used to retire Outstanding Bonds or mal:e
Debt Service payments. The amount computed pursuant to paragraph 7 shall
be deposited into the Construction Fund. The amount computed pursuant to
pazagraph 11 shall be retained b� CFD No. 16-I.
The Prepayment Amount may be sufficient to redeem an amount other than a $�.000
increment of Bonds. In such cases, the increment above $�,000 or integral multiple
thereof ���ill be retained in the appropriate fund established under the Fiscal Aeent
Agreement to redeem Bonds to be used «�ith the next prepayment of Bonds. �
The CFD Administrator will confirm that all previousl�� levied Special Tates have been
paid in full. A'ith respect to any Assessor's Parcel for �ihich the Special Tax Obligation is
prepaid in full, once the CFD Administrator has confirmed that all previously le��ied
Special Taxes ha��e been paid, the City Council shall cause a suitable notice to be
recorded in compliance with the Act, to indicate the prepa��ment of the Special Tax
ObliQation and the release of the Special Tax lien on such Assessor's Parcel, and the
obligation of the o���ner of such Assessor's Parcel to pa�� the Special Tat shall cease.
Notwithstandine the foreeoing, no Special Ta� prepa��ment shall be allo«-ed unless the
aggreoate amount of Matimum Special Ta�es less the Administrative Expense
Requirement that ma�� be le��ied on Ta�able Propert��, respectively. afrer the proposed
prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal
Year.
B. Partial Prepa�•ment
The Special Tas on an Assessors Parcel of Developed Propert�� or Undeveloped Property
for ��hich a Buildine Permit has been issued mav be partiall�� prepaid. The amount of the
prepayment shall be calculated as in Section 8.A.; escept that a partial prepa}�ment shall
be calculated accordine to the follo��ine formula:
PP = (PE-A) � F+A
Resolution No. 20]6-184
Page No. 24
These terms have the following meaning:
PP =the partial prepayment
PE =the Prepayment Amount calculated according to Section 8.A
F = the percentage by whicb the owner of the Assessor's Parcel(s) is
partially prepaying the Special Tax Obligation
A =the Prepayment Administrative Fees and Expenses from Section 8.A
The owner of any Assessor's Parcel who desires such partial prepayment shall notify the
CFD Administrator of (i) such owner's intent to partially prepay the Special Tax
Obligation, (ii) the percentage by which the Special T� Obligation shall be prepaid, and
(iii) the company or agency that will be acting as the escrow agent, if any. The CFD
Administrator shall provide the owner with a statement of the amount required for the
partial prepayment of the Special Tax Obligation for an Assessor's Parcel within sixty
(60) days of the request and may charge a reasonable fee for providing this service.
With respect to any Assessor's Parcel that is partially prepaid, the Ciry shall (i) distribute
the funds remitted to it according to Section 8.A., and (ii) indicate in the records of CFD
No. 16-I for IA1 that there has been a partial prepayment of the Special Tax Obligation
and that a portion of the Special Tax with respect to such Assessor's Parcel, equal to the
outstanding percentage (1.00 - F) of the M�imum Special Tax, shall continue to be
levied on such Assessor's Parcel.
Notwithstanding the foregoing, no partial prepayment shall be allowed unless the
aggregate amount of Maximum Special Taxes less the Administrative Expense
Requirement that may be levied on Taxable Property, respectively, after the proposed
partial prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each
Fiscal Yeaz.
9. TERM OF SPECIAL TAX
The Special Taa shall be ]evied as long as necessary to meet the Special Tax Requirement for a
period not to exceed forty (40) Fiscal Years commencing with Fiscal Year 2016-17.
o I ' I o Resolution No. 2016-184
o � Page No. 25
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Resolution No. 2016-184
Paee No. 27
EXHIBIT B
CITY OF CHULA V1STA Ai�`D CFD NO. 16-I CERTIFICATE
l. Pursuant to Section 3F of the Rate and I�4ethod of Apportionment of Special Tax (the
"RMA"), the City of Chula Vista (the "Cin�') and Community Facilities District No. 16-I
of the Cit�- of Chula Vista ("CFD No. 16-I") hereby agree to a reduction in the Special
Taa for Developed Propem. Undeveloped Property. and/or Provisional Propem�:
(a) The information in the RMA relating to the Special Tax for De��eloped Propem�, Unde��eloped
Propem. and Pro��isional Propem� shall be modified as follows:
[insen Tab(e 1. 2, and/or 3 shoiring rerised Assigned Specia( Tar ra�es for Dereloped
Properh�, insert rei�ised Backup Special Tax rales for Dei�eloped Properq-bv Zone, aitd insert
change to A�ciximum Specia! TaY rates for Undeveloped Propert}-a�zd Proidsio�ml Properry bY
ZoneJ
(b) The CFD Public Facilities Costs in Section 8 shall be chansed to �
2. Special Tas rates for Ta�able Propem�ma}�onl��be modified prior to the issuance of Bonds.
3. Upon execution of the Certificate b��the Cit�� and CFD No. 16-I the Cih� shall cause an amended
Notice of Special Taz Lien for IA 1 to be recorded reflecting the modifications set forth herein.
Bv e�ecution hereof. the undersisned ackno���ledees. on behalf of the Cih� of Chula Vista and CFD t�o.
16-I. receipt of this Certificate and modification of the RMA as set forth in this Certificate.
CITY OF CHULA VISTA
Bv: Date:
CFD Administrator
COMMLTNITY FACILITIES DISTRICT NO. 16-I
OF THE CITY OF CHULA VISTA
Bv: Date:
Resolation No. 2016-184
Page No. 28
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 2
A Special Tax shall be le��ied on all Taxable Property within the boundazies of Improvement
Area No. 1 of Community Facilities District No. 16-I (Millenia) of the City of Chula Vista
("IA2") and collected each Fiscal Year commencing in Fiscal Year 2016/17, in an amount
determined by the CFD Administrator through the application of the procedures described
below. All of the real property within IA2. unless exempted by law or by the provisions hereof;
shall be taxed for the purposes, to the extent, and in the manner herein provided.
1. DEFINITIONS
The terms hereinafrer set forth have the following meanings:
"Acre" or "Acreage" means the land area of an Assessor's Parcel as shown on an Assessors
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area sho«m on
the applicable Final Map. An Acre means 43;560 square feet of land. If the preceding maps for a
]and area are not a��ailable; the Acreage of such land area shall be determined by the City
Engineer.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5
of Part 1 of Division 2 of Title 5 of the Govemment Code of the State of Califomia.
"Administrative Expense RequiremenY' means an annual amount equal to $75,000, or such
lesser amount as may be designated by written instruction from an authorized representative of
the City to the Fiscal Agent, to be allocated as the first priority of Special Taxes received each
Fiscal Year for the payment of Administrative Expenses.
"Administrative Expenses" means the followi�g actual or reasonably estimated costs related to
the administration of IA2 induding, but not limited to: the cosis oPpreparing and computing the
Annual Special Tax (whether by the City or designee thereof or both); the costs of collecting the
Special Taaes (whether by the City, the County or otherwise); tl�e costs of remitting the Special
Taxes to the Fiscal Agent; the costs of the Fiscal Agent (including its legal counsel) in the
discharge of the duties required of it under the Fiscal Agent Agreement the costs to the City,
CFD No. 16-I, or any designee thereof complying with arbitrage rebate requirements, including
without limitation rebate liability costs and periodic rebate calculations; the costs to the Ciry,
CFD No. ]6-1, or any designee thereof complying with disclosure or reporting requirements of
the City or CFD No. 16-1, associated with applicable federal aud State laws; the costs associated
with preparing Special Tax disclosure statements and responding to public inquiries regardi�g
tl�e Special Taaes; the costs to the City, CFD No. 16-1, or any designee thereof related to an
appeal of' the Special "1'aa; and the City's annual administration fees and third party expenses.
Administrative Expenses shall also indude amounts estimated or advanced by the City or CFD
No. 16-I for any other administrative purposes o1'CFD No. 1C-1, including attorney's fees and
other costs related to comi��encing and pursuin� any foreclosure of delinquent Special Taxes.
Resolution No. 2016-184
Paee I�o. 29
"Annual Special Tax" means the Special Tat actuallv levied in am� Fiscal Yeaz on an�
Assessor's Pazcel.
"Assessor" means the Assessor of the Counri� of San Dieeo.
"Assessor's Parcel" means a lot or parcel sho���n on an Assessois Parcel Map «�ith an assigned
Assessor's Parcel Number.
"Assessor's Parcel Map" means an official map of the Assessor designating parcels b��
Assessor's Parcel Number.
"Assessor's Parcel 1�umber" means the number assiened to an Assessor's Parcel b�� the Countv
for purposes of identification. �
"Assigned Special Tas" means the Special Ta� of that name described in Section 3.A belo���.
"Backup Special Tac" means the Special 7ax of that name described in Section 3.B belo���.
`Bonds" means am bonds or other debt of CFD No. 16-I issued or incurred for ]A2. ���hether in
one or more series. secured b�� the le��y of Special 7a�es.
"Building PermiP' means a building permit for construction of a Residential Unit or non-
residential structure ���ithin IA2 issued bv the Cih�.
`Building Square Footage" means all of the square footaee of li��ins area �vithin the perimeter
of a residential structure. not includine an�� carport. �valkwa�-, gazaee�o��erhane, or similaz area.
The determination of Buildine Square Footaee shall be made b�� the CFD Administrator by
reference to the Building Permit(s) issued for such Assessors Parcel andlor bv reference to
appropriate records kept b�� the Citv. Building Square Footage for a Residential Unit will be
based on the Buildine Permit(s) issued for such Residential Unit prior to it beine classified as
Occupied Residential Property, and shall not change as a result of additions or modifications
made to such Residential Unit after such classification as Occupied Residential Propert}�.
"Calendar Year" means the period commencing Januan� 1 oF any ��ear and endine the follo���ing
December 31.
"CFD Administrator" means an authorized representative of the City, or designee thereof.
responsible for determining the Special Tax Requirement. for preparing the Annual Special Ta�
roll and/or calculating the Backup Special Tas.
"CFD No. 16-P' means the Communitv Facilities District No. 16-I (Millenia) of the Cit�� of
Chula Vista.
"Ciri'" means the Cit�� of Chula Vista. Califomia.
Resolution No. 2016-184
Page No. 30
"City Council° means the City Council of the City acting as the legislative body of CFD No.
16-1 under the Act.
"Condominium" means a unit, whether attached or detached, meeting the statutory definition of
a condominium contained in the Califomia Civil Code Section 4285.
"County" means the County of San Diego, Califomia.
"Debt Service" means for each Fiscal Year, the total amount of principal and interest payable on
any Outstanding Bonds during the Calendar Year commencing on January 1 of such Fiscal Year.
"Developed Property" means for each Fiscal Year, all Taxable Property, exclusive of
Provisional Property, for which a Building Permit was issued prior to March 1 of the previous
Fiscal Year. An Assessors Parcel dassified as Developed Property but for which the Building
Permit that caused such Assessors Parcel to be dassified as Developed Property has been
cancelled and/or voided prior to the Fiscal Year for which Special Taxes are being levied shall be
redassified as Undeveloped Property, provided that the levy of the Annual Special Tax after
such reclassification shall not be less than l.l times the annual Debt Service less Administrative
Expenses on all Outstanding Bonds. If Bonds have not been issued, an Assessor`s Parcel
classified as Developed Property for which such a Building Permit has been cancelled and/or
voided shall be reclassified as Undeveloped Property.
"Development AgreemenY' means that certain Development Agreement by and between the
City of Chula Vista and McMillin Otay Ranch LLC adopted October 6, 2009 and recorded with
the County of San Diegds Recorder s office on October 27, 2009 as Document Number 2009-
0595116, as may be amended and/or supplemented from time to time.
"Exempt Property" means for each Fiscal Year, all Assessor's Parcels designated as being
exempt from Special Taxes pursuant to Section 5 below.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot
line adjustment, pursuant to the Subdivision Map Act (Califomia Government Code
Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil
Code 4285 that creates individual lots for which Building Permits may be issued without further
subdivision.
"Fiscal Year" means the period starting on July 1 and ending the following June 30.
"Fiscal Agent" means the fiscal agent; trustee; or paying agent under the Fiscal Agent
Agreement.
"Fiscal Agent Agreement" means the fiscal agent agreement, indenture. resolution or other
instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from
time to time, and an�� instrument replacing or supplementing tl�e same.
"IA2" means Impro��ement Area No. 2 of CPD No. 16-I.
Resolution No. 2016-184
Pase No. 31
"Land Use Class" means am of the classes listed in Table ]or Z under Section 3A below.
A'ote: Land Uses Class is not in reference to a properry's aoning designution.
"Lot(s)" means an indi��idual leeal lot created by a Final 1�4ap for which a buildine permit for
residential construction has been or could be issued. NotH�ithstandine the foreeoine�in the case
of an individual legal lot created by such a Final Map upon ti�hich Condominiums aze entitled to
be developed. the number of Lots allocable to such legal lot for purposes of calculatine the
Backup Special Ta�: applicable to such Fina] Map shall equal the number of Condominiums
which are permitted to be constructed on such legal lot as sho�tim on such Final Map.
"b�aster De��eloper" means SLF IV-Millenia, LLC or its successors or assienees as defined in
the Development Aareement.
"A7asimum Special Tas" means for each Assessors Pazcel, the maximum Special TaY,
determined in accordance ti�ith Sections 3.0 and 3.D belo���. �;�hich mav be le��ied in a eiven
Fiscal Yeaz on such Assessor s Parcel of Taxable Property. �
"Nou-Residential Propert�'" means all Assessor`s Parcels of Developed Property for «hich a
Buildine Permit has been issued for the purpose of constructins one or more non-residential units
or structures. �
"Occupied Resideutial Properh�" means all Assessor Parcels of Residential Propertv for which
title is held by an end user (homeo�mer).
"Outstandiug Bouds" means all Bonds N�hich aze deemed to be outstanding under the Fiscal
Agent Agreement.
"Prepa��ment Amount" means the amount required [o prepay the Special Tak Oblieation in full
for an Assessor s Pazcel as described in Section 8.A below. �
"Properh� Owner Association Properh�" means an�� Assessor's Pazcel within the boundaries
of IA2 o��med in fee b�� a propert�� o��ner association, indudine an�� master or sub-association.
"Proportionatel��" or "Proportionate" means for De��eloped Property, that the ratio of the
actual Special TaY lev� to the applicable Assigned Special Taa or Backup Special Tax is equal
for all Assessors Parcels of Developed Property. For Undeveloped Property; "Proportionateh�"
means that the ratio of the actual Special Tax le��� per Acre to the Maaimum Special Tax per
Acre is equal for all Assessor's Parcels of Unde��eloped Property. "Proportionateh�" ma}�
similarlv be applied to other cate�ories of Taxable Property as listed in Section 3 beloti�.
"Provisional Properh°" means al] Assessor's Parcels of Public Propem�, Propeny O��mer
Association Propem or propem� that ��-ould othen��ise be classified as Esempt Propert�� pursuant
to the pro��isions of Section �, but cannot be dassified as E�empt Propert�� because to do so
�+-ould reduce the Acreage of all Tasable Propert�� belo��� the required minimum Acreage as set
forth in Section �.
Resolution No. 2016-184
Page No. 32
"Public Property" means any property within the boundaries of IA2, which is owned by, or
irrevocably offered for dedication to the federal government, the State of Califomia, the County,
the City or any other public agency; provided however that any property owmed by a public
a�ency and leased to a private entity and subject to taxation under Section 53340.1 of the Act
shall be taxed and classified in accordance with its use.
"Residential Properh�" means all Assessor's Parcels of Developed Property for which a
Building Permit has been issued for the purpose of constructing one or more Residential Units.
"Residential UniY' means each separate residential dwelling unit that comprises an independent
facility capable of conveyance or rentaL separate from adjacent residential dwelling units.
"Special Tax" means any special tax le��ied within iA2 pursuant to the Act and this Rate and
Method of Apportionment of Special Tax.
"Special Tax Obligation" means the total obligation of an Assessor's Parcel of Taxable
Property to pa}�the Special Taa for the remaining life of IA2.
"Special Tax Requirement" means that amount required in any Fiscal Year to: (i) pay regularly
scheduled Debt Sen�ice on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding
Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding
Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish
any reserve funds for all Outstanding Bonds; (v) accumulate funds to pay directly for acquisition
or construction of facilities provided that the inclusion of such amount does not cause an increase
in the Special Tax to be levied on Undeveloped Property; and (vi) pay for reasonably anticipated
delinquent Special Taxes based on (a) the average delinquency rate for speciai taxes levied in the
previous Fiscal Yeaz in all community facilities districts within the portion of the City commonly
known as Otay Ranch for the first Fiscal Year in which Special Taxes are levied and (b) the
delinquency rate for Special Taxes levied in the previous Fiscal Year within IA2 for all
subsequent Fiscal Years in which Special Taaces are levied; less (vii) a credit for funds available
to reduce the Annual Special Tax levy, as determined by the CFD Administrator pursuant ro the
Fiscal Agent Agreement.
"State" means the State of California.
"Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD, which
are not exempt from the levy of the Special Tax pursuant to law or Section 5 below.
"Undeveloped Propert��" means, for each Fiscal Year, all Taxable Property not classified as
Developed Property or Provisional Property.
"Zone A" means the specifc geographic area designated as such within [A2 and as depicted in
Eahibit A attacl�ed hereto.
Resolution No. 2016-18�
Paee No. 33
"Zone B" means the specific eeographic area designated as such w�ithin IA2 and as depicted in
E�ibit A attached hereto.
2. LAND USE CLASSIFICATION
Each Fiscal Year, beginnina with Fiscal Yeaz 2016-17, each Assessors Parcel k�ithin IA2 shall
be classified as TaYable Propert}� or Exempt Property. In addition. all Taxable Propem� shall
further be classified as Developed Property, Unde�eloped Propert�� or Provisional Propem�, and
all such Taxable Propem� shall be subject to the Ie�1� of Special Taaes in accordance �ith this
Rate and Method of Apportionment of Special Ta� determined pursuant to Sections 3 and 4
below. Furthermore, each Assessors Parcel of De��eloped Propem shall be classified according
to its applicable Land Use Class based on its Building Squaze Footaee.
For Assessor's Pazcels of Non-Residential Property developed with Condominiums (e.e.; office
or industrial condos), the Acreage applicable to each such Condominium for purposes of levying
Special Taxes shall be computed from the Acreage of the leeal lot created bv the Final Map upon
��-hich such Condominiums are entitled to be developed, with the Acreage of such lot allocated to
each Condominium on a pro-rata basis usin� the building square footaee of such Condominium
relative to the total building squaze footage of all Condominiums entitled to be developed on
such lot. The determination of buildina square footaee for each non-residential Condominium
shall be made by reference to the applicable Building Permit, and to the e�tent a Building Permit
has not been issued for all Condominiums to be located on the applicable leeal lot, the buildine
square footage attributable to am- such Condominiums shall be determined from the recorded
condominium plan, or applicable site plan, plot plan. or other appropriate records kept by the
City as reasonablti- determined b}� the CFD Administrator. In the event the Cit}' tal:es oti�nership
of a Condominium ���ithin IA2 and such propert�� in all other respects meets the definition of
Public Propertti- as set forth in Section 1, such property shall be exempt from Special Taxes
pursuant to Section 5.
3. SPECIAL TAX RATES
A. Assigned Special Tax for Developed Properh�
The Assigned Special Tax applicable to an Assessor`s Parcel classified as De��eloped
Property commencine Fiscal Year 2016-17 shall be determined pursuant to Table 1 or 2
below, as applicable.
Resolution No. 2016-184
Pase No. 34
Table 1
Assigned Special Tax Rates for
Developed Property within Zone A
Land Building
Use Land Use T��pe Square Assigned Special
Class Footage Tax
1 Residential Property < 1,450 $�,360 per
— Residential Unit
2 Residential Propert}� >1,450 $�,628 per
Residential Unit
3 Non-Residential Property N/A $6;000 per Acre
Table 2
Assigned Special Tax Rates for
Developed Property within Zone B
Gand Building
Use Land Use Type Square Assigned Special
Foota e Tax
Class g
1 Residential Property < 1,450 $1,360 per
— Residential Unit
2 Residential Property >1,450 $1,628 per
Residential Unit
3 Non-Residential Property N/A $6,000 per Acre
On each July 1, eommencing July 1, 2017, the Assigned Special Tax for Developed
Property shall be increased by two percent (2.00%) of the amount in effect in the prior
Fiscal Year.
B. Backup Special Taa for Developed Property
When a Pinal Map or a condominium plan is recorded �vithin Zone A or Zone B the
Backup Special Tax for Assessors Parcels of Developed Property dassified as
Residential Property shall be determined as follows:
For each Assessors Parcel of Residential Pro}�erty or for each Assessor's Parcel of
Undeveloped Properq� to be classitied as Residential Properry upon its development
Resolution No. 2016-18�
Paoe No. 3�
���thin the Final Map area� the Backup Special Ta� for Fiscal Yeaz 2016-17 shall be the
rate per Lot calculated according to the folloN�ine formula:
Zone A
�46.3�8 x .A
B = ------------------------
L
Zone B
�6.316 x A
B = ------------------------
L
The terms have the followina meanines:
B = Backup Special Tax per Lot
A ° Acreage dassified or to be classified as Residential Propert�� in such Final
A4ap. The land area applicable to a Condominium shall be computed from
the Acreaee of the Lot on ��-hich the Condominium is located. �aith the
Acreaee for such Lot allocated equall�� among all of the Condominiums
located or to be located on such Lot.
L = For a Final A4ap, the number of Lots ��fiich are classified or to be
classified as Residential Propert��.
For each Assessors Parcel of Developed Property classified as NomResidential Propert�-
or for each Assessor`s Parcel of Unde��eloped Property to be classified as Non-
Residential Propertv ��ithin the Final Map area, the Backup Special Ta� for Fiscal Year
2016-17 shall be determined b}� multipl��ing $46,3�8 for Zone A and $6,316 for Zone B
b��the total Acreaee of anv such Assessors Parcel.
Noh��ithstandins the foreeoing, if Assessors Parcels of Residential Property. Non-
Residential Property or Undeveloped Propert�� for which the Backup Special Tac has
been determined are subsequentl�� chaneed or modified b}� recordation of a ne��� or
amended Final Map, then the Backup Special Taa applicable to such Assessor's Parcels
shall be recalculated to equal the total amount of Backup Special Tat that would ha��e
been generated if such chanee did not tal:e place.
On each Jul�� 1, commencine Jul}� 1. 2017. the Backup Special Ta� applicable to each
Assessors Parcel of Taxable Propert�� shall be increased b}� n+�o percent (2.00%) of the
amount in effect in the prior Fiscal Year.
C. Dlaximum Special Ta� for Developed Properh�
Resolution No. 2016-184
Page No. 36
Each Fiscal Year, the Maximum Special Ta� for an Assessor's Parcel of Developed
Property shall be the greater of the applicable Assi�ned Special Tax or Backup Special
Tax.
D. Maximum Special Tas for Provisional Property and Undeveloped Property
The Maximum Special Tax for Provisional Property and Undeveloped Property
commencing in Fiscal Year 2016-17 shall be $46,358 per Acre for Zone A and $6,316
per Acre for Zone B.
On each July l; commencing July 1, 2017, the Maximum Special Tax for Provisional
Property and Undeveloped Property shall be increased by two percent (2.00%) of the
amount in effect in the prior Fiscal Yeaz.
E. Multiple Land Use Classes
In some instances an Assessor's Parcel of Developed Property may contain more than
one Land Use Class. The Maximum Special Tax that may be levied on such an
Assessor's Parcel shall only be levied on the Residential Property Land Use Class located
on such Assessor's Parcel.
F. Administrative Special Tax Reduction
Prior to the issuance of Bonds, the Assigned Special Tax, Backup Special Tax, and
Maximum Special Tax (collectively the "Special Tax Rates") on Taxable ProperCy may
be reduced in accordance with, and subject to the conditions set forth in this paragraph.
Upon the City's receipt of a written request from Master Developer and the CFD
Administrator, the Special Tax Rates on Taxable Property may be reduced to a level
which will provide not less than the sum of estimated Administrative Expense
Requirement and one hundred ten percent (110%) of the estimated debt service with
respect to the amount of Bonds requested to be issued in such written request. If it is
reasonably determined by the CFD Administrator that the total effective tax rate on
Residential Property, as determined in accordance with the Development Agreement,
exceeds the maximum level allowed in the Development Agreement, the Special Tax
Rates may be reduced to the amount necessary to satisfy the maximum allowable
effective tax rate requirement on Residential Property with the written consent of Master
Developer, which consent shall not be unreasonably withheld, and the CFD
Administrator. It shall not be required that reductions among each `Building Square
Footage" range of Residential Property be proportional. Additionally, the "CFD Public
Facilities Costs ' amount in Section 8 shall be reduced commensurate with any reductions
to the Special Tax Rates pursuant to this paragraph, as reasonably determined by the CFD
Administrator. A certificate in substantially the fonn attached hereto as Exhibit "B" shall
be used for purposes of evidencing the required written consent and effectuating the
reduction to the Special Tax Rates. Tl�e reductions permitted pursuant to this paragraph
shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to
be recorded.
Resolution No. 2016-184
Paee No. 37
4. METHOD OF APPORTIONMENT
For each Fiscal Yeaz, commencing Fiscal Year 2016-17, the CFD Administrator shall ]e��� the
Special Ta�: on all Taaable Propem� in accordance ���ith the follo�vina steps:
Step 1: The Special Ta� shall be levied Proportionatel�� on each Assessor's Pazcel of
Developed Propert�� at up to 100% of the applicable Assigned Special Tas to satisfi� the
Special Ta� Requirement;
St¢p 2: If additional monies are needed to satisfy the Special Ta� Requirement afrer Step
1 has been completed. the Special Tax shall be levied Proportionately on each Assessor's
Pazcel of Undeveloped Property up to 100% of the �4asimum Special Tat for
Undeveloped Propert��_
Step 3: If additional monies are needed to satisfi� the Special Ta� Requirement afrer the
first nvo steps have been completed, then the Special Tac amount determined in Step 1
shall be increased Proportionately on each Assessor's Parcel of Developed Propert�� up to
100% of the n4a�imum Special Tak for Developed Propem�.
Step 4: If additional monies are needed to satisfy the Special Tax Requirement afrer the
first three steps have been completed, then the Special Tax shall be le��ied Proportionateh
on each Assessors Pazcel of Pro��isional Property up to ]00% of the Masimum Special
Tax for Provisional Propem�;
Non�-ithstanding the abo��e, under no circumstances ���ill the Special Tax le��ied in an}� Fiscal
Year aQainst am� Assessor`s Parcel of Residential Property for �rhich an occupancy permit for
private residential use has been issued be increased as a result of a delinquenc�� or default in the
payment of the Special Tax applicable to any other Assessor`s Parcel ���ithin IA2 by more than
ten percent (]0%) abo��e what ���ould have been levied in the absence of such delinquencies or
defaults.
5. EXENIPTIONS
The CFD Adminisvator shall classifi� as Esempt Property (i) Assessor's Parcels of Public
Property, (ii) Assessor's Parcels of Property Owmer Association Property, (iii) Assessor's Parcels
�i-hich are used as places of worship and are esempt from ad valorem property ta�:es because the}�
are o���ned b}� a religious organization, and (iv) Assessor's Parcels ���ith public or utilitv
easements making impractical their utilization for other than the purposes set forth in the
easement, provided that no such dassification ���ould reduce the sum oF all Taxable Propeny in
IA2 to less than 14.89 Acres for Zone A or 7.92 Acres for Zone B. Assessors Parcels n-hich
cannot be classified as E�empt Propert.� because such classification ���ould reduce the sum of all
Tasable Propem� in [A2 to less than 14.89 Acres for Zone A or 7.92 Acres for Zone B shall be
classified as Provisional Property and �vill continue to be subject to the IA2 Special Ta�es
accordingl��. Ta� e�empt status for the purpose of this paragraph ���ill be assianed bv the CFD
Administrator in the chronoloeical order in ���hich propem� becomes eligible for classification as
E�empt Propert��.
Resolution No. 2016-184
Page No. 38
If the use of an Assessors Parcel of Exempt Property changes so that such Assessors Pazcel is
no longer classified as one of the uses set forth in the first paragraph of Section 5 above that
would make such Assessor`s Parcel eligible to be classified as Exempt Property, such Assessor's
Parcel shall cease to be dassified as Exempt Property and shall be deemed to be Taaable
Propert��.
6. APPEALS
Any landoti�ner ti�ho pays the Special Tax and claims the amount of the Special Tax levied on his
or her Assessor's Parcel is in error shall first consult N�ith the CFD Administrator regarding such
error not later than thirty-six (36) months afier first having paid the first installment of the
Special Tax that is disputed. If following such consultation the CFD Administrator determines
that an error has occurred, then the CFD Administrator shall take any of the following actions, in
order of priority, in order to correct the error:
(iv) Amend the Special Tax levy on the landowner's Assessor's Parcel(s) for the
current Fiscal Year prior to the payment date,
(v) Require the CFD to reimburse the landowner for the amount of the overpayment
to the extent of available CFD funds, or
(vi) Grant a credit against, eliminate ar reduce the future Special Taxes on the
landowner's Assessor's Parcel(s) in the amount of the overpayment.
If following such consultation and action by the CFD Administrator the landowner believes such
enor still exists, such person may file a written notice oPappea] with the City Council. Upon the
receipt of such notice; the City Council or designee may establish such procedures as deemed
necessary to undertake the review of any such appeaL If the City Council or designee
determines an error still exists, the CFD Administrator shall take any of the actions described as
(i), (ii) and (iii) above, in order of priority, in order to correct the error.
The City Council or designee thereof shall interpret this Rate and Method of Apportionment of
Special Tax for purposes of darif��ing any ambiguities and make determinations relative to the
administration of the Special Taac and any landowner appeals. The decision of the City Council
or designee shall be final and binding as to all persons.
7. COLLECTION OF SPECIAL TAXES
Collection of the Annual Special Tax shall be made by the County in the same manner as
ordinary ad valorem property taxes are collected and the Annual Special Tax shall be subject to
the same penalties and the same lien priority in the case of delinquency as ad valorem taxes;
provided, howe��er. that the City Council may provide for (i) other means of collecting the
Special Ta�, including direct billings thereof to the properiy owners; and (ii)judicial foreclosure
of delinquent Annual Special Taxes.
Resolution I`TO. 2016-184
Pa�e No. 39
8. PREPAYMENT OF SPECIAL TAX OBLIGATION
C. Prepayment iu Full
Property oNmers may prepay and permanentiv satisfi� the Special Tax ObliQation bv a
cash settlement with the Citv as permitted under Go��emment Code Section �3344. The
folloN�ing definitions apply to this Section 8:
"CFD Public Facilities Costs" means �12.900.000 or such lower number as (i) shall be
determined b�� the CFD Administrator as sufficient to acquire or construct the facilities to
be financed under the Act and financine program for IA2, or (ii) shall be determined bv
the Citv Council concurrentiv ��ith a covenant that it ���ill not issue anv more Bonds
(e�cept refundine bonds).
"Construction Fund" means the fund (reeardless of its name) established pursuant to
the Fiscal Agent A�reement to hold funds. ���hich are currenth� available for expenditure
to acquire or construct the facilities or pay fees authorized to be funded bv CFD No. 16-I
for IA2.
"Future Facilities Costs" means the CFD Public Facilities Costs minus (i) costs
pre��iousl�- paid from the Construction Fund to acquire or construct the facilities. (ii)
monies currentl�� on deposit in the Construction Fund. and (iii) monies currently on
deposit in an escro�i� or other desi�nated fund that are espected to be available to finance
CFD Public Facilities Costs.
"Outstanding Bonds" means all Previousl}• Issued Bonds. ��hich remain outstanding as "
of the first interest and/or principal pa�ment date follo�ving the current Fiscal Yeaz
exdudina Bonds to be redeemed at a later date ���ith proceeds of prior Special Tat
prepavments.
"Pre��iouslp Issued Bonds" means all Bonds that ha��e been issued prior to the date of
prepayment.
The Special Tat Obligation applicable to an Assessor`s Parcel of Developed Propert��, or
Undeveloped Propert�� for ���hich a Buildine Permit has been issued mav be prepaid and
the obligation to pay the Special Tax for such Assessor's Pazcel permanently satisfied as
described herein. provided that a prepa��ment mav be made ti�ith respect to a particulaz
Assessor`s Parcel onl}� if there are no delinquent Special Tases ��ith respect to such
Assessor's Parcel at the time of prepa��ment An on�ner of an Assessors Parcel eligible to
prepa�� the Special Tas Oblisation shall pro�ide the CFD Administrator �ti�ith ���ritten
notice of intent to prepa��. and desianate or identify the compan�� or aeencv that ��ill be
acting as the escro�v agent: if anv. The CFD .Administrator shall pro��ide the o��ner ��ith a
statement of the Prepa�ment Amount for such Assessors Parcel ��ithin thim� (30) days
of the request. and ma�� char�e a reasonable fee for pro�idine this sen�ice. Prepayment
must be made at least 60 da��s prior to anr redemption date for the Bonds to be redeemed
Resolution No. 2016-184
Page No. 40
with the proceeds of such prepaid Special Taxes, unless a shorter period is acceptable to
the Fiscal Agent and the Ciry.
The Prepayment Amount (defined below) shall be calculated for each applicable
Assessor's Parcel or group of Assessor's Parcels as summazized below (capitalized terms
as defined below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Prepayment Amount
plus Defeasance Amount
plus Prepayment Administrative Fees and Expenses
less Reserve Fund Credit
less Capitalized lnterest Credit
Total: equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined in Step 14
below) shall be calculated as follows:
Step No.:
16. Confirm that no Special Tax delinquencies apply to such Assessor s Parcel.
17. For Assessor's Parcels of Developed Property, determine the Maximum
, Special Tax. For Assessor's Parcels of Undeveloped Property for which a
Building Permit has been issued, compute the Maximum Special Tax for that
Assessors Parcel as though it was already designated as Developed Property,
based upon the Building Permit which has already been issued for that
Assessor's Parcel.
18. Divide the Maximum Special Tax computed pursuant to paragraph 2 by the
total expected Maximum Special Tax revenue for IA2 assuming all Building
Permits have been issued (build-out) within IA2, excluding any Assessor's
Parcels for which the Special Tax Obligation has been previously prepaid.
19. Multiply the quotient computed pursuant to paragraph 3 by the Outstanding
Bonds and round that number up to the nearest $5,000 increment to compute
the amount of Outstanding Bonds to be retired and prepaid for all applicable
Assessor s Parcels (the`Bond Redemption Amount").
20. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by
the applicable redemption premium (expressed as a percentage), if any, on the
Outstanding Bonds to be redeemed at the first available call date (the
"Redemption Premium").
21. Compute tl�e Future Facilities Costs.
Resolution No. 2016-184
Paee No. 41
22. Multipl�� the quotient computed pursuant to paragraph 3 bv the amount
determined pursuant to paraeraph 6 to compute the amount of Future
Facilities Costs to be prepaid (the `Future Facilities Prepa��ment Amounr`).
23. Compute the amount needed to pay interest on the Bond Redemption Amount
from the first bond interest and/or principal pa�-ment date follow�ine the
current Fiscal Year until the expected redemption date for the Outstandine
Bonds ��hich, dependine on the Fiscal Agent Aereement, may be as earl} as
the next interest pay7nent date.
24. Compute the amount the CFD Administrator reasonablv expects to dem e
from the reinvestment of the Prepa��ment Amount less the Future Facilities
Prepa�Tnent Amount and the Prepayment Administrative Fees from the date of
prepa��ment until the redemption date for the Outstandine Bonds to be
redeemed ��ith the prepayment.
2�. Subvact the amount computed in pazagraph 9 from the amount computed in
paragraph 8 (the "Defeasance Amount ').
26. Calculate the administrative fees and eapenses of CFD No. 16-I for IA2.
including the costs of computation of the prepa}�ment, the costs to invest the
prepa��ment proceeds, the costs of redeeming the Outstandine Bonds to be
redeemed with the prepa}ment, and the costs of recording any notices to
evidence the prepati�ment and the redemption (the "Prepa}�ment Administrati��e
Fees").
27. If reserve funds for the Outstandine Bonds. if anv, are at or abo��e ]00% of the
reserve requirement (as defined yin the Fiscal Aeent Aareement) on the
prepayment calculation date, a resen�e fund credit shall be calculated as a
reduction in the applicable resen�e fund for the Outstandine Bonds to be
redeemed pursuant to the prepavment (the "Reserve Fund Credit"). No
Resen�e Fund Credit shall be granted if, afrer the Prepayment Amount is
calculated, reserve funds are belo��� 100% of the reserve requirement afrer
takine into account such prepa��ment.
28. If an}' capitalized interest for the Outstandina Bonds will not haee been
expended at the time of the first interest and/or principal pa��ment follo«�ina
the current Fiscal Year, a capitalized interest credit shall be calculated b��
multipl��ing the quotient computed pursuant to paraeraph 3 by the expected
balance in the capitalized interest fund afrer such first interest and/or principal
pati�ment (the "Capitalized Interest Credit�`).
29. The amount to prepa�� the Special Taz Obligation is equal to the sum of the
amounts computed pursuant to paraRraphs 4. �, 7. 10, and 1 l, less the amounts
computed pursuant to para�raphs 12 and li (the "Prepa�ment Amount").
Resolution No. 2016-184
Page No. 42
30. From the Prepayment Amount, the sum of the amounts computed pursuant to
pazagraphs 4, 5, and 10, ]ess the amounts computed pursuant to paragraphs 12
and 13 shall be deposited into the appropriate fund as established under the
Fiscal Agent Agreement and be used to retire Outstanding Bonds or make
Debt Service payments. The amount computed pwsuant to paragraph 7 shall
be deposited into the Construction Fund. The amount computed parsuant to
paragraph ll shall be retained by CFD No. 16-I.
The Prepayment Amount may be sufficient to redeem an amount other than a $5,000
increment of Bonds. In such cases, the increment above $5,000 or integral multiple
thereof will be retained in the appropriate fund established under the Fiscal Agent
Agreement to redeem Bonds to be used with the next prepayment of Bonds.
The CFD Administrator will confirm that all previously levied Special Taxes have been
paid in full. With respect to any Assessor's Parcel for which the Special Tax Obligation is
prepaid in full, once the CFD Administrator has confirmed that all previously levied
Special Taxes have been paid, the City Council shall cause a suitable notice to be
recorded in compliance with the Act, to indicate the prepayment of the Special Tax
Obligarion and the release of the Special Tax lien on such Assessor's Parcel, and the
obligation of the owner of such Assessor's Parcel to pay the Special Tax shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the
aggregate amount of Maximum Special Taxes less the Administrative Expense
Requirement that may be levied on Taxable Property, respectively, after the proposed
prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal
Year.
D. Partial Prepayment �
The Special Tax on an Assessor's Parcel of Developed Property or Undeveloped Property
for which a Building Permit has been issued may be partially prepaid. The amount of the
prepayment shall be calculated as in Section 8.A.; except that a partial prepayment shall
be calculated according to the following formula:
PP =(PE-A) x F+A
These terms have the following meaning:
PP=the partial prepayment
PE=the Prepayment Amount calculated according to Section 8.A
F =the percentage by which the owner of the Assessor's Parcel(s) is
partially prepaying the Special Tax Obligation
A=the Prepayment Administrative Fees and Expenses from Section 8.A
"Che oN�ner of a��y Assessor's Parcel who desires sucl� partial prepayment shall notify the
CFD Ad�uinistrator of (i) sucl� owner's intent to partially prepay the Special Tax
Resolution No. 2016-184
Page No. 43
Oblieation (ii) the percentage bv ��hich the Special Tax Obli2ation shall be prepaid, and
(iii) the compan�� or agenc� that will be actine as the escroti aeent, if anv. The CFD
Administrator shall provide the ow�er with a statement of the amount required for the
partial prepa��ment of the Special Tax Obligation for an Assessors Parcel within sixty
(60) days of the request and may charee a reasonable fee for pro��idine this sen ice.
V�'ith respect to any Assessors Parcel that is partially prepaid, the Cih� shall (i) distribute
the funds remitted to it according to Section 8.A., and (ii) indicate in the records of CFD
No. 16-I for IA2 that there has been a partial prepavment of the Special Ta� Obligation
and that a portion of the Special Tax N�ith respect to such Assessor's Parcel, equal to the
outstandine percentage (1.00 - F) of the Ma�imum Special Ta�, shall continue to be
levied on such Assessors Pazcel.
Nonti�ithstanding the foreeoing, no partial prepayment shall be allo���ed unless the
ageregate amount of blaximum Special Taxes less the Adminisvati��e Expense
Requirement that may be levied on Taxable Property. respecti��ely. afrer the proposed
partial prepa�ment is at least 1.1 times the Debt Sen ice on all Outstanding Bonds in each
Fiscal Year.
9. TERA1 OF SPECIAL TAX
The Special Tax shall be le��ied as lone as necessarv to meet the Specia] 7ax Requirement for a
period not to esceed fom (40) Fiscal Years commencino with Fiscal Year 2016-17.
Resolution No. 2�16-184' � i '� i
Paqe No. 44 Z � I � : �° �
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Resolution No. 2016-184
Page No. 46
EXHIBIT B
CITY OF CHULA VISTA AND CFD NO. 16-I CERTIFICATE
1. Pursuant to Section 3F of the Rate and Method of Apportionment of Special Tax (the
"RMA"), the City of Chula Vista (the "City�') and Community Facilities District No. 16-I of the
City of Chula Vista (`CFD No. 16-I") hereby agree to a reduction in the Special Tax for ��
Developed Property, Undeveloped Property, and/or Provisional Property: •
(c) The information in the RMA relating to the Special Taa for Developed Property, Undeveloped
Propert��, and Pro��isional Property shall be modified as follows:
�i�uert Table 1 und/or?slioiring rerised Assig»ed Speciul Tax rates for Deneloped Properh�,
i�rsert revised Backup Sf�ecral Tax rates for Deneloped Properry by Zone, a�td insert chui�ge�o
Mcuinrum Special Tas rules for Urvdeveloped Pro��erry ar�d Provisior�al Properry by ZoneJ
(d) The CFD Public Facilities Costs in Section 8 shall be changed to $ �
4. Special Tax rates for Taaable Property may only be modified prior to the issuance of Bonds.
5. Upon esecution of the Certificate by the City and CFD No. 16-I the City shall cause an amended
Notice of Special Tas Lien for IA2 to be recorded reflecting the modifications set Torth herein.
By eaecution hereof, the undersi�ned acknowledges, on behalf of the City of Chula Vista and CFD No.
16-1, receip[of this Certificate and modification of the RMA as set forth in this Certificate.
CITY OF CHULA VISTA
By: Date:
CFD Administrator
COMMUNITY FACILITIES DISTRICT NO. 16-I
OF THE CITY OF CHULA VISTA ,
By: Date: