Loading...
HomeMy WebLinkAbout04-295 - ResolutionsRESOLUTION NO. 04-295 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, FORMING AND ESTABLISHING COMMUNITY FACILITIES DISTRICT NO.2004-01 (RANCHO ETIWANDA ESTATES) AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES WITHIN EACH SUCH IMPROVEMENT AREA TO THE QUALIFIED ELECTORS THEREOF WHEREAS, the CITY COUNCIL of the CITY OF RANCHO CUCAMONGA, CALIFORNIA (the "City Council"), has previously declared its intention to form a community facilities district for the purpose of financing the acquisition or construction of certain public facilities and ordered the preparation of a Community Facilities District Report 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 California (the "Act"). This community facilities district shall hereinafter be referred to as COMMUNITY FACILITIES DISTRICT NO. 2004-01 (RANCHO ETIWANDA ESTATES) (the "District"); and, WHEREAS, notice of a public hearing relating to the establishment of the District, the extent of the District, the financing of certain public facilities and all other related matters has been given, and a Community Facilities District Report, as ordered by this City Council, has been presented to this City Council and has been made a part of the record of the hearing to establish such District; and, WHEREAS, subsequent to the adoption by the City Council of the resolution declaring the intention of the City Council to consider the formation of the District and the authorization to levy special taxes within the District pursuant to the rate and method of apportionment that was attached to and incorporated into such resolution (the "Original RMA"), the City financing team determined that it would be necessary to modify the rates of the proposed special taxes as set forth in the Original RMA to ensure that such rates did not cause the aggregate taxes authorized to be levied on the developed properties within the District to exceed the limit as established by the Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts (the "Goals and Policies"); and WHEREAS, the City financing team is recommending that the Original RMA be modified to reduce the rates of certain of the special taxes proposed to be levied within the District so as to ensure compliance with the Goals and Policies; and WHEREAS, such modified rate and method of apportionment as set forth in Exhibit B attached hereto and incorporated herein by this reference (the "Modified RMA") has been presented to this City Council for its consideration; and WHEREAS, all communications relating to the establishment of the District, the financing of certain public facilities and the proposed rate and method of apportionment of special tax has been presented, and it has further been determined that a majority protest as defined by law has not been received against these proceedings or the levy of the special tax within the District; and, Resolution No. 04-295 Page 2 of 21 WHEREAS, inasmuch as there have been less than twelve (12) registered voters residing within the territory of the District for at least the preceding ninety (90) days, the authorization to levy special taxes within the District shall be submitted to the landowners thereof, such landowners being the qualified electors as authorized by law. NOW, THEREFORE, BE IT RESOLVED AND DETERMINED by the City Council of the City of Rancho Cucamonga as follows: SECTION 1: Recitals. The above recitals are all true and correct. SECTION 2: DETERMINATIONS. It is hereby determined by this City Council that: A. All prior proceedings pertaining to the formation of the District were valid and taken in conformity with the requirements of the law, and specifically the provisions of the Act, and that this finding and determination is made pursuant to the provisions of Government Code Section 53325.1. B. The written protests received, if any, do not represent a majority protest as defined by the applicable provisions of the Act and as applied to the District and, therefore, the special tax proposed to be levied within the District has not been precluded by majority protest pursuant to Section 53324 of the Government Code of the State of California. C. The District as proposed subject to the Modified RMA conforms with the City of Rancho Cucamonga Statement (the "Goals and Policies"). D. Less than twelve (12) registered voters have resided within the territory of the District for each of the ninety (90) days preceding the close of the public hearing, therefore, pursuant to the Act the qualified electors of the District shall be the landowners of the District as such term is defined in Government Code Section 53317(f) and each such landowner who is the owner of record as of the close of the public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre of land that she or he owns within the District. E. The time limit specified by the Act for conducting an election to submit the levy of the special taxes to the qualified electors of the District and the requirements for impartial analysis and ballot arguments have been waived with the unanimous consent of the qualified electors of the District. F. The City Clerk, acting as the election official, has consented to conducting any required election on a date which is less than 125 days following the adoption of any resolution forming and establishing the District. Resolution No. 04-295 Page 3 of 21 SECTION 3: COMMUNITY FACILITIES DISTRICT REPORT. The Community Facilities District Report for the District (the "Report"), as now submitted by David Taussig & Associates, Special Tax Consultant, shall stand as the report as required pursuant to Government Code Section 53321.5 for all future proceedings and all terms and contents are approved as set forth therein. SECTION 4: NAME OF DISTRICT. The City Council does hereby establish and declare the formation of the District known and designated as "COMMUNITY FACILITIES DISTRICT NO. 2004-01 (RANCHO ETIWANDA ESTATES)." SECTION 5: BOUNDARIES OF DISTRICT. The boundaries of the District are hereby generally described as follows: All property within the boundaries of COMMUNITY FACILITIES DISTRICT NO. 2004 - 04 (RANCHO ETIWANDA ESTATES), as shown on a boundary map as previously approved by this legislative body, such map designated by the name of this District, a copy of which is on file in the Office of the City Clerk. The boundary map of the proposed District has been filed pursuant to Sections 3111 and 3113 of the Streets and Highways Code of the State of California in the Office of the County Recorder of the County of San Bernardino, as Instrument 2004-0579652 at Page 17 of Book 77 of the Book of Maps of Assessment and Community Facilities Districts for such County. SECTION 6: DESCRIPTION OF THE PUBLIC FACILITIES AUTHORIZED TO BE FINANCED. A general description of the public facilities which are proposed to be financed under these proceedings, are generally described in Exhibit A attached hereto and incorporated herein by this reference. The public facilities as above -described are facilities which the City Council is authorized by law to contribute revenue to or to construct, own or operate. It is hereby further determined that the proposed facilities are necessary to meet increased demands placed upon the City as a result of development occurring within the District, and the costs and expenses charged to this District represent the fair share costs of the facilities attributable to this District. For a full and complete description of such types of facilities, reference is made to the Report, a copy of which is on file in the Office of the City Clerk. In addition to financing the above described types of facilities, the financing of those incidental expenses described in the Report are also approved and authorized. Resolution No. 04-295 Page 4 of 21 SECTION 7: SPECIAL TAX. Except where funds are otherwise available a special tax, secured by recordation of a continuing lien against all non- exempt real property in the proposed District, is hereby authorized, subject to voter approval, to be levied within the boundaries thereof. For particulars as to the modified rate and method of apportionment of the special tax proposed to be levied within the District, reference is made to the attached and incorporated Exhibit "B" (as previously defined, the "Modified RMA"), which sets forth in sufficient detail the method of apportionment of the special tax to allow each landowner or resident within the District to estimate the maximum amount that such person will have to pay. Such special tax shall be utilized to pay directly for the previously described public facilities, to pay debt service on bonds issued by the District to assist in financing such public facilities, to replenish any reserve fund established for such bonds, and to pay the costs of administering the bonds and the District. 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 manner if necessary to meet its financial obligations. Under no circumstances will the special tax to be levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the District by more than 10 percent. This legislative body further authorizes that special taxes may be prepaid and satisfied by payment of the prepayment amount calculated pursuant to the Special Tax Formula. Upon recordation of a Notice of Special Tax Lien pursuant to Section 3114.5 of the Streets and Highways Code of the State of California against the property within the District, a continuing lien to secure each levy of the special tax shall attach to all non-exempt real property in the District and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the legislative body ceases. Resolution No. 04-295 Page 5 of 21 SECTION 8: SPECIAL TAX ACCOUNTABILITY MEASURES. Pursuant to and in compliance with the provisions of Government Code Section 50075.1, this City Council hereby establishes the following accountability measures pertaining to the levy by the District of the special taxes described in Section 7 above: A. The special tax shall be levied for the specific purposes set forth in Section 7 above. B. The proceeds of the levy of the special tax shall be applied only to the specific applicable purposes set forth in Section 7 above. C. The District shall establish a separate account into which the proceeds of the special tax shall be deposited. D. The City Manager or his or her designee, acting for and on behalf of the District, shall annually file a report with the City Council as required pursuant to Government Code Section 50075.3. SECTION 9: PREPARATION OF ANNUAL TAX ROLL. The name, address and telephone number of the office, department or bureau which will be responsible for preparing annually a current roll of special tax levy obligations by Assessor's parcel number and which shall be responsible for estimating future special tax levies pursuant to Section 53340.1 of the Government Code of the State of California, are as follows: GIS/Special Districts Supervisor City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, CA 91729 (909) 477-2700, Ext 2567 SECTION 10: SUBSTITUTION FACILITIES. The description of the public facilities, as set forth in Exhibit A hereto, is general in its nature. The final nature and location of such facilities will be determined upon the preparation of final plans and specifications therefor. Such final plans may show substitutes in lieu of, or modification to, the above described facilities and any such substitution shall not be a change or modification in the proceedings as long as the facilities provide a service substantially similar to that as set forth in this Resolution. SECTION 11: ELECTION. This City Council herewith submits the levy of the special tax within the District to the qualified electors thereof, such electors being the landowners in the District, with each landowner having one (1) voter for each acre or portion thereof of land which he or she owns within the District. Resolution No. 04-295 Page 6 of 21 PASSED, APPROVED, AND ADOPTED this 15 th day of September 2004. AYES: Alexander, Gutierrez, Howdyshell, Kurth, Williams NOES: None ABSENT: None F-11 is,] if-11 1,41 1:4 ATTEST: Debra J. Adas Wd, City Clerk 1, DEBRA J. ADAMS, CITY CLERK of the City of Rancho Cucamonga, California, do hereby certify that the foregoing Resolution was duly passed, approved and adopted by the City Council of the City of Rancho Cucamonga, California, at a Adjourned Meeting of said City Council held on the 15 th day of September 2004. Executed this 16 th day of September 2004, at Rancho Cucamonga, California. Debra J. Adams; CMC, City Clerk Resolution No. 04-295 Page 7 of 21 Description Of Public Facilities The public facilities authorized to be financed by the District are generally described as follows: 1. Day Creek Boulevard — grading, storm drain, sewer, water, dry utilities, streets and landscaping. 2. Etiwanda Avenue — grading, sewer, water, dry utilities, streets and landscaping. 3. Cucamonga Valley Water District ("CVWD") reservoir transmission main. 4. Storm drain facilities including the northern property line storm drain and the Etiwanda Avenue storm drain. 5. Park facilities. 6. Equestrian facilities. 7. School facilities to be owned by the Etiwanda School District. 8. School facilities to be owned by the Chaffey Joint Union High School District. 9. Water and sewer facilities to be owned by CVWD which are authorized to be financed from the proceeds of capacity charges levied by CVWD. 10. Flood control facilities to be owned by the San Bernardino County Flood Control District. 11. Open space to be owned by the County of San Bernardino Resolution No. 04-295 Page 8 of 21 Modified Rate and Method of Apportionment of Special Tax ATTACH A COPY OF THE MODIFIED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Resolution No. 04-295 Page 9 of 21 AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2004-01 OF THE CITY OF RANCHO CUCAMONGA (RANCHO ETIWANDA ESTATES) A Special Tax hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in Community Facilities District No. 2004-01 of the City of Rancho Cucamonga ("CFD No. 2004-01 ") and collected each Fiscal Year commencing in Fiscal Year 2005-06, in an amount determined by the City Council of the City of Rancho Cucamonga, through the application of the Amended and Restated Rate and Method of Apportionment as described below. All of the real property in CFD No. 2004-01, 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 an,,a 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 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. 2004-01: 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 Fiscal Agent; the costs of the Fiscal Agent (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2004-01 or any designee thereof (f complying with arbitrage rebate requirements; the costs to the City, CFD No. 2004-01 or any designee thereof of complying with disclosure requirements applicable to CFD No. 2004-01 and/or the City 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. 2004-01 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. 2004-01 for any other administrative purposes of CFD No. 2004-01, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. City ofRancho Cucamonga (Rancho Etiwanda Estates) September 7, 2004 CFD No. 2004-01 Paee I Resolution No. 04-295 Page 10 of 21 "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. "Authorized Facilities" means those authorized improvements, as listed on Exhibit "A" to the Resolution of Formation. "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. 2004-01 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. 2004-01" means Community Facilities District No. 2004-01 (Rancho Etiwanda Estates) of the City of Rancho Cucamonga. "City" means the City of Rancho Cucamonga. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2004-01. "County" means the County of San Bernardino. "Developed Property" means for each Fiscal Year, all Taxable Property, exclusive of Taxable Public Property and Taxable Property Owner Association Property, for which a building permit for new construction was issued after March 1, 2004 and prior to March 1 of the prior Fiscal Year. "Fiscal Agent" means the trustee or fiscal agent under the Indenture. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the bond indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time. "Land Use Class" means any of the classes listed in Table 1 below. "Maximum Special Tax" means the Maximum Special Tax, determined in accordance with Section C below that can be levied in any Fiscal Year on any Assessor's Parcel. "Non -Residential Property" means all Assessor's Parcels of Developed Property for which a building permit was issued for a non-residential use. City of Rancho Cucamonga (Rancho Etiwaiida Estates) September 7, 2004 CFD No. 2004-01 paze 2 Resolution No. 04-295 Page 11 of 21 "Outstanding Bonds" means all Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2004-01 that was owned by a property owner association, including any master or sub -association, as of January 1 of the prior Fiscal Year. "Proportionately" means, for Developed Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property. The term "Proportionately" shall be similarly applied to other categories of Taxable Property as listed in Section E below. "Public Property" means property within the boundaries of CFD No. 2004-01 owned by, irrevocably offered or dedicated to, or for which an easement for purposes of public right-of- way has been granted to the federal government, the State of California, the County of San Bernardino, the City of Rancho Cucamonga, or any local government or other public agency, provided 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 according to its use. "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 the building permit(s) issued for such Assessor's Parcel. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Resolution of Formation" means the Resolution of Formation adopted pursuant to Government Code Section 53325.1 for CFD No. 2004-01. "Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property within CFD No. 2004-01 to fund the Special Tax Requirement. "Special Tax Buydown" means a mandatory bond principal buydown payment made by the property owner to reduce the amount of Outstanding Bonds to compensate for a loss of Special Tax revenues resulting from the construction of fewer residential dwelling units, smaller residential dwelling units, or a modified amount of non-residential Acreage, as determined in accordance with Section D below. "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2004-01 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 Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay directly for acquisition or construction City of Rancho Cucamonga (Rancho Etiwanda Estates) September 7, 2004 CFD No. 2004-01 Page 3 Resolution No. 04-295 Page 12 of 21 of Authorized Facilities to the extent that the inclusion of such amount does not increase the Special Tax levy on Undeveloped Property; (vi) pay for reasonably anticipated Special Tax delinquencies based on the delinquency rate for the Special Tax levy in the previous Fiscal Year; less (vii) a credit for funds available to reduce the annual Special Tax levy, as determined by the CFD Administrator pursuant to the Indenture. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2004-01 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 the provisions of Section F below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to the provisions of Section F below. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Public Property or Taxable Property Owner Association Property. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2004-01 shall be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association 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 E below. Residential Property shall be assigned to Land Use Classes 1 through 5 and Non -Residential Property shall be assigned to Land Use Class 6. The Maximum Special Tax for Residential Property shall be based on the Residential Floor Area of the dwelling unit(s) located on the Assessor's Parcel. The Maximum Special Tax for Non -Residential Property shall be based on the Acreage of the Assessor's Parcel. The Maximum Special Tax for any Assessor's Parcel of Developed Property containing more than one Land Use Class shall be determined pursuant to Section C below. C. MAXIMUM SPECIAL TAX 1. Developed Property (a) Maximum Special Tax The Maximum Special Tax for each Assessor's Parcel classified as Developed Property is shown below in Table 1. City of Rancho Cucamonga (Rancho Edwanda Estates) September 7, 2004 CFD No. 2004-01 Paee 4 Resolution No. 04-295 Page 13 of 21 TABLE 1 Maximum Special Tax for Developed Property in Community Facilities District No. 2004-01 Land Use Class Description Residential Floor Area Maximum Special Tad 1 Residential Property more than 4,000 SF T $5,555 per unit 2 Residential Property 3,801 - 4,000 SF $5,325 per unit 3 Residential Property 3,601 - 3,800 SF $5,151 per unit 4 Residential Property 3,400 - 3,600 SF $4,896 per unit 5 Residential Property less than 3,400 SF $4,410 per unit 6 Non -Residential NA $19,813 per Acre Property (b) Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on an Assessor's Parcel shall be the sum of the Maximum Special Taxes for all Land Use Classes located on that Assessor's Parcel. For an Assessor's Parcel that contains both Residential Property and Non -Residential Property, the Acreage of such Assessor's Parcel shall be allocated to each type of property based on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. 2. Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association Property (a) Maximum Special Tax The Maximum Special Tax for Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association Property shall be $21,216 per Acre. City of Rancho Cucamonga (Rancho Etiwanda Estates) September 7, 2004 CFD No. 2004-0I Page 5 Resolution No. 04-295 Page 14 of 21 D. SPECIAL TAX BUYDOWN All of the requirements of this Section D, which describes the need for a Special Tax Buydown that may result from a change in development as determined pursuant to this Section D, shall only apply after the sale of Bonds by CFD No. 2004-01. The following definitions apply to this Section D: "Certificate of Satisfaction of Special Tax Buydown" means a certificate from the CFD Administrator stating that the property described in such certificate has sufficiently met the Special Tax Buydown Requirement for such property as calculated under this Section D. "Letter of Compliance" means a letter from the CFD Administrator allowing the issuance of building permits based on the prior submittal of a Request for Letter of Compliance by a property owner. "Special Tax Buydown Requirement" means the total amount of Special Tax Buydown necessary to be prepaid to permit the issuance of building permits listed in a Request for Letter of Compliance, as calculated under this Section D. "Update Property" means an Assessor's Parcel of Undeveloped Property for which a building permit has been issued. For purposes of all calculations in this Section D, Update Property shall be taxed as if it were already Developed Property during the current Fiscal Year. 1. Request for Letter of Compliance The CFD Administrator must submit a Letter of Compliance to the City for a specific Assessor's Parcel or lot prior to the issuance by the City of a building permit for the construction of any residential and/or non-residential development on that Assessor's Parcel or Iot. If a Letter of Compliance has not yet been issued, and a property owner wishes to request a building permit for an Assessor's Parcel or lot, the property owner must first request a Letter of Compliance from the CFD Administrator. The request from the property owner shall contain a list of all building permits currently being requested, the Assessor's Parcels or tract and lot numbers on which the construction is to take place, and the Residential Floor Area (for each residential dwelling unit) or the Acreage (for each non- residential parcel) associated with each building permit. 2. Issuance of Letter of Compliance Upon the receipt of a Request for Letter of Compliance, the CFD Administrator shall assign each building permit identified in such request to Land Use Classes 1 through 6 as listed in Table 2 below, based on the type of use and the Residential Floor Area identified for each such building permit. If the CFD Administrator determines (i) that the number of building permits requested for each Land Use Class, plus those building permits previously issued for each Land Use Class, will not cause the total number of residential units or non-residential Acreage within any such Land Use Class to exceed the number of units or Acreage for such Land Use Class identified in Table 2 below, and (ii) that the total number of residential City of Rancho Cucamonga (Rancho Etiwanda Estates) Septeinher 7, 2004 CFD No. 2004-01 PaQe 6 Resolution No. 04-295 Page 15 of 21 dwelling units anticipated to be constructed pursuant to the current development plan for CFD No. 2004-01 shall not be less than 632, then a Letter of Compliance shall be submitted to the City by the CFD Administrator approving the issuance of the requested building permits. This Letter of Compliance shall be submitted to the City by the CFD Administrator within ten days of the submittal of the Request for Letter of Compliance by the property owner. However, should (i) the building permits requested, plus those previously issued, cause the total number of residential units or non-residential Acreage within any such Land Use Class to exceed the number of units or non-residential Acreage for such Land Use Class identified in Table 2 below, or (ii) the CFD Administrator determine that changes in the development plan may cause a decrease in the number of residential dwelling units within CFD No. 2004-01 to below 632 dwelling units, then a Letter of Compliance will not be issued and the CFD Administrator will be directed to determine if a Special Tax Buydown shall be required. TABLE 2 Expected Dwelling Units and Non -Residential Acreage per Land Use Class Community Facilities District No. 2004-01 Land Vse °Class Description - Residenttal Floor Area=-: Number of ITnxts/Acres; 1 Residential Property i more than 4,000 SF 70 units 2 Residential Property 3,801 - 4,000 SF 110 units 3 Residential Property 301 - 3,800 SF 185 units 4 Residential Property 3,401 - 3,600 SF 92 units 5 Residential Property less than 3,400 SF 175 units 6 Non -Residential NA 0.00 acres Property 3. Calculation of Special Tax Buydown If a Special Tax Buydown calculation is required as a result of item 2, above, the CFD Administrator shall review the current development plan for CFD No. 2004-01 in consultation with the current property owners for all remaining Undeveloped Property in CFD No. 2004-01, and shall prepare an updated version of Table 2 identifying the revised number of units or non-residential Acreage anticipated within each Land Use Class. The CFD Administrator shall not be responsible for any delays in preparing the updated Table 2 that results from a refusal on the part of one or more current property owners of Undeveloped Property to provide information on their future development. City of Rancho Cucamonga (Rancho Etiwanda Estates) September 7, 2004 CFD No. 2004-01 Page 7 Resolution No. 04-295 Page 16 of 21 The CFD Administrator shall then review the updated Table 2 and determine the Special Tax Buydown Requirement, if any, to be applied to the property identified in the Request for Letter of Compliance to assure the CFD's ability to collect special taxes equal to 110% debt service coverage on the Outstanding Bonds, plus the cost of annual CFD administration. The calculations shall be undertaken by the CFD Administrator, based on the data in the updated Table 2, as follows: Step 1. Compute the sum of the Maximum Special Tax to be levied on all Developed Property and Update Property within CFD No. 2004-01, plus the sum of the Maximum Special Tax to be levied on all future development as identified in the current development plan as determined by the CFD Administrator in consultation with the property owner(s). Step 2. Determine the amount of Special Tax required to provide 110% debt service coverage on the Outstanding Bonds, plus any other costs associated with the Special Tax Requirement. Step 3. If the total sum computed pursuant to step 1 is greater than or equal to the amount computed pursuant to step 2, then no Special Tax Buydown will be required and a Letter of Compliance shall immediately be issued by the CFD Administrator for all of the building permits currently being requested. If the total sum computed pursuant to step 1 is less than the amount computed pursuant to step 2, then continue to step 4. Step 4. Determine the Maximum Special Tax shortfall by subtracting the total sum computed pursuant to step 1 from the amount computed pursuant to step 2. Divide this Maximum Special Tax shortfall by the amount computed pursuant to step 2. Step 5.The Special Tax Buydown Requirement shall be calculated using the prepayment formula described in Section 1. 1, with the following exceptions: (i) skip Paragraphs 1, 2 and 3, and begin with Paragraph 4; (ii) the Bond Redemption Amount in Paragraph 4 of the prepayment formula described in Section 1.1 shall equal the product of the quotient computed pursuant to step 4 above times the Previously Issued Bonds, as defined in Section 1. 1; (iii) the Capitalized Interest Credit described in Paragraph 11 of Section 1.1 shall be $0; and (iv) any payments of the Special Tax Buydown (less Administrative Fees and Expenses) shall be disbursed pursuant to the Indenture. The Special Tax Buydown computed under step 5 shall be billed directly to the property owner of each Assessor's Parcel identified in the Request for Letter of Compliance and shall be due within 30 days of the billing date. If the Special Tax Buydown is not paid within 45 days of the billing date, a delinquent penalty of 10 percent shall be added to the Special Tax Buydown. Upon receipt of the Special Tax Buydown payment, the CFD Administrator shall issue a Letter of Compliance and a Certificate of Satisfaction of Special Tax Buydown for the subject property. City of Rancho Cucamonga (Rancho Ethvanda Estates) September 7, 2004 CFD No. 2004-01 Page 8 Resolution No. 04-295 Page 17 of 21 4. Costs and Expenses Related to Implementation of Special Tax Buydown The property owner of each Assessor's Parcel identified in the Request for Letter of Compliance shall pay all costs of the CFD Administrator or other consultants required to review the application for building permits, calculate the Special Tax Buydown, issue Letters of Compliance or any other actions required under Section D. Such payments shall be due 30 days after receipt of invoice by such property owner. o the Special Tax sit may e required by the CFD Administrator prior to undertaking work E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2005-06 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the total Special Tax levy equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied on each Assessor's Parcel of Developed Property in an amount equal to 100% of the applicable Maximum Special Tax; 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 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 Proportionatelyaonmum each Assessor's Parcel of Taxable Property Owner Association Property p to the Special Tax for Taxable Property Owner Association Property; Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel of Taxable Public Property at up to the Maximum Special Tax for Taxable Public Property; Notwithstanding the above the Council may, in any Fiscal Year, levy Proportionately less than 100% of the Maximum Special Tax in step one (above), when (i) the Council is no longer required to levy the Special Tax pursuant to steps two through four above in order to meet the Special Tax Requirement; and (ii) all authorized CFD No. 2004-01 Bonds have already been issued or the Council has bonds scovenanted dTa oval CFD No. 2004-01 Bonds (except refunding ) tobe supported by the Special Further notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential bep ncpreased by which more than tpen perancy cent lasoa private residential use has been issued consequence of delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2004-01. September 7, 2004 City of Rancho Cucamonga (Rancho Etiwanda Estates) Page 9 CFD No. 2004-01 Resolution No. 04-295 Page 18 of 21 F. EXEMPTIONS No Special Tax shall be levied on up to 78.75 Acres of Public Property and/or Property Owner Association Property. Tax-exempt status will be irrevocably assigned by the CFD Administrator in the chronological order in which property becomes Public Property or Property Owner Association Property. However, should an Assessor's Parcel no longer be classified as Public Property or Property Owner Association Property its tax-exempt status will be revoked. Public Property or Property Owner Association Property that is not exempt from the Special Tax under this section shall be subject to the levy of the Special Tax and shall be taxed Proportionately as part of the third and fourth steps in Section E above, at up to 100% of the applicable Maximum Special Tax for Taxable Public Property or Taxable Property Owner Association Property. G. APPEALS AND INTERPRETATIONS Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error may submit a written appeal to CFD No. 2004-01. The CFD Administrator shall review the appeal and if the CFD Administrator concurs, the amount of the Special Tax levied shall be appropriately modified. The Council may interpret this Amended and Restated Rate and Method of Apportionment of Special Tax for purposes of clarifying any ambiguity and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals. Any decision of the Council shall be final and binding as to all persons. H. MANNER OF COLLECTION The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2004-01 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. I. PREPAYMENT OF SPECIAL TAX The following definition applies to this Section I: "Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are deemed to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year. Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may be prepaid. The Special Tax obligation applicable to an Assessor's Parcel in CFD No. 2004-01 may only be prepaid after all authorized CFD No. City of Rancho Cucamonga (Rancho Edwanda Estates) September 7, 2004 CFD No. 2004-01 Pa-ee 10 Resolution No. 04-295 Page 19 of 21 2004-01 Bonds have already been issued, or after the Council has covenanted that it will not issue any additional CFD No. 2004-01 Bonds (except refunding bonds) to be supported by Special Taxes levied under this Amended and Restated Rate and Method of Apportionment. The obligation of the Assessor's Parcel to pay any Special Tax may be permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor's Parcel 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 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. Prepayment must be made not less than 45 days prior to any redemption date for the CFD No. 2004-01 Bonds to be redeemed with the proceeds of such prepaid Special Taxes. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Paragraph No.: Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. For Assessor's Parcels of Developed Property, compute the Maximum Special Tax for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property for which building permits have already been issued, compute the Maximum Special Tax for the Assessor's Parcel to be prepaid as though it were already designated as Developed Property, based upon the building permit which has been issued for that Assessor's Parcel. Divide the Maximum Special Tax computed pursuant to paragraph 2 by the estimated Maximum Special Taxes for CFD No. 2004-01 based on the Developed Property Special Taxes which could be charged in the current Fiscal Year on all expected development in CFD No. 2004-01, excluding any Assessor's Parcels which have been prepaid; and 4. Multiply the quotient computed pursuant to paragraph 3 by the Previously Issued Bonds to compute the amount of Previously Issued Bonds to be retired and prepaid; and City of Rancho Cucamonga (Rancho Etiwanda Estates) September 7, 2004 CFD No. 2004-01 Paze 11 Resolution No. 04-295 Page 20 of 21 5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium (e.g., the redemption price—100%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium"). 6. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date not covered by the current Fiscal Year Special Taxes until the earliest redemption date for the Previously Issued Bonds.. 7. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year that have not yet been paid. 8. Add the amounts computed pursuant to paragraphs 6 and 7. 9. Compute the net present value of the amount computed pursuant to paragraph 8, using as a discount rate the rate of return reasonably assumed for the conservative investment of these funds by the CFD Administrator (the "Defeasance Amount"). 10. The administrative fees and expenses of CFD No. 2004-01 are as calculated by the CFD Administrator and include the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming CFD No. 2004-01 Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 11. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of - (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Previously Issued 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 Previously Issued 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. No Reserve Fund Credit shall be granted if the amount then on deposit in the reserve fund for the Previously Issued Bonds is below 100% of the reserve requirement (as defined in the Indenture). 12. If any capitalized interest for the Previously Issued Bonds will not have been expended as of the date immediately following the first bond interest and/or principal payment date 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 fiord after such first interest and/or principal payment (the "Capitalized Interest Credit"). City of Rancho Cucamonga (Rancho Etiwanda Estates) September 7, 2004 CFD No. 2004-01 page 12 Resolution No. 04-295 Page 21 of 21 13. The Special Tax prepayment is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 9, and 10, less the amounts computed pursuant to paragraphs 11 and 12 (the "Prepayment Amount"). From the Prepayment Amount, the amounts computed pursuant to paragraphs 4, 5, 9, 10,11 and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Previously Issued Bonds, as applicable, or make scheduled debt service payments or to pay administrative expenses related to the prepayment of the Special Tax. The Prepayment Amount may be insufficient to redeem a full $5,000 increment of CFD No. 2004-01 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 CFD No. 2004-01 Bonds or to make scheduled debt service payments on such bonds. Upon confirmation 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 for which the Special Tax obligation is prepaid in full in accordance with this Section I., 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, at the time of such proposed prepayment, the amount of Maximum Special Taxes that may be levied on Taxable Property within CFD No. 04-1 (after excluding 78.75 Acres of Public Property and Property Owner Association Property as set forth in Section F) both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Previously Issued Bonds, plus the cost of annual CFD administration. I. TERM OF SPECIAL TAX The Special Tax shall be levied for a period not to exceed fifty years commencing with Fiscal Year 2005-06, provided however that Special Taxes will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all required interest and principal payments on the CFD No. 2004-01 Bonds have been paid; and (ii) all Authorized Facilities have been constructed. K:\Clients2\RanchoCucamonga\Rancho Etiwanda\RMA\CFD 2004-01_7(final-revised).doc City of Rancho Cucamonga (Rancho Etiwanda Estates) September 7, 2004 CFD No. 2004-01 Page 13