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HomeMy WebLinkAboutOrd 2000-2814ORDiNANCE NO. 2814 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2000-1 (SUNBOW II - VILLAGES 5 THROUGH 10) AUTHORIZING THE LEVY OF A SPECIAL TAX IN SUCH COMMUNITY FACILITIES DISTRICT WHEREAS, the City Council has initiated proceedings, held a public heating, conducted an election and received a favorable vote from the qualified electors authorizing the levy of a special tax in a commtmity facilities district, all as authorized pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982," being Chapter 2.5, Part 1. Division 2, Title 5 of the Government Code of the State of Califomia (the "Act") and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista trader 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 is designated as COMMUNITY FACILITIES DISTRICT NO. 2000-1 (SUNBOW II - VILLAGES 5 THROUGH 10). The City Council of the City of Chula Vista, Califomia, acting as the legislative body of Community Facilities District No. 2000-1 (Sunbow II - Villages 5 through 10), does hereby ordain as follows: SECTION1. This City Council does, bythepassageofthisordinance, authorizethelevyofspecial taxes pursuant to the Rate and Method of Apportionment of Special Taxes as set forth in Exhibit "A" attached hereto (the "Special Tax Formula"), referenced and so incorporated. SECTION 2. This City Council, acting as the legislative body of the District, is hereby further authorized, by Resolution, to annually determine the special tax to be levied for the then current tax year or future tax years, except that the special tax to be levied shall not exceed the maximum special tax calculated pursuant to the Special Tax Formula, but the special tax may be levied at a lower rate. SECTION 3. 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; provided, however, the District may utilize a direct billing procedure for any special taxes that cannot be collected on the County tax roll or may, by resolution, elect to collect the special taxes at a different time or in a different mariner if necessary to meet its financial obligations. SECTION4. ThespecialtaxshallbesecuredbythelienimposedpursuanttoSections3114.5and 3115.5 of the Streets and Highways Code of the State of California, which lien shall be a continuing lien and shall secure each levy of the special tax. The lien of the special tax shall continue in force and effect until the special tax obligation is prepaid, permanently satisfied and canceled in accordance with Section 53344 of the Government Code of the State of California or until the special tax ceases to be levied by the City Council in the manner provided in Section 53330.5 of said Govemment Code. SECTION 5. This Ordinance shall be effective thirty (30) days after its adoption. Within fifteen (15) days after its adoption, the City Clerk shall cause this Ordinance to be published in a newspaper of general circulation in the City pursuant to the provisions of Government Code Section 36933. Ordinance 2814 Page 2 Presented by Approved as to form by Jo ~'P. Lippitt P~t~ Works Director PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, Califomia, this 25m day of July, 2000, by the following vote: AYE S: Councilmembers: Davis, Moot, Padilia, Salas and Horton NAY S: Councilmembers: None ABSENT: Councilmembers: None ATTEST: - ~?."~ ~ c'. ~ - . z, Shirley Horton, Mayor Susan Bigelow, City Clerli 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 Ordinance No.2814 had its first reading at a regular meeting held on the 11t day of July, 2000 and its second reading and adoption at a regular meeting of said City Council hheld on the 25m day of July, 2000. Executed this 25th day of July, 2000 Susan Bigelow, City Clerk EXHIBIT A CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2000-1 (Sunbow II - Villages 5 through 10) RATE AND METHOD OF APPORTIONMENT RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2000-1 (Sunbow II - Villages 5 thru 10) A Special Tax as hereinaeter defined shall be levied on all Assessor's Parcels of Taxable Property within the City of Chula Vista Community Facilities District No. 2000-1 CCFD No. 2000-1") and collected each Fiscal Year commencing in Fiscal Year 2000-2001, in an amount determined by the City Council through the application of the appropriate Special Tax for '~)eveloped Property," "Taxable Property Owner Association Property," and "Undeveloped Property" as described below. All of the real property in CFD No. 2000-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, record of survey, or other recorded document creating or describing the parcel. If the preceding maps are not available, the Acreage shall be determined by the City Engineer. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2000-1 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 of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2000-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2000-1 or any designee thereof of complying with City, CFD No. 2000-1 or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2000-1 or any designee thereof related to an appeal of the Special Tax; and the costs associated with the release of funds from an escrow account, if any. Administrative Expenses shall also include amounts estimated or advaneed by the City or CFD No. 2000-1 for any other administrative purposes of CFD No. 2000-1, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes~ Ci~ of Chula I~ista May 1, 2000 Communi,ty Facilities District No. 2000-1 Page 1 "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's Parcel number. "Available Funds" means the balance in the reserve fund established pursuant to the terms of the Indenture in excess of the reserve requirement as defined in such Indenture, delinquent special tax payments, foreclosure proceeds, the portion of proceeds of Backup Special Tax payments and Special Tax prepayments collected to pay interest on Bonds, and other sources of funds available as a credit to the Special Tax Requirement as specified in such Indenture. "Backup Special Tax" means the Special Tax that is required to be paid as a condition precedent to the issuance of building permits or recordation of final maps, as determined in accordance with Section E below. "Bonds" means any bonds or other debt (as defined in the Act), whether in one or more series, issued by CFD No. 2000-1 under the Act. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No. 2000-1" means City of Chula Vista Community Facilities District No. 2000-1 (Sunbow II -Villages 5 thru 10). "City" means the City of Chula Vista. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2000-1. "County" means the County of San Diego. "Developed Property" means, for each Fiscal Year, all Taxable Property, exclusive of Taxable Property Owner Association Property, for which a building permit for new construction was issued prior to March 1 of the prior Fiscal Year. "Development Projection" means an annual calculation for each Planning Area of CFD No. 2000-1 o~ (i) the number and total Residential Floor Area of existing dwelling units of Residential Property, and (ii) a projection of all future development, including the acreage, projected number of residential dwelling units, projected Residential Floor Area, and an absorption schedule for all future development within CFD No. 2000-1. The Development Projection shall be dated as of March 1 and prepared each Fiscal Year by the Master Developer. Upon submittal, the CFD Administrator shall review, modify if necessary, and Ci(v of Chula Vista May 1, 2000 Communi(v Facilities District No. 2000-1 Page 2 approve the Development Projection. If the Development Projection is not received by the CFD Administrator on or before Aptill, the CFD Administrator shall then prepare or cause to be prepared a Development Projection. "Final Residential Subdivision" means a subdivision of property created by recordation of a final 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 reeordation of a eondominium plan pursuant to California Civil Code 1352 that creates individual lots for which residential building permits may be issued without further subdivision of such property. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Tables 1 and 2 of Section C. "Master Developer" means the owner of the predominant amount of Undeveloped Property in CFD No. 2000-1. "Maximum Annual Special Tax" means the maximum annual Special Tax, determined in accordance with the provisions of Section C below, that may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property. "Occupied Residential Property" means all Assessors' Parcels of Residential Property which have closed escrow to an end user (homeowners). "Outstanding Bonds" means all Bonds which remain outstanding. "Planning Area(s)" means Village 5, Village 6, Village 7, Village 8, Village 9, and Village 10 as shown on Tentative Tract No. 90-7 approved by the City on May 3, 1990. Minor adjustments in the boundaries of the Planning Areas may be made by the CFD Administrator to conform to the Final Residential Subdivision for these areas. "Property Owner Association Property" means any property within the boundaries of CFD No. 2000-1 owned by or dedicated to a property owner association, including any master or sub-association. "Proportionately" means for Developed Property that the ratio of the actual Special Tax levy to the Maximum Annual Special Tax is equal for all Assessor's Parcels of Developed Property within CFD No. 2000-1. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Annual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property within CFD No. 2000-1. City of Chula ~?sta May 1, 2000 Community Facilities District No. 2000-1 Page 3 "Public Property" means any property within the boundaries of CFD No. 2000-1 that is used for rights-of-way or any other purpose and is owned by or dedicated to 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 residemial dwelling units. "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be made by reference to appropriate records kept by the City's Planning and Building Department. Residential Floor Area will be based on the building permit(s) issued for each dwelling unit prior to it being classified as Occupied Residential Property, and shall not change as a result of additions or modifications made after such classi~eafion as Occupied Residential Property. "Special Tax" means the: (i) annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement pursuant to Section D, and (ii) the Backup Special Tax that may be required as a result of changes in development. "Special Tax Requirement" means that mount required in any Fiscal Year for CFD No. 2000-1 to: (i) pay annual debt service on all Outstanding Bonds as defined in Section A.; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture; (v) and pay directly for acquisition and/or construction of facilities, which are authorized to be financed by CFD No. 2000-1; (vi) less a credit for Available Funds. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2000-1 which are not exempt from the Special Tax pursuant to law or Section F below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section F below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means, for each Fiscal year, all Taxable Property not classified as Developed Property or Taxable Property Owner Association Property. city of Chula ~Tsta May 1, 2000 Community Facililies District No. 2000-1 Page 4 B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2000-1 shall be classified as Developed Property, Taxable Property Owner Association Property, or Undeveloped Property, and shall be subject to the levy of annual Special Taxes determined pursuant to Sections C and D below. C. MAXIMUM ANNUAL SPECIAL TAX RATE 1. Developed Property The Maximum Annual Special Tax for each Assessor's Parcel classified as Developed Property shall be the amount shown in Table 1 below: TABLE1 Maximum Annual Special Tax for Developed Property Land Use Class Description Maximum Annual Special Tax 1 Residential Property $.44 per square foot of Residential Floor Area Undeveloped Property and Taxable Property Owner Association Property The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped Property and Taxable Property Owner Association Property shall be the amounts shown in Table 2 below: TABLE2 Maximum Annual Special Tax for Undeveloped Property and Taxable Property Owner Association Property Land Use Class Description 2 Undeveloped Property 3 Taxable Property Owner Association Property Maximum Annual Special Tax $7,851 per Acre $7,851 per Acre METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2000-2001 and for each following Fiscal Year thereafter until the 2035/2036 Fiscal Year as provided for in Section J, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the amount of Special Ci,ty of Chula Fista May 1, 2000 Communi~ Faciliaes District No. 2000-1 Page 5 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 Assessors Parcel of Developed Property at up to 100% of the applicable Maximum Annual Special Tax to satisfy the Special Tax Requirement. Second: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property at up to 100% of the Maximum Annual Special Tax for Taxable Property Owner Association Property. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Occupied Residential Property be increased by more than ten (10%) 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 of CFD No. 2000-1. E. BACKUP SPECIAL TAX The purpose for the development of a "Backup Special Tax" is to ensure that appropriate revenues are generated to pay for the annual bond debt service obligations, in the event that there are shortfalls in either the number of units or square-footages of the residential units. The following definitions apply to this Section E: "Actual Average Special Tax Per Unit" means, for each Planning Area, the Actual Special Tax Revenue divided by the sum of the number of units included in any current building permit application(s) plus the number of units within such Planning Area for which building permits have previously been issued. Any building permits issued after an Assessor's Parcel has been classified as Occupied Residential Property shall not be included in determining the Actual Average Special Tax Per Unit. "Actual Special Tax Revenue" means, for each Planning Area, the sum of the total Residential Floor Area shown on any current building permit application(s) plus the total Residential Floor Area from any previously issued building permits within the Planning Area multiplied by the Maximum Annual Special Tax in Table 1. Any building permits issued after an Assessor's Parcel has been classified as Occupied Residential Property shall not be included in determining the Actual Special Tax Revenue. City of Chula Vista May 1, 2000 Community FaciliHes District No. 2000~1 Page 6 "Backup Special Tax Fund" means, for each Planning Area, the fund or account identified in the Indenture to hold Backup Special Tax payments received from property owners within such Planning Area. "Expected Special Tax Revenue" means, with respect to each Planning Area, the annual amount shown in the column so labeled in Table 3. "Required Average Special Tax Per Unit" means, for each Planning Area, the Expected Special Tax Revenue divided by the total number of dwelling units expected to be developed within the Planning Area, as determined by the CFD Administrator based on tentative maps, Final Residential Subdivision maps, the Development Projection, and all other relevant information available to the CFD Administrator. "Share of Annual Debt Service" means, for each Planning Area, the maximum annual debt service on the Bonds multiplied by that Planning Area's percentage of the total Special Tax revenue, as shown in Table 3 below. A Planning Area's Share of Annual Debt Service shall be adjusted to reflect any prepayments within that Planning Area. 1. Expected Development and Special Tax Revenues Table 3 below identifies the amount of development and Special Tax revenue that is currently expected from each Planning Area. Any Planning Area's information in Table 3 may be revised by the CFD Administrator prior to the issuance of Bonds without limitation. TABLE 3 Expected Development and Special Tax Revenue by Planning Area PLANNING AREAS Village 5 Village 6 Village 7 Village 8 Village 9 Village 10 TOTAL EXPECTED PRODUCT TYPE EXPECTED TOTAL ANNUAL PERCENT NUMBER RESIDENTIAL SPECIAL OF TOTAL OF UNITS FLOOR AREA TAX REVENUE Residential Property 144 units 403,200 $177,408 26.94% Residential Property 102 units 234,600 103,224 15.68% Residential Property 112 units 313,600 137,984 20.96% Residential Property 55 units 126,500 55,660 8.45% Residential Property 79 units 181,700 79,948 12.14% Residential Property 103 units 236,900 104,236 15.83% 59~5units $658_460 100,00% Calculation of Required Average Special Tax Per Unit City ofChula l~sta Mav I 2000 Community Facilities District No. 2000-1 Page 7 At the time the first building permit application for a Planning Area is submitted to the City, the CFD Administrator shall calculate the Required Average Special Tax Per Unit. Backup Special Tax due to Loss of Units If at any time after the Required Average Special Tax Per Unit has been calculated initially for a Planning Area, the CFD Administrator determines that based on tentative maps, Final Residential Subdivision maps, the Development ProjeCtion, and any other available information there has been a reduction in the total expected number of dwelling units within that Planning Area, then a Backup Special Tax payment shall be required for each lost unit prior to the issuance of any additional building permits or the recordation of any additional final maps for such Planning Area. Backup Special Tax due to Loss of Residential Floor Area For Planning Areas that include Residential Propetty, before each building permit (or group of permits) is issued, the CFD Administrator shall calculate the Actual Average Special Tax Per Unit for the Planning Area. If the Actual Average Special Tax Per Unit is less than the Required Average Special Tax Per Unit then a Backup Special Tax payment will be required prior to issuance of the building permit(s) included within the calculation. Calculation of Backup Special Tax The Backup Special Tax payment amount will be calculated using the prepayment formula described in Section I. 1, with the following exceptions: (i) if the Backup Special Tax is required as a result of Section E.3, then the amount used in Paragraph No. 1 of the prepayment formula described in Section I. 1 shall equal the number of lost units, times the Required Average Special Tax Per Unit; (ii) if the Backup Special Tax is required as a result of Section E.4, then the amount used in Paragraph No. 1 of the prepayment formula described in Section I. 1 shall equal the difference between the Actual Average Special Tax Per Unit and the Required Average Special Tax Per Unit times the sum of the number of units for which permits are being issued plus the number of units within the Planning Area for which building permits have previously been issued. The amount determined pursuant to the preceding sentence shall be reduced by the balance in the Backup Special Tax Fund that has been established for such Planning Area; (iii) in Paragraph No. 5 of the prepayment formula described in Section 1.1, compute the amount needed to pay interest on the Bond Redemption Amount until the first redemption date that occurs af[er five years from the date of the first Backup Special Tax payment in the Planning Area; (iv) any Backup Special Tax payments received for a Planning Area (less Administrative Fees and Expenses) shall be deposited into the Backup Special Tax Fund for that Planning Area and disbursed pursuant to the Indenture; and (v) the Maximum Annual Special Taxes applicable to City of Chula I~Tsta May 1, 2000 Community Facilities District No. 2000-1 Page 8 property within a Planning Area shall not be reduced or relieved as a result of payment of the Backup Special Tax. Use/Release of Backup Special Tax Payments When a Planning Area reaches full buildout (i.e. all expected building permits have been issued), the CFD Administrator shall calculate the actual Developed Property Maximum Annual Special Tax revenues that will be generated from such Planning Area. If the actual Developed Property Maximum Annual Special Tax revenues are greater than or equal to 1.1 times that Planning Area's Share of Annual Debt Service, the balance in the Backup Special Tax Fund shall be returned to the payer. If Backup Special Taxes have been paid by more than one entity, the mount of Backup Special Taxes returned to each payer shall be in proportion to the amount paid by each entity. If the actual Developed Property Maximum Annual Special Tax revenues are less than 1.1 times that Planning Area's Share of Annual Debt Service, then to the extent necessary to generate 110% coverage, the balance in the Backup Special Tax Fund shall be used to redeem bonds on the next available redemption date unless the CFD Administrator reasonably determines, in its sole discretion, that the actual Developed Property Maximum Annual Special Tax revenues and the estimated Developed Property Maximum Annual Special Tax revenues pursuant to the Development Projection that are expected to be generated from all Planning Areas in CFD No. 2000-1 are greater than or equal to 1.1 times the maximum annual debt service on the Bonds. Any moneys remaining in Backup Special Tax Fund after a required bond redemption, if any, shall be returned to the payer. Notwithstanding the above, if a Planning Area has not reached full buildout within five years after the first payment of Backup Special Taxes for such Planning Area, then all moneys in the Backup Special Tax Fund shall be used to redeem bonds on the next available redemption date. F. EXEMPTIONS No Special Tax shall be levied on: (i) the land area that lies outside the Planning Areas, and (ii) up to 56.15 Acres of Property Owner Association Property and Public Property. Tax- exempt status will be irrevocably assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. After the limit of 56.15 exempt Acres has been reached the Maximum Annual Special Tax obligation for any additional Public Property shall be prepaid in full by the seller pursuant to Section I. 1, prior to the transfer/dedication of such property. Until the Maximum Annual Special Tax obligation for any such Public Property is prepaid, the property shall continue to be subject to the levy of the Special Tax as Undeveloped Property. Property Owner Association Property that is not exempt from Special Taxes under this section shall be subject to the levy of the Special Tax and shall be taxed Proportionately as City of Chula 14sta b~ray 1, 2000 Community Facilities District No. 2000-1 Page 9 part of the third step in Section D above, at up to 100% of the Maximum Annual Special Tax for Taxable Property Owner AsSociation Property. G. REVIEW/APPEAL COMMITTEE The Council shall establish as part of the proceedings and administration of CFD No. 2000- 1 a special three-member Review/Appeal Committee. Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error may file a written notice with the Review/Appeal Committee appealing the amount of the Special Tax levied on such Assessor's Parcel. The Review/Appeal Committee may establish such procedures as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as heroin specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. H. MANNER OF COLLECTION The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorera property taxes; provided, however, that CFD No. 2000-1 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 which are delinquent in the payment of Special Taxes. Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. I. PREPAYMENT OF SPECIAL TAX The following definition applies to this Section I: "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 by an Assessor's Parcel of Developed Property, Undeveloped Property for which a building permit has been issued, or Public Property. The Maximum Annual Special Tax City of Chula Vista May 1, 2000 Community Faciliaes District No. 2000-1 Page 10 obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of the Assessor's Parcel to pay the Special Tax permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Annual Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus plus plus less less Total: equals Redemption Premium Defeasance Amount Administrative Fees and Expenses Reserve Fund Credit Capitalized Interest Credit Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Paragraph No.: For Assessor's Parcels of Developed Property, compute the Maximum Annual Special Tax for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Public Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel using the Maximum Annual Special Tax for Undeveloped Property. Divide the Maximum Annual Special Tax computed pursuant to paragraph 1 by the sum of the total expected Special Tax revenues in Table 3 in Section E, excluding any Assessor' s Parcels which have been prepaid. Multiply the quotient computed pursuant to paragraph 2 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Arnounf'). Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). ci.ty of Chula b Tsta May 1, 2000 Communi(y Faciliiies District No. 2000-1 Page 11 10. 11. 12. 13. 14. Compute the mount 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. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. Compute the amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. Add the amounts computed pursuant to paragraphs 5 and 7 and subtract the amount computed pursuant to paragraph 8 (the "Defeasance Amounf'). Verify the administrative fees and expenses of CFD No. 2000-1, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 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. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 2 by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credif '). The Maximum Annual Special Tax prepayment is equal to the sum of the amounts computed pursuant to paragraphs 3, 4, 9, and 10, less the amounts computed pursuant to paragraphs 11 and 12 (the "PrepaymentAmounf'). From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 9, 11, and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. City of Chula l~sta 3~lay 1, 2000 Community Facilities District No. 2000-1 Page 12 The amount computed pursuant to paragraph 10 shall be retained by CFD No. 2000- 1. The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under paragraph 7 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Taxes and the release of the Special Tax lien on such Assessor's 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 CFD No. 2000-1 both prior to and af[er the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. Tenders of Bonds in prepayment of Maximum Annual Special Taxes may be accepted upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. 2. Prepayment in Part The Maximum Annual Special Tax 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 I. 1; except that a partial prepayment shall be calculated according to the following formula: PP = (PE x F) + A These terms have the following meaning: PP = the partial prepayment PE = the Prepayment Amount calculated according to Section I. 1, minus Administrative Expenses and Fees 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 Administrative Expenses and Fees 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 ci.tv of Chula Vista May 1, 2000 Community Facilities District No. 2000-1 Page 13 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 Paragraph 14 of Section 1. 1, and (ii) indicate in the records of CFD No. 2000-1 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. J. TERM OF MAXIMUM ANNUAL SPECIAL TAX The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2000-2001 to the extent necessary to fully satisfy the Special Tax Requirement for a period no longer than the 2035-2036 Fiscal Year, City of Chula I~sta May 1, 2000 Community Facilities District NO. 2000-1 Page 14