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HomeMy WebLinkAboutCC RES 14-34RESOLUTION 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, 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, Resolution No. 14 -34 Page 1 of 6 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 be held 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 I such Property in the event of nonpayment of the special tax imposed by the Community Facilities District. 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 Resolution No. 14 -34 Page 2 of 6 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. 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 Resolution No. 14-34 Page 3 of 6 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, 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 Resolution No. 14 -34 Page 4 of 6 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 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. C JEF .PARKER, JE Cit C Resolution No. 14 -34 Page 5 of 6 Mayor r_w•m:T:n -A STATE OF CALIFORNIA ) ' COUNTY OF ORANGE ) SS 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 6t' day of May, 2014 by the following vote: COUNCILPERSONS AYES: Murray, Puckett, Nielsen, Gomez, Bernstein (5) COUNCILPERSONS NOES: None (0) COUNCILPERSONS ABSTAINED: None (0) COUNCILPERSONS ABSENT: None (0) I �'V '�a - PARKER, Resolution No. 14 -34 Page 6 of 6 EXHIBIT A ' DESCRIPTION OF THE TERRITORY OF THE PROPOSED COMMUNITY FACILITIES DISTRICT PROPOSED BOUNDARY MAP Earn n THE WnCE W THE CITY CUM W THE COMMUNITY FACILITIES DISTRICT NO. 2014-1 CITYWrvsnx TWs_wrW m1_. (TUSTIN LEGACY I STANDARD PACIFIC) CITY OF TUSTIN, COUNTY OF ORANGE, SFEArC. Po kCtt CUM STATE OF CALIFORNIA M W TusnH I KMV C 1" THAT THE MTHIN ~ SHQ M gCW5E0 6llHmWEs W THE CT" W 'U". m,IKllgm EI➢IITTES CHUNCT W. .111 ( H 18✓LY / SIIlIW1D PKIFIC) I CPMir CF CQtTGE, PATE W UI.14 MG Ig Ul m THE Cm ED'Al(II W TW Cm 6 TUSTW ET P 1 LWI ✓ UM THEx HELD CM THE wr W m1_ m rts EESIXYTIDN xo. EHMkV C. PM*K CITY CUSH( Em W TUSnx S.EET , OF 1 FILM THIS _ Mr p IDI— AT THE IEF _ OdCV( _H. W B QA of wss CIE wsSE WT ANE) mWllam rE.U{I}IQ dsrwcrs xT P. I THE FEWEST Of THE Cm W T I- In THE WEICE W THE CPMm PSpNEII a T. @JHry Ck bux VOE W Gt]IOE W FEE: IWT. 1: REMEE UIIWE2 wEL C CIEMR C` HIXv m DD.In CQErtr Q9U4x&WDDI CD1Mr W DWIIGE THE 105 AVD DIXHM W EEC. IOT M MPCEL SIIJ.M' a. THS . SWU m T,OvE ITHn ... DINFl9as / LL EW ME Q f CAMTT ASSFSQ.I'S W15 RA THOSE VYLF35 uww. THE cmm1 cx M I.569L1f5 E4vS Lou UNECN W IN SUIua 1nnCkwC4KfE1NdG TIE IEMFS AYD DINEXSIWS Ts W vxvcEiE. CFDaxwD.ny WYE 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. 1 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. n 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. I "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 CA.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 CA.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. 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 I 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 I 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 I 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 r 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 PrODertv 4 Single Family Residential DU 2,570 -2,889 s.f. $ 2,375 $ 1,164 Pro ert 5 Single Family Residential DU 2,250 — 2,569 s.f. $ 2,095 $ 1,020 Pro ert 6 Single Family Residential DU < =2,250 s.f. $ 1,745 $ 860 Pro ert 7 Multi -famil Residential Property Acre N/A $29,596 $14,475 8 Non - Residential Property Acre N/A M29,596 $14,475 b, Backuo 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 Owners 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. d. 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 I 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 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. I 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. F. 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 Facitities" 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 I 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. I 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 Credir). 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 11 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. I. 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.