HomeMy WebLinkAbout11 FORMATION OF CFD 2014-1 *a 0 Agenda Item 11
P�M AGENDA REPORT Reviewed: /
City Manager S
(ISIS /�
Finance Director ��'
MEETING DATE: MAY 6, 2014
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR/CITY TREASURER
SUBJECT: ADOPT RESOLUTION NO. 14-34, A RESOLUTION OF INTENTION OF
THE CITY COUNCIL OF THE CITY OF TUSTIN WITH RESPECT TO
ESTABLISHMENT OF PROPOSED CITY OF TUSTIN COMMUNITY
FACILITIES DISTRICT No. 2014-1 (TUSTIN LEGACY/STANDARD
PACIFIC)
ADOPT RESOLUTION NO. 14-35, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF TUSTIN DECLARING NECESSITY FOR
PROPOSED CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT No.
2014-1 (TUSTIN LEGACY/STANDARD PACIFIC) TO INCUR BONDED
INDEBTEDNESS
SUMMARY:
The City's Development Disposition Agreement dated March 4, 2014 (the "DDA") with
Standard Pacific Corporation ("Standard Pacific") sets forth the terms and conditions
whereby the City intends to convey the property located at the former Marine Corp Air
Station know as the Legacy Project (Legacy) to Standard Pacific who will develop the
property into 375 single family homes, a focal park, and other neighborhood amenities.
The DDA provides for the establishment of a community facilities district (CFD) to
provide for the financing of certain facilities and services.
Approval of the recommended action is the first step to establish the CFD for the
property, authorize special taxes and incur bonded indebtedness not to exceed $29
million. The formation of the CFD will occur after the public hearing, scheduled for June
17, 2014. At that hearing, the Council will be presented with information regarding the
CFD, the special taxes, public facilities and services.
RECOMMENDATION:
It is recommended that the City Council adopt:
Resolution No. 14-34, a resolution of intention of the City Council of the City of Tustin,
California, to establish the City of Tustin Community Facilities District No. 2014-1
(Tustin Legacy/Standard Pacific), to authorize the levy of a special tax to pay the cost of
•
ADOPT RESOLUTION NO. 14 -34 DECLARING INTENTION TO ESTABLISH COMMUNITY FACILITIES DISTRICT
NO. 2014-1 (TUSTIN LEGACY /STANDARD PACIFIC) AND RESOLUTION NO. 14 -35 DECLARING THE
NECESSITY TO INCUR BONDED INDEBTEDNESS OF THE CFD
May 6, 2014 Page 2 of 5
acquiring or constructing certain public facilities, provide certain services and pay for
certain incidental expenses and to pay debt service on bonded indebtedness.
Resolution No. 14 -35, a resolution of the City Council of the City of Tustin, California, of
intention to incur bonded indebtedness within the City of Tustin Community Facilities
District No. 2014 -1 (Tustin Legacy /Standard Pacific)
FISCAL IMPACT:
The recommended action carries no immediate fiscal impact. The formation of the CFD
will occur after the public hearing, scheduled for June 17, 2014. Any obligation of the
City to pay the financing team's costs for CFD formation will be reimbursed out of the
sales price of the land sold to Standard Pacific or from future CFD bond proceeds. The
underwriter's costs will be incurred when Community Facilities District No. 2014 -1
(Tustin Legacy /Standard Pacific) Bonds are sold after the formation of the CFD and are
fully contingent on the successful sale of bonds.
BACKGROUND AND DISCUSSION:
The City of Tustin is the fee title owner of 100% of the real property (the "Property ") located
in the Legacy described in a Development Disposition Agreement, by and between the
City and Standard Pacific Corp., a Delaware corporation dated as of March 4, 2014 (the
"DDA "). On December 10, 2013, the Planning Commission adopted Resolution No. 4239
recommending that the City approve the proposed project to construct 375 single family
detached units, a focal park, and other neighborhood amenities. Further, on February 4,
2014, the City Council approved the DDA, Specific Plan Amendment 2013 -002 and
Resolution No. 14 -14 approving the concept plan for the project.
The DDA provides for the establishment of a community facilities district to provide for
financing of certain facilities and services. The Mello -Roos Community Facilities Act of
1982, as amended, commencing with Section 53311 of the Government Code (the
"Act ") is the authorizing act and pursuant to Section 53318(a) of the Act, the City
Council will receive a'written request from two of its City Councilpersons to commence
proceedings to form a community facilities district with boundaries coterminous with the
Property to be known as the "City of Tustin Community Facilities District No. 2014 -1
(Tustin Legacy /Standard Pacific)."
CFD financing is a commonly -used method of financing infrastructure and services for
new development in California. Commonly referred to as "Mello- Roos," this land -
secured financing permits the local agency (i.e., the City) to issue bonds to pay for the
public facilities and infrastructure costs and services of local development. Debt service
on the bonds is paid from special taxes levied on real property within the CFD
boundary. The bonds are issued on a tax - exempt basis at the federal and state level.
ADOPT RESOLUTION N0, 14 -34 DECLARING INTENTION TO ESTABLISH COMMUNITY FACILITIES DISTRICT
NO. 2014 -1 (TUSTIN LEGACY /STANDARD PACIFIC) AND RESOLUTION NO. 14 -35 DECLARING THE
NECESSITY TO INCUR BONDED INDEBTEDNESS OF THE CFD
May 6, 2014 Page 3 of 5
Pursuant to the DDA, City staff and its financing consultants have been working to
identify the improvements and services to be financed through the CFD, define the CFD
boundaries, and develop the special tax to be levied within the CFD. Exhibit C to
Resolution No. 14 -34 is the Rate and Method of Apportionment of Special Tax for the
City of Tustin Community Facilities District No. 2014 -1 (Tustin Legacy /Standard Pacific)
(CFD 2014 -1). This document defines the two special taxes (Special Tax A and Special
Tax B) for this CFD based on the newly constructed dwellings' square footage.
Combined, the special tax rates do not exceed 2% of assessed value. Special Tax A is
collected for the purpose of paying off bonded indebtedness incurred due to the
construction of facilities and infrastructure. The purpose of Special Tax B is to fund the
maintenance of streets, sidewalks, parks and public safety. The $29 million of future
bond indebtedness includes the financing of construction of school district facilities.
Should The Tustin Unified School District (TUSD) decide to form their own CFD and not
participate in CFD 2014 -1 the total debt incurred would be less than indicated and
Special Tax A rates would be adjusted accordingly.
With the approval of Tentative Tract Map 17507 and Ordinance Nos. 1440 and 1441,
the Council may initiate proceedings to consider the establishment of a CFD for the
project. The balance of this report summarizes the resolutions presented for approval
and discusses the remaining steps for completing the CFD formation process.
Initiating the Proceedings
The Mello -Roos Act provides that prior to initiating the CFD proceedings; the City
Council must adopt a statement of local goals and policies concerning the use of the
Mello -Roos Act. The City's Resolution No. 04 -28, adopted on March 1, 2004, satisfies
this requirement.
The proceedings to consider the establishment of CFD No. 2014 -1 will be initiated by
the adoption of two resolutions discussed below.
1. Adopt Resolution 14 -34, a Resolution of Intention to form CFD 2014 -1.
This resolution does the following: a) accepts the written request filed by
two of the City's Councilmembers with respect to the CFD; b) describes
the territory of the boundaries of the CFD; c) describes the types of
facilities and services that will be financed with the special taxes and
proceeds of bonds; d) describes the rate and method of apportionment of
the special taxes to be levied in the CFD; e) calls for a public hearing to be
held on June 17, 2014; and f) describes the proposed voting procedures
for the CFD.
2. Adopt Resolution 14 -35, a Resolution Declaring the Necessity to Incur
Bonded Indebtedness of the Community Facilities District. This resolution
states the not -to- exceed amounts for bonds to be issued by the CFD and
ADOPT RESOLUTION NO. 14 -34 DECLARING INTENTION TO ESTABLISH COMMUNITY FACILITIES DISTRICT
NO. 2014 -1 (TUSTIN LEGACY /STANDARD PACIFIC) AND RESOLUTION NO. 14 -35 DECLARING THE
NECESSITY TO INCUR BONDED INDEBTEDNESS OF THE CFD
May 6, 2014
Page 4 of 5
declares that the special taxes to be levied within the CFD are to be used
for direct payment of facilities and services, as well as the payment of the
debt service on the bonds of the CFD. The resolution also calls for a
public hearing on June 17, 2014.
Conclusion and Next Steps
Adopting the attached resolutions is the first step in establishing CFD No. 2014-
1; authorizing special taxes; and incurring bonded indebtedness. The formation
of the CFD will occur after the public hearing, scheduled for June 17, 2014. At
that hearing, the Council will be presented with information regarding the CFD,
the special taxes, and public facilities and services. The public will also have the
opportunity to comment on the CFD. After the conclusion of the June 17, 2014
public hearing the Council may take the following actions:
1. Adopt a resolution establishing the CFD
2. Call a special election
3. Conduct the election
4. Adopt a resolution declaring the results of the election
5. Introduce for first reading an ordinance authorizing the levy of special
taxes
The adoption of the two resolutions under consideration this evening will not
commit the City Council to establish CFD No. 2014 -1 nor authorize the levy of
special taxes or the issuance of bonds. The City Council may establish CFD No.
2014 -1 only after conducting the June 17, 2014 public hearing and election.
Following the public hearing, the proposed schedule to complete the formation of
the CFD is as follows:
• July 1, 2014: Second reading of ordinance authorizing special tax levy
• July 15, 2014: Special Tax Ordinance becomes effective
The resolutions and related documents have been prepared and reviewed by the
City's finance team, which includes bond counsel, disclosure counsel, financial
advisor, and special tax consultant.
It is anticipated that CFD 2014 -1 will be formed July 2014, and the transfer of property
will occur in August of 2014. It is anticipated that the CFD bond sale would occur in late
2014.
ADOPT RESOLUTION NO. 14 -34 DECLARING INTENTION TO ESTABLISH COMMUNITY FACILITIES DISTRICT
NO. 2014 -1 (TUSTIN LEGACY /STANDARD PACIFIC) AND RESOLUTION NO. 14 -35 DECLARING THE
NECESSITY TO INCUR BONDED INDEBTEDNESS OF THE CFD
May 6, 2014
a��-
Pamela Arends -King
Finance Director /City Treasurer
Attachment(s): Resolution No. 14 -34
Resolution No. 14 -35
Page 5 of 5
RESOLUTION NO. 14 -34
A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY
OF TUSTIN, CALIFORNIA, TO ESTABLISH THE CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014 -1 (TUSTIN
LEGACY /STANDARD PACIFIC), TO AUTHORIZE THE LEVY OF A
SPECIAL TAX TO PAY THE COST OF ACQUIRING OR
CONSTRUCTING CERTAIN PUBLIC FACILITIES, PROVIDE CERTAIN
SERVICES AND PAY FOR CERTAIN INCIDENTAL EXPENSES AND TO
PAY DEBT SERVICE ON BONDED INDEBTEDNESS
The City Council of the City of Tustin does hereby resolve as follows:
WHEREAS, the City of Tustin, California (the "City ") is the fee title owner of
100% of the real property described in Attachment 2 to that certain Development
Disposition Agreement, by and between the City and Standard Pacific Corp., a
Delaware corporation ( "Standard Pacific "), dated as of March 11, 2014 (the "DDA "), and
as described in Exhibit A hereto (the "Property "); and
WHEREAS, the Property was formerly within the boundaries of Marine Corps
Air Station - Tustin ( "MCAS Tustin ") prior to its closure; and
WHEREAS, pursuant to the terms and conditions set forth in the DDA, the City
intends to convey the Property to Standard Pacific which will develop the Property as
set forth therein; and
WHEREAS, the DDA provides for the establishment of a community facilities
district to provide for financing of certain facilities and services described therein; and
WHEREAS, pursuant to Section 53318(a) of the Mello -Roos Community
Facilities Act of 1982, as amended, commencing with Section 53311 of the Government
Code (the "Act'), the City Council of the City (the "City Council ") has received a written
request from two of its City Councilpersons to commence proceedings to form a
community facilities district with boundaries coterminous with the Property to be known
as the "City of Tustin Community Facilities District No. 2014 -1 (Tustin Legacy /Standard
Pacific)" (the "Community Facilities District' or "CFD No. 2014 -1 ") to finance (1) (a) the
purchase, construction, expansion, improvement or rehabilitation of the public facilities
described in Exhibit B hereto (which attachment is incorporated herein by this
reference) to be owned and operated by the City, including all furnishings, equipment
and supplies related thereto (collectively, the "City Facilities "), which City Facilities have
a useful life of five years or longer, and (b) the purchase, construction, expansion,
Resolution No. 14 -34
Page 1 of 7
improvement or rehabilitation of the school facilities described in Exhibit B hereto to be
owned and operated by the Tustin Unified School District (the "School District'),
including all furnishings, equipment and supplies related thereto (collectively, the
"School District Facilities," and together with the City Facilities, the "Facilities "), which
School District Facilities have a useful life of five years or longer, (2) the services
described in Exhibit B hereto (collectively the "Services ") and (3) the incidental
expenses to be incurred in connection with financing the Facilities and /or Services, and
forming the Community Facilities District and administering the Community Facilities
District (the "Incidental Expenses "); and
WHEREAS, it is the intention of the City Council to consider financing the
Facilities, Services and the Incidental Expenses through the formation of the
Community Facilities District, and the sale of bonds (excluding the Services) in an
amount not to exceed $29,000,000 (the "Obligations ") and the levy of a special tax to
pay debt service on the Obligations, provided that the bond sale and special tax levy
are approved at an election to beheld for the Community Facilities District;
NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows:
SECTION 1: Each of the above recitals is true and correct.
SECTION 2: Intention. The City Council declares its intention to conduct
proceedings pursuant to the Act for the establishment of the Community Facilities
District with boundaries coterminous with the Property. It is further proposed that the
boundaries of the Community Facilities District shall be as described in Exhibit A hereto
which boundaries shall, upon recordation of the boundary map for the Community
Facilities District, include the entirety of any parcel subject to taxation by the Community
Facilities District therein. The City Clerk is hereby directed to sign the original boundary
map of the Community Facilities District and record it with all proper endorsements
thereon with the County Recorder of the County of Orange within 15 days after the
adoption of this resolution, all as required by Section 3111 of the Streets and Highways
Code of the State of California.
It is the intention of the City that the Property is to be transferred to Standard
Pacific pursuant to the terms and conditions of the DDA, and the City hereby
affirmatively waives any defense based on the fact of public ownership of the Property
currently owned by the City, to any action to foreclose on such Property in the event of
nonpayment of the special tax - imposed by the Community Facilities District.
Resolution No. 14 -34
Page 2 of 7
SECTION 3: Name of the Community Facilities District. The name of the
proposed Community Facilities District shall be "City of Tustin Community Facilities
District No. 2014 -1 (Tustin Legacy /Standard Pacific)."
SECTION 4: Types of Facilities and Services to be Financed by the Community
Facilities District. The Facilities proposed to be provided within the Community
Facilities District are public facilities as defined in the Act. The City is authorized by law
to construct, acquire, own and operate the City Facilities and to provide the Services
described in Exhibit B hereto for the benefit of the Community Facilities District. The
School District is authorized by law to construct, acquire, own and operate the School
District Facilities described in Exhibit B hereto. The City Council hereby finds and
determines that the description of the Facilities, Services and Incidental Expenses
herein is sufficiently informative to allow taxpayers within the Community Facilities
District to understand what the funds of the Community Facilities District may be used
to finance, the Facilities, Services and Incidental Expenses expected to be incurred,
including the cost of planning and designing the Facilities, the costs of forming the
Community Facilities District, issuing bonds, levying and collecting a special tax within
the Community Facilities District and the annual administration costs of the Community
Facilities District. The City Council hereby finds that the proposed Facilities and
Services are necessary to meet increased demands placed upon the City and the
School District as a result of development expected to occur in the Community Facilities
District. The Facilities may be acquired from one or more of the property owners as
completed public facilities or may be constructed by or on behalf of the City or the
School District and paid for with special taxes or bond proceeds. Any portion of the
Facilities may be financed through a lease or lease- purchase arrangement if the City or
the School District hereafter determines that such arrangement is of benefit to the City
or the School District.
SECTION 5: Special Taxes. Except where funds are otherwise available, it is
the intention of the City Council to levy annually in accordance with the procedures
contained in the Act a special tax, secured by a continuing lien against all non - exempt
real property in the Community Facilities District, sufficient to pay for the Facilities,
Services and Incidental Expenses and the principal and interest and other periodic
costs of Obligations issued to finance the Facilities and Incidental Expenses, including
the establishment and replenishment of any reserve funds deemed necessary by the
City, and any remarketing, credit enhancement and liquidity facility fees (including such
fees for instruments which serve as the basis of a reserve fund in lieu of cash) of the
Community Facilities District. The rate and method of apportionment and manner of
collection of the special tax in the Community Facilities District is described in detail in
Exhibit C attached hereto (which attachment is incorporated herein by this reference).
Exhibit C allows each landowner within the Community Facilities District to estimate the
maximum amount of special taxes that may be levied annually against each parcel to
be included in the Community Facilities District.
Resolution No. 14 -34
Page 3 of 7
If special taxes of the Community Facilities District are levied against any parcel
used for private residential purposes, (i) the maximum special tax rate shall not be
increased except to the extent permitted in the rate and method included as Exhibit C,
(ii) such special tax shall not be levied later than the 2054 -55 Fiscal Year for the
component of the special tax used to finance Facilities and Incidental Expenses and for
as long as necessary to meet the special tax requirement for Services, and (iii) under
no circumstances shall such special tax in the Community Facilities District be
increased in any fiscal year as a consequence of delinquency or default by the owner of
any other parcel or parcels within the Community Facilities District by more than ten
percent (10 %) above the amount that would have been levied in that fiscal year had
there never been any such delinquencies or defaults.
The special tax is based on the cost of making the Facilities and Services
available to each parcel of real property within the Community Facilities District. The
City Council hereby determines the rate and method of apportionment of the special tax
set forth in Exhibit C to be reasonable. The special tax is apportioned to each parcel on
the foregoing basis pursuant to Section 53325.3 of the Act; and such special tax is not
on or based upon the value or ownership of real property. In the event that a portion of
the property within the Community Facilities District shall become for any reason
exempt, wholly or partially, from the levy of the special tax specified in Exhibit C, the
City Council shall, on behalf of the Community Facilities District, cause the special tax
levy to be increased, subject to the limitation of the maximum special tax for a parcel as
set forth in Exhibit C, to the extent necessary upon the remaining property within the
Community Facilities District which is not exempt in order to yield the special tax
revenues required for the purposes described in this Section. The obligation to pay
special taxes may be prepaid as provided in the rate and method of apportionment set
forth in Exhibit C, as such rate and method may be amended hereafter.
SECTION 6: Public Hearing. A combined public hearing (the "Hearing ") on the
establishment of the Community Facilities District, the proposed rate and method of
apportionment of the special tax and the proposed issuance of Obligations to finance
the Facilities and the Incidental Expenses shall be held at 7 p.m., or as soon thereafter
as practicable, on June 17, 2014, at the City Council's Chambers, 300 Centennial Way,
Tustin, California. If the City Council determines to form the Community Facilities
District, a special election will be held to authorize the issuance of the Obligations and
the levy of the special tax in accordance with the procedures contained in Government
Code Section 53326. If such election is held, the proposed voting procedure at the
election will be a landowner vote with each landowner who is the owner of record of
land within the Community Facilities District at the close of the Hearing, or the
authorized representative thereof, having one vote for each acre or portion thereof
owned within the Community Facilities District. Ballots for the special election may be
distributed by mail or by personal service.
At the time and place set forth above for the Hearing, the City Council will
receive testimony as to whether the Community Facilities District shall be established,
Resolution No. 14 -34
Page 4 of 7
whether special taxes shall be levied in accordance with the proposed method of
apportionment of the special tax, and whether Obligations shall be issued to finance
Facilities and Incidental Expenses of the Community Facilities District.
At the time and place set forth above for the Hearing, any interested person,
including all persons owning lands or registered to vote within the Community Facilities
District, may appear and be heard.
SECTION 7: Notice. The City Clerk is hereby authorized and directed to publish
a notice (the "Notice ") of the Hearing pursuant to Section 6061 of the Government Code
in a newspaper of general circulation published in the area of the Community Facilities
District. The Notice shall contain the text or a summary of this Resolution, the time and
place of the Hearing, a statement that the testimony of all interested persons or
taxpayers will be heard, a description of the protest rights of the registered voters and
landowners in the Community Facilities District and a description of the proposed voting
procedure for the election required by the Act. Such publication shall be completed at
least seven (7) days prior to the date of the Hearing.
SECTION 8: Reports re Facilities and Services. The Director of Public Works of
the City is hereby directed to study the Community Facilities District and, at or before
the time of the Hearing, file a report with the City Council containing a brief description
of the public and school district facilities and services by type which will in his or her
opinion be required to meet adequately the needs of the Community Facilities District
and an estimate of the cost of providing those public and school district facilities and
services.
SECTION 9: Advances of Funds. The City may accept advances of funds or
work -in -kind from any source, including, but not limited to, private persons or private
entities, for any authorized purpose under the Act, including, but not limited to, paying
any cost incurred by the City in creating the Community Facilities District. The City may
enter into an agreement with the person or entity advancing the funds or work -in -kind
for the Community Facilities District, 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: Maximum Bonded Indebtedness. The reasonably expected
maximum principal amount of the Obligations is Twenty Nine Million Dollars
($29,000,000).
SECTION 11: Reservation of Rights. Except to the extent limited in any bond
resolution or trust indenture related to the issuance of Obligations, the City Council
Resolution No. 14 -34
Page 5 of 7
hereby reserves to itself all rights and powers set forth in Section 53344.1 of the Act
(relating to tenders in full or partial payment).
SECTION 12: Effective Date. This Resolution shall be effective upon its
adoption.
PASSED AND ADOPTED at a regular meeting of the Tustin City Council held on
the 6th day of May, 2014.
ELWYN A. MURRAY,
Mayor
ATTEST:
JEFFREY C. PARKER,
City Clerk
Resolution No. 14 -34
Page 6 of 7
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF TUSTIN )
I, Jeffrey C. Parker, City Clerk and ex- officio Clerk of the City Council of the City of
Tustin, California, do hereby certify that the whole number of the members of the City
Council of the City of Tustin is five; that the above and foregoing Resolution No. 14 -34
was duly passed and adopted at a regular meeting of the Tustin City Council, held on
the 6th day of May, 2014 by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
JEFFREY C. PARKER,
City Clerk
Resolution No. 14 -34
Page 7 of 7
DESCRIPTION OF THE TERRITORY OF THE
PROPOSED COMMUNITY FACILITIES DISTRICT
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EXHIBIT B
DESCRIPTION OF THE FACILITIES, SERVICES AND INCIDENTAL EXPENSES
TYPES OF FACILITIES
CITY FACILITIES
The types of City Facilities that are proposed to be financed by CFD No. 2014 -1 with the
proceeds of special taxes and bonds issued by CFD No. 2014 -1 consist of backbone
infrastructure needed for new development, such as roadway, bridge, sewer, water, reclaimed
water, dry utilities, storm drain, street and parkway landscaping, curb and gutter, medians,
median landscaping, traffic signals, entry signage, parks, trails, fire facilities, and appurtenances
and appurtenant work.
The City Facilities are necessary for development of the property within the boundaries
of CFD No. 2014 -1 and are generally intended to comply with the requirements of Tustin Legacy
Backbone Infrastructure Program of the City.
The description of City Facilities is general in nature. The final nature and location of the
City Facilities will be determined upon preparation of final plans and specifications. Addition,
deletion or modification of descriptions of the City Facilities may be made consistent with the
requirements of the City Council of the City, CFD No. 2014 -1 and the Act.
SCHOOL DISTRICT FACILITIES
The proposed School District Facilities include the construction, purchase, modification,
expansion, improvement and /or rehabilitation of school facilities to be owned and operated by
the Tustin Unified School District including, without limitation, classrooms, multi - purpose,
administration and auxiliary space at a school, and interim housing, together with furniture,
equipment and technology, needed by the Tustin Unified School District in order to mitigate the
impact on school facilities of the student population to be generated as a result of the
development of the property to be included within CFD No. 2014 -1, together with all land or
interests in land required for the construction of such school facilities and all land or interests in
land required to be provided by the Tustin Unified School District as mitigation of environmental
impacts associated with the development of such school facilities, and a proportionate share of
the costs of central support and administrative facilities, transportation and special education
facilities, including any incidental school administration and transportation center improvements.
The School District Facilities listed herein are representative of the types of facilities
authorized to be financed by CFD No. 2014 -1. Detailed scope and limits of specific projects will
be determined as appropriate, consistent with the standards of the Tustin Unified School
District. Addition, deletion or modification of descriptions of the School District Facilities may be
made consistent with the requirements of the governing board of the Tustin Unified School
District, CFD No. 2014 -1 and the Act.
TYPES OF SERVICES
The types of Services that are proposed to be provided by CFD No. 2014 -1 and funded
with the proceeds of special taxes levied by CFD No. 2014 -1 consist of services permitted to be
financed under the Mello -Roos Community Facilities Act of 1982 including, without limitation,
police and fire protection, ambulance and paramedic services, street sweeping, traffic signal
maintenance and the maintenance of City -owned parks, parkways and open spaces, lighting,
flood and storm protection services and the operation of storm drainage systems. All of the
services to be financed must be in addition to those provided within the boundaries of CFD
No. 2014 -1 before CFD No. 2014 -1 is created, and shall not supplant services already available
within that territory when CFD No. 2014 -1 is created.
TYPES OF INCIDENTAL EXPENSES
The Incidental Expenses to be paid from bond proceeds and /or special taxes include:
All costs associated with the creation of CFD No. 2014 -1, the issuance of the
Obligations, the determination of the amount of special taxes to be levied, costs incurred in
order to carry out the authorized purposes of CFD No. 2014 -1, including legal fees, fees of
consultants, engineering, planning, designing and the annual costs to administer CFD
No. 2014 -1 and any Obligations.
EXHIBIT C
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR
THE CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014 -1
( TUSTIN LEGACY /STANDARD PACIFIC)
A Special Tax (all capitalized terms used herein are defined in Section A., "Definitions ", below)
shall be levied on all Assessor's Parcels of Taxable Property in the City of Tustin Community
Facilities District No. 2014 -1 (Tustin Legacy /Standard Pacific) ( "CFD No. 2014 -1 ") and collected
each Fiscal Year commencing in Fiscal Year 2014 -2015, in an amount determined through the
application of this Rate and Method of Apportionment as described below. All of the real
property in CFD No. 2014 -1, unless exempted by law or by the provisions hereof, shall be taxed
for the purposes, to the extent and in the manner herein provided.
A. DEFINITIONS
The capitalized 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 the Assessor's Parcel Map,
the land area as shown on the applicable Final Subdivision, 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 Communities Facilities Act of 1982, as amended, being
Chapter 2.5, Division 2 of Title 5 of the California Government Code.
"Administrative Expenses" means the following actual or reasonably estimated costs
directly related to the administration of CFD No. 2014 -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 City, the County or otherwise); the costs of remitting the 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 of the City, CFD No. 2014 -1 or any
designee thereof of complying with any arbitrage rebate requirements applicable to the
Bonds; the costs of the City, CFD No. 2014 -1 or any designee thereof of complying with
City, CFD No. 2014 -1 or obligated persons disclosure requirements of applicable federal
and state securities laws and 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. 2014 -1 or any designee thereof related to an appeal of
the Special Tax; the costs associated with the release of funds from any escrow account
established for CFD No. 2014 -1; and the City's annual administration fees and third
party expenses in anyway related to CFD No. 2014 -1. Administrative Expenses shall
also include amounts estimated or advanced by the City or CFD No. 2014 -1 for any
other administrative purposes of CFD No. 2014 -1, including attorney's fees and other
costs related to commencing and pursuing to completion any foreclosure as a result of
delinquent Special Taxes.
"Annual Special Tax A" means the Special Tax A actually levied in any Fiscal Year on
any Assessor's Parcel.
"Annual Special Tax B" means the Special Tax B actually levied in any Fiscal Year on
any Assessor's Parcel.
"Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are
included in a Final Subdivision that was recorded prior to the January 1st preceding the
Fiscal Year in which the Special Tax A is being levied, and (ii) that have not been issued
a building permit on or before May 1st preceding the Fiscal Year in which the Special
Tax A is being levied.
"Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an
assigned Assessor Parcel Number.
"Assessor's Parcel Map" means an official map of the Assessor of the County
designating parcels by Assessor's Parcel Number.
"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by
the County for purposes of identification.
"Assigned Annual Special Tax A" means the Special Tax A for each Land Use
Category of Developed Property, as determined in accordance with Section C. 1.a.,
below.
"Authorized Facilities" means those facilities authorized to be financed by CFD
No. 2014 -1 pursuant to the Act and the proceedings to form CFD No. 2014 -1.
"Authorized Services" means those services authorized to be financed by CFD
No. 2014 -1 pursuant to the Act and the proceedings to form CFD No. 2014 -1.
"Backup Special Tax A" means the Special Tax amount set forth in Section C.1.b.,
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 the City for CFD No. 2014 -1 under the Act.
"Building Permit" means the first legal document issued by the City giving official
permission for new construction. For purposes of this definition, "Building Permit" may
or may not include any subsequent building permits issued or changed after the first
issuance, as determined by the CFD Administrator.
"Calendar Year" means the period commencing January 1 of any year and ending the
following December 31.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax A Requirement for Facilities and the Special Tax B
Requirement for Services, and otherwise providing for the levy and collection of the
Special Taxes.
"CFD No. 2014 -1" means City of Tustin Community Facilities District No. 2014 -1 (Tustin
Legacy /Standard Pacific).
"City" means the City of Tustin, California
"Consumer Price Index" means, for each Fiscal Year, the Consumer Price Index
published by the U.S. Bureau of Labor Statistics for "All Urban Consumers: in the Los
Angeles — Anaheim — Riverside Area, measured as of the month of December in the
calendar year which ends in the previous Fiscal Year. In the event this index ceases to
be published, the Consumer Price Index shall be another index as determined by the
CFD Administrator that is reasonably comparable to the Consumer Price Index for the
City of Los Angeles.
"Council" means the City Council of the City, acting as the legislative body of CFD
No. 2014 -1.
"County" means the County of Orange, California.
"Developed Property" means for each Fiscal Year, all Taxable Property, exclusive of
Taxable Public Property and Taxable Property Owner Association Property, that are
included in a Final Subdivision that was recorded prior to January 1st preceding the
Fiscal Year in which the Special Tax is being levied and for which a Building Permit for
new construction has been issued on or prior to May 1st preceding the Fiscal Year in
which the Special Tax is being levied.
"Dwelling Unit" or "DU" means a residential unit that is used or intended to be used as
a domicile by one or more persons, as determined by the CFD Administrator.
"Exempt Property" means all Assessor's Parcels designated as being exempt from
Special Tax A and Special Tax B as provided for in Section E.
"Final Subdivision" means a subdivision of property by recordation of a final
subdivision 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.
"Fiscal Year" means the period commencing July 1 of any year and ending 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.
"Land Use Class" means any of the classes listed in Table 1 below.
"Maximum Special Tax" means the Maximum Special Tax A and /or Maximum Special
Tax B, as applicable.
"Maximum Special Tax A" means the Maximum Special Tax A determined in
accordance with Section C that can be levied in any Fiscal Year on any Assessor's
Parcel within CFD No. 2014 -1.
"Maximum Special Tax B" means the Maximum Special Tax B determined in
accordance with Section C that can be levied in any Fiscal Year on any Assessor's
Parcel within CFD No. 2014 -1.
"Multi- family Residential Property" means all Parcels of Developed Property that
consist of a building or buildings comprised of attached Dwelling Units available for
rental by the general public, not for sale to an end user, and under common
management, as determined by the CFD Administrator.
"Non- Residential Property" means all Assessor's Parcels of Developed Property for
which a Building Permit permitting the construction of one or more non - residential units
or facilities has been issued.
"Outstanding Bonds" means all Bonds which are outstanding under the provisions of
an Indenture.
"Partial Prepayment Amount" means the amount required to prepay a portion of the
Special Tax A obligation for an Assessor's Parcel, as described in Section H.
"Prepayment Amount" means the amount required to prepay the Special Tax A
obligation in full for an Assessor's Parcel, as described in Section H.
"Property Owner Association Property" means, for each Fiscal Year, any property
within the boundaries of CFD No. 2014 -1 that was owned by a property owner
association, including any master or sub - association, as of January 1 of the prior Fiscal
Year.
"Proportionately" means for Developed Property, that the ratio of the actual Special
Tax A levy to the Assigned Special Tax A is equal for all Assessor's Parcels of
Developed Property and that the ratio of the actual Special Tax B levy to the Maximum
Special Tax B is equal for all Assessor's Parcels of Developed Property. For Approved
Property, that the ratio of the actual Special Tax A levy to the Maximum Special Tax A is
equal for all Assessor's Parcels of Approved Property and that the ratio of the actual
Special Tax B levy to the Maximum Special Tax B is equal for all Assessor's Parcels of
Approved Property. For Undeveloped Property, "Proportionately' means that the ratio of
the actual Special Tax A levy per Acre to the Maximum Special Tax A per Acre is equal
for all Assessor's Parcels of Undeveloped Property. The term "Proportionately" may
similarly be applied to other categories of Taxable Property as listed in Section C below.
"Public Property" means property within the boundaries of CFD No. 2014 -1 owned by,
irrevocably offered or dedicated to, or over, through or under which an easement for
purposes of public right -of -way has been granted, to the federal government, the State,
the County, the City, or any local government or other public agency, provided that any
property leased by a public agency to a private entity and subject to taxation under
Section 53340.1 of the Act shall be taxed and classified according to its use.
"Residential Floor Area" means all of the square footage of living area within the
perimeter of a residential structure, not including any carport, walkway, garage,
overhang, patio, enclosed patio, or similar area. The determination of Residential Floor
Area for an Assessor's Parcel 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 permitting the construction thereon of one or more residential dwelling
units has been.
"Single Family Residential Property" means all Assessor's Parcels of Residential
Property for which building permits have been issued for residential units, other than
Multi- family Property.
"Special Tax" means the Special Tax A and /or Special Tax B, as applicable.
"Special Tax A" means the special taxes to be levied in each Fiscal Year on each
Assessor's Parcel of Taxable Property within CFD No. 2014 -1 to fund the Special Tax A
Requirement for Facilities.
"Special Tax B" means the special tax authorized to be levied in each Fiscal Year on
each Assessor's Parcel of Taxable Property within CFD No. 2014 -1 to fund the Special
Tax B Requirement for Services.
"Special Tax A Requirement for Facilities" means the amount required in any Fiscal
Year for CFD No. 2014 -1 to: (i) pay the debt service on all Outstanding Bonds due in
the Calendar Year commencing in such Fiscal Year, (ii) pay periodic costs on the Bonds,
including but not limited to, credit enhancement and rebate payments with respect to the
Bonds due in the calendar year commencing in such Fiscal Year; (iii) pay actual and
estimated Administrative Expenses related to the levy and collection of Special Tax A,
the administration of the Bonds and the obligations of the City and CFD No. 2014 -1
under the Indenture; (iv) pay any amounts required to establish or replenish any reserve
funds for all Outstanding Bonds, to the extent not included in a computation of the
Special Tax A Requirement for Facilities in a previous Fiscal Year, (v) pay for
reasonable anticipated Special Tax A delinquencies for the current Fiscal Year based on
the delinquency rate for the Special Tax A levy in the previous Fiscal Year; (vi) pay
directly for acquisition or construction of Authorized Facilities, less (vii) a credit for funds
available to reduce the annual Special Tax A levy, as determined by the CFD
Administrator in accordance with any Indenture.
"Special Tax B Requirement for Services" means that amount required in any Fiscal
Year for CFD No. 2014 -1 to (i) pay directly for costs of the Authorized Services due in
the calendar year commencing in such Fiscal Year; (ii) pay actual and estimated
Administrative Expenses related to the levy and collection of the Special Tax B and the
provision of the Authorized Services; less (iii) a credit for funds available to reduce the
annual Special Tax B levy, as determined by the CFD Administrator.
"State" means the State of California.
"Taxable Property" means all Assessor's Parcels within the boundaries of CFD
No. 2014 -1, which are not exempt from the Special Tax pursuant to law or Section E
below.
"Taxable Property Owner Association Property" means, for each Fiscal Year, all
Assessor's Parcels of Property Owner Association Property that are not exempt from the
Special Tax pursuant to Section E below.
"Taxable Public Property" means, for each Fiscal Year, all Assessor's Parcels of
Public Property that are not exempt from the Special Tax pursuant to Section E below.
"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, Taxable Public Property or Taxable Property Owner
Association Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, all Taxable Property shall be classified as Developed Property, Approved
Property, Taxable Public Property, Taxable Property Owner Association Property, or
Undeveloped Property, and shall be subject to Special Taxes in accordance with this Rate and
Method of Apportionment determined pursuant to Sections C, D, and E below.
Parcels of Developed Property shall further be classified as Residential Property or Non -
Residential Property. Parcels of Residential Property shall further be classified as Single Family
Property or Multi- family Residential Property. Parcels of Single Family Property shall be further
categorized into Land Use Classes based on the Residential Floor Area for each such Parcel.
C. MAXIMUM SPECIAL TAX
1. Developed Property
The Maximum Special Tax A for each Parcel of Single Family Residential
Property shall be the greater of: (i) the applicable Assigned Special Tax
described in Table 1 or (ii) the amount derived by application of the Backup
Special Tax A.
The Maximum Special Tax B for each Parcel of Single Family Residential
Property shall be the applicable Maximum Special Tax B described in Table 1.
The Maximum Special Tax A for each Parcel of Non - Residential Property, or
Multi- family Residential Property shall be the Assigned Special Tax A described
in Table 1.
The Maximum Special Tax B for each Parcel of Non - Residential Property or
Multi- family Residential Property shall be the Maximum Special Tax B described
in Table 1.
a. Assigned Special Tax
The Assigned Special Tax for each Parcel of Developed Property is
shown in Table 1 below:
TABLE 1
Maximum Special Tax for Developed Property in
Community Facilities District No. 2014 -1
(Tustin Legacy /Standard Pacific)
Fiscal Year 2014 -2015
Land
Assigned
Maximum
Use
Residential
Special
Special
Class
Description
DU /Acre
Floor Area
Tax A
Tax B
1
Single Family Residential
DU
> 3,530 s.f.
$ 3,120
$ 1,522
Pro ert
2
Single Family Residential
DU
3,210 — 3,529 s.f.
$ 2,920
$ 1,425
Pro ert
3
Single Family Residential
DU
2,890 — 3,209 s.f.
$ 2,680
$ 1,314
Pro ert
4
Single Family Residential
DU
2,570 -2,889 s.f.
$ 2,375
$ 1,164
Property
5
Single Family Residential
DU
2,250 — 2,569 s.f.
$ 2,095
$ 1,020
Property
6
Single Family Residential
DU
< =2,250 s.f.
$ 1,745
$ 860
Pro ert
7
Multi-family Residential Property
Acre
N/A
$29,596
$14,475
8
Non - Residential Property
Acre
N/A
$29,596
1 $14,475
b. Backup Special Tax A
When a Final Subdivision is recorded, the Backup Special Tax A for a
Parcel classified or to be classified as Single Family Residential Property
within such Final Subdivision shall be determined by multiplying the
Undeveloped Property Maximum Special Tax A rate per acre, as defined
in Section C3 below, by the total Acreage of Taxable Property within such
Final Subdivision, excluding the Acreage associated with Multi - Family
Residential Property, Non - Residential Property, Public Property and /or
Property Owner's Association Property that is not Exempt Property
pursuant to Section E. and dividing such amount by the number of
Parcels within such Final Subdivision classified as either (i) Single Family
Residential Property or (ii) Approved Property for which a Building Permit
is expected to be issued for Single Family Residential Property (i.e., the
number of residential lots).
Notwithstanding the forgoing, if Parcels classified or to be classified as
Single Family Residential Property are subsequently changed or modified
by recordation of a lot line adjustment or similar instrument, then the
Backup Special Tax shall be recalculated for the area that has been
changed or modified using the methodology described in the preceding
paragraph.
The Backup Special Tax A shall not apply to Multi - Family Residential
Property, Non - Residential Property, Public Property, Property Owner's
Association Property, or Undeveloped Property.
C. Increase in the Maximum Special Tax
On each July 1, commencing on July 1, 2015, the Maximum Special Tax
A, calculated pursuant to Section C.1 above shall be increased by an
amount equal to two percent (2 %) of the amount in effect for the previous
Fiscal Year. On each July 1, commencing on July 1, 2015, the Maximum
Special Tax B shall be increased by an amount equal to two percent (2 %)
of the amount in effect for the previous Fiscal Year,
Multiple Land Use Classes
In some instances an Assessor's Parcel of Developed Property may
contain more than one Land Use Class. The Maximum Special Tax
levied on an Assessor's Parcel shall be the sum of the Maximum Special
Taxes for all Land Use Classes located on that Assessor's Parcel.
2. Approved Property
a. Single Family Residential Property
The Fiscal Year 2014 -2015 Maximum Special Tax A for each Parcel of
Approved Property expected to be classified as Single Family Residential
Property shall be the Backup Special Tax computed pursuant to
Section C.1.b above.
The Fiscal Year 2014 -2015 Maximum Special Tax B for each Parcel of
Approved Property expected to be classified as Single Family Residential
Property shall be $14,475 per acre.
b. Multi - family Residential Property and Non - Residential Property
The Fiscal Year 2014 -2015 Maximum Special Tax A for each Parcel of
Approved Property expected to be classified as Multi - Family Residential
Property and Non - Residential Property shall be $29,596 per acre.
The Fiscal Year 2014 -2015 Maximum Special Tax B for each Parcel of
Approved Property expected to be classified as Multi - Family Residential
Property and Non - Residential Property shall be $14,475 per acre.
C. Increase in the Maximum Special Tax A and Maximum Special Tax B
On each July 1, commencing on July 1, 2015, the Maximum Special Tax
A for Approved Property shall be increased by an amount equal to two
percent (2 %) of the amount in effect for the previous Fiscal Year. On
each July 1, commencing on July 1, 2015, the Maximum Special Tax B
for Approved Property shall be increased by an amount equal to two
percent (2 %) of the amount in effect for the previous Fiscal Year.
3. Undeveloped Property, Taxable Public Property, and Taxable Property
Owner Association Property
a. Maximum Special Tax A
The Fiscal Year 2014 -2015 Maximum Special Tax A for Undeveloped
Property, Taxable Public Property, and Taxable Property Owner
Association Property shall be $29,596 per Acre.
b. Maximum Special Tax B
The Fiscal Year 2014 -2015 Maximum Special Tax B for Undeveloped
Property, Taxable Public Property, and Taxable Property Owner
Association Property shall be $14,475 per Acre.
C. Increase in the Maximum Special Tax A and Maximum Special Tax B
On each July 1, commencing on July 1, 2015, the Maximum Special Tax
A for Undeveloped Property, Taxable Public Property, and Taxable
Property Owner Association Property, shall be increased by an amount
equal to two percent (2 %) of the amount in effect for the previous Fiscal
Year. On each July 1, commencing on July 1, 2015, the Maximum
Special Tax B for Undeveloped Property, Taxable Public Property, and
Taxable Property Owner Association Property, shall be increased by an
amount equal to two percent (2 %) of the amount in effect for the previous
Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Special Tax A
Commencing Fiscal Year 2014 -2015 and for each subsequent Fiscal Year, the
Council or its designee shall determine the Special Tax A Requirement for
Facilities and shall levy the Special Tax A until the total Special Tax A levy
equals the Special Tax A Requirement for Facilities. The Special Tax A shall be
levied each Fiscal Year as follows:
First: The Annual Special Tax A shall be levied Proportionately on each
Assessor's Parcel of Developed Property at up to 100% of the applicable
Assigned Special Tax A;
Second: If additional moneys are needed to satisfy the Special Tax A
Requirement for Facilities after the first step has been completed, the Annual
Special Tax A shall be levied Proportionately on each Assessor's Parcel of
Approved Property at up to 100% of the Maximum Special Tax A for Approved
Property;
Third: If additional moneys are needed to satisfy the Special Tax A Requirement
for Facilities after the first step has been completed, the Annual Special Tax A
shall be levied Proportionately on each Assessor's Parcel of Undeveloped
Property up to 100% of the Maximum Special Tax A for Undeveloped Property;
Fourth: If additional moneys are needed to satisfy the Special Tax A
Requirement for Facilities after the first three steps have been completed, the
Special Tax A to be levied on each Parcel of Developed Property for which the
Maximum Special Tax A is derived by the application of the Backup Special Tax
A shall be increased in equal percentages from the Assigned Special Tax A up to
the Maximum Special Tax A for such Parcel;
Fifth: If additional monies are needed to satisfy the Special Tax Requirement for
Facilities after the first four steps have been completed, then the Annual Special
Tax A shall be levied Proportionately on each Assessor's Parcel of Taxable
Property Owner Association Property at up to the Maximum Special Tax A
for Taxable Property Owner Association Property;
Sixth: If additional moneys are needed to satisfy the Special Tax Requirement
for Facilities after the first five steps have been completed, then Special Tax A
shall be levied Proportionately on each Assessor's Parcel of Taxable Public
Property at up to the Maximum Special Tax A for Taxable Public Property.
2. Special Tax B
Commencing with Fiscal Year 2014 -2015 and for each following Fiscal Year, the
Council or its designee shall levy the Special Tax B until the total Special Tax B
levy equals the Special Tax B Requirement for Services. The Special Tax B
shall be levied each Fiscal Year as follows:
First: The Special Tax B shall be levied Proportionately on each Assessor's
Parcel of Developed Property at up to 100% of the applicable Maximum Special
Tax B;
Second: If additional monies are needed to satisfy the Special Tax B
Requirement for Services after the first step has been completed, the Special
Tax B shall be levied Proportionately on each Assessor's Parcel of Approved
Property at up to 100% of the Maximum Special Tax B for Approved Property.
Third: If additional monies are needed to satisfy the Special Tax B Requirement
for Services after the first two steps have been completed, the Special Tax B
shall be levied Proportionately on each Assessor's Parcel of Undeveloped
Property at up to 100% of the Maximum Special Tax B for Undeveloped
Property.
E. EXEMPTIONS
1. Special Tax A
No Special Tax A shall be levied on up to 19.61 Acres of Public Property and /or,
Property Owner Association Property in the chronological order in which property
becomes Public Property and Property Owner Association Property. However,
should an Assessor's Parcel no longer be classified as Public Property or
Property Owner Association Property, its tax - exempt status will be revoked as
determined by the CFD Administrator.
Property Owner Association Property or Public Property that is not exempt from
the Special Tax A under this section shall be subject to the levy of the Special
Tax A and shall be taxed Proportionately as part of the fifth and sixth steps in
Section D.1 as determined by the CFD Administrator.
2. Special Tax B
No Special Tax B shall be levied on Public Property or Property Owner
Association Property.
APPEALS AND INTERPRETATIONS
Any landowner or resident who feels that the amount of the Special Tax levied on such
landowner's or resident's Assessor's Parcel is in error may submit a written appeal to
CFD No. 2014 -1. The CFD Administrator shall review the appeal and if the CFD
Administrator concurs and the Special Tax is to be modified in favor of the Property
owner or resident of the Assessor's Parcel, no cash refund shall be made for prior years'
Special Tax levies, but an adjustment shall be made to the next Special Tax levy(ies).
The Council may interpret this Rate and Method of Apportionment of Special Tax for
purposes of clarifying any ambiguity and make determinations relative to the amount of
Administrative Expenses.
G. MANNER OF COLLECTION
Special Tax A and Special Tax B will be collected in the same manner as ordinary ad
valorem property taxes or in such other manner as the Council shall determine, including
direct billing of the affected property owners.
H. PREPAYMENT OF SPECIAL TAX A
The following additional definitions apply to this Section H
"Build -out" means, for CFD No. 2014 -1, that all expected Building Permits for the
Assessors Parcels in CFD No. 2014 -1 have been issued.
"CFD Public Facilities" means either $16,200,000 in 2014 dollars, which shall increase
by the Construction Inflation Index on July 1, 2015, and on each July 1 thereafter, or
such lower number as (i) shall be determined by the CFD Administrator as sufficient to
provide the Authorized Facilities, or (ii) shall be determined by the City Council
concurrently with a covenant that it will not issue any more Bonds (except refunding
bonds) to be supported by the Special Tax A levy under this Rate and Method of
Apportionment as described in Section DA above.
"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 Construction 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 minus (i) public facility costs
previously paid from the Improvement Fund, (ii) moneys currently on deposit in the
Improvement Fund, and (iii) moneys currently on deposit in an escrow fund that are
expected to be available to finance the cost of CFD Public Facilities.
"Improvement Fund" means an account specifically identified in the Indenture to hold
funds which are currently available for expenditure to acquire or construct Authorized
Facilities.
"Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are
deemed to be outstanding under the Indenture after the first interest and /or principal
payment date following the current Fiscal Year.
Prepayment in Full
Only an Assessor's Parcel of Developed Property, or Taxable Property Owner
Association Property, Taxable Public Property or Approved Property for which a
building permit has been issued, may prepay Special Tax A. The obligation of
the Assessor's Parcel to pay the Special Tax A may be permanently satisfied as
described herein, provided that a prepayment may be made with respect to a
particular Assessor's Parcel only if there are no delinquent Special Taxes with
respect to such Assessor's Parcel at the time of prepayment. An owner of an
Assessor's Parcel intending to prepay the Special Tax A 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 for such Assessor's Parcel. The CFD Administrator may
charge the owner prepaying Special Tax A a reasonable fee for providing this
service. Prepayment must be made not less than 45 days prior to the next
occurring date that notice of redemption of CFD No. 2014 -1 Bonds from the
proceeds of such prepayment may be given by the Trustee pursuant to the
Indenture.
The Special Tax B may not be prepaid.
The Special Tax A Prepayment Amount (defined below) shall be calculated as
summarized below (capitalized terms as defined below):
Bond Redemption
Amount
plus
Redemption Premium
plus
Future Facilities Amount
plus
Defeasance Amount
plus
Administrative Fees and Expenses
less
Reserve Fund Credit
less
Capitalized Interest Credit
Total: equals
Special Tax A Prepayment Amount
As of the proposed date of prepayment, the Special Tax A Prepayment Amount shall be
calculated as follows:
Paragraph No.:
Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, Taxable Property Owner
Association Property, or Taxable Public Property for which a Building Permit has
been issued, compute the Maximum Special Tax A for the current Fiscal Year
applicable for the Assessor's Parcel to be prepaid. For Assessor's Parcels of
Approved Property for which a building permit has been issued, compute the
Maximum Special Tax A for the current Fiscal Year applicable 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.
3. Divide the Maximum Special Tax A computed pursuant to paragraph 2 by the
total estimated Maximum Special Tax A for the entire CFD No. 2014 -1 based on
the Developed Property Special Tax A which could be levied in the current Fiscal
Year on all expected development through Build -out of CFD No. 2014-1,
excluding any Assessor's Parcels which have been prepaid.
4. Multiply the quotient computed pursuant to paragraph 3 by the Previously Issued
Bonds to compute the amount of Previously Issued Bonds to be retired and
prepaid (the "Bond Redemption Amount').
5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the
applicable redemption premium (e.g., the redemption price - 100 %), if any, on the
Previously Issued Bonds to be redeemed (the "Redemption Premium ").
6. Compute the current Future Facilities Costs.
7. Multiply the quotient computed pursuant to paragraph 3 by the amount
determined pursuant to paragraph 6 to compute the amount of Future Facilities
Costs to be prepaid (the "Future Facilities 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 Previously Issued Bonds.
9. Determine any Special Tax A levied on the Assessor's Parcel in the current
Fiscal Year which has not yet been paid.
10. Compute the minimum amount the CFD Administrator reasonably expects to
derive from the reinvestment of the Special Tax A Prepayment Amount less the
Future Facilities Amount and the Administrative Fees and Expenses (defined
below) from the date of prepayment until the redemption date for the Previously
Issued Bonds to be redeemed with the prepayment.
11. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the
amount computed pursuant to paragraph 10 (the "Defeasance Amount').
12. The administrative fees and expenses of CFD No. 2014 -1 are as calculated by
the CFD Administrator and include the costs of computation of the prepayment,
the costs to invest the prepayment proceeds, the costs of redeeming CFD
No. 2014 -1 Bonds, and the costs of recording any notices to evidence the
prepayment and the redemption (the "Administrative Fees and Expenses').
13. If reserve funds for the Previously Issued 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 Previously Issued 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.
14. If any capitalized interest for the Previously Issued Bonds will not have been
expended as of the date immediately following the first interest and /or principal
payment following the current Fiscal Year, a capitalized interest credit shall be
calculated by multiplying the quotient computed pursuant to paragraph 3 by the
expected balance in the capitalized interest fund or account under the Indenture
after such first interest and /or principal payment (the "Capitalized Interest
Credit").
15. The Special Tax A prepayment is equal to the sum of the amounts computed
pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant
to paragraphs 13 and 14 (the "Special Tax A Prepayment Amount").
From the Special Tax for Facilities Prepayment Amount, the amounts computed
pursuant to paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund
as established under the Indenture and be used to retire Previously Issued Bonds or
make debt service payments. The amount computed pursuant to paragraph 7 shall be
deposited into the Improvement Fund. The amount computed pursuant to paragraph 12
shall be retained by the CFD Administrator.
The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full
$5,000 increment of Previously Issued Bonds. In such cases, the increment above
$5,000 or integral multiple thereof will be retained in the appropriate fund established
under the Indenture to be used with the next prepayment of Previously Issued Bonds or
to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax A levy as determined under
paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax
A levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's
Parcel that is prepaid, the City Council shall cause a suitable notice to be recorded in
compliance with the Act, to indicate the prepayment of the Special Tax A and the release of the
Special Tax A lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to
pay the Special Tax A shall cease.
Notwithstanding the foregoing, no Special Tax A prepayment shall be allowed unless, at the
time of such proposed prepayment, the amount of Maximum Special Tax A that may be levied
on Taxable Property within CFD No. 2014 -1 (after excluding Public Property and Property
Owner Association Property as set forth in Section E) both prior to and after the proposed
prepayment is at least 1.1 'times the maximum annual debt service on all Previously Issued
Bonds, plus the estimated annual Administration Expenses.
2. Prepayment in Part
The Special Tax A on an Assessor's Parcel of Developed Property or an
Assessor's Parcel of Taxable Property Owner Association Property, Taxable
Public 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 1.1; except that a partial prepayment shall be calculated
according to the following formula:
PP = ((PE -A) X F) + A
These terms have the following meaning
PP = the partial prepayment
PE = the Special Tax A Prepayment Amount calculated according to
Section 1.1
F = the percentage, expressed as a decimal, by which the owner of the
Assessor's Parcel is partially prepaying the Special Tax A.
A = Administrative'Fees and Expenses
The owner of any Assessor's Parcel who desires such prepayment shall notify
the CFD Administrator of such owner's intent to partially prepay the Special Tax
A and the percentage by which the Special Tax A shall be prepaid. The CFD
Administrator shall provide the owner with a statement of the amount required for
the partial prepayment of the Special Tax A 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 Section 1.1, and (ii) indicate in
the records of CFD No. 2014 -1 that there has been a partial prepayment of the
Special Tax A and that a portion of the Special Tax A with respect to such
Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the
remaining Maximum Special Tax A, shall continue to be levied on such
Assessor's Parcel pursuant to Section D.
Notwithstanding the foregoing, no Special Tax A prepayment shall be allowed
unless, at the time of such proposed prepayment, the amount of Maximum
Special Tax A that may be levied on Taxable Property within CFD No. 2014 -1
(after excluding Public Property and Property Owner Association Property as set
forth in Section E) both prior to and after the proposed prepayment is at least 1.1
times the maximum annual debt service on all Previously Issued Bonds, plus the
cost of annual CFD administration.
TERM OF SPECIAL TAX
The Special Tax A shall be levied for a period not to exceed forty years commencing
with Fiscal Year 2014 -2015. The Special Tax B shall be levied as long as necessary to
meet the Special Tax B Requirement for Services.
RESOLUTION NO. 14 -35
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN,
CALIFORNIA, OF INTENTION TO INCUR BONDED INDEBTEDNESS
WITHIN THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT
NO. 2014 -1 (TUSTIN LEGACY /STANDARD PACIFIC)
The City Council of the City of Tustin does hereby resolve as follows:
WHEREAS, upon receipt of a written request signed by two members of the City
Council (the "City Council ") of the City of Tustin, California (the "City "), as provided in
Government Code section 53318(a), which constitutes part of the Mello -Roos
Community Facilities Act of 1982, as amended (the "Act'), the City Council instituted
proceedings to form the City of Tustin Community Facilities District No. 2014 -1 (Tustin
Legacy /Standard Pacific) (the "Community Facilities District' or "CFD No. 2014 -1 ")
pursuant to the Act, and adopted a resolution of intention to establish CFD No. 2014 -1
on the date hereof (the 'Resolution of Intention ") stating its intention to form CFD No.
2014 -1 and to finance the Facilities, Services and Incidental Expenses as more fully set
forth in Exhibit B to the Resolution of Intention; and
WHEREAS, the City Council estimates that the amount required to finance the
Facilities and Incidental Expenses is approximately $29,000,000; and
WHEREAS, in order to finance the Facilities and Incidental Expenses, the City
Council intends to authorize the issuance of bonds from the Community Facilities
District in an amount not to exceed $29,000,000 (the "Bonds "), the repayment of which
is to be made from special taxes levied in accordance with Section 53340 of the Act on
all property in the Community Facilities District, other than those properties exempted
from taxation in the rate and method of apportionment of special tax for the Community
Facilities District set /forth in Exhibit C to the Resolution of Intention;
NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows:
SECTION 1: Each of the above recitals is true and correct.
SECTION 2: It is necessary to incur bonded indebtedness within the boundaries
of the Community Facilities District in an amount not to exceed $29,000,000, in order to
finance certain of the costs of the Facilities and Incidental Expenses, as permitted by
the Act.
Resolution No. 14 -35
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SECTION 3: The indebtedness will be incurred for the purpose of financing the
costs of the Facilities and the Incidental Expenses, including, but not limited to, the
funding of reserve funds for the Bonds, the financing of costs associated with the
issuance of the Bonds and all other costs and expenses necessary to finance the
Facilities which are permitted to be financed pursuant to the Act.
SECTION 4: It is the intent of the City Council to authorize the sale of the Bonds
in one or more series in the maximum amount set forth in Section 2, and which Bonds
may bear interest at a rate not in excess of the maximum rate permitted by law at the
time that the Bonds are sold. The term of the Bonds of each series shall be determined
pursuant to a resolution of this City Council authorizing the issuance of the Bonds of
such series, but such term shall in no event exceed 40 years from the date of issuance
of the Bonds of such series, or such longer term as is then permitted by law.
SECTION 5: A combined public hearing (the "Hearing ") on the proposed debt
issue and the levy of special taxes shall be held at 7 p.m. or as soon thereafter as
practicable, on June 17, 2014, at the City Council's Chambers, 300 Centennial Way,
Tustin, California.
SECTION 6: At the time and place set forth in this Resolution for the Hearing,
any interested persons, including all persons owning land or registered to vote within
the proposed Community Facilities District, may appear and be heard.
SECTION 7: The City Clerk is hereby directed to publish a notice of the Hearing
(the "Notice ") pursuant to Section 6061 of the Government Code in a newspaper of
general circulation published in the area of the proposed Community Facilities District.
Such publication shall be completed at least seven days prior to the date of the
Hearing.
SECTION 8: This Resolution shall be effective upon its adoption.
PASSED AND ADOPTED at a regular meeting of the Tustin City Council held on
the 6th day of May, 2014.
ELWYN A. MURRAY,
Mayor
Resolution No. 14 -35
Page 2 of 3
ATTEST:
JEFFREY C. PARKER,
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF TUSTIN )
I, Jeffrey C. Parker, City Clerk and ex- officio Clerk of the City Council of the City of
Tustin, California, do hereby certify that the whole number of the members of the City
Council of the City of Tustin is five; that the above and foregoing Resolution No. 14 -35
was duly passed and adopted at a regular meeting of the Tustin City Council, held on
the 6th day of May, 2014 by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
JEFFREY C. PARKER,
City Clerk
Resolution No. 14 -35
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