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HomeMy WebLinkAboutReso 2003-113RESOLUTION NO. 2003-113 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 06-I (EASTLAKE - WOODS, VISTAS AND LANDSWAP), DECLARING ITS INTISNTION TO AUTHORIZE THE ANNEXATION OF TERRITORY TO SUCH COMMUNITY FACILITIES DISTRICT AND IMPROVEMENT AREA B THERETO WHEREAS, the City Council of the City of Chula Vista, California, ("City Council"), formed a Community Facilities District and designated two improvement areas therein including Improvement Area No. 2 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 Califomia (the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community Facilities District Law"). The Community Facilities District has been designated as Community Facilities District No. 06-1 (F_astLake - Woods, Vistas and Land Swap) (the "District"); and WHEREAS, the City Council desires to initiate proceedings to consider the annexation of certain real property to the District (the "Territory") and Improvement Area No. 2 thereto; and WHEREAS, a map entitled "Annexation Map No. 1 to Community Facilities District No. 06-I (EastLake - Woods, Vistas and Land Swap), City of Chula Vista, County of Riverside, State of California" (the "Annexation Map") showing the Territory proposed to be annexed to the District and Improvement Area No. 2 thereto has been submitted, which map has been previously approved and a copy of the map shall be kept on ~e with the transcript of these proceedings; and WHEREAS, this City Council now desires to proceed to adopt its Resolution of Intention to annex the Territory to the District and Improvement Area No. 2 thereto, to describe the territory included within existing District and Improvement Area No. 2 thereto and the Territory proposed to be annexed thereto, to specify the facilities to be fmanced from the proceeds of the levy of special taxes within the Territory, to set and specify the special taxes that would be levied within the Territory to finance such facilities, and to set a time and place for a public heating relating to the annexation of the Territory to the District and Improvement ,Mea No. 2 thereto. NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS: SECTION 1. Recitals. The above recitals are all true and correct. SECTION 2. Legal Authority. These proceedings for annexation are initiated by this City Council pursuant to the provisions of and authorization contained in the Community Facilities District Law. SECTION 3. Intention To Annex; Description Of Territory And The District. This legislative body hereby determines that the public convenience and necessity requires that the Territory be Resolution 2003 - 113 Page 2 added to the District and this City Council declares its intention to annex the Territory to the District and Improvement Area No. 2 thereto. A description of the Territory is as follows: All that property within the Territory proposed to be annexed to the District and Improvement Area No. 2 thereto, as such property is shown on the Annexation Map as previously approved by this legislative body, a copy of which is on file in the office of the City Clerk and shall remain open for public inspection. A general description of the territory included in the District is hereinafter described as follows: All that property and territory as originally included within the District, as such property was shown on a map of the original District as approved by this City Council and designated by the name of the original District. A copy of such map is on file in the office of the City Clerk and has also been filed in the office of the County Recorder. SECTION 4. Facilities Authorized To Be Financed By The District. The facilities that are authorized to be financed by the District from the proceeds of special taxes levied within the District (the "Facilities") are generally described in Exhibit A attached hereto and incorporated herein by this reference. These same Facilities are proposed to be financed by the levy of special taxes within the Territory upon the annexation thereof to the District and Improvement Area No. 2 thereto. The District shall finance all direct, administrative and incidental annual costs and expenses necessary to provide the Facilities. The Facilities authorized to be financed by the District from the proceeds of special taxes levied within District are the types of facilities to be provided in the Territory. If and to the extent possible the Facilities shall be provided in common within the District and the Territory. SECTION 5. Special Taxes. It is the further intention of this City Council body that, except where funds are otherwise available, a special tax sufficient to pay for the Facilities and related incidental expenses authorized by the Act, secured by recordation of a continuing lien against all non-exempt real property in the Territory, will be levied annually within the boundaries of such Territory. For further particulars as to the rate and method of apportionment of the proposed special tax, reference is made to Exhibit B (the "Rate and Method"), which is attached hereto and incorporated herein by this reference and which sets forth in sufficient detail the method of apportionment of such special tax to allow each landowner or resident within the proposed Territory to clearly estimate the maximum amount that such person will have to pay. The special tax proposed to be levied within the Territory shall be equal to the special tax levied to pay for the Facilities in Improvement Area No. 2 of the District, except that a higher or lower special tax may be levied within the Territory to the extent that the actual cost of providing the Facilities in the Territory is higher or lower than the cost of providing those Facilities in Improvement Area No. 2 of the District. Notwithstanding the foregoing, the special tax may not be levied at a rate which is higher that the maximum special tax authorized to be levied pursuant to the Rate and Method. The special taxes, 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 Resolution 2003-113 Page 3 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 the Territory and used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within Improvement Area No. 2 of the District as a whole by more than 10 percent. This legislative body further authorizes that special taxes authorized to be levied within the Territory may be prepaid and satisfied by payment of the prepayment amount calculated pursuant to the Rate and Method. Upon recordation of a Notice of Special Tax Lien pursuant to Section 3114.5 of the Streets and Highways Code of the State of California, a continuing lien to secure each levy of the special tax shall attach to all non-exempt real property in the Territory 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. The maximum special tax rate authorized to be levied within Improvement Area No. 2 of the District shall not be increased as a result of the annexation of the Territory to the District and Improvement Area No. 2 thereto. SECTION 6. Public Hearing. NOTICE IS GIVEN THAT ON THE 6th DAY OF MAY, 2003, AT THE HOUR OF 4:00 P.M., IN THE REGULAR MEETING PLACE OF THE CITY COUNCIL, BEING THE COUNCIL CHAMBERS OF THE CITY OF CHULA VISTA, 276 FOURTH AVENUE, CHULA VISTA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD WHERE THIS CITY COUNCIL WILL CONSIDER THE AUTHORIZATION FOR THE ANNEXATION OF THE TERRITORY TO THE DISTRICT, THE PROPOSED RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX TO BE LEVIED WITHIN THE TERRITORY AND ALL OTHER MATTERS AS SET FORTH IN THIS RESOLUTION OF INTENTION. AT SUCH PUBLIC HEARING, THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE ANNEXATION OF THE TERRITORY OR THE LEVYING OF SPECIAL TAXES WITHIN THE TERRITORY WILL BE HEARD. PROTESTS AGAINST THE PROPOSED ANNEXATION OF THE TERRITORY, THE LEVY OF SPECIAL TAXES WITHIN THE TERRITORY OR ANY OTHER PROPOSALS CONTAINED IN THIS RESOLUTION MAY BE MADE ORALLY BY ANY INTERESTED PERSON. ANY PROTESTS PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL BE IN WRITING AND SHALL CLEARLY SET FORTH THE IRREGULARITIES OR DEFECTS TO WHICH OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH THE CITY CLERK PRIOR TO THE TIME FIXED FOR THE PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN AT ANY TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING. SECTION 7. Majority Protest. If (a) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the District, (b) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the Territory, Resolution 2003 - 113 Page 4 (c) owners of one-half or more of the area of land in the territory included in the District, or (d) owners of one-half or more of the area of land in the territory included in the Territory, file written protests against the proposed annexation of the Territory to the District and such protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings shall be undertaken for a period of one year from the date of the decision by the City Council on the issues discussed at the public heating. SECTION 8. Election. Upon the conclusion of the public hearing, if the legislative body determines to proceed with the annexation, a proposition shall be submitted to the qualified electors of the Territory. The vote shall be by registered voters within the Territory; however, if there are less than 12 registered voters, the vote shall be by landowners, with each landowner having one vote per acre or portion thereof within the Territory. SECTION 9. Notice. Notice of the time and place of the public hearing shall be given by the City Clerk by publication in a legally designated newspaper of general circulation, said publication pursuant to Section 6061 of the Government Code, with said publication to be completed at least seven (7) days prior to the date set for the public hearing. Presented by Approved as to form by Ann Moore City Attorney Resolution 2003-113 Page 5 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 25th day of March, 2003, by the following vote: A'I'I'EST: Cotmcilmembers: Councilmembers: Councilmembers: AYES: NAYS: ABSENT: Davis, Rindone, Salas, McCann and Padilla None None lla, l~ayor Susan Bigelow, City Cie'ftc STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITY OF CHULA VISTA ) I, Susan Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing Resolution No. 2003-113 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 25th day of March, 2003. Executed this 25th day of March, 2003. Susan Bigelow, City Cleft[ EXHIBIT A CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 06-I (EASTLAKE) LIST OF PROPOSED FACILITIES The developer is proposing the financing of backbone streets and associated improvements (i.e., grading, sewer, streets, landscaping, utilities), and certain "Traffic Enhancement" facilities. Following is a general description of the proposed facilities: Improvement Area A East Olympic Parkway West Olympic Parkway (Portion) Otay Lakes Road Proctor Valley Road Improvement Area B West Olympic Parkway (Portion) EastLake Parkway In addition to the above improvements, this CFD's bonding capacity maybe used for certain "Traffic Enhancement "facilities within the greater eastern territories of Chula Vista. These transportation facilities will be traffic capacity adding improvements and could include the following projects: · Telegraph Canyon Rd East of 1-805 · 1-805/Telegraph Canyon Road an additional on-ramp lane to 1-805 · Heritage Road (Olympic Parkway to Main Stree0 In addition to the above physical improvements, this CFD's bonding capacity maybe used for the purchase certain tangible maintenance equipment that has a useful life of five (5) years or more necessary to provided storm water discharge maintenance within each Improvement Area. I:\Engineer\AGENDA\Attachments\CAS EXHIBIT A - List of Facilities, 9-10412.doc EXHIBIT ~._...~ AMENDED RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 06-I IMPROVEMENT AREA B (EastLake - "Land Swap") 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. 06-I, Improvement Area B ("Improvement Area B") and collected each Fiscal Year commencing in Fiscal Year 2003-2004 in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," and "Undeveloped Property" as described below. All of the Taxable Property in Improvement Area B, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meaning: "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 parcel. 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 Govermnent Code of the State of California. "Administrative Expenses" means the actual or reasonably estimated costs directly related to the administration of Improvement Area B including, but not limited to, the following: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County, the City, or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD-06-I or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD-06-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-06-I or any designee thereof related to any appeal of the levy or application of the Special Tax; and the costs associated with the release of funds from an escrow account, if any. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD-06-I for any other administrative purposes of Improvement Area B, including, but not limited to City of Chula ~'ista Community Facilities District No. 06-1, Improvement.~rea B EastLake - Land Swap Page I attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown 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 of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Category of Developed Property as determined in accordance with Section C. 1 .a. "Available Funds" means the balance in the reserve fund established pursuant to the terms of the Indenture in excess of the reserve requirement as defined in such Indenture, delinquent Special Tax payments not required to fund the Special Tax Requirement for any preceding Fiscal Year, Special Tax prepayments collected to pay interest on Bonds, and other sources of funds available as a credit to the Special Tax Requirement as specified in such Indenture. "Backup Special Tax" means the Backup 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 by CFD-06-I for Improvement Area B under the Act. "Bond Year" means a one-year period beginning on September 2n~ in each year and ending on September Ist in the following year. Unless defined differently 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-06-I means City of Chula Vista, Community Facilities District No. 06-1. "City" means the City of Chula Vista. "Commercial Property" means all Assessors' Parcels of Developed Property, for which a building permit(s) was issued for a non-residential use, excluding Community Purpose Facility Property. "Community Purpose Facility Property" means all Assessors' Parcels which are classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2452. "Council" means the City Council of the City, acting as the legislative body of CFD-06-I. City of Chula Vista Community Facilities District No. 06-1, Improvement Area B EastLake - Land Swap 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. "Exempt Property" means property not subject to the Special Tax due to its classification as either Public Property, Property Owner Association Property Community Purpose Facility Property. "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. "Improvement Area B" means Improvement Area B of CFD No. 06-I known as the "Land Swap". "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 anyofthe classes listed in Table 1 of Section C. "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. "Master Developer" means the owner of the predominant amount of Undeveloped Property in Improvement Area B. "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. "Outstanding Bonds" mean all Bonds, which remain outstanding as defined in the Indenture. "Property Owner Association Property" means any property within the boundaries of Improvement Area B owned by or dedicated to a property owner association, including any master or sub-association. "Proportionately" means for Developed Property that the ratio of the actual Special Tax levy to the Assigned Special Tax or the Backup Special Tax is equal for all Assessors' Community Facilities District No. 06-1, Improvement Area B EastLake - Land Swap Page 3 Parcels of Developed Property within Improvement Area B. For Undeveloped Property "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Annual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property within Improvement Area B. "Public Property" means any property within the boundaries of Improvement Area B that is owned by or dedicated to the federal government, the State of California, the County, the City or any other public agency. "Residential Property" means all Assessors' 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 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 Improvement Area B to: (i) pay annual debt service on all Outstanding Bonds (as defined in Section A) 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 on Outstanding Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture; and (v) pay directly for acquisition and/or construction of public improvements which are authorized to be financed by CFD- 06-1 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on the Undeveloped Property for Improvement Area B; less (vi) a credit for Available Funds. "State" means the State of Califomia. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD-06-I, Improvement Area B 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. Community Facilities District No. 06-I, lrnprovement Area B EastLake - Land Swap Page 4 - "Zone 3" means a specific geographic area as depicted in Exhibit A attached hereto. "Zone 4" means a specific geographic area as depicted in Exhibit A attached hereto. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Assessor's Parcels of Taxable Property within, Improvement Area B shall be (a) categorized as being located in either Zone 3 or Zone 4, (b) classified as Developed Property or Undeveloped Property and (c) shall be subject to the levy of annual Special Taxes determined pursuant to Sections C and D below. Furthermore, all Developed Property shall then be classified as Residential or Commercial Property. C. MAXIMUM ANNUAL SPECIAL TAX RATE 1. Developed Property The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or Commemial Property shall be the greater of (1) the Assigned Special Tax described in Table 1 below or (2) the Backup Special Tax computed pursuant to b. below. a. Assigned Soecial Tax The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in Table 1. TABLE 1 Assigned Special Tax for Developed Property within Zone 3 and Zone 4 Land Use Class Description 1 Residential Property 2 Commercial Property Assigned Special Tax $0.74 per square foot of Residential Floor Area $6,000 per Acre b. Backul~ Sl~ecial Tax When a Final Subdivision Map is recorded within Zone 3 or Zone 4, the Backup Special Tax for Assessor's Parcels of Developed Property classified as Residential Property or Commercial Property shall be determined as follows: City of Chula Vista Community Facilities District No. 06-1, Improvement A rea B EastLake - Land Swap Page 5 For each Assessor's Parcel of Residential Property or for each Assessor's Parcel of 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 3 $20,563 x A L Zone 4 $6,667 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 Commercial Property or for each Assessor's Parcel of Undeveloped Property to be classified as Commercial Property within the Final Subdivision Map area, the Backup Special Tax shall be determined by multiplying $20,563 for Zone 3 and $6,667 for Zone 4 by the total Acreage of each Assessor's Parcels of the Commercial Property and Undeveloped Property to be classified as Commercial Property within the Final Subdivision Map area. Notwithstanding the foregoing, if Assessor's Parcels of Residential Property, Commercial Property or Undeveloped Property for which the Backup Special Tax has been determined are subsequently changed or modified by recordation of a new or amended Final Subdivision Map, then the Backup Special Tax applicable to such Assessor's Parcels shall be recalculated to equal the amount of Backup Special Tax that would have been generated if such change did not take place. City of Chula Vista Community Facilities District No. 06-1, Improvement Area B EastLake - Land Swap Page 6 2. Undeveloped Property The Maximum Annual Special Tax for each Assessor's Parcel classified, as Undeveloped Property shall be $20,563 per Acre for Zone 3 and $6,667 per Acre for Zone 4. 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 each Assessor's Parcel of Developed Property within Zone 3 and Zone 4 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 each Assessor's Parcel of Undeveloped Property within Zone 3 and Zone 4, excluding any Assessor's Parcels classified as Undeveloped Property pursuant to Section E, at a rate up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax to be levied on each Assessor's Parcel of Developed Property whose Maximum Annual Special Tax is derived by the application of the Backup Special Tax shall be increased Proportionately from the Assigned Special Tax up to the Maximum Annual Special Tax for each such Assessor's Parcel. Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel classified as Undeveloped Property pursuant to Section E at 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 Assessor's Parcel. City of Chula Vista Community Facilities District No. 06-1, Improvement Area B EastLake - Land Swap Page 7 E. EXEMPTIONS The CFD Administrator shall classify the following Assessor Parcel(s) as exempt property: (i) Public Property, (ii) Property Owner Association Property, (iii) Community Purpose Facility Property, and (iv) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement; provided, however, that no such classification shall reduce the sum of all Taxable Property to less than 36.50 Acres in Zone 3 and 52.00 Acres in Zone 4. Assessor's Parcels which cannot be classified as exempt property because such classification would reduce the Acreage of all Taxable Property to less than 36.50 Acres in Zone 3 and 52.00 Acres in Zone 4 will be classified as Undeveloped Property and shall be taxed as such. 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. 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 cannot be classified as exempt property as described in paragraph 1 of Section F shall be prepaid in full by the seller pursuant to Section I. 1, prior to the transfer/dedication of such property to such public agency. Until the Maximum Annual Tax obligation for any such Public Property is prepaid, the property shall continue to be subject to the levy of the Special Tax as Undeveloped Property. 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 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-06-I and 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. City of Chula Vista Community Facilities District No. 06-1, Improvement Area B EastLake - Land Swap Page 8 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-06-I, Improvement Area B may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on Assessor's Parcels 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- 06-I Improvement Area B. "CFD Public Facilities Costs" means either $12.3 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) fi'om interest earnings on the Construction Fund actually earned prior to 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. City of Chula Vista Community Facilities District No. 06-1, Improvement Area B EastLake - Land Swap Page 9 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 Public Property. The Maximum Annual Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of the Assessor's Parcel to pay the Special Tax permanently satisfied as described herein; provided, 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. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Total: Bond Redemption Amount plus plus plus plus less less equals Redemption Premium Future Facilities Amount Defeasance Amount Prepayment Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Step No.: For Assessor's Parcels of Developed Property, compute the Maximum Annual Special Tax for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property 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 Assessor's Parcels of Public Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel using the Maximum Annual Special Tax for Undeveloped Property. Divide the Maximum Annual Special Tax computed pursuant to paragraph 1 by the sum of the total expected Maximum Annual Special Tax revenues which may be levied within Improvement Area B excluding any Assessors Parcels for which the Maximum Annual Special Tax obligation has been previously prepaid. City of Chula Vista Community Facilities District No. 06-1, lmprovement Area B EastLake - Land Swap Page 10 10. Multiply the quotient computed pursuant to paragraph 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"). Multiply the Bond Redemption Amount computed pursuant to paragraph 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"). If all the Bonds authorized to be issued for Improvement Area B have not been issued, compute the Future Facilities Costs. Multiply the quotient computed pursuant to paragraph 2 by the amount determined pursuant to paragraph 5 to compute the amount of Future Facilities Costs to be allocated to such Assessor's Parcel (the "Future Facilities Amount"). 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. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year, which have not yet been paid. Determine the fees and expenses of CFD-06-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. 12. 13. 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, from the date of prepayment until the redemption date for the outstanding bonds to be redeemed with the prepayment. Add the amounts computed pursuant to paragraphs 7 and 9 and subtract the amount computed pursuant to paragraph 11 (the "Defeasance Amount"). The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect aRer 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. Oty of Chula Vista Commun#y Facilities District No. 064, lmprovement Area B EastLake - Land Swap Page 11 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 paragraph 2 by the expected balance in the capitalized interest fund after such first interest payment (the "Capitalized Interest Credit"). 15. The Maximum Aunual Special Tax prepayment is equal to the snm of the mounts computed pursuant to paragraphs 3, 4, 6, 10, and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Prepayment Amount"). 16. From the Prepayment Amount, the amounts computed pursuant to paragraphs 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 paragraph 10 shall be retained by CFD-06-I. The amount computed pursuant to paragraph 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 paragraph 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 anaount of Maximum Annual Special Taxes that may be levied on Taxable Property within Improvement Area B both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. Tenders of Bonds in prepayment of Maximum Annual Special Taxes may be accepted upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. 2. Prepayment in Part The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued City of Chula Vista Community Facilities District No. 06-I, Improvement Area B EastLake - Land Swap Page 12 _ 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 =(PEx 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 fimds remitted to it according to Step 16 of Section H. 1, and (ii) indicate in the records of CFD-06-I, Improvement Area B that there has been a partial prepayment of the Maximum Annual Special Tax and that a portion of the Maximum Annual Special Tax equal to the outstanding percentage (1.00 - F) of the remaining Maximum Annual Special Tax shall continue to be authorized to be levied on such Assessor's Parcel pursuant to Section D. I. TERM OF MAXIMUM ANNUAL SPECIAL TAX The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2003-2004 to the extent necessary to fully satisfy the Special Tax Requirement and shall be levied for a period no longer than the 2043-2044 Fiscal Year. J:\Engineer~AGENDA~Attachments\CFD No. 06-I Amended RMA clean Imp. B 5-6-03.doc Community Facilities District No. 06-I, Improvement Area B EastLake - Land Swap Page 13