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HomeMy WebLinkAboutOrd 2003-2896 ORDINANCE NO. 2896 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 08-I (OTAY RANCH VILLAGE SIX) AUTHORIZING THE LEVY OF A SPECIAL TAX IN SUCH COMMUNITY FACILITIES DISTRICT WHEREAS, the City Council of the City of Chula Vista, California (the "City Council"), has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors authorizing the levy of special taxes in a community facilities district, all as authorized pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1. Division 2, Title 5 of the Government Code of the State of California (the "Act") and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community Facilities District Law"). This Community Facilities District is designated as Community Facilities District No. 08-I (Otay Ranch Village Six) (the "District"). The City Council of the City of Chula Vista, California, acting as the legislative body of Community Facilities District No. 08-I (Otay Ranch Village Six), does hereby ordain as follows: SECTION 1. This City Council does, by the passage of this ordinance, authorize the levy of special taxes on taxable properties located in the District pursuant to the Rate and Method of Apportionment of Special Taxes as set forth in Exhibit "A" attached hereto and incorporated herein by this reference (the "Rate and Method"). SECTION 2. This City Council, acting as the legislative body of the District, is hereby further authorized, by resolution, to annually determine the special tax to be levied within the District for the then current tax year or future tax years; provided, however, the special tax to be levied shall not exceed the maximum special tax authorized to be levied pursuant to the Rate and Method. SECTION 3. The special taxes herein authorized to be levied, 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. SECTION 4. The special taxes authorized to be levied shall be secured by the lien imposed pursuant to Sections 3114.5 and 3115.5 of the Streets and Highways Code of the State of California, which lien shall be a continuing lien and shall secure each levy of the special tax. The lien of the special tax shall continue in force and effect until the special tax obligation is prepaid, permanentiy satisfied and canceled in accordance with Section 53344 of the Government Code of the State of California or until the special tax ceases to be levied by the City Council in the manner provided in Section 53330.5 of said Government Code. Ordinance 2896 Page 2 SECTION 5. This ordinance shall be effective thirty (30) days after its adoption. Within fifteen (15) days after its adoption, the City Clerk shall cause this ordinance to be published in a newspaper of general circulation in the City pursuant to the provisions of Government Code Section 36933. Presented by Approved as to form by C iff, Sffi L. Swanson Engineering Director PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 4th day of February, 2003, by the following vote: AYES: Councilmembers: Davis, Rindone, Salas, McCann, and Padilla NAYS: Councilmembers: None ABSENT: Councilmembers: None ATTEST: Susan Bigelow, City Clerk ~' STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITY OF CHULA VISTA ) I, Susan Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing Ordinance No. 2896 had its first reading at a regular meeting held on the 28th day of January, 2003 and its second reading and adoption at a regular meeting of said City Council held on the 4th day of February, 2003. Executed this 4th day of February, 2003. Susan Bige~ow, uity Cler EXHIBIT A RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMIVIUNITY FACILITIES DISTRICT NO. 08-I, (OTAY RANCH VILLAGE SIX) EXHIBIT A RATE AND METHOD OF APPORTIONMENT FOR - CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 08-I (Otay Ranch Village Six) A Special Tax as hereinafter defined shall be levied on each Assessor's Parcel of Taxable Property within the City of Chula Vista Community Facilities District No. 08-I (Otay Ranch Village Six) collected each Fiscal Year commencing in Fiscal Year 2003-2004 in an amount determined by the City Council through thc application of the appropriate Special Tax for "Developed Property", "Undeveloped Property", and "Provisional Undeveloped Property" as described below. All of the Taxable Property in CFD-08-I, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to thc extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meaning: "'A' Map" shall mean a master final subdivision or parcel map, filed in accordance with the Subdivision Map Act and the Chula Vista Municipal Code, which subdivides the land or a portion thereof shown on a tentative map into "super block" lots corresponding to units or phasing of a combination of units as shown on such tentative map and which may 'further show open space lot dedications, backbone street dedications and utility easements - required to serve such "super block" lots. "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 Subdivision Map, parcel map, condominium plan, record of survey, or other recorded document creating or describing the land area. If the preceding maps for a land area are not available, 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, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Fees and Expenses" means the actual or reasonably estimated costs directly related to the administration of CFD-08-I including, but not limited to, the following: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County, the City, or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD-08-I, or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD-08-I, or any designee thereof of providing continuing disclosure; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD-08-I, or any designee thereof related to any appeal of the levy or application of the Special Tax; and the City of Chula Vista 11-25-02 Community Facilities District No. 08-1 Otay Ranch Village Six Page 1 costs associated with the release of funds from an escrow account, if any. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD-08-I, for any other administrative purposes of CFD-08-I, including, but not limited to attorney's fees and other costs related to commencing and pursuing to completion any foreclosure on an Assessor's Parcel with delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Class of Developed Property as determined in accordance with Section C.l.a. "Available Funds" means (a) the balance in the reserve fund established pursuant to the terms of the Indenture in excess of the reserve requirement as defined in such Indenture, (b) delinquent Special Tax payments not required to fund the Special Tax Requirement for any preceding Fiscal Year,(c) that portion of Special Tax prepayments allocated to the payment of interest on Bonds, and (d) other sources of funds available as a credit to the Special Tax Requii-ement as specified in such Indenture. "Backup Special Tax" means the Special Tax amount set forth in Section C. 1.b. "Bonds" means any bonds or other debt (as defined in the Act), whether in one or more series, issued or incurred by CFD-08-I under the Act. "Bond Year" means a one-year period beginning on September 2nd in each year and ending on September 1st in the following year, unless defined otherwise in the applicable Indenture. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD-08-I" means City of Chula Vista Community Facilities District No. 08-[ "City" means the City of Chula Vista. "Community Purpose Facility Property" means all Assessor's Parcels which are (a) classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2002-2883 as amended on November 5, 2002 or (b) designated with specific boundaries and acreage on an 'A' Map or Final Subdivision Map as a community purpose facility. "Council" means the City Council of the City, acting as the legislative body of CFD-08-I. City of Chula Vista 11-25-02 Community Facilities District No. 08-1 Otay Ranch Village Six Page 2 "County" means the County of San Diego. "Developed Property" means, for each Fiscal Year, all Taxable Property for which a building permit for new construction was issued prior to March 1 of the prior Fiscal Year in which the Special Tax is being levied. "Exempt Property" means property not subject to the Special Tax due to its classification as either Public Property, Property Owner Association Property, Commmfity Purpose Facility Property, public or utility easements in accordance with section E.1. "Final Subdivision Map" means a subdivision of property, created by recordation of a final subdivision map, parcel map or lot line adjustment, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 1352, that creates individual lots for which residential building permits may be issued without further subdivision of such property. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1 of Section C. 1.a. "Lot(s)" means an individual legal lot created by a Final Subdivision Map for which a building permit for residential construction has been or could be issued. "Maximum Annual Special Tax" means the maximum annual Special Tax, determined in accordance with the provisions of Section C, which may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property. "Non-Residential Property" means all Assessor's Parcels of Developed Property, for which a building permit(s) was issued for a non-residential use, excluding Community Purpose Facility Property. "Open Space" means property within the boundaries of CFD 08-I which (a) has been designated with specific boundaries and acreage on an 'A' Map or Final Subdivision Map as open space, (b) is classified by the County Assessor as open space (c) has been irrevocably offered for dedication as open space, prior to June 1st of the preceding Fiscal Year, to the federal government, the State of California, the County, the City, any other public agency or (d) is encumbered by an easement or other restriction required by the City limiting the use of such property to open space. "Outstanding Bonds" means all Bonds, which remain outstanding as defined in the Indenture. City of Chula Vista 11-25-02 Community Facilities District No. 08~1 Otay Ranch Village St?c Page 3 "Property Owner Association Property" means any property within the boundaries of CFD-08-I which is (a) owned by a property owner association or (b) is designated with specific boundaries and acreage on an 'A' Map or Final Subdivision Map as property owner association property. As used in this definition, a Property Owner Association Property includes any master or sub-association. "Proportionately" means for Developed Property that the ratio of the actual Special Tax levy to the Assigned Special Tax or Backup Special Tax is equal for all Assessors' Parcels of Developed Property within CFD-08-I. For Undeveloped Property or Provisional Undeveloped Property "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Annual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property and equal for all Assessor's Parcels of Provisional Undeveloped Property within CFD-08-I. "Provisional Undeveloped Property" means all Assessor's Parcels of Public Property, Property Owner Association Property, Community Purpose Facility Property, Open Space or other property that would otherwise be classified as Exempt Property pursuant to the provisions of Section E, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum acreage as set forth in Section E.1 for Zone A or Zone B as applicable. "Public Property" means any property within the boundaries of CFD-08-1 that which (a) is owned by a public agency, (b) has been irrevocably offered for dedication, prior to lune 1st of the preceding Fiscal Year, to a public agency or (c) is designated with specific boundaries and acreage on an 'A' Map or Final Subdivision Map as property which will be owned by a public agency. For purposes of this definition, a public agency includes the federal government, the State of California, the County, the City or any other public agency. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be made by the CFD Administrator by reference to appropriate records kept by the City's Building Department. Residential Floor Area for a residential structure will be based on the initial building permit(s) issued for such structure. "Special Tax" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement. "Special Tax Requirement" means that amount of Special Tax revenue required in any Fiscal Year for CFD-08-I to: (i) pay annual debt service on all Outstanding Bonds due in the Bond Year beginning in such Fiscal Year; (ii) pay other periodic costs on Outstanding Bonds, including but not limited to, credit enhancement and rebate payments; (iii) pay City of Chula Vista l 1-25-02 Community Facilities District No. 08-1 Otay Ranch Village Six Page 4 Administrative Fees and Expenses; (iv) pay any amounts required to establish or replenish - any reserve funds for all Outstanding Bonds in accordance with the Indenture; and (v) pay directly for acquisition and/or construction of public improvements which are authorized to be financed by CFD-08-I provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on the Undeveloped Property; (vi) less a credit for Available Funds. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD-08-I that are not exempt from the Special Tax pursuant to law or Section E below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means, for each Fiscal year, all Taxable Property not classified as Developed Property. "Zone A" means a specific geographic area as depicted in Exhibits A and B attached hereto. "Zone B" means a specific geographic area as depicted in Exhibits A and B attached hereto. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Assessor's Parcels of Taxable Property within CFD-08-I shall be (a) categorized as being located in either Zone A or Zone B, (b) classified as Developed Property, Undeveloped Property or Provisional Undeveloped Property and (c) subject to the levy of annual Special Taxes determined pursuant to Sections C and D. Furthermore, all Developed Property shall then be classified as Residential Property or Non-Residential Property. C. MAXIMUM ANNUAL SPECIAL TAX RATE 1. Developed Property The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or Non-Residential Property shall be the greater of (1) the Assigned Special Tax described in Table I which follows or (2) the Backup Special Tax computed pursuant to b. which follows. a. Assigned Special Tax The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in Table 1. City of Chula Vista 11~25-02 Community Facilities District No. 08-1 Ota3~ Ranch Village Six Page 5 TABLE 1 Assigned Special Tax for Developed Property within Zone A and Zone B: Land Use Class Description Assigned Special Tax $800 per unit plus $.27 per square foot of 1 Residential Property Residential Floor Area 2 Non-Residential $6,000 per Acre Property b. Backup Special Tax When a Final Subdivision Map is recorded within Zone A or Zone B the Backup Special Tax for Residential Property, Non-Residential Property and Undeveloped Property shall be determined as follows: For each Assessor's Parcel of Residential Property or Undeveloped Property to be classified as Residential Property upon its development within the Final Subdivision Map area, the Backup Special Tax shall be the rate per Lot calculated according to the following formula: Zone A $ 14,981x A L Zone B $ 24,418 x A L The terms above have the following meanings: B = Backup Special Tax per Lot in each Fiscal Year. A = Acreage classified or to be classified as Residential Property in such Final Subdivision Map. L = Lots in the Final Subdivision Map which are classified or to be classified as Residential Property. For each Assessor's Parcel of Non-Residen0al Property or Undeveloped Property to be classified as Non-Residential Property upon the development thereof within the Final Subdivision Map area, the Backup Special Tax shall be determined by multiplying $14,981 for Zone A and $24,418 for Zone B by the total Acreage of all City of Chula Vista 11-25-02 Community Facilities District No. 08-I Otay Ranch Village Six Page 6 Non-Residential Property and Undeveloped Property to be classified as Non- _ Residential Property upon the development thereof within the Final Subdivision Map area. Notwithstanding the foregoing if an Assessor's Parcel 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 Subdivision Map, then the Backup Special Tax applicable to such Assessor's Pamel shall be recalculated to equal the amount of Backup Special Tax that would have been generated if such change did not take place. 2. Undeveloped Property and Provisional Undeveloped Property The Maximum Annual Special Tax for each Assessor's Parcel of Undeveloped Property or Provisional Undeveloped Property shall be $14,981 per Acre for Zone A and $24,418 per Acre for Zone B. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2003-04 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the amount of Special Taxes equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied Proportionately on all Developed Property within Zone A and Zone B at a rate up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax Requirement. Second: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on all Undeveloped Property within Zone A and Zone B, at a rate up to 100% of the Maximum Annual Special Tax for Undeveloped Property. In determining the Acreage of an Assessor's Parcel of Undeveloped Property for purposes of determining the annual Special Tax to be levied on such Assessor's Parcel, the CFD Admirfistrator shall not include any Acreage shown on any applicable tentative subdivision map or other land use entitlement approved by the City that designates such Acreage for a use that would be classified as Open Space, Property Owner Association Property, Community Purpose Facility or Public Property. Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax to be levied on each Assessor's Parcel of Developed Property whose Maximum Annual Special Tax is derived by the application of the Backup Special Tax shall be increased Proportionately fi.om the Assigned Special Tax up to the Maximum Annual Special Tax for each such Developed Property.. City of Chula Vista ll-25-02 Community Facilities District No. 08-I Otay Ranch Village Six Page 7 Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionatel3, on all Provisional Undeveloped Property at a rate up to 100% of the Maximum Annual ~::'~ ~' ' Special Tax for Undeveloped Property. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property be increased by more than ten percent per year as a consequence of delinquency or default in the payment of Special Taxes by the owner of any other Taxable Property. E. EXEMPTIONS . _ 1. The CFD Administrator shall classify the following as Exempt Property: (i) Public Property, (ii) Property Owner Association Property, (iii) Community Purpose Facility Property, (iv) Open Space and (v) Assessor's Parcels with public or utility easements making impractical their.,.utilization for other than the purposes set forth in the easement; provid?d, however, that no st{ch classification shall reduce the sum of all Taxable Property to less than 40.98 Acres in Zone A and 42.43 Acres in Zone B. Property which cannot be classified as Exempt ~ ' . Property because such classification would reduce the Acreage of all Taxable Property to less than 40.98 Acres in Zone A and 42.43 Acres in Zone B will be classified as Provisional Undeveloped Property and shall be taxed pursuant to the fourth step of Section D~ Tax exempt status for purposes of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes Exempt Property. 2. The Maximum Annual Special Tax obligation for any property which would be classified as Public Property upon its transfer or dedication to a public agency but which is classified as Provisional Undeveloped Property pursuant to paragraph 1 of Section E shall be prepaid in full by the seller pursuant to Section H.1, prior to the transfer/dedication of such property to such public agency. Until the Maximum Annual Special Tax obligation for any such Public Property is prepaid, : the property shall continue to be subject to the levy of the Special Tax as Provisional Undeveloped Property. i:. ' 3. If the use of an Assessor's Parcel of Exempt Property changes so that such Assessor's Parcel is no longer classified as one of the uses set forth in paragraph 1 that would make such Assessor's Parcel 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 Taxable Property. F. REVIEW/APPEAL COMMITTEE " Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error shall first consult with the CFD Administrator regarding such . error. If following such consultation, the CFD Administrator determines that an error has occurred the CFD Administrator may amend the amount of the Special Tax levied on such City of Chula Vista 11-25-02 ·. Community Facilities District No. 08-1 Otay Ranch Village Six Page 8_ Assessor's Parcel. If following such consultation and action (if any by the CFD _ Administrator), the landowner or resident believes such error still exists, such person may file a written notice with the City Clerk of the City appealing the amount of the Special Tax levied on such Assessor's Parcel. Upon the receipt of any such notice, the City Clerk shall forward a copy of such notice to the City Manager who shall establish as part of the proceedings and administration of CFD-08-I a special three-member Review/Appeal Committee. The Review/Appeal Committee may establish such procedures, as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. G. MANNER OF COLLECTION The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD-08-I, may directly bill the Special Tax, may collect Special Ta~es at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on Assessor's Parcels of Taxable Property that are delinquent in the payment of Special Taxes. Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. H. PREPAYMENT OF SPECIAL TAX The following definition applies to this Section H: "CFD Public Facilities" means those public facilities authorized to be financed by CFD- 08-I. "CFD Public Facilities Costs" means either $19 million, or such lower number as shall be determined either by (a) the CFD Administrator as sufficient to finance the CFD Public Facilities, or (b) the Council concurrently with a covenant that it will not issue any more Bonds to be secured by Special Taxes levied under this Rate and Method of Apportionment. "Construction Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct the CFD Public Facilities. "Future Facilities Costs means the CFD Public Facilities Costs minus that (a) portion of the CFD Public Facilities Costs previously funded (i) from the proceeds of all previously issued Bonds, (ii) from interest earnings on the Construction Fund actually earned prior to City of Chula Vista l 1-25-02 Commun#y Facilities District No. Otay Ranch Village Six Page 9 the date of prepayment and (iii) directly from Special Tax revenues and (b) the amount of the proceeds of all previously issued Bonds then on deposit in the Construction Fund. "Outstanding Bonds" means all previously issued Bonds which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Maximum Annual Special Taxes. 1. Prepayment in Full The Maximum Annual Special Tax obligation may only be prepaid and permanently satisfied for an Assessor's Parcel of Developed Property, Undeveloped Property for which a building permit has been issued, or Provisional Undeveloped Property. The Maximum Annual Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of such Assessor's Parcel to pay the Special Tax permanently satisfied as described herein; provided, however that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Annual Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure, which can be collected prior to preparing such calculation. The prepayment amount shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Prepayment Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Step No.: 1. For Developed Property, compute the Maximum Annual Special Tax for the Assessor's Parcel to be prepaid. For Undeveloped Property for which a building permit has been issued to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit, issued for that Assessor's Parcel. For Provisional Undeveloped Property to be prepaid, compute the Maximum Annual Special Tax for City of Chula Vista 11-25-02 Community Facilities District No. 08-I Otay Ranch Village Six Page 10 such Assessor's Parcel using the Maximum Annual Special Tax for Undeveloped - Property. 2. Divide the Maximum Annual Special Tax computed pursuant to step 1 by the sum of the total expected Maximum Annual Special Tax revenues which may be levied within CFD-08-I excluding any Assessor's Parcels for which the Maximum Annual Special Tax obligation has been previously pre?aid. 3. Multiply the quotient computed pursuant to step 2 by the principal amount of the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 4. Multiply the Bond Redemption Amount computed pursuant to step 3 by the applicable redemption premium on the next possible Bond call date, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 5. If all the Bonds authorized to be issued for CFD~08-I have not been issued, compute the Future Facilities Costs. 6. Multiply the quotient computed pursuant to step 2 by the amount if any, determined pursuant to step 5 to compute the amount of Future Facilities Costs to be allocated to such Assessor's Parcel (the "Future Facilities Amount'). 7. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 8. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year, which have not yet been paid. 10. Determine the fees and expenses of CFD-08-I, including but not limited to, the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds from the proceeds of such prepayment, and the cost of recording any notices to evidence the prepayment and the redemption (the "Prepayment Fees and Expenses") 11. Compute the amount the CFD Administrator reasonably expects to derive from the reinvestment of the prepayment amount less the Prepayment Fees and Expenses, as determined pursuant to step 10, fi'om the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 12. Add the amounts computed pursuant to steps 7 and 9 and subtract the amount computed pursuant to step 11 (the "Defeasance Amount"). City of Chula Vista ll-25-02 Community Facilities District No. O&l Otay Ranch Village Six Page 11 13. The reserve fund credit (the S'Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 14. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to step 2 by the expected balance in the capitalized interest fired after such first interest payment (the "Capitalized Interest Credit"). 15. The Maximum Annual Special Tax prepayment is equal to the sum of the amounts computed pursuant to steps 3, 4, 6, 10, and 12, less the amounts computed pursuant to steps 13 and 14 (the "Prepayment Amount"). 16. From the Prepayment Amount, the amounts computed pursuant to steps 3, 4, 12, 13, and 14 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to step 10 shall be retained by CFD-08-I. The amount computed pursuant to step 6 shall be deposited in the Construction Fund. The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under step 9 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Taxes and the release of the Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Annual Special Taxes that may be levied on Taxable Property within CFD-08-I, both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. City of Chula Vista 11-25-02 Community Facilities District No. 08-1 Otay Ranch Village Six Page 12 2. Prepayment in Part The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section H.1, except that a partial prepayment shall be calculated according to the following formula: PP = (PE x F) + A These terms have the following meaning: PP = the partial prepayment PE -- the Prepayment Amount calculated according to Section H. 1, minus Prepayment Fees and Expenses determined pursuant to step 10. F = the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the Maximum Annual Special Tax. A= the Prepayment Fees and Expenses determined pursuant to step 10. The owner of an Assessor's Parcel who desires to partially prepay the Maximum Annual Special Tax shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Maximum Annual Special Tax, (ii) the percentage by which the Maximum ,.Annual Special Tax shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if applicable. The CFD Administrator shall provide the owner with a - statement of the amount required for the partial prepayment of the Maximum Annual Special Tax for an Assessor's Parcel within 30 days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to step 16 of Section H.1, and (ii) indicate in the records of CFD-08-I that there has been a partial prepayment of the Maximum Annual Special Tax and that a portion of the Maximum Annual Special Tax equal to the outstanding percentage (1.00 - F) of the remaining Maximum Annual Special Tax shall continue to be authorized to be levied on such Assessor's Parcel pursuant to Section D. I. TERM OF MAXIMUM ANNUAL SPECIAL TAX Thc Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2003-2004 to the extent necessary to fully satisfy the Special Tax Requirement and shall be levied for a period no longer than the 2039~2040 Fiscal Year. City of Chula Vista 11-25-02 Community Facilities District No. 08-1 Otay Ranch Village Six Page 13_