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HomeMy WebLinkAbout06-327 - Resolutions RESOLUTION NO. 06-327 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, FORMING AND ESTABLISHING COMMUNITY FACILITIES DISTRICT NO.2006-02 (AMADOR ON ROUTE 66) AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES WITHIN THE DISTRICT 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. 2006-02 (AMADOR ON ROUTE 66) (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, the City Council has previously declared its intention to authorize the levy special taxes within the District pursuant to the rate and method of apportionment that was attached to and incorporated into such resolution (the 'RMA"); and WHEREAS, the RMA as set forth in Exhibit B attached hereto and incorporated herein by this reference 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, 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. Resolution No. 06-327 Page 2 of 22 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 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. 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. 2006-02 (AMADOR ON ROUTE 66)." Resolution No. 06-327 Page 3 of 22 SECTION 5: BOUNDARIES OF DISTRICT. The boundaries of the District are hereby generally described as follows: All that property as shown on a map as previously approved by this City Council, such map designated bythe name of this District, a copy of which is on file in the Office of the City Clerk and shall remain open for public inspection. 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 orto 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. 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 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 '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. Resolution No. 06-327 Page 4 of 22 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 the law or until collection of the tax by the legislative body ceases. 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. Resolution No. 06-327 Page 5 of 22 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 Manager City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, CA 91729 (909) 477-2700, Ext 2575 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. Please see the following page for formal adoption,certification and signatures Resolution No. 06-327 Page 6 of 22 PASSED, APPROVED, AND ADOPTED this 181h day of October 2006. AYES: Alexander, Gutierrez, Michael, Spagnolo, Williams NOES: None ABSENT: None ABSTAINED: None Gu William J. Alex nder, Mayor ATTEST: Kath n L. Sc(t, CAX, Secretary I, KATHRYN L.SCOTT, DEPUTY SECRETARY,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 Regular Meeting of said City Council held on the 18`h day of October 2006. Executed this 19`h day of October 2006, at Rancho Cucamonga, California. C2 AA,(44, d. 6LD'v— Kat syn L. S ott, CMC, Secretary Resolution No. 06-327 Page 7 of 22 EXHIBIT A Description Of Public Facilities The public facilities proposed to be financed by the District are generally described as follows: 1. Facilities authorized to be financed from the proceeds of the following City of Rancho Cucamonga fees: (a) Transportation fee; (b) Beautification fee; (c) Parks and Recreation Facility fee; (d) Drainage fee. 2. Facilities authorized to be financed from the proceeds of the following Cucamonga Valley Water District fees: (a) Water capacity fee; (b) Water meter & box charge; (c) Sewer capacity fee; and (d) Sewer connection fee. 3. Facilities authorized to be financed from the proceeds of Inland Empire Utility Agency fees. 4. Street improvements. 5. Landscaping improvements located within public rights-of-way. 6. Drainage improvements. 7. Water improvements. 8. Sewer improvements. Resolution No. 06-327 Page 8 of 22 RATE AND METHOD OF APPORTIONMENT FOR CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) A Special Tax hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) ("CFD No. 2006-02") and collected each Fiscal Year commencing in Fiscal Year 2006-07, in an amount determined through the application of this Rate and Method of Apportionment as described below. All of the real property in CFD No. 2006-02,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 or determined from the applicable Assessor's Parcel Map. Notwithstanding the foregoing,the Acreage attributable to a Condominium shall be computed by the CFD Administrator by dividing the total Acreage for the Final Subdivision in which the Condominium is located, less the Acreage for any Property Owner Association Property and/or Public Property,by the total number of Condominiums to be constructed within such Final Subdivision as determined from the applicable Condominium Plan. "Act"means the Mello-Roos Community Facilities Act of 1982,as amended,being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2006-02: 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 Fiscal Agent Agreement;the costs to the City,CFD No.2006-02 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2006-02 or any designee thereof of complying with disclosure requirements applicable to CFD No.2006-02 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. 2006-02 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.2006-02 for any other administrative purposes of CFD No. 2006-02, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. City ojRancho Cucamonga(Amador on Route 66) August 3,2006 CFD No. 2006-01 Page I Resolution No. 06-327 Page 9 of 22 "Assessor's Parcel" means a lot or parcel, including but not limited to Condominiums,to which an Assessor's parcel number is assigned as determined from an Assessor's Parcel Map or the applicable assessment roll. "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 improvements eligible to be financed by CFD No. 2006-02 under the Act and authorized to be financed pursuant to the Resolution of Formation. "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.2006-02"means City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66). "CFD No.2006-02 Bonds"means any bonds or other debt(as defined in Section 53317(d) of the Act),whether in one or more series,issued by or on behalf of CFD No.2006-02 under the Act. "City" means the City of Rancho Cucamonga. "Condominium"means a unit meeting the statutory definition of a condominium contained in the California Civil Code, Section 1351, and for which a condominium plan has been recorded pursuant to California Civil Code, Section 1352. "Condominium Plan"means a condominium plan as set forth in the California Civil Code, Section 1352. "Council" means the City Council of the City of Rancho Cucamonga, acting as the legislative body of CFD No. 2006-02. "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 January 1, 2006 and on or before March 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied, provided that a Final Subdivision for such Assessor's Parcel was recorded on or before January 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied. "Final Subdivision"means a subdivision of property by recordation of a(i) final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California City of Rancho Cucamonga(Amador on Route 66) August 3,1006 CFD No.2006-02 Page 2 Resolution No. 06-327 Page 10 of 22 Government Code Section 64410 et seq.) that creates individual lots for which building permits may be issued, or(ii) lot line adjustment approved by the City. "Fiscal Agent" means the trustee or fiscal agent under the Fiscal Agent Agreement. "Fiscal Agent Agreement"means the fiscal agent agreement,bond indenture,resolution or other instrument pursuant to which CFD No. 2006-02 Bonds are issued, as modified, amended and/or supplemented from time to time. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "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 of Taxable Property. "Non-Residential Property"means all Assessor's Parcels of Developed Property for which a building permit has been issued by the City for the purpose of constructing one or more non-residential facilities, and which is not otherwise Residential Property. "Outstanding Bonds" means all CFD No. 2006-02 Bonds which are deemed to be outstanding under the Fiscal Agent Agreement. "Property Owner Association Property" means, for each Fiscal Year, (i) any property within the boundaries of CFD No.2006-02 that was owned by a property owner association, including any master or sub-association, as of January 1 of the prior Fiscal Year, (ii) any property located in a Final Subdivision that was recorded as of the January 1 preceding the Fiscal Year in which the Special Tax is being levied and which, as determined from such Final Subdivision, is or will be open space, a common area recreation facility, or a private street, or(iii) any property which, as of the January 1 preceding the Fiscal Year for which the Special Tax is being levied, has been conveyed, irrevocably dedicated, or irrevocably offered to a property owner's association,including any master or sub-association,provided such conveyance, dedication, or offer is submitted to the CFD Administrator by January 1 preceding the Fiscal Year for which the Special Tax is being levied. Notwithstanding the preceding, Property Owner Association Property shall not include any property on which Condominiums are or will be located. "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. 2006-02 owned by, irrevocably offered or dedicated to,or for which an easement for purposes ofpublic right-of- City of Rancho Cucamonga(Amador on Route 66) August 3,2006 CFD No. 1006-01 Page 3 Resolution No. 06-327 Page 11 of 22 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 owned by a public agency and leased by such 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 for an Assessor's Parcel shall be made by reference to the building permit(s) issued for such Assessor's Parcel. Such determination shall be final following the issuance of certificate of occupancy for the residential dwelling unit located on such Assessor's Parcel. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued by the City for the purpose 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. 2006-02. . "Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property within CFD No. 2006-02 to fund the Special Tax Requirement. "Special Tax Buydown" means a mandatory bond principal buydown payment made by a 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. 2006-02 to: (i)pay debt service on all Outstanding Bonds;(ii)pay periodic costs on the CFD No.2006-02 Bonds,including but not limited to,credit enhancement and rebate payments on the CFD No. 2006-02 Bonds due in the calendar year commencing in such Fiscal Year;(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 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 Fiscal Agent Agreement. "State" means the State of California. "Taxable Property"means all of the Assessor's Parcels within the boundaries of CFD No. 2006-02 which are not exempt from the Special Tax pursuant to law or Section F below. City of Rancho Cucamonga(Amador on Route 66) August 3, 1006 CFD No.2006-02 Page 4 Resolution No. 06-327 Page 12 of 22 "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt from the levy of the Special Tax pursuant to the provisions of Section F below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt from the levy of the Special Tax 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. 2006-02 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 this Rate and Method of Apportionment determined pursuant to Sections C and E below. Residential Property shall be assigned to Land Use Classes 1 through 4,as listed in Table 1 below, and Non-Residential Property shall be assigned to Land Use Class 5. The Maximum Special Tax for each Assessor's Parcel of Residential Property shall be based on the Residential Floor Area of the residential dwelling unit(s)located on such Assessor's Parcel. The Maximum Special Tax for each Assessor's Parcel of Non-Residential Property shall be based on the Acreage of such 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(Amador on Route 66) August 3,2006 CFD No.2006-02 Page 5 Resolution No. 06-327 Page 13 of 22 TABLE 1 Maximum Special Tax for Developed Property in Community Facilities District No. 2006-02 Land User, ResidentialFloor Maximums. Class Description ;Area , ; SpecialTax' 1 Residential Property More than 1,850 SF $2,816 per unit 2 Residential Property 1,601 - 1,850 SF $2,697 per unit 3 Residential Property 1,351 - 1,600 SF $2,469 per unit 4 Residential Property Less than 1,351 SF $2,241 per unit 5 Non-Residential Property NA $64,747 per Acre (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 such 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, or equivalent entitlement, designated for each land use as determined by reference to the site plan approved by the City 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$71,889 per Acre. 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 issuance of the first series of CFD No.2006-02 Bonds. Prior to the issuance of the first series of CFD No. 2006-02 Bonds,the terms of the Special Tax Buydown shall not apply. The following additional definitions apply to this Section D: City of Rancho Cucamonga(Amador on Route 66) August 3,2006 CFD No.2006-02 Page 6 Resolution No. 06-327 Page 14 of 22 "Certificate of Satisfaction of Special Tax Buydown" means a certificate from the CFD Administrator stating that the property described in such certificate has 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 in order to permit the issuance ofbuilding 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 After the issuance of the first series of CFD No.2006-02 Bonds,a property owner shall,as a precondition to the issuance of a building permit for construction of any residential and/or non-residential development for a specific Assessor's Parcel or lot, submit a Letter of Compliance for the construction of the development on such Assessor's Parcel or lot. If a Letter of Compliance has not yet been issued,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 for which the property owner is requesting a Letter of Compliance,which may exceed the number ofbuilding permit issuances being applied for at that time. The property owner shall also submit 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 prospective building permit. 2. Issuance of Letter of Compliance Upon the receipt of a request for a Letter of Compliance,the CFD Administrator shall assign each building permit identified in such request to Land Use Classes 1 through 5 as listed in Table 2 below based on the type of use and, if applicable, 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 dwelling units or non-residential Acreage within any such Land Use Class to exceed the number of residential dwelling units or Acreage for such Land Use Class identified in Table 2 below, and (ii) that the total number of residential dwelling units anticipated to be constructed pursuant to the current development plan for CFD No.2006-02 shall not be less than 99 and the amount of non-residential Acreage will not be more than 0.0 Acres, then a Letter of Compliance shall be submitted to the City and/or property owner by the CFD Administrator approving the issuance of the requested building permits for the subject City ojRancho Cucamonga(Amador on Route 66) August 3,2006 CFD No.2006-02 Page 7 Resolution No. 06-327 Page 15 of 22 property,and such subject property shall no longer be subject to the terms of the Special Tax Buydown. This Letter of Compliance shall be submitted to the City and/or property owner 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 dwelling units or non- residential Acreage within any such Land Use Class to exceed the number of residential dwelling 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. 2006-02 to below 99 residential dwelling units or an increase in the amount of non-residential Acreage to above 0.0 Acres, 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. The number of residential dwelling units and non-residential Acreage,as listed in Table 2 below, may be updated by the CFD Administrator prior to the issuance of the first series of CFD No. 2006-02 Bonds. TABLE 2 Expected Residential Dwelling Units per Land Use Class and Non-Residential Acreage Community Facilities District No. 2006-02 Land Use:. Number,of Class ' Description `Resideudal Floor Area Uuits/Acres >- I Residential Property More than 1,850 SF 33 units 2 Residential Property 1,601 — 1,850 SF 33 units 3 Residential Property 1,351 — 1,600 SF 0 units q Residential Property Less than 1,351 SF 33 units 5 Non-Residential Property NA 0.00 Acres 3. Calculation of Special Tax Buydown If a Special Tax Buydown calculation is required as determined by the CFD Administrator pursuant to paragraph 2 above,the CFD Administrator shall review the current development plan for CFD No.2006-02 in consultation with the current property owners for all remaining Undeveloped Property in CFD No.2006-02,and shall prepare an updated version of Table 2 identifying the revised number of residential dwelling 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. 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 City of Rancho Cucamonga(Amador on Route 66) August 3,1006 CFD No.2006-02 Page 8 Resolution No. 06-327 Page 16 of 22 Letter of Compliance to assure the CFD's ability to levy special taxes equal to 110% debt service coverage on the Outstanding Bonds,plus Administrative Expenses. 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 authorized to be levied on all Developed Property and Update Property within CFD No.2006-02,plus the sum of the Maximum Special Tax authorized 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 payments included in 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 I,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 I shall equal the product of the quotient computed pursuant to step 4 above times the Previously Issued Bonds, as defined in Section I; (iii) the Capitalized Interest Credit described in Paragraph 12 of Section I shall be$0; and(iv)any payments of the Special Tax Buydown(less Administrative Fees and Expenses) shall be disbursed pursuant to the Fiscal Agent Agreement. 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,and such subject property shall no longer be subject to the terms of the Special Tax Buydown. City of Rancho Cucamonga(Amador on Route 66) _ August 3,2006 CFD No.2006-02 Page 9 Resolution No. 06-327 Page 17 of 22 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 Tac 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. A deposit may be required by the CFD Administrator prior to undertaking work related to the Special Tax Buydown. E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2006-07 and for each following Fiscal Year,the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the 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 Proportionately on each Assessor's Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to the Maximum Special Tax for Taxable Public Property and Taxable Property Owner Association 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 and three above in order to meet the Special Tax Requirement; and (ii) all authorized CFD No. 2006-02 Bonds have already been issued or the Council has covenanted that it will not issue any additional CFD No. 2006-02 Bonds (except refunding bonds) to be supported by the Special Tax. Further 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. 2006-02. F. EXEMPTIONS No Special Tax shall be levied on up to 6.0 Acres of Public Property and/or Property Owner Association Property. Tax-exempt status will be assigned by the CFD Administrator in the City of Rancho Cucamonga(Amador on Route 66) August 3,2006 CFD No. 2006-01 Page 10 Resolution No. 06-327 Page 18 of 22 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 step in Section E above,at up to 100%of the applicable Maximum Special Tax for Taxable Public Property and 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. 2006-02. The CFD Administrator shall review the appeal and if the CFD Administrator concurs,the amount of the Special Tax levied shall be appropriately modified through an adjustment to the Special Tax levy in the following Fiscal Year. No refunds shall be given in the current Fiscal Year. The Council may interpret this Rate and Method of Apportionment 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. 2006-02 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. L PREPAYMENT OF SPECIAL TAX The following additional 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 Fiscal Agent Agreement 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.2006-02 may only be prepaid after all authorized CFD No. 2006-02 Bonds have already been issued,or after the Council has covenanted that it will not issue any additional CFD No. 2006-02 Bonds(except refunding bonds) to be supported by Special Taxes levied.under this Rate and Method of Apportionment. The obligation of the Assessor's Parcel to pay any Special Tax may be permanently satisfied as described herein, City of Rancho Cucamonga(Amador on Route 66) August 3,2006 CFD No.2006-02 Page 11 Resolution No. 06-327 Page 19 of 22 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. 2006-02 Bonds to be redeemed with the proceeds of such prepaid Special Taxes. The Special Tax 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 Special Tax Prepayment Amount As of the proposed date of prepayment,the Special Tax Prepayment Amount shall be calculated as follows: ParagVh No.: 1. 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. 3. Divide the Maximum Special Tax computed pursuant to paragraph 2 by the estimated Maximum Special Taxes for CFD No. 2006-02 based on the Developed Property Special Taxes which could be charged in the current Fiscal Year on all expected development in CFD No.2006-02(as reasonably determined by the CFD Administrator), 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(the "Bond Redemption Amount"). 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"). City of Rancho Cucamonga(Amador on Route 66) August 3,1006 CFD No.2006-02 Page 12 Resolution No. 06-327 Page 20 of 22 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. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Special Tax Prepayment Amount less the Administrative Fees and Expenses (defined below) from the date of prepayment until the redemption date for the Previously Issued Bonds to be redeemed with the prepayment. 9. Add the amounts computed pursuant to paragraphs 6 and 7 and subtract the amount computed pursuant to paragraph 8 (the "Defeasance Amount'). 10. The administrative fees and expenses of CFD No.2006-02 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. 2006-02 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 Fiscal Agent Agreement), 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 Fiscal Agent Agreement) 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 Fiscal Agent Agreement). 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 fund after such first interest and/or principal payment (the "Capitalized Interest Credit"). 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 "Special Tax Prepayment Amount"). City of Rancho Cucamonga(Amador on Route 66) August 3,1006 CFD No.2006-02 Page 13 Resolution No. 06-327 Page 21 of 22 From the Special Tax 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 Fiscal Agent Agreement 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 Special Tax Prepayment Amount may be insufficient to redeem a full$5,000 increment of CFD No. 2006-02 Bonds. In such cases,the increment above$5,000 or integral multiple thereof will be retained in the appropriate fund established under the Fiscal Agent Agreement to be used with the next prepayment of CFD No. 2006-02 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 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. 2006-02 (after excluding 6.0 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 equal to the sum of(i) the Administrative Expenses, as defined in Section A above, and (ii) 1.10 times the maximum annual debt service on all Outstanding Bonds. J. TERM OF SPECIAL TAX The Special Tax shall be levied for a period not to exceed fifty years commencing with Fiscal Year 2006-07, 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.2006-02 Bonds have been paid;and(ii)all Authorized Facilities have been constructed. KACLIENTS2\RanchoCue=onga\Amador Route 66\RMA\Aimdor RMA for ROl.doc City of Rancho Cucamonga(Amador on Route 66) August 3,2006 CFD No. 2006-02 Page 14 Resolution No. 06-327 Page 22 of 22 CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) MAXIMUM SPECIAL TAX FOR DEVELOPED PROPERTY FISCAL YEAR 2006-2007 Land UseA Residentlal#I" Maximum . . - f Class Description =Area SpeciahTax 1 Residential Property More than 1,850 SF $2,816 per unit 2 Residential Property 1,601 - 1,850 SF $2,697 per unit 3 Residential Property 1,351 - 1,600 SF $2,469 per unit 4 Residential Property Less than 1,351 SF $2,241 per unit 5 Non-Residential Property NA $64,747 per Acre