23-1296RESOLUTION NO. 23-1296
RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE
CITY OF MENIFEE TO ESTABLISH COMMUNITY FACILITIES
DISTRICT NO. 2023-2 (CIMARRON RIDGE) OF THE CITY OF
MENIFEE AND IMPROVEMENT AREAS THEREIN, TO
AUTHORIZE THE LEVY OF A SPECIAL TAX TO PAY THE
COSTS OF ACQUIRING OR CONSTRUCTING CERTAIN
FACILITIES AND TO PAY DEBT SERVICE ON BONDED
INDEBTEDNESS
WHEREAS, the City of Menifee (the "City") has received a petition from Pulte Home
Company, LLC, a Michigan limited liability company (the "Developer'), the owner of more than
ten percent of the land within the boundaries of the territory which is proposed for inclusion in a
proposed community facilities district, which petition meets the requirements of Sections 53318
and 53319 of the Government Code of the State of California; and
WHEREAS, the City Council of the City (the "City Council") desires to adopt this
resolution of intention as provided in Section 53321 of the Mello -Roos Community Facilities Act
of 1982 (the "Act") to establish a community facilities district consisting of the territory described
in Attachment "A" hereto and incorporated herein by this reference which the City Council
hereby determines shall be known as "Community Facilities District No. 2023-2 (Cimarron
Ridge) of the City of Menifee ("Community Facilities District No. 2023-2" or the "District") to
finance (1) the purchase, construction, modification, expansion, improvement or rehabilitation of
certain real or other tangible property described in Attachment "B" hereto and incorporated
herein by this reference, including all furnishings, equipment and supplies related thereto
(collectively, the "Facilities"), which Facilities have a useful life of five years or longer, and (2)
the incidental expenses to be incurred in connection with financing the Facilities and forming
and administering the District (the "Incidental Expenses"); and
WHEREAS, in accordance with the request submitted by the Developer, the City Council
has been asked to consider the formation of two improvement areas within proposed
Community Facilities District No. 2023-2 with the boundaries described in Attachment "A" to be
known as "Improvement Area No. 1 of Community Facilities District No. 2023-2 (Cimarron
Ridge) of the City of Menifee" and "Improvement Area No. 2 of Community Facilities District No.
2023-2 (Cimarron Ridge) of the City of Menifee" (each individually an "Improvement Area" and
together the "Improvement Areas"); and
WHEREAS, the City Council further intends to approve an estimate of the costs of the
Facilities and the Incidental Expenses for Community Facilities District No. 2023-2; and
WHEREAS, it is the intention of the City Council to consider financing the Facilities and
the Incidental Expenses through the formation of Community Facilities District No. 2023-2, the
designation of the Improvement Areas and the issuance of bonded indebtedness in an amount
not to exceed $10,000,000 within proposed Improvement Area No. 1 and $15,000,000 within
proposed Improvement Area No. 2 and the levy of a special tax within each Improvement Area
to pay for the Facilities and the Incidental Expenses (the "Special Tax") and to pay debt service
on the bonded indebtedness to be incurred for such Improvement Area, provided that the bond
sales and such Special Tax levies are approved at a separate election to be held within the
boundaries of each proposed Improvement Area;
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WHEREAS, the City desires to enter into a reimbursement agreement with the
Developer, the form of which is on file with the City Clerk (the "Reimbursement Agreement"), to
provide for the reimbursement of certain amounts advanced by the Developer in connection with
the formation of the District;
WHEREAS, the District and the Developer may enter into a joint community facilities
agreement (the "JCFA") with each of Eastern Municipal Water District (the "Water District"),
Menifee Union School District, Romoland School District and Perris Union High School District
relating to certain facilities proposed to be financed by the District and owned and operated by
the Water District, Menifee Union School District, Romoland School District and Perris Union
High School District, as applicable, and the District expects to enter into the JCFAs prior to the
approval of the issuance of bonds pursuant to the Act in the event facilities of such entities are
to be financed by the District.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee,
California:
Section 1. The above recitals are true and correct.
Section 2. A community facilities district is proposed to be established under the terms of
the Act with two separate improvement areas designated pursuant to Section
53350 of the Act. It is further proposed that the boundaries of the District and of
each Improvement Area shall be the legal boundaries as described in
Attachment "A" hereto, which boundaries shall, upon recordation of the boundary
map for the District, include the entirety of any parcel subject to taxation by the
District, and as depicted on the map of the proposed Community Facilities
District No. 2023-2 which is on file with the City Clerk. The City Clerk is hereby
directed to sign the original map of the District and record it with all proper
endorsements thereon with the Assessor -County Clerk -Recorder of the County
of Riverside (the "County Recorder") within 15 days after the adoption of this
resolution, all as required by Section 3111 of the Streets and Highways Code of
the State of California.
Section 3. The name of the proposed community facilities district shall be "Community
Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee" and the two
proposed Improvement Areas shall be designated as "Improvement Area No. 1
of Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of
Menifee" and "Improvement Area No. 2 of Community Facilities District No. 2023-
2 (Cimarron Ridge) of the City of Menifee."
Section 4. The Facilities proposed to be provided within Community Facilities District
No. 2023-2 and to be financed, in part, by each Improvement Area, are public
facilities as defined in the Act, which the City, the Water District, Menifee Union
School District, Romoland School District and Perris Union High School District,
with respect to certain water and sewer facilities and school facilities, as
applicable, are authorized by law to construct, acquire, own and operate. The
City Council hereby finds and determines that the description of the Facilities
herein is sufficiently informative to allow taxpayers within the proposed District
and each proposed Improvement Area to understand what the funds of the
District may be used to finance. The Incidental Expenses expected to be
incurred include the cost of planning and designing the Facilities, the costs of
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Resolution of Intention to Establish CFD No. 2023-2 (Cimarron Ridge)
forming the District, issuing bonds and levying and collecting the Special Tax
within each Improvement Area of the proposed District. The Facilities may be
acquired from one or more of the property owners within the District as
completed public improvements or may be constructed from bond or Special Tax
proceeds.
All or a portion of the Facilities may be purchased with District funds as
completed public facilities pursuant to Section 53314.9 or as discrete portions or
phases pursuant to Section 53313.51 of the Act and/or constructed with District
funds pursuant to Section 53316.2 of the Act. Any portion of the Facilities may
be financed through a lease or lease -purchase arrangement if the District
hereafter determines that such arrangement is of benefit to the District.
Section 5. Except where funds are otherwise available, it is the intention of the City Council
to levy annually in accordance with the procedures contained in the Act the
Special Tax within each Improvement Area, secured by recordation of a
continuing lien against all nonexempt real property in such Improvement Area,
sufficient to pay for: (i) the portion of the Facilities and Incidental Expenses to be
financed by such Improvement Area; and (ii) the principal and interest and other
periodic costs on bonds or other indebtedness issued to finance the Facilities
and Incidental Expenses, including the establishment and replenishment of any
reserve funds deemed necessary by the District, and any remarketing, credit
enhancement and liquidity facility fees (including such fees for instruments which
serve as the basis of a reserve fund in lieu of cash). The rate and method of
apportionment and manner of collection of the Special Tax for Improvement Area
No. 1 are described in detail in Attachment "C" attached hereto, which
Attachment "C" is incorporated herein by this reference. Attachment "C" allows
each landowner within proposed Improvement Area No. 1 to estimate the
maximum amount of the Special Tax that may be levied against each parcel.
The rate and method of apportionment and manner of collection of the Special
Tax for Improvement Area No. 2 are described in detail in Attachment "D"
attached hereto, which Attachment "D" is incorporated herein by this reference.
Attachment "D" allows each landowner within proposed Improvement Area No. 2
to estimate the maximum amount of the Special Tax that may be levied against
each parcel. In the first year in which such Special Tax is levied in an
Improvement Area, the levy shall include an amount sufficient to repay to the
District all amounts, if any, transferred to the District pursuant to Section 53314 of
the Act and interest thereon.
If the Special Taxes of an Improvement Area are levied against any parcel used
for private residential purposes, (i) the maximum Special Tax rate shall be
specified as a dollar amount which shall be calculated and established not later
than the date on which the parcel is first subject to the Special Tax because of its
use for private residential purposes and shall not be increased over time, except
to the extent permitted in the rate and method of apportionment of the Special
Tax for such Improvement Area as set forth in Attachment "C" and Attachment
"D" hereto, as applicable, (ii) such Special Tax shall not be levied after fiscal year
2069-70, as described in Attachment "C" and "Attachment "D" hereto, as
applicable, and (iii) under no circumstances will the Special Tax levied in any
fiscal year against any such parcel used for private residential uses be increased
as a consequence of delinquency or default by the owner or owners of any other
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parcel or parcels within such Improvement Area by more than ten percent (10%)
above the amount that would have been levied in that fiscal year had there never
been any such delinquencies or defaults.
The Special Tax within each proposed Improvement Area is based on the
expected demand that each parcel of real property within such Improvement
Area will place on the Facilities and on the benefit that each parcel derives from
the right to access the Facilities. The City Council hereby determines that the
proposed Facilities are necessary to meet the increased demand placed upon
the City and the existing infrastructure in the City as a result of the development
of the land proposed for inclusion in the District. The City Council hereby
determines the rate and method of apportionment of the special tax applicable to
each proposed Improvement Area with respect to the Special Tax set forth in
Attachment "C" and "Attachment "D", respectively, to be reasonable. The Special
Tax is apportioned to each parcel on the foregoing basis pursuant to Section
53325.3 of the Act and such special tax is not on or based upon the value or
ownership of real property. In the event that a portion of the property within
Community Facilities District No. 2023-2 shall become for any reason exempt,
wholly or partially, from the levy of the Special Tax specified on Attachment "C"
or Attachment "D," respectively, the City Council shall, on behalf of Community
Facilities District No. 2023-2, cause the levy to be increased, subject to the
limitation of the maximum Special Tax for a parcel as set forth in Attachment "C"
or Attachment "D," respectively, to the extent necessary upon the remaining
property within the applicable Improvement Area which is not exempt in order to
yield the Special Tax revenues required for the purposes described in this
Section 5. The obligation to pay the Special Tax may be prepaid only as set forth
in Section G of Attachment "C" or Attachment "D," as applicable.
Section 6. A public hearing (the "Hearing") on the establishment of the proposed
Community Facilities District No. 2023-2 and each Improvement Area, the
proposed rate and method of apportionment of the Special Tax and the proposed
issuance of bonds for each Improvement Area to finance the Facilities and the
Incidental Expenses shall be held at 6:00 p.m., or as soon thereafter as
practicable, on April 19, 2023, at the City Council Chambers, 29844 Haun Road,
Menifee, California. Should the City Council determine to form the District and
establish the Improvement Areas, a special election will be held within each
Improvement Area to authorize the issuance of bonds of such Improvement Area
and the levy of a special tax within such Improvement Area in accordance with
the procedures contained in Government Code Section 53326. If held, the
proposed voting procedure at the elections will be a landowner vote with each
landowner who is the owner of record of land within an Improvement Area at the
close of the Hearing, or the authorized representative thereof, having one vote
for each acre or portion thereof owned within such proposed Improvement Area.
Ballots for the special elections may be distributed by mail or by personal service.
Section 7. At the time and place set forth above for the Hearing, the City Council will receive
testimony as to whether the proposed Community Facilities District No. 2023-2
and the proposed Improvement Areas shall be established and as to the method
of apportionment of the special tax within each proposed Improvement Area and
shall consider:
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Resolution of Intention to Establish CFD No. 2023-2 (Cimarron Ridge)
(a) if an ad valorem property tax is currently being levied on property within
proposed Community Facilities District No. 2023-2 for the exclusive purpose of
paying principal of or interest on bonds, lease payments or other indebtedness
incurred to finance construction of capital facilities; and
(b) if the capital facilities to be financed and constructed by Community
Facilities District No. 2023-2 will provide the same services as were provided by
the capital facilities mentioned in subsection (a); and
(c) if the City Council makes the findings specified in subsections (a) and (b)
above, it will consider appropriate action to determine whether the total annual
amount of ad valorem property tax revenue due from parcels within Community
Facilities District No. 2023-2, for purposes of paying principal and interest on the
debt identified in subsection (a) above, shall not be increased after the date on
which Community Facilities District No. 2023-2 is established, or after a later date
determined by the City Council with the concurrence of the legislative body which
levied the property tax in question.
Section 8. At the time and place set forth
including all persons owning
Community Facilities District No.
above for the Hearing, any interested person,
lands or registered to vote within proposed
2023-2, may appear and be heard.
Section 9. Each City officer who is or will be responsible for providing the Facilities within
proposed Community Facilities District No. 2023-2, if it is established, is hereby
directed to study the proposed District and, at or before the time of the above -
mentioned Hearing, file a report with the City Council containing a brief
description of the public facilities by type which will in his or her opinion be
required to meet adequately the needs of Community Facilities District No. 2023-
2 and an estimate of the cost of providing those public facilities, including the
cost of environmental evaluations of such facilities and an estimate of the fair and
reasonable cost of any Incidental Expenses to be incurred.
Section 10. The District may accept advances of funds or work -in -kind from any source,
including, but not limited to, private persons or private entities, for any authorized
purpose, including, but not limited to, paying any cost incurred in creating
Community Facilities District No. 2023-2. The District may enter into an
agreement with the person or entity advancing the funds or work -in -kind, to repay
all or a portion of the funds advanced, or to reimburse the person or entity for the
value, or cost, whichever is less, of the work -in -kind, as determined by the City
Council, with or without interest.
Section 11. The City Clerk is hereby directed to publish a notice (the "Notice") of the Hearing
pursuant to Section 6061 of the Government Code in a newspaper of general
circulation published in the area of proposed Community Facilities District No.
2023-2. The City Clerk is further directed to mail a copy of the Notice to each of
the landowners within the boundaries of the District at least 15 days prior to the
Hearing. The Notice shall contain the text or a summary of this Resolution, the
time and place of the Hearing, a statement that the testimony of all interested
persons or taxpayers will be heard, a description of the protest rights of the
registered voters and landowners in the proposed district and a description of the
proposed voting procedure for the elections required by the Act. Such
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Resolution of Intention to Establish CFD No. 2023-2 (Cimarron Ridge)
publication shall be completed at least seven (7) days prior to the date of the
Hearing.
Section 12. The reasonably expected maximum principal amount of the bonded
indebtedness to be incurred by Improvement Area No. 1 for the Facilities and
Incidental Expenses is Ten Million Dollars ($10,000,000) and by Improvement
Area No. 2 is Fifteen Million Dollars ($15,000,000).
Section 13. The form of the Reimbursement Agreement is hereby approved. The Mayor, the
City Manager, the Assistant City Manager, or their written designees are hereby
authorized and directed to execute and deliver the Reimbursement Agreement in
the form on file with the City Clerk with such changes, insertions and omissions
as may be approved by the officer or officers executing such agreement, said
execution being conclusive evidence of such approval.
Section 14. Except to the extent limited in any bond resolution or trust indenture related to
the issuance of bonds, the City Council hereby reserves to itself all rights and
powers set forth in Section 53344.1 of the Act (relating to tenders in full or partial
payment).
Section 15. This Resolution shall be effective upon its adoption.
PASSED, APPROVED AND ADOPTED this 15th day of March, 2023.
Bill Zimmerman, Mayor
Attest:
Kay Vin �on,ting City Clerk
Approved)gs to form:
T. Melching, C
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ATTACHMENT A
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4884-7342-8813v3/200299-0016
ATTACHMENT B
Types of Facilities To Be
Financed By Community
Facilities District No. 2023-2
The proposed types of public facilities and expenses to be financed by the District
include:
The construction, purchase, modification, rehabilitation, expansion 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 the 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, Romoland School District and Perris Union High 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 (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 to
finance the incidental expenses to be incurred, including:
a. The cost of engineering, planning and designing the Facilities;
b. All costs, including costs of the property owner petitioning 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
C. Any other expenses incidental to the construction, acquisition, modification,
rehabilitation, completion and inspection of the Facilities.
Capitalized terms used and not defined herein shall have the meaning set forth in the
Rate and Method of Apportionment of Special Taxes for the District.
�-A
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ATTACHMENT C
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2023-2 (CIMARRON RIDGE)
OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 1
A Special Tax (all capitalized terms are defined in Section A, "Definitions", below) shall be
applicable to each Assessor's Parcel of Taxable Property located within the boundaries of
Improvement Area No. 1 Community Facilities District No. 2023-2 (Cimarron Ridge) of the City
of Menifee ("CFD No. 2023-2 IA 1"). 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. 2023-2 IA 1, 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
"Accessory Dwelling Unit" means a residential unit of limited size including a smaller second
unit that shares an Assessor's Parcel with a Single Family Residential Property that has a
stand-alone Residential Unit.
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown
on the applicable final map, parcel map, condominium plan, or other recorded County parcel
map 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. 2023-2 IA 1: 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. 2023-2
IA 1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the
City, CFD No. 2023-2 IA 1 or any designee thereof of complying with disclosure requirements of
the City, CFD No. 2023-2 IA 1 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. 2023-2 IA 1 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. 2023-
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4884-7342-8813v3/200299-0016
2 IA 1 for any other administrative purposes of CFD No. 2023-2 IA 1, 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 1st preceding the Fiscal Year in which the
Special Tax is being levied, (ii) that have an assigned 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) that have not been issued a building permit on or before May 1st 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.
"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 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 as necessary to fairly allocate Special Tax to the
Assessor's Parcel, provided that following such determination the Maximum Special Tax that
may be levied in each Fiscal Year on all Assessor's Parcels of Taxable Property will be at least
1.1 times annual debt service on all outstanding CFD No. 2023-2 IA 1 Bonds plus the estimated
annual Administrative Expenses for such Fiscal Year.
"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" or "CFD No. 2023-2" means Community Facilities District No. 2023-2 (Cimarron Ridge)
established by the City under the Act.
"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.
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"CFD No. 2023-2 IA V means Improvement Area No. 1 of CFD No. 2023-2 as identified on the
boundary map for CFD No. 2023-2.
"CFD No. 2023-2 IA 1 Bonds" means any obligation to repay a sum of money, including
obligations in the form of bonds, notes, 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.
2023-2 IA 1 have been pledged.
"City" means the City of Menifee.
"City Council" means the City Council of the City of Menifee, acting as the Legislative Body of
CFD No. 2023-2 IA 1.
"Condominium Plan" means a condominium plan as set forth in California Civil Code Section
4285.
"County" means the County of Riverside.
"Developed Property" means all Assessor's Parcels: (i) that are included in a Final Map that
was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is
being levied, (ii) that 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) for which a
Building Permit for new construction was issued on or before May 1st 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 et 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 1st of any year and ending the following
June 30tn
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which CFD No. 2023-2 IA 1 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, Table 2, and Table 3 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. 2023-2 IA 1 in
any Fiscal Year 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
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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" or "NR" means all Assessor's Parcels for which a building
permit(s) was issued or will be 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
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.
"Rate and Method of Apportionment" means this Rate and Method of Apportionment of
Special Tax for CFD No. 2023-2 IA 1.
"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. An Accessory
Dwelling Unit that shares an Assessor's Parcel with a Single Family Residential Property shall
not be considered a Residential Unit for purposes of this Rate and Method of Apportionment.
"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. 2023-2 IA 1 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 CFD No. 2023-2 IA 1 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 CFD No. 2023-2 IA 1 Bonds, (v)
an amount equal to any anticipated shortfall due to Special Tax delinquencies, (vi) for debt
service on CFD No. 2023-2 IA 1 Bonds anticipated to be issued, and (vii) for the collection or
accumulation of funds for the acquisition or construction of facilities authorized by CFD No.
2023-2 IA 1, provided that the inclusion of such amount does not cause an increase in the levy
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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 CFD No. 2023-2 IA 1 Bonds pursuant to the Indenture.
"Tax Zone(s)" means the geographical area(s) within CFD No. 2023-2 IA 1 identified as Tax
Zone 1, Tax Zone 2, or Tax Zone 3 as shown on the Boundary Map.
"Tax Zone V means all property located within CFD No. 2023-2 IA 1 and on the Boundary Map
as Tax Zone 1.
"Tax Zone 2" means all property located within CFD No. 2023-2 IA 1 and on the Boundary Map
as Tax Zone 2.
"Tax Zone 3" means all property located within CFD No. 2023-2 IA 1 and on the Boundary Map
as Tax Zone 3.
"Taxable Property" means all Assessor's Parcels within CFD No. 2023-2 IA 1, 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, Provisional Undeveloped Property.
B. SPECIAL TAX
Commencing Fiscal Year 2023-2024 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.
C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2023-2024, each Assessor's Parcel within CFD
No. 2023-2 IA 1 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. In addition,
each Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property or
Provisional Undeveloped Property shall be further classified as being within Tax Zone 1, Tax
Zone 2, or Tax Zone 3.
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 Single Family Residential Property or Multifamily Property. Each Assessor's
Parcel of Single Family Residential Property shall be further categorized into Land Use
Categories based on its Building Square Footage and assigned to its appropriate Assigned
Special Tax rate.
In the event that an Assessor's Parcel for which one or more Building Permits have been issued
and the County has not yet assigned final Assessor's Parcel Number(s) to the Residential
Unit(s) (in accordance with the Final Map or Condominium Plan) on such Assessor's Parcel, the
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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 levy for such Assessor's Parcel, based on the classification of such
Assessor's Parcel as Undeveloped Property; (2) the amount of the Special Tax levy for the
Residential Units on such Assessor's Parcel for which Building Permits have been issued shall
be determined based on the Assigned Special Tax rates for Developed Property and shall be
taxed as Developed Property in accordance with Step 1 of Section E below; and (3) the amount
of the Special Tax levy on the Acreage of 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 all other Undeveloped Property multiplied by the total of
the amount determined in clause (1), less 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 or (ii) the Backup
Special Tax.
The Maximum Special Tax for each Assessor's Parcel of Non -Residential or Multifamily
Residential Property shall be the applicable Assigned Special Tax described in Table 1,
Table 2, and Table 3 of Section D.
a. Assigned Special Tax
Each Fiscal Year, each Assessor's Parcel of Single Family Residential Property, Multifamily
Property or Non -Residential shall be subject to an Assigned Special Tax. The Assigned
Special Tax applicable to an Assessor's Parcel of Developed Property shall be determined
pursuant to Table 1, Table 2, and Table 3 below.
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 1
(FISCAL YEAR 2023-2024)
Land Use Category
Taxable
Unit
Building Square Footage
Assigned
Special Tax
Per Taxable
Unit
1. Single
Family
Residential Property
RU
Less than 2,300 s . ft
$801.00
2. Single
Family
Residential Property
RU
2,300 s . ft to 2,500 s .
ft
$867.00
3. Single
Family
Residential Property
RU
2,501 s . ft to 2,700 s .
ft
$914.00
4. Single
Family
Residential Property
RU
2,701 s . ft to 2,900 s .
ft
$960.00
5. Single
Family
Residential Property
RU
2,901 s . ft to 3,100 s .
ft
$983.00
6. Single
Family
Residential Property
RU
3,101 s . ft to 3,300 s .
ft
$1,005.00
7. Single
Family
Residential Property
RU
Greater than 3,300 s .
ft
$1,069.00
8. Multifamily Property
Acre
N/A
$5,931.00
9. Non
-Residential Property
Acre
N/A
$5,931.00
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On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed
Property in Tax Zone 1 shall be increased by two percent (2.00%) of the amount in effect in
the prior Fiscal Year.
TABLE 2
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 2
(FISCAL YEAR 2023-2024)
Land Use Category
Taxable
Unit
Building Square
Footage
Assigned
Special Tax
Per Taxable
Unit
1. Single
Family Residential Property
RU
Less than 3,350 s . ft
$1 252.00
2. Single
Family Residential Property
RU
3,350 s . ft to 3,550 s . ft
$1 380.00
3. Single
Family Residential Property
RU
3,551 s . ft to 3,750 s . ft
$1,412.00
4. Single
Family Residential Property
RU
Greater than 3,750 s . ft
$1,464.00
5. Multifamily Property
Acre
N/A
$5,949.00
6. Non -Residential Property
Acre
N/A
$5,949.00
On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed
Property in Tax Zone 2 shall be increased by two percent (2.00%) of the amount in effect in
the prior Fiscal Year.
TABLE 3
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 3
(FISCAL YEAR 2023-2024)
Taxable
Land Use Category Unit
Building Square
Footage
Assigned
Special Tax
Per Taxable
Unit
1. Single Family Residential Property
RU
Less than 2,300 s . ft
$254.00
2. Single Family Residential Property
RU
2,300 s . ft to 2,600 s . ft
$721.00
3. Single Family Residential Property
RU
Greater than 2,600 s . ft
$843.00
4. Multifamily Property
Acre
N/A
$4 098.00
5. Non -Residential Property
Acre
N/A
$4,098.00
On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed
Property in Tax Zone 3 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 all Land Use Categories located on the Assessor's
Parcel. The CFD Administrator's allocation to each type of property shall be final.
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c. Backur) Special Tax
When a Final Map is recorded, the Administrator shall determine which Tax Zone the Final
Map area lies within and the Backup Special Tax for an Assessor's Parcel within the Final
Map classified or to be classified as Single Family 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 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 in such Final Map at
the time of calculation, as determined by the Administrator
L = Number of Residential Units expected to exist 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 determined by Table 4
below:
TABLE 4
MAXIMUM SPECIAL TAX PER ACRE
(FISCAL YEAR 2023-2024)
Maximum Special
Tax Zone Tax per Acre
1 $5,931
2 $5, 949
3 $4, 098
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 on
the rate per Acre shown in the table above. The Backup Special Tax shall not apply to
Multifamily Residential Property, or Non -Residential Property.
On each July 1, commencing July 1, 2024, 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.
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The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Multifamily Residential Property or Non -Residential Property shall be $5,931 per
Acre for Tax Zone 1, $5,949 per Acre for Tax Zone 2, and $4,098 per Acre for Tax Zone 3.
On each July 1, commencing July 1, 2024, 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 that is not Exempt
Property pursuant to the provisions of Section F
The Maximum Special Tax for each Assessor's Parcel of Undeveloped Property and
Provisional Undeveloped Property that is not Exempt Property shall be equal to the product
of $5,931 per Acre for Tax Zone 1, $5,949 per Acre for Tax Zone 2, and $4,098 per Acre for
Tax Zone 3, in each case multiplied by the Acreage of such Assessor's Parcel.
On each July 1, commencing July 1, 2024, 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 2023-2024 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 rate to
satisfy the Special Tax Requirement.
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 Proportionately 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
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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, or
(vi) Assessor's Parcels restricted to other types of public uses determined by the City Council,
provided that no such classification would reduce the total Acreage of all Taxable Property to
less than the amounts shown in Table 5 below.
TABLE 5
MINIMUM TAXABLE ACRES
Tax Zone Acres
1 22.00
2 28.40
3 27.21
Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt
Property if such classification would reduce the total Acreage of all Taxable Property to less
than the Acres shown in Table 5 per Tax Zone. Assessor's Parcels which cannot be classified
as Exempt Property because such classification would reduce the Acreage of all Taxable
Property to less than the Acres shown in Table 5 per Tax Zone 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 Public Facilities" means $6,000,000 expressed in 2023 dollars, which shall increase by
the Construction Inflation Index on July 1, 2024, and on each July 1 thereafter, or such lower
amount (i) determined by the City Council as sufficient to provide the public facilities under the
authorized bonding program for CFD No. 2023-2 IA 1, or (ii) determined by the City Council
concurrently with a covenant that it will not issue any more CFD No. 2023-2 IA 1 Bonds to be
supported by Special Tax levied under this Rate and Method of Apportionment.
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"Construction Fund" means an account specifically identified in the Indenture or functionally
equivalent to hold funds, which are currently available for expenditure to acquire or construct
public facilities eligible to be financed by CFD No. 2023-2 IA 1.
"Construction Inflation Index" means the annual percentage change in the Engineering
News -Record Building Cost Index for the City of Los Angeles, measured as of the Calendar
Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the
Construction Inflation Index shall be another index as determined by the 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 Public Facilities minus (i) public facility costs
previously funded from the Construction Fund, (ii) public facility costs available to be funded
through existing construction or escrow accounts funded by the Outstanding Bonds, and minus
(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 CFD No. 2023-2 IA 1 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 CFD No. 2023-2 IA 1 Bonds
to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.
Prepayment in Full
The Maximum 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) Approved Property or
Undeveloped Property for which a Building Permit has not been issued and (iv) Assessor's
Parcels of Public Property or Provisional Undeveloped Property that are not Exempt Property
pursuant to Section F. The Maximum 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 Maximum 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
Outstanding Bonds to be redeemed with the proceeds of such prepaid Special Taxes.
The Prepayment Amount (defined below) shall be calculated as follows (capitalized terms are
defined below):
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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:
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, Public Property, 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 Special Taxes that could be levied at the Maximum Special Tax at 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 Outstanding 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, including the cost of
computation of the Prepayment Amount, 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 Maximum 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 CFD No. 2023-2 IA 1.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of
Outstanding 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 Maximum 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 Maximum
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 each Fiscal Year on all Assessor's Parcels of
Taxable Property after the proposed prepayment will be at least 1.1 times annual debt service
for such Fiscal Year on the Outstanding Bonds that will remain outstanding after the
prepayment plus the estimated annual Administrative Expenses.
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Tenders of Outstanding Bonds in prepayment of the Maximum 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 Maximum Special Tax obligation for an Assessor's Parcel of Developed Property, Approved
Property or Undeveloped Property may be partially prepaid. For purposes of determining the
partial prepayment amount, the provisions of Section GA 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 Maximum Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax
obligation for the Assessor's Parcel shall notify the CFD Administrator of (i) such owner's intent
to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum
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 amount of a partial
prepayment. 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 Maximum 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 Maximum Special Tax
obligation equal to the remaining percentage (1.00 - F) of the Maximum Special Tax obligation
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 CFD No. 2023-2 IA 1 Bonds are outstanding the Special Tax shall
be levied on all Assessor's Parcels subject to the Special Tax. The Special Tax shall cease not
later than the 2069-2070 Fiscal Year, however, Special Tax 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. 2023-2 IA 1 Bonds have been paid; (ii) all authorized
facilities of CFD No. 2023-2 IA 1 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. 2023-2 IA 1 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. 2023-2 IA 1 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 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.
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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ATTACHMENT D
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2023-2 (CIMARRON RIDGE)
OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 2
A Special Tax (all capitalized terms are defined in Section A, "Definitions", below) shall be
applicable to each Assessor's Parcel of Taxable Property located within the boundaries of
Improvement Area No. 2 Community Facilities District No. 2023-2 (Cimarron Ridge) of the City
of Menifee ("CFD No. 2023-2 IA 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. 2023-2 IA 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.
B. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Accessory Dwelling Unit" means a residential unit of limited size including a smaller second
unit that shares an Assessor's Parcel with Single Family Residential Property that has a stand-
alone Residential Unit.
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown
on the applicable final map, parcel map, condominium plan, or other recorded County parcel
map 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. 2023-2 IA 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. 2023-2
IA 2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the
City, CFD No. 2023-2 IA 2 or any designee thereof of complying with disclosure requirements of
the City, CFD No. 2023-2 IA 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. 2023-2 IA 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
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include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2023-
2 IA 2 for any other administrative purposes of CFD No. 2023-2 IA 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 1st preceding the Fiscal Year in which the
Special Tax is being levied, (ii) that have an assigned 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) that have not been issued a building permit on or before May 1st 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.
"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 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 as necessary to fairly allocate Special Tax to the
Assessor's Parcel, provided that following such determination the Maximum Special Tax that
may be levied in each Fiscal Year on all Assessor's Parcels of Taxable Property will be at least
1.1 times annual debt service on all outstanding CFD No. 2023-2 IA 2 Bonds plus the estimated
annual Administrative Expenses for such Fiscal Year.
"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" or "CFD No. 2023-2" means Community Facilities District No. 2023-2 (Cimarron Ridge)
established by the City under the Act.
"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.
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"CFD No. 2023-2 IA 2" means Improvement Area No. 2 of CFD No. 2023-2 as identified on the
boundary map for CFD No. 2023-2.
"CFD No. 2023-2 IA 2 Bonds" means any obligation to repay a sum of money, including
obligations in the form of bonds, notes, 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.
2023-2 IA 2 have been pledged.
"City" means the City of Menifee.
"City Council" means the City Council of the City of Menifee, acting as the Legislative Body of
CFD No. 2023-2 IA 2.
"Condominium Plan" means a condominium plan as set forth in California Civil Code, Section
4285.
"County" means the County of Riverside.
"Developed Property" means all Assessor's Parcels: (i) that are included in a Final Map that
was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is
being levied, (ii) that 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) for which a
Building Permit for new construction was issued on or before May 1st 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 et 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 1st of any year and ending the following
June 30tn
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which CFD No. 2023-2 IA 2 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, Table 2, and Table 3 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. 2023-2 IA 2 in
any Fiscal Year 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
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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" or "NR" means all Assessor's Parcels for which a building
permit(s) was issued or will be 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
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.
"Rate and Method of Apportionment" means this Rate and Method of Apportionment of
Special Tax for CFD No. 2023-2 IA 2.
"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. An Accessory
Dwelling Unit that shares an Assessor's Parcel with a Single Family Residential Property shall
not be considered a Residential Unit for purposes of this Rate and Method of Apportionment.
"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. 2023-2 IA 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 CFD No. 2023-2 IA 2 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 CFD No. 2023-2 IA 2 Bonds, (v)
an amount equal to any anticipated shortfall due to Special Tax delinquencies, (vi) for debt
service on CFD No. 2023-2 IA 2 Bonds anticipated to be issued, and (vii) for the collection or
accumulation of funds for the acquisition or construction of facilities authorized by CFD No.
2023-2 IA 2, provided that the inclusion of such amount does not cause an increase in the levy
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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 CFD No. 2023-2 IA 2 Bonds pursuant to the Indenture.
"Tax Zone(s)" means the geographical area(s) within CFD No. 2023-2 IA 2 identified as Tax
Zone 1, Tax Zone 2, or Tax Zone 3 as shown on the Boundary Map.
"Tax Zone V means all property located within CFD No. 2023-2 IA 2 and identified on the
Boundary Map as Tax Zone 1.
"Tax Zone 2" means all property located within CFD No. 2023-2 IA 2 and identified on the
Boundary Map as Tax Zone 2.
"Tax Zone 3" means all property located within CFD No. 2023-2 IA 2 and identified on the
Boundary Map as Tax Zone 3.
"Taxable Property" means all Assessor's Parcels within CFD No. 2023-2 IA 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, Provisional Undeveloped Property.
B. SPECIAL TAX
Commencing Fiscal Year 2023-2024 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.
C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2023-2024, each Assessor's Parcel within CFD
No. 2023-2 IA 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. In addition,
each Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property or
Provisional Undeveloped Property shall be further classified as being within Tax Zone 1, Tax
Zone 2, or Tax Zone 3.
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 Single Family Residential Property or Multifamily Property. Each Assessor's
Parcel of Single Family Residential Property shall be further categorized into Land Use
Categories based on its Building Square Footage and assigned to its appropriate Assigned
Special Tax rate.
In the event that an Assessor's Parcel for which one or more Building Permits have been issued
and the County has not yet assigned final Assessor's Parcel Number(s) to the Residential
Unit(s) (in accordance with the Final Map or Condominium Plan) on such Assessor's Parcel, the
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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 levy for such Assessor's Parcel, based on the classification of such
Assessor's Parcel as Undeveloped Property; (2) the amount of the Special Tax levy for the
Residential Units on such Assessor's Parcel for which Building Permits have been issued shall
be determined based on the Assigned Special Tax rates for Developed Property and shall be
taxed as Developed Property in accordance with Step 1 of Section E below; and (3) the amount
of the Special Tax levy on the Acreage of 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 all other Undeveloped Property multiplied by the total of
the amount determined in clause (1), less the amount determined in clause (2).
D. MAXIMUM SPECIAL TAX
4. 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 or (ii) the Backup
Special Tax.
The Maximum Special Tax for each Assessor's Parcel of Non -Residential or Multifamily
Residential Property shall be the applicable Assigned Special Tax described in Table 1,
Table 2, and Table 3 of Section D.
b. Assigned Special Tax
Each Fiscal Year, each Assessor's Parcel of Single Family Residential Property, Multifamily
Property or Non -Residential shall be subject to an Assigned Special Tax. The Assigned
Special Tax applicable to an Assessor's Parcel of Developed Property shall be determined
pursuant to Table 1, Table 2, and Table 3 below.
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 1
(FISCAL YEAR 2023-2024)
Land Use Category
Taxable
Unit
Building Square Footage
Assigned
Special Tax
Per Taxable
Unit
1. Single Family Residential Property
RU
Less than 2,300 s . ft
$1,617.00
2. Single Family Residential Property
RU
Greater than 2,300 s . ft
$1,920.00
3. Multifamily Property
Acre
N/A
$9,661.00
4. Non -Residential Property
Acre
N/A
$9,661.00
On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed
Property in Tax Zone 1 shall be increased by two percent (2.00%) of the amount in effect in
the prior Fiscal Year.
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4884-7342-8813v3/200299-0016
TABLE 2
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 2
(FISCAL YEAR 2023-2024)
Land Use Category
Taxable
Unit
Building Square Footage
Assigned
Special Tax
Per Taxable
Unit
1. Single
Family Residential Property
RU
Less than 1,700 s . ft
$1,543.00
2. Single
Family Residential Property
RU
1,700 s . ft to 1,900 s . ft
$1,625.00
3. Single
Family Residential Property
RU
1,901 s . ft to 2,100 s . ft
$1,749.00
4. Single
Family Residential Property
RU
2,101 s . ft to 2,300 s . ft
$1,816.00
5. Single
Family Residential Property
RU
Greater than 2,300 s . ft
$1,873.00
6. Multifamily Property
Acre
N/A
$11,722.00
7. Non
-Residential Property
Acre
N/A
$11,722.00
On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed
Property in Tax Zone 2 shall be increased by two percent (2.00%) of the amount in effect in
the prior Fiscal Year.
TABLE 3
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 3
(FISCAL YEAR 2023-2024)
Land Use Category
Taxable
Unit
Building
Square Footage
Assigned
Special Tax
Per Taxable
Unit
1. Single
Family Residential Property
RU
Less than 2,500 s . ft
$1,681.00
2. Single
Family Residential Property
RU
2,500 s
. ft to 2,700 s . ft
$1,753.00
3. Single
Family Residential Property
RU
2,701 s
. ft to 2,900 s . ft
$1,790.00
4. Single
Family Residential Property
RU
2,901 s
. ft to 3,100 s . ft
$1,826.00
5. Single
Family Residential Property
RU
3,101 s
. ft to 3,300 s . ft
$1,848.00
6. Single
Family Residential Property
RU
Greater than 3,300 s . ft
$1,869.00
7. Multifamily Property
Acre
N/A
$8,853.00
8. Non -Residential Pro erty
Acre
N/A
$8,853.00
On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed
Property in Tax Zone 3 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 all Land Use Categories located on the Assessor's
Parcel. The CFD Administrator's allocation to each type of property shall be final.
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c. Backup Special Tax
When a Final Map is recorded, the Administrator shall determine which Tax Zone the Final
Map area lies within and the Backup Special Tax for an Assessor's Parcel within the Final
Map classified or to be classified as Single Family 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 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 in such Final Map at
the time of calculation, as determined by the Administrator
L = Number of Residential Units expected to exist 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 determined by Table 4
below:
TABLE 4
MAXIMUM SPECIAL TAX PER ACRE
(FISCAL YEAR 2023-2024)
Tax Zone
Maximum Special
Tax per Acre
1
$9,661
2
$11,722
$8,853
3
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 on
the rate per Acre shown in the table above. The Backup Special Tax shall not apply to
Multifamily Residential Property, or Non -Residential Property.
On each July 1, commencing July 1, 2024, the Backup Special Tax rate shall be increased by
two percent (2.00%) of the amount in effect in the prior Fiscal Year.
5. 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.
4884-7342-8813v3/200299-0016
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Multifamily Residential Property or Non -Residential Property shall be $9,661 per
Acre for Tax Zone 1, $11,722 per Acre for Tax Zone 2, and $8,853 per Acre for Tax Zone 3.
On each July 1, commencing July 1, 2024, 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.
6. Undeveloped Property and Provisional Undeveloped Property that is not Exempt
Property pursuant to the provisions of Section F
The Maximum Special Tax for each Assessor's Parcel of Undeveloped Property and
Provisional Undeveloped Property that is not Exempt Property shall be equal to the product
of $9,661 per Acre for Tax Zone 1, $11,722 per Acre for Tax Zone 2, and $8,853 per Acre for
Tax Zone 3, in each case multiplied by the Acreage of such Assessor's Parcel.
On each July 1, commencing July 1, 2024, 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 2023-2024 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 rate to
satisfy the Special Tax Requirement.
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 Proportionately 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
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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, or
(vi) Assessor's Parcels restricted to other types of public uses determined by the City Council,
provided that no such classification would reduce the total Acreage of all Taxable Property to
less than the amounts shown in Table 5 below.
TABLE 5
MINIMUM TAXABLE ACRES
Tax Zone Acres
1 2.20
2 37.29
3 15.70
Notwithstanding the above, the City Council shall not classify an Assessor's Parcel as Exempt
Property if such classification would reduce the total Acreage of all Taxable Property to less
than the Acres shown in Table 5 per Tax Zone. Assessor's Parcels which cannot be classified
as Exempt Property because such classification would reduce the Acreage of all Taxable
Property to less than the Acres shown in Table 5 per Tax Zone 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 Public Facilities" means $9,000,000 expressed in 2023 dollars, which shall increase by
the Construction Inflation Index on July 1, 2024, and on each July 1 thereafter, or such lower
amount (i) determined by the City Council as sufficient to provide the public facilities under the
authorized bonding program for CFD No. 2023-2 IA 2, or (ii) determined by the City Council
concurrently with a covenant that it will not issue any more CFD No. 2023-2 IA 2 Bonds to be
supported by Special Tax levied under this Rate and Method of Apportionment.
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"Construction Fund" means an account specifically identified in the Indenture or functionally
equivalent to hold funds, which are currently available for expenditure to acquire or construct
public facilities eligible to be financed by CFD No. 2023-2 IA 2.
"Construction Inflation Index" means the annual percentage change in the Engineering
News -Record Building Cost Index for the City of Los Angeles, measured as of the Calendar
Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the
Construction Inflation Index shall be another index as determined by the 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 Public Facilities minus (i) public facility costs
previously funded from the Construction Fund, (ii) public facility costs available to be funded
through existing construction or escrow accounts funded by the Outstanding Bonds, 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 CFD No. 2023-2 IA 2 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 CFD No. 2023-2 IA 2 Bonds
to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.
Prepayment in Full
The Maximum 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) Approved Property or
Undeveloped Property for which a Building Permit has not been issued and (iv) Assessor's
Parcels of Public Property Provisional Undeveloped Property that are not Exempt Property
pursuant to Section F. The Maximum 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 Maximum 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
Outstanding Bonds to be redeemed with the proceeds of such prepaid Special Taxes.
The Prepayment Amount (defined below) shall be calculated as follows (capitalized terms are
defined below):
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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:
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, Public Property 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 Special Taxes that could be levied at the Maximum Special Tax at 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 Outstanding 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, including the cost of
computation of the Prepayment Amount, 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 Maximum 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
Outstanding 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 Maximum 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 Maximum
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 each Fiscal Year on all Assessor's Parcels of
Taxable Property after the proposed prepayment will be at least 1.1 times annual debt service
for such Fiscal Year on the Outstanding Bonds that will remain outstanding after the
prepayment plus the estimated annual Administrative Expenses.
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Tenders of Outstanding Bonds in prepayment of the Maximum 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 Maximum Special Tax obligation for an Assessor's Parcel of Developed Property, Approved
Property or 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 Maximum Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax
obligation for the Assessor's Parcel shall notify the CFD Administrator of (i) such owner's intent
to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum
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 amount of a partial
prepayment. 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 Maximum 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 Maximum Special Tax
obligation equal to the remaining percentage (1.00 - F) of the Maximum Special Tax obligation
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 CFD No. 2023-2 IA 2 Bonds are outstanding the Special Tax shall
be levied on all Assessor's Parcels subject to the Special Tax. The Special Tax shall cease not
later than the 2069-2070 Fiscal Year, however, Special Tax 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. 2023-2 IA 2 Bonds have been paid; (ii) all authorized
facilities of CFD No. 2023-2 IA 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. 2023-2 IA 2 have been satisfied.
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I. 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. 2023-2 IA 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 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.
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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CITY Op
MENIFEE
h
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss
CITY OF MENIFEE )
I, Kay Vinson, Acting City Clerk of the City of Menifee, do hereby certify that the foregoing City
Council Resolution No. 23-1296 was duly adopted by the City Council of the City of Menifee at a
meeting thereof held on the 15th Day of March 2023 by the following vote:
Ayes:
Deines, Estrada, Karwin, Sobek, Zimmerman
Noes:
None
Absent:
None
Abstain:
None
�<r-w K X �) k A",', -A r�:)
Kay Vins , Acti g City Clerk