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HomeMy WebLinkAboutReso 2021-149 RESOLUTION NO. 2021-149 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, AUTHORIZING FORMATION OF THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 2021-11 (CITY OF CHULA VISTA – OTAY RANCH VILLAGE 8 WEST) THROUGH THE BOND OPPORTUNITIES FOR LAND DEVELOPMENT (“BOLD”) PROGRAM PURSUANT TO THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982, AS AMENDED; APPROVING A JOINT COMMUNITY FACILITIES AGREEMENT AND AUTHORIZING RELATED ACTIONS WHEREAS, the City of Chula Vista (the “City”) is a municipal corporation and charter city duly organized and existing under and pursuant to the Constitution and the laws of the State of California (the “State”) and has previously authorized the use of the California Municipal Finance Authority’s (“CMFA”) Bond Opportunities for Land Development Program (the “BOLD Program”) to allow the owners of property to be developed within the City to participate in the BOLD Program subject to the approval of the City Council of the City (the “City Council”); and WHEREAS, the CMFA has established the BOLD Program to allow the financing of certain public facilities and/or certain development impact fees that finance public facilities (together, the “Improvements”) levied by local agencies in the State through the levy of special taxes pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”); and WHEREAS, HomeFed Village 8, LLC (“HomeFed”), the master developer of the Otay Ranch Village 8 West development project (the “Project”) has requested that the City allow them in the BOLD Program and to allow the CMFA to form the California Municipal Finance Authority Community Facilities District No. 2021-11 (City of Chula Vista – Otay Ranch Village 8 West) (the “Village 8 West CFD”) under the Act, to levy special taxes within the Village 8 West CFD, and to issue bonds secured by such special taxes under the Act to finance the Improvements, provided that HomeFed voluntarily agrees to participate and consent to the levy of such special taxes and the issuance of such bonds; and WHEREAS, the City Council has previously approved Council Policy Number 505-04 “Statement of Goals and Policies Regarding Establishment of Community Facilities Districts,” (the “City’s Goals and Policies”) and with the exception of: (1) the prohibition on financing development impact fees; (2) the prohibition on the escalation of the maximum special tax to pay for public facilities; (3) the payment to the City of compensation equal to one percent (1%) of the total authorized bonded indebtedness; (4) the requirement that an appraisal be coordinated by, done under the direction of, and addressed to the City; and (5) the requirement that all consultants including the appraiser, be selected and retained by the City, the Village 8 West CFD shall be formed in accordance with the City’s Goals and Policies attached hereto as Exhibit 1 and incorporated herein by this reference; and DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 Resolution No. 2021-149 Page No. 2 WHEREAS, the Village 8 West CFD shall be authorized to finance City capital facilities and related costs (the “City Infrastructure”) in satisfaction of certain City development impact fees (“City Fees”) authorized to be financed under the Act and certain City capital facilities to be constructed by or on behalf of HomeFed (“Acquisition Improvements” and with the City Infrastructure and the City Fees, the “Facilities”); and WHEREAS, the Acquisition Improvements shall be accepted and moneys shall be disbursed in accordance with an Acquisition Funding Agreement to be entered into among the CMFA, the City and HomeFed (the “Acquisition Agreement”) which shall be approved by the City Council at a later date; and WHEREAS, the City Council has determined the Village 8 West CFD will provide benefit to the community at large as well as a benefit to the properties within the Village 8 West CFD of the types described in the City’s Goals and Policies; and WHEREAS, the City Council has determined that the public facilities authorized to be financed by the Village 8 West CFD are of the types described in the City’s Goals and Policies; and WHEREAS, under Section 53316.2 of the Act, the CMFA may form the Village 8 West CFD to finance the Facilities in connection with the Project and issue bonds, the proceeds of which are used by the City for City Infrastructure, provided the CMFA and the City enter into a joint community facilities agreement; and WHEREAS, the form of a Joint Community Facilities Agreement by and between the CMFA and the City (the “JCFA”) setting forth the administration of the Village 8 West CFD has been presented to and considered for approval by the City and the City Council, with the aid of staff has reviewed and considered the JCFA, finds that it will be beneficial to residents of the City and that it is suitable for approval, subject to the conditions set forth in this Resolution; and WHEREAS, following the adoption of this Resolution, all further proceedings with respect to the formation of the Village 8 West CFD and the issuance of special tax bonds and other debt for the Village 8 West CFD shall be undertaken by CMFA with the exception of the Acquisition Agreement which shall be approved by the City Council prior to the issuance of special tax bonds and/or other debt for the Village 8 West CFD. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that: SECTION 1. Each of the above recitals are true and correct and are hereby incorporated into this Resolution as though fully set forth herein. SECTION 2. The formation of the Village 8 West CFD is hereby authorized provided, that the Village 8 West CFD will be formed in accordance with the City’s Goals and Policies with the following exceptions: (1) the prohibition on financing development impact fees; (2) the prohibition on the escalation of the maximum special tax to pay for public facilities; (3) the payment to the City of compensation equal to one percent (1%) of the total authorized bonded indebtedness; (4) the requirement that an appraisal be coordinated by, done under the direction of, and addressed to the City; and (5) the requirement that all consultants including the appraiser, be selected and retained by the City. DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 Resolution No. 2021-149 Page No. 3 SECTION 3. The form of JCFA as presented to this City Council and on file with the City Clerk is hereby approved. The City Manager and such other official or officials of the City as may be designated in writing by this City Council (each, an Authorized Officer” and together, the “Authorized Officers”) are each authorized to execute the JCFA for and on behalf of the City with such changes thereto as such Authorized Officer, following consultation with the City Attorney and Best Best & Krieger LLP, deem to be in the best interests of the City. SECTION 4. The Authorized Officers and other officers, employees and agents of the City, are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. All actions heretofore taken by the Authorized Officers and other officers, employees and agents of the City with respect to the CMFA and the BOLD Program and the matters described herein are hereby approved, confirmed and ratified. SECTION 5. This Resolution shall take effect immediately upon its adoption. The City Clerk is hereby authorized and directed to transmit a certified copy of this Resolution to the Secretary of the CMFA. [SIGNATURES ON THE FOLLOWING PAGE] DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 Resolution No. 2021-149 Page No. 4 Presented by Approved as to form by Tiffany Allen Glen R. Googins Director of Development Services City Attorney PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 10th day of August 2021 by the following vote: AYES: Councilmembers: Cardenas, Galvez, McCann, Padilla, and Casillas Salas NAYS: Councilmembers: None ABSENT: Councilmembers: None Mary Casillas Salas, Mayor ATTEST: Kerry K. Bigelow, MMC, City Clerk STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITY OF CHULA VISTA ) I, Kerry K. Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing Resolution No. 2021-149 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 10th day of August 2021. Executed this 10th day of August 2021. Kerry K. Bigelow, MMC, City Clerk DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 1OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: BACKGROUND TheMello-RoosCommunity Facilities Actof1982 (the “Mello-Roos Act”) andOrdinanceNo. 2730, asamended fromtimetotimeandcodified inChapter 3.60 oftheChulaVista MunicipalCode (the CFD Ordinance”) allowsforthecreationofCommunity FacilitiesDistricts (CFDs) tofinance certain publiccapital facilities andservices, especially indeveloping areasandareasundergoing rehabilitation. Asa prerequisite toformingCFDs pursuant totheMello-RoosAct, eachlocal jurisdictionmust firstconsiderandadoptlocalgoals andpolicies asdescribed therein. TheCityfirst adopted theCityofChulaVista Statement ofGoals and Policies Regarding theEstablishment of Community FacilitiesDistricts (the “GoalsandPolicies”) onJanuary 13, 1998, via Resolution No. 18860. TheGoals andPoliciesweresubsequentlyamendedinJuly 1998, December1998, and November 2013viaResolution Nos. 19103, 19300, and2013-225, respectively. Inclusion ofthe GoalsandPolicies” intheCityCouncilPolicyManualisrecommended andareapplicable toCFDs formedundertheMello-RoosActandtheCFDOrdinance. PURPOSE Thepurpose ofthisStatement ofGoalsand PoliciesistoprovidetheCitystaff, theresidents ofthe City, andtheownersanddevelopers ofpropertylocatedwithin theCitywithguidanceinthe applicationfor, andconsideration of, theestablishment ofcommunityfacilitiesdistricts for the purpose offinancingorassistinginfinancingtheacquisition orconstructionofpublicinfrastructure ortheprovisionofauthorizedpublic services tobenefit andserveeitherexistingornew development oracombination thereof. Theunderlying principalsbehind thispolicy arethe protection ofthepublic interest, assuring fairness in theapplicationofspecialtaxesto current andfuture property owners, assuring fulldisclosure oftheexistence of anyspecial taxliens, ensuringthecreditworthinessofany community facilities districtspecial taxbonds, protectingtheCity's creditratingandfinancial positionandassuringthatapplicants forallcommunity facilitiesdistrictproceedings otherthanCity initiated proceedingspayallcostsassociated withtheformation ofany communityfacilities district. POLICY TheCityCouncil oftheCityofChula Vista (hereafter the “CityCouncil”) herebyestablishes and statesitsgoalsandpolicies concerningtheuseofChapter 2.5ofPartIofDivision 2ofTitle5ofthe Government Codeof theState ofCalifornia (hereafter the “Act”) inproviding adequate public infrastructureimprovements andpublic servicesfortheCityofChula Vista (the “City”). The following goalsand policiesshall applytoallcommunityfacilitiesdistricts hereafter formed or proposedtobeformedbytheCity. Any policyorgoal stated herein maybesupplemented oramended DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 2OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: byresolutionoftheCityCouncil. Thescope ofthispolicyis limitedtotheproposed formationofcommunityfacilities districts forthe limited purpose offinancingorassistinginfinancingtheacquisition orconstruction ofpublic infrastructure and/ortheprovisionofauthorizedpublicservices. IntroductoryStatement TheCitywillconsider applications initiatedbyownersordevelopers ofvacant property proposed to be developed, ownersofproperty within existing developed areas, registered votersresidingin existingdeveloped areas, ortheCityitselffortheestablishment ofcommunity facilitiesdistrictsto financeauthorizedpublicimprovements ortoprovide authorizedpublicservices whichbenefit or serveexisting ornewdevelopment oracombinationthereof. Acommunityfacilitiesdistrictor an improvement area withinacommunity facilitiesdistrictproposed tobeestablished tofinance public improvements orauthorizedservices toserve newdevelopment maybereferred toas a “Development RelatedCFD.” Eachapplication for theestablishment ofa community facilities districtmustcomply withthe applicable goalsandpoliciescontainedhereinunless theCity Councilexpressly grants anexception tosuchpolicy orpolicies asthey apply toaspecific application. Finding ofPublic Interestor Benefit TheCityCouncilmayauthorize theinitiation ofproceedings toform acommunity facilitiesdistrict to finance authorized publicimprovements ortoprovideauthorized publicservices iftheCityCouncil determinesthatthepublic improvementsto befinancedor public servicesto beprovided or, inthe caseof aDevelopmentRelated CFD, theattributesof thenewdevelopment willprovide, inthe opinionoftheCityCouncil, apublic benefit tothecommunityatlargeaswellasthebenefit tobe derived bythepropertieswithin thecommunity facilities district. Examples ofpublicbenefit tothecommunity atlargemayinclude, but arenot limitedto the following: 1. Construction ofa majorpublic facilitywhichmeetsacommunity need including, but notlimitedto, amajor arterialwhichwillprovidea vitalroadway facilitytoalleviatecongestion, waterstoragefacilities whichwillremedyinadequatefireflow, andstormdrainagefacilities which areapartof thestormdrainage master plan. 2. Provision ofpublic infrastructure sooner thanwouldotherwise be requiredfora DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 3OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: particular developmentproject. 3. Construction of publicinfrastructure toservecommercial orindustrial projects which willexpand the City'semployment and/orsalestaxbase. 4. Provisionof maintenance orotherauthorized publicservicessuchaslandscaping, lighting, stormdrain, floodcontrol oropenspacemaintenancenecessary topromote ormaintain qualityoflifeandpublic safetywithin existing ordeveloping areasoftheCity. Authorized PublicFacilities Improvementsproposed tobefinancedthroughacommunityfacilities districtmust bepublic improvementswhich willbeowned, operatedormaintained bytheCityoranotherpublicagencyor publicutility ortowhichthe Cityisauthorized to contributerevenue. Thetypes of improvements eligible tobefinanced mustserve awhole neighborhood orcommercial orindustrial areaor greater. Such improvementsinclude: 1. Streetsandhighwayssatisfying oneormoreofthefollowing criteria: A. identifiedintheCirculationElementoftheCity ascollectorsorarterials; B. nodirect access byabuttingproperties; or C. minimum daily trafficvolumeof3,500ADT. 2. Sewer lines orothersewerfacilitiesserving aminimum of500singlefamily dwellings orequivalentdwellingunitsor suchotherareaofthe community asthe CityManager, orhisorher designee, maydeterminetootherwisebe consistent withtheintentof these goalsandpoliciestobe locatedwithinauthorized streets andhighways orwithin otherpublic rights-of-wayshown on the masterplanofsewerfacilities. 3. Water mainswithaminimumdiameter of10" orother waterfacilities tobe located withinauthorized streetsandhighways orwithinother public rights-of-wayshownonthemaster plan ofwaterfacilities. 4. Drainage facilities servingaminimumof100acresor such other areaofthe community asthe CityManager, orhis orherdesignee, maydetermine tootherwisebeconsistent withtheintentofthesegoalsandpoliciesordraininganeligiblestreet. 5. Landscaping andirrigation facilities meeting oneofthe followingcriteria: A. Located within theright-of-wayofa street or highwayshown onthe DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 4OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: Circulation Elementofthe City'sGeneral Plan; B. Locatedadjacent toanadoptedscenic route; or C. Locatedwithindedicatedopen space. 6. Reclaimedwaterfacilities serving anareawhichbenefits thearea withintheproposed communityfacilities district. 7. Dry utilitiesservinga minimum of500 single familydwelling units orequivalent dwellingunitsorsuchotherareaof thecommunity astheCityManager, orhisorherdesignee, may determineto otherwise beconsistent withthe intentofthesegoals andpolicies; provided, however, theamountofspecial taxbondproceedsallocabletosuch dryutilitiesmaynot exceedthatamount permitted underFederal taxlawandregulations toensurethetaxexempt statusofintereston the applicable special taxbonds. 8. Grading foreligiblepublic streets; provided, however, grading foraDevelopment RelatedCFDmustmeetoneofthefollowingcriteria: A. Grading withinthevertical planesoftheright-of-way; B. Slopes toCity-ownedopen spaceoropen spaceeasement areas; or C. Offsite roadwaygrading. Ifthecutandfillwithin (A) and (B) donotbalance, thecostofexcavating, haulingand compactingfillinthestreet isauthorized tobefinanced. Ifthere isexcess material in thestreetright-of-way, onlythecostofexcavating andhauling toprivate property withinthedevelopment projectiseligibletobefinanced. The determination ofbalance willbemadeonatotaleligiblestreet grading basis, notonanindividual street basis. 9. Such otherimprovements asmaybeauthorized bylaw andwhich theCityCouncil determines areconsistentwith thepoliciesherein. The CityCouncilshall havethefinaldeterminationastotheeligibility ofanyimprovement for financing, aswellastheprioritization offinancingof suchimprovements. Generally, “in-tract” (e.g., localstreetsorutilities) improvements which serveresidentialdevelopment willnotbeconsidered eligibletobefinancedthrough acommunityfacilitiesdistrict unlessrequested bytheowners or registeredvoters ofan existingresidentialdevelopment toremedyathreat, foundtoexist bytheCity Council, tothepublichealth orsafetyresultingfromanexisting deficiency inpublicimprovements to servesuchexisting development. DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 5OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: Anypublicimprovements proposed tobefinanced throughacommunity facilitiesdistrict mustmeet alldesign andconstruction requirements andstandards asmaybeestablished by theCity. Anypublic improvement, theconstruction ofwhich iscompleted followingtheadoptionof theresolutionof formation ofacommunity facilities district, proposed tobeacquiredbytheCityfrom theowneror developer ofpropertywithinaDevelopment Related CFDmustbeconstructed asifsuch improvementshadbeen constructedunderthedirectionandsupervision, orundertheauthority of, the City. Publicimprovements proposed tobeacquired from theproceeds ofspecial taxbonds orspecial taxes shall notbeacquireduntilallimprovementsforaparticular Project (asdefined below) arecompleted andaccepted by theCityandtheCityManager, orhisorherdesignee, hascertifiedthefinalcostof suchimprovements. Forpurposes ofthisparagraph, a “Project” shallbedefinedas allimprovements withinaparticular street oreasement includingstreet improvements, sewer, drainage, utilitiesand grading andwhichare authorizedto beacquired bythecommunity facilitiesdistrict pursuant to an acquisition andfinancingagreementby andbetween theCity, acting onbehalfofitselfandthe communityfacilitiesdistrict, andthe propertyowneror developerwho isresponsibleforthe constructionofthe publicimprovements (the “'Acquisition/Financing Agreement”). Ifimprovements withinmore than one (1) Project areauthorized tobeacquired through thecommunity facilities district, thentheimprovements within eachProjectmaybe acquired separately as allimprovements withinsuchProjectarecompleted andacceptedbythe Cityand thefinalcostscertified. Each Project establishedfor anycommunity facilitiesdistrictandallimprovementsincluded withineachsuch Projectmust bedescribedintheAcquisition/Financing Agreement for suchcommunity facilities district. If theAcquisition/FinancingAgreement hasestablishedmorethan one (1) Project forany communityfacilities district, theAcquisition/FinancingAgreement mayauthorize thepartialrelease offunds topayforthe acquisitionofeachProjectwhensuch Projectiscompletedand acceptedby the City. TheCityCouncil may, initssole discretion, elect todeviatefromorwaive the foregoing policyinits considerationof theapproval ofanAcquisition/FinancingAgreementfor acommunity facilities districtto authorize thepaymentofthepurchase priceforeach discretecomponent ofaProject, i.e., anindividualimprovement withinaProject suchasasewer line withinaProject which alsoincludes street, water anddrainageimprovements. Inelecting todeviatefromorwaive theforegoing policy, theCityCouncilmaycondition thepaymentofthepurchaseprice fordiscretecomponentsastheCity Council deems necessarytoensure thefinancial integrity ofthecommunity facilities district financing. DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 6OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: Prioritization of PublicImprovements ItisthepolicyoftheCityto givefirstpriority totheprovisionofpublic improvementsbenefitingthe Cityinany communityfacilities districtestablished by theCity. Itissecondarily thepolicyofthe City, inanycommunity facilitiesdistrict established bytheCity, toassist inthe provisionofother publicimprovements tobeowned, operated ormaintained byotherpublicagencies orpublicutilities. AuthorizedPublicServices Publicservicesproposed tobefinancedthroughacommunity facilities districtmayinclude: 1. Maintenance ofparkways, medians andopen space, including butnotlimitedto, maintenanceof walls, fences, trailsystems, pedestrian access systemsandotherfacilitieswithin such openspace, maintenance andpreservationofhabitatwithinsuchopenspace, andbiotaandother formsof monitoringof plants, wildlife, useof wildlifecorridorsandhabitatquality asapartofany suchopenspace maintenance program. 2. Maintenanceofnaturalized drainage andfloodcontrol facilities including, butnot limitedto, channels and detentionanddesiltation basins. 3. Suchotherservicesasmay be authorized by theMello-RoosAct orbyordinance of theCityadoptedpursuant tothecharter authority oftheCityandwhichtheCity Councildetermines areconsistent with thegoalsandpolicies hereinandareinthebestinterest oftheCityandthe residentsandproperty ownerswithinthecommunityfacilities district. Incidental Costs EligibleIncidentalCosts Eligible incidental costswhichmaybefinancedfromtheproceeds ofspecial taxbondsissued fora DevelopmentRelated CFDorthespecial taxlevied within a DevelopmentRelated CFDshall be limitedtothoseincidentalcosts directly related totheimprovements financed fromtheproceedsof suchspecial taxbondsorspecialtaxrevenuesandmayinclude: 1. Usual andcustomary designandengineeringcostsnotto exceedthe following percentages: A. Civilengineering - 7.5% ofthecost oftheimprovements forwhichthe engineering was performed. DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 7OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: B. Soilsengineering - 15% of thecost oftheapplicablegrading. C. Landscape architecture - 10% ofthecostofthe applicable landscaping and irrigation. D. Surveyingandconstruction staking - 2% ofthecombinedcostofthecivil engineeringimprovements andgradingfor theapplicable streetandwet utilities. E. Utilityengineering/coordination - 3% ofthecostoftheapplicable dryutilities. 2. Construction administration and supervisionnottoexceed, inaggregate, 1.75% ofthe totalconstructioncostoftheapplicable publicimprovements. 3. Specialengineeringstudies related to "collector" or "transmission" facilities. Eligibility ofsuchstudiesmustbereviewedandapproved bytheDirectorofDevelopment Services, orhisorher designee. 4. Plancheckandinspectionfees (less anyrefunds). 5. Capacity orconnection feesrelatedsolelytothepublicimprovements beingacquired orconstructed aspermitted undertheMello-RoosAct. 6. Capitalizedinterest onanycommunity facilitiesdistrict specialtaxbondsasauthorized bytheCityCouncilpursuant tothesegoals andpolicies. 7. Costs ofacquisition ofoff-siterights-of-wayand/oreasementsincluding thefollowing: A. Appraisal costs, including titlereports. B. Costs ofpreparingacquisition plats. C. Appraised valueoractualcostofright-of-wayoreasement, whichever isless. D. Legalfeesand costrelatedtoeminent domain proceedings approvedbythe CityAttorney. 8. Reimbursement of fundsadvanced bytheapplicant topayfor (i) preformationcosts and/or (ii) costsofissuance incurredbyoronbehalfoftheCity. 9. Costsofenvironmental review, permitting andmitigation limitedtothespecificpublic improvements proposedtobefinanced through thecommunity facilities district. Unless specified otherwiseabove, the CityManager, orhisorherdesignee, shall review allincidental DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 8OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: coststoensure thatsuch costs arecustomaryandreasonable. Ineligible IncidentalCosts Thefollowing costs arenoteligibletobefinanced from theproceedsofcommunityfacilities district specialtaxbonds: 1. Development impact fees; provided, however, the CityCouncilmay, in itssole discretion, grantcreditin anamountnottoexceedthe obligationforthe paymentofsuchfees if improvementswhich would otherwise befinancedfromthe proceeds ofsuchfeesarefinancedfrom theproceedsofcommunityfacilitiesdistrict specialtaxbondsorspecial taxes. 2. Administrative oroverheadexpenses, financial orlegal feesincurred byan applicant for theformation ofacommunity facilities district. Thislimitation doesnotapply toamounts advanced bytheapplicant totheCitypursuant totheprovisions ofthispolicy topayforpreformation costsincurred bythe City. (See “Preformation CostDeposits andReimbursements” below.) 3. Landuseplanning andsubdivision costsandenvironmental reviewcostsrelated to suchland useplanningandsubdivision. 4. PlanningStudies unlessoff-site. 5. Environmental impact reports unlessoff-site. 6. Construction loaninterest. 7. Subdivision financialanalysis. 8. Attorneys’ feesrelated totheland useentitlement or subdivision process unless off- site. 9. Onsiteright-of-wayandeasements. 10. Anycompensation payable totheCityasconsideration for theCity'sagreementto provide thefinancing mechanism forthe financing ofthe authorized improvements and eligible incidentalexpenses and toacquiretheauthorized improvements pursuanttothetermsandconditions ofanagreement withtheCityandtheproperty ownerordeveloper as appropriate. 11. Otheroverhead expensesincurredbytheapplicant. RequiredValue-To-DebtRatio Itisthepolicy oftheCity thatthevalue-to-debtratio foracommunityfacilities districtmustbeat DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 9OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: least4:1. Thecalculated value-to-debt ratioshallreflect thefullcash valueof thepropertiessubject tothelevyofspecialtaxes, includingthevalueoftheimprovements tobefinanced fromtheproceeds of theissueorseries of specialtaxbondsfor whichthevalue-to-debtratioisbeingcomputed, comparedto theaggregate amountofthespecial taxlienproposed tobecreated plusanypriorfixed assessment liensand/or special taxliens. Therequiredvalue-to-debtratioshallbedetermined with respect toalltaxablepropertywithin thecommunity facilitiesdistrictintheaggregate andwith respecttoeachdevelopment areaforwhich nofinalsubdivision maphasbeenfiled. Acommunityfacilitiesdistrictwith avalue-to-debtratiooflessthan4:1butequaltoorgreater than 3:1maybeapproved, inthe solediscretionofthe CityCouncil, upona determination bytheCity Manager, afterconsultation withthe FinanceDirector, the bondcounsel, the underwriter andthe financial advisor, that avalue-to-debtratiooflessthan 4:1isfinancially prudent under the circumstancesoftheparticularcommunityfacilities district. Inaddition, the CityCouncil may, in its solediscretion, accept aformorforms ofcreditenhancement such asaletterofcredit, bondinsurance ortheescrow of bondproceeds to offsetadeficiencyintherequiredvalue-to-debtratioasitappliesto thetaxableproperty within the community facilitiesdistrict inthe aggregateorwithrespecttoany developmentarea. Thevalue-to-debtratio shallbedetermined basedupon thefullcashvalueoftheproperties subject to thelevyofthe special taxasshown onthead valorem assessment rolloruponan appraisalofthe properties proposedtobeassessed; provided, however, theCity Manager mayrequire that thevalue- to-debtratio bedeterminedby anappraisal if, inhisor herjudgement, theassessedvaluesofthe properties proposed tobeassessed donotreflectthecurrent fullcash value ofsuchproperties. The appraisal shall be coordinatedby, done under thedirectionof, andaddressed totheCity. The appraisal shallbeundertaken bya statecertified realestateappraiser, asdefined inBusiness and ProfessionsCodeSection 11340. Theappraisershallbeselected andretainedbytheCityortheCity's financial advisor. Thecostsassociated withthepreparation oftheappraisalreportshall bepaidbythe applicantforthecommunity facilities district and shallbesubjectto possiblereimbursement as provided forherein. Theappraisal shallbe conductedinaccordance withassumptionsand criteria established by theCity, basedupon generallyaccepted appraisalstandards orstate recommended standards forsimilar appraisalsconducted forthesamepurpose. TheCityreservestherighttorequireamarket absorption studyfor anyDevelopment RelatedCFD. In anysuchcasetheCity shallretain, attheapplicant'ssoleexpensebut subjecttoreimbursement as provided forherein, aconsultant to prepareareportto verifyorestablish theprojectedmarket absorptionfor andtheprojected salespricesof theproperties proposed tobeincluded withinthe DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 10OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: community facilitiesdistrict. Ifamarketabsorptionstudyisconducted, theappraisershallutilize the conclusionsofthemarketabsorptionstudyin conducting theappraisal oftheproperties within the proposedcommunity facilities districtorshalljustify, tothesatisfaction oftheCityManager, why suchconclusions werenot utilized inconducting suchappraisal. CriteriaforAppraisals Definition ofAppraisal Forpurposes ofthesegoals andpolicies, anappraisal shallmeanawritten statementindependently and impartially prepared by aqualifiedappraisersettingforth anopinionofdefinedvalue ofan adequately described property asofaspecificdate, supported bythepresentation andanalysisof relevant marketinformation. ContentsoftheAppraisal Anappraisal shouldreflect nationally recognized appraisal standards, including, totheextent appropriate, theUniformStandards ofProfessional Appraisal Practice. Anappraisalmustcontain sufficient documentation, including valuation dataandtheappraiser'sanalysis ofsuchdata, tosupport theappraiser'sopinionofvalue. Ataminimum, the appraisal shall containthefollowing: 1. PurposeoftheAppraisal. This should include thereasonfortheappraisal, adefinition ofallvalues required, andthepropertyrightsbeingappraised. 2. Area, CityandNeighborhoodData. Thesedata shouldinclude suchinformationas directly affectsthe appraised property together withtheappraiser'sconclusions astosignificant trends. 3. PropertyData. Thisshould includea detailed physical description oftheproperty, its size, shape, soilconditions, topography, improvements, andotherphysical characteristicswhich affect thepropertybeingappraised. Theavailability, capacityof, andproximityto, utilities andother infrastructure should alsobediscussed. 4. TitleCondition. Thecondition oftitle totheproperty appraised should bediscussed basedupontheappraiser’sexamination ofa titlereport ofthe propertyappraised. Theappraiser should analyze anddiscuss those titleissueswhichareconcluded toimpact thevalueoftheproperty being appraised. 5. Improvement Condition. A. Theappraisershallvaluetheproperty withinthecommunity facilities district DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 11OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: on an “as-is” basis takingintoconsiderationthevalue associatedwiththe publicimprovements tobefundedfromtheproceeds oftheissueof bondsfor whichthe appraisalis beingundertaken. Thepropertyinthecommunity facilities districtshallbevalued asifitwere freeandclearofanyspecial taxes andassessments, ifany, so thataproper comparisonofvalue-to-debtcanbe determined. Indetermininghisorherconclusion ofvalue, theappraiser may considerthe value oftheproperty inthecommunity facilities districtunder differentmarket conditions. Thismay consistofvaluing thepropertyasifit weresoldtoasingle purchaser inbulkorsoldtoseveralpurchasers inportions orpieces. B. Land parcels which have been developed withresidencesandsubsequentlysold should ataminimum indicate landparcel size, numberoflots, density, number ofplans, square footage, roomcounts, yearconstruction wasinitiated, yearof completion, andwhensaleswere initiated. C. Land parcelswithresidential product underconstruction orwithstanding inventory should bedescribedasinA. aboveandincludeasummary of the stageof development regarding thenumber ofunitscompleted, number of models, statusofunitsunder construction, finishedlotsandmass-gradedor raw lots. In addition, a commenton themarketability ofthe units (architecture, size, etc.) isappropriate. D. Landparcels whichhave beendevelopedwithincome-producing (orowner- occupied) commercial/retail, industrial, hotels, apartments, offices, etc., should bedescribedasfollows: i. Commercial-Retail - Landparcel size; basicconstruction type; typical tenantimprovements (andwhoisresponsiblefortheirconstruction); leasable area, whenconstructionwasinitiated; anddateofcompletion. ii. Industrial - Landparcel size; basic construction type, whethersingleor multi-tenant; typicaloffice build-outaspercentageof totalarea, when construction wasinitiated; anddateofcompletion. iii. Hotels – Landparcel size; basic constructiontype; numberofrooms; dining, recreation, convention space, meeting rooms, andother amenities. DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 12OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: iv. Apartments - Land parcel size; basic construction type; numberof stories; numberofunits; unitmix; size; totalrentablearea, when construction wasinitiated; anddateofcompletion. v. Office - Land parcelsize; basic construction type; typicaltenant improvements/allowance; netrentablearea, whenconstructionwas initiated; anddateofcompletion. 6. General PlanClassification. DescribetheGeneralPlan classification ofthesubject and comparable properties. 7. Zoning. Describe the zoningforthe subject and comparable properties. Noteany discrepancybetween General Plan classification andzoning. Ifrezoning isimminent, discussfurther under Item 8below. 8. Analysis ofHighest andBestUse. Thereport shouldstate andsupport thehighest and bestusetowhichaproperty canbeputand recognizethatland isappraised asthoughvacantand available fordevelopment toitshighest andbestuse, andtheimprovements arebased ontheir actual contributiontothesite. 9. StatementofValue. Theappraiser'sopinion ofthevalueofthespecified property rights, preparedaccording toallrelevant and reliable approachestovalue consistentwithcommonly accepted professionalappraisal practices. Ifadiscountedcashflow analysisis used, itshould be supported byatleastone othervaluationmethod suchassalescomparison approachutilizingsalesof properties thatarein thesamestageofdevelopment. Ifmorethanonevaluation approach isused, the appraiser shallinclude ananalysisand reconciliation ofsuch approaches tosupport theappraiser's opinionofvalue. 10. Certification. Certification ofappraiserandpermission toreproduce andusethe appraisal report asrequired forbondissuance. Maximum Aggregate Taxesand Assessments Itisthepolicy of theCity thatthemaximum annualspecialtax installment applicable toanyparcel usedforresidential purposes (notincluding motels, hotels, campsites, orothershort-termlodging, as determinedby theCity) shallnotexceed onepercent (1%) ofthesalepriceofnewlydeveloped properties subjecttothelevyofthespecialtax (the “Newly Developed Properties”) asofthe dateof theclose ofescrowoftheinitial saleofanyresidentialdwellingunittosuch residentialhomeowner. Asa distinctand separate requirement, thetotal ofthefollowing taxes, assessments describedin4. DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 13OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: belowandspecialtaxesappearing onthepropertytaxbill, shallnotexceed two (2%) ofsuchinitial salesprice ofNewlyDevelopedProperties: 1. Advaloremproperty taxes. 2. Voterapproved advaloremproperty taxes inexcess ofone percent (1%) of the assessed valueofthe subjectproperties. 3. Themaximumannual specialtaxesleviedbythecommunity facilitiesdistrict under consideration and anyother communityfacilities district orother publicagency excepting therefrom specialtaxes leviedbyacommunityfacilities districtformedorunderconsideration forformation for the purposeofprovidingservicessuchasopen spacemaintenance, landscape maintenanceand preservemaintenance. 4. Theannualassessment installments, including anyadministrativesurcharge, forany existingassessment district wheresuchassessment installments areutilizedtopay debtservice on bondsissued for suchassessmentdistrict. Annual assessmentinstallments for maintenanceand services shall notbeincluded inthe assessmentscalculated indetermining the aggregate tax, assessment andspecialtaxobligationforaparcel. Theapplicantfortheestablishment ofanyDevelopmentRelated CFD whichincludesresidential development subjecttotheforegoing limitationsshallberequired to enter intoanagreement withthe Cityorthecommunity facilities districtrequiringtheprepaymentbytheapplicantofthat portionof thespecial tax obligation applicable toanyparcelused for residential purposes inorder toreduce the annualmaximum special taxobligation sothatthemaximum annual specialtax installment shallnot exceed1% ofthesalespriceforsuchparcelandthetotaltaxes, assessments andspecial taxesdoes notexceed 2% ofsuchsalesprice. SpecialTaxRequirements Therateand methodofapportionment ofthespecial taxforanycommunity facilities district shall adhere to thefollowingrequirements: 1. Themaximumspecial taxshall beadequate toinclude anamount necessarytopayfor theexpenses incurredbysuchcommunity facilities district inthelevyand collection ofthespecial tax andtheadministrationofthespecial taxbondsand thecommunityfacilitiesdistrict. 2. Themaximumprojectedannual specialtaxrevenues mustequal110% oftheprojected annualgrossdebtserviceonany bondsofthecommunityfacilitiesdistrict. DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 14OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: 3. Abackupspecial taxshallbe requiredforany DevelopmentRelated CFDto protect against changes indensity resultinginthe generationofinsufficient special tax revenues topay annualdebtserviceandadministrative expenses, unlesstheCityManager, orhisorherdesignee, basedontheadviceofthefinancialadvisor, special taxconsultant orunderwriterdetermines thata backupspecial taxisnotneeded under thespecial taxformula forsuchDevelopmentRelated CFD. TheCityCouncilmay additionally oralternativelyrequirethatasacondition ofapprovalof the downsizingofthedevelopment inaDevelopment RelatedCFDat therequest of theapplicant or the applicant'ssuccessor-in-interest, theapplicant ortheapplicant's successor-in-interest, asapplicable, may berequired toprepay suchportionofthespecial taxobligation asmay benecessaryinthe determinationoftheCity toensurethatadequate debtservicecoverage existswithrespect toany outstanding bondsorotherwiseprovidessecurityinaformandamount deemednecessary bytheCity Council toprovide forthe payment ofdebtserviceon thebonds. 4. Alldevelopedandundeveloped propertywithinanycommunity facilitiesdistrict whichisnototherwise statutorilyexemptfromthelevyof specialtaxes shallbearitsappropriate shareofthecommunityfacilities district’saggregatespecial tax obligation fromthe dateof formation ofthecommunity facilitiesdistrict consistentwith theothergoalsandpolicies setforthherein. 5. Apartialand/or totalprepayment optionshallbeincludedinanyrateandmethodof apportionment ofspecial taxestopay forpublic facilities. Noprepayment shallbepermitted ofa specialtaxlevied tofinance authorized servicesand/ormaintenance. 6. Themaximumspecialtaxtopayforpublic facilitiesshallbelevied against anyparcel used forprivateresidential purposes inthefirst fiscalyearfollowingthefiscal yearinwhich the buildingpermitfor theconstruction ofaresidentialdwelling unitonsuch parcel isissued andsuch maximumspecial taxmaynotescalateafterthefirstfiscalyearinwhichsuchspecial taxissolevied. 7. Therateandmethod ofapportionment ofaspecial taxtopayforpublic facilitiesshall specifyafiscal yearbeyond whichthespecialtaxmay notbeleviedon anyparcelusedforprivate residential purposes. Aspecialtax topayforpublicservices and/ormaintenanceshallhaveno termination dateunless established bytheCityCouncil. 8. Therateand methodofapportionmentof aspecialtax topayforpublic servicesand/or maintenanceshallinclude life-cyclereplacement costsformaintained facilities, as determined bythe CityManager, orhis orherdesignee. 9. Therate andmethodof apportionmentofaspecialtax topayforpublic servicesand/or maintenance shallauthorize annualinflationary adjustments to themaximum special tax. The DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 15OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: authorized adjustments shall bebasedupon industry standard published indices, orsuchother dataas maybeapprovedbytheCityManager, orhisorherdesignee. Inall instances, itshallbe thepolicyof theCitytoemploythemostspecificapplicableindex. Examples includeapplying theConsumer Price IndexforUrbanWage Earners andClericalWorkers tolaborcosts andapplying the ConstructionCostIndex toassetreplacementcosts. Terms andConditionsofSpecial TaxBonds Alltermsandconditions ofanyspecial taxbonds issuedby theCityforanycommunity facilities district, including, withoutlimitation, thesizing, timing, term, interestrates, discount, redemption features, flowoffunds, investment provisions andforeclosurecovenants, shallbeestablished bythe City. Each special taxbondissue shall bestructured toadequately protect bondowners andtoavoid negatively impacting thebonding capacity orcreditworthiness oftheCity. Unlessotherwise approvedbytheCityCouncil, the followingshall serveasminimum bondrequirements: 1. Areserve fundshallbeestablished foreach bondissueto befunded outofthe bond proceeds inanamountequal to10% oftheoriginal proceeds of thebondsorsuch lesseramountas mayberequiredbyfederaltaxlaw. 2. Interest shallbecapitalized fora bond issueonlysolongasnecessarytoplacethe special taxinstallments ontheassessment roll; provided, however, interest maybecapitalizedfora termtobeestablished inthesole discretionofthe CityCouncil onacase-by-casebasis, nottoexceed anaggregate of24 months, takinginto consideration thevalue-to-debtratio, theexpected timingof initial occupancydatesfortheprivate improvementsbeingconstructed, expected absorption and buildout of theproject, theexpectedconstruction andcompletion schedule forthe public improvements tobe funded fromtheproceedsofthe bondissue inquestion, thesizeof thebondissue, thedevelopmentpro forma andthe equityposition ofthe applicantandsuchother factorsastheCity Councilmaydeemrelevant. 3. Ininstances wheremultipleseries ofbondsare tobeissued, theCityshalldetermine whatimprovements shall befinanced fromtheproceedsofeach seriesofbonds. 4. Neither thefaith, creditortaxing poweroftheCityshallbepledgedtothepayment of thebonds. The solesourceofrevenue forthepayment of thebondsshallbethespecialtaxes, capitalized interest, ifany, andmoneys ondeposit inthereserve fund establishedforsuchbonds. Discharge ofSpecial TaxObligation DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 16OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: ItisthepolicyoftheCitythatthespecialtaxobligation related tothefinancingof theacquisitionor construction ofpublicimprovementsmaybeprepaid anddischargedin wholeorinpartat anytime. Theapplicantfor theformationofaDevelopment Related CFD mustprovide noticeandopportunity forthepurchasers ofproperty within suchcommunityfacilitiesdistricttoprepay thespecial tax obligation applicableto suchproperty atthe timeof thecloseofescrow. Theapplicant forthe formationofa DevelopmentRelatedCFDmustprepareand present aplan, satisfactoryto the CityCouncil, priortothe public hearing toconsiderthe formationofsuch community facilities districtdescribing howtheprospective purchaserwillbenotified ofthe existenceofthespecialtaxlienandtheoptions whichtheprospective purchaser hasregarding the prepaymentanddischargeofthespecialtaxobligation. Disclosureto Property PurchasersinDevelopmentRelated CFD's Theapplicantfortheformation ofaDevelopmentRelatedCFDwillberequired todemonstrate tothe satisfactionofthe CityManager (when thetermCity Managerisusedherein itshallmeanthe City Manager orhisorherdesignee) thattherewillbe fulldisclosureofthespecialtaxobligation forsuch community facilitiesdistrict andofanyandallotherspecial taxesorassessments onindividual parcelsto prospective purchasers or lessees of propertywithin suchcommunityfacilities district, including interimpurchasers, merchant builders, residential homeownersandcommercial orindustrial purchasersorlessees. Suchnoticemust includeallof thefollowing inaddition to suchotherprovisions asmay berequired bytheMello-RoosAct, theMunicipal CodeoftheCityortheapplicant maydeemnecessary: 1. Provide forfulldisclosure oftheexistenceofthespecial taxlienandany other assessment orspecial taxobligation applicable to theproperties withinthecommunity facilities district (whether imposedbythe Cityoranyotherpublicagency), including the principalamount of thespecialtaxobligation and anyotherapplicableassessment orspecial taxobligation, term ofeach oftheassessment orspecial taxliensandtheamountoftheexpectedpayments ofthespecial taxes andthemaximum authorized special tax. 2. Disclosetheoptiontoprepaythespecial taxtopay forpublicfacilitiesorallow the specialtaxtopayforpublicfacilities tobepassedthroughto thepurchaserof suchpropertyand the adjustment, ifany, inthe salespriceofthehomesorother property whichwill apply ifthe specialtax lienispassedthrough. Provide theabilityfortheprospective purchasertoelecttoexercise theoption eitherto prepaythe specialtax obligation forfacilitiesat thecloseof escrowor tohavethe special taxesincluded intheproperty taxesfortheproperty. Suchdisclosure shallbeplaced inallsales DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 17OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: brochures, allotheron-siteadvertisingandallpurchasedocuments. 3. Specify inalldisclosure documents thename, title, telephonenumber andaddress ofa representative oftheCityasprovided totheapplicantwhomaybecontacted byanyprospective purchaserofproperty withinthecommunity facilitiesdistrictforfurtherinformation regarding the community facilities districtandthespecialtaxliens. Theapplicant mustagreetoprovideanoriginalcopy ofallapplicable disclosuredocuments tothe Citypriortoinitiatingpropertysales. Preformation Cost DepositsandReimbursements Except forthoseapplications forcommunity facilities districtswhere theCity istheapplicant, allCity and consultantcostsincurredintheevaluation ofapplications andthe proceedings toforma communityfacilities districtand issue special taxbondsthereforwill be paidbytheapplicantby advancedeposit withtheCityofmoneys sufficienttopayallsuchcosts. Each application fortheformation ofacommunityfacilities district shall beaccompanied byaninitial deposit inanamounttobedetermined bytheCityManagertobeadequate tofundtheevaluationof theapplication andundertake the proceedingstoformthe communityfacilities districtandissuethe specialtaxbonds therefor. TheCityManager may, inhisorhersolediscretion, permitanapplicant to makeperiodicdeposits tocoversuch expensesrather thana single lumpsumdeposit; provided, however, nopreformation costsshall beincurred bytheCityinexcess oftheamount thenon deposit for suchpurposes. Ifadditionalfundsare required topayrequired preformation costs, theCity Manager maymake writtendemand upontheapplicant for suchadditional fundsandtheapplicant shall depositsuchadditional fundswiththeCitywithin five (5) working daysofthe dateofreceipt of suchdemand. Upon the depletionofthefundsdepositedbyapplicant forpreformation costs, all proceedings shall besuspended untilreceipt bytheCityofsuchadditional funds astheCityManager maydemand. Thedeposits shallbeusedbytheCitytopayforcostsandexpenses incurred bythe Cityincident to theevaluationoftheapplication andtheproceedingsfortheformationofthecommunity facilities district and theissuance ofthe specialtaxbondstherefor, including, butnot limited to, legal, special taxconsultant, engineering, appraisal, market absorption, financialadvisor, administrative andstaff costsandexpenses, required notifications, printing andpublication costs. TheCityshall refund anyunexpended portion ofthe deposits upontheoccurrence ofoneofthe following events: DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 18OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: 1. Theformation of thecommunity facilities districtortheissuanceof thespecial tax bonds; 2. Theformation of thecommunity facilities districtortheissuanceof thespecial tax bondsisdisapprovedbytheCityCouncil; 3. Theproceedingsfor theformationofthe communityfacilities districtandtheissuance ofthespecial taxbonds areabandoned atthewritten requestoftheapplicant; or 4. TheCityhasdetermined thatthespecialtaxbonds willnotbe issued andsold. Except asotherwiseprovidedherein, theapplicant shall beentitled, attheoptionoftheapplicant, to reimbursement of, orcreditagainst, specialtaxesfor allamountsdeposited withtheCitytopayfor costs incident totheevaluation oftheapplication andtheproceedingsfor theformation ofthe community facilities district andthe issuance of thespecialtaxbondsthereforupontheformationof thecommunity facilitiesdistrictandthesuccessfulissuanceandsaleofthespecialtaxbondsfor the community facilities district. Anysuch reimbursementshallbepayablesolelyfrom theproceeds of thespecial taxbonds. TheCityshallnotaccrue orpayinterest onanymoneys deposited withtheCity. Selection ofConsultants TheCityshall select andretainallconsultants necessaryforthe evaluationofany application andthe proceedings fortheformation ofacommunity facilitiesdistrict andthe issuanceofthespecial tax bonds therefor, including, butnot limited to, special taxconsultant, bondcounsel, financialadvisor, underwriter, appraiser, andmarket absorptionanalystafterconsultationwiththeapplicant. LandUseApprovals Properties proposed tobeincludedin aDevelopmentRelated CFDmusthave received such discretionary landuse approvalsas may, inthedeterminationof theCity Manager, orhisorher designee, benecessary toenable theCitytoadequately evaluate thecommunityfacilities district includingtheproperties to beincluded andtheimprovements proposedtobe financed. TheCitywill issuebonds securedbythelevyofspecial taxes within a Development RelatedCFDwhen (i) the properties included withinsuchcommunity facilities district havereceived thoseapplicable discretionary landuseapprovalswhichwould permitthe development ofsuchproperties consistent withtheassumptions utilizedinthedevelopment of therateandmethod ofapportionment ofthe specialtaxesforsuchcommunityfacilities district; (ii) applicable environmental review has been DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 19OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: completed; and (iii) the Cityhasdetermined thattheother prerequisites toabondsale havebeen satisfied. ItisthepolicyoftheCityCouncil ingranting approval fordevelopment suchaszoning, specificplan orsubdivision approval tograntsuch approvalasapartoftheCity’songoing planningandlanduse approvalprocess. Ingrantingsuchapproval, theCity reserves suchrightsasmaybepermittedbylaw tomodify suchapprovals inthefutureastheCityCouncildetermines thepublic health, safety, welfare andinterestmayrequire. Such approval when grantedissubjectto aconditionthatthe construction ofanypartofthedevelopmentdoes not, standing alone, grantanyrightsto completethe development of theremainderofsuch development. Constructionof publicimprovementstoserve undeveloped landfinanced throughacommunityfacilities districtshall notvestanyrightstothe then existing landuseapprovalsforthepropertyassessedforsuchimprovementsor toanyparticular level, typeorintensityofdevelopment oruse. Applicants foraDevelopmentRelatedCFD mustinclude an expressacknowledgment ofthispolicy and shallexpresslywaive ontheirbehalfandonbehalfof theirsuccessors andassigns anycauseofactionatlaworinequity including, butnotlimited to, takingordamaging ofproperty, forreassessment ofpropertyordenialofanyrightprotected byUSC Section1983which mightbeapplicable to theproperties tobe assessed. ApplicationProcedureforDevelopment RelatedCFD's Anyapplication fortheestablishment ofacommunity facilitiesdistrictshall contain suchinformation andbe submittedinsuchformastheCityManagermayrequire. In additiontosuch information as theCityManager mayrequire, eachapplicationmust contain: 1. Proof ofauthorization tosubmit theapplicationonbehalf oftheowneroftheproperty forwhich theapplication is submittediftheapplicant isnottheowner ofsuchproperty. 2. Evidencesatisfactory totheCity Manager thattheapplicantrepresents orhasthe consentoftheowners ofnotlessthan67%, byarea, ofthepropertyproposed tobesubject tothelevy ofthespecial tax. 3. ForanyDevelopmentRelatedCFDproposedtofinanceimprovements tobenefitnew development, a businessplanfor thedevelopment of theproperty withinthe proposed community facilities districtandsuchadditionalfinancial informationastheCityManager maydeemnecessary toadequately reviewthefinancial feasibility ofthecommunity facilitiesdistrict. ForDevelopment RelatedCFD’sproposed tofinance improvements tobenefitnew development, the applicant must demonstratetothesatisfaction oftheCityManager theability oftheowneroftheproperty proposed tobedeveloped topaythespecialtax installmentsforthecommunity facilitiesdistrict andanyother DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 20OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: assessments, special taxesandadvalorem taxesonsuchpropertyuntilfullbuildoutoftheproperty. ItistheintentionoftheCityCouncilthatapplicants fora community facilitiesdistrict haveanearly opportunitytohavethe application reviewedbyCity staffforcompliance with thispolicy. Inthat regard, theCityCouncilhereby directs theCityManager to createacommunityfacilities district application reviewcommitteecomposed oftheCityAttorney, Director ofPublic Works, City Engineer, Director ofDevelopmentServices, and FinanceDirector, or theirdesignees, andsuch additionalpersons astheCityManagermaydeem necessary. The committee may meetwiththe applicantforacommunity facilitiesdistrictforthepurposeofreviewinganapplication toforma communityfacilities district following thedeterminationbythe CityManager, or hisor herdesignee, thattheinformation containedintheapplication forsuchcommunity facilitiesdistrictcomplies with therequirementsofthis policy. Following thereview of suchanapplication, the committee shall prepareandsubmitareporttothe CityManager containing thefindingsandrecommendations ofthe committee regarding theapplication. Following review ofthecommitteereport, theCityManagershallplacetheapplicationontheCity Council agenda forreview. Afterreview of theapplication andconsideration of thecommittee report, theCityCouncil shalldetermine whetherornottoapprove theinitiation ofproceedings toformthe community facilitiesdistrict. Thedecisionof theCity Councilpertaining to theapplicationshallbe final. Theability ofa property owner ordeveloper toobtain financingof public improvements fromthe proceeds oftax-exemptbondsprovidessubstantialeconomicbenefits tosuch ownerordeveloper not theleastofwhich maybethefinancingof suchimprovementsat interestratessubstantially lowerthan conventional financing interestrates, if suchconventional financing isavailable, and/ortheability to obtainfinancing withoutproviding equitycompensation tothelender. Inprovidingsuch financing for aDevelopment Related CFDthe CityCouncilbelievesthattheCityisproviding valuable considerationtotheproperty ownerordeveloper andshouldbereceiveconsideration inexchange. It isthegoaloftheCityto ensurethatthe Cityand theremainder ofitsresidents, property owners and taxpayers arecompensated fortheconsideration provided totheproperty ownerordeveloperof a Development Related CFDandthatsuchcompensation should beone percent (1%) ofthe total authorizedbonded indebtedness forsuch acommunity facilities district. Priortotheissuance of specialtax bondsforanyDevelopmentRelated CFD, theapplicantshallpaytotheCitythepro rata amountofanycompensationpayable totheCityasconsideration forthe City'sagreement toprovide thefinancingmechanism forthefinancingoftheauthorizedimprovements andeligible incidental expensesandtoacquiretheauthorized improvements pursuanttothetermsand conditionsofan DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 21OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: agreement betweentheCity andtheproperty ownerordeveloper asappropriate. Forexample, ifthe compensation payabletotheCityforsuchconsideration is $100,000foraDevelopment RelatedCFD wherethetotalauthorized bonded indebtedness is $10,000,000andtheseries ofspecial taxbonds to beinitiallyissuedis $5,000,000, thecompensationpayable totheCity prior totheissuance ofthe initialseries ofbondswillbetheprincipal amount ofthe initialbond issue ($5,000,000) divided by the totalamountoftheauthorized bonded indebtedness ($10,000,000) multiplied bythetotal compensation forsuch Development Related CFD ($100,000). Inthisexample, thecompensation payable priorto theissuanceof thefirstseriesof bondswouldbe: 5,000,000 100,000=$50,00010,000,000 Community FacilitiesDistricts forEnergy Efficiency, Water Conservation, andRenewable EnergyImprovements Introductory Statement Senate BillNo. 555 (Statutes2011, Chapter493) amended theMello-RoosActtoauthorizetheuseof community facilities districts forfinancing energyefficiency, waterconservation, and renewable energyimprovements toprivatelyorpubliclyownedreal property andbuildings. Inparticular, Senate BillNo. 555addedsection53328.1totheMello-RoosAct, thereby authorizing special taxesto beleviedonlywiththeunanimous consent ofallowners ofpropertytobe taxedby suchadistrict. Inlightofthelegislativefindingsinsection8ofSenateBill No. 555, the CityCouncil maydetermine toestablishoneormoreprograms through which theCitymayusesection 53328.1 oftheMello-Roos Act andtherelatedprovisionsaddedtotheMello-RoosAct bySenate Bill No. 555toprovide special taxfinancingforimprovements and properties thatmeet thecriteria setforthinthehearingreport prepared inconnection withtheestablishment ofanysuch program (eacha “Program”). TheCity willadminister eachProgramorcontract withathird-partytoadminister suchprogram (a “Program Administrator”). Withrespecttofinancings donethroughaProgram, the goalsandpolicies setforthinthissection, as such goalsandpoliciesmay beamendedfrom timetotime, supersede anyother goalsandpolicies adopted by theCityconcerningtheuseoftheMello-RoosAct. 1. EligibleImprovements. Aprogrammay beused tofinance orrefinance the acquisition, installation, andimprovement ofenergyefficiency, waterconservation, andrenewable DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 22OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: energyimprovementsonrealproperty andin oronbuildings, whethertherealpropertyorbuildings areprivatelyorpubliclyowned, subject tothefollowing: A. Forprivately owned realpropertyand buildings, eachownermustconsent in advance tothefinancing, inwriting. B. Financingthrough aProgramisnot availablefortheinitialconstructionof privately-ownedresidential buildings unless thatinitialconstruction is undertaken by theintended owneror occupant. TheCityisnotestablishing anyprioritieswithrespectto thefinancingof Eligible Improvements. Priority forfinancingshallbeconsideredon acasebycasebasisasdetermined bytheCityorthe applicable ProgramAdministrator in accordance withthehearing reportprepared inconnection with therelated Program, asamended ormodifiedfromtimetotime (each a “HearingReport”). No services (asdefinedbyGovernment CodeSection 53313) willbefinanced through anyProgram. 1. NoticetoProspectiveOwners. Toensure thatprospective purchasers ofproperty subjecttoaspecial tax leviedthrougha Program arefullyinformedaboutthetax, therelated Program Administratorwillrecordanotice ofspecial-taxlienforeachparticipating property asrequiredby the Mello-Roos Act andwillprovidetheseller ofeachwithadisclosure noticethatsatisfiessection 53340.2oftheMello-RoosActandCaliforniaCivilCodesection1102.6b. 2. Financing Limits. Foreach property. the minimum fundingrequestand maximum amountfinanced shallbedeterminedinaccordance withtheHearing Report. It isnotexpectedthat theCitywillissue bondsinconnection withanyProgram. IftheCityissuesbondsinconnectionwith aProgram, theCitywill establishpoliciesconcerning thecredit quality ofsuch bonds onacaseby casebasis. 3. Underwriting RequirementsforFinancings. For eachproperty, thefinancing of EligibleImprovementsonthatpropertymust meettheeligibility requirements setforthintheHearing Report. TheHearing Reportmaybeamended or modified fromtimeto timeas specified thereinor theCityCouncil maywaiveormodifyany requirementintheHearing Report onacase bycasebasis. 4. MaximumAnnual Special Tax. Thetotalannualaggregate amount ofproperty taxes andassessmentsoneach propertythatparticipates inaProgram, including thespecial taximposed throughsuch Program maynotexceed fivepercent (5%) ofthevalue oftheproperty. Thevalue of theproperty will bederived from theassessedvalue, theappraised value, oranestimate ofvalue basedupon data supplied byareputable realestate information service. Ifappraisals areusedto determinevalueforany purpose ofaProgram, thedefinitions, standards, andassumptions tobeused DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8 COUNCIL POLICY CITYOF CHULAVISTA SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE EstablishmentofCommunity Facilities NUMBER DATE PAGE Districts 505-04 4/9/2019 23OF23 ADOPTED BY: Resolution No. 2019-051 DATED: 4/9/2019 AMENDEDBY: insuch appraisals shallbedetermined ona casebycasebasisby theCityortherelated Program Administrator. 5. AdministrationCosts. The annualspecial taxforeachpropertythatparticipates ina Program mustbe inan amountsufficient (i) tofinanceorrefinance theEligibleImprovements for suchproperty and (ii) to paytheproperty’spro-ratashare oftheCity’sandtherelatedProgram Administrators coststoadministersuchProgram. 6. MinimumStandards; WaiverandAmendment. Thepolicies setforth inthissection reflecttheminimumstandards underwhichtheCitywillmakeuse oftheMello-Roos Act tofinance EligibleImprovements. TheCitymay, in itsdiscretion, requireadditional measures andprocedures, enhancedsecurityandhigher standards inparticular cases. The Citymay, inits discretion andtothe extentpermitted by law, waiveanyofthepoliciessetforthherein. Such waivers aregrantedonlyby actionoftheCityCouncil. Thegoals andpolicies setforthinthis section may be amended atany time and fromtime totime bythe City. DocuSign Envelope ID: 926BEA1E-D65A-424A-ADE4-BF86FB5E38F8