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HomeMy WebLinkAbout2022-063 - Resolution RESOLUTION NO. 2022-063 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-01 (STREET LIGHTING SERVICES) OF THE CITY OF RANCHO CUCAMONGA, AUTHORIZING THE ANNEXATION OF TERRITORY IN THE FUTURE TO SUCH COMMUNITY FACILITIES DISTRICT WHEREAS, the City Council (the "City Council")of the City of Rancho Cucamonga (the "City") has declared its intention, conducted proceedings and held a public hearing relating to the authorization to annex territory in the future to Community Facilities District No. 2022-01 (Street Lighting Services) of the City of Rancho Cucamonga ("CFD No. 2022-01") 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"), and specifically Article 3.5 thereof; and WHEREAS, notice of such public hearing was given in the form and manner as required by the Act; and WHEREAS, all communications relating to the authorization to annex territory in the future were presented at such public hearing, and it has been determined that a majority protest as defined by Government Code Section 53339.6 has not been received against the authorization to annex territory in the future to CFD No. 2022-01; and WHEREAS, it has now been determined to be within the public interest and convenience to establish a procedure to allow and provide for future annexations to CFD No. 2022-01 and further to specify the amount of special taxes that would be authorized to be levied on any parcels that may be annexed to CFD No. 2022-01 in the future, as well as setting forth the terms and conditions for certification for any annexation in the future; and WHEREAS, the territory proposed to be annexed in the future shall be known and designated as Future Annexation Area Community Facilities District No. 2022-01 (the "Future Annexation Area"), and a map designated as "Future Annexation Area, Community Facilities District No. 2022-01 (Street Lighting Services), City of Rancho Cucamonga, County of San Bernardino, State of California" showing the territory proposed to be annexed in the future has been approved and a copy thereof shall be kept on file with the transcript of these proceedings. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rancho Cucamonga, California, as follows: Section 1. Recitals. The above recitals are all true and correct. Section 2. Determinations. It is hereby determined by this City Council as follows: Resolution No. 2022-063 - Page 1 of 7 A. All prior proceedings pertaining to authorization for the annexation of the Future Annexation Area to CFD No. 2022-01 in the future were valid and taken in conformity with the- requirements of the law, and specifically the provisions of the Act, and this finding and determination is made pursuant to the provisions of Government Code Section 53325.1. B. The written protests against the authorization for the annexation of the Future Annexation Area to CFD No. 2022-01 in the future received do not represent a majority protest as defined by Government Code Section 53339.6 and, therefore, the authorization for the annexation of the Future Annexation Area to CFD No. 2022-01 in the future has not been precluded by majority protest pursuant to Government Code Section 53339.6. C. The public convenience and necessity require a procedure to authorize and provide for territory to be annexed in the future to CFD No. 2022-01 in order to finance the costs and expenses necessary to provide the public services described below made necessary by the development or redevelopment of such territory. D. The authorization for the annexation of territory within the Future Annexation Area to CFD No. 2022-01 in the future as proposed conforms with the City of Rancho Cucamonga's statement of goals and policies regarding the establishment of community facilities districts. E. The provision for the annexation of territory within the Future Annexation Area to CFD No. 2022-01 in the future and the authorization to levy special taxes of territory within the Future Annexation Area upon the annexation thereof to CFD No. 2022-01 to finance the public services described below constitutes the creation of a government funding mechanism which does not involve the commitment to any specific project which may result in a potentially significant physical impact on the environment. Therefore, the provision for the annexation of territory within the Future Annexation Area to CFD No. 2022-01 in the future and the authorization to levy special taxes within such territory upon the annexation thereof to CFD No. 2022-01 does not constitute a "project" which is subject to the provisions of the California Environmental Quality Act (California Public Resources Code Section 21000 and following). Section 3. Annexation Authority. This legislative body does hereby authorize the annexation of territory within the Future Annexation Area to CFD No. 2022-01 in the future pursuant to the provisions and authorization of Article 3.5 of the Act. Section 4. Description of the Future Annexation Area. A description of the Future Annexation Area is as follows: All that property and territory proposed to be annexed in the future to CFD No. 2022-01, as said property is shown on a Resolution No. 2022-063 - Page 2 of 6 • map as previously approved by this legislative body, said map designated as "Proposed Boundaries of the Future Annexation Area of Community Facilities District No. 2022-01 (Street Lighting Services) of the City of Rancho Cucamonga" (the "Future Annexation Area Map"), a copy of which is on file in the Office of the City Clerk and shall remain open for public inspection. The Future Annexation Area Map has been filed in the Office of the San Bernardino County Recorder, in Book 90, Page 25 of Maps of Assessment and Community Facilities Districts and as Document No. 2022-0169359. Future annexation proceedings may only be completed with the unanimous consent of the owner or owners of any parcel proposed for annexation. Section 5. Authorized Services. The types of services to be financed from the levy of the special tax in CFD No. 2022-01, including the Future Annexation Area, are those described in Exhibit A hereto which is incorporated herein by this reference ("Authorized Services"). The Authorized Services to be financed by the levy of special taxes to be levied on specific territory within the Future Annexation Area to be annexed to CFD No. 2022-01 may include some or all of such Authorized Services or may include alternatives to the Authorized Services. The Authorized Services shall to the maximum extent practicable, taking into account budgetary and operational demands of the City, be provided in common within CFD No. 2022-01 and the territory within the Future Annexation Area. The City Council finds that the Authorized Services described in this Section 5 hereof are necessary to meet increased demands placed upon the City as a result of new development occurring within the boundaries of CFD No. 2022-01 and the Future Annexation Area. Section 6. Special Tax. It is the intention of this legislative body that, except where funds are otherwise available, a special tax sufficient to finance the Authorized Services (the "Special Tax") to be provided in the territory of the Future Annexation Area upon the annexation of such territory to CFD No. 2022-01 and related incidental expenses authorized by the Act, secured by recordation of a continuing lien against all non-exempt real property in the territory within the Future Annexation Area that annexes to CFD No. 2022-01, will be levied annually .within the boundaries of such territory upon the annexation thereof to CFD No. 2022-01. For further particulars as to the rates and method of apportionment of the proposed Special Tax, reference is made to the attached and incorporated Exhibit B (the "Rates and Method"), which sets forth in sufficient detail the rate and method of apportionment of the Special Tax to allow each landowner or resident within the territory in the Future Annexation Area to clearly estimate the maximum amount of the Special Tax that such person will have to pay for the Authorized Services upon the annexation of such territory to CFD No. 2022-01. The Special Tax Resolution No. 2022-063 - Page 3 of 6 may not be prepaid. Notwithstanding the foregoing, if the actual cost of providing Authorized Services to any territory within the proposed Future Annexation Area is higher or lower than the cost of providing such services within the existing CFD No. 2022-01, a higher or lower special tax may be levied within such territory subject to the unanimous approval and election of the owner or owners of such territory. In any such circumstance, the Rate and Method may be revised to reflect the higher or lower special tax, as applicable. The proposed Special Tax, to the extent possible, shall be collected in the same manner as ad valorem property taxes or in such other manner as this City Council or its designee shall determine, including direct billing of the affected property owners. Such Special Tax shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes. Any Special Tax that may not be collected on the County tax roll shall be collected through a direct billing procedure by the City. Pursuant to Government Code Section 53340 and except as provided in Government Code Section 53317.3, properties of entities of the state, federal, and local governments shall be exempt from the levy of the Special Tax. Section 7. 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 CFD No. 2022-01 of the special taxes described in Section 6 above. A. The Special Tax shall be levied for the specific purposes set forth in Section 6 above. B. The proceeds of the levy of the Special Tax shall be applied only to the specific applicable purposes set forth in Section 6 above. C. CFD No. 2022-01 shall establish a separate account into which the proceeds of the Special Tax shall be deposited. D. The Finance Director of the City of Rancho Cucamonga, or his or her designee, acting for and on behalf of CFD No. 2022-01, shall annually file a report with the City Council as required pursuant to Government Code Section 50075.3 Section 8. Annexation Effective Date. Annexation of territory in the Future Annexation Area to CFD No. 2022-01 in the future shall be effective only upon the unanimous approval of the owner or owners of each parcel or parcels to the annexation of such parcel or parcels to the election by such owner or owners to subject such parcel or parcel to the levy of the special tax at any time that any parcel is proposed for annexation. Upon receipt of the written consent and election by such owner or owners, no further public hearings will be required to effectuate the annexation of such parcel or parcels to CFD No. 2022-01. Resolution No. 2022-063 - Page 4 of 6 Section 9. Effective Date. This resolution shall become effective upon its adoption. PASSED, APPROVED, and ADOPTED this 1st day of June 2022. Dom L. Dennis Michael, ayor ATTEST: if eAatcCA Ja rife C. Reynolds, Cit Clerk STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) ss CITY OF RANCHO CUCAMONGA ) I, Janice C. Reynolds, City Clerk of the City of Rancho Cucamonga, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the City Council of the City of Rancho Cucamonga, at a Regular Meeting of said Council held on the 1st day of June 2022. AYES: Hutchison, Kennedy, Michael and Scott NOES: None ABSENT: None ABSTAINED: None Executed this 2nd day of June, 2022, at Rancho Cucamonga, California. Janice C. Reynolds, ity Clerk Resolution No. 2022-063 - Page 6 of 6 EXHIBIT A DESCRIPTION OF AUTHORIZED SERVICES The City may finance any services which may be funded with proceeds of the special tax of CFD No. 2022-01, authorized pursuant to Section 53313 of the Act, including but not limited to all costs attributable to maintaining and servicing street lights, traffic signals and appurtenant • facilities throughout CFD No. 2022-01. Services include personnel, materials, contracting services, utilities, and all necessary costs associated with the maintenance, replacement, and repair required to keep the improvements in operational and satisfactory condition. In addition to payment of the cost and expense of the forgoing services, proceeds of the special tax may be expended to pay "Administrative Expenses," as said term is defined in the Rate and Method. A-1 • EXHIBIT B RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2022-01 (STREET LIGHTING SERVICES) OF THE CITY OF RANCHO CUCAMONGA A Special Tax, as hereinafter defined, shall be levied and collected for Community Facilities District No. 2022-01 (Street Lighting Services)of the City of Rancho Cucamonga ("CFD No. 2022-01") each Fiscal Year commencing in Fiscal Year 2022/23, in an amount determined by the application of the procedures below. All Taxable Property, as hereinafter defined, 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 meaning: "Accessory Dwelling Unit" or "ADU" means a secondary residential unit of limited size, as defined in California Government Code Section 65852.2, as may be amended from time to time, that is accessory to a single-unit dwelling. The ADU may be on the same Assessor's Parcel as the single-unit dwelling or on a separate Assessor's Parcel. For purposes of clarification, where an ADU and primary Unit are on the same Assessor's Parcel, the ADU located on such Assessor's Parcel is considered a separate Unit from the primary Unit on such Assessor's Parcel for purposes of the Special Tax. Should an Assessor's Parcel contain only an ADU, such Assessor's Parcel will be taxed as an ADU only. "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map or in the Assessor's Data for each Assessor's Parcel. In the event that the Assessor's Parcel Map or Assessor's Data shows no acreage, the Acreage for any Assessor's Parcel may be determined by the CFD Administrator based upon the applicable condominium plan, final map, parcel map or calculated using available spatial data and GIS. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1, Division 2 of Title 5 of the Government Code of the State. "Administrative Expenses" means the actual or reasonably estimated costs directly related to the administration of CFD No. 2022-01 including, but not limited to, the following: the costs of computing the Annual Special Tax Requirement and the annual Special Tax and of preparing the annual Special Tax collection schedules; the costs of collecting the Special Tax, including any charges levied by the County Auditor's Office, Tax Collector's Office or Treasurer's Office; the costs of the City or designee in complying with the disclosure requirements of the California Government Code (including the Act), including public inquiries regarding the B-1 Special Tax; the costs of the City or designee related to an appeal of the Special Tax; and the costs of commencing and pursuing to completion any action arising from any delinquent Special Tax in CFD No. 2022-01. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2022-01 for any other administrative purposes, including, but not limited to, attorney's fees. "Annual Services Costs" means the amounts required to fund services authorized to be funded by CFD No. 2022-01. "Annual Special Tax Requirement" means that amount with respect to CFD No. 2022-01 determined by the City Council or designee as required in any Fiscal Year to pay: (1) the Administrative Expenses, (2) the Annual Services Costs, (3) any amount required to establish or replenish any reserve or replacement fund established in connection with CFD No. 2022-01, and (4)any reasonably anticipated delinquent Special Tax based on the delinquency rate for any Special Tax levied in the previous Fiscal Year. "Assessor's Data" means Units, Acreage, or other information contained in the records of the County Assessor for each Assessor's Parcel. "Assessor's Parcel" or"Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's Parcel Number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel Number. "Assessor's Parcel Number" means, with respect to an Assessor's Parcel, that number assigned to such Assessment's Parcel by the County Assessor for purposes of identification. "Boundary Map" means that map recorded with the County recorder's office on May 4, 2022 in Book 90 at Page 22 as Document Number 2022-0167399. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Annual Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No. 2022-01" means Community Facilities District No. 2022-01 (Street Lighting Services) of the City of Rancho Cucamonga. "City" means the City of Rancho Cucamonga. "City Council" means the City Council of the City, acting as the legislative body of CFD No. 2022-01. "County" means the County of San Bernardino, California. "County Assessor" means the County Assessor of the County. B-2 • "Developed Property" means, in any Fiscal Year, all Taxable Property in CFD No. 2022-01 for which a building permit for new construction was issued by the City prior to April 1 of the preceding Fiscal Year. "Exempt Property" means all Assessors' Parcels within the boundary of CFD No. 2022-01 which are exempt from the Special Tax pursuant to Section E. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "GIS" means a geographic information system. "Maximum Special Tax" means the maximum Special Tax authorized for levy in any Fiscal Year that may apply to Taxable Property as described in Section C. "Mixed Use Property" means all Assessor's Parcels that have been classified by the City to allow multiple uses on each such Assessor's Parcel. For an Assessor's Parcel of Mixed Use Property, each property use thereon is subject to taxation pursuant to section C below. The Acreage used to calculate the Special Tax for a portion of an Assessor's Parcel that is Non-Residential Property shall include only the share of such Assessor's Parcel that will be used as Non-Residential Property, to include structures, parking and other Parcel area. "Multi-Family Residential Property" means, in any Fiscal Year, all Assessor's Parcels of Developed Property with two or more Units that share a single Assessor's Parcel Number, are offered for rent to the general public, and cannot be purchased by individual homebuyers, according to Assessor's Data or as otherwise known by the CFD Administrator. Multi-Family Property also means, in any Fiscal Year, all Assessor's Parcels of Developed Property with one Unit with a single Assessor's Parcel Number that is a condominium pursuant the definition in Civil Code Section 4125 or a townhome. "Non-Residential Property" means all Assessor's Parcels of Developed Property within the boundaries of CFD 2022-01 for which a building permit(s) has been issued for a non-residential structure(s). "Open Space Property" means property within the boundaries of CFD No. 2022-01 which (i) has been designated with specific boundaries and Acreage on a final subdivision map as open space, (ii) is classified by the County Assessor as open space, (iii) has been irrevocably offered for dedication as open space to the federal government, the State, the County, the City, or any other public agency, or (iv) is encumbered by an easement or other restriction required by the City limiting the use of such property to open space. "Property Owner's Association" means any property owner's association. As used in this definition, a Property Owner's Association includes any home-owner's B-3 association, condominium owner's association, master or sub-association or non- residential owner's association. "Property Owner's Association Property" means any property within the boundaries of CFD No. 2022-01 which is (a) owned by a Property Owner's Association or (b) designated with specific boundaries and acreage on a final subdivision map as property owner association property. "Proportionately" means for Developed Property and Undeveloped Property, that the ratio of the Special Tax levy to the Maximum Annual Special Tax is equal within each respective Tax Zone. "Public Property" means any property within the boundaries of CFD No. 2022-01 which (i) is owned by a public agency, (ii) has been irrevocably offered for dedication to a public agency, or (iii) is designated with specific boundaries and Acreage on a final subdivision map as property which will be owned by a public agency. For purposes of this definition, a public agency includes the federal government, the State, the County, the City, school districts, or any other public agency. "Rate and Method of Apportionment" means this Rate and Method of Apportionment of Special Tax for CFD No. 2022-01. "Single Family Residential Property" means all Assessor's Parcels of Developed Property with a residential structure intended as a single primary Unit. "Special Tax" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Annual Special Tax Requirement. "State" means the State of California. "Tax Escalation Factor" means on July 1 of each Fiscal Year, commencing on July 1, 2023, the Maximum Special Tax as shown in Section C shall be increased by a minimum of two percent (2%) to a maximum of six percent (6%), determined on an annual basis as needed to satisfy the Special Tax Requirement. "Tax Zone" means an area within which the Special Tax may be levied pursuant to this Rate and Method of Apportionment. All the Taxable Property within CFD No. 2022-01 at the time of its formation is within Tax Zone Nos. 1 and 6. Additional Tax Zones may be created when property is annexed to CFD No. 2022-01, and a separate Maximum Special Tax shall be identified for property within each new Tax Zone at the time of such annexation. The Assessor's Parcels included within a new Tax Zone when such Parcels are annexed to CFD No. 2022-01 shall be identified by Assessor's Parcel number in the annexation documents at the time of annexation. "Taxable Property" means all the Assessor's Parcels within the boundaries of CFD No. 2022-01 that are not exempt from the Special Tax pursuant to law or Section E below. B-4 "Undeveloped Property" means all the Assessor's Parcels of Taxable Property within the boundaries of CFD No. 2022-01 that are not Developed Property. "Unit" means an individual residential living space. The number of Units assigned to each Assessor's Parcel may be determined by (i) referencing Assessor's Data, (ii) site surveys and physical unit counts, and/or (iii) other research by the CFD Administrator. "Welfare Exempt Property" means, in any Fiscal Year, all Parcels within the boundaries of CFD No. 2022-01 that have been granted a welfare exemption by the County under subdivision (g) of Section 214 of the Revenue and Taxation Code. B. DETERMINATION OF TAXABLE PARCELS On, or about, July 1 of each Fiscal Year, the CFD Administrator shall determine the valid Assessor's Parcel Numbers for all Taxable Property within CFD No. 2022-01. If any Assessor's Parcel Numbers are no longer valid, the CFD Administrator shall determine the new Assessor's Parcel Number or Numbers in effect for the then- current Fiscal Year. To the extent a Parcel or Parcels of Taxable Property are subdivided, consolidated, or otherwise reconfigured, the Maximum Special Tax shall be assigned to the new Assessor's Parcels Numbers pursuant to Section C. The CFD Administrator shall also determine: (i) the Tax Zone within which each Parcel is located; (ii)which Parcels are Developed Property and Undeveloped Property; (iii) the number of Units or Acreage each Parcel contains; (iv) the property type, i.e., Single Family Residential Property, Non-Residential Property, etc.; and (v) the Annual Special Tax Requirement for the Fiscal Year. C. MAXIMUM ANNUAL SPECIAL TAX RATE The Maximum Special Tax for each Assessor's Parcel of Taxable Property within Tax Zone Nos. 1-8 shall be assigned according to the tables on the following pages. In some instances, an Assessor's Parcel of Developed Property may contain more than one property land use. The Maximum Special Tax assigned to an Assessor's Parcel of Mixed Use Property shall be the sum of the Maximum Special Tax for all property uses located on that Assessor's Parcel. Additionally, Accessory Dwelling Units will be levied at 50% of the applicable Maximum Special Tax Rate for the property type of the primary Unit. B-5 • • • Tax Zone No. 1 2022/23 Maximum Special Tax Property Land Use Rate Single Family Residential Property $22.67 per Unit Multi-Family Residential Property $22.67 per Unit Non-Residential Property $45.34 per Acre Undeveloped Property $200.00 per Parcel * On each July 1, commencing on July 1, 2023, the Maximum Special Tax Rate shall be Increased by the Tax Escalation Factor. Tax Zone No. 2 2022/23 Maximum Special Tax Property Land Use Rate Single Family Residential Property $75.17 per Unit Multi-Family Residential Property $75.17 per Unit Undeveloped Property $200.00 per Parcel * On each July 1, commencing on July 1, 2023, the Maximum Special Tax Rate shall be Increased by the Tax Escalation Factor. Tax Zone No. 3 2022/23 Maximum Special Tax Property Land Use Rate Single Family Residential Property $47.15 per Unit Multi-Family Residential Property $47.15 per Unit Non-Residential Property $94.30 per Are Undeveloped Property $200.00 per Parcel * On each July 1, commencing on July 1, 2023, the Maximum Special Tax Rate shall be Increased by the Tax Escalation Factor. B-6 r Tax Zone No. 4 2022/23 Maximum Special Tax Property Land Use Rate Single Family Residential Property $28.96 per Unit Multi-Family Residential Property $28.96 per Unit Non-Residential Property $57.92 per Acre Undeveloped Property $200.00 per Parcel * On each July 1, commencing on July 1, 2023, the Maximum Special Tax Rate shall be Increased by the Tax Escalation Factor. Tax Zone No. 5 2022/23 Maximum Special Tax Property Land Use Rate Single Family Residential Property $63.79 per Unit Undeveloped Property $200.00 per Parcel * On each July 1, commencing on July 1, 2023, the Maximum Special Tax Rate shall be Increased by the Tax Escalation Factor. Tax Zone No. 6 2022/23 Maximum Special Tax Property Land Use Rate Non-Residential Property $51.40 per Acre Undeveloped Property $200.00 per Parcel * On each July 1, commencing on July 1, 2023, the Maximum Special Tax Rate shall be Increased by the Tax Escalation Factor. B-7 Tax Zone No. 7 2022/23 Maximum Special Tax Property Land Use Rate Single Family Residential Property $58.64 per Unit Multi-Family Residential Property $58.64 per Unit Non-Residential Property $117.28 per Acre Undeveloped Property $200.00 per Parcel * On each July 1, commencing on July 1, 2023, the Maximum Special Tax Rate shall be Increased by the Tax Escalation Factor. Tax Zone No. 8 2022/23 Maximum Special Tax Property Land Use Rate Single Family Residential Property $37.79 per Unit Multi-Family Residential Property $37.79 per Unit Non-Residential Property $75.58 per Acre Undeveloped Property $200.00 per Parcel * On each July 1, commencing on July 1, 2023, the Maximum Special Tax Rate shall be Increased by the Tax Escalation Factor. On July 1 of each Fiscal Year, commencing on July 1, 2023, the Maximum Special Tax for Tax Zone Nos. 1-8 shall be increased by an amount equal to the Tax Escalation Factor. A different Maximum Special Tax rate and Tax Escalation Factor may be identified in Tax Zones added to CFD No. 2022-01 as a result of future annexations. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX All Taxable Property shall be subject to a Special Tax defined as follows. The Special Tax shall be levied each Fiscal Year by the CFD Administrator. The Annual Special Tax Requirement shall be apportioned to each Parcel within CFD No. 2022-01 by the method shown below. First: Determine the Annual Special Tax Requirement. B-8 Second: Levy the Special Tax on each Parcel of Developed Property and Undeveloped Property, Proportionately, up to the applicable Maximum Special Tax. Under no circumstances will the Special Tax on any Assessor's Parcel used for private residential purposes be increased by more than 10% as a consequence of delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2022-01. E. EXEMPTIONS Notwithstanding any other provision of this Rate and Method of Apportionment of Special Tax, no Special Tax shall be levied on Property Owner's Association Property,Assessor's Parcels with public or utility easements making impractical their utilization for any use other than the purposes set forth in the easement, or Public Property, except as otherwise provided in Sections 53317.3, 53317.5, and 533401 of the Act. Welfare Exempt Property shall thereafter be exempt from the Special Tax for as long as the property qualifies as Welfare Exempt Property. F. APPEAL OF SPECIAL TAX LEVY Any property owner may file a written appeal of the Special Tax with the CFD Administrator claiming that the amount or application of the Special Tax is not correct. The appeal must be filed not later than one calendar year after having paid the Special Tax that is disputed, and the appellant must be current in all payments of the Special Tax. In addition, during the term of the appeal process, all Special Tax levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the property owner disagrees with the CFD Administrator's decision relative to the appeal, the owner may then file a written appeal with the City Council whose subsequent decision shall be final and binding on all interested parties. If the decision of the CFD Administrator or subsequent decision by the City Council requires the Special Tax to be modified or changed in favor of the property owner, the CFD Administrator shall determine if sufficient Special Tax revenue is available to make a cash refund. If a cash refund cannot be made, then an adjustment shall be made to credit future Special Taxes. This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to filing any legal action by such owner. B-9 G. INTERPRETATION OF RATE AND METHOD OF APPORTIONMENT The City Council may, by resolution or ordinance, interpret, clarify and/or revise this Rate and Method of Apportionment to correct any inconsistency, vagueness, or ambiguity as it relates to the Special Taxes, method of apportionment, classification of Assessor's Parcels, or any definition used herein, as long as such correction does not materially affect the levy and collection of Special Taxes. In addition, the interpretation and application of any section of this document shall be at the City's discretion. H. MANNER AND DURATION OF SPECIAL TAX The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided that the City may directly bill the Special Tax, may collect the Special Tax at a different time or in a different manner if needed to meet the financial obligations of CFD No. 2022-01, and may collect delinquent Special Taxes through available methods. A Special Tax shall be levied commencing in Fiscal Year 2022/23 to the extent necessary to satisfy the Annual Special Tax Requirement and shall be levied for as long as required to satisfy the Annual Special Tax Requirement. I. PREPAYMENT OF SPECIAL TAX The Special Tax may not be prepaid. B-10