HomeMy WebLinkAbout13 CFD 07-1 05-01-07MEETING DATE: May 1, 2007
T0: William A. Huston, City Manager
FROM: Ronald A. Nault, Finance Director
SUBJECT: RESOLUTION N0.07-35 OF THE INTENTION TO ESTABLISH A COMMUNITY
FACILITIES DISTRICT AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES, AND
RESOLUTION N0.07-36 TO INCUR BONDED INDEBTEDNESS OF THE
PROPOSED CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT N0.07-1
SUMMARY:
A petition to form a Community Facilities District has been sent to the City by Vestar/Kimco
Tustin, L. P. for the area generally known as The District at Tustin Legacy. The items you are
being asked to approve are the initial documents which respond to the Developer's petition and
direct staff to proceed with the creation of the district, establish the rate and method of the
special tax apportionment, incur debt, and approve the selection of various Consultants.
RECOMMENDATION:
1. Accept the Petition to Create a Community Facilities District sent by Costco Wholesale
Corporation, Lowe's HIW, Inc., and VestarlKimco Tustin, L.P.
2. Adopt Resolution No. 07-35, a Resolution of the City Council of the City of Tustin,
California, of Intention to Establish a Community Facilities District and to Authorize the
Levy of Special Taxes.
3. Adopt Resolution No. 07-36, a Resolution of the City Council of the City of Tustin,
California, to Incur Bonded Indebtedness of the Proposed City of Tustin Community
Facilities District No. 07-1 (Tustin LegacylRetail Center).
4. Authorize the City Manager or the Finance Director to sign the Deposit And
Reimbursement Agreement between the City of Tustin and Vestar/Kimco Tustin, L. P.
5. Authorize the selection of various Consultants for the Community Facilities District
financing as recommended by staff.
FISCAL IMPACT:
The cost of the formation of the Community Facilities District will be paid by the Petitioner.
DISCUSSION:
On March 1, 2004 the City Council adopted the City's Mello-Roos Goals & Policies and
authorized staff to proceed with the formation of Community Facilities Districts (CFDs} for the
Legacy Project Area. The items you are requested to approve at this time are governed by the
Mello-Roos Community Facilities Act of 1982 to initialize the CFD formation process. Additional
documents requiring your approval are intended to come to you at your meeting of June 5th.
Exhibit B of Resolution No. 07-36, Proposed Rate and Method of Apportionment of Special Tax,
includes several schedules detailing the proposed special taxes necessary to cover the bonded
indebtedness and services .for the proposed CFD. The cost of the preparation of the CFD is
borne by the Developers and detailed in the Deposit and Reimbursement Agreement attached
to the Petition to Create a Community Facilities District.
The following Consultants have been selected to provide various services in conjunction with
this CFD formation and implementation as follows:
• David A. Taussig & Associates as Special Tax Consultant
• Orrick, Herrington & Sutcliffe, LLP as Bond Counsel
• Gardner, Underwood & Bacon, LLC as Pricing Consultant
• Bank of America Securities, LLC as Underwriters
• Harris Realty Appraisal for Appraisal Services
Staff will be available at the meeting to respond to specific questions that the City Council may
have regarding the Community Facilities District formation process.
;i
Rohal~. Nault, Finance director
Attachments
CommunifyFacilitiesDistrict07-7 FormationResolutionsStaffReport. doc
PETITION
TO CREATE A
COMMUNITY FACILITIES DISTRICT
City Council
City of Tustin
300 Centennial Way
Tustin, California 92680
Members of the City Council:
This is a petition to create a community facilities district, and a waiver with respect to
certain procedural matters, under the Mello-Roos Community Facilities Act of 1982 (the "Act"),
and the undersigned hereby state as follows:
1. Landowner. This Petition is submitted by Vestar/Kimco Tustin, L.P., a California
limited partnership ("Vestar"), Costco Wholesale Corporation, a Washington corporation
("Costco"), and Lowe's HIW, Inc., a Washington corporation ("Lowe's" and together with
Vestar and Costco, the "Landowners"), as the owners, collectively, of all of the area of land
proposed to be included within the community facilities district.
2. Proceedings Requested. The Landowners hereby request that the City Council (the
"City Council") of the City of Tustin (the "City") institute proceedings pursuant to the Act to
establish a community facilities district to be named "City of Tustin Community Facilities
District No. 07-1 (Tustin Legacy/Retail Center)" (the "Community Facilities District"), to levy
special taxes in the Community Facilities District and to authorize special tax bonds for the
Community Facilities District in the maximum amount of $16,000,000.
3. Boundaries of Community Facilities District. The boundaries of the territory which
is proposed for inclusion in the Community Facilities District are described in Exhibit A attached
hereto and made a part hereof.
4. Types of Facilities and Services. The types of facilities and services to be financed
by the Community Facilities District are described in Exhibit B attached hereto and made a part
hereof.
5. Elections. The Landowners hereby request that the special elections to be held under
the Act to authorize the special taxes for the Community Facilities District, to authorize the
issuance of the bonds for the Community Facilities District and to establish an appropriations
limit for the Community Facilities District be consolidated into a single election and that the
election be conducted by the City and its officials using mailed orhand-delivered ballots and that
such ballots be opened and canvassed and the results certified at the same meeting of the City
Council as the public hearings on the Community Facilities District under the Act, or as soon
thereafter as possible.
OHS WEST;260194729.3
6. Waiver. To expedite the completion of the proceedings for the Community Facilities
District, each of the Landowners hereby waives all notices of hearings (other than published
notices required under the Act) and all notices of election, all applicable waiting periods under
the Act for the election, all ballot analysis and arguments for the election and all requirements as
to the form of the ballot.
7. Deposit. Vestar has submitted (a) a check in the amount of $25,000, which shall
constitute the deposit required by the City to be used to compensate the City Council and the
City for all costs incurred in conducting proceedings to create the Community Facilities District,
and (b) a duly executed Deposit and Reimbursement Agreement, dated as of December 1, 2006
(the "Deposit Agreement"), by and between the City and Vestar. The Landowners hereby agree
that Vestar is entitled to reimbursement pursuant to the terms of the Deposit Agreement.
8. Representations and Warranties. Vestar hereby represents and warrants to the City
that (a) collectively, the Landowners are, as of the date of this Petition, the legal owners of the
fee interest in all of the property proposed to be included within the Community Facilities
District and that no other person or entity is the legal owner of any portion of the fee interest in
any of such property, (b) Vestar is the owner of the land identified on Exhibit A attached hereto
as being owned by it and (c) Vestar has the power and authority to execute and deliver this
Petition and the Deposit Agreement, and has taken all action necessary to cause this Petition and
the Deposit Agreement to be executed and delivered on its behalf, and this Petition and the
Deposit Agreement have been duly and validly executed and delivered by Vestar. Lowe's
hereby represents and warrants to the City that (a) Lowe's is the owner of the land identified on
Exhibit A attached hereto as being owned by Lowe's and (b) Lowe's has the power and authority
to execute and deliver this Petition, has taken all action necessary to cause this Petition to be
executed and delivered on its behalf, and has duly and validly executed and delivered this
Petition. Costco hereby represents and warrants to the City that (a) Costco is the owner of the
land identified on Exhibit A attached hereto as being owned by Costco and (b) Costco has the
power and authority to execute and deliver this Petition, has taken all action necessary to cause
this Petition to be executed and delivered on its behalf, and has duly and validly executed and
delivered this Petition.
9. Mailing Addresses. The address of each of the Landowners for receiving notices is
as follows:
To Lowe's: Lowe's HIW, Inc.
1530 Faraday Avenue, Suite 140
Carlsbad, CA 92008
Attn: Bob Midkiff, Construction Manager
With a copy to: Lowe's HIW, Inc.
1530 Faraday Avenue, Suite 140
Carlsbad, CA 92008
Attn: Tom Maddox
OHS WEST:260194729.3 2
10. Counterparts. This Petition may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
This Petition is dated as of May 1, 2007.
Costco Wholesale Corporation,
a Washington corporation
By: signed in counter part
Name:
Title:
Lowe's HIW, Inc.
a Washington corporation
By: _ si ~nPd in counter part
Name:
Title:
Vestar/Kimco Tustin, L.P.
By: Vestar California XXX, L.L.C.
Its: General Partner
By•
Name
Title ager ana er
M g
OHS WEST:260194729.4 3
10. Counterparts. This Petition may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
This Petition is dated as of May 1, 2007.
Costco Wholesale Corporation,
a Washington rpora 'o
By:
Name:
Title: •
• ~ ~~.
Lowe's HIW, Inc.
a Washington corporation
By: signed in counter part
Name:
Title:
Vestar/Kimco Tustin, L.P.
By: Vestar California XXX, L.L.C.
Its: General Partner
By:
Name:
Title:
signed in counter part
Manager
OHS WEST:260194729.4 3
10. Counterparts. This Petition may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
This Petition is dated as of May 1, 2007.
Costco wholesale Corporation,
a Washington corporation
By: signed in counter part
Name:
Title:
Lowe's HIw, Inc.
a Washington corporation
By: ~ ~C
Name: rtln,ow~_~S ~ . (1~.u ~ ~ a~
Title: ~ ~ c.;~ P.~ e.s ~ ~ n-~ /-~ss ~ ~ -~ ~
L o•.•.,v~ s.e
Vestar~co Tustin, L.P.
By: Vestar California XXX, L.L.C.
Its: General Partner
By'
Name:
Title:
signed in counter part
Manager
_~
OHS WES~':260194729.4 3
EXHIBIT A
BOUNDARIES OF COMMUNITY FACILITIES DISTRICT
The boundaries of the territory which are proposed for inclusion in the
Community Facilities District are depicted in the attached map. The territory proposed
for inclusion in the Community Facilities District and owned by the Landowners is
identified as the following Orange County Assessor Parcel Nos.:
The territory identified as follows is owned by Vestar:
434-431-03 (a portion) 434-441-10
434-431-25 (a portion) 434-441-11
434-441-01 434-441-12
434-441-03 434-441-13
434-441-04 (a portion) 434-441-14
434-441-OS 434-441-15
434-441-06 434-441-16
434-441-07 (a portion) 434-441-17
434-441-08 434-441-18
434-441-09
The territory identified as follows is owned by Costco:
434-431-03 (a portion)
434-431-OS (a portion)
434-431-06
434-431-10
434-431-11
434-431-12 (a portion)
434-431-21
434-431-22
434-431-24
434-431-30
(NOTE: The Costco territory is also known. as Parcel 2 of LLA 2006-07 and
Lot 15 of Tract Map No. 16695.)
The territory identified as follows is owned by Lowe's:
434-431-03 (a portion)
434-431-OS (a portion)
434-431-12 (a portion)
434-431-25 (a portion)
434-441-04 (a portion)
434-441-07 (a portion)
(NOTE: The Lowe's territory is also known as Parcel 1 of LLA 2006-07.)
A-1
EXHIBIT B
TYPES OF FACILITIES AND SERVICES
Facilities
The types of facilities to be financed by the Community Facilities District are street
improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and
signage, street lights and parkway and landscaping related thereto, storm drains, utilities, public
parks and recreation facilities, public library facilities, fire protection facilities and equipment
and land, rights-of way and easements necessary for any of such facilities.
Services
The types of services to be financed by the Community Facilities District are police
protection services, fire protection services, ambulance and paramedic services, recreation
program services, maintenance of parks, parkways and open space and flood and storm
protection services.
RESOLUTION N0.07-35
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN OF INTENTION TO ESTABLISH A COMMUNITY
FACILITIES DISTRICT AND TO AUTHORIZE THE LEVY
OF SPECIAL TAXES
WHEREAS, the City Council (the "City Council") of the City of Tustin (the "City")
has received a written petition (the "Petition") from Vestar/Kimco Tustin, L.P., a
California limited partnership ("Vestar"), Costco Wholesale Corporation, a Washington
corporation, and Lowe's HIW, Inc., a Washington corporation (collectively, the "Land-
owners") requesting the institution of proceedings for the establishment of a community
facilities district (the "Community Facilities District");
WHEREAS, each Landowner, respectively, has represented and warranted to
the City Council that it owns the land designated on Exhibit A to the Petition as being
owned by such Landowner, which is all of the area of land proposed to be included
within the Community Facilities District;
WHEREAS, under the Mello-Roos Community Facilities Act of 1982 (the "Act"),
the City Council is authorized to establish the Community Facilities District;
WHEREAS, Section 53314.9 of the Act provides that, at any time either before
or after the formation of a community facilities district, the legislative body may accept
advances of funds from any source, including, but not limited to, private persons or
private entities and may provide, by resolution, for the use of those funds for any
authorized purpose, including, but not limited to, paying any cost incurred by the local
agency in creating a community facilities district;
WHEREAS, Section 53314.9 of the Act further provides that the legislative body
may enter into an agreement, by resolution, with the person or entity advancing the
funds, to repay all or a portion of the funds advanced, as determined by the legislative
body, with or without interest, under all the following conditions: (a) the proposal to
repay the funds is included in both the resolution of intention to establish a community
facilities district adopted pursuant to Section 53321 of the Act and in the resolution of
formation to establish a community facilities district pursuant to Section 53325.1 of the
Act, (b) any proposed special tax is approved by the qualified electors of the community
facilities district pursuant to the Act, and (c) any agreement shall specify that if the
qualified electors of the community facilities district do not approve the proposed
special tax, the local agency shall return any funds which have not been committed for
any authorized purpose by the time of the election to the person or entity advancing the
funds;
WHEREAS, the City and Vestar are entering into a Deposit and Reimbursement
Agreement, dated as of December 1, 2006 (the "Deposit Agreement"), that provides for
the advancement of funds by Vestar to be used to pay costs incurred in connection with
Resolution No. 07-35
Page 1 of 22
the establishment of the Community Facilities District and the issuance of special tax
bonds thereby, and provides for the reimbursement to Vestar of such funds advanced,
without interest, from the proceeds of any such bonds issued by the Community
Facilities District; and
WHEREAS, the City desires to include in this Resolution, in accordance with
Section 53314.9 of the Act, the proposal to repay funds pursuant to the Deposit
Agreement;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Tustin
as follows:
Section 1. The City Council hereby finds that the Petition is signed by the requi-
site number of owners of land proposed to be included in the Community Facilities
District.
Section 2, The City Council proposes to establish a community facilities district
under the terms of the Act. The boundaries of the territory proposed for inclusion in the
Community Facilities District are described in the map showing the proposed Commu-
nity Facilities District (the "Boundary Map") on file with the City Clerk of the City (the
"City Clerk"), which boundaries are hereby preliminarily approved and to which map
reference is hereby made for further particulars. The City Clerk is hereby directed to
sign the original Boundary Map and record, or cause to be recorded, the Boundary Map
with all proper endorsements thereon in the office of the Orange County Recorder
within 15 days of the date of adoption of this Resolution, all as required by Section 3111
of the California Streets and Highways Code.
Section 3. The name proposed for the Community Facilities District is "City of
Tustin Community Facilities District No. Ol-1 (Tustin Legacy/Retail Center)."
Section 4. The public facilities (the "Facilities") proposed to be financed by the
Community Facilities District pursuant to the Act are described under the caption
"Facilities" on Exhibit A hereto, which is by this reference incorporated herein. Those
Facilities proposed to be purchased as completed public facilities are described under
the caption "Facilities to be Purchased" on Exhibit A hereto. The services (the "Ser-
vices") proposed to be financed by the Community Facilities District pursuant to the Act
are described under the caption "Services" on Exhibit A hereto. The incidental ex-
penses proposed to be incurred are identified under the caption "Incidental Expenses"
on Exhibit A hereto. All or any portion of the Facilities may be financed through a
financing plan, including, but not limited to, a lease, lease-purchase or installment-
purchasearrangement.
Section 5. Except where funds are otherwise available, a special tax sufficient to
pay for all Facilities and Services, secured by recordation of a continuing lien against all
nonexempt real property in the Community Facilities District, will be annual) levied
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within the Community Facilities District. The rate and method of apportionment of the
special tax (the "Rate and Method"), in sufficient detail to allow each landowner within
Resolution No. 01-35
Page 2 of 22
the proposed Community Facilities District to estimate the maximum amount that he or
she will have to pay, is described in Exhibit 6 attached hereto, which is by this refer-
ence incorporated herein. The conditions under which the obligation to pay the special
tax may be prepaid and permanently satisfied are specified in the Rate and Method.
The special tax will be collected in the same manner as ordinary ad valorem property
taxes or in such other manner as the City Council shall determine, including direct
billing of the affected property owners.
The tax year after which no further special tax to pay for public facilities will be
levied against any parcel used for private residential purposes is specified in the Rate
and Method. Under no circumstances shall the special tax to pay for public facilities
levied against any parcel used for private residential purposes be increased as a
consequence of delinquency or default by the owner of any other parcel or parcels
within the Community Facilities District by more than 10%. For purposes of this
paragraph, a parcel shall be considered "used for private residential purposes" not later
than the date on which an occupancy permit for private residential use is issued.
Section 6. Pursuant to Section 53344.1 of the Act, the City Council hereby re-
serves to itself the right and authority to allow any interested owner of property within
the Community Facilities District, subject to the provisions of said Section 53344.1. and
to those conditions as it may impose, and any applicable prepayment penalties as
prescribed in the bond indenture or comparable instrument or document, to tender to
the Community Facilities District treasurer in full payment or part payment of any
installment of the special taxes or the interest or penalties thereon which may be due or
delinquent, but for which a bill has been received, any bond or other obligation secured
thereby, the bond or other obligation to be taken at par and credit to be given for the
accrued interest shown thereby computed to the date of tender.
Section 7. The City Council hereby fixes Tuesday, June 5, 2007, at 7:00 p.m., or
as soon thereafter as the City Council may reach the matter, at 300 Centennial Way,
Tustin, California, as the time and place when and where the City Council will conduct a
public hearing on the establishment of the Community Facilities District.
Section 8. The City Clerk is hereby directed to publish, or cause to be published,
a notice of said public hearing one time in a newspaper of general circulation published
in the area of the Community Facilities District. The publication of said notice shall be
completed at least seven days prior to the date herein fixed for said hearing. Said
notice shall contain the information prescribed by Section 53322 of the Act.
Section 9. The levy of said proposed special tax shall be subject to the approval
of the qualified electors of the Community Facilities District at a special election. The
proposed voting procedure shall be by mailed or hand-delivered ballot among the
landowners in the Community Facilities District, with each owner having one vote for
each acre or portion of an acre such owner owns in the Community Facilities District.
Section 10. Each officer of the City who is or will be responsible for providing one
or more of the proposed types of Facilities or Services is hereby directed to study, or
Resolution No. 07-35
Page 3 of 22
cause to be studied, the proposed Community Facilities District and, at or before said
public hearing, file a report with the City Council containing a brief description of the
public facilities and services by type which will in his or her opinion be required to
adequately meet the needs of the Community Facilities District, and his or her estimate
of the cost of providing the Facilities and Services. Such officers are hereby also
directed to estimate the fair and reasonable cost of the Facilities proposed to be
purchased as completed public facilities and of the incidental expenses proposed to be
paid. Such report shall be made a part of the record of said public hearing.
Section 11. Vestar has heretofore advanced certain funds, and may advance ad-
d~tional funds, which have been or may be used to pay costs incurred in connection with
the establishment of the Community Facilities District and the issuance of special tax
bonds thereby. The City Council proposes to repay all or a portion of such funds
expended for such purpose, solely from the proceeds of such bonds, pursuant to the
Deposit Agreement. The Deposit Agreement is hereby incorporated herein as though
set forth in full herein.
Section 12. The officers, employees and agents of the City are hereby authorized
and directed to take all actions and do all things which they, or any of them, ma deem
Y
necessary or desirable to accomplish the purposes of this Resolution and not inconsis-
tentwith the provisions hereof.
Section 13. This Resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Tustin on the 1 St day of May, 2007.
~-' /1
LOU BONE
Mayor
PA LA STOKER
City Clerk
Resolution No. 07-35
Page 4 of 22
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Pamela Stoker, 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. 07-35 was duly
assed and ado ted at a re ular meetin of the Tustin City Council, held on the 1 st day of
p p 9 g
May, 2007, by the following vote:
COUNCILMEMBER AYES: Bone . ~m_ante, Davert . Kawashima; Palmer (51
COUNCILMEMBER NOES: Kone LQ1_
COUNCILMEMBERABSTAINED: None (0)
COUNCILMEMBER ABSENT: None (0)
<~
PAMELA STOKER
City Clerk
Resolution No. 07-35
Page 5 of 22
EXHIBIT A
FACILITIES, FACILITIES TO BE PURCHASED,
SERVICES AND INCIDENTAL EXPENSES
Facilities
The types of facilities proposed to be financed by the Community Facilities Dis-
trict are street improvements, including grading, paving, curbs and gutters, sidewalks,
street signalization and signage, street lights and parkway and landscaping related
thereto, storm drains, utilities, public parks and recreation facilities, public library
facilities, fire protection facilities and equipment and land, rights-of-way and easements
necessary for any of such facilities.
Facilities to be Purchased
The types of facilities to be purchased as completed facilities are street im-
provements, including grading, paving, curbs and gutters, sidewalks, street signalization
and signage, street lights and parkway and landscaping related thereto, storm drains,
utilities, public parks and recreation facilities, public library facilities, fire protection
facilities and equipment and land, rights-of-way and easements necessary for any of
such facilities.
Services
The types of services proposed to be financed by the Community Facilities Dis-
trict are police protection services, fire protection services, ambulance and paramedic
services, recreation program services, maintenance of parks, parkways and open
space and flood and storm protection services.
Incidental Expenses
The incidental expenses proposed to be incurred include the following:
~a} the cost of planning and designing public facilities to be financed,
including the cost of environmental evaluations of those facilities;
fib) the costs associated with the creation of the Community Facilities
District, issuance of bonds, determination of the amount of taxes, collection of
taxes, payment of taxes, or costs otherwise incurred in order tQ carry out the au-
thorized purposes. of the Community Facilities District; and
(c) any other expenses incidental to the construction, completion, and
inspection of the authorized work.
Resolution No. 07-35
Page 6 of 22
EXHIBIT B
PROPOSED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
Resolution No. 07-35
Page 7 of 22
RATE AND METHOD OF APPORTIONMENT FOR
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT No. 07-01
(TUSTIN LEGACY/ RETAIL CENTER)
A Special Tax shall be levied and collected on all Assessor's Parcels located within the boundaries
of City of Tustin Community Facilities District No. 07-01(Tustin Legacy /Retail Center) ("CFD No.
07-O1 ").The amount of Special Tax to be levied in each Fiscal Year on an Assessor's Parcel in CFD
No. 07-01, commencing in Fiscal Year 2007-2008, shall be determined through the application of
this Rate and Method of Apportionment as described below. All of the real property inCFD No. 07-
O 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
In addition to the capitalized terms set forth in the preceding paragraph, capitalized terms
used in this Section A shall have the following meanings:
"Acre" or "Acreage" means the land area of an Assessor's Parcel as shown on an
Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land
area shown on the applicable final map, parcel map, condominium plan, or other recorded
County parcel map. The square footage of an Assessor's Parcel is equal to the Acreage of
such parcel multiplied by 43,560.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter
2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the actual or reasonably estimated costs directly related
to the administration of CFD No. 07-O1, including but not limited to the following: (i) the
costs of computing the Special Taxes and of preparing the annual Special Tax collection
schedules (whether by the CFD Administrator or designee thereof, or both); (ii) the costs of
collecting the Special Taxes (whether by the City, County, or otherwise); (iii) the costs of
remitting the Special Taxes to the fiscal agent or Trustee for any Bonds; (iv) the costs of
commencing and pursuing to completion any foreclosure action arising from delinquent
Special Taxes; (v) the costs of the fiscal agent or Trustee (including its legal counsel) in the
discharge of the duties required of it under any Indenture; (vi) the costs of the City, or its
designee of complying with arbitrage rebate and disclosure requirements of applicable
federal and State of California securities laws, the Act, and the California Government Code,
including property owner or Bond owner inquiries regarding the Special Taxes; (vii) the
costs associated with the release of funds from any escrow account; (viii) the costs of the
City, or its designee related to any appeal of a Special Tax; and (ix) an allocable share of the
salaries of the City staff and City overhead expense directly relating to the foregoing.
Administrative Expenses shall also include amounts advanced by the City or the City for any
administrative purposes of CFD No. 07-O1.
"Assessor's Parcel" or "AP" means a lot or parcel shown on an Assessor's Parcel Map with
an assigned Assessor's parcel number.
City of Tustin April 26, 2007
Community Facilities District No. 07-01 (Tustin Legacy/Retail Center) Page 1
"Assessor's Parcel Map" means an official map of the County Assessor designating parcels
by Assessor's Parcel number.
"Authorized Facilities" means those authorized facilities proposed to be financed by CFD
No. 07-01 pursuant to the Act and listed in Exhibit A to this Rate and Method of
Apportionment.
"Authorized Services" means those authorized services proposed to be financed by CFD
No. 07-01 pursuant to the Act and listed in .Exhibit A to this Rate and Method of
Apportionment.
"Bonds" means any bonds or other debt (as defined in Section 53317(4) of the Act), whether
in one or more series, issued by CFD No. 07-01 under the Act.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement for Facilities and the Special Tax Requirement for
Services and providing for the levy and collection of the Special Taxes.
"CFD No. 07-01"means City of Tustin Community Facilities District No.2007-O1(Tustin
Legacy/ Retail Center).
"City" means the City of Tustin, California.
"Council" means the City Council of the City, acting as the legislative body of CFD No.
07-01.
"County" means the County of Orange, California.
"Developed Property" means for a Fiscal Year, all Taxable Property (i) which was within a
Final Map that was recorded prior to January 1 of the previous Fiscal Year, and (ii) for which
a building permit for new construction, other than the construction of a garage, parking lot,
parking structure or street, was issued after January 1, 2005, but prior to January 1 of the
previous Fiscal Year.
"Exempt Property" means any Lot located within the boundaries ofCFD No. 07-O1 which
is exempt from the Special Tax pursuant to law or Section G below.
"Final Map" means a final map, lot line adjustment, or parcel map, or portion thereof,
approved by the City pursuant to the Subdivision Map Act (California Government Code
Section 6b410 et seq.) and recorded with the County Recorder that creates individual Lots for
which building permits may be issued. The term "Final Map" shall not include any
Assessor's Parcel Map or subdivision map or portion thereof that does not create individual
Lots for which a building permit may be issued.
"Fiscal Year" means the twelve month period starting on July 1 of any calendar year and
ending the following June 30.
City of Tustin April 26, 2007
Community Facilities District No. 07-01 (Tustin Legacy/Retail Center) Page 2
"Floor Area" or "FA" for Residential or Non-residential Property means the total of the
gross area of the floor surfaces within the exterior wall of the building, not including space
devoted to stairwells, basement storage, required corridors, public restrooms, elevator shafts,
light courts, vehicle parking and areas incident thereto, mechanical equipment incidental to
the operation of such building, and covered public pedestrian circulation areas, including
atriums, lobbies, plazas, patios, decks, arcades and similar areas, except such public
circulation areas or portions thereof that are used solely for commercial purposes: The
determination of Floor Area shall be made by reference to appropriate records kept by the
Department of City Planning or Department of Building and Safety. Notwithstanding the
above, for purposes of determining the square footages of Floor Area for the Original Parcels
in order to determine the allocation of Special Tax A to Successor Parcels, the square
footages listed in Table 3 shall apply.
"Future Public Property" means Taxable Property at the time offormation of CFD No. 07-
01 that becomes Public Property at some point thereafter.
"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" means the classification of Taxable Property, as identified in Section B below.
"Lot" means a lot created by a Final Map for which building permits may or have already
been issued for either residential ornon-residential structures.
"Maximum Special Tax" means the Maximum Special Tax Aand/ 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.
"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.
"Non-residential Property" means all Lots of Developed Property for which a building
permit permitting the construction of one or more non-residential buildings or facilities has
been issued by the City.
"Original Parcel" means a Lot which was valid for Fiscal Year X007-2008, as listed in
Table 1 and Table 3 of Section C below.
City of Tustin April 26, 2007
Community Facilities District No. 07-01 (Tustin Legacy/Retail Center) Page 3
"Privately Owned Specific Retail Property" means property consisting of the
following Lots:
Instrument Number
Lot Lot Line Adjustment (Recordin Date)
2006000276405
Parcel2 2006-01 (4/25/06)
2006000744979
Parcel 1 2006-07 (11/13/06)
2006000744979
Parce12 2006-07 (11 /03/06)
2006000419431
Parce12 2006-02 (6/22/06)
2006000419912
Parcel 4 2006-03 (6/23/06)
AP: 434-431-24 NA NA
AP: 434-441-12 NA NA
"Proportionately" means that the ratio of the actual Special Tax levy to the Maximum
Special Taxis equal for all Lots of Taxable Property.
"Public Property" means (i) any Assessor's Parcel for which the owner of record, as
determined from the County Assessor's secured tax roll for the Fiscal Year in which the
Special Tax is being levied, is the federal government, the State of California, the County,
the City, or any local government or other governmental agency, (ii) any property within a
Final Map that is located within the boundaries of CFD No. 07-0 l and was recorded as of the
January 1 preceding the Fiscal Year in which the Special Tax is being levied and which, as
determined from such Final Map, is or will be a public street, or (iii) any Assessor's Parcel
which, as of the April 1 preceding the Fiscal Year for which the Special Tax is being levied,
has been conveyed, irrevocably dedicated to, or irrevocably offered to the federal
government, the State of California, the County, the City, or any local government or other
governmental agency, provided such conveyance, dedication, or offer is submitted to the
CFD Administrator prior to the May 1 preceding the Fiscal Year for which the Special Taxis
being levied.
"Remainder Lot" means Successor Parcels designated as a remainder lot by the CFD
administrator for which a no building permit will be issued for a Taxable Property use (e.g.,
Public Property).
"Residential Property" means all Lots of Developed Property for which a building permit
permitting the construction thereon of one or more residential dwelling units has been issued
by the City.
"Special Tax" means the Special Tax Aand/or Special Tax B, as applicable.
City of Tustin April 26, 2007
Community Facilities District No. 07-01(Tustin Legacy/Retail Center) Page 4
"Special Tax A"means the special taxes to be levied in each Fiscal Year on each Assessor's
Parcel of Taxable Property to fund the Special Tax Requirement for Facilities.
"Special Tax B" means the special taxes to be levied in each Fiscal Year on each Assessor's
Parcel of Taxable Property to fund the Special Tax Requirement for Services.
"Special Tax Requirement for Facilities" means (a) that amount with respect to CFD No.
07-O1 required in any Fiscal Year to pay (i) for annual debt service on all outstanding Bonds
due in the calendar year which commences in such Fiscal Year; (ii) periodic costs on the
Bonds, including, but not limited to, the costs of remarketing, credit enhancement, and
liquidity facility fees (including such fees for instruments that serve as the basis of a reserve
fund in lieu of cash related to any such Bonds) and rebate payments; (iii) the Administrative
Expenses; (iv) any reasonably anticipated delinquent Special Taxes based on the delinquency
rate for Special Taxes levied in ,the previous Fiscal Year or otherwise reasonably expected;
(v} any amounts required to establish or replenish any reserve funds established for the
Bonds, and less (b) available funds as directed under the Indenture.
"Special Tax Requirement for Services" means the amount required in any Fiscal Year for
CFD No. 07-O1 to (i) pay directly for Authorized Services due in the calendar year
commencing in such Fiscal Year, (ii) pay a proportionate share of Administrative Expenses;
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.
"Successor Parcel" means a Lot created by a Final Map, lot line adjustment, or similar
instrument that is not an Original Parcel.
"Taxable Property" means all Lots which are not exempt from the Special Tax pursuant to
law or Section G 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 or Public Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, commencing with Fiscal Year 2007-2008, all Taxable Property shall be
classified as either Developed Property, Undeveloped Property, or Public 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.
City of Tustin April 26, 2007
Community Facilities District No. 07-01 (Tustin Legacy/Retail Center) Page 5
C. MAXIMUM SPECIAL TAX
1. Special Tax A
Only the Lots identified in Table 1 below are subject to Special Tax A.
a. Developed Property
The Maximum Special Tax A for each Lot of Developed Property shall be the
applicable Maximum Special Tax A identified in Table 1 below.
Table 1
Fiscal Year 2007-2008
Maximum Special Tax A
Community Facilities District No. 07-01
Recording Date
Maximum Special Tax A
Lot (Instrument Number}
2006-07 APN 434-441-18 NA $74,098
06/22/2006
Parcel 1 of LLA No. 2006-O1 $19,458
(No. 2006000419431)
2006-07 APN 434-441-16 NA $409,774
11/03/2006
Parcel 1 of LLA No. 2006-OS $16,500
(No. 2006000744977)
06/23/2006
Parcel 1 of LLA No. 2006-04 $13,200
(No. 2006000421177)
06/23/2006
Parcel 2 of LLA No. 2006-03 $12,926
(No. 2006000419912)
06/23/2006
Parcel 3 of LLA No. 2006-03 $10,725
~(No. 2006000419912)
06/22/2006
Parcel 1 of LLA No. 2006-02 $19,846
(No. 2006000419431)
06/23/2006
Parcel 2 of LLA No. 2006-04 $317,338
(No. 2006000421177)
The Fiscal Year 2007-2008 Maximum Special Tax A, identified in Table 1 above, shall
increase, commencing on July 1, 2008 and on July 1 of each Fiscal Year thereafter, by an
amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.
City of Tustin Apri126, 2007
Community Facilities District No. 07-01(Tustin Legacy/Retail Center) Page 6
b. Undeveloped Property
The Fiscal Year 2007-2008 Maximum Special Tax A for each Assessor's
Parcel of Undeveloped Property shall be $26,051 per Acre, and shall increase,
commencing on July 1, 2008 and on July 1 of each Fiscal Year thereafter, by
an amount equal to two percent (2%) of the Maximum Special Tax A for the
previous Fiscal Year.
2. Special Tax B
All Assessor's Parcels of Developed Property within CFD No. 07-O1 will be subject
to Special Tax B, unless exempted pursuant to Section G below.
a. Maximum Special Tax B
The Fiscal Year 2007-2008 Maximum Special Tax B shall be $0.06 per
square foot of Floor Area.
b. Increase in the Maximum Special Tax B
The Fiscal Year 2008-2009 Maximum Special Tax B for Developed Property
shall be $0.12 per square foot of Floor Area. The Fiscal Year 2009-2010
Maximum Special Tax B for Developed Property shall be $0.18 per square
foot of Floor Area. The Fiscal Year 2010-2011 Maximum Special Tax B for
Developed Property shall be $0.25 per square foot of Floor Area. On each
July 1, commencing July 1, 2011, after the Maximum Special Tax B has been
increased to $0.25 per square foot of Floor Area, 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.
Table 2
Maximum Special Tax B
2007-08 throu h 2011-12
Maximum
Fiscal Year
S ecial Tax B
2007-08 $0.06
2008-09 $0.12
2009-10 $0.18
2010-11 $0.25
Escalates by
2011-12
°
2 /° annuall
City of Tustin ~ April 26, 2007
Community Facilities District No. 07-01(Tustin Legacy/Retail Center) Page 7
D. ALLOCATION OF MAXIMUM SPECIAL TAX A
1. Original Parcels
Square footage of Floor Area for the Original Parcels is shown in Table 3 below.
Table 3
FA of Original Parcels
Community Facilities District No. o7-O1
Original Parcels Square Footage
of Floor Area*
2006-07 APN 434-441-18 44,908
Parcel 1 of LLA No. 2006-O1 11,793
2006-07 APN 434-441-16 248,348
Parcel 1 of LLA No. 2006-OS 10,000
Parcel 1 of LLA No. 2006-04 8,000
Parcel 2 of LLA No. 2006-03 7,834
Parcel 3 of LLA No. 2006-03 6,500
Parcel 1 of LLA No. 2006-02 12,028
Parcel 2 of LLA No. 2006-04 192,326
*Square footage amounts contained herein are for the purpose of setting
Special Tax A rates and may not conform to the square foot amounts as
shown on a building permit. The square foot amounts contained herein will
govern for purposes of implementing this Rate and Method of Apportionment.
2. Methodology for Allocating Maximum Special Tax A to Successor Parcels
If any Original Parcel reflected in Table 3 above is subsequently changed or modified
by the recordation of a Final Map, lot line adjustment or similar instrument, the total
Maximum Special Tax A for all of the newly created Successor Parcels affected by
such Final Map, lot line adjustment or similar instrument, excluding any Lot
classified as a Remainder Lot, shall be equal to the Maximum Special Tax A of the
Original Parcel(s). Maximum Special Tax for Successor Parcels shall be computed
as follows:
a. Determine the square footage of Floor Area for each Lot and Remainder Lot
located within the Final Map, lot line adjustment or similar instrument that created
the Successor Parcels.
City of Tustin April 26, 2007
Community Facilities District No. 07-01(Tustin Legacy/Retail Center) Page 8
b. Divide the square footage of Floor Area for each newly created Lot by the
aggregate square footage of Floor Area of all Lots of Taxable Property calculated
in paragraph "a," to determine the percentage of the aggregate square footage of
Floor Area to be allocated to each such Lot.
c. Multiply the percentages(s) computed in paragraph "b" by the Maximum Special
Tax A of the Original Parcel to determine the Maximum Special Tax A for each
Lot. The aggregate Special Tax for the Lots will be levied on the corresponding
Assessor's Parcels.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
1. Special Tax A
Commencing with Fiscal Year 2007-2008 and for each following Fiscal Year, the Council
shall determine the Special Tax Requirement for Facilities and shall levy the Special Tax A
until the total Special Tax A levy equals the Special Tax Requirement for Facilities. The
Special Tax A shall be levied each Fiscal Year as follows:
First: The Special Tax A shall be levied Proportionately on each Assessor's Parcel of
Developed Property at up to 100% of the applicable Maximum Special Tax A for Developed
Property;
Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities
after the first step has been completed, the Special Tax A shall be levied Proportionately on
each Assessor's Parcel of Undeveloped Property at up to 100% of the applicable Maximum
Special Tax A for Undeveloped Property.
Notwithstanding the above, under no circumstances will the Special Tax A levied against any
Assessor's Parcel of Residential Property for which a certificate of occupancy has been
issued be increased by more than ten percent as a consequence of delinquency or default by
the owner of any other Assessor's Parcel within CFD No. 07-O1.
2. Special Tax B
Commencing with Fiscal Year 2007-2008 and for each follorwing Fiscal Year, the Council
shall levy the Special Tax B until the total Special Tax B levy equals the Special Tax
Requirement for Services. The Special Tax B shall be levied each Fiscal Year as follows:
The Special Tax B shall be levied Proportionately on each Assessor's Parcel of Developed
Property within CFD No. 07-O1 at up to 100% of the applicable Maximum Special Tax B for
such parcel.
City of Tustin April 26, 2007
Community Facilities District No. 07-01 (Tustin Legacy/Retail Center) Page 9
F. FUTURE PUBLIC PROPERTY
If any of the Original Parcels identified in Table 1 are acquired by a public entity through
negotiated transaction, by gift, or devise, the present owner of that Parcel will be required to
prepay and permanently satisfy the Special Tax A associated with such Parcel.
G. EXEMPTIONS
1. Special Tax A
No Special Tax A shall be levied on Privately Owned Specific Retail Property or Public
Property.
2. Special Tax B
No Special Tax B shall be levied on Public Property or Undeveloped Property.
H. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad
valorem property taxes and shall be subject to the same penalties, the same procedure, sale
and lien priority in the case of delinquency; provided, however, that the Special Tax maybe
billed directly and/or may be collected at a different time or in a different manner if necessary
or convenient to meet the financial obligations of CFD No. 07-O1, or as otherwise
determined by the CFD Administrator. The foreclosure remedies provided for in the
Indenture shall apply upon the nonpayment of Special Tax A.
I. REVIEWS AND APPEALS
Any taxpayer may file a written appeal of the Special Tax levied on hisser property with the
CFD Administrator, provided that the appellant is current in his/her payments of Special
Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid
on or before the payment date established when the levy was made. The appeal must specify
the reasons why the appellant claims the Special Tax is in error. The CFD Administrator
shall review the appeal, meet with the appellant if the CFD Administrator deems necessary,
and advise the appellant of its determination. If the CFD Administrator agrees with the
appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special
Taxes on the appellant's property. No refunds of previously paid Special Taxes shall be
made.
J. PREPAYMENT OF SPECIAL TAX A
1. Prepayment in Full
The obligation of an Assessor's Parcel to pay the Special Tax A may be prepaid and
permanently satisfied as described herein; provided that a prepayment may be made only for
Assessor's Parcels of Developed Property, or an Assessor's Parcel of Undeveloped Property
City of Tustin April 26, 2007
Community Facilities District No. 07-01(Tustin Legacy/Retail Center) Page 10
for which a building permit has been issued, and 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 of
such Assessor's Parcel. The CFD Administrator may charge 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 Bonds from the proceeds of such prepayment may be given to
the Trustee pursuant to the Indenture.
The following additional definitions apply to this Section J:
"Buildout" means, for CFD No. 07-0 l ,that all expected building permits have been issued.
"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.
The Prepayment Amount (defined below) shall be calculated as summarized below
(capitalized terms as defined below):
Bond Redemption Amount
plus Redemption Premium
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be
calculated as follows:
Par_agr_a h No.:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, determine the Maximum Special Tax
A. For Assessor's Parcels of Undeveloped Property for which a building permit has
been issued, compute the Maximum Special Tax A 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. 07-O1 based on the
Developed Property Special Tax A which could be levied in the current Fiscal Year
on all expected development through Buildout of CFD No. 07-O1, excluding any
Assessor's Parcels which have been prepaid.
City of Tustin April 26, 2007
Community Facilities District No. 07-01(Tustin Legacy/Retail Center) ~ Page 11
4. Multiply the quotient computed pursuant to paragraph 3 by the amount of 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 amount needed to pay interest on the Bond Redemption Amount from
the first bond interest and/or principal payment date not covered by the current Fiscal
Year Special Taxes until the earliest redemption date for the Previously Issued
Bonds.
7. Determine the Special Tax A levied on the Assessor's Parcel in the current Fiscal
Year which has not yet been paid.
8. Compute the minimum amount the CFD Administrator reasonably expects to derive
from the reinvestment of-the Prepayment Amount less 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.
9. Add the amounts computed pursuant to paragraphs 6 and 7 and subtract the amount
computed pursuant to paragraph 8(the "Defeasance Amount").
10. The administrative fees and expenses ofCFD No. 07-0 l 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 Bonds, and the costs of
recording any notices to evidence the prepayment and the redemption (the
"Administrative Fees and Expenses").
11. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the
expected reduction in the reserve requirement (as defined in the Indenture), if any,
associated with the redemption of Previously Issued Bonds as a result of the
prepayment, or (b) the amount derived by subtracting the new reserve requirement (as
defined in the Indenture) in effect after the redemption of Previously Issued Bonds as
a result of the prepayment from the balance in the reserve fund on the prepayment
date, but in no event shall such amount be less than zero. No Reserve Fund Credit
shall be granted if the amount then on deposit in the reserve fund for the Previously
Issued Bonds is below 100% of the reserve requirement (as defined in the Indenture).
12. 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").
City of Tustin April 26, 2007
Community Facilities District No. 07-01 (Tustin Legacy/Retail Center) Page 12
13. The Special Tax A prepayment is equal to the sum of the amounts computed pursuant
to paragraphs 4, 5, 9, and 10, less the amounts computed pursuant to paragraphs 11
and 12 (the "'repayment Amount").
From the Prepayment Amount, the amounts computed pursuant to paragraphs 4, S, 9,11 and
12 shall be deposited into the appropriate fund as established under the Indenture and be used
to retire Previously Issued Bonds or to make scheduled debt service payments or to pay
administrative expenses related to the prepayment of the Special Tax. The amount computed
pursuant to paragraph 10 shall be retained by CFD No. 07-01.
The Special Tax A Prepayment Amount may be insufficient to redeem a full $5,000
increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof
will be retained in the appropriate fund established under the Indenture to be used with the
next prepayment of Bonds or to make debt service payments.
Upon confirmation of the payment of the current Fiscal Year's Special Tax A levy as
determined under paragraph 7 (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 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 maybe
levied on Taxable Property within CFD No. 07-O1(after excluding Privately Owned Specific
Retail Property and Public Property that are exempt from the Special Tax as set forth in
Section G. l) 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 Administrative
Expenses.
2. Prepayment in Part
The Special Tax A on an Assessor's Parcel of Developed Property or an Assessor's Parcel of
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 J.l; except that a partial
prepayment shall be calculated according to the following formula:
These terms have the following meaning:
PP = the partial prepayment
PE = the Special Tax A Prepayment Amount calculated according to Section J.l
A = the Administrative Fees and Expenses calculated according to Section J. l
City of Tustin April 26, 2007
Community Facilities District No. 07-01(Tustin Legacy/Retail Center) Page 13
F =. the percentage, expressed as a decimal, by which the owner of the Assessor's Parcel
is partially prepaying the Special Tax A
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
J.l, and (ii) indicate in the records ofCFD No. 07-01 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 E.l.
K. PREPAYMENT OF SPECIAL TAX B
No prepayment of Special Tax B is allowed for any Assessor's Parcel within CFD No. 07-0 l .
L. TERM OF SPECIAL TAX
The Special Tax A shall be levied for a period not to exceed forty-five years commencing
with Fiscal Year 2007-2008. The Special Tax B shall be levied as long as necessary to meet
the Special Tax Requirement for Services.
City of Tustin April 26, 2007
Community Facilities District No. 07-01 (Tustin Legacy/Retail Center) Page 14
EXHIBIT A
TYPES OF FACILITIES AND SERVICES
Facilities
The types of facilities to be financed by the Community Facilities District are street
improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and
signage, street lights and parkway and landscaping related thereto, storm drains, utilities, public
parks and recreation facilities, public library facilities, fire protection facilities and equipment and
land, rights-of way and easements necessary for any of such facilities.
Services
The .types of services to be financed by the Community Facilities District are police
protection services, fire protection services, ambulance and paramedic services, recreation program
services, maintenance of parks, parkways and open space and flood and storm protection services.
City of Tustin April 26, 2007
Community Facilities District No. 07-01 (Tustin Legacy/Retail Center) Page A-1
RESOLUTION N0.07-36
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN TO INCUR BONDED INDEBTEDNESS OF THE
PROPOSED CITY OF TUSTIN COMMUNITY FACILITIES
DISTRICT NO. 07-1 (TUSTIN LEGACY/RETAIL CENTER)
WHEREAS, the City Council (the "City Council") of the City of Tustin (the "City"}
has this date adopted its Resolution entitled "A Resolution of the City Council of the City
of Tustin of Intention to Establish a Community Facilities District and to Authorize the
Levy of Special Taxes," stating its intention to establish the City of Tustin Community
Facilities District No. 07-1 (Tustin LegacylRetail Center) (the "Community Facilities
District") pursuant to the Mello-Roos Community Facilities Act of 1982 (the "Act")for the
purpose of financing certain public facilities (the "Facilities") and services, as further
provided in said Resolution; and
WHEREAS, in order to finance the Facilities it is necessary to incur bonded in-
debtedness inthe amount of up to $16,000,000;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Tustin
as follows:
Section 1. The City Council hereby declares that in order to finance the Facilities,
it is necessary to incur bonded indebtedness.
Section 2. The purpose for which the proposed debt is to be incurred is to pro-
vide the funds necessary to pay the costs of the Facilities, including construction costs
and all costs incidental to, or connected with, the accomplishment of said purpose and
of the financing thereof, as permitted by Section 53345.3 of the Act.
Section 3. The maximum amount of the proposed debt is $16,000,000.
Section 4. The City Council hereby fixes Tuesday, June 5, 2007, at 7:00 p.m., or
as soon thereafter as the City Council may reach the matter, at 300 Centennial Way,
Tustin, California, as the time and place when and where the City Council will conduct a
public hearing on the proposed debt issue.
Section 5. The City Clerk of the City is hereby directed to publish, or cause to be
published, a notice of said public hearing one time in a newspaper of general circulation
published in the area of the Community Facilities District. The publication of said notice
shall be completed at least seven days prior to the date herein set for said public
hearing. Said notice shall contain the information prescribed by Section 53346 of the
Act.
Section 6. The officers, employees and agents of the City are hereby authorized
and directed to take all actions and do all things which they, or any of them, may deem
Resolution No. 07-36
Page 1 of 2
necessary or desirable to accomplish the purposes of this Resolution and not inconsis-
tentwith the provisions hereof.
Section 7. This Resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Tustin on the 1 St day of May, 2007.
~-- ~/ ~i~
LOU BONE
Mayor
PAM S OKER
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Pamela Stoker, 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. 07-36 was duly
passed and adopted at a regular meeting of the Tustin City Council, held on the 1 st day of
May, 2007, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES: None (0)
COUNCILMEMBERABSTAINED: None (0)
COUNCILMEMBERABSENT: None (0)
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PAM LA STOKER
City Clerk
Resolution No. 07-36
Page 2 of 2
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DEPOSIT AND REIMBURSEMENT AGREEMENT
by and between
CITY OF TUSTIN
and
VESTAR/KIMCO TUSTIN, L.P.
Dated as of May 1, zoo ~
City of Tustin
Community Facilities District No. 07-1
(Tustin Legacy/Vestar)
OHS WEST:260138826.1
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DEPOSIT AND REIMBURSEMENT AGREEMENT
THIS DEPOSIT AND REIMBURSEMENT AGREEMENT (this "Deposit
Agreement"), dated as of I May 1, 2007 . , is by and between the CITY OF TUSTIN, a genera(
law city organized and existing under and by virtue of the laws of the State of California (the
"City"), and VESTARIKIMCO Tt1STIN, L.P., a California limited partnership ("Vestar").
WITNESSETH:
WHEREAS, Vestar expects to petition the City to establish a community facilities
district to be designated "City of Tustin Community Facilities District No. 07-1 (Tustin
LegacylVestar)" (the "Community Facilities District") under the Mello-Roos Community
Facilities Act of 1982 (the "Act");
WHEREAS, the City's Mello-Roos Community Facilities Act of 1982 Local Goals and
Policies (the "Policies"} provide that the costs of the proceedings for a community facilities
district financing initiated by petition of landowners are to be borne by the petitioners, that no
action will be taken on any petition unless and until a deposit of funds is made by or on behalf of
the petitioners with the City and that, if bonds are issued by such community facilities district,
the petitioners (or such other entity designated by the petitioners) will be reimbursed from bond
proceeds for the portion of such deposit that has been expended or encumbered;
WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after
the formation of a community facilities district, the legislative body may accept advances of
funds from any source, including, but not limited to, private persons or private entities and may
provide, by resolution, for the use of those funds for any authorized purpose, including, but not
limited to, paying any cost incurred by the local agency in creating a community facilities
district;
WHEREAS, Section 53314.9 of the Act further provides that the legislative body may
enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all
or a portion of the funds advanced, as determined by the legislative body, with or without
interest, under all of the following conditions: (a) the proposal to repay the funds is included in
both the resolution of intention to establish a community facilities district adopted pursuant to
Section 53521 of the Act and in the resolution of formation to establish the community facilities
district pursuant to Section 53325.1 of the Act, (b) any proposed special tax is approved by the
qualified electors of the community facilities district pursuant to the Act, and (c) any agreement
shall specify that if the qualified electors of the community facilities district do not approve the
proposed special tax, the local agency shall return any funds which have not been committed for
any authorized purpose by the time of the election to the person or entity advancing the funds;
and
WHEREAS, the City and Vestar desire to enter into this Deposit Agreement in
accordance with the Policies and Section 53314.9 of the Act in order to provide for the
advancement of funds by Vestar to be used to pay costs incurred in connection with the
establishment of the Community Facilities District and the issuance of special tax bonds (the
OHS WEST:260138826.1
"Bonds") thereby, and to provide for the reimbursement to Vestar of such funds advanced,
without interest, from the proceeds of any Bonds issued by the Community Facilities District;
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
Section 1. The Deposits and Application Thereof. (a) Vestar has delivered to the City
a check a able to the "City of Tustin" in the amount of $25,000 (the "Initial Deposit"). The
Py ~ ••
City, by its execution hereof, acknowledges receipt of, and accepts, the Initial Deposit.
(b) The Initial Deposit, together with any subsequent deposit required to be made by
Vestar pursuant to the terms hereof (collectively, the "Deposits"), are to be used to pay for any
costs incurred for any authorized purpose in connection with the establishment of the
Community Facilities District and the issuance of Bonds thereby, including, without limitation,
(a) the fees and expenses of any consultants to the City employed in connection with the
establishment of the Community Facilities District and the issuance of Bonds thereby, including
an engineer, special tax consultant, financial advisor, bond counsel and any other consultant
deemed necessary or advisable by the City, (b) the costs of appraisals, market absorption and
feasibility studies and other reports deemed necessary or advisable by the City in connection
with the establishment of the Community Facilities District and the issuance of Bonds thereby,
(c) the costs of publication of notices, preparation and mailing of ballots and other costs related
to any hearing, election or other action or proceeding undertaken in connection with the
establishment of the Community Facilities District and the issuance of Bonds thereby, (d)
reasonable charges for City staff time incurred in connection with the establishment of the
Community Facilities District and the issuance of Bonds thereby, including a reasonable
allocation of City overhead expense related thereto, and (e) any and all other actual costs and
expenses incurred by the City in connection with the establishment of the Community Facilities
District and the issuance of Bonds thereby (collectively, the "Initial Costs"). The City may draw
upon the Deposits from time to time to pay the Initial Costs.
(c) If, at any time prior to the establishment of the Community Facilities District and
the issuance of Bonds thereby, the unexpended and uncommitted balance of the Deposits is less
than $5,000, the City may request, in writing, that Vestar make an additional deposit in an
amount estimated to be sufficient, together with any such unexpended and uncommitted balance
and any special taxes of the Community Facilities District available for such purpose, to pay for
all Initial Costs. Vestar shall make such additional deposit with the City within ten business days
of the delivery to Vestar of the City's written request therefor. If Vestar fails to make any such
additional deposit within such ten business day period, the City may cease all work related to the
establishment of the Community Facilities District and the issuance of Bonds thereby.
(d) The Deposits may be commingled with other funds of the City for purposes of
investment and safekeeping, but the City shall at all times maintain records as to the expenditure
of the Deposits.
(e) The City shall provide Vestar with a written monthly summary of expenditures
made from the Deposits, and the unexpended balance thereof, within ten business days of receipt
OHS WEST:260138826.1 2
by the City of a written request therefor submitted by Vestar. The cost of providing any such
summary shall be charged to the Deposits.
Section 2. Return of Deposits; Reimbursement. (a) As provided in Section 53314.9 of
the Act, the approval by the qualified electors of the Community Facilities District of the
proposed special tax to be levied therein is a condition to the repayment to Vestar of the funds
advanced by Vestar pursuant hereto. Therefore, if the qualified electors of the Community
Facilities District do not approve the proposed special tax to be levied therein, the City shall have
no obligation to repay Vestar any portion of the Deposits expended or encumbered to pay Initial
Costs. In accordance with Section 53314.9 of the Act, if the qualified electors of the Community
Facilities District do not approve the proposed special tax to be levied therein, the City shall
return to Vestar any portion of the Deposits which have not been expended or encumbered to pay
Initial Costs by the time of the election on said proposed special tax.
(b) If proceedings for the establishment of the Community Facilities District or the
issuance of Bonds thereby are terminated, the City shall, within ten business days after official
action by the City or the Community Facilities District to terminate said proceedings, return the
then unexpended and uncommitted portion of the Deposits to Vestar, without interest.
(c) If Bonds are issued by the Community Facilities District, the City shall reimburse
Vestar, without interest, for the portion of the Deposits that has been expended or encumbered,
said reimbursement to be made within ten business days after the issuance of such Bonds, solely
from the proceeds of such Bonds and only to the extent otherwise permitted under the Act. The
City shall, within ten business days after the issuance of such Bonds, return the then unexpended
and uncommitted portion of the Deposits to Vestar, without interest.
Section 3. Deposit Agreement Not Debt or Liability of City. As provided in Section
53314.9(b) of the Act, this Deposit Agreement does not constitute a debt or liability of the City.
The City shall not be obligated to advance any of its own funds to pay Initial Costs or any other
costs incurred in connection with the establishment of the Community Facilities District and the
issuance of Bonds thereby. No member of the City Council of the City and no offcer, employee
or agent of the City shall to any extent be personally liable hereunder.
Section 4. No=. All written notices to be given hereunder shall be given to the party
entitled thereto at its address set forth below, or at such other address as such party may provide
to the other parties in writing from time to time, namely:
If to the City: City of Tustin
300 Centennial Way
Tustin, California 92680
Attention: Director of Finance
If to Vestar Vestar/Kimco Tustin, L.P.
2425 East Camelback Road #750
Phoenix, Arizona 85016
Attention: General Counsel
OHS WEST;260138826.1 3
Each such notice, statement, demand, consent, approval, authorization, offer, designation,
request or other communication hereunder shall be deemed delivered to the party to whom it is
addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic
communication, whether by telex, telegram or telecopier, upon the sender's receipt of an
appropriate answerback or other written acknowledgment, (c) if given by registered or certified
mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours
after such notice is deposited with the United States mail, (d) if given by overnight courier, with
courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any
other means, upon delivery at the address specified in this Section.
Section 5. California Law. This Deposit Agreement shall be governed and construed in
accordance with the laws of the State of California.
Section 6. Severabili If any part of this Deposit Agreement is held to be illegal or
unenforceable by a court of competent jurisdiction, the remainder of this Deposit Agreement
shall be given effect to the fullest extent reasonably possible.
Section 7. Successors and Assigns. This Deposit Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto.
Section 8. Counterparts. This Deposit Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Deposit Agreement as
of the date first written above.
CITY OF TU TIN
Y~r~e
By:
VESTAR/KIMCO TUSTIN, L.P.
By: Vestar California XXX, L.L.C.
Its: General Partner
4
By: :~. U ~'
Name: Rick Kuhle
Title: Manager Manager
OHS WESr260138826.1 4