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HomeMy WebLinkAboutCC RES 14-40RESOLUTION NO. 14 -40 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN ESTABLISHING THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2014 -1 ( TUSTIN LEGACY /STANDARD PACIFIC), AUTHORIZING THE LEVY OF SPECIAL TAXES, WAIVING CERTAIN ELECTION PROCEDURES AND CALLING AN ELECTION THEREIN WHEREAS, the City Council (the "City Council ") of the City of Tustin, California (the "City ") has heretofore adopted Resolution No. 14 -34 (the 'Resolution of Intention ") stating its intention to establish the City of Tustin Community Facilities District No. 2014- 1 (Tustin Legacy /Standard Pacific) (the "Community Facilities District') pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the "Act'); and WHEREAS, a copy of the Resolution of Intention setting forth a description of the proposed boundaries of the Community Facilities District, and the public facilities, services and the incidental expenses to be financed by the Community Facilities District (the "Facilities," "Services" and 'Incidental Expenses," respectively) is on file with the City Clerk; and, except to the extent amended by this resolution, the Resolution of Intention is incorporated herein by reference; and WHEREAS, a notice of a public hearing on matters related to the Community Facilities District to be held on June 17, 2014 was published in accordance with the Act; and WHEREAS, on June 17, 2014, the City Council opened the public hearing (the "Hearing ") as required by law; and WHEREAS, at the Hearing there was filed with this City Council a report containing a description of the Facilities and Services necessary to meet the needs of the Community Facilities District and an estimate of the cost of such Facilities and Services as required by Section 53321.5 of the Act (the "Community Facilities District Report"); and WHEREAS, at the Hearing all persons desiring to be heard on all matters pertaining to the proposed formation of the Community Facilities District and the levy of the special taxes and the issuance of bonded indebtedness were heard and a full and fair hearing was held; and WHEREAS, at the Hearing, evidence was presented to the City Council on the matters before it, and the proposed formation of the Community Facilities District and the levy of special taxes was not precluded by a majority protest of the type described in Section 53324 of the Act, and this City Council at the conclusion of the Hearing is fully Resolution No. 14 -40 Page 1 of 6 advised as to all matters relating to the formation of the Community Facilities District, the levy of the special taxes and the issuance of bonded indebtedness; and WHEREAS, at the Hearing, certain changes to the form of the rate and method of apportionment of special tax attached as Exhibit C to the Resolution of Intention were described; and WHEREAS, the City Council has determined that there have been fewer than twelve registered voters residing in the proposed boundaries of the Community Facilities District for the period of 90 days prior to the Hearing and that the qualified electors in the Community Facilities District are the landowners within the Community Facilities District; and WHEREAS, on the basis of all of the foregoing, the City Council has determined at this time to proceed with the establishment of the Community Facilities District and with the calling of an election within the boundaries of the Community Facilities District to authorize (i) the levy of special taxes within the Community Facilities District pursuant to the rate and method of apportionment of the special tax, (ii) the issuance of bonds to finance the Facilities and Incidental Expenses, and (iii) the establishment of an appropriations limit for the Community Facilities District; and WHEREAS, as the sole landowner within the Community Facilities District, the City desires to waive certain election procedures relating to such election; NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF TUSTIN AS FOLLOWS: Section 1. Each of the above recitals is true and correct. Section 2. The Community Facilities District to be designated "City of Tustin Community Facilities District No. 2014 -1 (Tustin Legacy /Standard Pacific)" is hereby established pursuant to the Act. The City Council hereby finds and determines that all prior proceedings taken with respect to the establishment of the Community Facilities District were valid and in conformity with the requirements of law, including the Act. This finding is made in accordance with the provisions of Section 53325.1(b) of the Act. Section 3. The boundaries of the Community Facilities District are established as shown on the map designated "Proposed Boundary Map Community Facilities District No. 2014 -1 (Tustin Legacy /Standard Pacific) City of Tustin, County of Orange, State of California ", which map is on file in the office of the City Clerk and was recorded pursuant to Sections 3111 and 3113 of the Streets and Highways Code in the County of Orange Book of Maps of Assessment and Community Facilities Districts in the County Recorder's Office in Book No. 99 at page 43 M/M as Document No. 2014000180375 on May 9, 2014. Section 4. The types of Facilities, Services and Incidental Expenses authorized to be provided for the Community Facilities District are those set forth in the Resolution of Intention. The estimated cost of the Facilities, Services and Incidental Resolution No. 14-40 Page 2 of 6 Expenses to be financed is set forth in the Community Facilities District Report, which estimates may change as the Facilities are designed and bid for construction and acquisition, and as the costs of the Services are more fully determined. The City of Tustin is authorized by the Act to contribute revenue to, or to construct or acquire the Facilities or provide the Services, all in accordance with the Act. The City Council finds that the proposed Facilities and Services are necessary to meet the increased demand that will be placed upon public infrastructure, the Tustin Unified School District and the City as a result of new development within the Community Facilities District. Section 5. The City Council hereby adopts the rate and method of apportionment of special tax attached hereto as Exhibit A (the "Rate and Method ") as the applicable rate and method of apportionment for the Community Facilities District. Except where funds are otherwise available, it is the intention of the City Council, subject to the approval of the qualified electors within the Community Facilities District, to levy the proposed special taxes in the Community Facilities District at the rates set forth in the Rate and Method hereto on all non - exempt property within the Community Facilities District sufficient to pay (i) the costs of the Facilities and the principal and interest and other periodic costs on the bonds proposed to be issued by the Community Facilities District to finance the Facilities, including the establishment and replenishment of reserve funds, 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) and other expenses of the type permitted by Section 53345.3 of the Act; (ii) the annual cost of the Services and (iii) the Incidental Expenses. The Community Facilities District expects to incur, and in certain cases has already incurred, Incidental Expenses in connection with the creation of the Community Facilities District, providing the Services, the issuance of bonds, the levying and collecting of the special tax, the completion and inspection of the Facilities and the annual administration of the bonds and the Community Facilities District. The Rate and Method is described in detail in Exhibit A hereto and incorporated herein by this reference, and the City Council hereby finds that said Exhibit A contains sufficient detail to allow each future landowner within the Community Facilities District to estimate the maximum amount that may be levied against each parcel. The special tax shall be levied on each assessor's parcel pursuant to the Rate and Method, but the special tax shall not be levied after Fiscal Year 2053- 54. The special tax is apportioned to each parcel on the foregoing bases pursuant to Section 53325.3 of the Act and such special tax is not a tax on or a tax based upon the ownership of real property. The City's Director of Finance will be responsible for preparing annually, or authorizing a designee to prepare, a current roll of special tax levy obligations by assessor's parcel number and will be responsible for estimating future special tax levies pursuant to Section 53340.2 of the Act. The City's Director of Finance is located at 300 Centennial Way, Tustin, California 92780, telephone: (714) 573 -3000. Section 6. 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 Resolution No. 14-40 Page 3 of 6 of the special tax specified in the Rate and Method, the City Council shall, on behalf of the Community Facilities District, increase the levy to the extent necessary and permitted by law and these proceedings upon the remaining property within the Community Facilities District which is not delinquent or exempt in order to yield the required debt service payments on any outstanding bonds of the Community Facilities District or to prevent the Community Facilities District from defaulting on any other of its obligations or liabilities; provided, however, that under no circumstances shall the special tax in the Community Facilities District be increased in any fiscal year (a) 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 or (b) in excess of the maximum special tax rates in the Rate and Method. The annual amount of the special tax levy will be set in accordance with the Rate and Method. Section 7. Upon recordation of a notice of special tax lien for the Community Facilities District pursuant to Section 3114.5 of the Streets and Highways Code, a continuing lien to secure each levy of the special tax shall attach to all non - exempt real property in the Community Facilities District; and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the special tax by the Community Facilities District ceases. Section 8. It is hereby further determined that there is no ad valorem property tax currently being levied on property within the proposed Community Facilities District for the exclusive purpose of paying the principal of or interest on bonds or other indebtedness incurred to finance the construction of capital facilities which provide the same services to the territory of the Community Facilities District as are proposed to be provided by the Facilities or Services to be financed by the Community Facilities District. Section 9. Written protests against the establishment of the Community Facilities District have not been filed by one -half or more of the registered voters within the boundaries of the Community Facilities District or by the property owners of one -half or more of the area of land within the boundaries of the Community Facilities District. The City Council hereby finds that the proposed special tax has not been precluded by a majority protest pursuant to Section 53324 of the Act. Section 10. An election is hereby called for the Community Facilities District on the propositions of levying the special tax on the property within the Community Facilities District and establishing an appropriations limit for the Community Facilities District pursuant to Section 53325.7 of the Act and shall be consolidated with the election on the proposition of incurring bonded indebtedness for the Community Facilities District, pursuant to Section 53351 of the Act (the "Election "). The propositions to be placed on the ballot for the Community Facilities District are attached hereto as Exhibit B. Resolution No. 1440 Page 4 of 6 C Section 11. To the maximum extent possible under the Act and the Election Code, the City hereby waives certain election procedures relating to the Election, including, but not limited to, the procedures set forth in Government Code sections 53326 and 53327 and Election Code sections 9160 to 9167, inclusive, 9195 and 9401. The Mayor of the City is hereby designated to vote on its behalf. Section 12. The date of the Election within the Community Facilities District shall be June 17, 2014, or such later date as is consented to by the City Clerk and the City, as the sole landowner within the Community Facilities District. The City Clerk shall conduct the Election. Except as otherwise provided by the Act, the Election shall be conducted by personally delivered ballot and, except as otherwise provided by the Act, the Election shall be conducted in accordance with the provisions of law regulating elections of the City insofar as such provisions are determined by the City Clerk to be applicable. It is hereby found that there are not more than twelve registered voters within the territory of the Community Facilities District for each of the 90 days prior to the close of the Hearing, and, pursuant to Section 53326 of the Act, each landowner who is the owner of record on the date hereof, or the authorized representative thereof, shall have one vote for each acre or portion thereof that he, she or it owns within the Community Facilities District. The voters shall be the City as the sole landowner of record within the Community Facilities District as of June 17, 2014. Section 13. The preparation of the Community Facilities District Report is hereby ratified. The Community Facilities District Report, as submitted, is hereby approved and made a part of the record of the public hearing regarding the formation of the Community Facilities District, and is ordered to be kept on file with the transcript of these proceedings and open for public inspection. Section 14. Pursuant to the Local Agency Special Tax and Bond Accountability Act, Section 50075.1 et seq. and Sections 53410 et seq. of the California Government Code: (a) the ballot measures referred to in Section 10 above contain a statement indicating the specific purposes of the special tax, the proceeds of the special tax will be applied only to the purposes specified in the ballot measure, the City's Director of Finance is directed to create an account into which proceeds of the special tax levies will be deposited and the City's Director of Finance is directed to provide an annual report to the City Council as required by Section 50075.3 of the California Government Code; and (b) the ballot measures contain a statement indicating the specific purposes of the bonds, the proceeds of the bonds will be applied only to the purposes specified in the ballot measure, the City's Director of Finance is directed to create an account into which the proceeds of the bonds will be deposited, and the City's Director of Finance is directed to provide an annual report as required by Section 53411 of the California Government Code. Resolution No. 14 -40 Page 5 of 6 Section 15. This Resolution shall be effective upon its adoption. PASSED AND ADOPTED by the City Council at a regular meeting held on the 17th day of June, 2014. ATTEST: _ W G ve4e-- JEFF F C. PARKER, City - le 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 -40 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 17th day of June 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) 'A' Attachments: Exhibits A and B Resolution No. 14 -40 Page 6 of 6 C EXHIBIT A 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 1 st preceding the Fiscal Year in which the Special Tax A is being levied, and (it) 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 1 st 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 Assessors 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 I n 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 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. $4,997 $1,522 Property 2 Single Family Residential DU 3,210 — 31529 $4,675 $1,425 Property s.f. 3 Single Family Residential DU 2,890-3209 $4,308 $1,314 Property s.f. 4 Single Family Residential DU 2,570 $3,822 $1,164 (2,889 5 lert Family Residential DU 2,250 $3,346 $1,020 Pro P Y S— 6 Single Family Residential DU < =2,250 s.f. $2,819 $860 Property 7 Multi - family Residential Acre N/A $47,492 $14,475 Property 8 Non - Residential Property Acre N/A $47,492 $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 CA 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 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 $47,492 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 w 0 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. D. 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 $47,492 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. METHOD OF APPORTIONMENT OF THE SPECIAL TAX 1. 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 E. F G. H. Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax B for Undeveloped Property. EXEMPTIONS Special Tax A No Special Tax A shall be levied on up to 46.57 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. 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. 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. 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 $26,000,000 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 D.1 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. 1. 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: Parauraph 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)XF) +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. 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. EXHIBIT B SAMPLE BALLOT CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2014 -1 (TUSTIN LEGACY /STANDARD PACIFIC) SPECIAL TAX AND SPECIAL BOND ELECTION June 17, 2014 This ballot represents _ votes. To vote, stamp a cross ( +) in the voting square after the word "YES" or after the word "NO ". All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void. PROPOSITION A: Shall the City of Tustin Community Facilities District No. 2014 -1 (Tustin Legacy /Standard Pacific) (the "District') incur an indebtedness and issue bonds of the District in the maximum principal amount of $29,000,000, with interest at a rate or YES rates not to exceed the maximum interest rate permitted by law, to _ finance the Facilities and the Incidental Expenses described in Resolution No. 14 -34 adopted by the City Council of the City of NO Tustin? _ PROPOSITION B: Shall special taxes with a rate and method of apportionment as provided in Resolution No. 14 -40 adopted by the City of Tustin, acting as the legislative body of the District, be levied YES to pay for the Facilities, Services, Incidental Expenses and other purposes described in Resolution No. 14 -34, including the payment — NO of the principal of and interest on bonds issued by the District to finance the Facilities and Incidental Expenses? — PROPOSITION C: For each year commencing with Fiscal Year 2014 -15, shall the appropriations limit, as defined by subdivision (h) YES of Section 8 of Article XIIIB of the California Constitution, for the _ District be an amount equal to $29,000,000? NO