HomeMy WebLinkAboutResolution - 2371 STATE OF CALIFORNIA ) RESOLUTION NO. 2371
COUNTY OF RIVERSIDE) SS
CITY OF SAN JACINTO }
RESOLUTION
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SAN JACINTO ESTABLISHING CITY OF
SAN JACINTO COMMUNITY FACILITIES DISTRICT
NO. 2002-1 (RANCHO SAN JACINTO, PHASE 2)
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,
AND ESTABLISHING THE BOUNDARIES
THEREOF
WHEREAS, the City of San Jacinto (the "City") has formed its
Community Facilities District No. 2 ("CFD No. 2") and, in connection therewith,
has 'issued its 1989 Special Tax Bonds in the original principal amount of
$26,000,000 (the "1989 Bonds") which are secured by special taxes levied by the
City on property within the boundaries of CFD No. 2, and because of the
delinquent payment of the special taxes levied in CFD No. 2, the 1989 Bonds are
currently in default in the payment of the principal and interest with respect
thereto;
WHEREAS, the City Council (the "City Council') of the City has
heretofore adopted Resolution No. 2364 stating that a community facilities district
to be known as "City of San Jacinto Community Facilities District No. 2002-1
(Rancho San Jacinto, Phase 2), County of Riverside, State of California" (the
"District"), is proposed to be established pursuant to Chapter 2.5 (commencing
with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government
Code, commonly known as the "Mello-Roos Community Facilities Act of 1982"
(the "Act"), and fixing the time and place for a public hearing on the
establishment of the District; and
WHEREAS, the Community Facilities District is proposed to be
formed for the purposes of (a) refinancing and causing the redemption of a
portion of outstanding bonds issued to finance construction of certain public
facilities in CFD No. 2 and to cause the special taxes with respect to CFD No. 2
levied on taxable real property within the proposed boundaries of the District to
be deemed paid and satisfied, and (b) paying the incidental expenses associated
with the creation of the proposed District, issuance of bonds thereof, the
determination of the amount and collection of the special taxes, and the payment
of special taxes, and costs otherwise incurred in order to carry out the authorized
purposes of the proposed District;
WHEREAS, notice was published and mailed to the owner of all of
the property in the District as required by law relative to the intention of the City
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Council to establish the District, ,to levy,special taxes therein, to provide public
facilities therein and to incur bonded indebtedness by the District, and of the time
and place of the public hearing; and
WHEREAS, on September 10, 2002, at the time and place
specified in the published and mailed notices, the City Council conducted a
public hearing as required by law relative to the establishment of the'District, the
levy of special taxes therein, the provision of public facilities therein, and the
incurring of a bonded indebtedness by District; and
WHEREAS,'prior to the commencement of the hearing there was
filed with the City Council a report (the "Report") required by Section 53321.5 of
the California Government Code; and
WHEREAS, at the public hearing all persons desiring to be heard
on all matters pertaining to the establishment of the District, the levy of the spe-
cial taxes, the provision of public facilities therein, and the incurring of the bonded
indebtedness therefor were heard, and a full and fair hearing was held; and
WHEREAS, at the public hearing evidence was presented to the
City Council on the matters before it, and the City Council at the conclusion of the
hearing was fully advised as to all matters relating to the establishment of the
District, the levy of the special taxes, the provision of public facilities therein and
the incurring of the bonded indebtedness therefor; and
` WHEREAS, the City Council may therefore proceed to establish
the District; and
WHEREAS, the City Clerk has advised the City Council that she
has received a statement from the Registrar of Voters of the County of Riverside
that no persons are registered to vote in the territory of the District;
NOW, THEREFORE, BE IT RESOLVED, determined and ordered
by the City Council of the City of San Jacinto, County of Riverside, State of
California, as follows:
Section 1. Findings. The City Council finds as follows:
(a) All of the preceding recitals are true and correct;
(b) On September 10, 2002, pursuant to notice thereof duly
given as provided by law, the City Council conducted a public hearing with
respect to the establishment of the District, the incurring of bonded indebtedness
by and for the District and the annual levying of specified special taxes on the
taxable property within the District to pay principal of and interest on bonds to be
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issued by and for the District to finance the public facilities and other obligations
which are described in Section 3 hereof;
(c) The boundary map of the District was recorded on August
161 2002, pursuant to Sections 3111 and 3113 of the California ,'Streets and
Highways Code, at pages 100-102 in Book 51 of Maps of Assessment and
Community Facilities.Districts, and as Instrument No2002-453120, in the official
records of the County of Riverside;
(d) All prior proceedings with respect to the establishment of the
District prior to and during the hearing with 'respect to the establishment of the
District which was conducted by the City Council on September 10, 2002, were
valid and in conformity with the requirements of the Act;
(e) No written protests were received at or prior to the time of
the hearing, against the establishment of the District; or the levying of the special
taxes, or the incurring of bonded indebtedness by the District, and the special
taxes have, therefore, not been eliminated by majority protest pursuant to
Section 53324 of the California Government Code,
(f) The City Council is, therefore, authorized to adopt a resolu-
tion of formation pursuant to Section 53325.1 of the California Government Code
for the establishment of City of San Jacinto Community Facilities District
No. 2002-1 (Rancho San Jacinto, Phase 2), County of Riverside, State of
California, and the District should be established; and
(g) Twelve (12) persons have not been registered to vote within
the territory of the District for each of the 90 days preceding the close of the
protest hearing on September 10; 2002, and pursuant to Section 53326 of the
California Government Code, the vote in the consolidated special elections
provided for in Section 10 hereof shall, therefore, be by the landowners of the
District whose property would be subject to the special taxes if they were levied
at the time of the election, and each landowner shall have one vote for each
acre, or portion thereof, which he or she owns within the District which would be
subject to the proposed special taxes if they were levied at the time of the
election.
Section 2. Establishment of District. City of San Jacinto
Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2), County
of Riverside, State of California, is hereby established. The boundaries of the
District are set forth and shown on the map entitled "Boundaries of City of San
Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2),
County of Riverside, State of California," which is on file with the City Clerk, and
those boundaries are hereby established.
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Section 3. Types of Facilities; Incidental Expenses.
(a) The types of;public facilities proposed to be provided for and
financed by the District are:
�r
(1) The cost to refinance and defease a portion of special
tax bonds issued with respect to CFD No. 2; and
(2) To cause the special taxes levied with respect to CFD
No. 2 on taxable real property within the boundaries
of the District to be deemed paid and satisfied.
(b) The incidental expenses which will be incurred are all costs
associated with the creation of the District, issuance of the bonds thereof, the
determination of the amount of and collection of special taxes, and the payment
of special taxes, and costs otherwise incurred in order to carryout the authorized
purposes of the District.
Section 4. Special Taxes. Except where funds are otherwise
available, special taxes sufficient to pay for all of the facilities and to pay the
principal of and interest on the bonds of the District, to establish and maintain a
reserve fund, and the annual administrative expenses of the City and the District
in determining, apportioning, levying and collecting such special taxes, and in
paying the principal of and interest on such bonds and the costs of registering,
exchanging and transferring such bonds, secured by the recordation of a
continuing lien against all taxable or nonexempt property in the District, shall be
annually levied within the District.
The rate and method of apportionment of special taxes to be levied
on parcels of taxable property to pay the principal of and interest of the bonds of
the District which may be issued to cause the refunding of certain bonds in CFD
No. 2 and to establish and maintain a reserve fund, shall be as set forth in
Exhibit "A" attached hereto and by this reference made a part hereof.
The maximum amounts of special taxes which may be levied in any
year on parcels within the District which are used for private residential purposes
("Residential Parcels") are specified in dollar amounts in Exhibit "A" hereto.
Special taxes shall not be levied on any Residential Parcels to pay the principal
of and interest on the outstanding bonds of the community facilities district after
the tax or fiscal year beginning on July 1, 2037 and ending on June 30, 2038,
and that fiscal year shall be the last tax year in which special taxes shall be
levied on Residential Parcels for such purpose. Under no circumstance shall the
special taxes levied on any Residential Parcel be increased as a consequence of
delinquency or default by the owner of any other parcel or parcels within the
District by more than 10 percent of the prior year's levy.
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The conditions under which the obligation to pay the special taxes
may prepaid and permanently satisfied are as set forth in 'Exhibit "A" hereto.
t
Pursuant to Section 53340 of the California Government Code,
said special taxes shall be collected in the same manner as ordinary ad valorem
property taxes are collected and shall be subject to the same penalties and the
same procedure, sale, and lien priority in case of delinquency as is provided for
ad valorem taxes.
Upon recordation of a notice of special tax lien pursuant to
Section 3114.5 of the California Streets and Highways Code 'a continuing lien to
secure each levy of the special taxes shall attach to all nonexempt real property
in the District and that lien shall continue in force and effect until the special tax
obligation is prepaid and permanently satisfied and the lien cancelled in
accordance with law or until collection of the special taxes ceases. The Finance
Department of the City, 201 East Main Street, California ` 92583, telephone
number (909) 487-7339, is designated as the office responsible for preparing
annually a current roll of special tax levy obligations by assessor's parcel
numbers, and for estimating future special tax levies pursuant to Section 53340.2
of the California Government Code.
Section 5. Exempt Property. Pursuant to Section 53340 of the
California Government Code, and except as provided in Section 53317.3 of said
s Code, properties of entities of the state, federal, and local governments shall be
exempt from the levy of special taxes for the payment of the principal of and
interest on the bonds of the District. In the event that a portion of the taxable
property within the District shall for any reason be or become exempt, wholly or
partially, from the apportionment and levy of the special taxes pursuant to Exhibit
"A" hereto, the City Council shall, on behalf of the District, increase the amount of
special taxes to the extent necessary and permitted by law and these
proceedings to be levied upon the remaining property within the District which is
not exempt in order to provide the required debt service payments on any
outstanding bonds of the District, or to prevent the District from defaulting on any
of its other obligations or liabilities.
Section 6. Necessity. The facilities are necessary to meet
increased demands placed upon the City as a result of new development
occurring within the boundaries of the District.
Section 7. Report. The Report is hereby approved and is made
a part of the record of the public hearing regarding the formation of the District,
and is ordered to be kept on file with the City Clerk as part of the transcript of
these proceedings.
Section 8. Repayment of Funds Advanced or Work-in-Kind.
Pursuant to Section 53314.9 of the California Government Code, the City Council
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proposes to accept advances of funds or work-in-kind from private;persons or
private entities and to provide, by resolution, for the use of those funds or that
work-in-kind for any authorized purpose, including but not limited to, paying any
costs incurred by the City in creating the District, and to enter into agreements,
by resolution, with the persons or entities advancing the funds or work-in-kind to
repay funds advanced, or to reimburse the persons or entities for the value, or
cost, whichever is less, of the work-in-kind, as determined by the City Council.
Section 9. Prohibition of Owner Contracts. Pursuant to
Section 53329.5 of the California Government Code, the City Council finds that
the public interest will not be served by allowing the owners of property within the
District to enter into a contract in accordance with subdivision (a) of that section,
and that such owners shall not be permitted to elect to perform the work and
enter into a written contract with the City Council for the construction of the
facilities pursuant to Section 53329.5 of the California Government Code.
Section 10. Description of Voting Procedures. The voting
procedures to be followed in conducting the consolidated special elections on
(i) the proposition of the District incurring a bonded indebtedness in an original
aggregate principal amount not to exceed $20,000,000, (ii) the proposition with
respect to the levy of special taxes on taxable property within the District to pay
the principal of and interest on the bonds thereof, and (iii) the proposition with
respect to the establishment of an appropriations limit for the District in the
amount of$2,000 000 (the "Consolidated Special Elections") shall be as follows:
(
(a) If at least 12 persons have been registered to vote within the
territory of the District for each of the 90 days preceding the close of the public or
protest hearing (the "protest hearing"), the vote in the consolidated special
elections shall be by the registered voters of the District with each voter having
one vote. In that event, the consolidated special elections shall be conducted by
the Registrar of Voters of the County of Riverside and shall be held on a date
selected by the City Council in conformance with the provisions of Section 53326
of the California Government Code and pursuant to the provisions of the
California Elections Code governing elections of cities, insofar as they may be
applicable, and pursuant to said Section 53326 the ballots for the consolidated
special elections shall be distributed to the qualified electors of the District by
mail with return postage prepaid, and the consolidated special elections shall be
conducted as a mail ballot election.
(b) If at the time of the close of the protest hearing, and for any
of the preceding 90 days, less than 12 persons have been registered to vote
within the territory of the District, and pursuant to Section 53326 of the California
Government Code, the vote is therefore to be by the landowners of the District,
with each landowner of record at the close of the protest hearing having one vote
for each acre or portion of an acre of land that he or she owns within the District,
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the consolidated special elections shall be conducted by the City Clerk (the "City
t
Clerk") as follows:
(1) The consolidated special elections shall be held on
the earliest date, following the adoption by the City
Council of the resolution determining the necessity for
the District to incur a bonded indebtedness pursuant
to Section 53351 of the California Government Code,
the resolution of formation establishing the District
tpursuant to Section 53325.1 of said Code, and a
resolution pursuant to Section 53326 of said Code
submitting the propositions with respect to (i) the levy
of special taxes to pay the principal of and interest on
the bonds of the District and (ii) the establishing of an
appropriations limit therefor to the qualified electors of
the District, upon which such elections can be held
pursuant to said Section 53326 which may be
selected by the City Council, or such earlier date as
the owners of land within the District and the City
Clerk agree and concur is acceptable.
(2) Pursuant to said Section 53326, the consolidated
special elections may be held earlier than 90 days
following the close of the protest hearing if the
qualified electors of the District waive the time limits
for conducting the elections set forth in said Section
53326 by unanimous written consent and the City
Clerk concurs in such earlier election date as shall be
consented to by the qualified electors.
(3) Pursuant to said Section 53326, ballots for the
consolidated special elections shall be distributed to
the qualified electors by the City Clerk by mail with
return postage prepaid, or by personal service.
(4) Pursuant to applicable sections of the California
Elections Code governing the conduct of mail ballot
elections of cities, and specifically Division 4
(commencing with Section 4000) of the California
Elections Code with respect to elections conducted by
mail, the City Clerk shall mail or deliver to each
qualified elector an official ballot in a form specified by
the City Council in the resolutions calling and
consolidating the consolidated special elections, and
shall also mail or deliver to all such qualified electors
a ballot pamphlet and instructions to voter, including a
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sample ballot identical in form to the official ballot but
identified as`a sample ballot, a statement;pursuant to
Section 9401 of said Code, an impartial analysis by
the City Attorney pursuant to Section 9280 of said
Code with respect to the ballot propositions contained
in the official ballot, 'arguments and rebuttals, if,any,
pursuant to 'Sections 9281 to 9287, inclusive, and
9295 of said Code,; a return identification envelope
with prepaid postage thereon addressed to the ;City
Clerk for returning voted official ballots, and a copy of
the resolution of formation establishing the District,
adopted by the 'City Council pursuant to Section
53325.1 of the California Government Code;` and the
exhibits ' thereto; provided, however, ` that such
statement, analysis and arguments may be waived
with the unanimous consent of all the landowners,
and in such event a finding regarding such waivers
shall be made in the resolution adopted by the City
Council calling the consolidated special elections.
(c) The official ballot to be mailed or delivered by the City Clerk
to each landowner-voter shall have printed or typed thereon the name of the
landowner-voter and the number of votes to be voted by the landowner-voter and
shall have appended to it a certification to be signed by the person voting the
official ballot which shall certify that the person signing the certification is the
person who voted the official ballot, and if the landowner-voter is other than a
natural person, that he or she is an officer of or other person affiliated with the
landowner-voter entitled to vote such official ballot, that he or she has been
authorized to vote such official ballot on behalf of the landowner-voter, that in
voting such official ballot it was his or her intent, as well as the intent of the
landowner-voter, to vote all votes to which the landowner-voter is entitled based
on its land ownership on the propositions set forth in the official ballot as marked
thereon in the voting square opposite each such proposition, and further
certifying as to the acreage of the landowner-voter's land ownership within the
District.
(1 ) The return identification envelope mailed or delivered
by the City Clerk to each landowner-voter shall have
printed or typed thereon the following: (i) the name of
the landowner, (ii) the address of the landowner, (iii) a
declaration under penalty of perjury stating that the
voter is the landowner or the authorized
representative of the landowner entitled to vote the
enclosed ballot and is the person whose name
appears on the identification envelope, (iv) the printed
name and signature of the voter, (v) the address of
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the voter, (vi) the date of signing and place of
execution of said declaration, and (vii) a notice that
the envelope contains an official ballot and is to be
opened only by the City Clerk.
(2) The instruction to voter form to be mailed or delivered
by the City Clerk to the landowner-voters shall inform
them that the official ballots shall be returned to the
City Clerk properly voted as provided thereon and
with the certification appended thereto properly
completed and signed in the sealed return
identification envelope with the certification thereon
completed and signed and all other information to be
inserted thereon properly inserted by the 'hour on the
date of the election which is specified by the 'City
Clerk for the receipt of ballots; provided that if all
qualified voters have voted, the election may be
closed by the City Clerk.
(3) Upon receipt of the return identification envelopes
which are returned prior to the voting deadline on the
date of the elections, the City Clerk shall canvass the
votes cast in the consolidated special elections, and
shall file a statement with the City Council as to the
results of such canvass and the election on each
proposition set forth in the official ballot.
The procedures set forth in this section for conducting the
consolidated special elections, if they are held, may be modified as the City
Council may determine to be necessary or desirable by a resolution
subsequently adopted by the City Council
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V
APPROVED AND ADOPTED this 10th day of September, 2002.
Ayes: Ayres, Carlson-Buydos,' Good `
Nays: None
Absent: Conner
Abstain: Conner
City of San Jacinto
t;
11�
y Jim A:""res, Vice Mayor
ATTEST:
orothy L. ouinard, City Clerk
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RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 2002-1
OF THE CITY OF SAN JACINTO
(RANCHO SAN JA,CINTO PHASE 2)
A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels in Community Facilities
District No. 2002-1 of the City of San Jacinto (Rancho 'San Jacinto Phase 2) ("CFD No. 2002-1")
and collected each Fiscal Year commencing in Fiscal Year 2002-03, in an amount determined by the
Council through the application of the appropriate Special Tax for"Developed Property, "Taxable
Property Owner Association Property," "Taxable Public Property," "Undeveloped Property" and
"Undeveloped Commercial Property," as described below. All of the real property in CFD No. 2002-
1, unless exempted bylaw or by the provisions hereof, shall be taxed for the purposes, to the extent
and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown
on the applicable final map, parcel map, condominium plan, or other recorded County parcel
map. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by
43,560.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter
2.5, Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs
directly related to the administration of CFD No. 2002-1: the costs of computing the Special
Taxes and preparing the annual Special Tax collection schedules (whether by the City or
designee thereof or both); the costs of collecting the Special Taxes (whether by the County
or otherwise); the costs of remitting the Special Taxes to the Trustee, the costs of the Trustee
(including reasonable costs of its legal counsel) in the discharge of the duties required of it
under the Indenture or the Financing Authority Indenture; the costs to the City, CFD No.
2002-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to
the City, CFD No. 2002-1 or any designee thereof of complying with City, CFD No. 2002-1
or obligated persons disclosure requirements associated with applicable federal and state
securities laws and of the Act; the costs associated with preparing Special Tax disclosure
statements and responding to public inquiries regarding the Special Taxes; the costs of the
City, CFD No. 2002-1 or any designee thereof related to an appeal of the Special Tax, 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. 2002-1 for any other
administrative purposes of CFD No. 2002-1, including reasonable attorney's fees and other
costs related to commencing and pursuing to completion any foreclosure of delinquent
Special Taxes.
City of San Jacinto Septem&er S,2002
CFD No.2002-I Page I
"Assessor's Parcel" or "Assessor's Parcel Number" means a`lot or parcel shown in an
Assessor's Parcel Map with an assigned Assessor's Parcel number.
"Assessor's Parcel Map" means an official map of the Assessor of the County designating
`parcels by Assessor's Parcel number.
"Assigned Special Tax" means the Special Tax for each Land Use Class of Developed
Property, as determined in accordance with Section C below.
"Bonds"means any bonds or other debt (as defined in Section 53317(d) of the Act), whether
in one or more series, issued by CFD No. 2002-1 under the Act.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement and providing for the levy and collection of the
Special Taxes.
"CFD No. 2002-1" means Community Facilities District No. 2002-1 of the City of San
Jacinto (Rancho San Jacinto Phase 2).
"City" means the City of San Jacinto.
"Commercial Property" means, for each Fiscal Year, all Developed Property located in
Assessor's Parcel Number 438-040-009, and on 4.8 acres located within Assessor's Parcel
Number 438-040-008, as such Assessor's Parcels were designated on the Fiscal Year 2002-03
Assessor's Rolls. The specific location of the 4.8 acres within Assessor's Parcel Number
438-040-008 that is to qualify as Commercial Property shall be determined by the CFD
Administrator.
"Council" means the City Council of the City of San Jacinto, acting as the legislative body
of CFD No. 2002-1.
"County" means the County of Riverside.
"Developed Property" means all Taxable Property, exclusive of Taxable Property Owner
Association Property and Taxable Public Property, for which (i) a Final Map was recorded
prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied and
(2) a building permit was issued after January 1, 2002, but prior to the April 1 st preceding the
Fiscal Year in which the Special Tax is being levied.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or
lot line adjustment, pursuant to the Subdivision Map Act (California Government Code
Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil
Code 1352 that creates individual lots for which building permits may be issued without
further subdivision.
"Financing Authority" means the San Jacinto Financing Authority.
City of San Jacinto September 5,2002
CFD No. 2002-I Page 2
"Financing Authority Indenture" means the indenture, fiscal agent agreement, resolution
or other instrument pursuant to which bonds are issued by the
Financing Authority, as modified, amended and/or supplemented from time to time, and any
instrument replacing or supplementing the same.
"Fiscal Year" means the period starting July 1 and ending on the following June 30.
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which Bonds are issued, as modified, amended and/or supplemented from time
to time, and any Instrument replacing or supplementing the same.
"Land Use Class" means any of the classes listed in Table 1
"Mandatory Prepayment Special Tax" means a Special Tax applicable to an Assessor's
Parcel of Developed Property or Undeveloped Property, as determined in accordance with
Section D below.
"Maximum Special Tax" means the maximum Special Tax, determined in accordance with
Section C below, that can be levied in any Fiscal Year on any Assessor's Parcel.
"Multifamily Property" means any Assessor's Parcel of Residential Property that consists
of a building or buildings comprised of attached residential units available for rental by the
general public, not for sale to an end user, and under common management.
"Other Non-Residential Property" means all Assessor's Parcels of Developed Property for
which a building permit(s) has been issued for a non-residential use, other than Commercial
Property.
"Outstanding Bonds" means all Bonds which are deemed to be outstanding under the
Indenture.
"Property Owner Association Property" means any property within the boundaries of CFD
No. 2002-1 that is owned by or dedicated to a property owner association, including any
master or sub-association.
"Proportionately" means for 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
within CFD No. 2002-1. For Undeveloped Property or Undeveloped Commercial 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
or Undeveloped Commercial Property in CFD No. 2002-1, as applicable. For Taxable
Property Owner Association Property and Taxable Public 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 Taxable Property Owner Association Property or
Taxable Public Property in CFD No. 2002-1, as applicable.
City of San Jacinto September S, 2002
CFD No. 2002-1 Page 3
"Public Property" means any property within CFD No. 2002-1 that is owned by, irrevocably
offered for dedication to, or dedicated to the federal government,the State, the County, the
City or any other public agency; provided however that any property leased by a public
agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be
taxed and classified in accordance with its use. To ensure that property is classified as Public
Property in the first Fiscal Year after it is acquired by, irrevocably offered for dedication to,
or dedicated to a public agency, the property owner shall notify the CFD Administrator in
writing of such acquisition, offer, or dedication not later than June 30 of the Fiscal Year in
which the acquisition, offer, or dedication occurred if(i) such property was acquired by,
irrevocably offered for dedication to, or dedicated to a public agency after January 1 but on
or before June 30 of such Fiscal Year or(ii)the property is subject to an irrevocable offer for
dedication that is not reflected on a recorded tract map.
"Qualified Investor" means an entity that owns 100% of all Outstanding Bonds and has
purchased such Outstanding Bonds through a private sale.
"Reserve Fund"means a reserve fund established pursuant to the Indenture or the Financing
Authority Indenture, as applicable
"Residential Floor Area"means, for an Assessor's Parcel of Residential Property, all of the
square footage of living area within the perimeter of a residential structure or dwelling unit,
not including any carport,walkway, garage, overhang, patio, enclosed patio, or similar area.
The determination of Residential Floor Area shall be made by reference to the building
permit(s) issued for such Assessor's Parcel.
"Residential Property" means all Assessor's Parcels of Developed Property for which a
building permit has been issued for purposes of constructing one or more residential dwelling
units.
"Resolution of Formation" means the Resolution of Formation for CFD No. 2002-1.
"Single Family Property" means Assessors Parcels of Residential Property that will contain
only one single family detached dwelling unit or one single family attached dwelling unit.
"Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's
Parcel of Developed Property, Undeveloped Property, Undeveloped Commercial Property,
Taxable Property Owner Association Property and Taxable Public Property to fund the
Special Tax Requirement.
"Special Tax Requirement" means that amount required in any Fiscal Year for CFD No.
2002-1 to: (1) pay debt service on all Outstanding Bonds, (ii) pay periodic costs on the Bonds,
including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay
reasonable Administrative Expenses, (iv) pay any amounts required to establish or replenish
any Reserve Fund for either (but not both) of the Outstanding Bonds or debt issued by the
Financing Authority (however, no Special Taxes will be levied on Undeveloped Property or
Undeveloped Commercial Property for purposes of establishing any Reserve Fund) ; and (v)
pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for
City of San Jaeinto September 5, 2002
CFD No. 2002-1 Page 4
Special Taxes levied in the previous Fiscal Year; less (vi) a credit for funds available to reduce
the annual Special Tax levy, as determined by the CFD Administrator pursuant to the
Indenture or the Financing Authority Indenture.
"State"means the State of California.
"Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No.
2002-1 that are not exempt from the Special Tax pursuant to law or Section F below.
"Taxable Property Owner Association Property" means all Assessor's Parcels of Property
Owner Association Property that are not exempt pursuant to Section F below.
"Taxable Public Property" means all Assessor's Parcels of Public Property that are not
exempt pursuant to Section F below.
"Trustee" means the trustee or fiscal agent under the Indenture or the Financing Authority
Indenture.
"Undeveloped Commercial Property" means, for each Fiscal Year, all property for which
building permits were not issued prior to April I"preceding the Fiscal Year in which the tax
is being levied, that is located in Assessor's Parcel Number 438-040-009 and on 4.8 acres
located within Assessor's Parcel Number 438-040-008, as such Assessor's Parcels were
designated on the Fiscal Year 2002-03 Assessor's Rolls. The specific location of the 4.8
acres within Assessor's Parcel Number 438-040-008 that is to qualify as Undeveloped
Commercial Property shall be determined by the CFD Administrator.
"Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified
as Developed Property, Undeveloped Commercial Property, Taxable Property Owner
Association Property or Taxable Public Property.
"Update Property" means an Assessor's Parcel of Undeveloped Property or Undeveloped
Commercial Property for which a building permit has been issued. For purposes of all
calculations in Sections D and 1, Update Property shall be taxed as if it were Developed
Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, all Taxable Property within CFD No. 2002-1 shall be classified as
Developed Property, Taxable Public Property, Taxable Property Owner Association Property,
Undeveloped Property or Undeveloped Commercial Property, and shall be subject to Special
Taxes in accordance with the rate and method of apportionment determined pursuant to
Sections C, D and E, below. Single Family Property shall be assigned to Land Use Classes
1-8, Multifamily Property shall be assigned to Land Use Class 9, Commercial Property shall
be assigned to Land Use Class 10, and Other Non-Residential Property shall be assigned to
Land Use Class 11.
Cite of San Jacinto September 5,2002
CFD No.2002-1 Page 5
The Assigned Special Tax for Single Family Property shall be based on the Residential Floor
Area of the dwelling unit located on the Assessor's Parcel. The Assigned Special Tax for
Multifamily Property, Commercial Property and Other Non-Residential Property shall be
based on the Acreage of the Assessor's Parcel.
C. MAXI1l9U?✓I ANNUAL SPECIAL TAX RATE
1. Developed Property
a. Maximum Special Tax
The Maximum Special Tax that can be levied annually for each Assessor's
Parcel classified as Developed Property shall be the amount derived by
application of the Assigned Special Tax.
b. Assigned S ep vial Tax
The Assigned Special Tax for each Land Use Class for Fiscal Year-0 002-03
is shown below in Table 1.
TABLE Y
Assigned Special Taxes for Developed Property
Communi Facilities District No.2002-1
FY 2002—2003
Land Use j Residential Floor li Assigned Special Tax
Description
Class Area Per Unit/Acre
1 Single Family Property. _> 2,550 sq. ft. $1,449.32 per Unit
2 Single Family Property 2,250— 2,549 sq. ft. $1,354.11 per Unit
i
3 Single Family Property 1,950 — 2,249 sq. ft. S1,259.91 per Unit
4 Single Family Property 1,800 — 1,949 sq. ft. S 1,217.23 per Unit
5 Single Family Property. 1,650 — 1,799 sq. ft. $1,179.55 per Unit
6 Single Family Property 1,500 — 1,649 sq. ft. S 1,085.34 per Unit
7 Single Family Property. 1,350 — 1,499 sq. ft. S1,028.82 per Unit
8 Single Family Property < 1,350 sq. ft. $991.14 per Unit
9 Multifamily Property Not Applicable S 10,611 per Acre
10 Commercial Property Not Applicable $6,248 per Acre
I
11 Other Non-Residential Property Not Applicable S 10.611 per Acre
City of San Jacinto September 5, 2002
CFD No. 2002-I Page 6
C. Increase in the Assigned Special Tax
The Assigned Special Taxes in Table 1 shall be applicable for Fiscal Year
2002-03, and shall increase thereafter, commencing on July 1, 2003 and on
July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%)
of the Assigned Special Tax for the previous Fiscal Year.
d. 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'ofthe Assigned Special Taxes for all Land
Use Classes located on that Assessor's Parcel. For an Assessor's Parcel that
contains Multifamily Property, Commercial Property or Other Non-
Residential Property,the Acreage of such Assessor's Parcel shall be allocated
to each type of property based on the amount of Acreage designated for each
land use as referenced in the site plan approved for such Assessor's Parcel, as
determined by the CFD Administrator.
2. Undeveloped Property, Undeveloped Commercial Property,Taxable Property
Owner Association Property and Taxable Public Property
a. Maximum Special Tax
The Maximum Special Tax for Undeveloped Property, Taxable Property
Owner Association Property and Taxable Public Property in CFD No. 2002-1
shall first be levied in Fiscal Year 2004-05, and shall equal $11,040 per Acre
in that Fiscal Year, The Maximum Special Tax for Undeveloped Commercial
Property in CFD No. 2002-1 shall first be levied in Fiscal Year 2006-07, and
shall equal $6,763 per Acre in that Fiscal Year. There shall be no Special Tax
levied on Undeveloped Property, Taxable Property Owner Association
Property and Taxable Public Property in Fiscal Years 2002-03 and 2003-04.
There shall be no Special Tax levied on Undeveloped Commercial Property
in Fiscal Year 2002-03 through Fiscal Year 2005-06.
b. Increase in the Maximum Special Tax
The Maximum Special Tax for Undeveloped Property, Taxable Property
Owner Association Property and Taxable Public Property in CFD No. 2002-1
shall increase on July l of each Fiscal Year, commencing on July 1, 2005, by
an amount equal to two percent (2%) of the Maximum Special Tax for the
previous Fiscal Year. The Maximum Special Tax for Undeveloped
Commercial Property in CFD No. 2002-1 shall increase on July 1 of each
Fiscal Year, commencing on July 1, 2007, by an amount equal to two percent
(2%) of the Maximum Special Tax for the previous Fiscal Year.
City of San Jacinto September 5,2002
CFD No. 2002-1 Page 7
D. MANDATORY PREPAYMENT SPECIAL TAX
The following definitions apply to this Section D:
"Aggregate Credits" means the total Assigned Special Taxes from all Developed Property
and Update Property within all Built Out Development Phases minus the total Assigned
Special Taxes that would have been levied in those Built Out Development Phases as
projected in the current Original Report. Aggregate Credits shall be calculated only with
respect to a Built Out Development Phase.
"Builder" means the merchant builder(s) for each Development Phase.
"Builder Certiricate" means a certificate from the Builder of a Development Phase stating
that such Development Phase will generate at least the amount of Assigned Special Taxes that
was projected in the Original Report or Updated Report that was relied upon by the CFD
Administrator in issuing the most recent Letter of Compliance for such Development Phase.
"Builder Property" means all Assessor's Parcels within a Development Phase that are
currently owned by the Builder.
"Buildout" means, for any Development Phase, that all expected building permits have been
issued.
"Built Out Development Phase" means a Development Phase that has reached Buildout.
"Certificate of Satisfaction of Prepayment Special Tax" means a certificate from the CFD
Administrator stating that the property described in such certificate has sufficiently met the
Prepayment Special Tax Requirement for such property as calculated under Section D.7
below. This Certificate shall be issued even when the Prepayment Special Tax Requirement
is $0.
"Development Phase" means a geographic area representing the expected construction
phases planned to be developed by each Builder. The Original Report will designate the
geographic area included in each Development Phase by tract and lot.
"Excess Aggregate Credits" means the total Aggregate Credits minus both (1) the Aggregate
Credits previously allocated to Development Phases with shortfalls, as computed under step
4 of Section D.7, and (ii) the Aggregate Credits previously allocated to allow the
reimbursement of Mandatory Prepayment Special Taxes under Section D.8., below. Excess
Aggregate Credits are to be credited as discussed under Sections D.7. and D.8. on a first-
come first-served basis by the CFD Administrator.
"Letter of Compliance" means a letter from the CFD Administrator stating that, based on
the most recent Updated Report, the property described in such letter will generate at least
the amount of Assigned Special Taxes that was established for such property in the current
Original Report.
City of San Jacinto September S,2002
CFD No. 2002-I }gage 8
"Master Developer" means Rancho San Jacinto L.L.C. and/or any assignee(s) or
successor(s) serving as the master developer of infrastructure within CFD No. 2002-1 If no
specificentity(ies) is serving this function'at a given point in time, the responsibilities of the
Master Developer shall be assumed by the CFD Administrator.
"Prepayment Special Tax Account" means, for each Development Phase, the fund of
account (regardless of its name) identified in the Indenture or the Financing Authority
Indenture to hold payments of Mandatory Prepayment Special Taxes received from the
property owners within such Development Phase.
"Prepayment Special Tax Requirement" means the total amount of Special Taxes
necessary to be prepaid as calculated under Section D.7 below, as of the date of any
Mandatory Prepayment Special Tax calculation.
1. Original Report
Concurrently with the adoption of the Resolution of Formation by the Council, the
Master Developer shall submit a report (the "Original Report") to the CFD
Administrator containing a listing for each Development Phase that identifies the
tract(s) and lot(s) within the Development Phase, as well as its total Acreage, the
anticipated number of dwelling units in each Land Use Class at Buildout, the
anticipated number of Acres of Multifamily, Commercial and Other Non-Residential
Property at Buildout, and the Assigned Special Taxes to be generated by such
projected development based on the then current Fiscal Year's Special Tax rates.
At the request of the Master Developer, the CFD Administrator may amend the
Original Report to reflect changes proposed by the Master Developer, provided that
changes in the Original Report shall not be permitted if the total Assigned Special
Taxes for all property in CFD No. 2002-1 at Buildout are reduced by such changes,
based on the then current Fiscal Year's Special Tax rates, or if the CFD Administrator
determines that such changes are not feasible.
2. Updated Report
The Master Developer shall submit updated reports to the CFD Administrator
quarterly(within 45 days after each March 31, June 30, September 30, and December
31)until CFD No. 2002-1 reaches Buildout for all Development Phases. Such reports
shall contain a listing for each Development Phase that identifies the total Acreage
within the Development Phase, the actual and expected number of dwelling units in
each Land Use Class, the actual and expected number of Acres of Multifamily,
Commercial and Other Non-Residential Property, and the Assigned Special Taxes to
be generated based on the actual and expected development at Buildout and the then
current Assigned Special Tax rates. Such reports shall also contain a comparison of
the information in the updated report to the information provided for each
Development Phase in the current Original Report, assuming the then current Fiscal
Year's Special Tax rates. For Assessor's Parcels of Developed Property and Update
Property within the Development Phase, the quarterly updated report shall also
City of San Jacinto September S, 2002
CFD No. 2002-I Page 9
include the dates that their building permits were issued. Upon approval by the CFD
Administrator, such report shall constitute an Updated Report (the "Updated
Report"). The failure to provide a report in a timely manner will result in the
rescission of any outstanding Letters of Compliance for the appropriate Development
Phase, and the CFD administrator shall, within 30 days of the due date of the
delinquent report, notify the Master Developer, Builder and City Building Department
that all Letters of Compliance for the appropriate Development`Phase have been
rescinded.
3. Initial Letters of Compliance
If, based on the initial Updated Report, the CFD Administrator determines that a
Development Phase will generate at least the amount of Assigned Special Taxes that
was established for such Development Phase in the current Original Report, the CFD
Administrator shall, within 30 days of the submittal of the initial Updated Report,
issue an initial Letter of Compliance with respect to such Development Phase. If the
CFD Administrator determines that a Development Phase will not generate at least
the amount of Assigned Special Taxes that was established for such Development
Phase in the current Original Report, then a Letter of Compliance will not be issued
for such Development Phase at such time.
4. Letters of Compliance Based on Subsequent Updated Reports
Upon the receipt of each Updated Report, the CFD Administrator shall compare the
data provided for each Development Phase to the data included in the current Original
Report and make one of the determinations set forth in the following two paragraphs.
If the CFD Administrator determines that a Development Phase at Buildout will
generate at least the amount of Assigned Special Taxes that was established for such
Development Phase in the current Original Report, then, if a Letter of Compliance is
not currently in effect for such Development Phase, the CFD Administrator shall,
within 30 days of the submittal of an Updated Report, issue a Letter of Compliance
with respect to such Development Phase.
If the CFD Administrator determines that a Development Phase at Buildout will not
generate the amount of Assigned Special Taxes that was established for such
Development Phase in the current Original Report, then any Letter of Compliance
previously issued for such Development Product will be rescinded. The CFD
Administrator shall, within 30 days of the submittal of an Updated Report, notify the
Master Developer, Builder, and City Building Department that such Letter of
Compliance has been rescinded. Whether or not building permits have already been
issued for such Development Phase, the CFD Administrator shall calculate and levy
the Mandatory Prepayment Special Tax on all Builder Property pursuant to Section
D.7 below.
City of San Jacinto September 5, 2002
CFD No. 2002-I Page 10
5. Issuance of Building Permits for Parcels with a Letter of Compliance`
Each time a request for a building permit(or group of permits)is submitted to the City
Building Department within a Development Phase, the Builder shall provide a copy
of the Letter of Compliance for the applicable property, along with either a Builder
Certificate or a Certificate of Satisfaction of Prepayment Special Tax. No building
permit shall be issued without (i) a Letter of Compliance and (ii) either a Builder
Certificate or a Certificate of Satisfaction of Prepayment Special Tax.
6. Builder Notification for Parcels without a Letter of Compliance and Builder
Certificate
At least 30 days prior to submitting a building permit application for property that has
not yet received a Letter of Compliance, or for property that has received a Letter of
Compliance but for which the Builder is unable to provide the certification required
by Section D.5 above, the Builder shall notify the CFD Administrator of its intent to
request building permits for particular lots within a Development Phase. The
Builder's notification("Builder Notification") shall include for each Assessor's Parcel
of Single Family Property for which building permits are being requested the proposed
Residential Floor Area, Land Use Class, Assigned Special Tax, and Acreage. For
each Assessor's Parcel of Multifamily, Commercial or Other Non-Residential
Property, the Builder Notification shall include the Acreage of such Assessor's Parcel.
If the CFD Administrator determines based on the calculations in Section D.7 that no
Mandatory Prepayment Special Tax is required as a result of the Assessor's Parcels
included within the Builder Notification, then the CFD Administrator shall, within 30
days of the submittal of the Builder Notification, issue a Letter of Compliance and a
Certificate of Satisfaction of Prepayment Special Tax with respect to such property.
If the CFD Administrator determines based on the calculations in Section D.7 that
a Mandatory Prepayment Special Tax is required, then the CFD Administrator shall
calculate and levy the Mandatory Prepayment Special Tax pursuant to Section D.7
below on all Builder Property.
7. Calculation of Mandatory Prepayment Special Tax
Upon the receipt of a Builder Notification or determination under Section DA or
Section D.6 that a Mandatory Prepayment Special Tax is required to be calculated,
the CFD Administrator shall determine the Mandatory Prepayment Special Tax to be
applied to all Builder Property in a Development Phase by undertaking the following
steps:
Step 1. Compute the sum of the actual Assigned Special Taxes from all Developed
Property and Update Property within the Development Phase in which the
property is located, plus both the Assigned Special Taxes from the property
described in the Builder Notification (if applicable) and the expected Assigned
Special Taxes on the remaining property within the Development Phase
(assuming all such property will be taxed as Developed Property).
Cit}'of San Jacinto September 5,2002
CFD No.2002-I Page 11
Step 2. Compute the sum of the expected Assigned Special <Taxes from the
Development Phase assuming that all such property will be developed as set
forth in the current Original Report.
Step 3. If the amount computed pursuant to step I is greater than or equal to the
amount computed pursuant to step 2, then no Mandatory Prepayment Special
Tax will be required. If the amount computed pursuant to step 1 is less than
the amount computed pursuant to step 2, then continue to step 4.
Step 4. If there are Excess Aggregate Credits currently available, assign a sufficient
number of such Excess Aggregate Credits to the Development Phase to cover
the shortfall calculated under step 3, so that the sum of the Assigned Special
Taxes as computed under step I plus the Excess Aggregate Credits assigned
to the Development Phase is equal to the Assigned Special Taxes as computed
under step 2. If the total number of Excess Aggregate Credits currently
available are not sufficient to cover the shortfall calculated under step 3, then
assign all of the available Excess Aggregate Credits to the Development
Phase.
Step 5. If the sum of the Assigned Special Taxes and the Excess Aggregate Credits
assigned pursuant to step 4 is greater than or equal to the amount computed
pursuant to step 2, then no Mandatory Prepayment Special Tax will be
required. If the sum of the Assigned Special Taxes and the Excess Aggregate
Credits assigned pursuant to step 4 is less than the amount computed pursuant
to step 2, then continue to Step 6.
Step 6. (i) After subtracting such Development Phase's pro rata share of estimated
Administrative Expenses from the Assigned Special Taxes and Excess
Aggregate Credits determined under Step 4, determine the amount of CFD
No. 2002-1 Bonds that can be supported by the remaining Assigned Special
Taxes plus the Excess Aggregate Credits assigned to the Development Phase
as computed under step 4, with 105% debt service coverage; and
(ii) After subtracting such Development Phase's pro rata share of estimated
Administrative Expenses from the Assigned Special Taxes determined under
Step 2, determine the amount of CFD No. 2002-1 Bonds that could be
supported by the remaining Assigned Special Taxes computed under step 2,
with 105% debt service coverage.
Step 7 The Prepayment Special Tax Requirement shall be calculated using the
prepayment formula described in Section I.1, with the following exceptions:
(1) skip Paragraphs 1 and 2, and begin with Paragraph 3; (ii) the Bond
Redemption Amount in Paragraph 3 of the prepayment formula described in
Section I.1 shall equal the difference between the amount calculated pursuant
to step 6(ii) and the amount calculated pursuant to step 6(i); (iii) in Paragraph
4 of Section 1.1, calculate the premium on (a) the first available redemption
City of Scan Jacinto September 5,2002
CFD No. 2002-1 Page 12
date after 3 years from the date of prepayment, or (b) in the case of the final
Development Phase as referenced in the last paragraph in Section 8, the first
available redemption date following the Buildout of the final Development
Phase (collectively, (a) and (b) 'shall be referred to as the "Mandatory
Prepayment Call Date');:(iv) in Paragraph 5 of Section I.1, compute the
amount needed to pay interest on the Bond Redemption Amount from the
date of prepayment until the applicable Mandatory Prepayment Call Date; (v)
no determination of amounts pursuant to Paragraphs 6 and 7 in Section I.1
need be made-, (vi) in Paragraph 8 of the prepayment formula described in
Section I.1, compute the amount of reinvestment`earnings from the date of
prepayment to the applicable Mandatory Prepayment Call Date; (vii) any
payments of the Mandatory Prepayment Special Tax (less Administrative Fees
and Expenses) shall be deposited into the Mandatory Prepayment Special Tax
Account and disbursed pursuant to Section 8 and the Indenture or the
Financing Authority Indenture; (viii)the Assigned Special Taxes applicable to
any Assessor's Parcel in Development Phase shall not be reduced or relieved
as a result of payment of the Mandatory Prepayment Special Tax; and (ix)the
"Coverage Test" discussed in Section I.I.shall not be 'applicable to the
implementation of the Mandatory Prepayment Special Tax.
Step 8. The Prepayment Special Tax Requirement computed for a Development Phase
under Step 7 (above) shall be satisfied by levying Mandatory Prepayment
Special Taxes on all Assessor's Parcels of Builder Property within that
Development Phase. The amount of Mandatory Prepayment Special Taxes
levied on each Assessor's Parcel of Builder Property within that Development
Phase shall be calculated by multiplying the Mandatory Prepayment Special
Tax Requirement for the Development Phase by the quotient of the Acreage
of each Assessor's Parcel divided by the Acreage of all Assessor's Parcels of
Builder Property within the Development Phase.
The Mandatory Prepayment Special Taxes computed under step 8 shall be billed
directly to all Assessor's Parcels of Builder Property and shall be due within 30 days
of the billing date. If Mandatory Prepayment Special Taxes are not paid within 45
days of the billing date, a delinquent penalty of 10 percent shall be added to the
Mandatory Prepayment Special Taxes, and no additional building permits shall be
issued for any property owned by the Builder or Master Developer until payment is
received. Upon receipt of the Mandatory Prepayment Special Tax payment, the CFD
Administrator shall issue a Letter of Compliance (if one has not been issued for such
Assessor's Parcels) and a Certificate of Satisfaction of Prepayment Special Tax for
the subject property.
S. Use/Release of Mandatory Prepayment Special Tax Payments
In implementing this section of the Mandatory Prepayment Special Tax program, the
three year period discussed below shall be determined separately each time a
Mandatory Prepayment Special Tax is levied; depending upon the date of that levy.
For example, there may be cases within a Development Phase where some
City of San Jacinto Septemher i,2002
CFD No. 2002-1 Page 13
Mandatory Prepayment Special Taxes have been levied within three years prior to
Buildout, while other Mandatory Prepayment Special Taxes have been levied more
Than three years prior to Buildout. In all cases, each levy of the Mandatory
Prepayment Special Tax would be treated individually, based on the circumstances
which apply to that specific Mandatory Prepayment Special Tax levy, as discussed
below.
If a Development Phase has not reached Buildout within three years after the payment
of a Mandatory Prepayment Special Tax for such Development Phase, ,then such
Mandatory Prepayment Special Tax shall be used to redeem CFD No. 2002-1 Bonds
on the next available redemption date after the end of the three year period.
If a Development Phase reaches Buildout prior to three years after the payment of a
Mandatory Prepayment Special Tax, the CFD Administrator shall calculate the actual
Assigned Special Taxes that will be generated from such Development Phase. If the
actual Assigned Special Taxes at Buildout are greater than or equal to the amount of
Assigned Special Taxes established for such Development Phase in the current
Original Report, the entire balance in the Prepayment Special Tax Account
attributable to that Development Phase shall be returned to the payer(s). If
Mandatory Prepayment Special Taxes have been paid by more than one entity, the
amount of Mandatory Prepayment Special Taxes returned to each payer shall be in
proportion to the amount paid by each entity.
If a Development Phase reaches Buildout prior to three years after the payment of a
Mandatory Prepayment Special Tax, and if at Buildout the actual Assigned Special
Taxes are less than the amount of Assigned Special Taxes established for such
Development Phase in the current Original Report, then the Mandatory Prepayment
Special Taxes remaining in the Prepayment Special Tax Account attributable to that
Development Phase shall each continue to be held for the remainder of their three year
period. At the end of each three year period, if Excess Aggregate Credits are
available at that time in other Development Phases, all or a portion of the Mandatory
Prepayment Special Tax, in an amount that is equal to the Excess Aggregate Credits
available, shall be returned to the payer. Any remaining balance of the Mandatory
Prepayment Special Tax for which Excess Aggregate Credits are not available shall
be used to redeem CFD No. 2002-1 Bonds on the next available redemption date.
The Mandatory Prepayment Special Tax Account shall be maintained until three years
after the last Mandatory Prepayment Special Tax was levied within the Development
Phase under Section D.7., above.
Notwithstanding the above, if at Buildout of the last Development Phase within CFD
2002-1, the actual Assigned Special Taxes are less than the amount of Assigned
Special Taxes established for such Development Phase in the current Original Report,
then after any Excess Aggregate Credits have been applied and, if appropriate,
portions of Mandatory Prepayment Special Taxes have been returned to the payer(s),
any remaining funds in the Prepayment Special Tax Account (or required to be
deposited therein) attributable to that Development Phase shall be used to redeem
CFD No. 2002-1 Bonds on the next available redemption date, and shall not be held
City of San Jacinto September 5, 2002
CFD No. 2002-1 Page 14
for the obligatory three year period.
9. Costs and Expenses Related to Implementation of Mandatory Prepayment
Special Tax
Master Developer and/or Builder(s) shall pay all costs of the CFD Administrator or
other consultants required to review Update Reports, calculate Mandatory
Prepayment Special Taxes, issue Compliance Letters or any other actions required
under Section D. Such payments shall be due 30 days after receipt of invoice by
Master Developer and/or Builder.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2002-03 and for each following Fiscal Year, the Council shall
levy the Special Tax on Developed Property as described under the First Step listed below.
Commencing with Fiscal Year 2004-05, Special Taxes may also be levied as described under
the Second and Third Steps listed below, as necessary to satisfy the Special Tax Requirement:
First: Commencing with Fiscal Year 2002-03, the Special Tax shall be levied on each
Assessor's Parcel of Developed Property that is Residential Property,Commercial Property
or Other Non-Residential Property at 100% of the applicable Assigned Special Tax;
Second: If additional mo»ies are needed to satisfy the Special Tax Requirement after the first
step has been completed, commencing with Fiscal Year 2004-05, the Special Tax shall be
levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of
the Maximum Special Tax for Undeveloped Property, and commencing with Fiscal Year
2006-07, the Special Tax shall be levied Proportionately on each Assessor's Parcel of
Undeveloped Property and Undeveloped Commercial Property at up to 100% of the
Maximum Special Tax for Undeveloped Property and Undeveloped Commercial Property,
respectively,
Third: Commencing with Fiscal Year 2004-05, if additional monies are needed to satisfy the
Special Tax Requirement after the first two steps have been completed, then the Special Tax
shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner
Association Property and Taxable Public Property at up to the Maximum Special Tax for
Taxable Property Owner Association Property or Taxable Public Property.
Notwithstanding the above, the Council may, in any Fiscal Year, levy Proportionately less
than 100% of the Assigned Special Tax in step one of Section E (above), when (i) the
Reserve Fund is fully funded at its required level, (ii)the Council is no longer required to levy
a Special Tax pursuant to steps two and three above in order to meet the Special Tax
Requirement and (iii) all authorized CFD No. 2002-1 Bonds have already been issued or the
Council has covenanted that it will not issue any additional CFD No. 2002-1 Bonds (except
refunding bonds) to be supported by Special Taxes.
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
City of San Jacinto September 5,2002
CFD No.2002-1 Page 15
residential use has been issued be increased by more than ten percent as'a consequence of
delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2002-1,
except for Residential Property whose owners are also delinquent or in default on their
Special Tax payments for one or more other properties within CFD No. 2002-1.
F. EXEMPTIONS
No Special Tax shall be lvried on up to 58.6 Acres of Property Owner Association Property
and 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 tax-exempt'status 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
Proportionately as part of the third step in Section E above at up to 100% of the applicable
Maximum Special Tax for Taxable Property Owner Association Property or Taxable Public
Property.
G. APPEALS AND INTERPRETATIONS
Any taxpayer may file a written appeal of the Special Tax on his/her property with the CFD
Administrator, provided that the appellant is current in his/her payments of Special Taxes.
During the pendency of an appeal, all Special Taxes previously levied must be paid on or
before the payment date established when the levy was made. The appeal must specify- the
reasons why the appellant claims the calculation of the Special Tax is in error. The CFD
Administrator shall review the appeal, meet with the appellant if the CFD Administrator
deems necessary, and advise the appellant of its determination. If the CFD Administrator
agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax
on the appellant's property and/or provide a refund to the appellant. If the CFD
Administrator disagrees with the appellant and the appellant is dissatisfied with the
determination, the appellant then has 30 days in which to appeal to the Council by filing a
written notice of appeal with the City clerk, provided that the appellant is current in his/her
payments of Special Taxes. The second appeal must specify the reasons for its disagreement
with the CFD Administrator's determination. The decision of the Council shall be final.
A. MANNER OF COLLECTION
The annual Special Tax shall be collected in the same manner and at the same time as ordinary
ad valorem property taxes; provided, however, that CFD No. 2002-1 may directly bill the
Special Tax, may collect Special Taxes at a different time or in a different manner if necessary
to meet its financial obligations, and may covenant to foreclose and may actually foreclose
on delinquent Assessor's Parcels as permitted by the Act. The Mandatory Prepayment
Special Tax shall be directly billed to the property owner at the time such Special Tax is being
levied.
I. PREPAYMENT OF SPECIAL TAX
City of San Jacinto September i,2002
CFD No. 2002-I Page 16
The following definitions apply to this Section I:
"Accrued Amount" means the then current accrued but unpaid interest on Tranche D
Bonds.
"Outstanding Bonds" means all Bonds which are deemed to be outstanding under the
Indenture after the first interest and/or principal payment date following the current Fiscal
Year.
"Tranche D Bonds" are all Outstanding Bonds classified as Tranche D pursuant to the
formation of CFD No. 2002-1.
1. Prepayment in Full
The Special Tax obligation of any Assessor's Parcel of Developed Property, Update Property
or Undeveloped Commercial Property may prepaid. The Special Tax obligation applicable
to any such Assessor's Parcels in CFD No. 2002-1 may be fully prepaid and the obligation of
the Assessor's Parcel to pay the Special Tax permanently satisfied as described herein;
provided that a prepayment may be made only if there are no delinquent Special Taxes with
respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's
Parcel intending to prepay the Special Tax obligation shall provide the CFD Administrator
with written notice of intent to prepay. Within 30 days of receipt of such written notice, the
CFD Administrator shall notify such owner of the prepayment amount of such Assessor's
Parcel. The CFD Administrator may charge a reasonable fee for providing this amount.
Prepayment must be made not less than 45 days prior to the next occurring date that notice
of redemption of Bonds from the proceeds of such prepayment may be given by the Trustee
pursuant to the Indenture or the Financing Authority Indenture.
The Prepayment Amount (defined below) for any Assessor's Parcel of Developed Property
or Update Property, or for any Undeveloped Commercial Property, shall be calculated as
summarized below (capitalized terns as defined below):
Bond Redemption Amount
plus Redemption Premium
plus Defeasance Amount
Administrative Fees and Expenses
Total equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be
calculated as follows:
Paragraph No.:
1. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for
the current Fiscal Year applicable for the Assessor's Parcel to be prepaid. For
City of San Jacinto September 5,2002
CFD No.2002-1 Page 17
Assessor's Parcels of Update Property, compute the Assigned Special Tax for the
current Fiscal Year 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 Commercial
Property for which a building permit has not yet been issued, compute the Assigned
Special Tax for the current Fiscal Year for that Assessor's Parcel as though it were
already designated as Commercial Property.
2. For Assessor's Parcels of Developed Property, Update Property and Undeveloped
Commercial Property, divide the Assigned Special Tax computed pursuant to
paragraph I by the total estimated Assigned Special Taxes for the entire CFD No
2002-1 based on the Developed Property Special Taxes which could be charged in the
current Fiscal Year on all expected development through buildout of CFD No. 2002-1
based on the most recent Updated Report submitted under Section 4, excluding any
Assessor's Parcels which have been prepaid.
3. Multiply the quotient computed pursuant to paragraph 2 by the sum of the
Outstanding Bonds plus the Accrued Amount to compute the amount of Outstanding
Bonds and Accrued Amount to be retired and prepaid (the "Bond Redemption
Amount").
4. Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the
applicable redemption premium, if any, on the Outstanding Bonds to be redeemed on
the next available call date (the "Redemption Premium").
5. 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.
6. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel,
7. Determine the Special Taxes that would be levied (but for the prepayment) or have
been levied on the Assessor's Parcel in the current Fiscal Year that have not yet been
paid.
8. Compute the minimum amount the CFD Administrator reasonably expects to derive
from the reinvestment of the Bond Redemption Amount less the Administrative Fees
and Expenses from the date of prepayment until the redemption date for the
Outstanding Bonds to be redeemed with the prepayment.
9. Add the amounts computed pursuant to paragraphs 5 and 7 and subtract the amount
computed pursuant to paragraph 8.
10. Compute the net present value of the amount computed pursuant to paragraph 9,
using as a discount rate the rate of return assumed by the CFD Administrator in
paragraph 8 (the "Defeasance Amount').
L'iiy of San Jaeinto September 5,2002
CFD No.2002-1 Page 18
11. Verify the administrative fees and expenses of CFD No. 2002-1, including the costs
of computation of the prepayment, the costs to invest the prepayment proceeds, the
costs of redeeming Bonds, and the costs of recording any notices to evidence the
prepayment and the redemption (the"Administrative Fees and Expenses").
I2 The Special Tax prepayment is equal to the sum of the amounts computed pursuant
to paragraphs 3, 4, 10 and 11 (the "Prepayment Amount").
13. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4.
and 10, shall be deposited into the appropriate fund as established under the Indenture
or the Financing Authority Indenture and be used to retire Outstanding Bonds or
make debt service payments. The amount computed pursuant to paragraph I 1 shall
be retained by CFD No. 2002-1_
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of
Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained
in the appropriate fund established under the Indenture or the Financing Authority Indenture
to be used with the next prepayment of Bonds or to make debt service payments.
Notwithstanding the above, during the period in which all of the Outstanding Bonds are held
by a Qualified Investor, increments as small as $1,000 may be redeemed. ,In such cases, the
increment above $1,000 or integral multiple thereof will be retained in the appropriate fund
established under the Indenture or the Financing Authority Indenture to be used with the next
prepayment of Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined under
paragraph 7 (above), the CFD Administrator shall remove the current Fiscal Year's Special
Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's
Parcel that is prepaid, 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
amount of Assigned Special Taxes that may be levied on Taxable Property in any given year
within CFD No. 2002-1 both prior to and after the proposed prepayment (based on the
Special Taxes that could be charged on all expected development through buildout of CFD
No. 2002-1 according to the most recent Updated Report, assuming that it were all
Developed Property in any given year) is at least 1.05 times the maximum annual debt service
in that given year on all Outstanding Bonds plus estimated Administrative Expenses for that
given year (the "Coverage Test").
City of San Jacinto September 5,2002
CFD No.2002-1 Page 19
2. Prepayment in Part
The Special Tax on an Assessor's Parcel of Developed Property, Update Property or
Undeveloped Commercial Property may be partially prepaid. The amount of the prepayment
shall be calculated as in Section I.1, except that a partial prepayment shall be calculated
according to the following formula:
PP = PE x F.
These terms have the following meaning:
PP = the partial prepayment
PE _ the Prepayment Amount calculated according to Section 1.1
F the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the
Special Tax.
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax
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 applicable. 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 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 Council shall (i) distribute
the funds remitted to it according to Paragraph 13 of Section I.1., and (ii) indicate in the
records of CFD No. 2002-1 that there has been a partial prepayment of the Special Tax and
that a portion of the Special Tax equal to the outstanding percentage (1.00 - F) of the
remaining Special Tax shall continue to be authorized to be levied on such Assessor's Parcel
pursuant to Section E.
I TERM OF SPECIAL TAX
The Special Tax shall be levied for the period not to exceed thirty-five years commencing in
Fiscal Year 2002-03.
K:`.CIients2\Ga ettGrorrp:lsmJacinto\RM.414.doe
City of San Jacinto September 5,2002
CFD No. 2002-1 Page 20