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HomeMy WebLinkAboutReso 2005-025 RESOLUTION NO. 2005-025 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2001-1 (SAN MIGUEL RANCH), MAKING CERTAIN DETERMINATIONS, AND AUTHORIZING THE SUBMITTAL OF THE PROPOSED MODIFICATIONS TO THE FACILITIES AUTHORIZED TO BE FINANCED BY SUCH COMMUNITY FACILITIES DISTRICT, THE RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES AUTHORIZED TO BE LEVIED WITHIN IMPROVEMENT AREA B THERETO AND THE AUTHORIZED BONDED INDEBTEDNESS FOR IMPROVEMENT AREA B TO THE QUALIFIED ELECTORS THEREOF WHEREAS, the City Council of the City ofChula Vista, California, (the "City Council") previously has previously undertaken proceedings to form Community Facilities District No 2001-1 (San Miguel Ranch) (the "District"), to designate two improvement areas therein ("Improvement Area A" and "Improvement Area B") and to authorize the levy of special taxes within each Improvement Area pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (Government Code Section 53311 and following) (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") to finance the acquisition or construction of certain authorized facilities. WHEREAS, the qualified electors of each Improvement Area of the District, voting in a special election held on December II, 2001, approved the authorization to (a) levy special taxes within each Improvement Area pursuant to a separate rate and method of apportionment of such special taxes for each Improvement Area (the rate and method of apportionment of special taxes approved for Improvement Area B shall be referred to as the "Existing Improvement Area B RMA") and (b) to incur a bonded indebtedness of the District for Improvement Area B in a principal amount not to exceed $6,000,000 (the "Existing Improvement Area B Bond Authorization"); and WHEREAS, subsequent to the formation of the District and such election, NNP-Trimark San Miguel Ranch, LLC and Procter Valley West Properties, LLC, the current master developers of the property within the District, have requested that the City Council, acting as the legislative body of the District, initiate proceedings to consider modifications to (a) the facilities authorized to be financed (the "Authorized Facilities") from the proceeds of special taxes levied within Improvement Area B of the District and/or bonds issued by the District for Improvement Area B which are secured by the levy of such special taxes, (b) the Existing Improvement Area B RMA and (c) the Existing Improvement Area B Bond Authorization; and WHEREAS, the City Council has adopted its Resolution No. 2004-390 declaring its intention to consider modifications to (a) the Authorized Facilities, (b) the Existing Improvement Area B RMA and (c) the Existing Improvement Area B Bond Authorization; and Resolution 2005-025 Page 2 WHEREAS, notice of a public hearing to consider the proposed modifications has been given in the form and manner required by the Community Facilities District Law; and WHEREAS, it has now been determined that written protests have not been received by 50% or more of the registered voters residing within Improvement Area B of the District and/or property owners representing more than one-half or more of the area of land within Improvement Area B of the District to the proposed modifications or anyone of them; and WHEREAS, inasmuch as there have been less than twelve persons registered to vote within Improvement Area B for each of the ninety preceding days, this legislative body desires to submit the questions of authorizing the modifications to the Authorized Facilities, the Existing Improvement Area B RMA and the Existing Improvement Area B Bond Authorization to the landowners of Improvement Area B, said landowners being the qualified electors as authorized bylaw. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2001-1 (SAN MIGUEL RANCH), DOES HEREBY RESOLVE, DECLARE, FIND, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. RECITALS. The above recitals are all true and correct. SECTION 2. DETERMINATIONS It is determined by this City Council that: A. All proceedings related to the proposed modifications to (a) the Authorized Facilities, (b) the Existing Improvement Area B RMA and (c) the Existing Improvement Area B Bond Authorization prior hereto were valid and taken in conformity with the requirements of law, and specifically the provisions of the Community Facilities District Law. B. The proposed modifications to (a) the Authorized Facilities, (b) the Existing Improvement Area B RMA and (c) the Existing Improvement Area B Bond Authorization conform with the City of Chula Vista Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts. C. The Additional Facilities (as defined below) proposed to be financed from the proceeds of special taxes to be levied within the Improvement Area B are necessary to meet increased demands placed upon the City of ChuIa Vista as a result of development and/or rehabilitation occurring in Improvement Area B. D. Written protests have not been received by 50% or more of the registered voters residing within Improvement Area B of the District and/or property owners representing more than one-half or more of the area of land within Improvement Area B of the District to the proposed modifications to (a) the Authorized Facilities, (b) the Existing Improvement Area B RMA or (c) the Existing Improvement Area B Bond Authorization. E. Less than twelve registered voters have resided within Improvement Area B for each of the ninety days preceding the close of the public hearing and, consequently, the qualified electors shall be the landowners of Improvement Area B and each landowner who is the owner of record as of the close of the public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre of land that she or he owns within Improvement Area B. Resolution 2005-025 Page 3 F. The qualified electors have consented to the shortening oftime for conducting the special election to present the questions to authorize the modifications to (a) the Authorized Facilities, (b) the Existing Improvement Area B RMA and (c) the Existing Improvement Area B Bond Authorization, therefore, such special election may be conducted less than 90 days following the date of the public hearing to consider such modifications. SECTION 3. DESCRIPTION OF THE AREA TO BE AFFECTED. The area to be affected by the proposed modifications to the Authorized Facilities, the Existing Improvement Area B RMA, and the Existing Improvement Area B Bond Authorization is all of Improvement Area B of the District as shown on the Amended Boundary Map. SECTION 4. PROPOSED MODIFICATION OF FACILITIES AUTHORIZED TO BE FINANCED BY THE DISTRICT. This City Council hereby approves, subject to the approval by the qualified electors of the District, the modification of the Authorized Facilities to authorize the District to finance the additional facilities set forth in Exhibit "A" attached hereto and incorporated herein by this reference (the "Additional Facilities" and together with the Authorized Facilities, the "Modified Facilities"). SECTION 5. PROPOSED MODIFICATION TO THE EXISTING IMPROVEMENT AREA B RMA. Except to the extent that funds are otherwise available to the District to pay for the Modified Facilities, this City Council hereby approves, subject to the approval by the qualified electors of Improvement Area B, changes to the Existing Improvement Area B RMA to authorize the levy of special taxes within Improvement Area B pursuant to the modified rate and method of apportionment of special taxes (the "Modified Improvement Area B RMA") set forth in Exhibit "B" attached hereto and incorporated herein by this reference. Such modified special taxes shall be secured by recordation of a continuing lien against all non-exempt real property within Improvement Area B, shall be levied annually within Improvement Area B, and shall be collected in the same manner as ordinary ad valorem property taxes, or in such other manner at this Board or its designee shall determine, including direct billing of the affected property owners. Under no circumstances will the special tax levied against any parcel used for private residential purposes be increased by more than 10% as a consequence of delinquency or default by the owner of any other parcel or parcels within Improvement Area B. 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 Modified Improvement Area B RMA sets forth the conditions under which the special tax obligation for any parcel within Improvement Area B may be prepaid and permanently satisfied in whole or in part. SECTION 6. PROPOSED MODIFICATION TO THE EXISTING IMPROVEMENT AREA B BOND AUTHORIZATION. This City Council hereby approves, subject to the approval by the qualified electors of the District, the modification of the Existing Improvement Area B Bond Authorization by increasing such authorization from $6,000,000 to $14,000,000 (the "Modified Improvement Area B Bond Authorization"). SECTION 7. SPECIAL TAX ACCOUNTABILITY MEASURES. Pursuant to and in compliance with the provisions of Govemment Code Section 50075.1, this City Council hereby establishes the following accountability measures pertaining to the levy by the District within Improvement Area B ofthe special taxes described in Section 5 above: Resolution 2005-025 Page 4 A. Such special tax shall be levied for the specific purposes set forth in Section 5. above. B. The proceeds of the levy of such special tax shall be applied only to the specific applicable purposes set forth in Section 5. above. C. The District shall establish a separate account into which the proceeds of such special tax shall be deposited. D. The City Manager or his or her designee, acting for and on behalf of the District, shall annually file a report with the City Council as required pursuant to Government Code Section 50075.3. SECTION 8. BOND ACCOUNTABILITY MEASURES. Pursuant to and in compliance with the provisions of Article 1.5 (commencing with Section 534 I 0) of Chapter 3 of Part I of Division 2 of Title 5 of the Government Code, this City Council hereby establishes the following accountability measures pertaining to any bonded indebtedness for Improvement Area B incurred by or on behalf of the District: A. Such bonded indebtedness shall be incurred for the purpose of financing the costs of the acquisition or construction of the Modified Facilities, appurtenances and appurtenant work and any and all of those applicable incidental costs described in and authorized by Government Code Section 53345.3. B. The proceeds of any such bonded indebtedness shall be applied only to the applicable specific purposes identified in paragraph A above. C. The document or documents establishing the terms and conditions for the issuance of any such bonded indebtedness shall provide for the creation of an account into which the proceeds of such indebtedness shall be deposited. D. The City Manager or his or her designee, acting for and on behalf of the District, shall annually file a report with this City Council as reqúired by Government Code Section 53411. SECTION 9. ELECTION. The propositions to authorize the District to (a) finance the Additional Facilities, (b) levy special taxes within Improvement Area B pursuant to the Modified Improvement Area B RMA and (c) issue bonds secured by such special taxes in a principal amount not to exceed $14,000,000 and the shall be submitted to the qualified electors of Improvement Area B, said electors being the landowners, with each landowner having one (1) vote for each acre or portion thereof of land which he or she owns within said annexed territory. The special election shall be held on January 24, 2004 or such other date as the City Clerk, acting as the election official for such special election (the "Election Official"), and all of the qualified electors within Improvement Area B may agree and consent. If the proposition to authorize the District to finance the Additional Facilities receives the approval of more than two-thirds of the votes cast on such proposition, the District may finance the Additional Facilities as provided for in this Resolution. If the proposition to authorize the levy of the special tax pursuant to the Modified Improvement Area B RMA receives the approval of more than two-thirds (2/3) of the votes cast on such proposition, the special tax may be levied pursuant to the Modified Improvement Area B RMA as provided for in this resolution. If the proposition to authorize the District to incur a bonded indebtedness for Improvement Area B in an amount equal to the Resolution 2005-025 Page 5 Modified Improvement Area B Bond Authorization, the District shall be authorized to incur such bonded indebtedness as provided for in this resolution. SECTION 10. BALLOT The ballot proposals to be submitted to the qualified voters at the election shall generally be as follows: PROPOSITION A Shall City of Chula Vista Community Facilities District No. 2001-1 (San Miguel Ranch), be authorized to finance the Additional Facilities in addition to the Authorized Facilities as such terms are defined in Resolution No. 2005-025? PROPOSITION B Shall City of Chula Vista Community Facilities District No. 2001-1 (San Miguel Ranch), subject to accountability measures set forth in Resolution No. 2005-025, be authorized to levy a special tax pursuant to the revised rate and method of apportionment as set forth in such Resolution for the purposes of paying debt service on bonds of such district issued for Improvement Area B, replenishing the reserve fund for such bonds, paying costs of administering such indebtedness and such district and paying directly for the Modified Facilities as defined in such Resolution? PROPOSITION C Shall the City of Chula Vista Community Facilities District No. 2001-1 (San Miguel Ranch), subject to accountability measures set forth in Resolution No. 2005-025, incur a bonded indebtedness for Improvement Area A of such district in an amount not to exceed $14,000,000 for the specific purposes set forth in such resolution? SECTION 11. VOTE. The appropriate mark placed in the box after the word "YES" shall be counted in favor of the adoption of the proposition voted upon, and the appropriate mark placed in the box after the word "NO" in the manner as authorized, shall be counted against the adoption of said proposition. SECTION 12. ELECTION PROCEDURE. The Election Official is hereby authorized to take any and all steps necessary for the holding of said election. Said Election Official shall perform and render all services and proceedings incidental to and connected with the conduct of said election, and said services shall include, but not be limited to the following: A. Prepare and furnish to the election officers necessary election supplies for the conduct of the election. B. Cause to be printed the requisite number of official ballots, tally sheets and other necessary forms. C. Furnish and address official ballots for the qualified electors of Improvement Area B. D. Cause the official ballots to be mailed and/or delivered, as required by law. Resolution 2005-025 Page 6 E. Receive the returns of the election. F. Sort and assemble the election material and supplies III preparation for the canvassing of the returns. G. Canvass the returns of the election. H. Furnish a tabulation of the number of votes given in the election. I. Make all arrangements and take the necessary steps to pay all costs of the election incurred as a result of services performed for the District and pay costs and expenses of all election officials. J. Conduct and handle all other matters relating to the proceedings and conduct of the election in the manner and form as required by law. Prepared by Approved as to form by <Ä\QXCìf\\\ ~ ,,-h'O \9... Ann Moore ' City Attorney Resolution 2005-025 Page 7 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 25th day of January, 2005, by the following vote: AYES: Councilmembers: Castaneda, Davis, McCann, Rindone and Padilla NAYS: Councilmembers: None ABSENT: Councilmembers: None ATTEST: S~;an i:~:, ~,citfÌirkP in -/ 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. 2005-025 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 25th day of January, 2005. Executed this 25th day of January, 2005. ~~ -_ ~.J 1 tu.... I (j ~ Susan Bigelow, MMC, City lerk EXHIBIT A ADDITIONAL AUTHORIZED FACILITIES · Facilities to be financed by proceeds of the Public Facilities Development Impact Fee · Facilities to be flllanced by proceeds of the Park Acquisition and Development Fee · Facilities to be financed by proceeds of the Fiscal Deficit Impact Fee " A-I EXHIBIT B MODIFIED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX COMMUNITY FACILITIES DISTRICT 2001-1 (SAN MIGUEL RANCH) IMPROVEMENT AREA B {Attach a copy of the revised Rate and Method] B-1 AMENDED RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1, IMPROVEMENT AREA B (San Miguel Ranch) A Special Tax as hereinafter defmed shall be levied on all Assessor's Parcels of Taxable Property within the City of Chula Vista Community Facilities District No. 2001-1 ("CFD No. 2001-1 Improvement Area B") and collected each Fiscal Year commencing in Fiscal Year 2005-06, in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," and "Undeveloped Property as described below. All of the real property in Improvement Area B, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: " 'A' Map" shall mean a master fmal subdivision or parcel map, filed in accordance with the Subdivision Map Act and the Chula Vista Municipal Code, which subdivides the land or a portion thereof shown on a tentative map into "super block" lots corresponding to units or phasing of a combination of units as shown on such tentative map and which may further show open space lot dedications, backbone street dedications and utility easements required to serve such "super block" lots. "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, record of survey, or other recorded document creating or describing the parcel. If the preceding maps are not available, the Acreage 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 Expenses" means the following actual or reasonably estimated costs directly related to the administration ofImprovement Area B of CFD No. 2001-1 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 ofremitting 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 No. 2001-1, or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2001-1, or any designee thereof of complying with disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure City ofChula Vista Community Facilities District No. 2001-1, 1mprovementAreo B San Mirzuel Ranch Revised November 2004 Palle 1 statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2001-1, or any designee thereof related to an appeal 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 No. 2001-1, Improvement Area B for any other administrative purposes of CFD No. 2001- I, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Category of Developed Property as determined in accordance with Section C.I.a. "Available Funds" means the balance in the reserve fund established pursuant to the terms of the Indenture in excess of the reserve requirement as defined in such Indenture, delinquent Special Tax payments, the Special Tax prepayments collected to pay interest on Bonds, and other sources of funds available as a credit to the Special Tax Requirement as specified in such Indenture. "Backup Special Tax" means the Special Tax amount set forth in Section C.l.b. "Bonds" means any bonds or other debt (as defined in the Act), whether in one or more series, issued by CFD No. 2001-1 for Improvement AreaB under the Act. "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 No. 2001-1" means City of Chula Vista, Community Facilities District No. 2001-1 (San Miguel Ranch). "City" means the City of Chula Vista. "Commercial Property" means all Assessor's Parcels of DeveIoped Property for which a building permit has been issued for purposes of constructing one or more non-residential structures, excluding Community Purpose Facility Property. "Community Purpose Facility Property" means all Assessor's Parcels which are (a) classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2002-2883 as amended on November 5, 2002 or (b) designated with specific boundaries and acreage on an 'A' Map or Final Subdivision Map as a community purpose facility. - City ofChula Vista Community Facilities District No. 2001-1, ImprovementArea B San Miguel Ranch Revised November 2004 Pa"e 2 "Council" means the City Council of the City, acting as the legislative body ofCFD No. 2001-1. "County" means the County of San Diego. "Developed Property" means, for each Fiscal Year, all Taxable Property for which a building permit for new construction was issued prior to March 1 of the prior Fiscal Year. "Exempt Property" means all Assessor's Parcels that are exempt from the levy of the Special Tax pursuant to the provisions of Section E. "Final Map" means a subdivision of property created by recordation of a fmal map, parcel map, or lot line adjustment, approved by the City pursuant to the Subdivision Map Act (California Gove=ent Code Section 664 I 0 et seq.) or recordation of a condominium plan pursuant to California Civil Code 13 52 that creates individual lots for which residential building permits may be issued without further subdivision of such property. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Improvement Area B" means Improvement Area B ofCFD No. 2001-1. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1 of Section C. "Lot(s)" means an individual legal lot created by a Final Map for which a building permit for residential construction has been or could be issued. "Master Developer" means the owner of the predominant amount of Undeveloped Property in Improvement Area B. "Maximum Annual Special Tax" means the maximum annual Special Tax, determined in accordance with the provisions of Section C , that may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property. "Outstanding Bonds" means all Bonds which remain outstanding. "Property Owner Association Property" means any property within the boundaries of CFD No. 2001-1 which is (a) owned by a property owner association or (b) is designated with specific boundaries and acreage on an 'A' Map or Final Subdivision Map as property owner association property. As used in this definition, a property owner association property includes any master or sub-association. City ofChula Vìsta Community Facilities District No. 2001-1, Improvement Area B San Miguel Ranch Revised November 2004 Page 3 "Proportionately" means for Developed Property that the ratio of the actual Special Tax levy to the Assigned Special Tax or Backup Special Tax is equal for all Assessor's Parcels of Developed Property within Improvement Area B. For Undeveloped Property "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Annual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property within Improvement Area B. "Public Property" means any property within the boundaries of CFD No. 2001-1 that which (a) is owned by a public agency, (b) has been irrevocably offered for dedication, prior to June 1st of the preceding Fiscal Year, to a public agency or (c) is designated with specific boundaries and acreage on an 'A' Map or Final Subdivision Map as property which will be owned by a public agency. For purposes of this defmition, a public agency includes the federal government, the State of California, the County, the City or any other public agency. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be made by reference to appropriate records kept by the City's Building Department. Residential Floor Area will be based on the building permit(s) issued for each dwelling unit prior to it being classified as Residential Property, and shall not change as a result of additions or modifications made after such classification as Residential Property. "Special Tax" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2001-1, Improvement Area B to: (i) pay annual debt service on all Outstanding Bonds; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture; (v) and pay directly for acquisition and/or construction of public improvements which are authorized to be fmanced by CFD No. 2001-1 for Improvement Area B; (vi) less a credit for Available Funds. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of Improvement Area B which are not exempt ITom the Special Tax pursuant to law or Section E below. "Trustee" means the trustee, fiscal agent, ör paying agent under the Indenture. City ofChula Vista Community Facilities District No. 2001-1, 1mprovement Area B San Miguel Ranch Revised Navember 2004 Page 4 "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property. "Zone I" means a specific geographic area as depicted in Exhibit A attached hereto. "Zone 2" means a specific geographic area as depicted in Exhibit A attached hereto. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within Improvement Area B shall be classified as Developed Property or Undeveloped Property and shall be subject to the levy of annual Special Taxes determined pursuant to Sections C and D below. Furthermore, Developed Property shall be classified as Residential Property or Commercial Property. C. MAXIMUM ANNUAL SPECIAL TAX RATE 1. Developed Property The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or Commercial Property that is classified as Developed Property shall be the greater of (I) the Assigned Special Tax described in Table 1 below or (2) the amount derived by application of the Backup Special Tax. a. Assil!ned SDeciaI Tax The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in Table 1. TABLE 1 Assigned Special Tax for Developed Property within Zone 1 and Zone 2 Land Use Class 1 Descri tion Residential Property Assi ned S ecial Tax $475.00 per unit plus $0.82 per square foot of Residential Floor Area $4,000 per Acre of Commercial Pro e 2 Commercial Property - City ofChula Vista Community Facilities District No. 2001-1, ImprovementArea B San Mí,;uel Ranch Revised November 2004 Page 5 b. Backuo Soecial Tax When a Final Map is recorded within Zone I or Zone 2, the Backup Special Tax for Assessor's Parcels of Developed Property classified as Residential Property or Commercial Property shall be determined as follows: For each Assessor's Parcel of Developed Property classified as Residential Property or for each Assessor's Parcel of Undeveloped Property to be classified as Residential Property within the Final Map area, the Backup Special Tax shall be the rate per Lot calculated according to the following formula: Zone I $10,444xA B= ------------------------ L Zone 2 $4,444xA B= ------------------------ L The terms above have the following meanings: B = Backup Special Tax per Lot in each Fiscal Year. A = Acreage classified or to be classified as Residential Property in such Final Map. L = Lots in the Final Map which are classified or to be classified as Residential Property. For each Assessor's Parcel of Developed Property classified as Commercial Property or for each Assessor's Parcel of Undeveloped Property to be classified as Commercial Property within the Final Map area, the Backup Special Tax shall be determined by multiplying $10,444 for Zone 1 and $4,444 for Zone 2 by the total Acreage of the Commercial Property and Undeveloped Property to be classified as Commercial Property within the Final Map area. Notwithstanding the foregoing, if Assessor's Parcels of Residential Property, Commercial Property or Undeveloped Property for which the total Backup Special Tax has been determined are subsequently changed or modified by recordation of a new or amended Final Map, then the total Backup Special Tax applicable to such Assessor's Parcels shall be recalculated to equal the amount of total Backup Special Tax that would have been generated if such change did not take place. City ofChula Vista Community Facilities District No. 2001-1, Improvement Area B San Miguel Ranch Revised Navemher 2004 Page 6 2. Undeveloped Property The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped Property shall be $10,444 per Acre for Zone 1 and $4,444 per Acre for Zone 2. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2005-06 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 on each Assessor's Parcel of 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 after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property, excluding any Assessor's Parcels classified as Undeveloped Property pursuant to Section E, at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax to be levied on each Assessor's Parcel whose Maximum Annual Special Tax is derived by the application of the Backup Special Tax and shall be increased Proportionately ftom the Assigned Special Tax up to the Maximum Annual Special Tax for each such Assessor's Parcel. Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel classified as Undeveloped Property pursuant to Section E at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property be increased by more than ten percent per year as a consequence of delinquency or default in the payment of Special Taxes by the owner of any other Assessor's Parcel in Improvement Area B. , R(Nised November 2004 City ofChula VIsta Community Facilities District No. 200]-], ImprovementArea B San Miguel Ranch Page 7 E. EXEMPTIONS I. The CFD Administrator shall classify as Exempt Property (i) Assessor's Parcels defmed as Public Property, (ü) Assessor's Parcels defined as Property Owner Association Property, (ill) Assessor's Parcels defined as Community Purpose Facility Property or (iv) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, provided that no such classification would reduce the sum of all Taxable Property to less than 100.94 Acres in Zone 1 and 9.63 Acres in Zone 2. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 100.94 Acres in Zone I and 9.63 Acres in Zone 2 will be classified as Undeveloped Property and shall be taxed as such. Tax-exempt status for purposes of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes Exempt Property. 2. The Maximum Annual Special Tax obligation for any Public Property which cannot be classified as Exempt Property as described in the first paragraph of Section E shall be prepaid in full by the seller pursuant to Section H.l, prior to the transfer/dedication of such property. 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 Undeveloped Property. 3. If the use of an Assessor's Parcel of Exempt Property changes so that such Assessor's Parcel is no longer classified as one of the uses set forth in paragraph 1 that would make such Assessor's Parcel eligible to be classified as Exempt Property, such Assessor's Parcel shall cease to be classified as Exempt Property and shall be deemed to be Taxable Property. F. REVIEW/APPEAL COMMITTEE The Council shall establish as part of the proceedings and administration ofCFD No. 2001- 1, Improvement Area B a special three-member 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 may file a written notice with the Review/Appeal Committee appealing the amount of the Special Tax levied on such Assessor's Parcel. The Review/Appeal Committee may establish such procedures as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. City ofChula Vista Community Facilities District No. 2001-1, Improvement Area B San Miguel Ranch Revised November 2004 Page 8 G. MANNER OF COLLECTION The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2001-1, Improvement Area B may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its fmancial obligations, and may covenant to foreclose and may actually foreclose on Assessor's Parcels which are delinquent in the payment of Special Taxes. Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. H. PREPAYMENT OF SPECIAL TAX The following definition applies to this Section H: "CFD Public Facilities" means those public facilities authorized to be fmanced by Improvement Area B. "CFD Public Facilities Costs" means either $9.75 million, or such lower number as shall be determined either by (a) the CFD Administrator as sufficient to finance the CFD Public Facilities, or (b) the Council concurrently with a covenant that it will not issue any more Bonds to be secured by Special Taxes levied under this Rate and Method of Apportionment. "Construction Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct the CFD Public Facilities. "Future Facilities Costs" means the CFD Public Facilities Costs minus that (a) portion of the CFD Public Facilities Costs previously funded (i) from the proceeds of all previously issued Bonds, (ii) from interest earnings on the Construction Fund actually earned prior to the dateofprepayment 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. Revised Navember 2004 City ofChula VistaCommunity Facilities District No. 2001-1, Improvement Area B San Miguel Ranch Page 9 1. Prepayment in Full The Maximum Annual Special Tax obligation may only be prepaid and permanently satisfied by an Assessor's Parcel of Developed Property, Undeveloped Property for which a building permit has been issued, or Public Property. The Maximum Annual Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of the Assessor's Parcel to pay the Special Tax permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Annual Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure. The Prepayment Amount (defmed below) shall be calculated as summarized below (capitalized terms as defmed below): Bond Redemption Amount plus plus plus plus less less Total: equals Redemption Premium Future Facilities Amount Defeasance Amount Prepayment Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Paragraph No.: 1. For Assessor's Parcels of Developed Property, compute the Maximum Annual Special Tax for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property 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 which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Public Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel using the Maximum Annual Special Tax for Undeveloped Property. 2. Divide the Maximum Annual Special Tax computed pursuant to paragraph 1 by the sum of the total expected Maximum Annual Special Tax revenues which may be levied within Improvement Area B excluding any Assessors Parcels for which the Maximum Annual Special Tax obligation has been previously prepaid. City ofChula Vista Community Facilities District No. 2001-1, Improvement Area B San Miguel Ranch Revised November 2004 Page 10 3. Multiply the quotient computed pursuant to paragraph 2 by the principal amount of Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 4. Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 5. If all the Bonds authorized to be issued for Improvement Area B have not been issued, compute the Future Facilities Costs. 6. Multiply the quotient computed pursuant to paragraph 2 by the amount determined pursuant to paragraph 5 to compute the amount of Future Facilities Costs to be allocated to such Assessor's Parcel (the "Future Facilities Amount"). 7. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 8. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. 10. Determine the fees and expenses of Improvement Area B, including but not limited to, the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds from the proceeds of such prepayment, and the cost of recording any notices to evidence the prepayment and the redemption (the "Prepayment Fees and Expenses"). 11. Compute the amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Prepayment Fees and Expenses as determined pursuant to paragraph 10, from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 12. Add the amounts computed pursuant to paragraphs 7 and 9 and subtract the amount computed pursuant to paragraph 11 (the "Defeasance Amount"). 13. 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. Revised November 2004 City ofChula Vista Community Facilities District No. 2001-1, ImprovementArea B San Miguel Ranch Page 11 14. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 2 by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit") . 15. The Maximum Annual Special Tax prepayment is equal to the sum of the amounts computed pursuant to paragraphs 3, 4, 6, 10 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Prepayment Amount"). 16. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 12, 13, and 14 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds Of make debt service payments. The amount computed pursuant to paragraph 10 shall be retained by CFD No. 2001- 1, Improvement Area B. The amount computed pursuant to paragraph 6 shall be deposited in the Construction Fund. The Prepayment Amount may be insufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the CFD Administrator 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 Parce~ and the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Annual Special Taxes that may be levied on Taxable Property within CFD No. 2001-1, Improvement Area B both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. Tenders of Bonds in prepayment of Maximum Annual Special Taxes may be accepted upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. 2. Prepayment in Part The Maximum Annual Special Tax obligation on an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as City ofChula Vista Community Facilities District No. 2001-1, Improvement Area B San Miguel Ranch Revised Novémher 2004 Page 12 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 PE = the Prepayment Amount calculated according to Section H.l, minus Prepayment Fees and Expenses 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 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, (ü) the percentage by which the Maximum Annual Special Tax shall be prepaid, and (üi) the company or agency that will be acting as the escrow agent, if applicable. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Maximum Annual Special Tax for an Assessor's Parcel within 30 days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Paragraph 16 of Section H. I, and (ü) indicate in the records ofCFD No. 2001-1, Improvement Area B that there has been a partial prepayment of the Maximum Annual Special Tax and that a portion of the Maximum Annual Special Tax equal to the outstanding percentage (1.00 - F) of the remaining Maximum Annual Special Tax shall continue to be authorized to be levied on such Assessor's Parcel pursuant to Section D. I. TERM OF MAXIMUM ANNUAL SPECIAL TAX The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2005-06 to the extent necessary to fully satisfy the Special Tax Requirement for a period no longer than 2041-42. City ofChula Vista Community Facilities District No. 2001-1, ImprovementArea B San Miguel Ranch Revised November 2004 Page 13 iš ::¡- .~ Ii ~ g~~ ~ ~ "'''' gf,,~ ¡;¡ ~'~E~; '''"I- P ",!1 r" ~. "I" ~~~~~+mmm~~~~~~o__ "g:;, w~.~ ~~ ~~i os ~ .. ~!!! 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