Loading...
HomeMy WebLinkAboutCC Res 5415 2005-12-12 RESOLUTION NUMBER 5415 A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH TO ESTABLISH CITY OF SEAL BEACH COMMUNITY FACILITIES DISTRICT NO, 2005-01 (PACIFIC GATEWAY BUSINESS CENTER) AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN CITY OF SEAL BEACH COMMUNITY FACILITIES DISTRICT NO. 2005-01 (PACIFIC GATEWAY BUSINESS CENTER) I RECITALS: WHEREAS, the CITY COUNCIL (the "City Council") of the CITY OF SEAL BEACH (the "City") has received a petition (the "Petition") signed by the owner of all of the land which is proposed for inclusion in a proposed community facilities district which meets the requirements of Sections 53318 and 53319 of the Mello-Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (the "Act"), and; WHEREAS, the Act authorizes the City Council to establish a community facilities district and to levy special taxes within that district; and WHEREAS, in accordance with the request set forth in the Petition, the City Council desires to undertake proceedings to establish a community facilities district pursuant to the Act, to finance public facilities and services to serve the area of land hereinafter described. .,~,. --... .4'" .. NOW, THEREFORE, 'TFIE CITY COUNCIL OF THE CITY OF SEAL BEACH BOES HEREBY RESOLVE, DETERMINE AND ORDER AS I FOLLOWS: . _ . 1 , , . Section 1. Intention. In accordance with the request set forth in the Petition, the City Council hel"l?by declares its intention to conduct proceedings for the formation of-a community facilities district under the terms of the Act. Section 2. Name of District. The name of the proposed community facilities district is "City of Seal Beach Community Facilities District No. 2005-01 (Pacific Gateway Business Center)" (the "District"). Section 3. Boundaries of District. The exterior boundaries of the District are shown on that certain map now on file in the office of the City Clerk entitled "Proposed Boundaries of City of Seal Beach Community Facilities District No. 2005-01 (pacific Gateway Business Center)" (the "Map"). The Map indicates by a boundary line the extent of the territory included in the proposed District and shall govern for all details as to the extent of the District. On the original and one copy of the Map, the City Clerk shall endorse the certificate evidencing the date and adoption of this Resolution. The City Clerk shall file the original of the Map in her office and, within 15 days after the adoption of this Resolution, the City Clerk shall file a copy of the Map so endorsed in the records of the County Recorder, County of Orange, State of California, and in any event this map shall be filed no later than 15 days before the public hearing specified in Section 7 below. 1 Section 4. Facilities and Services. The type of public facilities proposed to be provided within the District and to be financed under the Act shall consist of those facilities set forth on Exhibit "A" (the "Facilities") attached hereto and incorporated herein by reference. The City Council hereby finds and determines that the description of the Facilities herein is sufficiently informative to allow taxpayers within the proposed District to understand what the funds of the District Resolution Number 5415 the United States, the State of California and/or the City, or any departments or political subdivisions thereof, shall be omitted from the levy of the Special Tax to be made to cover the costs and expenses of the Facilities and Services. In addition, reference is hereby made to Exhibit "B" for a description of other lands which shall be omitted from the levy of the Special Tax. I Section 15. Election to Perform Work. Pursuant to 53329.5(c) of the Act, the City Council finds that, in its opinion, the public interest will not be served by allowing property owners in the District to enter into a contract pursuant to Section 53329.5(a). This Section is not intended to prevent the City from entering into an agreement with any property owner pursuant to which it agrees to acquire the Facilities or any portion thereof, from that property owner. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Seal Beach on the 12th day of December , 2005 by the following vote: AYES: Council ~embers On~, r!1fl4dJh, ~df ) f?4 Council Members ~ Council Members JjdtaJH. Council Members (r~ NOES: ABSENT: ABSTAIN: 1 ~~ MAYOR ATTEST: JihA ~(hl ~i~ Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF SEAL BEACH ) I I, Linda Devine, City Clerk of Seal Beach, California, do hereby certify that the foregoing resolution is the original copy of Resolution Number 5415 on file in the office of the City Clerk, passed, approved, and adopted by the City Council of the City of Seal Beach, at a regular meeting thereof held on the 12th day of December. 2005. ~~~I Ity lerk Resolution Number 5415 EXHIBIT "A" DESCRIPTION OF FACILITIES AND SERVICES The facilities (the "Facilities") and services (the "Services") described below are proposed to be financed by Community Facilities District No. 2005-01 (Pacific Gateway Business Center) (the "District") of the City of Seal Beach (the "City). The cost of the Facilities and Services shall include Incidental Expenses, including the costs associated with forming the District, issuance of bonds (Facilities only), determination of the amount of the Special Tax, collection of the Special Tax, payment of the Special Tax, costs incurred in order to carry out the authorized purposes of the District, any other expenses, incidental to the construction, completion and inspection of the authorized work and the attributable costs of engineering and inspection. The Facilities shall be constructed, whether or not acquired in their completed states, pursuant to plans and specifications approved by the City and the officials thereof. 1 The Facilities include, but shall not be limited to, the facilities listed below, and other facilities of the same type or types may be substituted in the place of one or more of the specific facilities listed below, together with all appurtenances and appurtenant work, such as related clearing and grubbing, grading, and any removal or temporary signage or markings related thereto. The final nature and location of the Facilities will be determined upon the preparation of final plans and specifications for such Facilities. The Facilities may include facilities financed pursuant to public agency development impact fees. Facilities Sanitary Sewer Facilities. The sewer facilities include gravity pipelines, manholes, lift station and force mains. Water Facilities. Water supply is proposed to be looped through the site, with connections to existing mains in Seal Beach Boulevard and Westminster Avenue and include water mains, fitting~~ ~aterals, fire hydrants, valves and tees. 1 " Roadway Facilities. Including, but not limited to, right of way, excavation, signing and striping, access ramps, grading, pavement, median and parkway landscaping, irrigation and improvements, storm drains, catch basins, manholes outlet structures, right turn lanes, construction and. jI"p8rade of tiaffic signal improvement, curbs and gutters and sidewalks and the streetlights along S'eal Beach Boulevard and Westminster Avenue, as well as the interibr' street~ights. " ./ . '~~ A,p.9(.)o Dnve ApolloCourt South Apollo Drive Saturn Way Seal Beach Blvd. Westminster Avenue Adolfo Lopez Drive Dry Utilities and Joint Trench. Regional dry utilities will be constructed in Seal Beach Boulevard and Westminster Avenue by relocating overhead transmission poles and wires in Westminster Avenue as required to relocate street improvements. Relocating portions of the overhead wires and poles adjacent to the project, along the westerly boundary, are included. Also included are the onsite joint trench facilities. 1 Landscape and Irrigation. Landscape improvements include the installation and construction of landscaping and irrigation within the medians in Seal Beach Boulevard and Westminster Avenue and within the parkways for Apollo Drive, Apollo Court and Saturn Way. Services The services to be financed include maintenance of parks, parkways and open space on Seal Beach Boulevard and W estminster Avenue within or benefiting the District. * * * * Resolution Number 5415 1 may be used to finance, and that the proposed Facilities are necessary to meet increased demands placed upon the City as a result of development occurring in the District. The cost of the Facilities shall include Incidental Expenses, as defined in Exhibit "A" and may include reimbursement of money advanced by the owner of property within the District to pay development fees charged by the City and used by the City to finance improvements. The type of services proposed to be provided within the District and to be financed under the Act shall consist of those services set forth on Exhibit "A" (the "Services") attached hereto and incorporated herein by reference. The City Council hereby finds that the proposed Services are in addition to those provided in the territory of the District prior to the establishment of the District and the proposed Services will not supplant services already available within that territory. 1 Section 5. Special Tax. a. Except where funds are otherwise available to pay for the Facilities, the Services, and/or the principal and interest and other periodic costs as they becomes due on bonds of the District issued to finance the Facilities, it is the intention of the City Council to levy annually in accordance with procedures contained in the Act a special tax (the "Special Tax") within the District sufficient to pay for the costs thereof, including incidental expenses which shall include, without limitation, the establishment and replenishment of any reserve funds deemed necessary by the District, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash), financing of the costs associated with the issuance of the bonds, and all other costs necessary to finance the Facilities which are permitted to be financed pursuant to the Act. The Special Tax will be secured by recordation of a continuing lien against all non-exempt real property in the District and will be collected in the same manner as ordinary ad valorem property taxes are collected, or in such other manner as may be provided by the City Council including, without limitation, direct billing of the affected property owner, and shall be subject to the same penalties, procedure, sale and lien priority in case of delinquency as applicable for ad valorem property taxes. Provided, however, such Special Tax may be collected in such other manner as may be provided by the City Council. In the first year in which such a Special Tax is levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred to the District pursuant to Section 53314 of the Act and interest thereon. b. The proposed rate and method of apportionment of the Special Tax (the "Rate and Method") among parcels of real property in the District, in sufficient detail to allow each resident or landowner within the proposed District to estimate the maximum amount such resident or owner will have to pay, is shown in Exhibit "B," attached hereto and incorporated herein by reference. The Special Tax is based on the expected demand that each parcel of real property within the proposed District will place on the Facilities and on the benefit that each parcel derives from the right to access the Facilities. The City Council hereby determines the Rate and Method set forth in Exhibit "B" to be reasonable. The obligation to pay the Special Tax may be prepaid as set forth in Exhibit "B". I Section 6. Bonds. It is the intent of the City Council, acting as the legislative body of the District, to cause one or more series of bonds to be issued under the Act on behalf of the District to finance, in whole or in part, the Facilities. If so issued, the bonds will be in the aggregate principal amount of not to exceed $10,000,000, shall bear interest payable semi-annually or in such other manner as the City Council shall determine at a maximum interest rate not in excess of 12 percent per annum or such rate not in excess of the maximum rate permitted by law at the time the bonds are issued, and the term of the bonds of each series shall not exceed 31 years from the date of issuance of such series of bonds or such longer term as is then permitted by law. Resolution Number 5415 Section 7. Hearing. A public hearing (the "Hearing") on the establishment of the District, the extent of the District, the furnishing of Facilities and Services to serve the District, and the proposed rate and method of apportionment of the Special Tax shall be held on January 23, 2006, at 7:00 p.m., or as soon thereafter as practicable, at the chambers of the City Council of the City of Seal Beach, 211 Eighth Street, Seal Beach, California 90740. At the Hearing, any interested person or taxpayer, including all persons owning lands or registered to vote within the proposed District, may appear and be heard. Section 8. Reoort. The City officer who is or will be responsible for the Facilities and Services to be financed by the District, if it is established, is hereby directed to study the proposed District and, at or before the time of the above-mentioned Hearing, file, or cause to be filed, a report with the City Council, which is to be made a part of the record of the Hearing, containing the following: 1 (a) a brief description of the Facilities and Services which will in his or her opinion be required to adequately meet the needs of the District; and (b) an estimate of the fair and reasonable cost of fmancing the Facilities and Services. Section 9. Advances. The City may accept advances of funds or work in-kind from any source, including, but not limited to, private persons or private entities, and is authorized and directed to use such funds or that work in-kind for any authorized purpose, including, but not limited to, paying any cost incurred by the City in creating the District. The City may enter into an agreement with the person or entity advancing the funds or work-in-kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council, with or without interest. Section 10. Published Notice. The City Clerk is hereby directed to publish a notice of the Hearing ("Notice") pursuant to Section 6061 of the California Government Code in a newspaper of general circulation published in the area of the proposed District. Such Notice shall be substantially in the form specified in Section 53222 of the Act. Publication of the Notice shall be completed at least 7 days prior to the date of the Hearing. 1 Section 11. Mailed Notice. The City Clerk is hereby directed to send a copy of the Notice of the Hearing by first-class mail, postage prepaid, to each registered voter and to each landowner within the proposed District as shown on the last equalized assessment roll. Mailing of the Notice shall be completed at least 15 days prior to the date of the Hearing. Section 12. Voting. Should the City Council determine to form the District, a special election will be held within the District to authorize the issuance of bonds and the levy of the Special Tax in accordance with the procedures contained in Section 53326 of the Act. If held, the proposed voting procedure at the election will be a landowner vote with each landowner who is the owner of record of land within the District at the close of the Hearing, or the authorized representative thereof, having one vote for each acre or portion thereof owned within the District. Ballots for the special election may be distributed by mail with return postage prepaid or by personal service. 1 Section 13. Tender of Bonds. Except to the extent limited in any bond resolution or trust indenture related to the issuance of bonds, the City Council hereby reserves to itself all rights and powers set forth in Section 53344.1 of the Act (relating to tenders of bonds in full or partial payment of any installment of the special tax or the interest or penalties thereon which may be due or delinquent). Section 14. ExemDtions from SDecial Tax. Except as may otherwise be provided in Exhibit "B" hereto or by law, all lands owned by any public entity, including Resolution Number 5415 EXHIBIT "B" RATE AND METHOD OF APPORTIONMENT FOR CITY OF SEAL BEACH COMMUNITY FACILITIES DISTRICT NO. 2005-01 (PACIFIC GATEWAY BUSINESS CENTER) 1 A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels in City of Seal Beach Community Facilities District No. 2005-01 (Pacific Gateway Business Center) ("CFD No. 2005-01") and collected each Fiscal Year commencing in Fiscal Year 2006-2007, in an amount determined by the Council through the application of the appropriate Special Tax for "Developed Property," "Property Owner Association Property," "Public Property," and "Undeveloped Property" as described below. All of the real property in CFD No. 2005-01, 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, or other recorded County parcel map. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Govemment Code of the State of California. 1 "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2005-01: 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 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. 2005-01 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2005-01 or any designee thereof of complying with City, CFD No. 2005-01 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. 2005-01 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from any escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2005-01 for any other administrative purposes of CFD No. 2005-01, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. I "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax A" means the Special Tax A for each Land Use Class of Developed Property, as determined in accordance with Section C.1 below. Resolution Number 5415 "Backup Special Tax A" means the Special Tax A applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C.1 below. "Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 2005-01 under the Act. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement for Facilities and the Special Tax Requirement for Services, and providing for the levy and collection of the Special Taxes. 1 "CFD No. 2005-01" means City of Seal Beach Community Facilities District No. 2005-01 (pacific Gateway Business Center). "City" means the City of Seal Beach. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2005-01. "County" means the County of Orange. "Developed Property" means, for each Fiscal Year, all Taxable Property, exclusive of Property Owner Association Property, or Public Property, for which a building permit for new construction was issued after January 1, 2005 and as of March 1 of the previous Fiscal Year. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time. I "Maximum Special Tax" means the Maximum Special Tax A and/or Maximum Special Tax B, as applicable. "Maximum Special Tax A" means the Maximum Special Tax A, determined in accordance with Section C.1 below, that can be levied in any Fiscal Year on any Assessor's Parcel. "Maximum Special Tax B" means the Maximum Special Tax B, determined in accordance with Section C.2 below, that can be levied in any Fiscal Year on any Assessor's Parcel. "Outstanding Bonds" means all Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any Assessor's Parcel within the boundaries of CFD No. 2005-01 that was owned by or irrevocably offered for dedication to a property owner association, including any master or sub-association, as of January 1 of the previous Fiscal Year. "Proportionately" means for Developed Property that the ratio of the actual Special Tax A levy to the Assigned Special Tax A is equal for all Assessor's Parcels of Developed Property and that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is equal for all Assessor's Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax A levy per Acre to the Maximum Special Tax A per Acre is equal for all Assessor's Parcels of Undeveloped Property and that ratio of the actual Special Tax B levy per Acre to the Maximum Special Tax B per Acre is equal for all Assessor's Parcels of Undeveloped Property. For Public Property and I . . Resolution Number 5415 Property Owner Association Property, "Proportionately" means that the ratio of the actual Special Tax A levy per Acre to the Maximum Special Tax A per Acre is equal for all Assessor's Parcels of Public Property and Property Owner Association Property, as applicable. 1 "Public Property" means, for each Fiscal Year, any property within CFD No. 2005-01 that is owned by, irrevocably offered for dedication to, or dedicated to the federal govemment, the State, the County, the City or any other public agency as of June 30 of the prior Fiscal Year; provided however that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. To ensure that property is classified as Public Property in the first Fiscal Year after it is acquired by, irrevocably offered for dedication to, or dedicated to a public agency, the property owner shall notify the CFD Administrator in writing of such acquisition, offer, or dedication not later than June 30 of the Fiscal Year in which the acquisition, offer, or dedication occurred. "Special Tax" means the Special Tax A and/or Special Tax B, as applicable. "Special Tax A" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property, Undeveloped Property, Property Owner Association Property, and Public Property to fund the Special Tax Requirement for Facilities. "Special Tax B" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property to fund the Special Tax Requirement for Services. 1 "Special Tax Requirement for Facilities" means that amount required in any Fiscal Year for CFD No. 2005-01 to: (i) pay debt service on all Outstanding Bonds; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay a portion of the Administrative Expenses as determined by the CFD Administrator; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; and (v) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (vi) a credit for funds available to reduce the annual Special Tax A levy, as determined by the CFD Administrator pursuant to the Indenture. "Special Tax Requirement for Services" means that amount required in any Fiscal Year for CFD No. 2005-01 to: (i) pay directly for maintenance of parks, parkways, and open space benefiting property within CFD No. 2005-01; (ii) pay a portion of the Administrative Expenses as determined by the CFD Administrator; less (iii) a credit for funds available to reduce the annual Special Tax B levy, as determined by the CFD Administrator. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2005-01 which are not exempt from the Special Tax pursuant to law or Section E below. I "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Property Owner Association Property, or Public Property. Resolution Number 5415 B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2005-01 shall be classified as Developed Property, Property Owner Association Property, Public Property, or Undeveloped Property, and shall be subject to Special Taxes in accordance with the rate and method of apportionment determined pursuant to Sections C and D below. C. MAXIMUM SPECIAL TAX RATE 1. Special Tax A a. Develooed Prooertv I (1) Maximum Special Tax A The Maximum Special Tax A for each Assessor's Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax A or (ii) the amount derived by application of the Backup Special Tax A. (2) Assigned Special Tax A The Fiscal Year 2006-2007 Assigned Special Tax A shall equal $12,352.20 per Acre. (3) Backup Special Tax A The Fiscal Year 2006-2007 Backup Special Tax A shall equal $14,997.06 per Acre. (4) Increase in the Assigned Special Tax A and Backup Special TaxA 1 On each July 1, commencing on July 1, 2007, the Assigned Special Tax A and the Backup Special Tax A shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. b. Undevelooed Prooertv. Prooertv Owner Association Prooertv. and Public Prooerty (1) Maximum Special Tax A The Fiscal Year 2006-2007 Maximum Special Tax A for Undeveloped Property, Property Owner Association Property, and Public Property shall equal $15,189.84 per Acre. (2) Increase in the Maximum Special Tax A On each July 1, commencing on July 1, 2007, the Maximum Special Tax A for Undeveloped Property, Property Owner Association Property, and Public Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. I 2. Special Tax B a. Develooed Prooertv (1) Maximum Special Tax B 1 I D. I Resolution Number 5415 The Fiscal Year 2006-2007 Maximum Special Tax B shall equal $2,369.46 per Acre. (2) Increase in the Maximum Special Tax B On each July 1, commencing on July 1, 2007, the Maximum Special Tax B for Developed Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. b. Undeveloned Pronertv (1) Maximum Special Tax B The Fiscal Year 2006-2007 Maximum Special Tax B shall equal $2,369.46 per Acre. (2) Increase in the Maximum Special Tax B On each July 1, commencing on July 1, 2007, the Maximum Special Tax B for Undeveloped Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. c. Pronertv Owner AssociatiOli Pronertv and Public Pronertv No Special Tax B shall be levied on an Assessor's Parcel classified as Property Owner Association Property or Public Property. METHOD OF APPORTIONMENT OF THE SPECIAL TAX 1. Special Tax A Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement for Facilities and shall levy the Special Tax A as follows: First: The Special Tax A shall be Proportionately levied on each Assessor's Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax A as needed to satisfy the Special Tax Requirement for Facilities; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax A shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax A for Undeveloped Property; Third: If additional monies are needed to satisfy the Special Tax A Requirement for Facilities after the first two steps have been completed, then the levy of the Special Tax A on each Assessor's Parcel of Developed Property whose Maximum Special Tax is determined through the application of the Backup Special Tax A shall be increased in equal percentages from the Assigned Special Tax A up to the Maximum Special Tax A for each such Assessor's Parcel; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax A shall be levied Proportionately on each Assessor's Parcel of Property Owner Association Property and Public Property at up to the Maximum Special Tax A for Property Owner Association Property or Public Property. Resolution Number 5415 2. Special Tax B Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement for Services and shall levy the Special Tax B as follows: First: The Special Tax B shall be Proportionately levied on each Assessor's Parcel of Developed Property at up to 100% of the applicable Maximum Special Tax B as needed to satisfy the Special Tax Requirement for Services; I Second: If additional monies are needed to satisfy the Special Tax Requirement for Services after the first step has been completed, the Special Tax B shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax B for Undeveloped Property. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of residential property for which an occupancy permit for private residential use has been issued be increased by more than ten percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2005-01. E. EXEMPTIONS 1. Special Tax A Public Property and Property Owner Association Property are not exempt from the Special Tax. 2. Special Tax B 1 No Special Tax B shall be levied on Public Property and Property Owner Association Property. F. APPEALS AND INTERPRETATIONS Any taxpayer may file a written appeal of the Special Tax on hislher property with the CFD Administrator, provided that the appellant is current in hislher payments of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the calculation of the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax on the appellant's property and/or provide a refund to the appellant. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has 30 days in which to appeal to the Council by filing a written notice of appeal with the City clerk, provided that the appellant is current in hislher payments of Special Taxes. The second appeal must specify the reasons for its disagreement with the CFD Administrator's determination. 1 G. MANNER OF COLLECTION The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2005-01 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 delinquent Assessor's Parcels as permitted by the Act. Resolution Number 5415 H. PREPAYMENT OF SPECIAL TAX A The following definition applies to this Section H: 1 "CFD Public Facilities Cost" means either $7.7 million in 2005 dollars, which shall increase by the Construction Inflation Index on July 1, 2006, and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2005-01 under the authorized bonding program for CFD No. 2005-01, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taxes levied under this Rate and Method of Apportionment as described in Section D. "Construction Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct public facilities eligible under the Act. "Construction Inflation Index" means the annual percentage change in the Engineering News-Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. "Future Facilities Costs" means the CFD Public Facilities Cost minus (i) public facility costs previously paid from the Construction Fund, (ii) moneys currently on deposit in the Construction Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance facilities costs. 1 "Outstanding Bonds" means all Previously Issued Bonds which are deemed to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year. "Previously Issued Bonds" means all Bonds that have been issued by CFD No. 2005-01 prior to the date of prepayment. I. Prepayment in Full 1 The obligation of an Assessor's Parcel to pay the Special Tax A may be prepaid and permanently satisfied as described herein; provided that a prepayment may be made only for Assessor's Parcels for which 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 Special Tax A 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 service. Prepayment must be made not less than 45 days prior to the next occurring date that notice of redemption of Bonds from the proceeds of such prepayment may be given to the Trustee pursuant to the Indenture. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount - plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit Resolution Number 5415 less Total: equals CaDitalized Interest Credit Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Paral!:raDh No.: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. I 2. For Assessor's Parcels of Developed Property, compute the Maximum Special Tax A for the Assessor's Parcel to be prepaid. For all other Assessor's Parcels, compute the Maximum Special Tax A for that Assessor's Parcel as though it was designated as Developed Property. 3. Divide the Maximim Special Tax A computed pursuant to paragraph 2 by the total estimated Maximum Special Tax A for the entire CFD No. 2005- 01 based on the Developed Property Special Tax A which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2005-01, excluding any Assessor's Parcels which have been prepaid. 4. Multiply the quotient computed pursuant to paragraph 3 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 1 7. Multiply the quotient computed pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 9. Determine the Special Tax A levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. 10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount (as defined below) less the Future Facilities Amount and the Administrative Fees and Expenses (as defined below) from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 11. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the amount computed pursuant to paragraph 10 (the "Defeasance Amount"). 1 12. Verify the administrative fees and expenses of CFD No. 2005-01, 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"). Resolution Number 5415 13. The reserve fund credit ("Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defmed in the Indenture), ifany, 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. 1 14. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 3 by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit'~. 15. The Special Tax A prepayment is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Prepayment Amount"). 16. From the Prepayment Amount, the amounts computed pursuant to paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the construction fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2005-01. 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 A levy as determined under paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax A 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 Tax A and the release of the Special Tax A lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax A shall cease. Notwithstanding the foregoing, no Special Tax A prepayment shall be allowed unless the amount of Maximum Special Tax A that may be levied on Taxable Property within CFD No. 2005-01 both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. The Special Tax B may not be prepaid. 2. Prepayment in Part I The Special Tax A on an Assessor's Parcel may be partially prepaid. The amount of the prepayment shall be calculated as in Section H.l; except that a partial prepayment shall be calculated according to the following formula: PP=(PE-A)xF+A These terms have the following meaning: PP = the partial prepayment Resolution Number 5415 PE = the Prepayment Amount calculated according to Section H.l F = the percentage by which the owner of the Assessor's Parcel(s) is partially prepaying the Special Tax A A = the Administration Fees and Expenses from Section H.l The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax A and the percentage by which the Special Tax A shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax A for an Assessor's Parcel within thirty (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 Section H.I, and (ii) indicate in the records of CFD No. 2005-01 that there has been a partial prepayment of the Special Tax A and that a portion of the Special Tax A with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Special Tax A, shall continue to be levied on such Assessor's Parcel pursuant to Section D. 1 I. TERM OF SPECIAL TAX The Special Tax A shall be levied for the period necessary to fully satisfy the Special Tax Requirement for Facilities, but in no event shall it be levied after Fiscal Year 2046-47. The Special Tax B shall be levied as long as necessary to meet the Special Tax Requirement for Services. 1 1