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HomeMy WebLinkAbout07 COMMUNITY FACILITIES DISTRICT 18-01 ZONE 2DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D MEETING DATE TO: FROM: SUBJECT: AGENDA REPORT FEBRUARY 16, 2021 MATTHEW S. WEST, CITY MANAGER Agenda Item DS Reviewed:�� City Manager Finance Director _ �a ECONOMIC DEVELOPMENT DEPARTMENT/FINANCE DEPARTMENT COMMUNITY FACILITIES DISTRICT 18-01 ZONE 2 SUMMARY: Approve the implementing documents and resolution related to the annexation of property subject to a Disposition and Development Agreement (DDA) between the City and Brookfield Homes Southern California LLC (Brookfield) into Community Facilities District 2018-01 (CFD 18-01) and designating the property as Zone 2 (CFD 18-01 Zone 2). RECOMMENDATIONS: It is recommended that the City Council take the following actions: 1) Receive and file the unanimous approval of annexation into CFD 18-01 Zone 2 and related matters signed by the City Manager on behalf of the City of Tustin as the property owner. 2) Direct the City Clerk to record a cancellation of the Community Facilities District 13-01 (CFD 13-01) special tax lien for Lots 2, 5, 6, 7, 8, 9 and 10 of Tract 18197. 3) Adopt Resolution 21-10, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN DETERMINING THAT LOTS 2, 5, 6, 7, 8, 9, AND 10 OF TRACT 18197 ARE ANNEXED TO THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES), APPROVING A BOUNDARY MAP OF THE ANNEXATION PROPERTY, AND DIRECTING THE CITY CLERK TO RECORD THE BOUNDARY MAP AND NOTICE OF THE SPECIAL TAX LIEN FISCAL IMPACT: The special tax will be for services (not facilities) such as police and fire; recreation program services; maintenance of parks, streets, sidewalks and drainage facilities; and other general City services associated with the development and maintenance of Tustin Legacy. The Rate and Method of Apportionment (RMA) for each Zone establishes the assessment services required for each land use. The RMA for CFD 18-01 Zone 2 has been previously negotiated through the DDA between the City and Brookfield which was approved by the City Council on December 17, 2019. DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D Agenda Report — CFD 18-01 Zone 2 February 16, 2021 Page 2 CORRELATION TO THE STRATEGIC PLAN: This action correlates to the City's Strategic Plan for Economic and Neighborhood Development (Goal A) and Financial Strength (Goal C). BACKGROUND: To date, six (6) CFDs have been formed at Tustin Legacy to fund facilities (Tax A) and operational costs (Tax B) at Tustin Legacy due to the discrepancy in property tax revenue (3% of the basic levy (1.0%) at Tustin Legacy, 10.5% City-wide). Tustin Legacy has significant operational and maintenance costs that can require more than the 10.5% property tax revenue received City-wide. A breakdown of CFDs formed to date: - CFD 04-01 (Tustin Field I and II) o Tax A and B - CFD 06-01 (Villages of Columbus) o Tax A and B - CFD 07-01 (The District) o Tax A and B - CFD 13-01 (The Village at Tustin Legacy, Amalfi, Anton Legacy, FLIGHT at Tustin Legacy, TUSD Middle/High School) o Tax B only - CFD 14-01 (Greenwood) o Tax A and B - CFD 18-01 (Levity, Brookfield, remaining undeveloped portions of Tustin Legacy) The City Council authorized formation of CFD 13-01 in 2013 for services (not facilities) such as police and fire; maintenance of parks, streets, sidewalks and drainage facilities; and other general City services associated with the development and maintenance of the undeveloped portions of Tustin Legacy. Since 2013, the plan for Tustin Legacy has evolved to include a variety of land uses not previously considered under CFD 13-01 (e.g., hotels and separate commercial uses). A new services CFD was formed to account for known and unknown land uses in the future. Accordingly, CFD 18-01 was created in 2018 to account for known and unknown future land uses in and is broken up into Zones. A map of the CFD 18-01 boundaries is shown on Attachment 1; however, most of the property is identified as "Future Annexation Parcels." As projects are proposed, they will be analyzed for their impact to City services. This approach intends to ensure that each Zone meets the funding levels for the required services. Any property within the boundaries of CFD 13-01 and CFD 18-01 will be released of the CFD 13-01 obligation when the Zone is annexed into CFD 18-01. DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D Agenda Report — CFD 18-01 Zone 2 February 16, 2021 Page 3 CFD 18-01 Zone 1 was formed for the Levity homes project at Tustin Legacy in 2018. Tax B on the project is already being collected, with full project completion expected later this year. The Council action recommendations are specific to the required documentation and the RMA for CFD 18-01 Zone 2 for the 400 home Brookfield project within Neighborhood D South. The DDA between the City and Brookfield established the CFD rates for the project, not to exceed an overall tax rate of 1.40% when combined with other taxes (1 % basic levy, school and water bonds, etc). The Zone 2 RMA established a 20% increase in Brookfield's base pricing (established at DDA execution) to account for any potential base price increases between DDA execution (December 2019) and the first building permit issuance. The RMA also gives Brookfield the ability to request a Price Point Study 150 days prior to pulling their first building permit to determine if 20% was an accurate anticipated number to use, or if the pricing increase should be lowered in order to not exceed a 1.40% overall tax rate. Brookfield's current schedule anticipates the first building permit being pulled in late summer 2021. The City will begin to receive Tax B revenue from this project shortly thereafter, with a 2-4% escalation each year based on the Consumer Price Index for Los Angeles, Riverside and Orange Counties. As the project progresses, the City will receive more Tax B revenue each year until project completion. Zone 2 will exist in perpetuity to continue to offset the costs of services and maintenance at Tustin Legacy. Mello -Roos Act Section 53339.8 provides that upon a determination by the legislative body that the area proposed to be annexed is added to the existing community facilities district, the clerk of the legislative body shall record notice of the annexation in the real property records of the County. DocuSigned by: (,G,visfap(�,c,v�osfc,v Christopher Koster Director of Economic Development yyDocuSigned by: PiP- Kennetig ee Senior Management Analyst FSigned by: -at-v". 5 F E. Jason I- mam Director of Finance DocuSigned by: �aa-Il. 4.aq'1. A'CiF�#€'I ... Sean ranB Deputy Director of Finance — Administrative Services DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D Agenda Report — CFD 18-01 Zone 2 February 16, 2021 Page 4 Attachments: 1. CFD 18-01 boundary map (showing Zone 1) 2. Executed Unanimous Approval of Annexation to a Community Facilities District 3. Notice of special tax lien cancellation for CFD 13-01 4. Resolution 21-10 5. CFD 18-01 Zone 2 map 6. Notice of Special Tax Lien for CFD 18-01 Zone 2 �wriY lo(p ZZ SHEET 1 of 2 PROPOSED BOUNDARIES OF CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) COUNTY OF ORANGE STATE OF CALIFORNIA (1) Filed in the office of the City Clerk of the City of Assessor Parcels within the Future Annexation Area of City of Tustin Tustin this ' 1 day of 2018. Community Facilities District No. 2018-01 (Public Services): 430-271-u4 430-271-89 430-371-21 430-371-56 430-381-42 430-391-46 430-271-35 430-271-90 430-371-22 30-371-57 430-381-43* 430-391-47 Erica N. Rabe, City Clerk, City of Tustin 430-271-36 430-271-91 430-371-23 430-371-58 portion 430-391-48 430-271-37 430-271-92 430-371-24 430-371-59 430-381-65 430-391-49 (2) 1 hereby certify that the within map showing the 430-271-38 430-271-93 430-371-25 430-371-60 430-381-66 430-391-50 proposed boundaries of City of Tustin Community 430-271-39 430-282-01 430-371-26 430-371-61 430-381-67 430-391-51 Facilities District No. 2018-01 (Public Services), 430-271-49 430-282-07 430-371-27 430-371-62 430-381-68 430-391-52 County of Orange, State of California, was 430-271-50 430-282-13 430-371-28 430-371-63 430-381-69 430-391-53 approved by the City Council of the City of Tustin 430-271-51 430-282-14 430-371-29 430-371-64 430-381-74 430-391-54 at a regular meeting thereof, held on the 71h 430-271-52 430-282-15 430-371-30 430-371-65 430-381-75 430-391-55 day of f11nrrh 2018, by its Resolution No. 430-271-53 430-282-16 430-371-31 430-371-66 430-391-03 430-391-56 _15 430-271-54 430-282-25 430-371-32 430-371-67 430-391-15 430-391-57 430-271-55 430-283-02 430-371-33 430-371-68 430-391-19 430-391-58 430-271-70* 430-283-04 430-371-38 430-371-73 430-391-20 430-391-59 *portion 430-283-05 430-371-39 430-371-74 430-391-21 430-391-60 Erica N. Rabe, City Clerk, City of Tustin 430-271-71 430-283-06 430-371-40 430-371-76 430-391-22 430-391-61 Rec.nfng (jeyuesr..( bd,: C -v -r srs-. 430-271-72 430-283-08 430-371-41 430-371-77 430-391-23 430-391-62 430-271-77 430-283-09 430-371-42 430-381-27 430-391-24 430-391-63 (3) Filed this ZZ"A day of r3laYct+ 2018, at 430-271-78 430-283-10 430-371-43 430-381-28 430-391-25 430-391-64 the hour of1'141 o'clock gm, in Book 430-271-79 430-283-11 430-371-44 430-381-29 430-391-26 430-391-65 Iola of Maps of Assessment and 43,.271-80 20-283-21 430-371-45 430-381-30 430-391-27 430-391-66 Community Facilities Districts at page 430-271-81 430-283-22 430-371-46 430-381-31 430-391-28 430-391-67 Zz-16 Ni.4 and as Instrument No. 430-271-82 430-283-23 430-371-47 430-381-32 430-391-29 430-391-68 2.a60o0loZotq in the office of the 430-27 i 83 430-283-24 430-371-48 430-381-33 430-391-30 430-391-69 County Recorder of the County of Orange, State 430-271-84 430-284-01 430-371-50 430-381-35 430-391-32 430-391-72 of California. 430-271-85 430-284-04 430-371-51 430-381-38 430-391-42 434-021-30 430-271-86 430-371-18 430-371-52 430-381-39 430-391-43 434-061-49 Hugh Nguyen, 430-271-87 430-371-19 430-371-54 430-381-40 430-391-44 County Clerk -Recorder of County of Orange 430-271-88 430-371-20 430-371-55 430-381-41 430-391-45 Assessor Parcels within Improvement Area No. 1 of City of Tustin _ y Community Facilities District No. 2018-01 (Public Services): Reference is hereby made to the Assessor maps ty 430-381-18 of the County of Orange for a description of the 430-381-44 lines and dimensions of these parcels. Fee £y�hp� 430-381-45 Exempt recording requested, per 430-381-46 Prepared by David Taussig & Associates, Inc. CA Government Code §6103 N s D PROPOSED BOUNDARIES OF CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO (PUBLIC SERVICES) COUNTY OF ORANGE RAP 2 3 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D UNANIMOUS APPROVAL OF ANNEXATION TO A COMMUNITY FACILITIES DISTRICT AND RELATED MATTERS CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) ANNEXATION NO.1 ZONE 2 FEBRUARY 3, 2021 Honorable Council Members City of Tustin 300 Centennial Way Tustin, CA 92780 Members of the City Council: The undersigned hereby states and certifies, under penalty of perjury, as follows: 1. Property Owner. The undersigned is the owner (the "Property Owner") of fee simple title to the real property identified by the parcel number(s) listed below and described as set forth in Exhibit C (the "Property"), and possesses all legal authority necessary to execute this Unanimous Approval. If requested by the City of Tustin (the "City"), the Property Owner has supplied to the City current evidence of its ownership of the Property. The Property Owner hereby represents and warrants that there are no persons resident on the Property that are registered to vote. 2. Acknowledgement of CFD. The Property Owner acknowledges and understands the following: a. The City Council of the City has formed the City of Tustin Community Facilities District No. 2018-01 (Public Services) (the "CFD") and a future annexation area for the CFD (the "Future Annexation Area"), pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (the "Act") for the purpose of financing municipal services (the "Services") described on Exhibit A hereto and made a part hereof. b. The proceedings for the formation of the CFD authorized the City Council to levy an annual special tax (the "Special Tax") on property in the CFD as specified in a new Rate and Method of Apportionment of Special Tax (the "Rate and Method"), attached hereto as Exhibit B and made a part hereof, that is substantially in the form of the original Rate and Method of Apportionment for the CFD (the "Original Rate and Method"). DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D c. The Property Owner acknowledges that the City will create a special account into which the Special Taxes will be deposited, when collected, and that the City will prepare the annual report required by Government Code Section 50075.3. d. The proceedings for the formation of the CFD authorized the City Council to annex property in the Future Annexation Area to the CFD, without additional public hearings, upon approval of the owner of the property to be annexed as permitted by Section 53339.7(a) of the Act. e. The Property is in the Future Annexation Area for the CFD. 3. Unanimous Approval and Vote. This Unanimous Approval constitutes the unanimous approval and vote of the Property Owner in favor of the following matters for the purposes of Section 53339.7 et seq. of the Act and Article XIIIA of the California Constitution: a. Annexation: The annexation of the Property to the CFD for the purpose of financing municipal services b. Special Tax: The levy of the Special Tax on the Property to finance the Services, according to the Rate and Method. c. Appropriations Limit: An initial appropriations limit for the CFD of $4,000,000. 4. Waivers. The Property Owner hereby irrevocably waives (i) any right the Property Owner may otherwise have to protest or challenge the validity of the proceedings to form the CFD and to authorize the annexation of any property (including the Property) to the CFD, and (ii) any necessity, requirement or right for further public hearings or any election pertaining to the annexation of the Property to the CFD or the levy of the Special Tax on the Property. 5. Recordation of Notice of Special Tax Lien. The Property Owner acknowledges and understands that a Notice of Special Tax Lien for Improvement Area No. 1 of the CFD (the "Notice of Special Tax Lien") was recorded in the Office of the Recorder of the County of Orange on May 17, 2018, as Document No. 2018-000180578. The Property Owner hereby authorizes and directs the City Clerk to execute and cause to be recorded in the office of the County Recorder of the County of Orange a Notice of Special Tax Lien for Zone 2 the CFD as required by Section 3117.5 of the California Streets and Highways Code, which will impose a continuing lien on the Property to secure each levy of the Special Tax. The Notice of Special Tax Lien shall include the Rate and Method as an exhibit thereto. The Property Owner acknowledges and understands that the lien of the Special Tax on the Property is coequal with the lien for ad valorem real property taxes levied by the County on the Property. 6. Disclosures. The Property Owner hereby agrees to provide to any subsequent purchaser of the Property written notice of the annexation of the Property to the CFD, and of the authority of the City Council to levy the Special Tax on the Property pursuant to the Rate and Method, to the extent required by applicable law. 2 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D 7. Agreements. The Property Owner further agrees to execute such additional or supplemental agreements and to take such additional actions as may be required by the City to provide for any of the actions and conditions described in this Unanimous Approval, including any cash deposit required to pay for the City's costs in annexing the Property to the CFD. The Property subject to this Unanimous The full legal name of the Property Owner Approval and to be annexed to the CFD, is: consists of the following parcels: Lots 2, 5, 6, 7, 8, 9, and 10 of Tract 18197 as Matthew S. West further described on Exhibit D hereto. The foregoing Unanimous Approval is hereby executed this 3 day of February, 2021, in Tustin, California. DocuSigned by: By: m Xti u.. 5. W.If Name: N a 'R'est Title: City Manager DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT A DESCRIPTION OF SERVICES TO BE FINANCED BY THE CFD It is intended that Zone 2 will be eligible to finance any, all or any portion of the services described in Section 53313 of the Act including but not limited to police protection services; fire protection services; ambulance and paramedic services; recreation program services; maintenance of parks, parkways, and open space; flood and storm protection; and street and sidewalk maintenance (collectively, the "Services"). DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT B RATE AND METHOD OF APPORTIONMENT ZONE 2 OF THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D RATE AND METHOD OF APPORTIONMENT FOR ZONE 2 OF CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2015-01 (PUBLIC SERVICES) CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in Zone 2 of City of Tustin Community Facilities District No. 2018- 01 (Public Services), City of Tustin, County of Orange, State of California ("CFD No. 2018-01") and collected each Fiscal Year commencing in Fiscal Year 2020-2021, in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," as described below. All of the real property in Zone 2 of CFD No. 2018-01, unless exempted by law or by the provisions hereof, shall be taxed for these purposes, to the extent and in the manner herein provided. The terms hereinafter set forth have the following meanings: "Acre" or "Acreage" means the land area in acres 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 in acres shown on the applicable final map, parcel map, condominium plan, or other map or plan recorded with the County. 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 following actual or reasonably estimated costs directly related to the administration of CFD No. 2018-01: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or any designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs to the City, CFD No. 2018-01, or any designee thereof of complying with CFD No. 2018-01 or obligated persons disclosure requirements associated with the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs to the City, CFD No. 2018-01, or any designee thereof related to an appeal of the Special Tax; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2018-01 for any other administrative City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 1 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D purposes of CFD No. 2018-01, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" or "Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel number. "Attached Residential Property" means Assessor's Parcels of Developed Property for which Building Permits have been issued for a Dwelling Unit that shares, or will share, an inside wall with another Dwelling Unit. "Authorized Services" means those services eligible to be funded by CFD No. 2018-01, as defined in the Resolution of Formation and authorized to be financed by CFD No. 2018-01 pursuant to Section 53313 and Section 53313.5 of the Act. CFD No. 2018-01 shall finance Authorized Services only to the extent that they are in addition to those provided in the territory of CFD No. 2018-01 before the CFD was created and such Authorized Services may not supplant services already available within CFD No. 2018-01 when the CFD was created. "Building Permit" means a permit issued by the City or other governmental agency for the construction of a residential or non-residential building on an Assessor's Parcel. "CFD Administrator" means an official of CFD No. 2018-01, or any designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No. 2018-01" means City of Tustin Community Facilities District No. 2018-01 (Public Services), City of Tustin, County of Orange, State of California. "City" means the City of Tustin, California. "City Council" means the City Council of the City. "City Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2018-01 that is owned by or irrevocably offered for dedication to the City; provided however that any property leased by the City to a private entity and subject to taxation under Section 53340.1 of the Act, as such section may be amended or replaced, shall be taxed and classified in accordance with its use. "Consumer Price Index" means, for each Fiscal Year, the Consumer Price Index published by the U.S. Bureau of Labor Statistics for All items in Los Angeles -Riverside- Orange County, CA, all urban consumers, not seasonally adjusted" index (Series Id: CUURA421SA0), measured as of the month of December in the calendar year that ends in the previous Fiscal Year. In the event this index ceases to be published, the Consumer Price Index shall be City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 2 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D another index as determined by the CFD Administrator that is reasonably comparable to the Consumer Price Index. "County" means the County of Orange. "Detached Residential Property" or "SFD" means Assessor's Parcels of Developed Property for which Building Permits have been issued for a Dwelling Unit that is or is expected to be surrounded by freestanding walls and that does not share an inside wall with any other Dwelling Unit. "Developed Property" means, for each Fiscal Year, all Assessor's Parcels for which a Building Permit was issued after January 1, 2020 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied. "Dwelling Unit" means a building or portion thereof designed for and occupied in whole or part as a residence or sleeping place, either permanently or temporarily, by one (1) family and its guests, with sanitary facilities and one (1) kitchen provided within the unit. Boarding or lodging houses, dormitories, and hotels shall not be defined as Dwelling Units unless the land use permit specifies a residential use. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Flat Property" or "Flats" means Attached Residential Property generally characterized as having the majority of living space on a single floor which may overlap other dwelling units above or below within the same building, for which Building Permits have been issued permitting the development of 2- or 3 -story flats, as determined by the CFD Administrator. "Maximum Special Tax" means, for each Fiscal Year, the maximum Special Tax, determined in accordance with Section C, below, that can be levied on any Assessor's Parcel. "Property Owner Association Property" means, for each Fiscal Year, any Assessor's Parcel within the boundaries of CFD No. 2018-01 that is owned by or irrevocably offered for dedication to a property owner association, including any master or sub- association, not including any such property that is located directly under a residential or non-residential structure. "Proportionately" means, that the ratio of the actual annual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels of Developed Property. "Rate and Method of Apportionment" or "RMA" means this Rate and Method of Apportionment of Special Tax. "Resolution of Formation" means the resolution forming CFD No. 2018-01. "Special Tax" or "Special Taxes" means the special tax or special taxes to be City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 3 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D levied in each Fiscal Year on each Assessor's Parcel of Developed Property to fund the Special Tax Requirement. "Special Tax Requirement" means that amount to be collected in any Fiscal Year for CFD No. 2018-01 to pay for certain costs as required to meet the needs of the CFD in that Fiscal Year. The costs to be covered shall be the (i) direct costs for Authorized Services, including the establishment of reserves for future costs of Authorized Services, (ii) Administrative Expenses, and (iii) an amount to cover anticipated delinquencies for the payment of the Special Tax, based on the delinquency rate for the preceding Fiscal Year; less (iv) a credit for funds available to reduce the annual Special Tax levy, if any, as determined by the CFD Administrator. Under no circumstances shall the Special Tax Requirement include debt service payments for debt financings by CFD No. 2018-01. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of Zone 2 of CFD No. 2018-01 which are not exempt from the Special Tax pursuant to law or Section E below. "Townhome Property" or "Townhomes" means Attached Residential Property generally characterized as having a direct ground floor private entry where living space occurs on multiple levels of roughly the same proportion and having at least one vertical wall extending from ground to roof dividing it from the adjoining unit, for which Building Permits have been issued permitting the development of townhomes, as determined by the CFD Administrator. "Undeveloped Property" means, for each Fiscal Year, all property not classified as Developed Property, Property Owner Association Property, or City Property. "Zone" means a mutually exclusive geographic area or areas, within which particular Special Tax rates may be levied pursuant to this Rate and Method of Apportionment. The initial Zone of CFD No. 2018-01 is identified as Zone 2. Additional Zones may be created when property is annexed into CFD No. 2018-01. Each Fiscal Year, all Assessor's Parcels within Zone 2 of CFD No. 2018-01 shall be classified by the CFD Administrator as Developed Property, Undeveloped Property, Property Owner Association Property, or City Property, and shall be subject to annual Special Taxes in accordance with this Rate and Method of Apportionment as determined by the CFD Administrator pursuant to Sections C and D below. The CFD Administrator's allocation of property to each type of Land Use Class shall be conclusive and binding. However, only Developed Property shall be subject to annual Special Taxes in accordance with the Rate City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 4 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D and Method of Apportionment as determined pursuant to Sections C and D below. Luo Imummu W -M_.: -a 1. Developed Property a. Maximum Special Tax The Maximum Special Tax for Fiscal Year 2020-2021 for Developed Property is shown below in Table 1. Under no circumstances shall a Special Tax be levied on additions to existing Dwelling Units. Maximum Special Taxes for Developed Property for Fiscal Year 2020-2021 Zone 2 of Community Facilities District No. 2018-01 Land Use Class Land Use Fiscal Year 2020-2021 Maximum Special Tax 1 FLATS (>= 2,100 SF) $2,465 PER DWELLING UNIT 2 FLATS (1,800 - 2,099 SF) $2,264 PER DWELLING UNIT 3 FLATS (1,500 - 1,799 SF) $1,762 PER DWELLING UNIT 4 FLATS k 1,500 SF) $1,387 PER DWELLING UNIT 5 SFD (>= 3,100 SF) $3,404 PER DWELLING UNIT 6 SFD (2,700 - 3,099 SF) $3,275 PER DWELLING UNIT 7 SFD k 2,700 SF) $2,922 PER DWELLING UNIT 8 TOWNHOMES (>= 2,250 SF) $2,662 PER DWELLING UNIT 9 TOWNHOMES (2,000 - 2,249 SF) $2,522 PER DWELLING UNIT 10 TOWNHOMES k 2,000 SF) $2,279 PER DWELLING UNIT b. 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 that can be levied on an Assessor's Parcel shall be the sum of the Maximum Special Taxes that can be levied for all Land Use Classes located on that Assessor's Parcel. City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 5 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D C. Increase in the Maximum Special Tax On each July 1, commencing on July 1, 2021, the Maximum Special Tax for Developed Property shall be increased annually by the greater of the change in the Consumer Price Index during the twelve (12) months prior to December of the previous Fiscal Year and two percent (2.00%), not to exceed four percent (4.00%). 2. Undeveloped Property No Special Taxes shall be levied on Undeveloped Property. I 1, 11111 1,1111i Commencing with Fiscal Year 2020-2021 and for each following Fiscal Year, the City Council shall levy the annual Special Tax Proportionately for each Assessor's Parcel of Developed Property at up to 100% of the applicable Maximum Special Tax, until the amount of Special Taxes equals the Special Tax Requirement. In addition to Undeveloped Property being exempt from annual Special Taxes, no Special Tax shall be levied on City Property or Property Owner Association Property in Zone 2 of CFD No. 2018-01. However, should an Assessor's Parcel no longer be classified as City Property or Property Owner Association Property, such Assessor's Parcel may, upon each reclassification, no longer be exempt from Special Taxes. Any landowner or resident may file a written appeal of the Special Tax on his/her property with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax on the appellant's property and/or provide a refund to the appellant. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has thirty (30) days in which to appeal to the City Council by filing a written notice of appeal with the clerk of the City, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for the appellant's disagreement with the CFD Administrator's determination. The CFD City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 6 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D Administrator may charge the appellant a reasonable fee for processing the appeal. The City may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals. Any decision of the City will be final and binding as to all persons. G. MANNER OF COLLECTI®N The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the City may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary or otherwise advisable to meet its financial obligations for CFD No. 2018-01, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. H. FUTURE ANNEXATI®NS It is anticipated that additional properties will be annexed into CFD No. 2018- 01 from time to time. For Land Use Classes not included in the initial boundaries of CFD No. 2018-01, a study and report describing the Authorized Services to be provided to such properties and the estimated cost of such Authorized Services shall be provided to the City Council as the legislative body of the CFD No. 2018-01 in accordance with Section 53321.5 of the Mello -Roos Act. Based on this analysis, the property to be annexed, pursuant to California Government Code section 53339 et. seq. will be assigned an appropriate Maximum Special Tax rate for the Zone or areas within the Zone by Land Use Class as provided herein or as defined and detailed when annexed and included in Exhibit A. I. TERM OF SPECIAL TAX The Special Tax shall be levied in perpetuity as necessary to meet the Special Tax Requirement, unless no longer required to pay for Authorized Services as determined at the discretion of the City. J. SPECIAL TAX REDUCTION The following definitions apply to this Section J: "Developer" means, for Zone 2, Brookfield Homes Southern California LLC, and its successors and assigns. The term "successors" does not refer to the successors to all or any portion of the property within Zone 2 of CFD No. 2018-01 unless the new property owner receives an assignment of the rights and obligations under the development agreement. "Land Use Class" means any of the categories listed in Table 1 of Section C. "Plan Type" means a discrete residential plan type (generally consisting of City of Tustin 7anuary7 2021 CFD )Vo. 2018-01 (Public Services) 7 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D residential dwelling units that share a common product type (e.g., Flats, SFD, Townhomes) and that have nearly identical amounts of living area) that is constructed or expected to be constructed within Zone 2 of CFD No. 2018-01 as identified in the Price Point Study. "Price Point" means, with respect to the Dwelling Units in each Plan Type, as of the date of the applicable Price Point Study, the base price of such Dwelling Units, estimated by the Price Point Consultant as of such date, but excluding potential appreciation or premiums, options or upgrades, based upon their actual or expected characteristics, such as living area, view, or lot size. The Price Point shall not be less than the current base prices (as modified by the criteria set forth in the immediately preceding sentence) of Dwelling Units offered for sale to members of the general public. "Price Point Consultant" means any consultant or firm of such consultants selected by City that (a) has substantial experience in performing price point studies or otherwise estimating or confirming pricing for Dwelling Units within community facilities districts, (b) is well versed in analyzing economic and real estate data that relates to the pricing of Dwelling Units in community facilities districts, (c) is independent and not under the control of CFD No. 2018-01 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD No. 2018-01, (ii) the City, (iii) any owner of real property in CFD No. 2018- 01, or (iv) any real property in CFD No. 2018-01, and (e) is not connected with CFD No. 2018-01 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 2018-01 or the City. "Price Point Study" means a price point study or a letter updating a previous price point study, which (a) has been prepared by the Price Point Consultant, (b) sets forth the Plan Types constructed or expected to be constructed within Zone 2 of CFD No. 2018-01, (c) sets forth the estimated number of constructed and expected Dwelling Units for each Plan Type, (d) sets forth such Price Point Consultant's estimate of the Price Point for each Plan Type and (e) uses a date for establishing such Price Points that is no earlier than 30 days prior to the date the Price Point Study is delivered to the CFD Administrator pursuant to Section J herein. The Price Point Study will only include the for -sale Plan Types in Zone 2 of CFD No. 2018-01. "Total Effective Tax Rate" means, for a Plan Type, the quotient of (a) the Total Burden for such Plan Type divided by (b) the Price Point for such Plan Type, converted to a percentage. "Total Effective Tax Rate Limit" means, 1.40%. "Total Tax Burden" means, with respect to a Plan Type, for the Fiscal Year for which the calculation is being performed, the sum of the Maximum Special Tax and estimated ad valorem property taxes, special assessments, special taxes for any overlapping community facilities districts, and any other governmental City of Tustin 7anuary7 2021 CFD No. 2018-01 (Public Services) 8 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D taxes, fees and charges levied or imposed on Dwelling Units of such Plan Type in Zone 2 of CFD No. 2018-01 in such Fiscal Year or that would have been levied or imposed on all such Dwelling Units had these Dwelling Units been subject to such levies (excluding Property Assessed Clean Energy ("PACE") charges imposed pursuant to AB 811 or SB 555, that are levied on individual Assessor's Parcels). Upon the written request of the Developer, submitted to the City within one hundred fifty (150) calendar days before the projected date of the first Building Permit permitting the construction of a Dwelling Unit for a Land Use Class within Zone 2 of CFD No. 2018-01, the following steps shall be taken for each Land Use Class of for -sale Plan Types in said Zone of CFD No. 2018-01 for evaluating the Special Tax: Step No.: 1. A Price Point Study shall be completed and delivered to the CFD Administrator, and the CFD Administrator shall calculate the Total Tax Burden and Total Effective Tax Rate for each Plan Type in Zone 2 of CFD No. 2018-01. 2. Separately, for each Land Use Class in Zone 2 of CFD No. 2018-01, the CFD Administrator shall determine whether or not the Total Effective Tax Rate for all Plan Types in a Land Use Class is less than or equal to the Total Effective Tax Rate Limit. a. If the Total Effective Tax Rate for all Plan Types in a Land Use Class in Zone 2 of CFD No. 2018-01 is less than or equal to Total Effective Tax Rate Limit, then there shall be no change in Special Tax for such Land Use Class in Zone 2 of CFD No. 2018-01. b. If the Total Effective Tax Rate for any Plan Type in a Land Use Class in Zone 2 of CFD No. 2018-01 is greater than the Total Effective Tax Rate Limit, the CFD Administrator shall calculate a revised Maximum Special Tax for that Land Use Class in such Zone of CFD No. 2018-01, such that the revised Maximum Special Tax does not cause the Total Effective Tax Rate for any Plan Type in such Land Use Class to exceed the Total Effective Tax Rate Limit. 3. If the Maximum Special Tax for any Land Use Class is revised pursuant to step 2.b. above, the CFD Administrator shall also prepare and execute a Certificate to Amend the Special Tax substantially in the form of Exhibit "B" hereto and shall deliver such Certificate to Amend the Special Tax to the CFD No. 2018-01. The Certificate to Amend the Special Tax shall be completed for all Land Use Classes within Zone 2 and shall set forth, as applicable, either (i) the reduced Maximum Special Tax for a Land Use Class as calculated pursuant to step 2.b., (ii) the Maximum Special Tax as identified in Table 1 of Section C for a Land Use Class that was not revised City of Tustin 7anuary7 2021 CFD No. 2018-01 (Public Services) 9 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D as determined pursuant to step 2.a. 4. After the execution by CFD No. 2018-01 of the acknowledgement on the Certificate to Amend the Special Tax, CFD No. 2018-01 shall cause to be recorded in the records of the County Recorder an Amended Notice of Special Tax Lien for CFD No. 2018-01 reflecting the Maximum Special Tax set forth in such Certificate to Amend the Special Tax. If the Maximum Special Tax is not required to be changed for any Land Use Class based on the calculations performed under step 2 above, there shall be no reduction in the Maximum Special Tax, and no Certificate to Amend the Special Tax shall be required. City of Tustin CFD No. 2018-01 (Public Services) January7 2021 /10 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT A MAXIMUM SPECIAL TAXES BY ZONE COUNTY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) Table 1A: Maximum Special Tax Rates for Developed Property Zone [ ] of Community Facilities District No. 2018-01 (Public Services) Land Use Class Land Use Fiscal Year 2020-2021 Maximum Special Tax 1 FLATS (>= 2,100 SF) $[ ] PER DWELLING UNIT 2 FLATS (1,800 - 2,099 SF) $[ ] PER DWELLING UNIT 3 FLATS (1,500 - 1,799 SF) $[ ] PER DWELLING UNIT 4 FLATS k 1,500 SF) $[ ] PER DWELLING UNIT 5 SFD (>= 3,100 SF) $[ ] PER DWELLING UNIT 6 SFD (2,700 - 3,099 SF) $[ ] PER DWELLING UNIT 7 SFD k 2,700 SF) $[ ] PER DWELLING UNIT 8 TOWNHOMES (>= 2,250 SF) $[ ] PER DWELLING UNIT 9 TOWNHOMES (2,000 - 2,249 SF) $[ ] PER DWELLING UNIT 10 TOWNHOMES k 2,000 SF) $[ ] PER DWELLING UNIT Increases in the /Maximum Special Tax On each July 1, commencing on July 1, 2021, the Maximum Special Tax for Developed Property shall be increased annually by the greater of the change in the Consumer Price Index during the twelve (12) months prior to December of the previous Fiscal Year and two percent (2.00%), not to exceed four percent (4.00%). City of Tustin 7anuary7 2021 CFD No. 2018-01 (Public Services) 11 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT B CERTIFICATE OF REDUCTION OF SPECIAL TAX FOR ZONE IN COUNTY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) 1. Pursuant to Section H of the Rate and Method of Apportionment, the Maximum Special for Developed Property for [certain or all] Land Use Classes within Zone [ ] of CFD No. 2018-01 has been reduced. 2. The calculations made pursuant to Section J were based upon a Price Point Study that was received by the CFD Administrator on 3. Tables 2A below shows the Special Tax for each Land Use Class in Zone [ ] of CFD No. 2018-01 after such reduction. TABLE 2A Maximum Special Taxes for Developed Property For Fiscal Year [ ] Zone [ 1 of Communitv Facilities District No. 2018-01 Land Use Class Land Use Fiscal Year [ l Maximum Special Tax 1 FLATS (>= 2,100 SF) $[ l PER DWELLING UNIT 2 FLATS (1,800 - 2,099 SF) $[ l PER DWELLING UNIT 3 FLATS (1,500 - 1,799 SF) $[ l PER DWELLING UNIT 4 FLATS k 1,500 SF) $[ l PER DWELLING UNIT 5 SFD (>= 3,100 SF) $[ l PER DWELLING UNIT 6 SFD (2,700 - 3,099 SF) $[ l PER DWELLING UNIT 7 SFD k 2,700 SF) $[ l PER DWELLING UNIT 8 TOWNHOMES (>= 2,250 SF) $[ l PER DWELLING UNIT 9 TOWNHOMES (2,000 - 2,249 SF) $[ l PER DWELLING UNIT 10 TOWNHOMES k 2,000 SF) $[ l PER DWELLING UNIT 4. Upon execution of the Certificate of Reduction of the Special Tax by the City and CFD No. 2018-01 the City shall cause an amended Notice of Special Tax Lien for CFD No. 2018-01 to be recorded reflecting the modifications set forth herein. City of Tustin 7anuary Z 2021 CFD No. 2018-01 (Public Services) /12 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D CFD ADMINISTRATOR Date: By execution hereof, the undersigned acknowledges, on behalf of CFD No. 2018-01, receipt of this certificate and modification of the Rate and Method of Apportionment as set forth in this certificate. COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) LIN City of Tustin CFD No. 2018-01 (Public Services) Date: January7, 2021 /13 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT C DESCRIPTION OF PROPERTY Owner City of Tustin 300 Centennial Way Tustin, CA 92780 Assessor's Parcel Numbers 430-271-81 430-271-78 (portion) 430-271-80 (portion) 430-271-82 (portion) 430-271-84 (portion) 430-271-92 (portion) 430-271-93 (portion) 430-371-41 (portion) 430-371-42 (portion) 430-371-43 (portion) 430-371-44 (portion) 430-371-45 (portion) 430-371-46 (portion) 430-371-48 (portion) 430-371-51 (portion) 430-371-54 (portion) 430-371-73 (portion) 430-371-74 (portion) 430-371-76 (portion) 430-371-77 (portion) DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D RECORDING REQUESTED BY AND AFTER RECORDATION RETURN TO: City Clerk City of Tustin 300 Centennial Way Tustin, California 92780 NOTICE OF CANCELLATON OF SPECIAL TAX LIEN CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2013-01 Pursuant to the requirements of Section 53344 of the Mello -Roos Community Facilities Act of 1982, the undersigned City Clerk of the City of Tustin, hereby gives notice that the obligation to pay the special taxes levied pursuant to the Rate and Method of Apportionment for City of Tustin Community Facilities District No. 13-01 (Services) (the "CFD No. 13-01 Special Taxes") on the parcels of land identified in Exhibit A attached hereto (the "CFD No. 2018-01 Zone 2 Parcels") is deemed to have been prepaid and permanently satisfied and the lien thereon established by the Notice of Special Tax Lien recorded in the Orange County Recorder's office on May 16, 2013 as Document No. 2013-000296640 (the "Notice of Special Tax Lien") has been cancelled. The assessor's parcel number of each CFD No. 2018-01 Parcel subject to the lien so cancelled, and the name of the owner of record of each such CFD No. 2018-01 Zone 2 Parcel is set forth on Exhibit A attached hereto. This Notice of Cancellation of Special Tax Lien applies only to the lien on the CFD No. 2018-01 Zone 2 Parcels established by the Notice of Special Tax Lien for the CFD No. 13-01 Special Taxes. Dated: February 16, 2021 Erica N. Yasuda, City Clerk DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT A CFD NO. 2018-01 ZONE 2 PARCELS Owner City of Tustin 300 Centennial Way Tustin, CA 92780 Assessor's Parcel Numbers 430-271-81 430-271-78 (portion) 430-271-80 (portion) 430-271-82 (portion) 430-271-84 (portion) 430-271-92 (portion) 430-271-93 (portion) 430-371-41 (portion) 430-371-42 (portion) 430-371-43 (portion) 430-371-44 (portion) 430-371-45 (portion) 430-371-46 (portion) 430-371-48 (portion) 430-371-51 (portion) 430-371-54 (portion) 430-371-73 (portion) 430-371-74 (portion) 430-371-76 (portion) 430-371-77 (portion) DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D RESOLUTION NO. 21-10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DETERMINING THAT LOTS 2, 5, 6, 7, 8, 9 AND 10 OF TRACT 18197 ARE ANNEXED TO THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES), APPROVING A BOUNDARY MAP OF THE ANNEXATION PROPERTY AND DIRECTING THE CITY CLERK TO RECORD THE BOUNDARY MAP AND NOTICE OF THE SPECIAL TAX LIEN WHEREAS, on March 7, 2018, the City Council adopted Resolution No. 18-15, approving formation of a Community Facilities District (the "Resolution of Formation"), ordering the formation of the "City of Tustin Community Facilities District No. 2018-01 (Public Services)" (the "CFD") and a "City of Tustin Community Facilities District No. 2018-01 (Public Services) (Future Annexation Area)", authorizing the levy of a special tax on property within the CFD and establishing an appropriations limit for the CFD, all pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, constituting California Government Code Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311 (the "Mello -Roos Act"); and WHEREAS, in the Resolution of Formation, the City Council resolved that parcels within the Future Annexation Area shall be annexed to the CFD only with the unanimous approval (each, a "Unanimous Approval') of the owner or owners of each parcel or parcels at the time that parcel or those parcels are annexed, without any requirement for further public hearings or additional proceedings; and WHEREAS, in Ordinance No. 1495, adopted by the City Council on May 1, 2018 (the "Special Tax Ordinance"), the City Council authorized and levied special taxes within the CFD pursuant to the Mello -Roos Act, at the rate and in accordance with the rate and method of apportionment of special tax (the "Rate and Method") set forth in the Resolution of Formation, and further ordered that the provisions of the Special Tax Ordinance shall apply not only to the initial territory included in the CFD but also to parcels included in the Future Annexation Area that are annexed to the CFD at the rate or rates to be approved unanimously by the owner or owners of each parcel or parcels to be annexed to the CFD; and WHEREAS, the City Council has been provided with a Unanimous Approval executed by the owner of Lots 2, 5, 6, 7, 8, 9, and 10 of Tract 18197, which are located in the Future Annexation Area, as such parcels are described on the attached Exhibit A and shown in the proposed boundary map attached as Exhibit B (the "Annexation Property"); and WHEREAS, in order to comply with Mello -Roos Act Section 53339.8, the City Council wishes to determine that the Annexation Property is added to the CFD. DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Tustin as follows: Section 1. The foregoing recitals are true and correct. Section 2. This City Council hereby determines that the Annexation Property is added to the CFD, is hereby designated as within Zone 2 of the CFD, the boundary map attached as Exhibit B is hereby approved, and the City Clerk is hereby ordered and directed to record notice of the special tax lien and the boundary map attached as Exhibit B. Section 3. This Resolution shall take effect immediately upon its adoption. APPROVED and ADOPTED at a meeting of the City Council of the City of Tustin on February 16, 2021. LETITIA CLARK, Mayor ATTEST: ERICA N. YASUDA, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF TUSTIN ) I, Erica N. YASUDA, 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 21-10 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 16th day of February, 2021 by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D ERICA N. YASUDA, City Clerk DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT A AUTHORIZED SERVICES It is intended that Zone 2 will be eligible to finance any, all or any portion of the services described in Section 53313 of the Act including but not limited to police protection services; fire protection services; ambulance and paramedic services; recreation program services; maintenance of parks, parkways, and open space; flood and storm protection; and street and sidewalk maintenance (collectively, the "Services"). DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT B PROPOSED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR ZONE 2 SHEET 1 OF 1 Assessor Parcels within Annexation No. 1/ Zone 2 to City of Tustin Community Facilities District No. 2018-01 (Public Services): 430-271-78 (portion) 430-271-80 (portion) 430-271-81 430-271-82 (portion) 430-271-84 (portion) 430-271-92 (portion) 430-271-94 (portion) 430-371-41 (portion) 430-371-42 (portion) 430-371-43 (portion) 430-371-44 (portion) 430-371-45 (portion) 430-371-46 (portion) 430-371-48 (portion) 430-371-51 (portion) 430-371-54 (portion) 430-371-73 (portion) 430-371-74 (portion) C\ 430-371-76 (portion) 430-371-77 (portion) / ANNEXATION NO. 1 / ZONE 2 TO CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. (PUBLIC SERVICES) \� COUNTY OF ORANGE STATE OF CALIFORNIA Reference is hereby made Tract Map No. 18197, recorded on December 10, 2020 in Book 990 of Miscellaneous Maps at pages 25 through 33 as Instrument Number 2020000726746, and to the e Assessor maps of the County of Orange for a '/ description of the lines and dimensions of these parcels. Annexation No. 1/Zone 2 to City of Tustin Community Facilities District No. 2018-01 (Public Services) contains Lots 2, 5, 6, 7, 8, 9, and 10 of Tract Map No. 18197. DTA 2018-01 Reference is hereby made to that certain map entitled "Proposed boundaries of City of Tustin Community Facilities District No. 2018-01 (Public Services), County of Orange, State of California," recorded on March 22, 2018, under Instrument No. 2018000102019, in Book 106, Pages 22 and 23 of Maps of Assessment and Community Facilities Districts, in the office of the County Recorder of the County of Orange, State of California, which this Annexation Map affects. (1) Filed in the office of the City Clerk of the City of Tustin this day of , 2021. Erica Yasuda, City Clerk, City of Tustin (2) 1 hereby certify that the within map showing the proposed boundaries of Annexation No. 1/Zone 2 to City of Tustin Community Facilities District No. 2018-01 (Public Services), County of Orange, State of California, was approved by the City Council of the City of Tustin at a regular meeting thereof, held on the day of 2021, by its Resolution No. Erica Yasuda, City Clerk, City of Tustin (3) Filed this day of , 2021 at the hour of o'clock _m, in Book of Maps of Assessment and Community Facilities Districts at page and as Instrument No. in the office of the County Recorder of the County of Orange, State of California. Hugh Nguyen, County Clerk -Recorder of County of Orange By Deputy Fee Exempt recording requested, per CA Government Code §27383 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D RECORDING REQUESTED BY AND AFTER RECORDATION RETURN TO: City Clerk City of Tustin 300 Centennial Way Tustin, California 92780 NOTICE OF SPECIAL TAX LIEN CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) ZONE 2 Pursuant to the requirements of Section 3117.5 of the Streets and Highways Code of California and the Mello -Roos Community Facilities Act of 1982, as amended (Chapter 2.5 of Part of Division 2 of Title 5, commencing with Section 53311, of the California Government Code) (the "Act"), the undersigned City Clerk of the City of Tustin, County of Orange, State of California, hereby gives notice that a lien to secure payment of a special tax is hereby imposed by the City Council of the City of Tustin on the property described on Exhibit C hereto and incorporated herein (the "Property"). The special tax is authorized to be levied within Zone 2 of the City of Tustin Community Facilities District No. 2018-01 (Public Services) (the "Community Facilities District'') which has now been officially designated and the lien of the special tax is a continuing lien which shall secure each annual levy of the special tax and which shall continue in force and effect until the special tax obligation is prepaid, permanently satisfied, and canceled in accordance with law or until the special tax ceases to be levied and a notice of cessation of special tax is recorded in accordance with Section 53330.5 of the Act. The territory originally included in the CFD is set forth in a boundary map of the CFD recorded on March 22, 2018, at 11:41 a.m. as Document No. 2018-000102019 at Book 106 of Maps of Assessment and Community Facilities Districts at Pages 22-23 m/m, in the office of the County Recorder of the County of Orange, State of California. The Property is included in the territory that is identified as "Future Annexation Area" on the boundary map of the CFD described in the preceding paragraph, and this Notice of Special Tax Lien gives notice that a lien to secure payment of a special tax is hereby imposed by the City Council of the City of Tustin on the Property. The lien of the special tax is a continuing lien that shall secure each annual levy of the special tax and that shall continue in force and effect until the special tax obligation is prepaid, permanently satisfied, and canceled in accordance with law or until the special tax ceases to be levied and a notice of cessation of special tax is recorded in accordance with Section 53330.5 of the Government Code DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D The rate, method of apportionment, and manner of collection of the authorized special tax is as set forth in Exhibit B attached hereto and hereby made a part hereof. Conditions under which the obligation to pay the special tax may be prepaid and permanently satisfied and the lien of the special tax canceled are as set forth in said Exhibit B and hereby incorporated herein by this reference. Notice is further given that upon the recording of this notice in the office of the County Recorder of the County of Orange, the obligation to pay the special tax levy shall become a lien upon all nonexempt real property within Zone 2 of the Community Facilities District in accordance with Section 3115.5 of the California Streets and Highways Code. The name(s) of the owner(s) and the assessor's tax parcel number(s) of the real property included within Zone 2 of the Community Facilities District and not exempt from the special tax are as set forth in Exhibit C attached hereto and hereby made a part hereof. For further information concerning the current and estimated future tax liability of owners or purchasers of real property subject to this special tax lien, interested persons should contact the CFD Consultant of the City of Tustin, 300 Centennial Way, Tustin, California 92780, (714) 573-3060. Dated: February 16, 2021 Erica N. Yasuda, City Clerk DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT A DESCRIPTION OF ELIGIBLE SERVICES It is intended that Zone 2 will be eligible to finance any, all or any portion of the services described in Section 53313 of the Act including but not limited to police protection services; fire protection services; ambulance and paramedic services; recreation program services; maintenance of parks, parkways, and open space; flood and storm protection; and street and sidewalk maintenance (collectively, the "Services"). DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT B RATE AND METHOD OF APPORTIONMENT ZONE 2 OF THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D RATE AND METHOD OF APPORTIONMENT FOR ZONE 2 OF CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2015-01 (PUBLIC SERVICES) CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in Zone 2 of City of Tustin Community Facilities District No. 2018- 01 (Public Services), City of Tustin, County of Orange, State of California ("CFD No. 2018-01") and collected each Fiscal Year commencing in Fiscal Year 2020-2021, in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," as described below. All of the real property in Zone 2 of CFD No. 2018-01, unless exempted by law or by the provisions hereof, shall be taxed for these purposes, to the extent and in the manner herein provided. The terms hereinafter set forth have the following meanings: "Acre" or "Acreage" means the land area in acres 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 in acres shown on the applicable final map, parcel map, condominium plan, or other map or plan recorded with the County. 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 following actual or reasonably estimated costs directly related to the administration of CFD No. 2018-01: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or any designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs to the City, CFD No. 2018-01, or any designee thereof of complying with CFD No. 2018-01 or obligated persons disclosure requirements associated with the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs to the City, CFD No. 2018-01, or any designee thereof related to an appeal of the Special Tax; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2018-01 for any other administrative City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 1 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D purposes of CFD No. 2018-01, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" or "Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor's Parcel number. "Attached Residential Property" means Assessor's Parcels of Developed Property for which Building Permits have been issued for a Dwelling Unit that shares, or will share, an inside wall with another Dwelling Unit. "Authorized Services" means those services eligible to be funded by CFD No. 2018-01, as defined in the Resolution of Formation and authorized to be financed by CFD No. 2018-01 pursuant to Section 53313 and Section 53313.5 of the Act. CFD No. 2018-01 shall finance Authorized Services only to the extent that they are in addition to those provided in the territory of CFD No. 2018-01 before the CFD was created and such Authorized Services may not supplant services already available within CFD No. 2018-01 when the CFD was created. "Building Permit" means a permit issued by the City or other governmental agency for the construction of a residential or non-residential building on an Assessor's Parcel. "CFD Administrator" means an official of CFD No. 2018-01, or any designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No. 2018-01" means City of Tustin Community Facilities District No. 2018-01 (Public Services), City of Tustin, County of Orange, State of California. "City" means the City of Tustin, California. "City Council" means the City Council of the City. "City Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2018-01 that is owned by or irrevocably offered for dedication to the City; provided however that any property leased by the City to a private entity and subject to taxation under Section 53340.1 of the Act, as such section may be amended or replaced, shall be taxed and classified in accordance with its use. "Consumer Price Index" means, for each Fiscal Year, the Consumer Price Index published by the U.S. Bureau of Labor Statistics for All items in Los Angeles -Riverside- Orange County, CA, all urban consumers, not seasonally adjusted" index (Series Id: CUURA421SA0), measured as of the month of December in the calendar year that ends in the previous Fiscal Year. In the event this index ceases to be published, the Consumer Price Index shall be City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 2 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D another index as determined by the CFD Administrator that is reasonably comparable to the Consumer Price Index. "County" means the County of Orange. "Detached Residential Property" or "SFD" means Assessor's Parcels of Developed Property for which Building Permits have been issued for a Dwelling Unit that is or is expected to be surrounded by freestanding walls and that does not share an inside wall with any other Dwelling Unit. "Developed Property" means, for each Fiscal Year, all Assessor's Parcels for which a Building Permit was issued after January 1, 2020 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied. "Dwelling Unit" means a building or portion thereof designed for and occupied in whole or part as a residence or sleeping place, either permanently or temporarily, by one (1) family and its guests, with sanitary facilities and one (1) kitchen provided within the unit. Boarding or lodging houses, dormitories, and hotels shall not be defined as Dwelling Units unless the land use permit specifies a residential use. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Flat Property" or "Flats" means Attached Residential Property generally characterized as having the majority of living space on a single floor which may overlap other dwelling units above or below within the same building, for which Building Permits have been issued permitting the development of 2- or 3 -story flats, as determined by the CFD Administrator. "Maximum Special Tax" means, for each Fiscal Year, the maximum Special Tax, determined in accordance with Section C, below, that can be levied on any Assessor's Parcel. "Property Owner Association Property" means, for each Fiscal Year, any Assessor's Parcel within the boundaries of CFD No. 2018-01 that is owned by or irrevocably offered for dedication to a property owner association, including any master or sub- association, not including any such property that is located directly under a residential or non-residential structure. "Proportionately" means, that the ratio of the actual annual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels of Developed Property. "Rate and Method of Apportionment" or "RMA" means this Rate and Method of Apportionment of Special Tax. "Resolution of Formation" means the resolution forming CFD No. 2018-01. "Special Tax" or "Special Taxes" means the special tax or special taxes to be City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 3 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D levied in each Fiscal Year on each Assessor's Parcel of Developed Property to fund the Special Tax Requirement. "Special Tax Requirement" means that amount to be collected in any Fiscal Year for CFD No. 2018-01 to pay for certain costs as required to meet the needs of the CFD in that Fiscal Year. The costs to be covered shall be the (i) direct costs for Authorized Services, including the establishment of reserves for future costs of Authorized Services, (ii) Administrative Expenses, and (iii) an amount to cover anticipated delinquencies for the payment of the Special Tax, based on the delinquency rate for the preceding Fiscal Year; less (iv) a credit for funds available to reduce the annual Special Tax levy, if any, as determined by the CFD Administrator. Under no circumstances shall the Special Tax Requirement include debt service payments for debt financings by CFD No. 2018-01. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of Zone 2 of CFD No. 2018-01 which are not exempt from the Special Tax pursuant to law or Section E below. "Townhome Property" or "Townhomes" means Attached Residential Property generally characterized as having a direct ground floor private entry where living space occurs on multiple levels of roughly the same proportion and having at least one vertical wall extending from ground to roof dividing it from the adjoining unit, for which Building Permits have been issued permitting the development of townhomes, as determined by the CFD Administrator. "Undeveloped Property" means, for each Fiscal Year, all property not classified as Developed Property, Property Owner Association Property, or City Property. "Zone" means a mutually exclusive geographic area or areas, within which particular Special Tax rates may be levied pursuant to this Rate and Method of Apportionment. The initial Zone of CFD No. 2018-01 is identified as Zone 2. Additional Zones may be created when property is annexed into CFD No. 2018-01. Each Fiscal Year, all Assessor's Parcels within Zone 2 of CFD No. 2018-01 shall be classified by the CFD Administrator as Developed Property, Undeveloped Property, Property Owner Association Property, or City Property, and shall be subject to annual Special Taxes in accordance with this Rate and Method of Apportionment as determined by the CFD Administrator pursuant to Sections C and D below. The CFD Administrator's allocation of property to each type of Land Use Class shall be conclusive and binding. However, only Developed Property shall be subject to annual Special Taxes in accordance with the Rate City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 4 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D and Method of Apportionment as determined pursuant to Sections C and D below. Luo Imummu W -M_.: -a 1. Developed Property a. Maximum Special Tax The Maximum Special Tax for Fiscal Year 2020-2021 for Developed Property is shown below in Table 1. Under no circumstances shall a Special Tax be levied on additions to existing Dwelling Units. Maximum Special Taxes for Developed Property for Fiscal Year 2020-2021 Zone 2 of Community Facilities District No. 2018-01 Land Use Class Land Use Fiscal Year 2020-2021 Maximum Special Tax 1 FLATS (>= 2,100 SF) $2,465 PER DWELLING UNIT 2 FLATS (1,800 - 2,099 SF) $2,264 PER DWELLING UNIT 3 FLATS (1,500 - 1,799 SF) $1,762 PER DWELLING UNIT 4 FLATS k 1,500 SF) $1,387 PER DWELLING UNIT 5 SFD (>= 3,100 SF) $3,404 PER DWELLING UNIT 6 SFD (2,700 - 3,099 SF) $3,275 PER DWELLING UNIT 7 SFD k 2,700 SF) $2,922 PER DWELLING UNIT 8 TOWNHOMES (>= 2,250 SF) $2,662 PER DWELLING UNIT 9 TOWNHOMES (2,000 - 2,249 SF) $2,522 PER DWELLING UNIT 10 TOWNHOMES k 2,000 SF) $2,279 PER DWELLING UNIT b. 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 that can be levied on an Assessor's Parcel shall be the sum of the Maximum Special Taxes that can be levied for all Land Use Classes located on that Assessor's Parcel. City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 5 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D C. Increase in the Maximum Special Tax On each July 1, commencing on July 1, 2021, the Maximum Special Tax for Developed Property shall be increased annually by the greater of the change in the Consumer Price Index during the twelve (12) months prior to December of the previous Fiscal Year and two percent (2.00%), not to exceed four percent (4.00%). 2. Undeveloped Property No Special Taxes shall be levied on Undeveloped Property. I 1, 11111 1,1111i Commencing with Fiscal Year 2020-2021 and for each following Fiscal Year, the City Council shall levy the annual Special Tax Proportionately for each Assessor's Parcel of Developed Property at up to 100% of the applicable Maximum Special Tax, until the amount of Special Taxes equals the Special Tax Requirement. In addition to Undeveloped Property being exempt from annual Special Taxes, no Special Tax shall be levied on City Property or Property Owner Association Property in Zone 2 of CFD No. 2018-01. However, should an Assessor's Parcel no longer be classified as City Property or Property Owner Association Property, such Assessor's Parcel may, upon each reclassification, no longer be exempt from Special Taxes. Any landowner or resident may file a written appeal of the Special Tax on his/her property with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax on the appellant's property and/or provide a refund to the appellant. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has thirty (30) days in which to appeal to the City Council by filing a written notice of appeal with the clerk of the City, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for the appellant's disagreement with the CFD Administrator's determination. The CFD City of Tustin January7, 2021 CFD No. 2018-01 (Public Services) 6 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D Administrator may charge the appellant a reasonable fee for processing the appeal. The City may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals. Any decision of the City will be final and binding as to all persons. G. MANNER OF COLLECTI®N The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the City may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary or otherwise advisable to meet its financial obligations for CFD No. 2018-01, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. H. FUTURE ANNEXATI®NS It is anticipated that additional properties will be annexed into CFD No. 2018- 01 from time to time. For Land Use Classes not included in the initial boundaries of CFD No. 2018-01, a study and report describing the Authorized Services to be provided to such properties and the estimated cost of such Authorized Services shall be provided to the City Council as the legislative body of the CFD No. 2018-01 in accordance with Section 53321.5 of the Mello -Roos Act. Based on this analysis, the property to be annexed, pursuant to California Government Code section 53339 et. seq. will be assigned an appropriate Maximum Special Tax rate for the Zone or areas within the Zone by Land Use Class as provided herein or as defined and detailed when annexed and included in Exhibit A. I. TERM OF SPECIAL TAX The Special Tax shall be levied in perpetuity as necessary to meet the Special Tax Requirement, unless no longer required to pay for Authorized Services as determined at the discretion of the City. J. SPECIAL TAX REDUCTION The following definitions apply to this Section J: "Developer" means, for Zone 2, Brookfield Homes Southern California LLC, and its successors and assigns. The term "successors" does not refer to the successors to all or any portion of the property within Zone 2 of CFD No. 2018-01 unless the new property owner receives an assignment of the rights and obligations under the development agreement. "Land Use Class" means any of the categories listed in Table 1 of Section C. "Plan Type" means a discrete residential plan type (generally consisting of City of Tustin 7anuary7 2021 CFD )Vo. 2018-01 (Public Services) 7 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D residential dwelling units that share a common product type (e.g., Flats, SFD, Townhomes) and that have nearly identical amounts of living area) that is constructed or expected to be constructed within Zone 2 of CFD No. 2018-01 as identified in the Price Point Study. "Price Point" means, with respect to the Dwelling Units in each Plan Type, as of the date of the applicable Price Point Study, the base price of such Dwelling Units, estimated by the Price Point Consultant as of such date, but excluding potential appreciation or premiums, options or upgrades, based upon their actual or expected characteristics, such as living area, view, or lot size. The Price Point shall not be less than the current base prices (as modified by the criteria set forth in the immediately preceding sentence) of Dwelling Units offered for sale to members of the general public. "Price Point Consultant" means any consultant or firm of such consultants selected by City that (a) has substantial experience in performing price point studies or otherwise estimating or confirming pricing for Dwelling Units within community facilities districts, (b) is well versed in analyzing economic and real estate data that relates to the pricing of Dwelling Units in community facilities districts, (c) is independent and not under the control of CFD No. 2018-01 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD No. 2018-01, (ii) the City, (iii) any owner of real property in CFD No. 2018- 01, or (iv) any real property in CFD No. 2018-01, and (e) is not connected with CFD No. 2018-01 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 2018-01 or the City. "Price Point Study" means a price point study or a letter updating a previous price point study, which (a) has been prepared by the Price Point Consultant, (b) sets forth the Plan Types constructed or expected to be constructed within Zone 2 of CFD No. 2018-01, (c) sets forth the estimated number of constructed and expected Dwelling Units for each Plan Type, (d) sets forth such Price Point Consultant's estimate of the Price Point for each Plan Type and (e) uses a date for establishing such Price Points that is no earlier than 30 days prior to the date the Price Point Study is delivered to the CFD Administrator pursuant to Section J herein. The Price Point Study will only include the for -sale Plan Types in Zone 2 of CFD No. 2018-01. "Total Effective Tax Rate" means, for a Plan Type, the quotient of (a) the Total Burden for such Plan Type divided by (b) the Price Point for such Plan Type, converted to a percentage. "Total Effective Tax Rate Limit" means, 1.40%. "Total Tax Burden" means, with respect to a Plan Type, for the Fiscal Year for which the calculation is being performed, the sum of the Maximum Special Tax and estimated ad valorem property taxes, special assessments, special taxes for any overlapping community facilities districts, and any other governmental City of Tustin 7anuary7 2021 CFD No. 2018-01 (Public Services) 8 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D taxes, fees and charges levied or imposed on Dwelling Units of such Plan Type in Zone 2 of CFD No. 2018-01 in such Fiscal Year or that would have been levied or imposed on all such Dwelling Units had these Dwelling Units been subject to such levies (excluding Property Assessed Clean Energy ("PACE") charges imposed pursuant to AB 811 or SB 555, that are levied on individual Assessor's Parcels). Upon the written request of the Developer, submitted to the City within one hundred fifty (150) calendar days before the projected date of the first Building Permit permitting the construction of a Dwelling Unit for a Land Use Class within Zone 2 of CFD No. 2018-01, the following steps shall be taken for each Land Use Class of for -sale Plan Types in said Zone of CFD No. 2018-01 for evaluating the Special Tax: Step No.: 1. A Price Point Study shall be completed and delivered to the CFD Administrator, and the CFD Administrator shall calculate the Total Tax Burden and Total Effective Tax Rate for each Plan Type in Zone 2 of CFD No. 2018-01. 2. Separately, for each Land Use Class in Zone 2 of CFD No. 2018-01, the CFD Administrator shall determine whether or not the Total Effective Tax Rate for all Plan Types in a Land Use Class is less than or equal to the Total Effective Tax Rate Limit. a. If the Total Effective Tax Rate for all Plan Types in a Land Use Class in Zone 2 of CFD No. 2018-01 is less than or equal to Total Effective Tax Rate Limit, then there shall be no change in Special Tax for such Land Use Class in Zone 2 of CFD No. 2018-01. b. If the Total Effective Tax Rate for any Plan Type in a Land Use Class in Zone 2 of CFD No. 2018-01 is greater than the Total Effective Tax Rate Limit, the CFD Administrator shall calculate a revised Maximum Special Tax for that Land Use Class in such Zone of CFD No. 2018-01, such that the revised Maximum Special Tax does not cause the Total Effective Tax Rate for any Plan Type in such Land Use Class to exceed the Total Effective Tax Rate Limit. 3. If the Maximum Special Tax for any Land Use Class is revised pursuant to step 2.b. above, the CFD Administrator shall also prepare and execute a Certificate to Amend the Special Tax substantially in the form of Exhibit "B" hereto and shall deliver such Certificate to Amend the Special Tax to the CFD No. 2018-01. The Certificate to Amend the Special Tax shall be completed for all Land Use Classes within Zone 2 and shall set forth, as applicable, either (i) the reduced Maximum Special Tax for a Land Use Class as calculated pursuant to step 2.b., (ii) the Maximum Special Tax as identified in Table 1 of Section C for a Land Use Class that was not revised City of Tustin 7anuary7 2021 CFD No. 2018-01 (Public Services) 9 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D as determined pursuant to step 2.a. 4. After the execution by CFD No. 2018-01 of the acknowledgement on the Certificate to Amend the Special Tax, CFD No. 2018-01 shall cause to be recorded in the records of the County Recorder an Amended Notice of Special Tax Lien for CFD No. 2018-01 reflecting the Maximum Special Tax set forth in such Certificate to Amend the Special Tax. If the Maximum Special Tax is not required to be changed for any Land Use Class based on the calculations performed under step 2 above, there shall be no reduction in the Maximum Special Tax, and no Certificate to Amend the Special Tax shall be required. City of Tustin CFD No. 2018-01 (Public Services) January7 2021 /10 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT A MAXIMUM SPECIAL TAXES BY ZONE COUNTY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) Table 1A: Maximum Special Tax Rates for Developed Property Zone [ ] of Community Facilities District No. 2018-01 (Public Services) Land Use Class Land Use Fiscal Year 2020-2021 Maximum Special Tax 1 FLATS (>= 2,100 SF) $[ ] PER DWELLING UNIT 2 FLATS (1,800 - 2,099 SF) $[ ] PER DWELLING UNIT 3 FLATS (1,500 - 1,799 SF) $[ ] PER DWELLING UNIT 4 FLATS k 1,500 SF) $[ ] PER DWELLING UNIT 5 SFD (>= 3,100 SF) $[ ] PER DWELLING UNIT 6 SFD (2,700 - 3,099 SF) $[ ] PER DWELLING UNIT 7 SFD k 2,700 SF) $[ ] PER DWELLING UNIT 8 TOWNHOMES (>= 2,250 SF) $[ ] PER DWELLING UNIT 9 TOWNHOMES (2,000 - 2,249 SF) $[ ] PER DWELLING UNIT 10 TOWNHOMES k 2,000 SF) $[ ] PER DWELLING UNIT Increases in the /Maximum Special Tax On each July 1, commencing on July 1, 2021, the Maximum Special Tax for Developed Property shall be increased annually by the greater of the change in the Consumer Price Index during the twelve (12) months prior to December of the previous Fiscal Year and two percent (2.00%), not to exceed four percent (4.00%). City of Tustin 7anuary7 2021 CFD No. 2018-01 (Public Services) 11 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT B CERTIFICATE OF REDUCTION OF SPECIAL TAX FOR ZONE IN COUNTY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) 1. Pursuant to Section H of the Rate and Method of Apportionment, the Maximum Special for Developed Property for [certain or all] Land Use Classes within Zone [ ] of CFD No. 2018-01 has been reduced. 2. The calculations made pursuant to Section J were based upon a Price Point Study that was received by the CFD Administrator on 3. Tables 2A below shows the Special Tax for each Land Use Class in Zone [ ] of CFD No. 2018-01 after such reduction. TABLE 2A Maximum Special Taxes for Developed Property For Fiscal Year [ ] Zone [ 1 of Communitv Facilities District No. 2018-01 Land Use Class Land Use Fiscal Year [ l Maximum Special Tax 1 FLATS (>= 2,100 SF) $[ l PER DWELLING UNIT 2 FLATS (1,800 - 2,099 SF) $[ l PER DWELLING UNIT 3 FLATS (1,500 - 1,799 SF) $[ l PER DWELLING UNIT 4 FLATS k 1,500 SF) $[ l PER DWELLING UNIT 5 SFD (>= 3,100 SF) $[ l PER DWELLING UNIT 6 SFD (2,700 - 3,099 SF) $[ l PER DWELLING UNIT 7 SFD k 2,700 SF) $[ l PER DWELLING UNIT 8 TOWNHOMES (>= 2,250 SF) $[ l PER DWELLING UNIT 9 TOWNHOMES (2,000 - 2,249 SF) $[ l PER DWELLING UNIT 10 TOWNHOMES k 2,000 SF) $[ l PER DWELLING UNIT 4. Upon execution of the Certificate of Reduction of the Special Tax by the City and CFD No. 2018-01 the City shall cause an amended Notice of Special Tax Lien for CFD No. 2018-01 to be recorded reflecting the modifications set forth herein. City of Tustin 7anuary Z 2021 CFD No. 2018-01 (Public Services) /12 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D CFD ADMINISTRATOR Date: By execution hereof, the undersigned acknowledges, on behalf of CFD No. 2018-01, receipt of this certificate and modification of the Rate and Method of Apportionment as set forth in this certificate. COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) LIN City of Tustin CFD No. 2018-01 (Public Services) Date: January7, 2021 /13 DocuSign Envelope ID: C36E5736-5449-4BA5-92D9-F1 F02D15934D EXHIBIT C PROPERTY IN ZONE 2 OF THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2018-01 (PUBLIC SERVICES) The property in Zone 2 of the City of Tustin Community Facilities District No. 2018-01 (Public Services) is owned, and identified as Orange County Assessor's Parcel Numbers, as shown below: Owner City of Tustin 300 Centennial Way Tustin, CA 92780 Assessor's Parcel Numbers 430-271-81 430-271-78 (portion) 430-271-80 (portion) 430-271-82 (portion) 430-271-84 (portion) 430-271-92 (portion) 430-271-93 (portion) 430-371-41 (portion) 430-371-42 (portion) 430-371-43 (portion) 430-371-44 (portion) 430-371-45 (portion) 430-371-46 (portion) 430-371-48 (portion) 430-371-51 (portion) 430-371-54 (portion) 430-371-73 (portion) 430-371-74 (portion) 430-371-76 (portion) 430-371-77 (portion)