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HomeMy WebLinkAbout2006/11/21 Item 14 COUNCIL AGENDA STATEMENT Item ~ Meeting Date 11/21/2006 ITEM TITLE: A. Resolution adopting an annexation map, Annexation No.6, showing territory (Otay Ranch Village Two) proposed to be annexed to Community Facilities District No. 97-2 (Preserve Maintenance District) and Improvement Area C thereto. B. Resolution declaring its intention to authorize the annexation, Annexation No.6, of territory (Otay Ranch Village Two) to Community Facilities District No. 97-2 (Preserve Maintenance District) and Improvement Area C thereto and setting the public hearing to consider establishment of the proposed district. SUBMITTED BY: Acting Director of Engineering-W /,(' REVIEWED BY: Interim City Manager il (4/5ths Vote: Yes_ No-1Q Otay Project LP has requested the City conduct proceedings to consider the annexation of territory into Improvement Area C of Community Facilities District No. 97-2 (Preserve Maintenance District) (CFD 97-2). The conditions of approval of the tentative map for Otay Ranch Village Two require that said annexation be a condition of the first final map for the project. CFD 97-2 was formed in 1998 and funds the maintenance of areas that have been conveyed to the preserve in accordance with the Otay Ranch Resource Management Plan. The City has retained the services of MuniFinancial as special tax consultant and Best, Best and Krieger, LLP as legal counsel to provide assistance during the proceedings. Tonight's action will initiate the formal proceedings to consider the annexation ofOtay Ranch Village Two to CFD No. 97-2, Improvement Area C. RECOMMENDATION: That Council: 1. Approve the Resolution adopting an annexation map showing territory proposed to be annexed to Community Facilities District No. 97-2 (Preserve Maintenance District) and Improvement Area C. 2. Approve the Resolution declaring the intention to authorize annexation of territory to Improvement Area C of Community Facilities District No. 97-2 and setting the public hearing to consider establishment of the proposed district. BOARDS/COMMISSIONS RECOMMENDATION: N/A 14-1 Page 2, Item ~ Meeting Date 11/21/2006 DISCUSSION: In July 1998, Council formed CFD No. 97-2 (Preserve Maintenance District). CFD 97-2 was originally divided into two Improvement Areas: Improvement Area A and Improvement Area B. Improvement Area A funds the costs of the Resource Monitoring Program as well as Preserve Operations and Maintenance within the boundaries of the Otay Ranch Preserve. Improvement Area B only funds the Resource Monitoring Program within that same area. Improvement Area C was formed in 2003 in conjunction with the annexation of Brookfield Shea Otay Village Eleven into CFD 97-2 and funds both the Resource Monitoring Program and Preserve Operations and Maintenance. Territorv Proposed to be Annexed The proposed boundaries of the territory proposed to be annexed to Improvement Area C of CFD No. 97-2 encompass the parcels located within the Village Two, an Urban Village of approximately eight-hundred and eleven (810.9) acres located south of Olympic Parkway (Poggi Canyon), west of La Media Road, and north of Wolf Canyon. Otay Project LP owns 100% of the property within the proposed district. Otay Project LP Village Two is proposed to contain approximately 1,310 single-family detached homes and 1,476 multi-family units (365.60 residential acres), industrial areas (94.70 acres) and a commercial area (12.50 acres), a public school (10.30 acres), three neighborhood parks (15.40 acres), one community park (44.60 acres), and several Community Purpose Facility ("CPF") properties (6.30 acres). The Otay Landfill area located to the southwest of the village will be excluded from the annexation. Staff has reviewed the proposed annexation boundary map, identified as Annexation Map No.6 to CFD 97-2, and has found it ready and acceptable for approval by Council. A reduced copy of the map is presented in Exhibit "B". Proposed Special Tax The rate and method of apportionment of the special taxes authorized to be levied within the existing boundaries ofCFD 97-2 has four categories of taxation, as follows: . Developed Parcels (Single-Family and Multi-Family Residences) are taxed based on the square footage of the structure. Industrial and Commercial Parcels are taxed on the acreage of the parcel. . The Final Mapped properties, which include all single-family and multi- residential parcels and all industrial and commercial parcels, for which a building permit has not been issued are taxed on acreage of the parcel. 14-2 Page 3, Item ~ Meeting Date 11/21/2006 . Property not categorized as Developed or Final Mapped Property is taxed on acreage of the parcel. . The Exempt Category includes all publicly owned parcels and Homeowner's Association parcels. Developed Parcels are those parcels for which a building permit has been issued. The proposed maximum special tax rate in the rate and method of apportionment was determined at the time off ormation ofCFD 97-2 in 1998. Collection of Taxes At the beginning of each fiscal year the City shall determine the amount of the Special Tax Liability (budget plus reserve) of each Improvement Area. Then, the special taxes will first be levied within each of the Improvement Areas on the Developed Parcels therein to fund the Special Tax Liability for such Improvement Area. If this pool of funds is not enough to fund the Special Tax Liability for such Improvement Area, as may be the case in the early years of development, the district will levy the special tax on the vacant land within such Improvement Area starting with Final Mapped Property. The buffer of having the vacant land covering any portion of the Special Tax Liability not funded from special taxes levied on Developed Parcels within an Improvement Area will disappear once the Improvement Area has been fully developed. If the Special Tax Liability for any fiscal year for an Improvement Area is less than the maximum special tax authorized to be levied on the Developed Parcels within such Improvement Area, the actual rate of the special taxes to be levied on such Developed Property in that specific year will be reduced accordingly. Following is a brief discussion of some key issues regarding the "Rate and Method of Apportionment (RMA) of Special Taxes" proposed to be established for territory proposed to be annexed to Improvement Area C of CFD 97-2 (See Exhibit "A" for full description ofRMA): . The Maximum Special Tax Rates increases each year by a factor equal to the annual percentage change in the Consumer Price Index. . The RMA provides that the annual budget for any year may include an amount deemed necessary to maintain an adequate level of this operating reserve fund. . The maximum special tax rates are based on the original Rate and Method of Apportionment of special taxes established for CFD 97-2 when CFD 97-2 was formed. If the actual square footage of residential development and/or the acreage 01 non-residential (industrial and commercial) development within Improvement 14-3 Page 4, Item 11..- Meeting Date 11/21/2006 Area C meets or exceeds the projections on which the special tax rates were based, the actual special tax rate necessary to be levied annually within Improvement Area C to fund the Special Tax Liabillty for Improvement Area C may be less than the authorized maximum special tax. Approved Maximum Special Taxes The approved maximum special tax rates for fiscal year 2006/07 for Improvement Area C ofCFD 97-2 are as follows: Table 1. Maximum Special Tax for Monitoring Special Tax Category Maximum Special Tax (Monitoring) Residential (per square foot) $0.0062 N on-Residential (per acre) $101.1797 Final Map Property (per acre) $101.1797 Undeveloped Property (per acre) $65.3004 Table 2. Maximum Special Tax for Operations & Maintenance Special Tax Category Maximum Special Tax (Operations & Maintenance) Residential (per square foot) $0.0099 Non-Residential (per acre) $160.6303 Final Map Property (per acre) $160.6303 Undeveloped Property (per acre) $103.6696 Resolutions There are two resolutions on tonight's agenda, which, if adopted, will accomplish the following: The RESOLUTION ADOPTING THE ANNEXATION MAP is the formal action adopting the Annexation Map No.6 setting forth the boundaries of the territory proposed to be annexed to Improvement Area C of Community Facilities District No. 97-2 (Preserve Maintenance District). The RESOLUTION OF INTENTION is the jurisdictional resolution declaring the intention of the City Council to authorize the annexation of the territory within 14-4 Page 5, Item A Meeting Date 11/21/2006 Annexation Map No.6 to Improvement Area C of Community Facilities District No. 97- 2 (Preserve Maintenance District), thereto, to authorize the levy of a Special Tax, and to set the time and place for the public hearing. . Future Actions The public hearing and consideration of the adoption of a resolution submitting the authorization for the levy of special taxes to the qualified electors are scheduled for the City Council meeting of January 9, 2007, at 6:00 P.M. ENVIRONMENTAL REVIEW: The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because the creation of government funding mechanism is not considered a project; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental revIew IS necessary. DECISION MAKER CONFLICTS: Staff has reviewed the property holdings of the City Council Members for conflicts and has found no property holdings within 500 feet of the boundaries of the property which is the subject ofthis action. FISCAL IMPACT: All costs of annexation to the district are being borne by the developers and the on-going administration will be funded entirely by the district. The City will recover the full cost of staff time expended in district formation and administration activities in perpetuity. Exhibits: "A" Rate and Method of Apportionment "B" Annexation Map J:\EngineerIAGENDA \CAS2006\ 11-21-06\CFD 97-2 Ann 6 staff agenda for _11-13-06.doc 14-5 EX H \ 13 \ T "A " RATE AND METHOD OF ApPORTIONMENT CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 97-2 IMPROVEMENT AREA C ANNEXATION NO.6 (OTAY RANCH VILLAGE Two) A Special Tax of Community Facilities District No. 97-2 (preserve Maintenance District) of the City of Chula Vista ("CFD") shall be levied on all Assessor's Parcels in Improvement Area C, Annexation No.6 (Otay Ranch Village Two), of the CFD and collected each Fiscal Year commencing with Fiscal Year 2006-2007 in an amount determined through the applicatIon of the rate and method of apportionment of the Special Tax set forth below. All of the real property in the CFD, 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. DEFINITlDNS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel lYrap, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent map or instrument recorded in the Office of the County Recorder. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560 "Act" means the Mello-RoDS Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the actual or estimated costs incurred by the City, acting for and on behalf of the CFD as the administrator thereof, to determine, levy and collect the Special Taxes, including salaries of City employees and a proportionate amount of the City's general administrative overhead related thereto, and the fees of consultants and legal counsel providing services related to the administration of the CFD; the costs of collecting installments of the Special Taxes; and any other costs required to administer Area C of the CFD as determined by the City. "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 Assessor of the County designating parcels by assessor's parcel number. "Building Square Foot or Square Footage" means the square footage as shown on an Assessor's Parcel's building permit of Residential Property excluding garages or other IIMuniRnandal Page 1 14-6 structures not used as living space. "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" means Community Facilities District No. 97-2 of the City of Chula Vista. "City" means the City of Chula Vista. "City Clerk" means the City Clerk for the City of Chula Vista or his or her designee. "City Manager" means the City Manager for the City of Chula Vista or his or her designee. "Community Purpose Facility Property" or "CPF Property" means all Assessor's Parcels which are classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2883. "Council" means the City Council of the Ciry of Chula Vista, acting as the legislative body of the CFD. "County" means the Counry of San Diego, California. "Developed Property" means all Taxable Property for which a building permit was issued prior to the March 1st preceding the Fiscal Year in which the Special Tax is being levied. "Final Map Property" means any residential lot or non-residential lot created by a Final Subdivision Map, but which is not classified as Developed Property. "Final Subdivision Map" means a subdivision of property creating residential or non- residential buildable lots by recordation of a final subdivision map or parcel map 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 building permits may be issued ",-lthout further subdivision and is recorded pnor to March 1 preceding the Fiscal Year in which the Special Tax is being levied. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Improvement Area C" or "Area C" means Improvement Area C of the CFD, as identified on the boundary map for the CFD as amended from time to time. "Land Use Class" means any of the classes listed in Table 1, Table 2, or Table 3. "Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section C below that 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 II MuniFinancial Page 2 14-7 which a building permit(s) has been issued for a structure or structures for non-residential use. "Operating Fund" means a fund that shall be maintained within the CFD for each Fiscal Year to pay for Resource Monitoring and/ or Preserve Operations and Maintenance activities and Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Operating Fund Requirement" means for any Fiscal Year an amount equal to the Resource l\-lonitoring Fund Requirement and the Preserve Operations and };laintenance Fund Rel1uirement for the current Fiscal Year in which Special Taxes are levied. "Preserve Operations and Maintenance" means those activities described in Attachment A hereto which is incorporated herein by this reference. "Preserve Operations and Maintenance Fund Requirement" means for any Fiscal Year an amount equal to the budgeted costs for Preserve Operations and Maintenance plus a pro- rata share of the budgeted Administrative Expenses of the District for the current Fiscal Year in which Special Taxes are levied. "Property Owner Association Property" means any property within the boundaries of Area C of the CFD that is owned by, or irrevocably dedicated as indicated in an instrument recorded "\vith the County Recorder to, a property" owner association, including any master or sub-association. "Public Property" means any property within the boundarIes of Area C of the CFD that is, at the time of the CFD formation, expected to be used for any public purpose and is owned by or dedicated to the federal government, the State, the County, the City or any other public agency. "Reserve Fund" means a fund that shall be maintained for the CFD each Fiscal Year to provide necessary cash flow for the first six months of each Fiscal Year, working capital to cover monitoring, maintenance and repair cost overruns and delinquencies in the payment of Special Taxes and a reasonable buffer to prevent large variations in annual Special Tax levies. "Reserve Fund Balance" means the amount of funds in the Reserve Fund at the end of the preceding Fiscal Year. "Reserve Fund Requirement" means an amount equal to up to 100% of the Operating Fund Requirement for any Fiscal Year. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit(s) has been issued for purposes of constructing one or more residential dwelling unit. "Resource Management Plan" means the Otay Ranch Phase 1 Resource IvIanagement IIMuniRnancial Page 3 14-8 Plan also referred to as "The Otay Ranch Resource Management Plan" dated October 28, 1993, and the Otay Ranch Phase 2, Resource Management Plan dated June 4,1996, as both such plans may be amended from time to time. "Resource Monitoring Program" means those described in ...A.ttachment B hereto which is incorporated herein by this reference. "Resource Monitoring Fund Requirement" means for any Fiscal Year an amount for each Improvement Area equal to the Improvement Area's fair share of the budgeted costs of the Resource Monitoring Program plus a pro rata share of the budgeted Administrative Expenses of the CFD for the current Fiscal Year in which Special Taxes are levied. Improvement Area C's "fair share" shall be based on Improvement Area C's percentage of the total acreage within the Otay Ranch General Development Plan Planning Area for which a Resource Monitoring Program funding mechanism has been established. "Special Tax" means the Special Tax levied pursuant to the provisions of sections C and D below in each Fiscal Year on each Assessor's Parcel of Developed Property and Undeveloped Property in Area C to fund the Special Tax Requirement. "Special Tax Requirement" means that amount required in any Fiscal Year for Area C to: (i) pay the Resource Monitoring Fund Requirement, and Preserve Operauons and Maintenance Fund Requirement, less the Operating Fund Balance, and (il) pay any amounts required to establish or repleriish the Reserve Fund to the Reserve Fund Requirement; (ill) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of Area C of the CFD that are not exempt from the Special Tax pursuant to law or as defIned below. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classifIed as Developed Property. II MuniRnancial Page 4 14-9 B. ASSIGNMENT TO CATEGORIES OF SPECIAL TAX Each Fiscal Year using the definitions above, all Taxable Property within Area C, Annexation No.6 (Otay Ranch Village Two), of the CFD shall be classified as Category I, Category II, Category III or Exempt. Developed Property, Final Map Property or C ndeveloped Property, and shall be subject to Special Taxes pursuant to Sections C and D below. Developed Property shall be further assigned to a Land Use Class as specified in Table 1. C. MAXIMUM SPECIAL TAX RATE CATEGORY I Category I includes Developed Property within the District ("Category I"). The Maximum Special Tax for Resource Monitoring, and Preserve Operations and Maintenance for Fiscal Year 2006-2007 on Developed Property are the rates set forth in Table 1 below. For Residential Property, the Special Tax shall be levied based upon Building Square Footage and for Non-Residential Property shall be levied based on Acreage. TABLE 1 MAXIMUM SPECIAL TAX FOR CATEGORY I COMMUNITY FACILITIES DISTRICT No. 97-2 I MPROVEMENT AREA C (FISCAL YEAR 2006-2007) Description Resource Operation & Total Monitoring 1vbintenance Residential $0.0062 sq ft $0.0099/ Sq ft $00162/sq ft Non- $101.1797/ acre $160.6303/.cre $261.81/ acre Residential CATEGORY II Category II includes each Assessor's Parcel of Taxable Property within the District for which a Final Map has been recorded, but which is not classified as a Developed Parcel ("Category II") The T:vlaximum Special Tax for Resource Monitoring, and Preserve Operations and Maintenance approved for Fiscal Year 2006-2007 on each Assessor's Parcel in Category II is the rate set forth in Table 2 below (said amount to be levied pro rata for any portion of an Acre). II MuniRnancial Page 5 14-10 TABLE 2 MAXIMUM SPECIAL TAX FOR CATEGORY II COMMUNITY FACILITIES DISTRICT No. 97-2 IMPROVEMENT AREA C (FISCAL YEAR 2006-2007) Resource Operation & Total Monitoring J\laintenance $101.1797/acre $160.6303/acre $261.81/ acre CATEGORY III Category III includes each Parcel of Taxable Property within the District not subject to Special Tax under any other category ("Category III"). The Maximum Special Tax approved for Fiscal Year 2006-2007 on Taxable Property within Category III is the rate set forth in Table 3 below (said amount to be levied pro rata for any portion of an Acre). TABLE 3 MAXIMUM SPECIAL TAX FOR CATEGORY III COMMUNITY FACILITIES DISTRICT No. 97-2 IMPROVEMENT AREA C (FISCAL YEAR 2006-2007) Resource Operation & Total Monitoring Maintenance $65.3004/acre $103.6696/acre $168.97/acre EXEMPT CATEGORY The Exempt Category includes each property owned, conveyed or irrevocably offered for dedication to a public agency, or land which is in the public right-of-way, unmanned utility easements which make utilization for other than the purpose set forth in the easement impracticaL common areas, private streets and parks, and open space lots ("Exempt Category''). IIMuniRnancial Page 6 14-11 SPECIAL CASES In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class and be considered" Special Case". The Maximum Special Tax that may be levied on an Assessor's Parcel identified as Special Case shall be the sum of the Maximum Special Tax levies that may be levied on all Land Use Classes located on that Assessor's Parcel. The CFD Administrator shall determine the allocation to each Land Use Class. ANNUAL ESCALATION OF MAxIMUM SPECIAL TAX The Maximum Special Tax as shown in the tables above that may be levied on each Assessor's Parcel in Area C, Annexation No.6 (Otay Ranch Village Two), shall be increased each Fiscal Year beginning in Fiscal Year 2007-2008 and thereafter by a factor equal to the annual percentage change in the San Diego Metropolitan i\rea all Urban Consumer Price Index (All Items). D. METHDD DF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2006-2007, and for each following Fiscal Year, the Council shall levy the Area C, Annexation No.6 (Otay Ranch Village Two), Special Tax at the rates established pursuant to steps 1 through 4 below so that the amount of the Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: Step 1: Determine the revenue which could be generated by Parcels assigned to Category I by multiplying the Building Square Footage for Parcels classified as Residential Parcels by the Maximum Special Tax per Building Square Foot for Resource Monitoring, and Preserve Operations and lvIaintenance for Parcels and adding to that the maximum revenue which could be generated by multiplying the total acres for Parcels classified as Non-Residential Parcels by the Maximum Special Tax per .A,.cre for Resource Monitoring and Preserve Operations and J'vLaintenance. Step 2: If the total revenue as calculated in Step 1 is greatet than the estimated Special Tax Liability for Improvement Area C, reduce the Special Tax for each Parcel proportionately so that the Special Tax levy for the Fiscal Year is equal to the Special Tax Liability for the Fiscal Year. Step 3: If the total revenue as calculated in Step 1 is less than the Special Tax Liability for Improvement Area C, a Special Tax shall be levied upon each Parcel within Improvement Area C, classified as Category II. The Special Tax for Parcels assigned to Category II shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category II, II MuniRnancial Page 7 14-12 OR The Maximum Special Tax rate for Parcels assigned to Category II. Step 4: If the total revenue as calculated in Step I and 3 is less than the Special Tax Liability, for Improvement Area C, a Special Tax shall be levied upon each Parcel within Improvement ",'.rea C classIfied as Category III. The Special Tax for Parcels assigned the Category III shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step I and 3 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category III, OR The Maximum Special Tax rate for Parcels assigned to Category III and within Improvement Area C. However, in the event it is determined that the Special Tax Liability for Improvement Area C includes delinquent Special Taxes from Parcel in Category III from the prior Fiscal Year, the City shall determine the amount of delinquent taxes that arose from such Parcels and identify the owner(s). The amount of delinquent Special Taxes, if any, that arose from the applicable owner(s) shall first be divided by the total Category III Acres owned by such owner(s) and collected from the applicable owner(s) with the remaining portion of the Special Tax Liability not relared to delinquent Special Taxes to be collected from all Parcels in Category III according to the procedure set forth in the preceding paragraph. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property or Multi-Family Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent annually up to the Maximum Special Tax as a consequence of delinquency or default by the owner of any other Assessor's Parcel within Area C of the CFD. E. APPEALS l'.ny landowner or resident who pays the Special Tax and believes that the amount of the Special Tax levied on their Assessor's Parcel is in error shall flrst 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 actlon, if any, by rhe CFD Adininistrator, the landowner or resident believes such error still exists, IIMuniFinancial Page 8 14-13 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 the CFD, 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. F. MANNER OF COLLECTION Special Taxes levied pursuant to Section D above shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the CFD Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of Area C of the CFD or as otherwise determined appropriate by the CFD Administrator. G. TERM OF SPECIAL TAX Taxable Property in Improvement Area C of the CFD shall remain subject to the Special Tax in perpetuity. IIMuniRnancial Page 9 14-14 Attachment A Description of Pteserve Operations and Maintenance Preserve Operations and J\faintenance includes the maintenance, operation and management of the public or private property within boundaries of the Otay Ranch Preserve, as such boundaries may be modified from time to time, required by the Resource Management Plan to be maintained as open space or habitat preservation land or both. Such maintenance, operations and management shall include, but not be limited to, the following: (i) Preserve Malntenance. Development, implementation and ongoing provision of programs to maintain, operate and manage preserve habitat values through: cultivation, irrigation, trimming, spraying, fertilizing, and/or treatment of disease or injury; removal of trimmings, rubbish, debris and other solid waste; maintenance of trails; removal and control of exotic plant species (weeds); and control of cowbirds through trapping. (il) Security. Development, implementation and ongoing provision of security programs to: enforce "no trespassing" rules; curtail activities that degrade resources, such as grazing, shooting, and illegal dumping; remove trash, litter, and other debris; control access; prohibit off-road traffic; and maintain fences and trails. (ill) Preserve improvements: Acquire equipment and/ or install improvements necessary to maintain, operate and manage the open space and habitat preservation land described above. The above description of the Preserve Operations and Maintenance is general in nature. The actual maintenance, operations and management of the open space and habitat preservation land within the Otay Ranch Preserve may be modified from time to time as necessary in order to effectively provide such services in compliance with the requirements of the Resource lYfanagement Plan. II MuniRnancial Page 10 14-15 Attachment B Descriprion of Resource Moniroring Implement the annual biota monitoring and reporting program consistent with the Resource Management Plan to identify changes in the quality and quantity of preserve resources including wildlife species, sensitive plants and sensitive habitat types. The above description of the Resource Monitoring IS general in nature. The actual monitoring and reporting program may be modified from rime to time as necessary in order to effectively provide ::mch services consistent with the requirements of the Resource J\.1anagement Plan. II MuniFinancial Page 11 14-16 GX 1-1) ., SHEET 1 OF 1 ANNEXATION MAP NO.6 COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) IMPROVEMENT AREA C CITY OF CHULA VISTA COUNTY OF SAN DIEGO STATE OF CALIFORNIA VICINITY MAP ~ .j:> I ~ CD ...... ~o 8 ~ MuniFinancial ~J=:r- _1~_1i..-C-= _. l ""'~ f.ILEDINTHEOFFICEOFlH~CITYCI...EAKnllS lJAYOI' - - I HERESY CEFlTiI'Y THAT THE WlllilN IMP SHOWING PRQPOliED IlOI.tlDAAIES OF 1.NNEXATION~. 6 TOCOMMUNITY FACILITIES DISTRICT NO_ 97_2IPRE8l'A~E MAINTEMNCEllISTRICT),Ir.lPFlOVE.l.lENTAAEAG,CITYOFCHULlVIST", COlJ~Of6ANDIEGO.5TATEOfGAl.IFORNI"'.WA8APPAOVE[)aYTHECllY COU~i.OFTHECITYDFGHUlAVIST"'ATAREGULA.A".eET'OIGTHEAEOF. Hil[)ONTHE_llAVOF ,2006,llVrrSRESOI-UTKlNNO CITYClHIK GIT'IOF CHuulVISTA FllEOTljIS __DAVOF______.2l1Ol5,ATTIiE:I1OUR Of O'CLOGI(__Iol.INTHEIlOQj( PAGE Of ......PS Of "'SSESSM~NT ANll COMMUNITY fACILITIES DISTfl'ciij AND AS INSTFlUMENTI<O IN THE OFFICE OF THE COUHTY REOOflD~IlIN THE COUNTY OF SAN DIEGO-:-STA TE OF CALIFDRNlO. COU"ITYAECOflOER COUNn OF SAN OIEOO ST...rrOFC.....,FOONIA AEFEAENCEISMADETOTlIATBOUNDAIlYMAPOFCOt.lMUNlTYfACIUTlES O'STA,CTNO,9T_2IPAESEAVEIM,NTEJ,JANCEDISTAICTjOFTHECrrYOFCHULO. VISTA FlECORDED Willi THE SAN DIEOO COUNTY FU:CORDEfI's OFFICE IN ilOOj( aoOF IM.PS Of ASSESSMENTS AND COMI.IUN'TY FACllITlt:s lll5TRJCT,PAGE 52 AS 'NSTRUI.IEHT t.IO, l~(l8.{]l;2a<l1l11 TtiELINESANDDlMEN5lON50FANYASSESSOAPAIlCELSHOWNONTHlSDI...oAAM SHAlL BE THOSE lINES N<ID OlI.lENSIONS AS SHOWN ON THE SAN ~EOO COUNTY ACCESSOO'S IMPS FOflTHOSE PAFlCElS L1SlEO, THE SAN DIEGO COlINTYASSESSOA'S IMPS SH"'U, OOVEAN FOFI All DETAllllCOtlCEIlNINQ THE LINES AND DI"'ENSIONS OF SUGH lOTS OA PAACELS FORDETALS ON LOTS WITHIN THE CHU\.A VISTATFlACT NO. 1lII-05 OTAV RANCH VIUAGE. ANDPORHONSOFV'lLAGE,"^" WlP, IlEfEA 10 TllE SUllDIVISKlN IMP NO '~]500NFIlEWlffiTHECITYOFCHULAVIST"'ANOTHERECOFIIll:Il0FlHE COUNTY OF SAN OIEOO. LEGEND ANNEXATiON BOUNDAAY CD MAP AEFERENCE NUMBEA m NOTAPAAT " Aeference Number lealOooscrition AssessOl Pa,cel Number 6H.030_15.00 lOTS 1-33 INCLUSIVE AND lOTS A-D INCLUSIVE OF CHULA VIST TRACT NO. 06-05 OTAY RANCH VilLAGE 2 AND PORTIONS Of VILLAGE 4 "A" MAP, AS SHOWN ON THE MAP FllEO AS SUBDIVISION MAP NO. 15350 IN THE OFFICIAL RECORDS OF THE RECORDER OF THE COUNTY OF SAN DIEGO, STATE OF CALIfORNIA, ON MAY 26, 2006, AS FilE NO, 2006"0315303 RESOLUTION NO. 2006- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, ADOPTING AN ANNEXATION MAP, ANNEXATION NO.6, SHOWING TERRITORY (OTA Y RANCH VILLAGE TWO) PROPOSED TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) AND IMPROVEMENT AREA "c" WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA, ("City Council"), formed a Community Facilities District and certain improvement areas therein 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"). The Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) (the "District") and the Improvement Areas were designated as IMPROVEMENT AREA "A," IMPROVEMENT AREA "B," and IMPROVEMENT AREA "c" of such District ("Improvement Area 'A,'" "Improvement Area 'B,''' and "Improvement Area 'C,'" respectively); and, WHEREAS, the City Council desires to initiate proceedings to annex certain property to Improvement Area "c" thereof; and WHEREAS, there has been submitted a map entitled "Annexation Map NO.6 To Community Facilities District No. 97-2 (Preserve Maintenance District), Improvement Area "C," City Of Chula Vista, County Of San Diego, State Of California" (the "Annexation Map") showing the territory proposed to be annexed to Improvement Area "c" of the District (the "Territory"). NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: SECTION 1. The above recitals are all true and correct. SECTION 2. The Annexation Map showing the Territory proposed to be annexed to Improvement Area "c" of the District and to be subject to the levy of a special tax is hereby approved and adopted. SECTION 3. A certificate shall be endorsed on the original and on at least one (I) copy of the Annexation Map, evidencing the date and adoption of this Resolution, and within fifteen (15) days after the adoption of the Resolution fixing the time and place of the hearing on the intention to annex or extent of the annexation to Improvement Area "c" of the District, a copy of such map shall be filed with the correct and proper endorsements thereon with the I 14-18 County Recorder, all in the manner and form provided for in Section 3111 of the Streets and Highways Code of the State ofCa1ifornia. PREPARED BY: APPROVED AS TO FORM BY: Leah Browder Acting Director of Engineering H:'iENGINEER\RESOS\Resos2006\1/-14-06\CFD No. 97-2 Annexation 6-Resolution Approving Annexation Mapfor V2.DOC 2 14-19 RESOLUTION NO. 2006- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, DECLARING ITS INTENTION TO AUTHORIZE THE ANNEXATION, ANNEXATION NO.6, OF TERRITORY (OTAY RANCH VILLAGE TWO) TO COMMUNITY FACILITIES, DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) AND IMPROVEMENT AREA "c" THERETO AND SETTING THE PUBLIC HEARING TO CONSIDER THE AUTHORIZATION OF SAID ANNEXATION WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA, ("City Council"), formed a Community Facilities District and designated certain improvement areas therein 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"). The Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) (the "District") and the Improvement Areas were designated as IMPROVEMENT AREA "A," IMPROVEMENT AREA "B," and IMPROVEMENT AREA "c" of such District ("Improvement Area 'A,''' "Improvement Area 'B,'" and Improvement Area "C,'" respectively); and, WHEREAS, the District was formed for the purpose of financing the monitoring, maintenance, operation and management of public property required to be maintained as open space or habitat preservation or both; and WHEREAS, Improvement Area "c" was established to finance Preserve Operations and Maintenance and the Resource Monitoring Program plus a pro-rata share of Administrative Expenses of the District as such terms are defined in the rate and method of apportionment of special taxes (the "Special Tax Formula") attached as Exhibit A hereto and incorporated herein by this reference; and WHEREAS, certain territory is proposed to be annexed to the District and Improvement Area "c" thereto and such territory shall be known and designated as COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT), IMPROVEMENT AREA "C," ANNEXATION NO.6 (the "Territory"). WHEREAS, this legislative body now desires to proceed to adopt its Resolution of Intention to Annex the Territory to Improvement Area "C," to describe the territory included within Improvement Area "c" and the Territory proposed to be annexed thereto, to specify the services to be financed from the proceeds of the levy of special taxes within the Territory, to set and specify the special taxes that would be levied within the Territory to finance such services, and to set a time and place for a public hearing relating to the annexation of the Territory to Improvement Area "c" and the levy of special taxes within the Territory; and, 14T20 WHEREAS, a map showing the Territory proposed to be annexed has been submitted, which map has been previously approved and a copy of the map shall be kept on file with the transcript of these proceedings. NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: RECITALS SECTION 1. The above recitals are all true and correct. LEGAL AUTHORITY SECTION 2. These proceedings for annexation are initiated by this City Council pursuant to the authorization of the Community Facilities District Law. INTENTION TO ANNEX; DESCRIPTION OF TERRITORY SECTION 3. This legislative body hereby determines that the public convenience and necessity requires that the Territory be added to the District and Improvement Area "c" thereto and this City Council declares its intention to annex the Territory to the District and Improvement Area "c" thereto. A description of the boundaries and Territory proposed to be annexed is as follows: All that property within the Territory proposed to be annexed to the District and Improvement Area "c" thereto, as such property is shown on a map as previously approved by this legislative body, such map designated by the number of the annexation and the name of the existing District, a copy of which is on file in the Office of the City Clerk and shall remain open for public inspection. A general description of the territory included in the District is hereinafter described as follows: All that property and territory as originally included within and previously annexed to the District, as such property is shown on maps of the original District and territory previously annexed and approved by this City Council and designated by the name of the original District and Annexation Nos. I through 5. A copy of such maps are on file in the Office of the City Clerk and have also been filed in the Office of the County Recorder. NAME SECTION 4. The proposed annexation shall be known COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE DISTRICT), IMPROVEMENT AREA "C," ANNEXATION NO.6. and designated as MAINTENANCE 1 42: 21 SERVICES AUTHORIZED TO BE FINANCED BY THE DISTRICT SECTION 5. The services that are authorized to be financed by the District from the proceeds of special taxes levied within Improvement Area "c" are certain services which are in addition to those provided in or required for the territory within Improvement Area "c" and will not be replacing services already available. A general description of such services to be financed by the District is as follows: The monitoring, maintenance, operation and management of public property in which the City has a property interest and which conforms to the requirements of the Ordinance or private property within the Otay Ranch Preserve which is required by the Preserve Owner/Manager to be maintained as open space or for habitat maintenance or both. Such property may be located outside the boundaries of the District and outside the jurisdictional boundaries of the City of Chula Vista. Such services shall not include the maintenance, operation and/or management of any property owned, maintained, operated and/or managed by the federal and/or state government as open space, habitat maintenance and/or for any other purpose. The District shall finance all direct, administrative and incidental annual costs and expenses necessary to provide such monitoring, maintenance, operation and management of such public property. The same types of services which are authorized to be financed by the District from the proceeds of special taxes levied within Improvement Area "c" are the types of services to be provided in the Territory. If and to the extent possible, such services shall be provided in common within the District and the Territory. SPECIAL TAXES SECTION 6. It is the further intention of this City Council that, except where funds are otherwise available, a special tax sufficient to pay for such services 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 Territory, will be levied annually within the boundaries of such Territory. For further particulars as to the rate and method of apportionment of the proposed special tax, reference is made to the attached and incorporated Exhibit "A" (the "Special Tax Formula"), which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within the proposed Territory to clearly estimate the maximum amount that such person will have to pay. The special tax proposed to be levied within the Territory shall be equal to the speCial tax levied to pay for the same services in Improvement Area "C," except that a higher or lower special tax may be levied within the Territory to the extent that the actual cost of providing the services in the Territory is higher or lower than the cost of providing those services in Improvement Area "C." Notwithstanding the foregoing, the special tax may not be levied at a rate which is higher than the maximum special tax authorized to be levied pursuant to the Special Tax Formula. 14322 The special taxes herein authorized, to the extent possible, shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien 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. The maximum special tax rate in Improvement Area "c" shall not be increased as a result of the annexation of the Territory to Improvement Area "c." PUBLIC HEARING SECTION 7. NOTICE IS GIVEN THAT ON JANUARY 9, 2007, AT THE HOUR OF 6:00 PM CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE LEGISLATIVE BODY, BEING THE COUNCIL CHAMBERS, 276 FOURTH AVENUE, CHULA VISTA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD WHERE THIS LEGISLATIVE BODY WILL CONSIDER THE AUTHORIZATION FOR THE ANNEXATION OF THE TERRITORY TO THE DISTRICT AND IMPROVEMENT AREA "c" THERETO, THE PROPOSED RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX TO BE LEVIED WITHIN THE TERRITORY AND ALL OTHER MATTERS AS SET FORTH IN THIS RESOLUTION OF INTENTION. AT SUCH PUBLIC HEARING, THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE ANNEXATION OF THE TERRITORY OR THE LEVYING OF SPECIAL TAXES WITHIN THE TERRITORY WILL BE HEARD. AT SUCH PUBLIC HEARING, PROTESTS AGAINST THE PROPOSED ANNEXATION OF THE TERRITORY, THE LEVY OF SPECIAL TAXES WITHIN THE TERRITORY OR ANY OTHER PROPOSALS CONTAINED IN THIS RESOLUTION MAY BE MADE ORALLY BY ANY INTERESTED PERSON. ANY PROTESTS PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL BE IN WRITING AND SHALL CLEARLY SET FORTH THE IRREGULARITIES OR DEFECTS TO WHICH OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH THE CITY CLERK PRIOR TO THE TIME FIXED FOR THE PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN AT ANY TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING. MAJORITY PROTEST SECTION 8. If (a) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the District; (b) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the Territory; (c) owners of one- half or more of the area of land in the territory included in the District; or (d) owners of one-half or more of the area of land included in the Territory, file written protests against the proposed annexation of the Territory to the District and such protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings shall be undertaken for a period of one year from the date of the decision by the City Council on the issue discussed at the public hearing. 14423 ELECTION SECTION 9. Upon the conclusion of the public hearing, if the legislative body determines to proceed with the annexation, a proposition shall be submitted to the qualified electors of the Territory. The vote shall be by registered voters within the Territory; however, if there are less than 12 registered voters, the vote shall be by landowners, with each landowner having one vote per acre or portion thereof within the Territory. . NOTICE SECTION 10. Notice of the time and place of the public hearing shall be given by the City Clerk by publication in the legally designated newspaper of general circulation, said publication pursuant to Section 6061 of the Government Code, with said publication to be completed at least seven (7) days prior to the date set for the public hearing. Leah Browder Acting Director of Engineering APPROVED AS TO FORM BY: ~ /is/; ! - nn Moore ~ City Attorney PREPARED BY: 14')24 EXHIBIT liA II RATE AND METHOD OF ApPORTIONMENT CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 97-2 IMPROVEMENT AREA C ANNEXATION No.6 (OTAY RANCH VILLAGE Two) A Special Tax of Community Facilities District No. 97-2 (preserve Maintenance District) of the City of Chula Vista ("CFD") shall be levied on all Assessor's Parcels in Improvement Area C, Annexation No.6 (Otay Ranch Village Two), of the CFD and collected each Fiscal Year commencing with Fiscal Year 2006-2007 in an amount detennined through the application of the rate and method of apportionment of the Special Tax set forth below. All of the real property in the CFD, 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. DEFINITIDNS The terms hereinafter ser forth have the following meanings: "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, other final map, other parcel map, other condominium plan, or functionally equivalent map or instrument recorded in the Office of the County Recorder. The square footage of an Assessor's Parcel is equal ro the Acreage multiplied by 43,560. "Act" means the Mello-RoDS Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 ofTicle 5 of the Government Code of the State of California. "Administrative Expenses" means the actual or estimated costs incurred by the City, acting for and on behalf of the CFD as the administrator thereof, to determine, levy and collect the Special Taxes, including salaries of City employees and a proportionate amount of the City's general administrative overhead related thereto, and the fees of consultants and legal counsel providing services related to the administration of the CFD; the costs of collecting installments of the Special Taxes; and any other costs required to administer Area C of the CFD as determined by the City. "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 Assessor of the County designating parcels by assessor's parcel number. "Building Square Foot or Square Footage" means the square footage as shown on an Assessor's Parcel's building permit of Residential Property excluding garages or other ElMuniFinancial Page 1 14-25 structures not used as living space. "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" means Community Facilities District No. 97-2 of the City of Chula Vista. "City" means the City of Chula Vista. "City Clerk" means the City Clerk for the City of Chula Vista or rus or her designee. "City Manager" means the City Manager for the City of Chula Vista or rus or her designee. "Community Purpose Facility Property" or "CPF Property" means all Assessor's Parcels wruch are classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2883. "Council" means the City Council of the City of Chula Vista, acting as the legislative body of the CFD. "County" means the County of San Diego, California. "Developed Property" means all Taxable Property for wruch a building permit was issued prior to the March 1st preceding the Fiscal Year in wruch the Special Tax is being levied. "Final Map Property" means any residential lot or non-residential lot created by a Final Subdivision Map, but wruch is not classified as Developed Property. "Final Subdivision Map" means a subdivision of property creating residential or non- residential buildable lots by recordation of a final subdivision map or parcel map 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 wruch building permits may be issued without further subdivision and is recorded prior to March 1 preceding the Fiscal Year in wruch the Special Tax is being levied. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Improvement Area cn or "Area C" means Improvement Area C of the CFD, as identified on the boundary map for the CFD as amended from time to time. "Land Use Class" means any of the classes listed in Table 1, Table 2, or Table 3. "Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section C below that 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 mMuniFinancial Page 2 14-26 which a building pennit(s) has been issued for a structure or structw::es for non-residential use. "Operating Fund" means a fund that shall be maintained within the CFD for each Fiscal Year to pay for Resource Monitoring and/ or Preserve Operations and Maintenance activities and Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Operating Fund Requirement" means for any Fiscal Year an amount equal to the Resource Monitoring Fund Requirement and the Preserve Operations and Maintenance Fund Requirement for the current Fiscal Year in which Special Taxes are levied. "Preserve Operations and Maintenance" means those activities described in Attachment A hereto which is incorporated herein by this reference. "Preserve Operations and Maintenance Fund Requirement" means for any Fiscal Year an amount equal to the budgeted costs for Preserve Operations and Maintenance plus a pro- rata share of the budgeted Administrative Expenses of the District for the current Fiscal Year in which Special Taxes are levied. "Property Owner Association Property" means any property within the boundaries of Area C of the CFD that is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder to, a property owner association, including any master or sub-association. "Public Property" means any property within the boundaries of Area C of the CFD that is, at the time of the CFD formation, expected to be used for any public purpose and is owned by or dedicated to the federal government, the State, the County, the City or any other public agency. "Reserve Fund" means a fund that shall be maintained for the CFD each Fiscal Year to provide necessary cash flow for the first six months of each Fiscal Year, working capital to cover monitoring, maintenance and repair cost overruns and delinquencies in the payment of Special Taxes and a reasonable buffer to prevent large variations in annual Special Tax levies. "Reserve Fund Balance" means the amount of funds in the Reserve Fund at the end of the preceding Fiscal Year. "Reserve Fund Requirement" means an amount equal to up to 100% of the Operating Fund Requirement for any Fiscal Year. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit( s) has been issued for purposes of constructing one or more residential dwelling unit. "Resource Management Plan" means the Olay Ranch Phase 1 Resource Management BMuniFinancial Page 3 14-27 Plan also referred to as "The Otay Ranch Resource Management Plan" dated October 28, 1993, and the Otay Ranch Phase 2, Resource Management Plan dated June 4, 1996, as both such plans may be amended from time to time. "Resource Monitoring Program" means those described in Attachment B hereto which is incorporated herein by this reference. "Resource Monitoring Fund Requirement" means for any Fiscal Year an amount for each Improvement Area equal to the Improvement Area's fair share of the budgeted costs of the Resource Monitoring Program plus a pro rata share of the budgeted Administrative Expenses of the CFD for the current Fiscal Year in which Special Taxes are levied. Improvement Area C's "fair share" shall be based on Improvement Area C's percentage of the total acreage within the Otay Ranch General Development Plan Planning Area for which a Resource Monitoring Program funding mechanism has been established. "Special Tax" means the Special Tax levied pursuant to the provisions of sections C and D below in each Fiscal Year on each Assessor's Parcel of Developed Property and Undeveloped Property in Area C to fund the Special Tax Requirement. "Special T ax Requirement" means that amount required in any Fiscal Year for Area C to: (i) pay the Resource Monitoring Fund Requirement, and Preserve Operations and Maintenance Fund Requirement, less the Operating Fund Balance, and (ii) pay any amounts required to establish or replenish the Reserve Fund to the Reserve Fund Requirement; (iii) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of Area C of the CFD that are not exempt from the Special Tax pursuant to law or as defined below. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property. iiiMuniFinancial Page 4 14-28 B. ASSIGNMENT TO CATEGORIES OF SPECIAL TAX Each Fiscal Year using the defInitions above, all Taxable Property within Area C, Annexation No.6 (Otay Ranch Village Two), of the CFD shall be classifIed as Category I, Category II, Category III or Exempt. Developed Property, Final Map Property or Undeveloped Property, and shall be subject to Special Taxes pursuant to Sections C and D below. Developed Property shall be further assigned to a Land Use Class as specifIed in Table 1. C. MAXIMUM SPECIAL TAX RATE CATEGORY I Category I includes Developed Property within the District ("Category I"). The Maximum Special Tax for Resource Monitoring, and Preserve Operations and Maintenance for Fiscal Year 2006-2007 on Developed Property are the rates set forth in Table 1 below. For Residential Property, the Special Tax shall be levied based upon Building Square Footage and for Non-Residential Property shall be levied based on Acreage. TABLE 1 MAXIMUM SPECIAL TAX FOR CATEGORY I COMMUNITY FACILITIES DISTRICT No. 97-2 IMPROVEMENT AREA C (FISCAL YEAR 2006-2007) Description Resource Operation & Total Monitoring Maintenance Residential $0.0062 sa ft $0.0099/ sq ft $0.0162/sq ft Non- $101.1797/acre $160.6303/ acre $261.81/ acre Residential CATEGORY II Category II includes each Assessor's Parcel of Taxable Property within the District for which a Final Map has been recorded, but which is not classifIed as a Developed Parcel ("Category II"). The Maximum Special Tax for Resource Monitoring, and Preserve Operations and Maintenance approved for Fiscal Year 2006-2007 on each Assessor's Parcel in Category II is the rate set forth in Table 2 below (said amount to be levied pro rata for any portion of an Acre). iii MuniFinancial Page 5 14-29 TABLE 2 MAXIMUM SPECIAL TAX FOR CATEGORY II COMMUNITY FACILITIES DISTRICT No. 97-2 IMPROVEMENT AREA C (FISCAL YEAR 2006-2007) Resource Operation & Total Monitoring Maintenance $101.1797/acre $160.6303/acre $261.81/acre CATEGORY III Category III includes each Parcel of Taxable Property within the District not subject to Special Tax under any other category ("Category III"). The Maximum Special Tax approved for Fiscal Year 2006-2007 on Taxable Property within Category III is the rate set forth in Table 3 below (said amount to be levied pro rata for any portion of an Acre). TABLE 3 MAXIMUM SPECIAL TAX FOR CATEGORY III COMMUNITY FACILITIES DISTRICT No. 97-2 IMPROVEMENT AREA C (FISCAL YEAR 2006-2007) Resource Operation & Total Monitoring Maintenance $65.3004/ acre $103.6696/ acre $168.97/acre EXEMPT CATEGORY The Exempt Category includes each property owned, conveyed or irrevocably offered for dedication to a public agency, or land which is in the public right-of-way, unmanned utility easements which make utilization for other than the purpose set forth in the easement impractical, common areas, private streets and parks, and open space lots ("Exempt Category") . BMuniRnancial Page 6 14-30 SPECIAL CASES In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class and be considered" Special Case". The Maximum Special Tax that may be levied on an Assessor's Parcel identified as Special Case shall be the sum of the Maximum Special Tax levies that may be levied on all Land Use Clasges located on that Assessor's Parcel. The CFD Administrator shall determine the allocation to each Land Use Class. ANNUAL ESCALATION OF MAxIMUM SPECIAL TAX The Maximum Special Tax as shown in the tables above that may be levied on each Assessor's Parcel in Area C, Annexation No.6 (Otay Ranch Village Two), shall be increased each Fiscal Year beginning in Fiscal Year 2007-2008 and thereafter by a factor equal to the annual percentage change in the San Diego Metropolitan Area all Urban Consumer Price Index (All Items). D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2006-2007, and for each following Fiscal Year, the Council shall levy the Area C, Annexation No.6 (Otay Ranch Village Two), Special Tax at the rates established pursuant to steps 1 through 4 below so that the amount of the Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: Step 1: Determine the revenue which could be generated by Parcels assigned to Category I by multiplying the Building Square Footage for Parcels classified as Residential Parcels by the Maximum Special Tax per Building Square Foot for Resource Monitoring, and Preserve Operations and Maintenance for Parcels and adding to that the maximum revenue which could be generated by multiplying the total acres for Parcels classified as Non-Residential Parcels by the Maximum Special Tax per Acre for Resource Monitoring and Preserve Operations and Maintenance. Step 2: If the total revenue as calculated in Step 1 is greater than the estimated Special Tax Liability for Improvement Area C, reduce the Special Tax for each Parcel proportionately so that the Special Tax levy for the Fiscal Year is equal to the Special Tax Liability for the Fiscal Year. Step 3: If the total revenue as calculated in Step 1 is less than the Special Tax Liability for Improvement Area C, a Special Tax shall be levied upon each Parcel within Improvement Area C, classified as Category II. The Special Tax for Parcels assigned to Category II shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category II, III MuniFinancial Page 7 14-31 OR The Maximum Special Tax rate for Parcels assigned to Category II. Step 4: If the total revenue as calculated in Step 1 and 3 is less than the Special Tax Liability, for Improvement Area C, a Special Tax shall be levied upon each Parcel within Improvement Area C classified as Category III. The Special Tax for Parcels assigned the Category III shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 and 3 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category III, OR The Maximum Special Tax rate for Parcels assigned to Category III and within Improvement Area C. However, in the event it is determined that the Special Tax Liability for Improvement Area C includes delinquent Special Taxes from Parcel in Category III from the prior Fiscal Year, the City shall determine the amount of delinquent taxes that arose from such Parcels and identify the owner(s). The amount of delinquent Special Taxes, if any, that arose from the applicable owner(s) shall first be divided by the total Category III Acres owned by such owner(s) and collected from the applicable owner(s) with the remaining portion of the Special Tax Liability not related to delinquent Special Taxes to be collected from all Parcels in Category III according to the procedure set forth in the preceding paragraph. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property or Multi-Family Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent annually up to the Maximum Special Tax as a consequence of delinquency or default by the owner of any other Assessor's Parcel within Area C of the CFD. E. APPEALS Any landowner or resident who pays the Special Tax and believes 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, i'lMuniFinancial Page 8 14-32 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 the CFD, 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 Re;v:iew / 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. F. MANNER OF COLLECTION Special Taxes levied pursuant to Section D above shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the CFD Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of Area C of the CFD or as otherwise determined appropriate by the CFD Administrator. G. TERM OF SPECIAL TAX Taxable Property in Improvement Area C of the CFD shall remain subject to the Special Tax in perpetuity. !Iii MuniFinancial Page 9 14-33 Attachment A Description of Preserve Operations and Maintenance Preserve Operations and Maintenance includes the maintenance, operation and management of the public or private property within boundaries of the <;)tay Ranch Preserve, as such boundaries may be modified from time to time, required by the Resource Management Plan to be maintained as open space or habitat preservation land or both. Such maintenance, operations and management shall include, but not be limited to, the following: (i) Preserve Maintenance. Development, implementation and ongoing provision of programs to maintain, operate and manage preserve habitat values through: cultivation, irrigation, trimming, spraying, fertilizing, and/or treatment of disease or injury; removal of trimmings, rubbish, debris and other solid waste; maintenance of trails; removal and control of exotic plant species (weeds); and control of cowbirds through trapping. (ii) Security. Development, implementation and ongoing provision of security programs to: enforce 11 no trespassing" rules; curtail activities that degrade resources, such as grazing, shooting, and illegal dumping; remove trash, litter, and other debris; control access; prohibit off-road traffic; and maintain fences and trails. (iii) Preserve improvements: Acquire equipment and/ or install improvements necessary to maintain, operate and manage the open space and habitat preservation land described above. The above description of the Preserve Operations and Maintenance is general in nature. The actual maintenance, operations and management of the open space and habitat preservation land within the Otay Ranch Preserve may be modified from time to time as necessary in order to effectively provide such services in compliance with the requirements of the Resource Management Plan. . Ii!iI MuniFinancial Page 10 14-34