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HomeMy WebLinkAboutReso 2003-395RESOLUTION NO. 2003-395 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARING ITS INTENTION TO ESTABLISH COMMUNITY FACILITIES DISTRICT NO. 07-I (OTAY RANCH VILLAGE ELEVEN) AND TO AUTHORIZE THE LEVY A SPECIAL TAX THEREIN TO FINANCE THE ACQUISITION OR CONSTRUCTION OF CERTAIN FACILITIES WHEREAS, the City Council of the City of Chula Vista, California (''City Counc'fl"), pursuant to the request of Brookfield Shea Otay. LLC (the "Developer") as the master developer of the property within Village Eleven of Otay Ranch, previously initiated proceedings at a regular meeting on January 7, 2003, to create a Community Facilities District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act") and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community Facilities District Law") and adopted Resolutions 2003-006, 2003-007, 2003-008 and 2003-009 in furtherance thereof. This Community Facilities District shall hereinafter be designated as Community Facilities District No. 07-I (Otay Ranch Village Eleven) (the "District"); and WHEREAS, at the above stated meeting, the City adopted Resolution No. 2003-007 initiating proceedings to create the District, declaring its intention to establish the District and to authorize the levy of a special tax therein to finance the acquisition or construction of certain public facilities; and WHEREAS, at the request of the Developer the City delayed the proceedings to create the District until the Developer substantially completed the construction of certain of such public facilities; and WHEREAS, the Developer has substantially completed the construction of such public facilities; and WHEREAS, as a result of the Developer's substantial completion the construction of certain of such public facilities, this City Council desires to adopt this Resolution of Intention to reinitiate the proceedings to consider the establishment of such District, to set forth the proposed boundaries for such District, to indicate the type of public fac'rifles proposed to be financed by such District, to indicate the proposed rate and apportionment of a special tax sufficient to finance the acquisition or construction of such public facilities and the administration of the District and any indebtedness incurred by the District, to set a time and place for a public hearing relating to the establishment of such District; and WHEREAS, the Community Facilities District Law provides that the City Council may initiate proceedings to establish a community facilities district only ff it has first considered and adopted local goals and policies concerning the use of the Community Facilities District Law; and Resolution 2003-395 Page 2 WHEREAS, this City Council has adopted local goals and policies as required pursuant to the Community Facilities District Law. NOW, THEREFORE, IT IS HEREBY RESOLVED: RECITALS SECTION 1. The above recitals are all true and correct. REINITIATION OF PROCEEDINGS SECTION 2. These proceedings were initiated and are now reinitiated by this City Council pursuant to the authorization of the Community Facilities District Law. BOUNDARIES OF DISTRICT SECTION 3. It is the intention of this City Council to establish the boundaries of the proposed District. A description of the proposed boundaries of the territory to be included in the District including the properties and parcels of land proposed to be subject to the levy of a special tax by the District is as follows: All that property as shown on an amended map as previously approved by this City Council, such amended map designated by the name of this District, a copy of which is on file in the Office of the City Clerk and shall remain open for public inspection. NAME OF DISTRICT SECTION 4. The name of the proposed District shall be Community Facilities District No. 07-I (Otay Ranch Village Eleven). DESCRIPTION OF PUBLIC FACILITIES SECTION 5. It is the intention of this City Council to finance the acquisition or construction of certain public facilities authorized to be acquired pursuant to the provisions of the Community Facilities District Law. A general description of the type of public facilities proposed to be acquired or constructed through financing provided by the District is set forth in Exhibit A attached hereto and incorporated herein by this reference (the "Facilities"). The Facilities are facilities which this legislative body is authorized by law to contribute revenue to or to construct, own or operate. It is hereby further determined that the proposed Facilities are necessary to meet increased demands and needs placed upon the City as a result of development within the District. The cost of acquiring or constructing the Facilities includes Incidental Expenses as such term is defined in Government Code Section 53317(e) and may include, but not be limited to, the costs of planning and designing the Facilities; all costs associated with the establishment of the District, the issuance and administration of bonds to be issued for the District, including the payment of any rebate obligation due and owing to the federal government, the determination of the amount of any special taxes to be levied, the costs of collecting any special taxes, and costs otherwise incurred in order to carry out the authorized purposes of the District, together with any other expenses incidental to the acquisition, construction, completion and inspection of the Facilities. Resolution 2003-395 Page 3 SPECIAL TAX SECTION 6. It is hereby further proposed that, except where funds are otherwise available, a special tax sufficient to pay for such Facilities and related Incidental Expenses authorized by the Community Facilities District Law, secured by recordation of a continuing lien against all non-exempt real property in the District, will be levied annually within the boundaries of the District. Under no circumstances will the special tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the District by more than 10 percent. For further particulars as to the rote and method of apportionment of the proposed special tax (the "Rate and Method of Apportionment") reference is made to the attached and incorporated Exhibit B, which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within the proposed District to clearly estimate the maximum amount that such person will have to pay. The Rate and Method of Apportionment also sets forth the tax year after which no further special tax shall be levied or collected against any parcel used for private residential purposes. A parcel shall be considered "used for private residential purposes" not later than the date on which an occupancy permit or the equivalent for private residential use is issued for such parcel. The special taxes herein proposed, to the extent possible, shall be collected in the same manner as ad valorem property taxes or in such other manner at this City Council shall determine, including without limitation, direct billing of the affected property owners, and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the Treasurer of the City of Chula Vista (the "City"), acting for and on behalf of the District. The special tax obligation for any parcel may be prepaid and permanently satisfied in whole or in part pursuant to the provisions therefor contained in the Rate and Method of Apportionment. PUBLIC HEARING SECTION 7. NOTICE IS GIVEN THAT ON OCTOBER 21, 2003, AT THE HOUR OF 6:00 O'CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE CITY COUNCIL BEING THE COUNCIL CHAMBERS, CITY HALL, LOCATED AT 276 FOURTH STREET, CHULA VISTA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD WHERE THIS CITY COUNCIL WILL CONSIDER THE ESTABLISHMENT OF THE PROPOSED DISTRICT, THE RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX PROPOSED TO BE LEVIED WITHIN THE DISTRICT, AND ALL OTHER MATTERS AS SET FORTH IN THIS RESOLUTION OF INTENTION. AT THE ABOVE-MENTIONED TIME AND PLACE FOR PUBLIC HEARING ANY PERSONS INTERESTED, INCLUDING TAXPAYERS AND PROPERTY OWNERS MAY APPEAR AND BE HEARD. THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE ESTABLISHMENT OF THE DISTRICT, THE EXTENT OF THE DISTRICT, OR THE FINANCING OF THE FACILITIES, WILL BE HEARD AND CONSIDERED. ANY PROTESTS MAY BE MADE ORALLY OR IN WRITING, HOWEVER, ANY PROTESTS PERTAINING TO THE REG~TY OR SUFFICIENCY OF THE PROCEEDINGS SHALL BE IN WRITING AND CLEARLY SET FORTH THE IRREGULARITIES AND DEFECTS TO WHICH THE OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH THE CITY CLERK OF THE CITY ON OR BEFORE THE TIME FIXED FOR THE PUBLIC HEARING. WRi'i'r~N PROTESTS MAY BE WITHDRAWN IN WRITING AT ANY TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING. Resolution 2003-395 Page 4 IF A WRITTEN MAJORITY PROTEST AGAINST THE ESTABLISHMENT OF THE DISTRICT IS FILED, THE PROCEEDINGS SHALL BE ABANDONED. IF SUCH MAJORITY PROTEST IS LIMITED TO CERTAIN FACILITIES OR PORTIONS OF THE SPECIAL TAX, THOSE FACILITIES OR THAT PORTION OF THE SPECIAL TAX SHALL BE ELIMINATED BY THE CITY COUNCIL. ELECTION SECTION 8. If, following the public hearing described in the Section above, the City Council determines to establish the District and proposes to levy a special tax within the District, the City Council shall then submit the levy of the special taxes to the qualified electors of the District. If at least twelve (12) persons, who need not necessarily be the same twelve (12) persons, have been registered to vote within an the District for each of the ninety (90) days preceding the close of the public hearing, the vote shall be by registered voters of the District, with each voter having one (1) vote. Otherwise, the vote shall be by the landowners of District who were the owners of record at the close of the subject hearing, with each such landowner or the authorized representative thereof, having one (1) vote for each acre or portion of an acre of land owned within the District. NOTICE SECTIO~. Notice of the time and place of the public hearing shall be given by the City Clerk by causi~e publication of a Notice of Public Hearing in the legally designated newspaper of general circulation, such publication pursuant to Section 6061 of the Government Code, with such publication to be completed at least seven (7) days prior to the date set for the public hearing. Th~ City Clerk shall also cause notice to be given by first-class mail to each registered voter, if any, and to each landowner as defined in the Community Facilities District Law within the proposed boundaries of the District. Such notice shall be mailed at least 15 days before the public hearing and shall contain the same information as is required to be contained in the notice published pursuant to the preceding paragraph. RESERVATION OF RIGHTS TO AUTHORIZE TENDER OF BONDS SECTION 10. The City Council reserves to itself, in its capacity as the legislative body of the District if formed, the right and authority to allow any interested owner of property within the District, subject to the provisions of Government Code Section 53344.1 and to such conditions as this City Council may impose, and any applicable prepayment penalties as may be described in the bond indenture or comparable instrument or document, to tender to the Treasurer, acting for and on behalf of the District, in full payment or part payment of any installment of the special taxes or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bond or other obligation to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender. ADVANCES OF FUNDS OR WORK-IN-KIND SECTION 11. At any time either before or after the formation of the District, the City Council may accept advances of funds or work-in-kind from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds or that work-in-kind for any authorized purpose, including, but not limited to, paying any cost Resolution 2003-395 Page 5 incurred by the City in creating the District. The City may enter into an agreement, by resolution, with the person or entity advancing the funds or work-in-kind, to repay all or a portion of the funds so advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-[n-kind, as determined by the City Council. The City has entered into a Community Facilities District Reimbursement Agreement with the Developer to provide for such advances for the payment of all initial consulting and administration costs and expenses related to the proceedings to consider the formation of the District and to subsequently authorize, issue and sell bonds for the District. Such advances are subject to reimbursement pursuant to the terms of such agreement. No such agreement shall constitute a debt or liability of the City. In addition, it is proposed that the City emer into an agreement with the Developer pursuant to which the Developer shall construct and install the Facilities and the District shall, through the acquisition of such Facilities, repay the funds expended by the Developer for such purpose or value or cost of the work in-kind, whichever is less. CONFLICTING PROVISIONS SECTION 12. If any provisions of this resolution conflicts with Resolution 2003-007, the provisions of this resolution shall supersede any such conflicting provisions. Prepared by Approvedastoformby Ann Moore City Attorney Resolution 2003-395 Page 6 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 16th day of September, 2003, by the following vote: ATrEST: Councilmembers: Councilmembers: Councilmembers: AYES: NAYS: ABSENT: Davis, McCann, Rindone, Salas and Padilla None None Susan Bigelow, CMC, 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 Resolution No. 2003-395 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 16th day of September, 2003. Executed this 16th day of September, 2003. Susan Bigelow, CMC, City Oerk EXHIBIT A DESCRIPTION OF TYPES OF FAC[LIT[ES The types of public facilities authorized to be financed by the levy of special taxes within the proposed District shall include streets, grading, landscaping within public rights-of-way, sewers, public utilities, a park, traffic enhancement facilities and other public improvements authorized to be financed from the proceeds of the Public Facilities Development Impact Fee as may be authorized by the goals and policies of the City Council pertaining to the use of the Community Facilities District Law. EXHIBIT B RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 07-I (Otay Ranch Village Eleven) 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. 07-I (Otay Ranch Village Eleven), and collected each Fiscal Year commencing in Fiscal Year 2004-2005 in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," "Approved Property", "Undeveloped Property" and "Provisional Undeveloped Property" as described below. All of the Taxable Property within CFD~07-I, 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: "'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 combination of units as shown on such tentative map and which may further show Community Purpose Facility Property, Property Owner Association Property, Public Property, 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-07-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-07-I, or any designee thereof of complying with arbitrage rebate requirements and/or responding to any audit of the Bonds by the Internal Revenue Service; the costs to the City, CFD-07-I, or any designee thereof of providing continuing disclosure; the costs of the City, CFD-07-1 or any designee thereof of preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD- City of Chula Vista Community Facilities District No. 07-1, Ott~y Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page I 07-1, 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-07-I, for any other administrative purposes, including, but not limited to attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in an 'A' Map, excluding lettered lots thereon, or a Final Subdivision Map, excluding lettered lots thereon, that were recorded prior to January 1st for the Fiscal Year of 2004, and a March Ist date for each subsequent year thereafter for the preceding Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit prior to the Mamh Ist preceding the Fiscal Year in which the Special Tax is being levied. "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 Class of Developed Property as determined in accordance with Section C. 1.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 Requirement as specified in such Indenture. "Backup Special Tax" means the Special Tax as determined in accordance with Section C.l.b. "Bonds" means any bonds or other debt (as defined in the Act), whether in one or more series, issued or incurred by CFD-07-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-07-I" means City of Chula Vista Community Facilities District No. 07-I. City of Chula Vista Community Facilities District No. 07-1, Otay Ranch Village Eleven 12~02- 2002 Revise 8-25~03 Page 2 "City" means the City of Chula Vista. "Community Purpose Facility Property" means all Assessor's Parcels which are (a) classified as community purpose £acilities and meet the requirements of City of Chula Vista Ordinance No. 2002-2883 as amended on November 5, 2002 or (b) designated on an "A" Map or a Final Subdivision Map as a community purpose facility. "Council" means the CiW Council of the City, acting as the legislative body of CFD-07-I. "County" means the County of San Diego. "Density" means for each Assessor's Pamel of Residential Property the number of Dwelling Units per gross acre determined pursuant to those provisions of Ordinance No. 2866, in effect as of January 7, 2003, that provide for the calculation of density for purposes of calculating Transportation Development Impact Fees. "Developed Property" means all Assessor's Parcels of Taxable Property for which a building permit has been issued prior to March 1st preceding the Fiscal Year in which the Special Tax is being levied. "D~L~ing Unit" means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental separate from adjacent residential dwelling units. - "Exellapt Property" means all Assessor's Parcels that are exempt fi'om the Special Tax pursuant to Section E.I. "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 I of Section C. "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. City of Chula Vista Community Facilities District No. 07-1. Otay Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page 3 "Mixed Use Property" means all Assessor's Parcels that have been classified by the City to allow both Residential Property and Non-Residential Property uses on each such Assessor's Parcel. For an Assessor's Parcel of Mixed Use Property, each Land Use Class thereon is subject to taxation pursuant to the provisions of Section C regardless of the geographic orientation of such Land Use Classes on such Assessor's Parcel. "Non-Residential Property" means all Assessor's Pamels of Developed Property, for which a building permit(s) has been issued to allow the construction of one or more buildings or structures for a non-residential use, excluding Community Purpose Facility Property. "Open Space" means property within the boundaries of CFD 07-I in which prior to June 1st of the preceding Fiscal Year (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 to the federal government, the State of California, the County, the City, or 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. "Property Owner Association Property" means any property within the boundaries of CFD-07-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 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 the Backup Special Tax is equal for all Assessors' Parcels of the Developed Property. For Approved Property, Undeveloped Property and 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 like classification. "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-07-1 which (a) is owned by a public agency, (b) has been irrevocably offered for dedication 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 City of Chula ~/ista Community Facilities District No. 07-1, Otay Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page 4 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 to allow the construction of one or more buildings or structures for use as a residential dwelling units. "Special Tax" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel o£Taxable Property to fund the Special Tax Requirement. "Special Tax Requirement" means that amount of Special Tax revenue required in any Fiscal Year for 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 payment; (iii) pay 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 am authorized to be financed by CFD-07-1 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on the Undeveloped Property; less (vi) a credit for Available Funds. "State" means the State of California. "Ta,able Property" means all of the Assessor's Parcels within the boundaries of CFD 074 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, Approved Property or Provisional Undeveloped Property. "Zone A" means a specific geographic area as depicted in Exhibits A and B attached hereto. "Zone B" means a specific geographic ama as depicted in Exhibits A and B attached hereto. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Assessors' Parcels of Taxable Property within CFD-07-I shall be (a) categorized as being located in either Zone A or Zone B, (b) classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property and (c) subject to the levy of annual Special Taxes determined pursuant to Sections C and D below. Developed Property shall be further classified as either Residential Property, Non-Residential Property or Mixed Use Property. The Land Use Class of each Assessor's Parcel of Residential Property or Mixed Use Property shall be determined based on its Density. City of Chula Vista Community Facilities' District No. 07-1, Otay Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page 5 C. MAXIMUM ANNUAL SPECIAL TAX RATE Developed Property The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property, Non-Residential Property or Mixed Use Property shall be the greater o£ (1) the Assigned Special Tax described in Section a. below or (2) the Backup Special Tax computed pursuant to Section b. below. a. Assigned Special Tax The Assigned Special Tax for each Land Use Class of Developed Property is shown in Table 1. TABLE 1 Assigned Special Tax for Developed Property Within Zone A and Zone B: Land Use Class 1 2 3 4 Description Density (DU/Acre) Residential 0 to 8 Property Residential >8 to 20 Property Residential >20 Property Non N/A Residential Property Assigned Special Tax $1,675 per Dwelling Unit $1,340 per Dwelling Unit $1,005 per Dwelling Unit $6,000 per Acre The Assigned Special Tax for each Assessor's Parcel of Mixed Use Property shall equal the total of(i) the Assigned Special Tax that would be applicable to such Assessor's Parcel if it was classified only as Residential Property and (ii) the Assigned Special Tax that would be applicable to such Assessor's Parcel if it was classified as Non-Residential Property. b. Backul~ Sl~ecial Tax When a Final Subdivision Map is recorded within Zone A or Zone B, the Backup Special Tax for Residential Property and Non-Residential Property, shall be determined as follows: City of Chula Vista Community Facilities District No. 07d, Otay Ranch Village Eleven 12-02-2002 Revise 8-25-03 Page 6 For each Assessor's Parcel of Residential Property or Undeveloped Property and Approved 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 Dwelling Unit calculated according to the following formula: Zone A $13,955 x A U Zone B $24,218 x A U The terms above have the following meanings: B = Backup Special Tax per Dwelling Unit in each Fiscal Year. A = Acreage classified or to be classified as Residential Property in such Final Subdivision Map. U = Number of Dwelling Units in the Final Subdivision Map which are classified or expected to be classified as Residential Property. For each Assessor's Parcel of Developed Property classified as Non-Residential Property or for each Assessor's Parcel of Approved or Undeveloped Property to be classified as Non-Residential Property within the Final Subdivision Map area, the Backup Special Tax shall be determined by multiplying $13,955 for Zone A and $24,218 for Zone B by the total Acreage of any such Assessor's Parcel. For each Assessor's Parcel of Mixed Use Property, the Backup Special Tax shall be determined by multiplying $13,955 for Zone A and $24,218for Zone B by the total Acreage of any such Assessor's Parcel. Notwithstanding the foregoing, if Assessor's Parcels of Residential Property, Non- Residential Property, Mixed Use Property, Approved 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. 07-I, _Otay Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page 7 2. Approved Property The Maximum Annual Special Tax for each Assessor's Parcel of Approved Property shall be $13,955 per Acre for Zone A and $24,218 per Acre for Zone B. 3. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for each Assessor's Parcel of Undeveloped Property and Provisional Undeveloped Property shall be $13,955 per Acre for Zone A and $24,218 per Acre for Zone B. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2004-2005 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 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 aRer the first step has been completed, the Special Tax shall be levied Proportionately on all Approved Property at up to 100% of the Maximum Annual Special Tax for Approved Property. Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have 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 Parcels of Undeveloped Property, the CFD Administrator 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. Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three 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 thc 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. City of Chula Vista Community Facilities District No. 07~L Otay Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page 8 Fifth: If additional monies are needed to satisfy the Special Tax Requirement after the first four steps have been completed, then the Special Tax shall be levied Proportionately 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 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; provided, however, that no such classification shall reduce the sum of all Taxable Property to less than 147.15 Acres for Zone A and 59.04Acres for Zone B. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 147.15 Acres for Zone A and 59.04 Acres for Zone B will be classified as Provisional Undeveloped Property and shall be taxed pursuant to the fifth step of Section D. Exempt status for purposes of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes Exempt Property. In the event the Taxable Property will be reduced below the minimum Acreage noted above for either Zone A or Zone B as a result of a single "A" Map, the CFD Administrator shall exempt the property in the following order: 1) Community Purpose Facility Property, 2) Property Owner Association Properly, 3) Public Property, 4) Open Space, 5) other public or utility easements making impractical their utilization for no other such purpose. 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 E.1 above 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. 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 Properly and shall be deemed to be Taxable Property. City of Chula Vista Community Facilities District No. 07-I, _Otay Ranch Village Eleven 12-02-2002 Revise 8-25-03 Page 9 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-07-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 ~nual 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-07-I, 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 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 CounciI. H. PREPAYMENT OF SPECIAL TAX The following definitions apply to this Section H: "CFD Public Facilities" means those public facilities authorized to be financed by CFD- 07-I. "CFD Public Facilities Costs" means either $35 million, or such lower number as shall be determined either by (a) the CFD Administrator as sufficient to finance the CFD Public City of Chula Vista Community Facilities District No. 07-1, Otay Ranch Village Eleven 12-02- 2O02 Revise &25~03 Page 10 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 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 Pamel of Developed ProI~e~ty, Undeveloped Property or Approved 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 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, 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 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 City of Chula Vista Community Facilities District No. 07-I, Otay Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page ] 1 As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Step No.: For Developed Property, compute the Maximum Annual Special Tax for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Approved Property or Undeveloped Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit issued for that Assessor's Parcel. For Assessor's Parcels of Provisional Undeveloped Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel using the Maximum Annual Special Tax for Provisional Undeveloped Property. Divide the Maximum Annual Special Tax computed pursuant to stepl by the sum of the total expected Maximum Annual Special Tax revenues which may be levied within CFD-07-I excluding any Assessors Parcels for which the Maximum Annual Special Tax obligation has been previously prepaid. Multiply the quotient computed pursuant to step 2 by the principal amount of the Outstanding Bofids to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). Multiply the Bond Redemption Amount computed pursuant to step 3 by the applicable redemption premium(s) 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 by CFD-07-I have not been issued, then compute the Future Facilities Costs. 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'). City of Chula Vista Community Facilities District No. 07-1, Otay Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page 12 10. 11. 12. 13. 14. 15. 16. Compute the amount needed to pay interest on the Bond Redemption Amount fi.om the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 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-07-1, 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 Fee and Expenses"). Compute the amount the CFD Administrator reasonably expects to derive fi.om the reinvestment of the prepayment amount, less the Prepayment Fees and Expenses, 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 steps 7 and 9 and subtract the amount computed pursuant to step 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 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. 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 fund after such first interest payment (the "Capitalized Interest Credit"). 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"). 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-07-I. The amount computed pursuant to step 6 shall be deposited in the Construction Fund. City of Chula Vista Community Facilities District No. 07-I, Otay Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page 13 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 Pamel, and the obligation of such Assessor's Pamel 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 both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. 2. Prepayment in Part The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an Assessor's Pamel of Approved 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 presented in Section H.l; 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 P~ = 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. City of Chula Vista Community Facilities District No, 074, Otay Ranch Village Eleven 12-02~ 2002 Revise 8-25-03 Page 14 With respect to any Assessor's Pamel 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-07-1 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 Pamel pursuant to Section D. I. TERM OF MAXIMUM ANNUAL SPECIAL TAX The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2004-2005 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. City of Chula Vista Community Facilities District No. 07~1, Otay Ranch Village Eleven 12-02- 2002 Revise 8-25-03 Page 15