2021/11/17 Notice Notice of Special Tax Lien for Community Facilities District No. 2021-2 of the City of Menifee (Sumac Ridge)Recording Requested By and
When Recorded Mail To:
Stradling, Yocca, Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Brian P. Forbath, Esq.
2021-0682899
11/17/2021 10:25 AM Fee: $ 59.00
Page 1 of 16
Recorded in Official Records
County of Riverside
Peter Aldana
Assessor -County Clerk -Recorder
127
This document is exempt from
the payment of a recording fee
pursuant to Government Code
Section 6103.
NOTICE OF SPECIAL TAX LIEN
FOR COMMUNITY FACILITIES DISTRICT NO. 2021-2
OF THE CITY OF MENIFEE (SUMAC RIDGE)
Pursuant to the requirements of Section 3114.5 of the Streets and Highways Code and
Section 53328.3 of the Government Code, the undersigned City Clerk of the City of Menifee (the
"City"), acting on behalf of Community Facilities District No. 2021-2 of the City of Menifee
(Sumac Ridge) (the "District"), State of California, hereby gives notice that a lien to secure
payment of special taxes is hereby imposed by the City Council of the City of Menifee, Riverside
County, State of California, sitting as the legislative body of the District (the "City Council"). The
special taxes secured by this lien are authorized to be levied for the purpose of: (a) paying for
the cost of the construction, purchase, modification, expansion, rehabilitation and/or
improvement of (i) drainage, library, park, roadway, traffic, administration and general
government facilities, animal shelter facilities, fire and safety, and other public facilities of the
City, including the foregoing public facilities which are included in the City's fee programs with
respect to such facilities and authorized to be financed under the Mello -Roos Community
Facilities Act of 1982, as amended (the "City Facilities"); (ii) water and sewer facilities including
the acquisition of capacity in the sewer system and/or water system of Eastern Municipal Water
District which are included in Eastern Municipal Water District's water and sewer capacity and
connection fee programs (the "Water District Facilities"), and (iii) interim and permanent school
facilities of Menifee Union School District, including classrooms, multi -purpose facilities,
administration and auxiliary space at school facilities, athletic fields, playgrounds and
recreational facilities and improvements thereto, landscaping, access roadways, drainage,
sidewalks and gutters and utility lines, furniture, equipment and technology, including
technology upgrades and mobile devices and infrastructure therefore, with a useful life of at
least five (5) years at such school facilities, including such school facilities of Menifee Union
School District which are included in Menifee Union School District's school fee program (the
"School Facilities" and together, with the City Facilities and the Water Facilities, the "Facilities")
and all appurtenances and appurtenant work in connection with the foregoing Facilities,
including the cost of engineering, planning, designing, materials testing, coordination,
construction staking, construction management and supervision for such Facilities, and (b) to
finance the incidental expenses (the "Incidental Expenses") to be incurred, including: (1) the
cost of engineering, planning and designing the Facilities; (2) all costs, including costs to form
the District, associated with the creation of the District, the issuance of the bonds, the
determination of the amount of special taxes to be levied and costs otherwise incurred in order
to carry out the authorized purposes of the District; and (3) any other expenses incidental to the
construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities;
and (c) paying for the principal and interest and other periodic costs on the bonds to be issued
to finance the Facilities and Incidental Expenses.
The special tax is authorized to be levied within the District, which has now been
officially formed and the lien 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 Government Code.
The rate, method of apportionment and manner of collection of the authorized special
tax is as set forth in Appendix A attached hereto and incorporated herein by this reference.
Conditions under which the obligation to pay the Special Tax may be prepaid and permanently
satisfied and the lien of the special tax cancelled are as follows:
Parcels within the District may prepay the special tax obligation in whole or in part as set
forth in Section G of Appendix A attached hereto.
Notice is further given that upon the recording of this notice in the office of the County
Recorder, the obligation to pay the special tax levy shall become a lien upon all nonexempt real
property within the District in accordance with Section 3115.5 of the Streets and Highway Code.
The names of the owners and the assessor's tax parcel numbers of the real property
included within the District and not exempt from the special tax are as set forth in Appendix B
attached hereto and incorporated herein by this reference.
Reference is made to the boundary map of the District recorded at Book No. 87 of Maps
of Assessment and Community Facilities Districts at Page No. 66, in the office of the County
Recorder for the County of Riverside, State of California, which map is now the final boundary
map of the District.
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 Deputy City Manager, City of Menifee, 29844 Haun Road, Menifee, California 92586,
(951) 672-6777.
City Clerk of taCity of Menifee 6behalf of
ommunity Facc oilities District o. 21-2 of the City
of Menifee (Sumac Ridge)
APPENDIX A
RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 2021-2
OF THE CITY OF MENIFEE (SUMAC RIDGE)
A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A,
"Definitions", below) shall be applicable to each Assessor's Parcel of Taxable Property located
within the boundaries of the City of Menifee Community Facilities District No. 2021-2 (Sumac
Ridge) ("CFD No. 2021-2"). The amount of Special Tax to be levied in each Fiscal Year on an
Assessor's Parcel shall be determined by the City Council of the City of Menifee, acting in its
capacity as the legislative body of CFD No. 2021-2, by applying the appropriate Special Tax for
Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped
Property that is not Exempt Property as set forth below. All of the real property, unless
exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the
extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre" or "Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown
on the applicable final map, parcel map, condominium plan, or other recorded parcel map or
instrument. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by
43,560.
"Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of 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. 2021-2: the costs of computing the Special Taxes and
preparing the Special Tax collection schedules (whether by the City or designee thereof or
both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of
remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the
discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2021-2
or any designee thereof of complying with arbitrage rebate requirements; the costs to the City,
CFD No. 2021-2 or any designee thereof of complying with continuing disclosure requirements
of the City, CFD No. 2021-2 and any major property owner associated with applicable federal
and state securities laws and the Act; the costs associated with preparing Special Tax
disclosure statements and responding to public inquiries regarding the Special Taxes; the costs
of the City, CFD No. 2021-2 or any designee thereof related to an appeal of the Special Tax; the
costs associated with the release of funds from an escrow account; and the City's annual
administration fees and third party expenses. Administration Expenses shall also include
amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2021-2 for
any other administrative purposes of CFD No. 2021-2, including attorney's fees and other costs
related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
"Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in
a Final Map that was recorded prior to the January 1s' preceding the Fiscal Year in which the
Special Tax is being levied, (ii) that have an assigned Assessor's Parcel Number from the
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County shown on an Assessor's Parcel Map for the individual lot included on the Final Map, and
(iii) that have not been issued a building permit on or before May 1 s' preceding the Fiscal Year in
which the Special Tax is being levied.
"Assessor's Parcel" means a lot or parcel of land designated 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.
"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the
County for purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below.
"Backup Special Tax" means the Special Tax of that name described in Section D below.
"Bonds" means any obligation to repay a sum of money, including obligations in the form of
bonds, certificates of participation, long-term leases, loans from government agencies, or loans
from banks, other financial institutions, private businesses, or individuals, or long-term contracts,
or any refunding thereof, to which Special Tax of CFD No. 2021-2 have been pledged.
"Boundary Map" means a recorded map of the CFD which indicates the boundaries of the
CFD.
"Building Permit" means the first legal document issued by a local agency giving official
permission for new construction. For purposes of this definition, "Building Permit" may or may
not include expired or cancelled building permits, or any subsequent building permit
document(s) authorizing new construction on an Assessor's Parcel that are issued or changed
by the City after the first original issuance, as determined by the CFD Administrator, provided
that following such determination the Maximum Special Tax that may be levied on all Assessor's
Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding
Bonds plus the estimated annual Administrative Expenses.
"Building Square Footage" or "BSF" means the square footage of assessable internal living
space, exclusive of garages or other structures not used as living space, as determined by
reference to the Building Permit for such Assessor's Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the
following December 31.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement, and providing for the levy and collection of the
Special Taxes.
"CFD" or "CFD No. 2021-2" means Community Facilities District No. 2021-2 (Sumac Ridge)
established by the City under the Act.
"City" means the City of Menifee, State of California.
"City Council" means the City Council of the City of Menifee, acting as the legislative body of
CFD No. 2021-2.
A-2
"Condominium Plan" means a condominium plan pursuant to California Civil Code, Section
4285.
"County" means the County of Riverside, State of California.
"Developed Property" means all Assessor's Parcels that: (i) are included in a Final Map that
was recorded prior to the January 151 preceding the Fiscal Year in which the Special Tax is
being levied, and (ii) have an Assessor's Parcel Number from the County shown on an
Assessor's Parcel Map for the individual lot included on the Final Map, and (iii) a Building Permit
for new construction was issued on or before May 1s' preceding the Fiscal Year in which the
Special Tax is being levied.
"Exempt Property" means all Assessor's Parcels designated as being exempt from Special
Taxes as provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot
line adjustment, pursuant to the Subdivision Map Act (California Government Code Section
66410 at seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section
4285 that creates individual lots for which Building Permits may be issued without further
subdivision.
"Fiscal Year" means the period commencing on July 151 of any year and ending the following
June 30tn
"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, and any instrument replacing or supplementing the same.
"Land Use Category" means any of the categories listed in Table 1 of Section D.
"Maximum Special Tax" means for each Assessor's Parcel, the maximum Special Tax,
determined in accordance with Section D below, that can be levied by CFD No. 2021-2 on such
Assessor's Parcel.
"Multifamily Property" means all Assessor's Parcels of Developed Property for which a
Building Permit has been issued for the purpose of constructing a building or buildings
comprised of attached Residential Units available for rental by the general public, not for sale to
an end user, and under common management, as determined by the CFD Administrator.
"Non -Residential Property" means all Assessor's Parcels of Developed Property for which a
Building Permit(s) was issued for a non-residential use. The CFD Administrator shall make the
determination if an Assessor's Parcel is Non -Residential Property.
"Partial Prepayment Amount" means the amount required to prepay a portion of the Special
Tax obligation for an Assessor's Parcel, as described in Section G.2.
"Prepayment Amount" means the amount required to prepay the Special Tax obligation in full
for an Assessor's Parcel, as described in Section G.1.
"Proportionately" means for Taxable Property that is (i) Developed Property, that the ratio of
the actual Special Tax levy to the Assigned Special Tax is the same for all Assessor's Parcels of
Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the
A-3
Maximum Special Tax is the same for all Assessor's Parcels of Approved Property, and (iii)
Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special
Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor's Parcels
of Undeveloped Property or Provisional Undeveloped Property, as applicable.
"Provisional Undeveloped Property" means all Assessor's Parcels of Taxable Property that
would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but
cannot be classified as Exempt Property because to do so would be reduce the Acreage of all
Taxable Property below the required minimum Acreage set forth in Section F.
"Residential Property" means all Assessor's Parcels of Developed Property for which a
Building Permit has been issued for purposes of constructing one or more Residential Units.
"Residential Unit" or "RU" means a residential unit that is used or intended to be used as a
domicile by one or more persons, as determined by the CFD Administrator.
"Single Family Residential Property" means all Assessor's Parcels of Residential Property
other than Multifamily Property.
"Special Tax" or "Special Taxes" means any of the special taxes authorized to be levied
within CFD No. 2021-2 pursuant to the Act to fund the Special Tax Requirement.
"Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt
service or the periodic costs on all outstanding Bonds due in the Calendar Year that
commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the
release of funds from an escrow account, (iv) any amount required to replenish any reserve
funds established in association with the Bonds, (v) an amount up to any anticipated shortfall
due to Special Tax delinquencies and (vi) for the collection or accumulation of funds for the
acquisition or construction of facilities authorized by CFD No. 2021-2 or the payment of debt
services on Bonds anticipated to be issued, provided that the inclusion of such amount does not
cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property as
set forth in Steps Two or Three of Section E., less (vii) any amounts available to pay debt
service or other periodic costs on the Bonds pursuant to the Indenture.
"Taxable Property" means all Assessor's Parcels within CFD No. 2021-2, which are not
Exempt Property.
"Taxable Unit" means either a Residential Unit or an Acre.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not
Developed Property, Approved Property, or Provisional Undeveloped Property.
B. SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year, the City Council
shall levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax, to
fund the Special Tax Requirement.
O
C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2021-2022, each Assessor's Parcel within CFD
No. 2021-2 shall be classified as Taxable Property or Exempt Property. In addition, each
Assessor's Parcel of Taxable Property shall be further classified as Developed Property,
Approved Property, Undeveloped Property or Provisional Undeveloped Property.
Assessor's Parcels of Developed Property shall further be classified as Residential Property or
Non -Residential Property. Each Assessor's Parcel of Residential Property shall further be
classified as a Single Family Residential Property or Multifamily Property. Each Assessor's
Parcel of Single Family Residential Property shall be further assigned to a Land Use Category
based on its Building Square Footage.
In the event that there are Assessor's Parcel(s) for which one or more Building Permits for
Residential Units have been issued and the County has not yet assigned final Assessor's Parcel
Number(s) to such Assessor's Parcel(s) (in accordance with the Final Map or Condominium
Plan), the amount of the Special Tax levy on such Assessor's Parcel for each Fiscal Year shall
be determined as follows: (1) the CFD Administrator shall first determine an amount of the
Maximum Special Tax for such Assessor's Parcel, based on the classification of such
Assessor's Parcel as Undeveloped Property; (2) the amount of the Special Tax for the
Residential Units on such Assessor's Parcel for which Building Permits have been issued shall
be determined based on the Developed Property Special Tax rates and such amount shall be
levied as Developed Property in accordance with Step 1 of Section E below; and (3) the amount
of the Special Tax on the Taxable Property in such Assessor's Parcel not subject to the Special
Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate
levied on Undeveloped Property pursuant to Step 3 of Section E below, multiplied by the total of
the amount determined in clause (1), less (B) the amount determined in clause (2).
D. MAXIMUM SPECIAL TAX
1. Developed Property
The Maximum Special Tax for each Assessor's Parcel of Single Family Residential Property
in any Fiscal Year shall be the greater of (i) the Assigned Special Tax for such Assessor's
Parcel or (ii) the Backup Special Tax.
The Maximum Special Tax for each Assessor's Parcel of Multifamily Property and Non -
Residential Property shall be the applicable Assigned Special Tax described in Table 1 of
Section D.
a. Assigned Special Tax
Each Fiscal Year, each Assessor's Parcel of Single Family Residential Property, Multifamily
Property or Non -Residential Property shall be subject to an Assigned Special Tax, The
Assigned Special Tax for Fiscal Year 2021-2022_ applicable to an Assessor's Parcel of
Developed Property shall be determined pursuant to Table 1 below.
A-5
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2021-2022
Land Use Category
Taxable
Unit
Building Square
Footage
Assigned
Special Tax
Per Taxable
Unit
1.
Single
Family
Residential Property
RU
Less than 2,000 s .
ft
$2,981.00
2.
Single
Family
Residential Property
RU
2,000 s . It to 2,200 s
. ft
$3,065.00
3.
Single
Family
Residential Property
RU
1 2,201 s . ft to 2,400 s
. ft
$3,148.00
4.
Single
Family
Residential Property
RU
2,401 s . ft to 2,600 s
. ft
$3,257.00
5.
Single
Family
Residential Property
RU
2,601 s . ft to 2,800 s
. ft
$3,366.00
6.
Single
Family
Residential Property
RU
2,801 sq . ft to 3,000 s
. ft
$3,449.00
7.
Sin
le Famil
Residential Property
RU
3,001 s . ft to 3,200 s
. ft
$3,592.00
8.
Single
Family
Residential Property
RU
Greater than 3,200 s
. It
$3,734.00
9.
Multifamily
Property
Acre
N/A
$22,314.00
10.
Non -Residential Property
Acre
N/A
$22,314.00
On each July 1, commencing July 1, 2022, the Assigned Special Tax rate for Developed
Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal
Year.
b. Multiple Land Use Categories
In some instances an Assessor's Parcel of Developed Property may contain more than one
Land Use Category. The Maximum Special Tax levied on an Assessor's Parcel shall be the
sum of the Maximum Special Tax for each Taxable Unit for all Land Use Categories located
on the Assessor's Parcel. The CFD Administrator's allocation to each type of property shall
be final.
c. Backup Special Tax
The Backup Special Tax for an Assessor's Parcel within a Final Map classified as Single
Family Residential Property or Approved Property expected to be classified as Single Family
Residential Property shall calculated according to the following formula.
B=(UxA)/L
The terms above have the following meanings:
B = Backup Special Tax per Assessor's Parcel classified as Single Family Residential
Property or Approved Property expected to be classified as Single Family Residential
Property within the Final Map.
U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below.
A = Acreage of Single Family Residential Property expected to exist after build out in
such Final Map at the time of calculation, as determined by the Administrator
M
L = Number of Assessor's Parcels of Single Family Residential Property expected to
exist after build out in such Final Map at the time of calculation, as determined by the
Administrator.
In the event any portion of the Final Map is changed or modified, the Backup Special Tax for
all Assessor's Parcels within such changed or modified area shall be $22,314 per Acre.
Notwithstanding the foregoing, the Backup Special Tax for an Assessor's Parcel of
Developed Property for which a certificate of occupancy has been granted may not be
revised.
In the event any superseding Final Map is recorded as a Final Map within the boundaries of
the CFD, the Backup Special Tax for all Assessor's Parcels within such Final Map shall be
$22,314 per Acre. The Backup Special Tax shall not apply to Multifamily Residential
Property or Non -Residential Property.
On each July 1, commencing July 1, 2022, the Backup Special Tax rate shall be increased by
two percent (2.00%) of the amount in effect in the prior Fiscal Year.
2. Approved Property
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Single Family Residential Property shall be the Backup Special Tax computed
pursuant to Section D.1.c above.
The Maximum Special Tax for each Assessor's Parcel of Approved Property not expected to
be classified as Single Family Residential Property shall be $22,314 per Acre.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Approved
Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal
Year.
3. Undeveloped Property and Provisional Undeveloped Property
The Maximum Special Tax for each Assessor's Parcel of Undeveloped Property and
Provisional Undeveloped Property shall be $22,314 per Acre.
On each July 1, commencing July 1, 2022, the Maximum Special Tax rate for Undeveloped
Property and Provisional Undeveloped Property shall be increased by two percent (2.00%) of
the amount in effect in the prior Fiscal Year.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2021-2022 and for each subsequent Fiscal Year, the City
Council shall levy Special Taxes on all Taxable Property in accordance with the following steps:
Step One: The Special Tax shall be levied Proportionately on each Assessor's Parcel of
Developed Property at up to 100% of the applicable Assigned Special Tax rates
in Table 1 to satisfy the Special Tax Requirement.
Ill
Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the
first step has been completed, the Special Tax shall be levied Proportionately on
each Assessor's Parcel of Approved Property at up to 100% of the Maximum
Special Tax applicable to each such Assessor's Parcel as needed to satisfy the
Special Tax Requirement.
Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the
first two steps have been completed, the Special Tax shall be levied
Proportionately on each Assessor's Parcel of Undeveloped Property up to 100%
of the Maximum Special Tax applicable to each such Assessor's Parcel as
needed to satisfy the Special Tax Requirement.
Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the
first three steps have been completed, then the Special Tax levy on each
Assessor's Parcel of Developed Property for which the Maximum Special Tax is
the Backup Special Tax shall be increased in equal percentages from the
Assigned Special Tax up to 100% of the Backup Special Tax as needed to
satisfy the Special Tax Requirement.
Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the
first four steps have been completed, the Special Tax shall be levied
Proportionately on each Assessor's Parcel of Provisional Undeveloped Property
up to 100% of the Maximum Special Tax applicable to each such Assessor's
Parcel as needed to satisfy the Special Tax Requirement.
Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal
Year against any Assessor's Parcel of Residential Property as a result of a delinquency in the
payment of the Special Tax applicable to any other Assessor's Parcel be increased by more
than ten percent (10%) above the amount that would have been levied in that Fiscal Year had
there never been any such delinquency or default.
F. EXEMPTIONS
The City shall classify as Exempt Property, in the following order of priority, (i) Assessor's
Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in
use by the State of California, Federal or other local governments, including school districts, (ii)
Assessor's Parcels which are used as places of worship and are exempt from ad valorem
property taxes because they are owned by a religious organization, (iii) Assessor's Parcels
which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a
homeowners' association, (iv) Assessor's Parcels with public or utility easements making
impractical their utilization for other than the purposes set forth in the easement, (v) Assessor's
Parcels which are privately owned and are encumbered by or restricted solely for public uses,
(vi) Assessor's Parcels which are classified as Non -Residential Property or (vii) Assessor's
Parcels restricted to other types of public uses determined by the City Council, provided that no
such classification would reduce the sum of all Taxable Property to less than 26.06 Acres.
Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt
Property if such classification would reduce the sum of all Taxable Property to less than 26.06
Acres. Assessor's Parcels which cannot be classified as Exempt Property because such
classification would reduce the Acreage of all Taxable Property to less than 26.06 Acres will be
classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to
Step Five in Section E.
G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
"CFD Facilities" means $13,000,000 expressed in 2021 dollars, which shall increase by the
Construction Inflation Index on July 1, 2022, and on each July 1 thereafter, or such lower
amount (i) determined by the City Council as sufficient to provide the facilities under the
authorized bonding program for CFD No. 2021-2, or (ii) determined by the City Council
concurrently with a covenant that it will not issue any more Bonds to be supported by Special
Tax levied under this Rate and Method of Apportionment.
"Construction Fund" means an account specifically identified in the Indenture or functionally
equivalent to hold funds, which are available for expenditure to acquire or construct facilities
eligible to be financed by CFD No. 2021-2.
"Construction Inflation Index" means the greater of (i) 2% and (ii) the annual percentage
change in the Engineering News -Record Building Cost Index for the city of Los Angeles,
measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this
index ceases to be published, the Construction Inflation Index shall be another index as
determined by the City that is reasonably comparable to the Engineering News -Record Building
Cost Index for the city of Los Angeles.
"Future Facilities Costs" means the CFD Facilities minus (i) amounts deposited in the
Construction Fund, (ii) amounts deposited in any escrow accounts funded by the Outstanding
Bonds and anticipated to fund public facilities costs, and (iii) public facility costs funded by
interest earnings on the Construction Fund actually earned prior to the date of prepayment.
"Outstanding Bonds" means all previously issued Bonds issued and secured by the levy of
Special Tax which will remain outstanding after the first interest and/or principal payment date
following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the
proceeds of prior prepayments of Special Tax.
Prepayment in Full
The Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor's
Parcels of Developed Property, (ii) Assessor's Parcels of Approved Property or Undeveloped
Property for which a Building Permit has been issued, (iii) Assessor's Parcels of Approved
Property or Undeveloped Property for which a Building Permit has not been issued and (iv)
Assessor's Parcels of Provisional Undeveloped Property. The Special Tax obligation applicable
to an Assessor's Parcel may be fully prepaid and the obligation to pay the Special Tax for such
Assessor's Parcel permanently satisfied as described herein; provided that a prepayment may
be made 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
obligation for such Assessor's Parcel shall provide the CFD Administrator with written notice of
intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator
shall notify such owner of the amount of the non-refundable deposit determined to cover the
cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the
Assessor's Parcel. Within 15 days of receipt of such non-refundable deposit, the CFD
Administrator shall notify such owner of the Prepayment Amount for the Assessor's Parcel.
Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to
be redeemed with the proceeds of such prepaid Special Taxes.
ME
The Prepayment Amount shall be calculated as follows (some capitalized terms are
defined below):
Bond Redemption Amount
plus
Redemption Premium
plus
Future Facilities Amount
plus
Defeasance Amount
plus
Administrative Fees and Expenses
less
Reserve Fund Credit
Equals:
Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as
follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For an Assessor's Parcel of Developed Property, compute the Maximum Special
Tax for the Assessor's Parcel. For an Assessor's Parcel of Approved Property or
Undeveloped Property for which a Building Permit has been issued, compute the Maximum
Special Tax for the Assessor's Parcel as though it was already designated as Developed
Property, based upon the Building Permit which has been issued for the Assessor's Parcel.
For an Assessor's Parcel of Approved Property or Undeveloped Property for which a
Building Permit has not been issued, or Provisional Undeveloped Property, compute the
Maximum Special Tax for the Assessor's Parcel.
3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total
amount of Maximum Special Taxes that could be levied assuming build out of all Assessor's
Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor's
Parcels of Developed Property not including any Assessor's Parcels for which the Special
Tax obligation has been previously prepaid.
4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of
the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with
the Prepayment Amount (the "Bond Redemption Amount").
5. Multiply the Bond Redemption Amount by the applicable redemption premium, if
any, on the Outstanding Bonds to be redeemed (the "Redemption Premium").
6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined
pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the
Assessor's Parcel (the "Future Facilities Amount").
8. Determine the amount needed to pay interest on the Bond Redemption Amount
from the first bond interest and/or principal payment date following the current Fiscal Year
until the earliest redemption date for the Outstanding Bonds on which Bonds can be
redeemed from Special Tax prepayments.
9. Determine the Special Taxes levied on the Assessor's Parcel in the current
Fiscal Year which have not yet been paid.
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10. Determine the amount the CFD Administrator reasonably expects to derive from
the investment of the Bond Redemption Amount and the Redemption Premium from the
date of prepayment until the redemption date for the Outstanding Bonds to be redeemed
with the Prepayment Amount,
11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the
amount derived pursuant to paragraph 10 (the "Defeasance Amount").
12. Verify the administrative fees and expenses of the CFD, the cost to invest the
Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of
recording notices to evidence the prepayment of the Special Tax obligation for the
Assessor's Parcel and the redemption of Outstanding Bonds (the "Administrative Fees and
Expenses').
13. 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 Outstanding 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 Outstanding 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.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount,
the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the
Administrative Fees and Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption
Premium, and Defeasance Amount shall be deposited into the appropriate fund as
established under the Indenture and be used to redeem Outstanding Bonds or make debt
service payments. The Future Facilities Amount shall be deposited into the Construction
Fund. The Administrative Fees and Expenses shall be retained by the CFD.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of
Bonds. In such event, the increment above $5,000 or an integral multiple thereof will be
retained in the appropriate fund established under the Indenture to be used with the next
redemption from other Special Tax prepayments of Outstanding Bonds or to make debt service
payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined
pursuant to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year's
Special Tax levy for the Assessor's Parcel from the County tax roll. With respect to any
Assessor's Parcel for which the Special Tax obligation is prepaid, the City Council shall cause a
suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special
Tax obligation and the release of the Special Tax lien for the Assessor's Parcel, and the
obligation to pay the Special Tax for such Assessor's Parcel shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the
amount of Maximum Special Tax that may be levied on all Assessor's Parcels of Taxable
Property after the proposed prepayment will be at least 1.1 times maximum annual debt service
on the Bonds that will remain outstanding after the prepayment plus the estimated annual
Administrative Expenses.
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Tenders of Bonds in prepayment of the Special Tax obligation may be accepted upon
the terms and conditions established by the City Council pursuant to the Act. However, the use
of Bond tenders shall only be allowed on a case -by -case basis as specifically approved by the
City Council.
2. Prepayment in Part
The Special Tax obligation for an Assessor's Parcel of Developed Property, Approved
Property, Undeveloped Property, or Provisional Undeveloped Property may be partially prepaid.
For purposes of determining the Partial Prepayment Amount, the provisions of Section G.1 shall
be modified as provided by the following formula:
PP = ((PE — A) x F) + A
These terms have the following meaning:
PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1
F = the percent by which the owner of the Assessor's Parcel(s) is partially
prepaying the Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section GA
The owner of an Assessor's Parcel who desires to partially prepay the Special Tax
obligation for the Assessor's Parcel shall notify the CFD Administrator of (i) such owner's intent
to partially prepay the Special Tax obligation, (ii) the percentage of the Special Tax obligation
such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow
agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such
property owner of the amount of the non-refundable deposit determined to cover the cost to be
incurred by the CFD in calculating the Partial Prepayment Amount. Within 15 business days of
receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the
amount of the Partial Prepayment Amount for the Assessor's Parcel. A Partial Prepayment
Amount must be made not less than 60 days prior to the redemption date for the Outstanding
Bonds to be redeemed with the proceeds of the Partial Prepayment Amount.
With respect to any Assessor's Parcel for which the Special Tax obligation is partially
prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in
Paragraph 15 of Section G.1, and (ii) indicate in the records of the CFD that there has been a
partial prepayment for the Assessor's Parcel and that a portion of the Special Tax obligation
equal to the remaining percentage (1.00 - F) of the applicable Special Tax will continue to be
levied on the Assessor's Parcel pursuant to Section E.
H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all
Assessor's Parcels subject to the Special Tax pursuant to Section E. The Special Tax shall
cease not later than the 2061-2062 Fiscal Year, however, Special Taxes will cease to be levied
in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest
and principal payments on the CFD No. 2021-2 Bonds have been paid; (ii) all authorized
facilities of CFD No. 2021-2 have been acquired and all reimbursements to the developer have
been paid, (iii) no delinquent Special Taxes remain uncollected and (iv) all other obligations of
CFD No. 2021-2 have been satisfied.
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MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad
valorem property taxes, provided, however, that CFD No. 2021-2 may collect Special Taxes at a
different time or in a different manner if necessary to meet its financial obligations, and may
covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted
by the Act.
J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes levied on his/her Assessor's
Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments
of Special Taxes. During 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 Assessor's Parcel(s). No refunds of previously paid Special Taxes shall be made
unless approved by the CFD Administrator.
The CFD Administrator shall interpret this Rate and Method of Apportionment and make
determinations relative to the annual levy and administration of the Special Taxes and any
taxpayer who appeals, as herein specified.
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APPENDIX B
NAME OF OWNER AND ASSESSOR'S PARCEL NUMBER
Landowner
Meritage Homes of California Inc.
Meritage Homes of California Inc.
Meritage Homes of California Inc.
Meritage Homes of California Inc.
Meritage Homes of California Inc.
[S
Assessor's Parcel Number
372-160-006
372-160-007
372-160-008
372-160-013
372-190-003