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HomeMy WebLinkAboutReso 2005-232 RESOLUTION NO. 2005-232 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARING ITS INTENTION TO ESTABLISH COMMUNITY FACILITIES DISTRICT NO. 12-1 (MCMILLIN - OT A Y RANCH - VILLAGE SEVEN) AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX THEREIN TO FINANCE THE ACQUISITION OR CONSTRUCTION OF CERTAIN PUBLIC FACILITIES WHEREAS, the City Council of the City ofChula Vista (the "City Council"), at this time desires to initiate proceedings to create a Community Facilities District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part I, Division 2, Title 5 of the Government Code of the State of California (the "Act") and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community Facilities District Law"). This Community Facilities District shall hereinafter be referred to as Community Facilities District No. 12-1 (McMillin - Otay Ranch - Village Seven) (the "District"); and WHEREAS, this City Council desires to proceed to adopt its Resolution of Intention to initiate the proceedings to consider the establishment of such District, to set forth the proposed boundaries for such District, to indicate the public facilities proposed to be financed by such District, to indicate the proposed rate and apportionment of a special tax sufficient to finance the acquisition or construction of such facilities and the administration of the District and any indebtedness incurred by the District, to set a time and place for a public hearing relating to the establishment of such District; and WHEREAS, the Community Facilities District Law provides that the City Council may initiate proceedings to establish a community facilities district only if it has first considered and adopted local goals and policies concerning the use of the Community Facilities District Law; and WHEREAS, this City Council has adopted local goals and policies as required pursuant to the Community Facilities District Law. NOW, THEREFORE, IT IS HEREBY RESOLVED: RECITALS SECTION I. The above recitals are all true and correct. Resolution No. 2005-232 Page 2 INITIATION OF PROCEEDINGS SECTION 2. These proceedings are initiated by this City Council pursuant to the authorization of the Community Facilities District Law. BOUNDARIES OF DISTRICT SECTION 3. It is the intention of this City Council to establish the boundaries of the proposed District. A description of the proposed boundaries of the territory to be included in the District including the properties and parcels of land proposed to be subject to the levy of a special tax by the District is as follows: All that property as shown on a map as previously approved by this City Council, such map entitled "Boundaries of Community Facilities District No. 12-1 (McMillin - Otay Ranch - Village Seven)", a copy of which is on file in the Office of the City Clerk and shall remain open for public inspection. NAME OF DISTRICT SECTION 4. The name of the proposed District t shall be Community Facilities District No. 12-1 (McMillin - Otay Ranch - Village Seven). DESCRIPTION OF FACILITIES SECTION 5. It is the intention of this City Council to finance the acquisition or construction of certain facilities authorized to be acquired pursuant to the provisions of the Community Facilities District Law. A general description of the facilities proposed to be authorized to be acquired or constructed is set forth in Exhibit A attached hereto and incorporated herein by this reference (the "Facilities"). The Facilities are facilities which this legislative body is authorized by law to contribute revenue to or to construct, own or operate. It is hereby further determined that the proposed Facilities are necessary to meet increased demands and needs placed upon the City as a result of development within the District. The cost of acquiring or constructing the Facilities includes Incidental Expenses as such term is defined in Government Code Section 53317(e) and may include, but not be limited to, the costs of planning and designing the facilities; all costs associated with the establishment of the District, the issuance and administration of bonds to be issued for the District, including the payment of any rebate obligation due and owing to the federal government, the determination of the amount of any special taxes to be levied, the costs of collecting any special taxes, and costs otherwise incurred in order to carry out the authorized purposes of the District, together with any other expenses incidental to the acquisition, construction, completion and inspection of the Facilities. '-- _____ ___u__.~ Resolution No. 2005-232 Page 3 SPECIAL TAX SECTION 6. It is hereby further proposed that, except where funds are otherwise available, a special tax sufficient to pay for the acquisition or construction of the Facilities and related Incidental Expenses authorized by the Community Facilities District Law, secured by recordation of a continuing lien against all non-exempt real property in the District, will be levied annually within the boundaries of the District. Under no circumstances will the special tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the District by more than 10 percent (10%). For further particulars as to the rate and method of apportionment of the proposed special tax (the "Rate and Method of Apportionment") reference is made to the attached and incorporated Exhibit B, which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within the proposed District to clearly estimate the maximum amount that such person will have to pay. The Rate and Method of Apportionment also set forth the tax year after which no further special tax shall be levied or collected against any parcel used for private residential purposes. A parcel shall be considered "used for private residential purposes" not later than the date on which an occupancy permit or the equivalent for private residential use is issued for such parcel. The special taxes herein proposed, to the extent possible, shall be collected in the same manner as ad valorem property taxes or in such other manner at this City Council shall determine, including without limitation, direct billing of the affected property owners, and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the Treasurer of the City of Chula Vista (the "City"), acting for and on behalf of the District. The special tax obligation for any parcel may be prepaid and permanently satisfied in whole or in part pursuant to the provisions therefor contained in the Rate and Method of Apportionment. PUBLIC HEARING SECTION 7. Notice is given that on August 16,2005, at the hour of 6:00 o'clock p.m., in the regular meeting place of the City Council being the Council Chambers, City Hall, located at 276 Fourth Street, Chula Vista, California, a Public Hearing will be held where the City Council will consider the establishment of the proposed district, the rate and method of apportionment of the special tax proposed to be levied within the district, and all other matters as set forth in this resolution of intention. At the above-mentioned time and place for Public Hearing any persons interested, including taxpayers and property owners may appear and be heard. The testimony of all interested persons for or against the establishment of the district, the extent of the district, or the financing of the facilities, will be heard and considered. Any protests may be made orally or in writing, however, any protests pertaining to the regularity or sufficiency of the proceedings shall be in writing and clearly set forth the irregularities and defects to which the objection is made. All written protests shall be filed with the City Clerk of the City on or before the time fixed for the Public Hearing. Written protests may be withdrawn in writing at any time before the conclusion of the public hearing. Resolution No. 2005-232 Page 4 If a written majority protest against the establishment of the district is filed, the proceedings shall be abandoned. If such majority protest is limited to certain facilities or portions of the special tax, those facilities or that portion of the special tax shall be eliminated by the City Council. ELECTION SECTION 8. If, following the public hearing described in the Section above, the City Council determines to establish the District and proposes to levy a special tax within the District, the City Council shall then submit the levy of the special taxes to the qualified electors of the District. If at least twelve (12) persons, who need not necessarily be the same twelve (12) persons, have been registered to vote within an the District for each of the ninety (90) days preceding the close of the public hearing, the vote shall be by registered voters of the District, with each voter having one (1) vote. Otherwise, the vote shall be by the landowners of District who were the owners of record at the close of the subject hearing, with each such landowner or the authorized representative thereof, having one (1) vote for each acre or portion of an acre of land owned within the District. NOTICE SECTION 9. Notice of the time and place of the public hearing shall be given by the City Clerk by causing the publication of a Notice of Public Hearing in the legally designated newspaper of general circulation, such publication pursuant to Section 6061 of the Government Code, with such publication to be completed at least seven (7) days prior to the date set for the public hearing. The City Clerk shall also cause notice to be given by first-class mail to each registered voter, if any, and to each landowner as defined in the Cornmunity Facilities District Law within the proposed boundaries of the District. Such notice shall be mailed at least 15 days before the public hearing and shall contain the same information as is required to be contained in the notice published pursuant to the preceding paragraph. RESER V ATION OF RIGHTS TO AUTHORIZE TENDER OF BONDS SECTION 10. The City Council reserves to itself, in its capacity as the legislative body of the District if formed, the right and authority to allow any interested owner of property within the District, subject to the provisions of Government Code Section 53344.1 and to such conditions as this City Council may impose, and any applicable prepayment penalties as may be described in the bond indenture or comparable instrument or document, to tender to the Treasurer, acting for and on behalf of the District, in full payment or part payment of any installment of the special taxes or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bond or other obligation to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender. I L Resolution No. 2005-232 Page 5 ADVANCES OF FUNDS OR WORK-IN-KIND SECTION II. At any time either before or after the formation of the District, the City Council may accept advances of funds or work-in-kind from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds or that work-in- kind for any authorized purpose, including, but not limited to, paying any cost incurred by the City in creating the District. The City may enter into an agreement, by resolution, with the person or entity advancing the funds or work-in-kind, to repay all or a portion of the funds so advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council. The City has entered into a Community Facilities District Reimbursement Agreement with McMillin Otay Ranch, LLC (the "Corporation") to provide for such advances for the payment of all initial consulting and administration costs and expenses related to the proceedings to consider the formation of the District and to subsequently authorize, issue and sell bonds for the District. Such advances are subject to reimbursement pursuant to the terms of such agreement. No such agreement shall constitute a debt or liability of the City. In addition, it is proposed that the City enter into an agreement with the Corporation pursuant to which the Corporation shall construct and install all or a portion of the Facilities and the District shall repay the funds expended by the Company for such purpose or value or cost of the work in- kind, whichever is less. Prepared by Approved as to form by , jk'7 {' ..----7 ~a n-Cu-LO X. Sohaib AI-Agha City Engineer /7 ~<.:e..-uc~ ~~ Ann Moore City Attorney Resolution No. 2005-232 Page 6 PASSED, APPROVED, and ADOPTED by the City Council of the City ofChula Vista, California, this 12th day of July, 2005, by the following vote: AYES: Councilmembers: Davis, McCann, Rindone, and Padilla NAYS: Councilmembers: None ABSENT: Councilmembers: Castaneda d!~(L I Stephen C. Padilla, Mayor ATTEST: i /. ~ ~, J ~ . il LLJ.... r -... ~. JI.-,. ) Susan Bigelow, MMC, City Cle 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. 2005-232 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 12th day of July, 2005. Executed this 12th day of July, 2005. ~.J - ;Ll~I--<ir- Susan Bigelow, MMC, City CI Resolution No. 2005-232 Page 7 EXHIBIT A DESCRIPTION OF TYPES OF FACILITIES The public facilities autborized to be financed by the levy of special taxes within tbe District shall include backbone streets and related improvements, including without limitation, grading, landscaping, sewers, drainage improvements and pedestrian bridges, and public utilities and otber public improvements authorized to be financed from tbe proceeds of the Public Facilities Development Impact Fee as may be authorized by tbe goals and policies of the City Council pertaining to tbe use oftbe Community Facilities District Law. Resolution No. 2005-232 Page 8 EXHIBIT B RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 12-1 (McMillin Otay Ranch Village Seven) A Special Tax as hereinafter de.fined shall be levied on each Assessor's Parcel of Taxable Property within the City of Chula Vista Co=unity Facilities District No. 12-1 (CFD No. 12-1) and collected each Fiscal Year commencing in Fiscal Year 2006-2007 in an 8IIlount determined by the City Council through the application of the appropriate Special Tax for "Developed Property", "Undeveloped Prope~ an~Qntingent Taxable Property" as described below. All of the Taxable Property CFD No. 12-1, unless exempted by law or by the provisions hereof, shall be taxed for the p'urposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meaning: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Subdivision Map, parcel map, condominium plan, record of survey, or other recorded document creating or describing the parceL If the preceding maps for a land area are not available, the Acreage of such land area shall be determined by the City Engineer. "Act" means the Mello-Roos Community Facilities Act of 1982, as 8IIlended, being Chapter 2.5, Division 2 ofTitJe 5 of the Government Code of the State of California. "Administrative Expense Requirement" means an annual 8IIlount equal to $75,000, or such lesser 8IIlount as may be designated by written instruction from an Authorized Representative to the Fiscal Agent, to be allocated as the first priority of Special Taxes received each Fiscal Year for the payment of Administrative Expenses. "Administrative Expenses" means the actual or reasonably estimated costs directly related to the administration of CFD No. 12-1 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. 12-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 12-1 or any designee thereof of providing continuing disclosure; the costs associated with preparing Special Tax disclosure stat~ents and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 12-1 or any designee thereof related to any appeal of the levy or application of the Special Tax; and the costs associated with the release of funds ft-om an escrow account, if any. Administrative City of Chula Vista Community Faci/iJie. District No. /2-/ McMillin Olay Ranch Villa!!;e Seven June 15, 2005 Pa!!;e 1 -, Resolution No. 2005-232 Page 9 Expenses shall also include amounts estimated or advanced by the City or CFD No. 12-1 for any other administrative purposes, including, but not limited to, attorney's fees and other costs related to co=encing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by an Assessor's Parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Category of Developed Property as determined in accordance with Section C.1.a. "Available Funds" means the balance in the reserve fund established pursuant to the t=s of any Indenture in excess of the reserve requirement as defined in such Indenture, delinquent Special Tax payments not required to fund the Special Tax Requirement for any preceding Fiscal Year, Special Tax prepayments collected to pay interest on Bonds, and other sources of funds available as a credit to the Special Tax Requirement as specified in such bond indenture. "Backup Special Tax" means the Backup Special Tax amount set forth in Section C.1.b. "Bonds" means any bonds or other debt (as defined in the Act), whether in one or more series, issued by CFD No. 12-1 under the Act. "Bond Year" means a one-year period beginning on September 2nd in each year and ending on September 1st in the following year, unless defined differently in the applicable Indenture. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No. 12-1 means City of Chula Vista, Co=unity Facilities District No. 12-r. "City" means the City of Chula Vista. "Contingent Taxable Property" means all Assessor's Parcels of Public Property, Property Owner Association Property, Open Space or other property that would otherwise be classified as Exempt Property pursuant to the provisions of Section E, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum acreage as set forth in Section E.l for Zone A or Zone B as applicable. City of Chula Vista Community Facilities District No. 12-1 McMillin Otav Ranch ViI/a". S"".n June 15. 2005 Pa".2 Resolution No. 2005-232 Page 10 "Council" means the City Council of the City, acting as the legislative body of CFD No. 12-1. "County" means the County of San Diego. "Developed Property" means all Assessor's Parcels of Taxable Property for which a building permit has been issued prior to March 1 II preceding the Fiscal Year in which the Special Tax is being levied. "Exempt Property" means all Assessors' Parcels that are exempt from the Special Tax pursuant to Section E.l. "Final Subdivision Map" means a subdivision of property, created by recordation of a final subdivision map, parcel map or lot line adjustment, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 1352, that creates individual lots for which residential building permits may be issued without further subdivision of such property. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended andlor supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1 of Section C.1.a. "Lot(s)" means an individual legal lot created by a Final Subdivision Map for which a building permit for residential construction has been or could be issued. Notwithstanding the foregoing, in the case of an individual legal lot created by such a Final Subdivision Map upon which condominium units are entitled to be developed but for which a condominium plan has not been recorded, the number of Lots allocable to such legal lot for purposes of calculating the Backup Special Tax applicable to such Final Subdivision Map shall equal the number of condominium units which are permitted to be constructed on such legal lot as shown on such Final Subdivision Map. "Maximum Annual Special Tax" means the maximum annual Special Tax, det=ined in accordance with the provisions of Section C, which may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property. "Non-Residential Property" means all Assessor's Parcels of Developed Property, for which a building permit(s) has been issued to allow the construction of one or more buildings or structures for a non-residential use. "Occupied Residential Property" means all Assessors' Parcels of Residential Property for which title is owned by an end user (homeowner). City of Chula Vista Community Faciliti& District No. /2-1 McMillin OIay Ranch Villaffe Seven June 15. 2005 Paffe3 - ~----~ ~-------,;,._.- Resolution No. 2005-232 Page II "Open Space" means property within the boundaries of CFD No. 12-1 which (a) has been designated with specific boundaries and acreage on a Final Subdivision Map as open space (b) is classified by the County Assessor as open space (c) has been irrevocably offered for dedication as open space to the federal government, the State of California, the County, the City, any other public agency or Cd) is encumbered by an easement or other restriction required by the City limiting the use of such property to open space. "Outstanding Bonds" mean all Bonds, which remain outstanding as defined in the Indenture. "Property Owner Association Property" means any property within the boundaries of CFD No. 12-1 which is (a) owned by a property owner association or (b) designated with specific boundaries and acreage on a Final Subdivision Map as property owner association property. As used in this definition, a property owner association includes any master or sub-association. "Proportionately" means for Developed Property that the ratio of the Special Tax levy to the Assigned Special Tax or the Backup Special Tax is equal for all Assessors' Parcels of Developed Property within CFD No. 12-1. For Undeveloped Property or Contingent Taxable Property "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Annual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property and equal for all Assessor's Parcels of Contingent Taxable Property within CFD No. 12-1. "Public Property" means any property within the boundaries of CFD No. 12-1 that which (a) is owned by a public agency, (b) has been irrevocably offered for dedication to a public agency or (c) is designated with specific boundaries and acreage on a Final Subdivision Map as property which will be owned by a public agency. For purposes of this definition, a public agency includes the federal government, the State of California, the County, the City . or any other public agency. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be made by the CFD Administrator by reference to appropriate records kept by the City's Building Department. Residential Floor Area for a residential structure will be based on the building permit(s) issued for such structure prior to it being classified as Occupied Residential Property, and shall not change as a result of additions or modifications made to such structure after such classification as Occupied 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. City of Chula Vista Community Facilities District No. /2-/ McMillin atlI)! Ranch Village Seven June /5, 2005 ~- Page 4 Resolution No. 2005-232 Page 12 "Special Tax Requirement" means that amount of Special Tax revenue required in any Fiscal Year for CFD No. 12-1 to: (i) Pay Administrative Expenses in an amount equal to Administrative Expense Requirement or such other amount as may be designated by the City (ii) pay annual debt service on all Outstanding Bonds (as defined in Section A) due in the Bond Year beginning in such Fiscal Year; (iii) pay other periodic costs on Outstanding Bonds, including but not limited to, credit enhancement and rebate payments on Outstanding Bonds; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture; and (v) pay directly for acquisition and/or construction of public improvements which are authorized to be financed by CFD No. 12-1 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on the Undeveloped Property for CFD No. 12-1; less (vi) a credit for Available Funds. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within th.e boundaries of CFD No. 12-1 that are not exempt from the Special Tax pursuant to law or Section E below. "Trustee" means the trustee, fiscal agent, or paying agent under th.e bond indenture. "Undeveloped Property" means, for each Fiscal year, all Taxable Property not classified as Developed Property or Contingent Taxable Property. "Zone A" means the specific geographic area designated as such and as depicted in Exhibit A attached hereto. "Zone B" means the specific geographic area designated as such and as depicted in Exhibit A attached hereto. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Assessor's Parcels of Taxable Property within CFD No. 12-1 shall be (a) categorized as being located in either Tax Zone A or Zone B, (b) classified as Developed Property, Undeveloped Property or Contingent Taxable Property and (c) shall be subject to the levy of annual Special Taxes determined pursuant to Sections C and D below. Furthermore, all Developed Property shall then be classified as Residential or Non- Residential Property. C. MAXIMUM ANNUAL SPECIAL TAX RATE 1. Developed Property The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or Non-Residential Property shall be the greater of (1) the Assigned Special Tax described in Table 1 or (2) the Backup Special Tax computed pursuant to b. on next page. City of Chula Vista Community Facilities District No. 12-1 McMillin Otay Ranch Village Seven June 15. 2005 Page 5 Resolution No. 2005-232 Page 13 a. Assie:ned Special Tax The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in Table 1. TABLEl Assigned Special Tax for Developed Property within Zone A and Zone B Land Use Class Descri tion Assi ed S ecial Tax $890 per Unit Plus $0.79 per square foot of Residential Floor Area $6,000 per Acre 1 Residential Property 2 Non-Residential Pro e b. Backup Special Tax When a Final Subdivision Map or a condominium plan is recorded within Zone A or Zone B, the Backup Special Tax for Assessor's Parcels of Developed Property classified as Residential Property or Non-Residential Property shall be determined as follows: For each Assessor's Parcel of Residential Property or for each Assessor's Parcel of Undeveloped Property to be classified as Residential Property upon its development within the Final Subdivision Map area, the Backup Special Tax shall be the rate per Lot calculated according to the following fo=ula: Zone A $24,383 x A B = ------------------- L Zone B $41,621 x A B= . ------------------------ L City ofChula Vista Community Facilities District No. /2-1 Mr.Milli71 ntnv Rn"rlt Vj1T",alll ~#'I'Q" June 15, 2005 Pnvp f1 Resolution No. 2005-232 Page 14 The tenns have the following meanings: B = Backup Special Tax per Lot in each Fiscal Year. A = Acreage classified or to be classified as Residential Property in such Final Subdivision Map. L = For a Final Subdivision Map, the number of Lots which are classified or to be classified as Residential Property. For each Assessor's Parcel of Developed Property classified as Non-Residential Property or for each Assessor's Parcel of Undeveloped Property to be classified as Non-Residential Property within the Final Subdivision Map area, the Backup Special Tax shall be determined by multiplying $24,383 for Zone A and $41,621 for Zone B by the total Acreage of any such Assessor's Parcel. Notwithstanding the foregoing, if Assessor's Parcels of Residential Property, Non- Residential Property or Undeveloped Property for which the Backup Special Tax has been determined are subsequently changed or modified by recordation of a new or amended Final Subdivision Map, then the Backup Special Tax applicable to such Assessor's Parcels shall be recalculated to equal the total amount of Backup Special Tax that would have been generated if such change did not take place. 2. Undeveloped Property and Contingent Taxable Property The Maximum Annual Special Tax for each Assessor's Parcel of Undeveloped Property and Contingent Taxable Property shall be $24,383 per Acre for Zone A and $41,621 per Acre for Zone B. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2006-07 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the amount of Special Taxes equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property within Zone A and Zone B at a rate up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax Requirement. Second: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on all Undeveloped Property within Zone A and Zone B, at a rate up to 100% of the Maximum Annual Special Tax for Undeveloped Property. In determining the Acreage of an Assessor's Parcel of Undeveloped Property for purposes of determining the annual Special Tax to be levied on such Assessor's Parcels of Undeveloped Property, the CFD' Administrator shall not include any Acreage shown on any applicable tentative subdivision map or other land use entitlements approved by the City that designates such Acreage for a City of Chu/a Vista Community Facilities District No. 12-1 McMillin Otay Ranch Vi/la[!;e Seven June J 5, 2005 Pa[!;e 7 L Resolution No. 2005-232 Page 15 use that would be classified as Open Space, Property Owner Association Property or Public Property. Third: If additional monies are needed to satisfy the Special Tax Requirement after the . :first two steps have been completed, the Special Tax to be levied on each Assessor's Parcel of Developed Property whose Maximum Annual Special Tax is derived by the application of the Backup Special Tax then the Annual Special Tax shall be increased at the same percentage from the Assigned Special Tax up to the Maximum Annual Special Tax for each such Assessor's Parcel. Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on all Contingent Taxable Property at a rate up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property be increased by more than ten percent per year as a consequence of delinquency or default in the payment of Special Taxes by the owner of any other Assessor's Parcel. E. EXEMPTIONS 1. The CFD Administrator shall classify the following as Exempt Property: (i) Public Property, (ii) Property Owner Association Property, (iii) Open Space and (iv) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement; provided, however, that no such classification shall reduce the sum of all Taxable Property to less than 32.98 Acres for Zone A and 22.00 Acres for Zone B. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 32.98 Acres for Zone A and 22.00 Acres for Zone B will be classified as Contingent Taxable Property and shall be taxed pursuant to the fourth step of Section D. Exempt status for purposes of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes Exempt Property. 2. The Maximum Annual Special Tax obligation for any property which would be classified as Public Property upon its transfer or dedication to a public agency but which is classified as Contingent Taxable Property pursuant to E.l above shall be prepaid in full by the seller pursuant to Section H.1, prior to the transfer/dedication of such property to such public agency. Until the Maximum Annual Special Tax obligation for any such Public Property is prepaid, the property shall continue to be subject to the levy of the Special Tax as Contingent Taxable 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 E.!. above City of Chula Vista Community Facilities District No. /2-/ McMillin Ourv Ranch Villa"e Seven June / 5, 2005 Po"e8 Resolution No. 2005-232 Page 16 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 AI1y landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error shall first consult with the CFD Administrator regarding such error. If following such consultation, the CFD Administrator determines that an error has occurred; the CFD Administrator may amend the amount of the Special Tax levied on such Assessor's Parcel. If following such consultation and action (if any by the CFD Administrator), the landowner or resident believes such error still exists, such person may file a written notice with the City Clerk of the City appealing the amount of the Special Tax levied on such Assessor's Parcel. Upon the receipt of any such notice, the City Clerk shall forward a copy of such notice to the City Manager who shall establish as part of the proceedings and administration of CFD No. 12-1 and a special three-member Review/Appeal Committee. The Review/Appeal Committee may establish such procedures, as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. 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. 12-1, may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on Assessor's Parcels of Taxable Property that are delinquent in the payment of Special Taxes. Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. H. PREPAYMENT OF SPECIAL TAX The following definition applies to this Section H: "CFD Public Facilities" means those public facilities authorized to be financed by CFD No. 12-1. "CFD Public Facilities Costs" means either $ 17.1 million, or such lower number as shall be det=ined either by (a) the CFD Administrator as sufficient to finance the CFD Public City of Chu/a Vista Community Facilities District No. 12-1 McMillin Dray Ranch Village Seven June /5. 2005 Page 9 . -- ~----~- Resolution No. 2005-232 Page 17 Facilities, or (b) the Council concurrently with a covenant that it will not issue any more Bonds to be secured by Special Taxes levied under this Rate and Method of Apportionment. "Construction Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct the CFD Public Facilities. "Future Facilities Costs" means the CFD Public Facilities Costs minus that (a) portion of the CFD Public Facilities Costs previously funded (i) from the proceeds of all previously issued Bonds, (ii) from interest earnings on the Construction Fund actually earned prior to the date of prepayment and (iii) directly from Special Tax revenues and (b) the amount of the proceeds of al1 previously issued Bonds then on deposit in the Construction Fund. "Outstanding Bonds" means all previously issued Bonds which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Maximum Annual Special Taxes. 1. Prepayment in Full The Maximum Annual Special Tax obligation may only be prepaid and permanently satisfied for an Assessor's Parcel of Developed Property, Undeveloped Property for which a building permit has been issued, or Contingent Taxable Property. The Maximum Annual Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of the Assessor's Parcel to pay the Special Tax permanently satisfied as described herein; provided, however that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Annual Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Prepayment Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Prepayment Amount City of Chu/a Vista Community Facilities District No. /2-[ McMillin Otav Ra1'1ch VillnCT" SPVPrl June J 5. 2005 Parre J 0 Resolution No. 2005-232 Page 18 A5 of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Step No.: \. For Developed 'Property, compute the Maximum AImua1 Special Tax for the A5sessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit issued for that A5sessor's Parcel. For A5sessor's Parcels of Contingent Taxable 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 AImual Special Tax computed pursuant to step 1 by the sum of the total expected Maximum AImual Special Tax revenues which may be levied within CFD No. 12-1 excluding any A5sessors Parcels for which the Maximum Annual Special Tax obligation has been previously prepaid. 3. Multiply the quotient computed pursuant to step 2 by the principal amount of the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amounf'). 4. Multiply the Bond Redemption Amount computed pursuant to step 3 by the applicable redemption premium on the next possible Bond call date, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 5. If all the Bonds authorized to be issued for CFD No. 12-1 have not been issued, then compute the Future Facilities Costs. 6. Multiply the quotient computed pursuant to step 2 by the amount determined pursuant to step 5 to compute the amount of Future Facilities Costs to be allocated to such Assessor's Parcel (the "Future Facilities Amount'1. 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 ofCFD No. 12-1, including but not limited to, the costs of comput<Ltion 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 City of Chula Vista Community Facilities District No. J 2-1 McMillin Dray Ranch Villaf;e Seven June 15, 2005 Paf;e 11 Resolution No. 2005-232 Page 19 recording any notices to evidence the prepayment and the redemption (the "Prepayment Fees and Expenses"). 11. Compute the amount the CFD Administrator reasonably expects to derive from the reinvestment .of the prepayment amount less the Prepayment Fees and Expenses, as determined pursuant to step 10, 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 steps 7 and 9 and subtract the amount computed pursuant to step 11 (the "Defeasance Amounf'). 13. The reserve fund credit (the "Reserve Fund Credif') shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 14. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to step 2 by the expected balance in the capitalized interest fund after such first interest payment (the "Capitalized Interest Credif'). 15. The Maximum Annual Special Tax prepayment is equal to the sum of the amounts computed pursuant to steps 3, 4, 6, 10, and 12, less the amounts computed pursuant to steps 13 and 14 (the "Prepayment Amaunf'). 16. From the Prepayment Amount, the amounts computed pursuant to steps 3, 4, 12, 13, and 14 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to step shall be retained by CFD No. 12-1. The amount computed pursuant to step 6 shall be deposited in the Construction Fund. The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multipie thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under step 9 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Taxes and the release of the City of Chu/a Vista Community Facilities District No. 12-1 McMillin Otav Ranch Villa"e Seven June 15, 2005 Par?;el2 Resolution No. 2005-232 Page 20 Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Annual Special Taxes that may be levied on Taxable Property within ern No. 12-1 prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. 2. Prepayment in Part The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section H 1; except that a partial prepayment shall be calculated according to the following formula: PP = (PE-A x F) + A These terms have the following meaning: PP = the partial prepayment PE = the Prepayment Amount calculated according to Section H.1, minus Prepayment Fees and Expenses determined pursuant to Step 10. F = the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the Maximum Annual Special Tax. A= the Prepayment Fees and Expenses determined pursuant to Step 10. The owner of an Assessor's Parcel who desires to partially prepay the Maximum Annual Special Tax shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Maximum Annual Special Tax, (ii) the percentage by which the Maximum Annual Special Tax shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if applicable. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Maximum Annual Special Tax for an Assessor's Parcel within 30 days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Step 16 of Section H.1, and (ii) indicate in the records of CFD No. 12-1, that there has been a partial prepayment of the Maximum Annual Special Tax and that a portion of the Maximum Annual Special Tax equal to the outstanding percentage (1.00 - F) of the remaining Maximum Annual Special Tax shall continue to be. authorized to be levied on such Assessor's Parcel pursuant to Section D. City of Chula Vista CommWlity Facilities District No. /2-/ McMillin Otay Ranch Village Seven June 15, 2005 Page 13 -_.~---~ - Resolution No. 2005-232 Page 21 I. TERM OF MAXIMUM ANNUAL SPECIAL TAX The Maximum Al1IlUal Special Tax shall be levied co=encing in Fiscal Year 2006-2007 to the extent necessary to fully satisfy the Special Tax Requirement and shall be levied for a period no longer than the 2046-2047 Fiscal Year. City of Chula Vista Community Facilities District No.1 2-1 McMillin Otav Rn.",./, Vi11mnl' ~,,_.. June IS, 2005 D,.".. Iii