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HomeMy WebLinkAbout01-086 - Resolutions RESOLUTION NO. 01-086 RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA TO ESTABLISH CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2001-01 AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2001-01 RECITALS: WHEREAS, the CITY COUNCIL (the "City Council") of the CITY OF RANCHO CUCAMONGA (the "City") desires to undertake proceedings to establish a community facilities district pursuant to the Mello-Roos Community Facilities Act of 1982,as amended,commencing with Section 53311 of the California Government Code(the"Act"), to finance facilities to serve the area of land hereinafter described. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. INTENTION. The City Council hereby declares its intention to conduct proceedings for the formation of a community facilities district under the terms of the Act with three separate improvement areas designated pursuant to Section 53350 of the Act. SECTION 2. NAME OF DISTRICT. The name of the proposed community facilities district is"City of Rancho Cucamonga Community Facilities District No.2001-01"(the"District")and the three improvement areas shall be designated as "Improvement Area No. 1," "Improvement Area No. 2," and "Improvement Area No. 3." SECTION 3. BOUNDARIES OF DISTRICT. The exterior boundaries of the District and the boundaries of each Improvement Area are shown on that certain map now on file in the office of the City Clerk entitled "Proposed Boundaries of City of Rancho Cucamonga Community Facilities District No. 2001-01;" which map indicates by a boundary line the extent of the territory included in the proposed District and the extent of the territory in each Improvement Area and shall govern for all details as to the extent of the District. On the original and one copy of such map, the City Clerk shall endorse the certificate evidencing the date and adoption of this Resolution. The City Clerk shall file the original of such map in her office and,within fifteen (15) days after the adoption of this Resolution, the City Clerk shall file a copy of such map so endorsed in the records of the County Recorder, County of San Bernardino, State of California. Resolution No. 01-086 Page 2 of 52 SECTION 4. FACILITIES. The type of public facilities proposed to be provided within the District and to be financed in part by each Improvement Area under the Act shall consist of those facilities set forth on Exhibit "A," attached hereto and incorporated herein by reference (the "Facilities"). The City Council hereby finds that the proposed Facilities are necessary to meet increased demands placed upon the City as a result of development occurring in the District. The Facilities may be acquired from one or more property owners as completed public facilities pursuant to Section 53314.9 of the Act and/or constructed with District funds pursuant to Section 53316.2 of the Act. SECTION 5. SPECIAL TAX. a. Except where funds are otherwise available to pay for the Facilities and/or the principal and interest as it becomes due on bonds of the District issued to finance the Facilities, it is the intention of the City Council to levy annually in accordance with procedures contained in the Act a special tax (the "Special Tax")within each Improvement Area of the District sufficient to pay for the costs thereof, including incidental expenses. The Special Tax will be secured by recordation of a continuing lien against all non-exempt real property in the District and will be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties, procedure, sale and lien priority in case of delinquency as applicable for ad valorem property taxes. Provided, however, such Special Tax may be collected in such other manner as may be provided by the City Council. In the first year in which such a Special Tax is levied,the levy shall include a sum sufficient to repay to the City all amounts, if any,transferred to the District pursuant to Section 53314 of the Act and interest thereon. b. The proposed rate and method of apportionment of the Special Tax among parcels of real property in each Improvement Area of the District, in sufficient detail to allow each resident or landowner within each Improvement Area of the proposed District to estimate the maximum amount such resident or owner will have to pay, are shown in Exhibit 'B," attached hereto and incorporated herein by reference. The Special Tax within a proposed Improvement Area is based on the expected demand that each parcel of real property within that proposed Improvement Area will place on the Facilities and on the benefit that each parcel derives from the right to access the Facilities. The City Council hereby determines the rate and method of apportionment of the special tax set forth in Exhibit "B" for each proposed Improvement Area to be reasonable. The obligation to pay the Special Tax may be prepaid as set forth in Exhibit"B". Resolution No. 01-086 Page 3 of 52 c. In the case of any Special Tax to pay for the Facilities to be levied against any parcel used for private residential purposes: (i)the maximum Special Tax shall be specified as a dollar amount which shall be calculated and thereby established not later than the date on which the parcel is first subject to the tax because of its use for private residential purposes and which amount shall not be increased over time over two percent per year; (ii) the tax year after which no further Special Tax subject to this sentence shall be levied or collected shall be as set forth in Exhibit "B" hereto; and (iii) under no circumstances will the Special Tax levied against any parcel subject to this sentence be increased as a consequence of delinquency or default by the owner of any other parcel within the District by more than 10 percent. For the purposes hereof, a parcel is used for"private residential purposes" not later than the date on which an occupancy permit for private residential use is issued. SECTION 6. BONDS. It is the intent of the City Council, acting as the legislative body of the District, to cause bonds to be issued under the Act on behalf of the Improvement Areas to finance, in whole or in part, the acquisition and/or construction of the Facilities. A series of bonds for Improvement Area No. 1 and Improvement Area No. 2 will be in the aggregate principal amount of not to exceed $15,000,000 and a series of bonds for Improvement Area No. 3 will be in the aggregate principal amount of not to exceed $12,000,000, at a maximum interest rate not in excess of 12 percent per annum or such rate not in excess of the maximum rate permitted by law at the time the bonds are issued,and the term of the bonds of each series shall not exceed 31 years from the date of issuance of such series of bonds or such longer term as is then permitted by law. SECTION 7. HEARING. A public hearing (the"Hearing")on the establishment of the District, each proposed Improvement Area, the extent of the District and each proposed Improvement Area, the furnishing of specified types of public facilities within the District,and the proposed rate and method of apportionment of the Special Tax shall be held on June 6, 2001, at 7:00 p.m., or as soon thereafter as practicable, at the chambers of the City Council of the City of Rancho Cucamonga, 10500 Civic Center, Rancho Cucamonga, California 91730. At the Hearing, any interested person or taxpayer, including all persons owning lands or registered to vote within the proposed District, may appear and be heard. SECTION 8. REPORT. Each City officer who is or will be responsible for the Facilities to be financed by the District, if it is established, is hereby directed to study the proposed District and, at or before the time of the above-mentioned Hearing,file, or cause to be filed, a report with the City Council, which is to be made a part of the record of the Hearing, containing the following: Resolution No. 01-086 Page 4 of 52 (a) a brief description of the Facilities by type which will in his or her opinion be required to adequately meet the needs of the District; and (b) an estimate of the fair and reasonable cost of financing the Facilities, including incidental expenses and including the costs of the proposed bond financing and all other related costs as provided for in Section 53345.3 of the Act. SECTION 9. ADVANCES. The City may accept advances of funds or work in-kind from any source, including, but not limited to, private persons or private entities, and is authorized and directed to use such funds or that work in-kind for any authorized purpose,including, but not limited to, paying any cost incurred by the City in creating the District. The City may enter into an agreement with the person or entity advancing the funds or work-in-kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council, with or without interest. SECTION 10. PUBLISHED NOTICE. The City Clerk is hereby directed to publish a notice ("Notice") of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the proposed District. Such Notice shall be substantially in the form specified in Section 53222 of the Act. Publication of the Notice shall be completed at least 7 days prior to the date of the Hearing. SECTION 11. MAILED NOTICE. The City Clerk is hereby directed to send a copy of the Notice of the Hearing by first-class mail, postage prepaid, to each registered voter and to each landowner within the proposed District as shown on the last equalized assessment roll. Mailing of the Notice shall be completed at least 15 days prior to the date of the Hearing. SECTION 12. VOTING. Should the City Council determine to form the District and establish the Improvement Areas, a special election will be held within each Improvement Area to authorize the issuance of bonds and the levy of the Special Tax in accordance with the procedures contained in Section 53326 of the Act. If held, the proposed voting procedure at the elections will be a landowner vote with each landowner who is the owner of record of land within an Improvement Area at the close of the Hearing, or the authorized representative thereof, having one vote for each acre or portion thereof owned within the Improvement Area. Ballots for the special election maybe distributed by mail with return postage prepaid or by personal service. Resolution No. 01-086 Page 5 of 52 SECTION 13. EXEMPTIONS FROM SPECIAL TAX. Except as may otherwise be provided in Exhibit"B"hereto or by law,all lands owned by any public entity, including the United States, the State of California and/or the City, or any departments or political subdivisions thereof, shall be omitted from the levy of the Special Tax to be made to cover the costs and expenses of the Facilities. SECTION 14. TENDER OF BONDS. Except to the extent limited in any bond resolution or trust indenture related to the issuance of bonds,the City Council hereby reserves to itself all rights and powers set forth in Section 53344.1 of the Act (relating to tenders of bonds in full or partial payment of any installment of the special tax or the interest or penalties thereon which may be due or delinquent). PASSED, APPROVED, AND ADOPTED this 18'' day of April 2001. AYES: Alexander, Biane, Dutton, Williams NOES: None ABSENT: None ABSTAINED: None William J. Alex der, Mayo ATTEST: D bra J. Ada s, CMC, City Clerk Resolution No. 01-086 Page 6 of 52 I,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 Regular Meeting of said City Council held on the 181'day of April 2001. Executed this 1 g`h day of April, at Rancho Cucamonga, California. Debra J. Adai , CMC, City Clerk Resolution No. 01-086 Page 7 of 52 EXHIBIT "A" DESCRIPTION OF FACILITIES The facilities described below are proposed to be financed by City of Rancho Cucamonga Community Facilities District No. 2001-01 (the "District"). The cost of the facilities shall include incidental expenses, including the costs associated with forming the District, issuance of bonds, determination of the amount of the Special Tax, collection of the Special Tax, payment on the Special Tax, costs incurred in order to carry out the authorized purposes of the District, any other expenses, incidental to the construction, completion and inspection of the authorized work and the attributable costs of engineering and inspection. The facilities shall be constructed,whether or not acquired in their completed states, pursuant to plans and specifications approved by the City and the officials thereof. Facilities Public improvements required as a condition of approval of development of the property within the proposed District; such improvements to include but not be limited to: street improvements, demolition and grading, curb, gutter and sidewalks, traffic signals; entry features and signs; fire hydrants;storm drains;water and sewer improvements; paving;striping; landscaping and irrigation improvements; public utilities and appurtenances. Resolution No. 01-086 Page 8 of 52 EXHIBIT "B" RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Resolution No. 01-086 Page 9 of 52 CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2001-01 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR IMPROVEMENT AREA NO. 1 A Special Tax shall be levied on all Taxable Property in Improvement Area No. 1 of the City of Rancho Cucamonga Community Facilities District No. 2001-01 and collected each Fiscal Year commencing in Fiscal Year 2002-2003 according to the tax liability determined by the Council, through the application of the rate and method of apportionment of the Special Tax set forth below. All Taxable Property shall be taxed to the extent and in the manner herein provided. I. DEFINITIONS This Rate and Method of Apportionment employs terms defined below and terms defined in the Rate and Method of Apportionment for Improvement Area No. 2 of the City of Rancho Cucamonga Community Facilities District No. 2001-01 ("IA No. 2"). When necessary, terms defined in the latter shall be distinguished from terms defined in the former by including the words "IA No. 2" prior to the defined term. The terms hereinafter set forth have the following meanings: "Acquisition and Construction Agreement" means the Acquisition and Construction Agreement for IA No. 1 and IA No. 2 that was approved by the Council on f 1, 2001, as it may be modified or supplemented from time to time. "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 Assessors Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County parcel map. The square footage of an Assessors Parcel is equal to the Acreage of such parcel multiplied by 43,560. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. "Administrative Fees" or "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of IA No. 1 and IA No. 2: the costs of computing the IA No. 1 and IA No. 2 Special Taxes; the costs of preparing the annual IA No. 1 Special Tax and IA No. 2 Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the IA No. 1 and IA No. 2 Special Taxes(whether by the City, the County or otherwise); the costs of remitting the IA No. 1 and IA No. 2 Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2001-01, or any designee thereof complying with arbitrage rebate requirements; the costs to the City, CFD No. 2001-01, or any Cky ofRxxho GmwxrW Apnt 11,2001 C wwwy Factitia Disco Na 2001-01 IA No. I pale 1 Resolution No. 01-086 Page 10 of 52 designee thereof complying with disclosure requirements of the City or CFD No. 2001-01, associated with applicable Federal and State securities laws and the Act; the costs associated with preparing IA No. 1 and/or IA No. 2 Special Tax disclosure statements and responding to public inquiries regarding the IA No. 1 and/or IA No. 2 Special Taxes; the costs to the City, CFD No. 2001-01, or any designee thereof related to an appeal of the IA No. 1 and/or the IA No. 2 Special Tax; the costs associated with the release of funds from an 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. 2001-01 for any other administrative purposes of IA No. 1 and/or IA No. 2, including attorney's fees and other costs related to commencing and pursuing any foreclosure of delinquent IA No. 1 and/or IA No. 2 Special Taxes. "Apartment Property" means any Assessor's Parcel of Residential Property that consists of a building or buildings comprised of attached residential units available for rental, but not purchase, by the general public and which are under common management. "Assessor"means the Assessor of the County of San Bernardino. "Assessor's Parcel" means a lot or parcel shown in an Assessors Parcel Map with an assigned Assessors parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Class of Developed Property, as determined in accordance with Section III below. "Authorized Facilities" means those improvements, as listed on Exhibit "A" to the Acquisition and Construction Agreement. "Backup Special Tax" means the Special Tax applicable to each Assessors Parcel of Developed Property, as determined in accordance with Section III below. "Bond Share" means the share of Bonds assigned to a Taxable Parcel as specified in Section VI. "Bonds" means any bonds or other indebtedness (as defined in the Act)of CFD No. 2001-01 for Improvement Area No. 1 or Improvement Area No. 2, whether in one or more series, secured by the levy of Special Taxes. "CFD No. 2001-01"means the City of Rancho Cucamonga Community Facilities District No. 2001-01. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and for levying and collecting the Special Taxes. "City"means the City of Rancho Cucamonga, California. "Council" means the City Council of the City of Rancho Cucamonga acting as the legislative body of the CFD under the Act. City grR-id"CuwnaV Aprd 11,2001 Cam-2ity Facilities Distw Na 2001-011A No. 1 page 2 Resolution No. 01-086 Page 11 of 52 "County"means the County of San Bernardino, California. "Debt Service" means for each Fiscal Year, the total amount of principal and interest payable on any Bonds, notes or certificates of participation of the CFD during the calendar year commencing on January 1 of such Fiscal Year. "Developed Property" means for each Fiscal Year, all"Taxable Property, exclusive of Taxable Property Owner Association Property or Taxable Public Property, for which a building permit for new construction or renovations was issued prior to January 1 of the previous Fiscal Year. "Final Mapped Property" means, for each Fiscal Year, all Taxable Property, exclusive of Developed Property, Taxable Property Owner Association Property or Taxable Public Property, which as of January 1 of the previous Fiscal Year was located within a Final Subdivision. The term "Final Mapped Property" shall include any parcel map or subdivision map or portion thereof that creates individual lots for which a building permit may be issued, including parcels that are designated as a remainder parcel. "Final Subdivision" means a subdivision of property within (i) a final map, or portion thereof approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) and recorded with the County Recorder that creates individual lots for which building permits may be issued, or(ii)for condominiums, a final map, or portion thereof, approved by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 that creates individual lots for which building permits may be issued. "Fiscal Year" means the period starting on July 1 and ending the following June 30. "IA No. 1 and IA No, 2 Bonds" meansDnvpberrjds or other debt (as defined in Section 53317(d)of the Act), whether in one or more series, issued by CFD No. 2001-01 for both IA No. 1 and IA No. 2 under the Act. "Improvement Area No. 1" or "IA No. 1" means Improvement Area No. 1 of CFD No. 2001-01,as identified on the boundary map for CFD No. 2001-01. "Improvement Area No. 2" or "IA No_ 2" means Improvement Area No. 2 of CFD No. 2001-01, as identified on the boundary map for CFD No. 2001-01. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which IA No. 1 and IA No. 2 Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Intermediate Special Tax" means the Special Tax applicable to each Assessor's Parcel of Final Mapped Property, as determined in accordance with Section III below. "Land Use Class"means any of the classes listed in Table 1. City gfRmrd�oG-x7 W April ll, 2001 (.'mars Facd,6l umrt Na 2001-011A No. I Page Resolution No. 01-086 Page 12 of 52 "Maximum Annual Special Tax" means the greatest amount of Special Tax, determined in accordance with Section III below, which may be levied in any Fiscal Year on any Assessor's Parcel based on its Land Use classification. "Maximum Special Tax Revenue" means the sum of the Maximum Annual Special Tax which may be levied on all of the Taxable Properties in the CFD. "Multi-Family Residential (MFR)" means Residential property that shares a common wall between one or more residential units, or a parcel that contains more than one Single Family Residence. "Non-Residential Floor Area" means all of the square footage of usable area within the perimeter of a non-residential structure, not including any carport, walkway, garage, overhang, or similar area. The determination of Non- Residential Floor Area shall be made by reference to the building permits) issued for such Assessor's Parcel. "Non-Residential Property"means all Developed Property for which a building permit(s)was issued for a non-residential use. "Other Residential Property" means all Developed Property for which a building permit(s)was issued for a residential use. "Outstanding Bonds" means all IA No. 1 and IA No. 2 Bonds, which are deemed to be outstanding under the Indenture. "Parcel" means any County of San Bernardino Assessor's Parcel that is within the boundaries of the CFD, based on the equalized tax rolls of the County of San Bernardino as of January 1 in the prior Fiscal Year. "Partial Prepayment" means a prepayment of a portion of the Special Tax obligation applicable to a parcel of Taxable Property as set forth in Section VI. "Property Owner Association Property" means any property within the boundaries of IA No. 1 owned in fee, dedicated to or subject to an easement benefiting a property owner association, including any master or sub-association. However, notwithstanding the above, any of such property which constitutes the "pad-area" located directly under a residential or non-residential building shall not be considered Property Owner Association Property. "Proportionately" or "Proportionate" means, for Developed Property and IA No. 2 Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is equal for all Assessor's Parcels of Developed Property and IA No. 2 Developed Property. For Undeveloped Property and IA No. 2 Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levies per Acre to the Maximum Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property and IA No. 2 Undeveloped Property. The term "Proportionately" may similarly be applied to other categories of Taxable Property as listed in Section IV below. Q�yofR"id-G_D W Aprd 11,2001 Cornco iry Fa dwe,Diurid Na 2001-011A No. 1 page 4 Resolution No. 01-086 Page 13 of 52 "Public Property" means any property within the boundaries of IA No. 1 the ownership of which is transferred to a public agency on or after the date of formation of CFD No. 2001-01 and is used for rights-of-way or any other purpose and is owned by or dedicated to the federal government, the State of California, the County, the City or any other public agency; provided however that any property owned by a public agency and leased to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. "RMA"means this Rate and Method of Apportionment. "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 passed by the Council authorizing the formation of CFD No.2001-01. "Resolution of Issuance" means the Resolution passed by the Council authorizing the issuance of bonds. "Special Tax" means any tax levied within the CFD pursuant to the Act and this Rate and Method of Apportionment of Special Tax. "Special Tax Obligation" means the total obligation of a Taxable Parcel to pay the Special Tax for the remaining life of the CFD. "Special Tax Requirement" means that amount required in any Fiscal Year to: (i) pay Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding Bonds Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) accumulate funds to pay directly for acquisition or construction of Authorized Facilities, and (vi) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied 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 Assessors Parcels within the boundaries of IA No. 1, which are not exempt from the levy of the Special Tax pursuant to law or Section VIII below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property within IA No. 1 that are not exempt from the levy of Special Tax pursuant to Section VIII below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt from the levy of Special Tax pursuant to Section VIII below. City ofRmxbA0-m-W Apnl11,2001 Qrwwuty Facili0a Diana Na 2001-01 IA No. 1 Page 5 Resolution No. 01-086 Page 14 of 52 "Tax-Exempt Parcel" means, as of January 1 of each year,(i)any parcel owned by a governmental entity, or irrevocably offered for dedication to a governmental entity, (ii) any Parcel which constitutes public right-of-way or which is encumbered by an unmanned utility easement, making impractical its utilization for other than the purpose set forth in the easement, or(iii)any Parcel assigned a zero value by the San Bernardino County Assessor. Notwithstanding the foregoing, (i) a Taxable Parcel acquired by a public entity after the adoption of the Resolution of.Formation by means of negotiated transaction, or by gift or devise, or by eminent domain proceedings, shall remain a Taxable Parcel, and (ii) if a governmental entity owning a Tax-Exempt Parcel, including a Tax-Exempt Parcel held in trust for any beneficiary, grants a leasehold or other possessory interest in the parcel to a non-exempt person or entity, the Special Tax shall be levied on the leasehold or possessory interest and shall be payable by the owner of the leasehold or possessory interest. Tax-Exempt Parcels include the specific parcels,or their successor parcels. "Trustee"means the trustee or fiscal agent under the Indenture. "Undeveloped Property"means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Final Mapped Property, Taxable Property Owner Association Property, or Taxable Public Property. II. CLASSIFICATION OF PARCELS Each Fiscal Year, all Taxable Property within IA No. 1 shall be classified as Developed Property, Final Mapped Property, Taxable Property Owner Association Property, Taxable Public Property, or.Undeveloped Property, and all such Taxable Property shall be subject to the levy of Special Taxes in accordance with the rate and method of apportionment determined pursuant to Sections III and IV below. III MAXIMUM SPECIAL TAX RATE 1. Developed Property (a). Maximum Special Tax The Maximum Special Tax for each Assessor's Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax or (ii) the amount derived by application of the Backup Special Tax. (b). Assigned Special Tax The Assigned Special Tax for each Land Use Class is shown in Table 1. City ofRado� April 11, 2001 Cmrraoriry Factitia District Na 2001-01 IA No. 1 Page 6 Resolution No. 01-086 Page 15 of 52 TABLE 1 Assigned Special Taxes for Developed Property Improvement Area No. 1 Land Use Description Residential Assigned Class Floor Area Special Tax 1 Single Family Property =>3,250 sq.ft. $2,100 per residential dwelling unit 2 Single Family Property 2,950 to 3,249 sq.ft $1,684 per residential dwelling unit 3 Single Family Property 2,650 to 2,949 sq.ft. $1,515 per residential dwelling unit 4 Single Family Property 2,350 to 2,649 sq.ft. $1,301 per residential dwelling unit 5 Single Family Property 2,150 to 2,349 sq.ft. $1,217 per residential dwelling unit 6 Single Family Property 1,950 to 2,149 sq.ft. $1,119 per residential dwelling unit 7 Single Family Property < 1,950 sq. ft. $938 per residential dwelling unit 8 Apartment Property Not Applicable $237 per residential dwelling unit 9 Non-Residential Property Not Applicable $8,398 per Acre (c). Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Assigned Special Tax levied on an Assessor's Parcel shall be the sum of the Assigned Special Taxes for all Land Use Classes located on that Assessor's Parcel. The Maximum Special Tax that can be levied on an Assessor's Parcel shall be the sum of the Maximum Special Taxes that can be levied for all Land Use Classes located on that Assessor's Parcel derived by application of the Backup Special Tax. 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 Class 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. City-fRandvQ"mW April 11,2001 Cnrvrsarity Facilities Di frit Na 2001-01 IA Na 1 Pale 7 Resolution No. 01-086 Page 16 of 52 (d). Backup Special Tax The Backup Special Tax shall equal $10,768 per Acre. 2. Final Mapped Property (a). Intermediate Special Tax The Intermediate Special Tax shall only be levied on Assessor's Parcels of Final Mapped Property. To compute the Intermediate Special Tax attributable to a Final Subdivision, the Acreage of all Developed Property and Final Mapped Property within that Final Subdivision shall be multiplied by $7,500. The Intermediate Special Tax for each Assessor's Parcel of Final Mapped Property planned for residential development shall then be computed by dividing the Intermediate Special Tax attributable to the applicable Final Subdivision by the total number of Assessor's Parcels planned for residential development within that Final Subdivision (i.e., the number or residential lots). The Intermediate Special Tax for each Assessors Parcel of Final Mapped Property in a Final Subdivision planned exclusively for non-residential development shall equal $7,500 multiplied by the Acreage of such Assessor's Parcel. If a Final Subdivision includes Assessors Parcels of Developed Property and Final Mapped Property planned for both residential and non-residential development, then the Intermediate Special Tax for each Assessor's Parcel of Final Mapped Property planned for residential development shall be calculated as described above based exclusively on the Acreage of the residential Final Mapped Property. Conversely, the Intermediate Special Tax for each Assessor's Parcel of Final Mapped Property planned for non-residential development shall be calculated as described above based exclusively on the Acreage of the non-residential Final Mapped Property. The CFD Administrator shall allocate the Acreage of each Assessor's Parcel in the Final Subdivision to residential and non-residential development based on the projected use of each such Assessor's Parcel. (b). Maximum Special Tax The Maximum Special Tax for Final Mapped Property shall be $10,768 per Acre. 3. Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property. The Maximum Special Tax for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $10,768 per Acre. CLY9rRmzGhoQrmnn;&I April 11,2001 Com"*Fualitia Dish=Na 2001-01 1A No. I page 8 Resolution No. 01-086 Page 17 of 52 IV. APPORTIONMENT OF SPECIAL TAX For each Fiscal Year the Council shall determine the Special Tax Requirement and levy the Special Tax, taking into consideration the levy of the IA No. 2 Special Tax, until the amount of Special Taxes and IA No. 2 Special Taxes 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 Assigned Special Tax; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 2 RMA, the IA No. 2 Special Tax shall be levied on each Assessor's Parcel of IA No. 2 Developed Property in an amount equal to 100% of the applicable IA No. 2 Assigned 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 on each Assessor's Parcel of Final Mapped Property at up to 100% of the Intermediate Special Tax for Final Mapped Property; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 2 RMA, the IA No. 2 Special Tax shall be levied on each Assessors Parcel of IA No. 2 Final Mapped Property at up to 100% of the IA No. 2 Intermediate Special Tax for IA No. 2 Final Mapped Property, with the levy on Final Mapped Property and IA No. 2 Final Mapped Property being Proportionate; Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax shall be levied on each Assessors Parcel of Undeveloped Property at up to $7,500 per Acre; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 2 RMA, the IA No. 2 Special Tax shall be levied on each Assessors Parcel of IA No. 2 Undeveloped Property at up to $7,500 per Acre, with the levy on Undeveloped Property and IA No. 2 Undeveloped Property being Proportionate; Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, the Special Tax shall be levied on each Assessors Parcel of Final Mapped Property and Undeveloped Property at up to 100% of the Maximum Special Tax for Final Mapped Property and Undeveloped Property; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 2 RMA, the IA No. 2 Special Tax shall be levied on each Assessors Parcel of IA No.2 Final Mapped Property and IA No. 2 Undeveloped Property at up to 100% of the IA No. 2 Maximum Special Tax for IA No. 2 Final Mapped Property and IA No. 2 Undeveloped Property, with the levy on Final Mapped Property and Undeveloped Property and IA No. 2 Final Mapped Property and IA No. 2 Undeveloped Property being Proportionate; Fifth: If additional monies are needed to satisfy the Special Tax Requirement after the first four steps have been completed, then the levy of the Special Tax on each Assessors Parcel of Developed Property whose Maximum Special Tax is City gfR rd"Qm-x,W April ll,2001 Qnnw iry Facilities azzi Na 2001-01 IA No. 1 Page 9 Resolution No. 01-086 Page 18 of 52 determined through the application of the Backup Special Tax shall be increased in equal percentages from the Assigned Special Tax up to the Maximum Special Tax for each such Assessor's Parcel; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 2 RMA, the levy of the IA No. 2 Special Tax on each Assessors Parcel of IA No. 2 Developed Property whose IA No. 2 Maximum Special Tax is determined through the application of the IA No. 2 Backup Special Tax shall be increased in equal percentages from the IA No. 2 Assigned Special Tax up to the IA No. 2 Maximum Special Tax for each such Assessor's Parcel, with the levy on Developed Property and IA No. 2 Developed Property being Proportionate; Sixth: If additional monies are needed to satisfy the Special Tax Requirement after the first five steps have been completed, then the Special Tax shall be levied on each Assessor's Parcel of Taxable Property Owner Association Property or Taxable Public Property at up to the Maximum Special Tax for Taxable Property Owner Association Property or Taxable Public Property; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 2 RMA, the IA No. 2 Special Tax shall be levied on each Assessor's Parcel of IA No. 2 Taxable Property Owner Association Property or IA No. 2 Taxable Public Property at up to the IA No. 2 Maximum Special Tax for IA No. 2 Taxable Property Owner Association Property or IA No. 2 Taxable Public Property, with the levy on Taxable Property Owner Association Property or Taxable Public Property and IA No. 2 Taxable Property Owner Association Property or IA No. 2 Taxable Public Property being Proportionate. Notwithstanding the above the Council may, in any Fiscal Year, levy Proportionately less than 100% of the Assigned Special Tax and the IA No. 2 Assigned Special Tax in step one of Section IV (above), when (i) the Council is no longer required to levy a Special Tax pursuant to steps two through six above and the Council is no longer required to levy an IA No. 2 Special Tax pursuant to steps two through six in Section IV of the IA No. 2 RMA in order to meet the Special Tax Requirement; (ii) all authorized IA No. 1 and IA No. 2 Bonds have already been issued or the Council has covenanted that it will not issue any additional IA No. 1 and IA No. 2 Bonds(except refunding bonds)to be supported by Special Taxes and IA No. 2 Special Taxes; and (iii) all Authorized Facilities have been constructed and/or acquired. 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 IA No. 1 or IA No. 2, except for those Residential Properties whose owners are also delinquent or in default on their Special Tax payments for one or more other properties within IA No. 1 or IA No. 2. V. MANNER OF COLLECTION CuyofRm°dmGramW Aprd 11,2001 Q" maWy Facilities Drsnict Na 2001-01 1A No. I Pate 10 Resolution No. 01-086 Page 19 of 52 Collection of the Special Tax shall be by the County in the same manner as ordinary ad valorem property taxes are collected and the Special Tax shall be subject to the same penalties and the same lien priority in the case of delinquency as ad valorem taxes; provided, however, that the Council may provide in the Indenture or in the Resolution of Issuance for (i) other means of collecting the Special Tax, including direct billings thereof to the property owners; and(ii)judicial foreclosure of delinquent Special Taxes. A DISCHARGE OF SPECIAL TAX OBLIGATION Property owners may prepay and permanently satisfy the Special Tax Obligation by a cash settlement with the City as permitted under Government Code Section 53344. Prepayment is permitted only under the following conditions: The following definition applies to this Section VI: "CFD Public Facilities Costs" means either$10,500,000 in 2001 dollars,which shall increase by the Construction Inflation Index on July 1, 2002, and on each July 1 thereafter, or such lower number as (i)shall be determined by the CFD Administrator as sufficient to acquire or construct the Authorized Facilities to be Financed by IA No. 1 and IA No. 2 under the authorized Mello-Roos financing program for CFD No. 2001-01, or (ii)shall be determined by the Council concurrently with a covenant that it will not issue any more IA No. 1 and IA No. 2 Bonds (except refunding bonds)to be supported by Special Taxes and IA No. 2 Special Taxes. "Construction Fund" means the fund (regardless of its name) established pursuant to the Indenture to hold funds, which are currently available for expenditure to acquire or construct the Authorized Facilities. "Construction Inflation Index" means the annual percentage change in the Engineering News-Record Building Cost Index for the City of Los Angeles, measured as of the calendar year,which ends in the previous Fiscal Year. In the event this index ceases to be published, the Inflation Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. "Future Facilities Costs" means the CFD Public Facilities Costs minus(i)costs previously paid from the Construction Fund to acquire or construct the Authorized Facilities, (ii) monies currently on deposit in the Construction Fund, and (iii) monies currently on deposit in an escrow or other earmarked fund that are expected to be available to finance Public Facilities Costs. "Outstanding Bonds" means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following• the current Fiscal Year. "Previously Issued Bonds" means all IA No. 1 and IA No. 2 Bonds that have been issued prior to the date of prepayment. City ofRar C--rApn111,2001 Ccnmo*Facilities Dmrat Na 2001-011A No. I Page Il Resolution No. 01-086 Page 20 of 52 1. Prepayment in Full The Special Tax Obligation applicable to an Assessor's Parcel in IA No. 1 may be prepaid and the obligation of the Assessor's Parcel to pay any Special Tax 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. The CFD Administrator shall provide the owner with a statement of the Prepayment Amount for such Assessor's Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. Prepayment must be made not less than 60 days prior to any redemption date for the IA No. t and IA No. 2 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 Future Facilities Prepayment Amount 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.: 1. Confirm that no Special Tax delinquencies apply to such Assessors Parcel. 2. For Assessors Parcels of Developed Property, compute the Assigned Special Tax and Backup Special Tax. For Assessor's Parcels of Final Mapped Property or Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax and Backup Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Undeveloped Property compute the Maximum Special Tax. 3. (a) Divide the Assigned Special Tax computed pursuant to paragraph 2 by the total estimated Assigned Special Taxes for IA No. 1 and IA No. 2 based on the Developed Property Special Taxes and IA No. 2 Developed Property Special Taxes which could be levied in the current Fiscal Year G�Y ofR=J"l=trcmn� Apnl 11, 2001 t;onraacty Facilities aaurid Na 2001-01/A No. 1 Page 12 Resolution No. 01-086 Page 21 of 52 on all expected development through build-out of IA No. 1 and IA No. 2 as determined by the CFD Administrator, excluding any Assessor's Parcels for which the Special Tax Obligation has been prepaid,and (b) Divide the Backup Special Tax or Maximum Special Tax computed pursuant to paragraph 2 by the total estimated Backup Special Taxes and IA No. 2 Backup Special Taxes at build-out for IA No. 1 and IA No. 2, excluding any Assessor's Parcels for which the Special Tax Obligation has been prepaid. 4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid(the"Bond Redemption Amount"). 5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium (expressed as a percentage), if any, on the Outstanding Bonds to be redeemed at the first available call date(the"Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Prepayment Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 9. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Future Facilities Amount and the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 10. Take the amount computed pursuant to paragraph 8 and subtract the amount computed pursuant to paragraph 9(the"Defeasance Amount'). 11. Verify the administrative fees and expenses of IA No. 1 and IA No. 2, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming IA No. 1 and IA No. 2 Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Prepayment Administrative Fees and Expenses"). 12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the reserve requirement (as defined in the Indenture) on the prepayment date, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed City ofR="Cvcm-,W Ap411,2001 Cawwvty Facilities Dlstry Na 2001-01 1A No. I Page 13 Resolution No. 01-086 Page 22 of 52 pursuant to the prepayment (the 'Reserve Fund Credit'. No Reserve Fund Credit shall be granted if reserve funds are below 100% of the reserve requirement. 13. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 3(a)or 3(b) by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit"). 14. The Special Tax Obligation is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 10, and 11, less the amounts computed pursuant to paragraphs 12 and 13(the"Prepayment Amount"). 15. From the Prepayment Amount, the sum of the amounts computed pursuant to paragraphs 4, 5, 10, 12, and 13 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make Debt Service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by CFD No. 2001-01. The Prepayment Amount may be sufficient to redeem an amount other than a $5,000 increment of IA No. 1 and IA No. 2 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 redeem IA No- 1 and IA No. 2 Bonds be used with the next prepayment of IA No. 1 and IA No. 2 Bonds. The CFD Administrator will confirm that all previously levied Special taxes have been paid in full. With respect to any Assessor's Parcel that is prepaid in full, once the CFD Administrator has confirmed that all previously levied Special taxes have been paid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Taxes and the release of the Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes and IA No. 2 Maximum Special Taxes that may be levied on Taxable Property and IA No. 2 Taxable Property, respectively, after the proposed prepayment is at least 1.1 times the maximum annual Debt Service on all Outstanding Bonds. 2. Prepayment in Part The Special Tax on an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Final Mapped Property or Undeveloped Property for which a C'iY qfRwid"C—� Aprd 11, 2001 Cavrravriry Facilir Diana Na 2001-01 IA No. 1 Page 14 Resolution No. 01-086 Page 23 of 52 building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section VIA; except that a partial prepayment shall be calculated according to the following formula: PP=PExF. These terms have the following meaning: PP= the partial prepayment PE= the Prepayment Amount calculated according to Section VIA F= the percentage by which the owner of the Assessor's Parcel(s)is partially prepaying the Special Tax. The owner of any Assessors Parcel who desires such prepayment shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Special Tax, (ii) the percentage by which the Special Tax shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax for an Assessors Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Section VIA, and(ii) indicate in the records of CFD No. 2001-01 that there has been a partial prepayment of the Special Tax and that a portion of the Special Tax with respect to such Assessors Parcel, equal to the outstanding percentage(1.00- F)of the remaining Maximum Annual Special Tax, shall continue to be levied on such Assessor's Parcel pursuant to Section IV. VII. TERM OF "SPECIAL TAX" The Special Tax shall be levied for a period not to exceed fifty years commencing with Fiscal Year 2002-2003, 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 IA No. 1 and IA No. 2 Bonds have been paid; and (ii) all facilities have been acquired and all reimbursements to the developer have been paid pursuant to the Acquisition and Construction Agreement. VIII. EXEMPTIONS No Special Tax shall be levied on up f Acres of Property Owner Association Property and (_, Acres of Public Property. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner City ofRtti C� April 11,2001 Coram *Facilities Diov No.1001-01 IA Na I Page 13 Resolution No. 01-086 Page 24 of 52 Association Property or Public Property, its status as a property exempt from the levy of Special Taxes will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Taxes under this section shall be subject to the levy of the Special Tax and shall be taxed as part of the fifth step in Section IV above, at up to 100% of the applicable Maximum Special Tax for Taxable Property Owner Association Property or Taxable Public Property. GtY of&md"C4e—x W April 11,2001 Cm?wWy Facilities Dicmt Na 2001-011A No. 1 Page 16 Resolution No. 01-086 Page 25 of 52 CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2001-01 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR IMPROVEMENT AREA NO. 2 A Special Tax shall be levied on all Taxable Property in Improvement Area No. 2 of the City of Rancho Cucamonga Community Facilities District No. 2001-01 (IA No. 2) and collected each Fiscal Year commencing in Fiscal Year 2002-2003 according to the tax liability determined by the Council, through the application of the rate and method of apportionment of the Special Tax set forth below. All Taxable Property shall be taxed to the extent and in the manner herein provided. I. DEFINITIONS This Rate and Method of Apportionment employs terms defined below and terns defined in the Rate and Method of Apportionment for Improvement Area No. 1 of the City of Rancho Cucamonga Community Facilities District No. 2001-01 ("IA No. 1"). When necessary, terms defined in the latter shall be distinguished from terms defined in the former by including the words "IA No. 1" prior to the defined term. The terms hereinafter set forth have the following meanings: "Acquisition and Construction Agreement" means the Acquisition and Construction Agreement for IA No. 1 and IA No. 2 that was approved by the Council on [ 1. 2001, as it may be modified or supplemented from time to time. "Acre or Acreage" means the land area of an Assessors Parcel as shown on an Assessors Parcel Map, or if the land area is not shown on an Assessors Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County parcel map. The square footage of an Assessor's Parcel is equal to the Acreage of such parcel multiplied by 43,560. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. "Administrative Fees" or "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of IA No. 1 and IA No. 2: the costs of computing the IA No. 1 and IA No. 2 Special Taxes; the costs of preparing the annual IA No. 1 Special Tax and IA No. 2 Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the IA No. 1 and IA No. 2 Special Taxes(whether by the City, the County or otherwise); the costs of remitting the IA No. 1 and IA No. 2 Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2001-01, , or any designee thereof complying with arbitrage rebate requirements; the costs to the City, CFD No. 2001-01, , or any City yfRm AC*--rW April 11,2001 Cm n,my Facilities Dm-rxt Na 2001-01 1A No. 2 Page 1 Resolution No. 01-086 Page 26 of 52 designee thereof complying with disclosure requirements of the City or CFD No. 2001-01 associated with applicable Federal and State securities laws and the Act; the costs associated with preparing IA No. 1 and/or IA No. 2 Special Tax disclosure statements and responding to public inquiries regarding the IA No. 1 and/or IA No. 2 Special Taxes; the costs to the City, CFD No. 2001-01, or any designee thereof related to an appeal of the IA No. 1 and/or the IA No. 2 Special Tax; the costs associated with the release of funds from an 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. 2001-01 for any other administrative purposes of IA No. 1 and/or IA No. 2, including attorney's fees and other costs related to commencing and pursuing any foreclosure of delinquent IA No. 1 and/or IA No. 2 Special Taxes. "Apartment Property" means any Assessors Parcel of Residential Property that consists of a building or buildings comprised of attached residential units available for rental, but not purchase, by the general public and which are under common management. "Assessor" means the Assessor of the County of San Bernardino. "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Class of Developed Property, as determined in accordance with Section III below. "Authorized Facilities"means those improvements, as listed on Exhibit"A"to the Acquisition and Construction Agreement. "Backup Special Tax" means the Special Tax applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section 111 below. "Bond Share" means the share of Bonds assigned to a Taxable Parcel as specified in Section VI. "Bonds"means any bonds or other indebtedness(as defined in the Act)of CFD No. 2001-01 for Improvement Area No. 1 or Improvement Area No. 2, whether in one or more series, secured by the levy of Special Taxes. "CFD No.2001-01"means the City of Rancho Cucamonga Community Facilities District No. 2001-01. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and for levying and collecting the Special Taxes. "City"means the City of Rancho Cucamonga, Califomia. City ofR-KhOC"COrXrg2 Aprd 11,2001 Corsm-4 Facilities D''srricz Na 200101 IA Na 2 page 2 Resolution No. 01-086 Page 27 of 52 "Council" means the City Council of the City of Rancho Cucamonga acting as the legislative body of the CFD under the Act. "County"means the County of San Bernardino, California. "Debt Service" means for each Fiscal Year, the total amount of principal and interest payable on any Bonds, notes or certificates of participation of the CFD during the calendar year commencing on January 1 of such Fiscal Year. "Developed Property" means for each Fiscal Year, all Taxable Property, exclusive of Taxable Property Owner Association Property or Taxable Public Property, for which a building permit for new construction or renovations was issued prior to January 1 of the previous Fiscal Year. "Final (Napped Property" means, for each Fiscal Year, all Taxable Property, exclusive of Developed Property, Taxable Property Owner Association Property or Taxable Public Property, which as of January 1 of the previous Fiscal Year was located within a Final Subdivision. The term "Final Mapped Property" shall include any parcel map or subdivision map or portion thereof that creates individual lots for which a building permit may be issued, including parcels that are designated as a remainder parcel. "Final Subdivision" means a subdivision of property within (i) a final map, or portion thereof approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) and recorded with the County Recorder that creates individual lots for which building permits may be issued, or(ii)for condominiums, a final map, or portion thereof, approved by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 that creates individual lots for which building permits may be issued. "Fiscal Year" means the period starting on July 1 and ending the following June 30. "IA No. 1 and IA No. 2 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. 2001-01 for both IA No. 1 and IA No. 2 under the Act. "Improvement Area No. 1" or "IA No. 1" means Improvement Area No. 1 of CFD No. 2001-01, as identified on the boundary map for CFD No. 2001-01. "Improvement Area No. 2" or "IA No. 2" means Improvement Area No. 2 of CFD No. 2001-01, as identified on the boundary map for CFD No. 2001-01. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which IA No. 1 and IA No. 2 Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Intermediate Special Tax" means the Special Tax applicable to each Assessor's Parcel of Final Mapped Property, as determined in accordance with Section III below. City ofRs 73-C-C r» April 11, 2001 Comaouty Facilities Distria Na 2001-011A No. 2 Page 3 Resolution No. 01-086 Page 28 of 52 "Land Use Class—means any of the classes listed in Table 1.. "Maximum Annual Special Tax" means the greatest amount of Special Tax, determined in accordance with Section III below, which may be levied in any Fiscal Year on any Assessors Parcel based on its Land Use classification. "Maximum Special Tax Revenue" means the sum of the Maximum Annual Special Tax which.may be levied on all of the Taxable Properties in the CFD. "Mufti-Family Residential (MFR)" means Residential property that shares a common wall between one or more residential units, or a parcel that contains more than one Single Family Residence. "Non-Residential Floor Area" means all of the square footage of usable area within the perimeter of a non-residential structure, not including any carport, walkway, garage, overhang, or similar area. The determination of Non- Residential Floor Area shall be made by reference to the building permit(s) issued for such Assessor's Parcel. "Non-Residential Property" means all Developed Property for which a building permit(s)was issued for a non-residential use. "Other Residential Property" means all Developed Property for which a building permit(s)was issued for a residential use. "Outstanding Bonds" means all IA No. 1 and IA No. 2 Bonds, which are deemed to be outstanding under the Indenture. "Parcel" means any County of San Bernardino Assessor's Parcel that is within the boundaries of the CFD, based on the equalized tax rolls of the County of San Bernardino as of January 1 in the prior Fiscal Year. "Partial Prepayment" means a prepayment of a portion of the Special Tax obligation applicable to a Parcel of Taxable Property as set forth in Section VI. "Property Owner Association Property" means any property within the boundaries of IA No. 2 owned in fee, dedicated to or subject to an easement benefiting a property owner association, including any master or sub-association. However, notwithstanding the above, any of such property which constitutes the "pad-area"located directly under a residential or non-residential building shall not be considered Property Owner Association Property. "Proportionately" or "Proportionate" means, for Developed Property and IA No. 1 Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is equal for all Assessor's Parcels of Developed Property and IA No. 1 Developed Property. For Undeveloped Property and IA No. 1 Undeveloped Property, 'Proportionately" means that the ratio of the actual Special Tax levies per Acre to the Maximum Special Tax per Acre is equal for all Assessors Parcels of Undeveloped Property and IA No. 1 Undeveloped Qt 4Rmr Cl-ar"gr Aprd 11, 2001 Cb>rramuy F"iau Dinh Na 2001-01 IA No. 2 page 4 Resolution No. 01-086 Page 29 of 52 Property. The term"Proportionately"may similarly be applied to other categories of Taxable Property as listed in Section IV below. "Public Property" means any property within the boundaries of IA No. 2 the ownership of which is transferred to a public agency on or after the date of formation of CFD No. 2001-02 and is used for rights-of-way or any other purpose and is owned by or dedicated to the federal government, the State of California, the County, the City or any other public agency; provided-however that any property owned by a public agency and leased to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. "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 passed by the Council authorizing the formation of CFD No. 2001-01. "Resolution of Issuance" means the Resolution passed by the Council authorizing the issuance of bonds. "RMA"means this Rate and Method of Apportionment. "Special Tax" means any tax levied within the CFD pursuant to the Act and this Rate and Method of Apportionment of Special Tax. "Special Tax Obligation"means the total obligation of a Taxable Parcel to pay the Special Tax for the remaining life of the CFD. "Special Tax Requirement" means that amount required in any Fiscal Year to: (i) pay Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) accumulate funds to pay directly for acquisition or construction of Authorized Facilities identified, and (vi) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (vii) a credit for funds available to reduce the annual Special Tax levy, as determined by the CFDAdministrator pursuant to the Indenture. "State"means the State of California. "Taxable Property"means all of the Assessors Parcels within the boundaries of IA No. 2, which are not exempt from the levy of Special Tax pursuant to law or Section VIII below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property within IA No. 1 and IA No. 2 that are not exempt from the levy of the Special Tax pursuant to Section VIII below. Gry of'Ran C—arr®W April ll,2001 C.or www Facilities Diam Na 2001-01 IA No. 2 Page 5 Resolution No. 01-086 Page 30 of 52 "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt from the levy of the Special Tax pursuant to Section VIII below. "Tax-Exempt Parcel"means, as of January 1 of each year,(i)any parcel owned by a governmental entity, or irrevocably offered for dedication to a governmental entity, (ii) any Parcel which constitutes public right-of-way or which is encumbered by an unmanned utility easement, making impractical its utilization for other than the purpose set forth in the easement, or(iii)any Parcel assigned a zero value by the San Bernardino County Assessor. Notwithstanding the foregoing, (i) a Taxable Parcel acquired by a public entity after the adoption of the Resolution of Formation by means of negotiated transaction, or by gift or devise, or by eminent domain proceedings, shall remain a Taxable Parcel, and (ii) if a public agency owning a Tax-Exempt Parcel, including a Tax-Exempt Parcel held in trust for any beneficiary, grants a leasehold or other possessory interest in the parcel to a non-exempt person or entity, the Special Tax shall be levied on the leasehold or possessory interest and shall be payable by the owner of the leasehold or possessory interest. Tax-Exempt Parcels include the specific parcels, or their successor parcels. "Trustee"means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Final Mapped Property, Taxable Property Owner Association Property, or Taxable Public Property. II. CLASSIFICATION OF PARCELS Each Fiscal Year, all Taxable Property within IA No. 2 shall be classified as Developed Property, Final Mapped Property, Taxable Property Owner Association Property, Taxable Public Property, or Undeveloped Property, and all such Taxable Property shall be subject to Special Taxes in accordance with the rate and method of apportionment determined pursuant to Sections III and IV below. QyoFRarrd"� Aprd 11,2001 Car°mo*Facilities Di¢ria Na 2001-01 IA No. 2 page6 Resolution No. 01-086 Page 31 of 52 III MAXIMUM SPECIAL TAX RATE 1. Developed Property (a). Maximum Special Tax The Maximum Special Tax for each Assessor's Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax or (ii) the amount derived by application of the Backup Special Tax. (b). Assigned Special Tax The Assigned Special Tax for each Land Use Class is shown in Table 1. TABLE 1 Assigned Special Taxes for Developed Property Improvement Area No.2 Land Use Description Assigned Special Tax Class 1 Apartment Property $237 per unit 2 Other Residential Property $10,768 per Acre 3 Non-Residential Property $0.63 per square foot of Non- Residential Floor Area (c). Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Assigned Specia: Tax levied on an Assessors Parcel shall be the sum of the Assigned Special Taxes for cl! Land Use rC!asses !ocated on that Assessor's Parcel. The Maximum Special Tax that can be levied on an Assessors Parcel shall be the sum of the Maximum Special Taxes that can be levied for all Land Use Classes located on that Assessor's Parcel derived by application of the Backup Special Tax. 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 Class as determined by reference to the site plan Qyq(Rxx Q"mrW Aprd 11,2001 Gn monty Facilities Di tw No.2001-01 1A No. 2 Page 7 Resolution No. 01-086 Page 32 of 52 approved for such Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final.. (d). Backup Special Tax The Backup Special Tax shall equal$10, 061 per Acre. 2. Final Mapped Property (a). Intermediate Special Tax The Intermediate Special Tax shall only be levied on Assessors Parcels of Final Mapped Property. To compute the Intermediate Special Tax attributable to a Final Subdivision, the Acreage of all Developed Property and Final Mapped Property within that Final Subdivision shall be multiplied by $7,500. The Intermediate Special Tax for each Assessor's Parcel of Final Mapped Property planned for residential development shall then be computed by dividing the Intermediate Special Tax attributable to the applicable Final Subdivision by the total number of Assessor's Parcels planned for residential development within that Final Subdivision (i.e., the number or residential lots). The Intermediate Special Tax for each Assessor's Parcel of Final Mapped Property in a Final Subdivision planned exclusively for non-residential development shall equal $7,500 multiplied by the Acreage of such Assessor's Parcel. If a Final Subdivision includes Assessors Parcels of Developed Property and Final Mapped Property planned for both residential and non-residential development, then the Intermediate Special Tax for each Assessor's Parcel of Final Mapped Property planned for residential development shall be calculated as described above based exclusively on the Acreage of the residential Final Mapped Property. Conversely, the Intermediate Special Tax for each Assessors Parcel of Final Mapped Property planned for non-residential development shall be calculated as described above based exclusively on the Acreage of the non-residential Final Mapped Property. The CFD Administrator shall allocate the Acreage of each Assessor's Parcel in the Final Subdivision to residential and non-residential development based on the projected use of each such Assessor's Parcel. (b). Maximum Special Tax The Maximum Special Tax for Final Mapped Property shall be $10,768 per Acre. City grRmrdo rug`rxW Aprd 11,2001 Caw-uty Facilities D-s na Na 2001-011A No. 2 page 8 Resolution No. 01-086 Page 33 of 52 3. Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property The Maximum Special Tax for Taxable Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $10,768 per Acre. IV. APPORTIONMENT OF SPECIAL TAX For each Fiscal Year the Council shall determine the Special Tax Requirement and levy the Special Tax, taking into consideration the levy of the IA No. 1 Special Tax, until the amount of Special Taxes and IA No. 1 Special Taxes 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 Assigned Special Tax; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 1 RMA, the IA No. 1 Special Tax shall be levied on each Assessors Parcel of IA No. 1 Developed Property in an amount equal to 100% of the applicable IA No. 1 Assigned Special Tax; PP e 9 P 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 on each Assessors Parcel of Final Mapped Property at up to 100% of the Intermediate Special Tax for Final Mapped Property; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 1 RMA, the IA No. 1 Special Tax shall be levied on each Assessor's Parcel of IA No. 1 Final Mapped Property at up to 100% of the IA No. 1 Intermediate Special Tax for IA No. 1 Final Mapped Property, with the levy on Final Mapped Property and IA No. 1 Final Mapped Property being Proportionate; Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax shall be levied on each Assessor's Parcel of Undeveloped Property at up to $7,500 per Acre; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 1 RMA, the IA No. 1 Special Tax shad be levied on each Assessors Parcel of IA No. 1 Undeveloped Property at up to$7,500 per Acre, with the levy on Undeveloped Property and IA No. 1 Undeveloped Property being Proportionate; Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, the Special Tax shall be levied on each Assessor's Parcel of Final Mapped Property and Undeveloped Property at up to 100% of the Maximum Special Tax for Final Mapped Property and Undeveloped Property; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 1 RMA, the IA No. 1 Special Tax shall be levied on each Assessors Parcel of IA No. 1 Final Mapped Property and (In'ofR-mbo April 11,2001 Car mo*Facilites District Na 2001-01!A No. 2 Page 9 Resolution No. 01-086 Page 34 of 52 IA No. 1 Undeveloped Property at up to 100% of the IA No, 1 Maximum Special Tax for IA No. 1 Final Mapped Property and IA No. 1 Undeveloped Property, with the levy on Final Mapped Property and Undeveloped Property and IA No. 1 Final Mapped Property and IA No. 1 Undeveloped Property being Proportionate; Fifth: If additional monies are needed to satisfy the Special Tax Requirement after the first four steps have been completed, then the levy of the Special Tax on each Assessor's Parcel of Developed Property whose Maximum Special Tax is determined through the application of the Backup Special Tax shall be increased in equal percentages from the Assigned Special Tax up to the Maximum Special Tax for each such Assessors Parcel; and the Council shall be noted by the CFD Administrator that under the terms of the IA No. 1 RMA, the levy of the IA No. 1 Special Tax on each Assessor's Parcel of IA No. 1 Developed Property whose IA No. 1 Maximum Special Tax is determined through the application of the IA No. 1 Backup Special Tax shall be increased in equal percentages from the IA No. 1 Assigned Special Tax up to the IA No. 1 Maximum Special Tax for each such Assessor's Parcel, with the levy on Developed Property and IA No. 1 Developed Property being Proportionate; Sixth: If additional monies are needed to satisfy the Special Tax Requirement after the first five steps have been completed, then the Special Tax shall be levied on each Assessor's Parcel of Taxable Property Owner Association Property or Taxable Public Property at up to the Maximum Special Tax for Taxable Property Owner Association Property or Taxable Public Property; and the Council shall be notified by the CFD Administrator that under the terms of the IA No. 1 RMA, the IA No. 1 Special Tax shall be levied on each Assessor's Parcel of IA No. 1 Taxable Property Owner Association Property or IA No. 1 Taxable Public Property at up to the IA No. 1 Maximum Special Tax for IA No. 1 Taxable Property Owner Association Property or IA No. 1 Taxable Public Property, with the levy on Taxable Property Owner Association Property or Taxable Public Property and IA No. 1 Taxable Property Owner Association Property or IA No. 1 Taxable Public Property being Proportionate. Notwithstanding the above the Council may, in any Fiscal Year, levy Proportionately less than 100% of the Assigned Special Tax and the IA No. 1 Assigned Special Tax in step one of Section IV(above), when (i) the Council is no longer required to levy a Special Tax pursuant to steps two through six above and the Council is no longer required to levy an IA No. 1 Special Tax pursuant to steps two through six in Section IV of the IA No. 1 RMA in order to meet the Special Tax Requirement; (ii) all authorized IA No. 1 and IA No. 2 Bonds have already been issued or the Council has covenanted that it will not issue any additional IA No. 1 and IA No. 2 Bonds(except refunding bonds)to be supported by Special Taxes and IA No. 1 Special Taxes; and (iii) all Authorized Facilities have been constructed and/or acquired. 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 IA No. 1 or IA No. 2, except for those Residential Properties whose owners are also delinquent or in default on their City gfRoxkoC—aApril 11,2001 C"mwuty Facilities Dw is Na 2001-011A No.2 page 10 Resolution No. 01-086 Page 35 of 52 Special Tax payments for one or more other properties within IA No. 1 or IA No. 2. V. MANNER OF COLLECTION Collection of the Special Tax shall be by the County in the same manner as ordinary ad valorem property taxes are collected and the Special Tax shall be subject to the same penalties and the same lien priority in the case of delinquency as ad valorem taxes; provided, however, that the Council may provide in the Indenture or in the Resolution of Issuance for (i) other means of collecting the Special Tax, including direct billings thereof to the property owners and(ii)judicial foreclosure of delinquent Special Taxes. VI. DISCHARGE OF SPECIAL TAX OBLIGATION Property owners may prepay and permanently satisfy the Special Tax Obligation by a cash settlement with the City as permitted under Government Code Section 53344. Prepayment is permitted only under the following conditions: The following definition applies to this Section VI: "CFD Public Facilities Costs" means either$10,500,000 in 2001 dollars, which shall increase by the Construction Inflation Index on July 1, 2002, and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to acquire or construct the Authorized Facilities to be financed by IA No. 1 and IA No. 2 under the authorized Mello-Roos financing program for CFD No. 2001-01, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more IA No. 1 and IA No. 2 Bonds (except refunding bonds)to be supported by Special Taxes and IA No. 1 Special Taxes. "Construction Fund" means the fund (regardless of its name) pursuant to the Indenture to hold funds, which are currently available for expenditure to acquire or construct the Authorized Facilities. "Construction Inflation Index" means the annual percentage change in the Engineering News-Record Building Cost Index for the City of Los Angeles, measured as of the calendar year, which ends in the previous Fiscal Year. In the event this index ceases to be published, the Inflation Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. "Future Facilities Costs" means the CFD Public Facilities Costs minus(i)costs previously paid from the Construction Fund to acquire or construct the Authorized Facilities, (ii) monies currently on deposit in the Construction Fund, and (iii) monies currently on deposit in an escrow or other earmarked fund that are expected to be available to finance CFD Public Facilities Costs. Gry cfRandn CurmrxrW Apn111, 2001 Camwmiy Faalri Dania Na 2001-01 IA No.2 Page 11 Resolution No. 01-086 Page 36 of 52 "Outstanding Bonds" means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following the current Fiscal Year. "Previously Issued Bonds" means all IA No. 1 and IA No. 2 Bonds that have been issued prior to the date of prepayment. 1. Prepayment in Full The Special Tax Obligation applicable to an Assessor's Parcel in IA No. 2 may be prepaid and the obligation of the Assessor's Parcel to pay any Special Tax 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 Assessors Parcel intending to prepay the Special Tax Obligation shall provide the CFD Administrator with written notice of intent to prepay. The CFD Administrator shall provide the owner with a statement of the Prepayment Amount for such Assessor's Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. Prepayment must be made not less than 60 days prior to any redemption date for the IA No. 1 and IA No. 2 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 Future Facilities Prepayment Amount 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.: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax and Backup Special Tax. For Assessors Parcels of Final Mapped Property or Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax and Backup Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has already City qrRmdnCjm-,. Aprd 11,2001 Co wza y Facilities District Na 2001-01 IA No. 2 pa&e 12 Resolution No. 01-086 Page 37 of 52 been issued for that Assessor's Parcel. For Assessor's Parcels of Undeveloped Property compute the Maximum Special Tax. 3. (a) Divide the Assigned Special Tax computed pursuant to paragraph 2 by the total estimated Assigned Special Taxes for IA No. 1 and IA No. 2 based on the Developed Properly Special Taxes and IA No. 1 Developed Property Special Taxes which could be levied in the current Fiscal Year on all expected development through build-out of IA No: 1 and IA No. 2 as determined by the CFD Administrator, excluding any Assessor's Parcels for which the Special Tax Obligation has been prepaid, and (b) Divide the Backup Special Tax or Maximum Special Tax computed pursuant to paragraph 2 by the total estimated Backup Special Taxes and IA No. 1 Backup Special Taxes of build-out for IA No. 1 and IA No. 2, excluding any Assessor's Parcels for which the Special Tax Obligation has been prepaid. 4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid(the "Bond Redemption Amount"). 5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium (expressed as a percentage), if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Prepayment Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 9. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Future Facilities Amount and the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 10. Take the amount computed pursuant to paragraph 8 and subtract the amount computed pursuant to paragraph 10(the"Defeasance Amount"). 11. Verify the administrative fees and expenses of IA No. 1 and IA No. 2, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming IA No. 1 and IA No. 2 Bonds, and the costs of recording any notices to evidence the City ofRando Gr anwln Apel 11,2001 Camam4 Facilities Datw Na 2001-017A No.2 Page 13 Resolution No. 01-086 Page 38 of 52 prepayment and the redemption (the "Prepayment Administrative Fees and Expenses"). 12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the reserve requirement (as defined in the Indenture) on the prepayment date, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the "Reserve Fund Credit ). No Reserve Fund Credit shall be granted if reserve funds are below 100% of the reserve requirement. 13 If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 3(a)or 3(b) by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit'). 14. The Special Tax Obligation is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 10, and 11, less the amounts computed pursuant to paragraphs 12 and 13(the"Prepayment Amount"). 15. From the Prepayment Amount, the sum of the amounts computed pursuant to paragraphs 4, 5, 10, 12, and 13 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make Debt Service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by CFD No. 2001-01. The Prepayment Amount may be sufficient to redeem an amount other than a $5,000 increment of IA No. 1 and IA No. 2 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 to redeem IA No. 1 and IA No. 2 Bonds with the next prepayment of IA No. 1 and IA No. 2 Bonds. The CFD Administrator will confirm that all previously levied Special taxes have been paid in full. With respect to any Assessor's Parcel that is prepaid in full, once the CFD Administrator has confirmed that all previously levied Special taxes have been paid, 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 Assessors Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes and IA No. 1 Maximum Special Taxes that may be levied on Taxable Property and IA No. 1 Taxable Property, respectively, after the proposed City afRa>u1nQrmrr W April 11,1001 Ca�Facilities Dwricz Na 2001-01 IA No. 2 Page 14 Resolution No. 01-086 Page 39 of 52 prepayment is at least 1.1 times the maximum annual Debt Service on all Outstanding Bonds. 2. Prepayment in Part The Special Tax on an Assessors Parcel of Developed Property, or an Assessor's Parcel of Final Mapped Property or Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section VIA; except that a partial prepayment shall be calculated according to the following formula: PP= PExF. These terms have the following meaning: PP= the partial prepayment Pr= the Prepayment Amount calculated according to Section HA F= the percentage by which the owner of the Assessor's Parcel(s)is partially prepaying the Special Tax. The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Special Tax, (ii) the percentage by which the Special Tax shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax for an Assessor's Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall(i) distribute the funds remitted to it according to Section VIA, and(ii)indicate in the records of CFD No. 2001-01 that there has been a partial prepayment of the Special Tax and that a portion of the Special Tax with respect to such Assessor's Parcel, equal to the outstanding percentage(1.00- F)of the remaining Maximum Annual Special Tax, shall continue to be levied on such Assessor's Parcel pursuant to Section IV. VII TERM OF "SPECIAL TAX" The Special Tax shall be levied for a period not to exceed fifty years commencing with Fiscal Year 2002-2003, 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 IA No. 1 and IA No. 2 Bonds have been paid; and (ii) all facilities have been acquired and all reimbursements to the developer have been paid pursuant to the Acquisition and Construction. Gty,fR—.1-Gamm-pa Apn111,2001 Gnmamity Facilities Dian Na 2001-01 1A No. 2 Page 15 Resolution No. 01-086 Page 40 of 52 VIII. EXEMPTIONS No Special Tax shall be levied on up (_� Acres of Property Owner Association Property and j_] Acres of Public Property. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or Public Property, its status as a property exempt from the levy of Special Taxes will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Taxes under this section shall be subject to the levy of the Special Tax and shall be taxed as part of the fifth step in Section IV above, at up to 100% of the applicable Maximum Special Tax for Taxable Property Owner Association Property or Taxable Public Property. G*yofRa &C"� Aprd 11,2001 Cmrru Facilities Disbict Na 2001-01 IA No. 2 Page 16 Resolution No. 01-086 Page 41 of 52 CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2001-01 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR IMPROVEMENT AREA NO. 3 A Special Tax shall be levied on all Taxable Property in Improvement Area No. 3 of the City of Rancho Cucamonga Community Facilities District No. 2001-01 and collected each Fiscal Year commencing in Fiscal Year 2002-2003 according to the tax liability determined by the Council, through the application of the rate and method of apportionment of the Special Tax set forth below. All Taxable Property shall be taxed to the extent and in the manner herein provided. t. DEFINITIONS This Rate and Method of Apportionment employs terms defined below and terms defined in the Rate and Method of Apportionment for Improvement Area No. 3 of the City of Rancho Cucamonga Community Facilities District No. 2001-01 (IA No. 3). 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 Assessors Parcel Map, or if the land area is not shown on an Assessors Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County parcel map. The square footage of an Assessor's Parcel is equal to the Acreage of such parcel multiplied by 43,560. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. "Administrative Fees" or "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of IA No. 3: the costs of computing the IA No. 3 Special Taxes; the costs of preparing the annual IA No. 3 Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the IA No. 3 (whether by the City, the County or otherwise); the costs of remitting the IA No. 3 Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2001-01, or any designee thereof complying with arbitrage rebate requirements; the costs to the City, CFD No. 2001-01, or any designee thereof complying with disclosure requirements of the City or CFD No. 2001-01 associated with applicable Federal and State securities laws and the Act; the costs associated with preparing IA No. 3 Special Tax disclosure statements and responding to public inquiries regarding the IA No. 3 Special Taxes; the costs to the City, CFD No. 2001-01, or any designee thereof related to an appeal of the IA No. 3 Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party City ofRmrdnQ"r"w Apn111,2001 Cnrm"V Facdwes District Na 2001-01 IA No.3 Page I Resolution No. 01-086 Page 42 of 52 expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2001-01 for any other administrative purposes of IA No. 3, including attorney's fees and other costs related to commencing and pursuing any foreclosure of delinquent IA No. 3 Special Taxes. "Assessor"means the Assessor of the County of San Bernardino. "Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an assigned Assessor's parcel number. "Authorized Facilities" means those improvements, as listed in the Resolution of Formation. "Bond Share" means the share of Bonds assigned to a Taxable Parcel as specified in Section VI. "Bonds" means any bonds or other indebtedness(as defined in the Act)of CFD No. 2001-01 for Improvement Area No. 3, whether in one or more series, secured by the levy of Special Taxes. "CFD No. 2001-01"means the City of Rancho Cucamonga Community Facilities District No. 2001-01. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and for levying and collecting the Special Taxes. "City"means the City of Rancho Cucamonga, California. "Council" means the City Council of the City of Rancho Cucamonga acting for the CFD under the Act. "County"means the County of San Bernardino,California. "Debt Service" means for each Fiscal Year, the total amount of principal and interest payable on any Bonds, notes or certificates of participation of the CFD during the calendar year commencing on January 1 of such Fiscal Year. "Fiscal Year" means the period starting on July 1 and ending the following June 30. "IA No. 3 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. 2001-01 for IA No. 3 under the Act. "Improvement Area No. 3" means Improvement Area No. 3 of CFD No. 2001- 01, as identified on the boundary map for CFD No. 2001-01. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which IA No. 3 Bonds are issued, as modified, amended City ofRmid C"«r Aprd 11,1001 CoTrisvrity Facilities District Na 2001-01 1A No.3 paw 2 Resolution No. 01-086 Page 43 of 52 and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Maximum Annual Special Tax" means the greatest amount of Special Tax, determined in accordance with Section III below, which may be levied in any Fiscal Year on any Assessor's Parcel based on its Land Use classification. "Maximum Special Tax Revenue" means the sum of the Maximum Annual Special Tax which may be levied on all of the Taxable Properties in the CFD. "Original Parcel" means the Assessor Parcel's existing at the formation of the CFD, as depicted on the Boundary Map as recorded with the County Recorder, County of Riverside, State of California "Outstanding Bonds" means all IA No. 3 Bonds, which are deemed to be outstanding under the Indenture. "Parcel" means any County of San Bernardino Assessor's Parcel that is within the boundaries of the CFD, based on the equalized tax rolls of the County of San Bernardino as of January 1 in the prior Fiscal Year. "Parcel's Allocated Share" means the Maximum Annual Special Tax for a Parcel divided by the Maximum Annual Special Tax Revenue. "Partial Prepayment" means a prepayment of a portion of the Special Tax Obligation applicable to a Parcel of Taxable Property, as set forth in Section VI. "Payoff Parcel"means any taxable Developed Parcel for which a prepayment of the Special Tax Obligation is being calculated pursuant to Section VI. "Proportionately" or "Proportionate" means, for Developed Property and IA No. 3 Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is equal for all Assessor's Parcels of Developed Property and IA No. 3 Developed Property. For Undeveloped Property and IA No. 3 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 and IA No. 3 Undeveloped Property. The term "Proportionately" may similarly be applied to other categories of Taxable Property as listed in Section IV below. "Public Property" means any property within the boundaries of IA No. 3 that is transferred to a public agency on or after the date of formation of CFD No. 2001- 01 and is used for rights-of-way or any other purpose and is owned by or dedicated to the federal government, the State of California, the County, the City or any other public agency; provided however that any property owned by a public agency and leased to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. "Redevelopment Agency" means the Redevelopment Agency of the City of Rancho Cucamonga acting for the CFD under the Act. Gly ofR--6 G—r-W April 11, 2001 Cmrma*FmiliriesDistria Na 2001-011A No.3 Page Resolution No. 01-086 Page 44 of 52 "Reserve Fund Share" means the total Reserve Fund amount multiplied by the Parcel's Allocated Share. "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 passed by the Council authorizing the formation of CFD No. 2001-01. "Resolution of Issuance" means the Resolution passed by the council authorizing the issuance of bonds. "RMA"means this Rate and Method of Apportionment. "Special Tax" means any tax levied within the CFD pursuant to the Act and this Rate and Method of Apportionment of Special Tax. "Special Tax Collection Schedule" means the document prepared by the Finance Director and sent to the County Auditor for use in collecting the Special Tax each Fiscal Year. DrvQueryFontTree(): i "Special Tax Obligation" means the total obligation of a Taxable Parcel to pay the Special Tax for the remaining life of the CFD. "Special Tax Requirement" means that amount required in any Fiscal Year to: (i) pay Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) accumulate funds to pay directly for acquisition or construction of Authorized Facilities identified, and (vi) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied 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. "Successor Parcel" means a Parcel created by Subdivision, lot line adjustment, or parcel map from an Original or Successor Parcel "Taxable Acreage" is the area within each Parcel as shown on the Assessor Parcel Map The Taxable Acreage for each Zone is described in Section III, Table 1. (ly qr'Rmuin C---x W April ll,2001 Gmm"i ,Fa ddi,Ih3mct Na 2001-01 IA No.3 page 4 Resolution No. 01-086 Page 45 of 52 "Taxable Property"means all of the Assessors Parcels within the boundaries of IA No. 3, which are not exempt from the levy of the Special.Tax pursuant to law or Section VIII below. "Taxable Public Property" means all Assessors Parcels of Public Property that are not exempt from the levy of the Special Tax pursuant to Section VIII below. "Tax-Exempt Parcel"means, as of January 1 of each year, (i)any parcel owned by a governmental entity, or irrevocably offered for dedication to a governmental entity, (ii) any Parcel which constitutes public right-of-way or which is encumbered by an unmanned utility easement, making impractical its utilization for other than the purpose set forth in the easement, or(iii)any Parcel assigned a zero value by the San Bernardino County Assessor. Notwithstanding the foregoing, (i) a Taxable Parcel acquired by a public entity after the adoption of the Resolution of Formation by means of negotiated transaction, or by gift or devise, or by eminent domain proceedings, shall remain a Taxable Parcel, and (ii) if a public agency owning a Tax-Exempt Parcel, including a Tax-Exempt Parcel held in trust for any beneficiary, grants a leasehold or other possessory interest in the parcel to a non-exempt person or entity, the Special Tax shall be levied on the leasehold or possessory interest and shall be payable by the owner of the leasehold or possessory interest. Tax-Exempt Parcels include the specific parcels, or their successor parcels. "Trustee"means the trustee or fiscal agent under the Indenture. "Zone" means that area that is further described on the Boundary Map of CFD 2001-01. II. CLASSIFICATION OF PARCELS Each Fiscal Year, all Taxable Property within each Zone of IA No. 3 shall be classified as Taxable or Non-Taxable Property and all such Taxable Property shall be subject to the levy of Special Taxes in accordance with the rate and method of apportionment determined pursuant to Sections III and IV below. GiyofRariA April 11,2001 Cawwnry Fmdit a Dion No.2001-01 1A No.3 Page 5 Resolution No. 01-086 Page 46 of 52 III. MAXIMUM SPECIAL TAX RATE A. The Maximum Special Tax and Taxable Acreage for Taxable Property and Taxable Public Property for each Zone is shown in Table 1. TABLE 1 07—Leggio one Taxable Bond Maximum Tax Acreage Share Per Acre RDA 55.00 41.93% $17,193.82 Lyons 6.37 0.37% $506.78 olombero 8.33 3.12% $3,382.76 Sun-Rich 5.75 1.14% $1,78172 Leggio East 14.55 11.98% $7,466.66 ierotti 31.25 20.68% $5,999.74 eggio South 42.74 1 13.590/6 $1,963.45 B. Assignment of MaximumAnnual Special Tax to Successor Parcels. The CFD Administrator shall assign the Maximum Annual Special Tax to each Successor Parcel as follows: 1) When an Original or Successor Parcel is subdivided, the CFD Administrator shall classify the resulting Successor Parcels as Taxable Parcels or Tax-Exempt parcels using the definitions in Section I. 2) If the Successor Parcel is a Taxable Parcel: calculate the percentage of the taxable Successor Parcel's square footage to the total square footage for all taxable Successor Parcels of that Original or Successor Parcel; then, multiply this percentage by the Maximum Annual Special Tax assigned to the previous Original Parcel or Successor Parcel. The result of this calculation is the Maximum Annual Special Tax for the Taxable Successor Parcel. C. Taxable Parcels Acquired by a Public Agency Taxable Parcels that are acquired by a public agency after the CFD is formed will remain subject to the applicable Special Tax unless the Special Tax obligation is satisfied pursuant to Section 53317.5 of the Government Code. An exception to this may be made if the Public use planned for a Public Parcel within the CFD is relocated to a Taxable Parcel and the previously Tax-Exempt Parcel of comparable acreage becomes a Taxable Parcel. This trading of Parcels will be permitted to the extent that there is no net loss in Maximum Special Tax. It is anticipated Q�Y gfRandA Q_rx'&r Aprd 11, 2001 Coma&uty Facilities District No.2001-011A No.3 PaW6 Resolution No. 01-086 Page 47 of 52 that the City will acquire approximately 55 Acres that will be subject to the Special Tax. IV. APPORTIONMENT OF SPECIAL TAX For each Fiscal Year the Council shall determine the Special Tax Requirement and levy the Special Tax, taking into consideration the levy of the IA No. 3 Special Tax, until the amount of Special Taxes and IA No. 3 Special Taxes 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 Taxable Property in Zones 2, 3, and 6 in an amount equal to 91% 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 on each Assessor's Parcel of Taxable Property in Zones 4, 5 and 7 in an amount equal to 91% of the applicable Maximum Tax; Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax shall be levied on each Assessor's Parcel of Taxable Property in Zone 1 in an amount equal to 91% if the applicable Maximum Tax. Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, the Special Tax shall be levied proportionately on each Assessor's Parcel of Taxable Property in all Zones up to 100% of the applicable Maximum 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 IA No. 3, except for those Residential Properties whose owners are also delinquent or in default on their Special Tax payments for one or more other properties within IA No. 3. V. MANNER OF COLLECTION Collection of the Special Tax shall be by the County in the same manner as ordinary ad valorem property taxes are collected and the Special Tax shall be subject to the same penalties and the same lien priority in the case of delinquency as ad valorem taxes; provided, however, that the Council may provide in the Indenture or in the Resolution of Issuance for (i) other means of collecting the Special Tax, including direct billings thereof to the property owners; and(ii)judicial foreclosure of delinquent Special Taxes. Cay o/Rmuln W Apel 11,2001 QnmamiV Fa dilia Dist v Na 2001-01 IA No.3 Page 7 Resolution No. 01-086 Page 48 of 52 A DISCHARGE OF SPECIAL TAX OBLIGATION Property owners may prepay and permanently satisfy the Special Tax Obligation by a cash settlement with the City as permitted under Government Code Section 53344. Prepayment is permitted only under the following conditions: The following definition applies to this Section VI: "CFD Public Facilities Costs" means either $8,000,000 in 2001 dollars, which shall increase by the Construction Inflation Index on July 1, 2002, and on each July 1 thereafter, or such lower number as (i)shall be determined by the CFD Administrator as sufficient to acquire or construct the Authorized Facilities to be financed by IA No. 3 under the authorized Mello-Roos financing program for CFD No. 2001-01, or (ii)shall be determined by the Council concurrently with a covenant that it will not issue any more IA No. 3 Bonds (except refunding bonds) to be supported by Special Taxes and IA No. 3 Special Taxes. "Construction Fund" means the fund (regardless of its name) established pursuant to the Indenture to hold funds, which are currently available for expenditure to acquire or construct the Authorized Facilities. "Construction Inflation Index" means the annual percentage change in the Engineering News-Record Building Cost Index for the City of Los Angeles, measured as of the calendar ,year,which ends in the previous Fiscal Year. In the event this index ceases to be published, the Inflation Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. "Future Facilities Costs" means for each Zone the CFD Public Facilities Costs minus(i)costs previously paid from the Construction Fund to acquire or construct the Authorized Facilities, (ii) monies currently on deposit in the Construction Fund, and (iii) monies currently on deposit in an escrow or other earmarked fund that are expected to be available to finance CFD Public Facilities Costs. "Outstanding Bonds" means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following the current Fiscal Year. Each Zone's Bond Share is shown as a percentage of the total Bonds in Table 1. "Previously Issued Bonds" means all IA No. 3 Bonds that have been issued prior to the date of prepayment. 1. Prepayment in Full The Special Tax Obligation applicable to an Assessor's Parcel in IA No. 3 may be prepaid and the obligation of the Assessor's Parcel to pay any Special Tax permanently satisfied as described herein, provided that a prepayment may be City ojRmdr G"r"W Aprd 11,1001 Car l-uty F",t Dudia Na 2001-011A No.3 Page 8 Resolution No. 01-086 Page 49 of 52 made with respect to a particular Assessor's Parcel only if there are no delinquent Special Taxes with respect to such Assessors Parcel at the time of prepayment. An owner of an Assessors Parcel intending to prepay the Special Tax Obligation shall provide the CFD Administrator with written notice of intent to prepay. The CFD Administrator shall provide the owner with a statement of the prepayment amount for such Assessor's Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. Prepayment must be made not less than 60 days prior to any redemption date for the IA No. 3 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 Future Facilities Prepayment Amount 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.: 1. Confine that no Special Tax delinquencies apply to such Assessors Parcel. 2. Determine the Maximum Special Tax for the Payoff Parcel based on the assignment of the Maximum Special tax described in Section III above. 3. Divide the Maximum Special Tax computed pursuant to paragraph 2 by the total Maximum Special Taxes for the Zone in which the Payoff Parcel is located to arrive at the Parcel's Allocated Share. 4. Determine the Bond Redemption Amount for the Payoff Parcel by multiplying the Allocated Share from paragraph 3 by the total amount of Outstanding Bonds issued by the CFD applicable to the Zone in which the Payoff Parcel is located. 5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium (expressed as a percentage), if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. City ofRwxbo G.rcmre April 11,2001 t:arrrwwrity Faafities Diu[ Na 1001-01 1A No.3 Page 9 Resolution No. 01-086 Page 50 of 52 7. Multiply the Allocated Share by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the"Future Facilities Amount Prepayment"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 9. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Future Facilities Amount and the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment_ 10. Take the amount computed pursuant to paragraph 8 and subtract the amount computed pursuant to paragraph 9(the"Defeasance Amount"). 11. Verify the administrative fees and expenses of IA No. 3, including the costs of computation of the prepayment, the Payoff Parcel's proportionate share of the costs of formation of the CFD if Bonds have not been sold, the costs to invest the prepayment proceeds, the costs of redeeming IA No. 3 Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Prepayment Administrative Fees and Expenses"). 12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the reserve requirement (as defined in the Indenture) on the prepayment date, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the "Reserve Fund Credit'. No Reserve Fund Credit shall be granted if reserve funds are below 100% of the reserve requirement. 13. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following The current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the Allocated Share by the expected balance in the capitalized interest fund after such first interest and/or principal payment(the"Capitalized Interest Credit"). 14. The Special Tax Obligation is equal to the sium of the amounts computed pursuant to paragraphs 4, 5, 7, 10, and 11" less the amounts computed pursuant to paragraphs 12 and 13("Prepayrnent Amount"). 15. From the Prepayment Amount, the sum of the amounts computed pursuant to paragraphs 4, 5, 10, 12, and 13 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make Debt Service payments. The amount computed pursuant to paragraph 7 shall be deposited into the e Gry Rmnlx,0-,.ga AP11,2001 Corsi¢mitY Facilities Di¢ncz Na 2001-0]IA No.3 Pale 10 Resolution No. 01-086 Page 51 of 52 Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by CFD No. 2001-01. The Prepayment Amount may be sufficient to redeem an amount other than a $5,000 increment of IA No. 3 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 to redeem IA No. 3 Bonds with the next prepayment of IA No. 3 Bonds. The CFD Administrator will confirm that all previously levied Special taxes have been paid in full. With respect to any Assessor's Parcel that is prepaid in full, once the CFD Administrator has confirmed that all previously levied Special taxes have been paid, 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 Assessors Parcel, and the obligation of such Assessors Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes and IA No. 3 Maximum Special Taxes that may be levied on Taxable Property and IA No. 3 Taxable Property, respectively, after the proposed prepayment is at least 1.1 times the maximum annual Debt Service on all Outstanding Bonds. 2. Prepayment in Part The Special Tax on an Assessor's Parcel of Developed Property, or an Assessor's Parcel of Final Mapped Property or Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section VIA; except that a partial prepayment shall be calculated according to the following formula: PP= PExF. These terms have the following meaning: PP= the partial prepayment P,= the Prepayment Amount calculated according to Section VIA F= the percentage by which the owner of the Assessor's Parcel(s) is partially prepaying the Special Tax. The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of(i) such owner's intent to partially prepay the Special Tax, (ii) the percentage by which the Special Tax shall be prepaid, and (iii)the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the City ofRmon C'ruvmngz Aprd 11,2001 (brrraovry Facilities Diuria Na 2001-01 IA No.3 Page 11 Resolution No. 01-086 Page 52 of 52 Special Tax for an Assessor's Parcel within thirty(30)days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Section VIA. and (ii) indicate in the records of CFD No. 2001-01 that there has been a partial prepayment of the Special Tax and that a portion of the Special Tax with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Annual Special Tax, shall continue to be levied on such Assessor's Parcel pursuant to Section IV. VII TERM OF "SPECIAL TAX" The Special Tax shall be levied for a period not to exceed fifty years commencing with Fiscal Year 2002-2003, 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 IA No. 3 Bonds have been paid; and (ii)all facilities have been acquired and all reimbursements to the developer have been paid pursuant to the Acquisition and Construction Agreement. Crry°fR` -u q Cur� Aprd 11,2001 O"noWy Favi mis DBnict No.2001-01 IA Na 3 Page 12