24-1500RESOLUTION NO. 24-1500
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, ACTING AS THE
LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-3, LEGADO,
OF THE CITY OF MENIFEE, DECLARING ITS INTENTION TO CONSIDER
AMENDING THE BOUNDARY MAP OF THE DISTRICT, AMENDING THE RATE AND
METHOD OF APPORTIONMENT FOR IMPROVEMENT AREA NO. 2, DECREASING
THE MAXIMUM AUTHORIZED BONDED INDEBTEDNESS FOR IMPROVEMENT
AREA NO. 2, DESIGNATING IMPROVEMENT AREA NO. 3 OF THE DISTRICT AND
TO INCUR BONDED INDEBTEDNESS WITHIN IMPROVEMENT AREA NO. 3
WHEREAS, after a public hearing, on September 21, 2022, the City Council (the "City Council")
of the City of Menifee (the "City") adopted Resolution Nos. 22-1222 (the "Resolution of Formation") and
22-1223 (the "Resolution to Incur Bonded Indebtedness") which formed Community Facilities District
No. 2022-3, Legado, of the City of Menifee (the "District" or "Community Facilities District No. 2022-3"),
designated two improvement areas therein ("Improvement Area No. 1" and "Improvement Area No 2")
and called a special election on September 21, 2022, within each improvement area on three
propositions relating to the levying of a special tax, the incurring of bonded indebtedness and the
establishment of an appropriations limit for the District, which were approved by more than two-thirds
vote of the qualified electors within each improvement area on September 21, 2022; and
WHEREAS, subsequent to formation, the District received a petition (the "Petition") signed by
BLC Fleming, LLC, a Delaware limited liability company (the "Owner"), which currently owns more than
25 percent of the taxable land within Improvement Area No. 2, to initiate certain changes to: (i) amend
the boundary map of the District to exclude certain property from Improvement Area No. 2; (ii) amend
and restate the original rate and method of apportionment of special tax for Improvement Area No. 2
(the "Original Improvement Area No. 2 Rate and Method") in the form attached as Exhibit A (the
"Amended Improvement Area No. 2 Rate and Method") and (iii) designate Improvement Area No. 3 of
the District within the property that is being excluded from Improvement Area No. 2 in connection with
these proceedings.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee, California,
acting as the legislative body of Community Facilities District No. 2022-3, Legado, of the City of
Menifee, does hereby determine and order as follows
Section 1. Each of the above recitals is true and correct and is adopted by the legislative body of
the District.
Section 2. The City Council, acting as the legislative body of the District, declares its intention to
conduct proceedings pursuant to Article 3.5 of the Mello -Roos Community Facilities Act
of 1982, as amended, commencing with Section 53311 of the Government Code (the
"Act") to amend and restate the Original Improvement Area No. 2 Rate and Method, in
the form of the Amended Improvement Area No. 2 Rate and Method attached hereto as
Exhibit A.
The proposed Amended Improvement Area No. 2 Rate and Method and manner of
collection of the special tax for Improvement Area No. 2 are described in detail in Exhibit
A (which attachment is incorporated herein by this reference) and allow each landowner
within Improvement Area No. 2 to estimate the maximum amount that may be levied
against each parcel.
If the special tax of Improvement Area No. 2 is levied against any parcel used for private
residential purposes, (i) the maximum special tax rate shall be specified as a dollar
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amount that 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 as set forth in Exhibit A hereto, (ii) such
Special Tax shall not be levied after fiscal year 2064-65, as described in Exhibit A
hereto, 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 parcel or
parcels within Improvement Area No. 2 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 of Improvement Area No. 2 is based on the expected demand that each
parcel of real property within proposed Improvement Area No. 2 will place on the
facilities described in Attachment A to the Resolution of Formation (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 Amended Improvement Area No. 2 Rate and Method set
forth in Exhibit A to be reasonable. The special tax of Improvement Area No. 2 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 Improvement Area No. 2 shall become for
any reason exempt, wholly or partially, from the levy of the special tax of Improvement
Area No. 2 specified in Exhibit A, the City Council shall, on behalf of the District, cause
the levy to be increased, subject to the limitation of the maximum special tax for a parcel
as set forth in Exhibit A, to the extent necessary upon the remaining property within
proposed Improvement Area No. 2 which is not exempt in order to yield the special tax
revenues of Improvement Area No. 2 required for the purposes described in this Section
2. The obligation to pay the Special Tax may be prepaid only as set forth in Section G of
Exhibit A hereto.
Section 3. The City Council, acting as the legislative body of the District, declares its intention,
pursuant to Sections 53331, 53332, 53334 and 53350 of the Act to remove the property
described and depicted in Exhibit B hereto from Improvement Area No. 2 and to
designate such property as Improvement Area No. 3. It is proposed that the boundaries
of Improvement Area No. 3 shall be the legal boundaries on the proposed amended
boundary map depicted in Exhibit B hereto. The name of the proposed Improvement
Area No. 3 shall be "Improvement Area No. 3 of Community Facilities District No. 2022-3
(Legado) of the City of Menifee." The City Clerk is hereby directed to sign the original
amended boundary and record it with all proper endorsements thereon with the County
Recorder of the County of Riverside 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 4. 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 a special tax within
Improvement Area No. 3 (the "Special Tax"), secured by recordation of a continuing lien
against all nonexempt real property in Improvement Area No. 3, sufficient to pay for: (i)
the Facilities and Incidental Expenses (as defined in the Resolution of Formation); and
(ii) the principal and interest and other periodic costs on bonds or other indebtedness
issued within Improvement Area No. 3 to finance the Facilities and Incidental Expenses,
including the establishment and replenishment of any reserve funds deemed necessary
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by the District, and any remarketing, credit enhancement and liquidity facility fees
(including such fees for instruments that serve as the basis of a reserve fund in lieu of
cash). The rate and method of apportionment and manner of collection of the Special
Tax are described in detail in Exhibit C attached hereto, which Exhibit C is incorporated
herein by this reference (the "Improvement Area No. 3 Rate and Method"). Exhibit C
allows each landowner within Improvement Area No. 3 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, 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 Tax is levied against any parcel used for private residential purposes, (i)
the maximum Special Tax rate shall be specified as a dollar amount that 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 as set forth in Exhibit C hereto, (ii) such Special Tax not
shall be levied after fiscal year 2064-65, as described in Exhibit C hereto, 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 parcel or parcels within Improvement Area
No. 3 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 is based on the expected demand that each parcel of real property
within proposed Improvement Area No. 3 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 with respect to the
Special Tax set forth in Exhibit C 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 Improvement Area No. 3 shall become for any
reason exempt, wholly or partially, from the levy of the Special Tax specified on Exhibit
C, the City Council shall, on behalf of the District, cause the levy to be increased, subject
to the limitation of the maximum Special Tax for a parcel as set forth in Exhibit C, to the
extent necessary upon the remaining property within proposed Improvement Area No. 3
that is not exempt in order to yield the Special Tax revenues required for the purposes
described in this Section 4. The obligation to pay the Special Tax may be prepaid only
as set forth in Section G of Exhibit C hereto.
Section 5. It is necessary to incur bonded indebtedness within the boundaries of Improvement Area
No. 3 in an amount not to exceed $28,000,000, in order to finance certain of the costs of
the Facilities and Incidental Expenses, as permitted by the Act for the benefit of
Improvement Area No. 3.
Section 6. The indebtedness will be incurred for the purpose of financing the costs of the Facilities
and the Incidental Expenses of Improvement Area No. 3, including, but not limited to, the
funding of reserve funds for the bonds, the financing of costs associated with the
issuance of the bonds and all other costs and expenses necessary to finance the
Facilities and Incidental Expenses that are permitted to be financed pursuant to the Act.
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Section 7. It is the intent of the City Council to authorize the sale of bonds of Improvement Area No.
3 in one or more series, which bonds may be issued to fund Facilities and Incidental
Expenses for Improvement Area No. 3 in the maximum amount set forth in Section 5,
and which bonds may bear interest at a rate not in excess of the maximum rate
permitted by law at the time that the bonds are issued. The term of the bonds of each
series shall be determined pursuant to a resolution of this City Council authorizing the
issuance of the bonds of such series, but such term shall in no event exceed 40 years
from the date of issuance of the bonds of such series, or such longer term as is then
permitted by law.
Section 8. A public hearing (the "Hearing") on: (i) amending the Original Improvement Area No. 2
Rate and Method in accordance with the proposed Amended Improvement Area No. 2
Rate and Method; (ii) removing certain property currently included in Improvement Area
No. 2 and designating such property as Improvement Area No. 3; (iii) the levying of the
Special Tax in Improvement Area No. 3 in accordance with the Improvement Area No. 3
Rate and Method; and (iv) the proposed issuance of bonds with respect to Improvement
Area No. 3 to finance the Facilities and Incidental Expenses shall be held at 6:00 p.m.,
or as soon thereafter as practicable, on November 6, 2024, at the City Council
Chambers, 29844 Haun Road, Menifee, California. Should the City Council determine to
take action to effectuate the foregoing, a special election will be held within Improvement
Area No. 2 to authorize the levy of the special tax pursuant to the proposed Amended
Improvement Area No. 2 Rate and Method and within proposed Improvement Area No. 3
to authorize the issuance of the bonds for Improvement Area No. 3 and the levy of the
special tax for Improvement Area No. 3 in accordance with the procedures contained in
Government Code Section 53326. If such elections are held, the proposed voting
procedure at the election will be by landowner vote with each landowner who is the
owner of record of land within Improvement Area No. 2 or Improvement Area No. 3, as
applicable, at the close of the Hearing, or the authorized representative thereof, having
one vote for each acre or portion thereof owned within Improvement Area No. 2 or
Improvement Area No. 3. Ballots for the special election may be distributed by mail or by
personal service.
Section 9. At the time and place set forth above for the Hearing, the City Council will receive
testimony regarding the matters described in Section 8 above. At the time and place set
forth above for the Hearing, any interested person, including all persons owning lands or
registered to vote within Improvement Area No. 2 and Improvement Area No. 3 may
appear and be heard.
Section 10. 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 the District. The City Clerk is further directed to mail a copy of
the Notice to each of the landowners within the boundaries of Improvement Area No. 2
and proposed Improvement Area No. 3 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 Improvement
Area No. 2 and proposed Improvement Area No. 3 and a description of the proposed
voting procedure for the election required by the Act. Such publication shall be
completed at least seven (7) days prior to the date of the Hearing.
Section 11. At the time the District was formed, the maximum principal amount of bonded
indebtedness which may be incurred by the District within Improvement Area No. 2 that
was authorized was $45,000,000. It is the intent of the City Council, acting as the
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legislative body of the District, to determine that upon the authorization of the special
taxes and bonded indebtedness for Improvement Area No. 3 in connection with the
change proceedings set forth herein, that it shall not incur bonded indebtedness within
Improvement Area No. 2 in a principal amount in excess of $17,000,000.
Section 12. Except as set forth herein, no other amendments or modifications to the District are
being considered at this time
Section 13. This Resolution shall be effective upon its adoption.
PASSED, APPROVED AND ADOPTED this the 2"d day of October, 2024.
�v.
Bill Zimmerman, Mayor
Attest:
Stephanie Roseen, Acting City Clerk
Appr ed as to form:
Je rey T. Melching, Cit At rney
4885-1777-3277v4/200299-0011
EXHIBIT A
AMENDED AND RESTATED
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
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
of the City of Menifee Community Facilities District No. 2022-3 (Legado) ("CFD No. 2022-3 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. 2022-3
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.
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 as a Single -Family Residential Property with 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. 2022-3 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. 2022-3 IA 2 or any designee thereof of complying
with arbitrage rebate requirements; the costs to the City, CFD No. 2022-3 IA 2 or any designee thereof
of complying with disclosure requirements of the City, CFD No. 2022-3 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. 2022-3 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 include
amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2022-3 IA 2 for any
other administrative purposes of CFD No. 2022-3 IA 2, including attorney's fees and other costs related
to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
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"Amended Boundary Map" means a recorded map of the CFD which indicates the boundaries of the
CFD.
"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) and has 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.
"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.
2022-3 IA 2 Bonds plus the estimated annual Administrative Expenses for such Fiscal Year.
"Building Square Footage" or "BSF" means the
exclusive of garages or other structures not used
Building Permit for such Assessor's Parcel.
square footage of assessable internal living space,
as living space, as determined by reference to the
"Calendar Year" means the period commencing January 1 of any year and ending the following
December 31.
"CFD Administrator" means an official of the City, or designee thereof, responsible for determining
the Special Tax Requirement, and providing for the levy and collection of the Special Taxes.
"CFD" or "CFD No. 2022-3" means Community Facilities District No. 2022-3 (Legado) established by
the City under the Act.
"CFD No. 2022-3 IA 2" means Improvement Area No. 2 of CFD No. 2022-3 as identified on the
boundary map for CFD No. 2022-3.
"CFD No. 2022-3 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. 2022-3 IA 2 have been
pledged.
"City" means the City of Menifee.
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"City Council" means the City Council of the City of Menifee, acting as the Legislative Body of CFD
No. 2022-3 IA 2.
"Condominium Plan" means a condominium plan as set forth in the 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, and
(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
30tr
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to
which CFD No. 2022-3 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 and Table 2 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. 2022-3 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 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
actual Special Tax levy to the Assigned Special Tax
Developed Property, (ii) Approved Property, that the
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(i) Developed Property, that the ratio of the
is the same for all Assessor's Parcels of
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 Sections F.
"Residential Property" means all Assessor's Parcels of Developed Property for which a building
permit has been issued for purposes of constructing one or more Residential Units.
"Residential Unit" or "RU" means a residential unit that is used or intended to be used as a domicile
by one or more persons, as determined by the CFD Administrator. 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 RMA.
"Single Family Residential Property" means all Assessor's Parcels of Residential Property other
than Multifamily Property.
"Special Tax" means any of the special taxes authorized to be levied within CFD No. 2022-3 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. 2022-3 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. 2022-3 IA 2 Bonds, (v) an amount equal to any anticipated shortfall due
to Special Tax delinquencies, (vi) for debt service on CFD No. 2022-3 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. 2022-3 IA 2, provided that the inclusion of such amount does not cause an
increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps
Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs
on the CFD No. 2022-3 IA 2 Bonds pursuant to the Indenture.
"Tax Zone(s)" means the geographical area(s) within CFD No. 2022-3 IA 2 identified as Tax Zone 1 or
Tax Zone 2 as shown on the Amended Boundary Map.
"Tax Zone V means all property located within CFD No. 2022-3 IA 2 and identified on the Amended
Boundary Map as Tax Zone 1.
"Tax Zone 2" means all property located within CFD No. 2022-3 IA 2 and identified on the Amended
Boundary Map as Tax Zone 2.
"Taxable Property" means all Assessor's Parcels within CFD No. 2022-3 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.
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B. SPECIAL TAX
Commencing, Fiscal Year 2024-2025 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 2024-2025, each Assessor's Parcel within CFD No. 2022-
3 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 or Tax Zone 2.
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 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 Provert
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 and Table 2 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
and Table 2 below.
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TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 1
-
Land Use Category
Taxable Building Square
Unit Footage
Assigned
Special Tax
Per Taxable
Unit
1. Single Family Residential Property
RU
Less than 1,900 sq. ft
$2,841.33
2. Single Family Residential Property
RU
1,900 sq. ft to 2,100 sq. ft
$3,013.00
3. Single Family Residential Property
RU
2,101 sq. ft to 2,300 sq. ft
$3,073.34
4. Single Family Residential Property
RU
2,301 sq. ft to 2,500 sq. ft
$3,179.46
5. Single Family Residential Property
RU
2,501 sq. ft to 2,700 sq. ft
$3,234.60
6. Single Family Residential Property
RU
Greater than 2,700 sq. ft
$3,324.08
7. Multifamily Property
Acre
N/A
$22,230.00
8. Non -Residential Property
Acre
N/A
$22,230.00
On each July 1, commencing July 1, 2025, the Assigned Special Tax rate for Developed Property
shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
TABLE 2
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 2
Land Use Category
Taxable
Unit
RU
Assigned
Special Tax
Building Square Per Taxable
Footage Unit
1. Single Family Residential Property
Less than 2,100 sq. ft
$2,962.02
2. Single Family Residential Property
RU
2,100 sq. ft to 2,400 sq. ft
$3,111.84
3. Single Family Residential Property
RU
2,401 sq. ft to 2,700 sq. ft
$3,243.97
4. Single Family Residential Property
RU
2,701 sq. ft to 3,000 sq. ft
$3,273.10
5. Single Family Residential Property
RU
3,001 sq. ft to 3,300 sq. ft
$3,336.56
6. Single Family Residential Property
RU
Greater than 3,300 sq. ft
$3,624.75
7. Multifamily Property
Acre
N/A
$20,791.00
8. Non -Residential Property
Acre
I N/A
$20,791.00
On each July 1, commencing July 1, 2025, the Assigned Special Tax rate for Developed Property
shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
b. Multiple Land Use Categories
In some instances, an Assessor's Parcel of Developed Property may contain more than one Land
Use Category. The Maximum Special Tax levied on an Assessor's Parcel shall be the sum of the
Maximum Special Tax for all Land Use Categories located on the Assessor's Parcel. The CFD
Administrator's allocation to each type of property shall be final.
c. Backup Special Tax
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
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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 3 below:
TABLE 3
MAXIMUM SPECIAL TAX PER ACRE
Maximum Special
Tax Zone Tax per Acre
1 $22,230
2 $20,791
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, 2025, 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 Property shall be the Backup Special Tax computed pursuant to Section
D.1.c above.
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Multifamily Residential Property or Non -Residential Property shall be $22,230 per Acre
for Tax Zone 1 and $20,791 per Acre for Tax Zone 2.
On each July 1, commencing July 1, 2025, 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
Prooertv 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 $22,230 per Acre
for Tax Zone 1 and $20,791 per Acre for Tax Zone 2 multiplied by the Acreage of such Assessor's
Parcel.
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On each July 1, commencing July 1, 2025, the Maximum Special Tax rate for Undeveloped 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 2024-2025 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 Annual 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 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
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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 4 below.
TABLE 4
MINIMUM TAXABLE ACRES
Tax Zone Acres
_ 1 13.21
2 21.07
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 4 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 4 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 $11,500,000 expressed in 2024 dollars, which shall increase by the
Construction Inflation Index on July 1, 2025, 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. 2022-3 IA 2, or (ii) determined by the City Council concurrently with a covenant
that it will not issue any more Bonds to be supported by Special Tax levied under this Amended and
Restated Rate and Method of Apportionment.
"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. 2022-3 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 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. 2022-3 IA 2 Bonds to be redeemed at a later date with the
proceeds of prior prepayments of Special Tax.
1. 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
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Undeveloped Property for which a Building Permit has not been issued and (iv) Assessor's Parcels of
Public Property or Property Owner's Association 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 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):
Bond Redemption Amount
plus
Redemption Premium
plus
Future Facilities Amount
plus
Defeasance Amount
plus
Administrative Fees and Expenses
less
Reserve Fund Credit
Equals:
Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For an Assessor's Parcel of Developed Property, compute the Maximum Special Tax for
the Assessor's Parcel. For an Assessor's Parcel of Approved Property or Undeveloped Property for
which a Building Permit has been issued, compute the Maximum Special Tax for the Assessor's
Parcel as though it was already designated as Developed Property, based upon the Building Permit
which has been issued for the Assessor's Parcel. For an Assessor's Parcel of Approved Property or
Undeveloped Property for which a Building Permit has not been issued, Public Property, Property
Owner's Association Property, or Provisional Undeveloped Property to be prepaid 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.
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4885-1777-3277v4/200299-0011
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined
pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor's
Parcel (the "Future Facilities Amount").
8. Determine the amount needed to pay interest on the Bond Redemption Amount from the
first bond interest and/or principal payment date following the current Fiscal Year until the earliest
redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax
prepayments.
9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year
which have not yet been paid.
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 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
A-11
4885-1777-3277v4/200299-0011
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 Bonds that will remain outstanding after the prepayment plus the estimated annual
Administrative Expenses.
Tenders of 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
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4885-1777-3277v4/200299-0011
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor's
Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2064-2065 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. 2022-3 IA 2
Bonds have been paid; (ii) all authorized facilities of CFD No. 2022-3 IA 2 have been acquired and all
reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected
and (iv) all other obligations of CFD No. 2022-3 IA 2 have been satisfied.
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. 2022-3 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 Amended and Restated 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.
A-13
4885-1777-3277v4/200299-0011
EXHIBIT B
LEGAL DESCRIPTION OF PROPERTY AND AMENDED BOUNDARY MAP
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4885-1 777-3277v4/200299-001 1
EXHIBIT C
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)
OF THE CITY OF MENIFEE
(IMPROVEMENT AREA NO. 3)
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. 3
of the City of Menifee Community Facilities District No. 2022-3 (Legado) ("CFD No. 2022-3 IA 3"). 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. 2022-3
IA 3, 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 as a Single -Family Residential Property with 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. 2022-3 IA 3: 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. 2022-3 IA 3 or any designee thereof of complying
with arbitrage rebate requirements; the costs to the City, CFD No. 2022-3 IA 3 or any designee thereof
of complying with disclosure requirements of the City, CFD No. 2022-3 IA 3 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. 2022-3 IA 3 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. 2022-3 IA 3 for any
other administrative purposes of CFD No. 2022-3 IA 3, including attorney's fees and other costs related
to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
"Amended Boundary Map" means a recorded map of the CFD which indicates the boundaries of the
CFD.
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"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) and has 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.
"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.
2022-3 IA 3 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 Administrator" means an official of the City, or designee thereof, responsible for determining
the Special Tax Requirement, and providing for the levy and collection of the Special Taxes.
"CFD" or "CFD No. 2022-3" means Community Facilities District No. 2022-3 (Legado) established by
the City under the Act.
"CFD No. 2022-3 IA 3" means Improvement Area No. 3 of CFD No. 2022-3 as identified on the
boundary map for CFD No. 2022-3.
"CFD No. 2022-3 IA 3 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. 2022-3 IA 3 have been
pledged.
"City" means the City of Menifee.
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"City Council" means the City Council of the City of Menifee, acting as the Legislative Body of CFD
No. 2022-3 IA 3.
"Condominium Plan" means a condominium plan as set forth in the 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 1 st preceding the Fiscal Year in which the Special Tax is being levied, and
(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. 2022-3 IA 3 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. 2022-3 IA 3 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 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
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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 Sections F.
"Residential Property" means all Assessor's Parcels of Developed Property for which a building
permit has been issued for purposes of constructing one or more Residential Units.
"Residential Unit" or "RU" means a residential unit that is used or intended to be used as a domicile
by one or more persons, as determined by the CFD Administrator. 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 RMA.
"Single Family Residential Property" means all Assessor's Parcels of Residential Property other
than Multifamily Property.
"Special Tax" means any of the special taxes authorized to be levied within CFD No. 2022-3 IA 3
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. 2022-3 IA 3 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. 2022-3 IA 3 Bonds, (v) an amount equal to any anticipated shortfall due
to Special Tax delinquencies, (vi) for debt service on CFD No. 2022-3 IA 3 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. 2022-3 IA 3, provided that the inclusion of such amount does not cause an
increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps
Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs
on the CFD No. 2022-3 IA 3 Bonds pursuant to the Indenture.
"Tax Zone(s)" means the geographical area(s) within CFD No. 2022-3 IA 3 identified as Tax Zone 1,
Tax Zone 2, or Tax Zone 3 as shown on the Amended Boundary Map.
"Tax Zone 1" means all property located within CFD No. 2022-3 IA 3 and identified on the Amended
Boundary Map as Tax Zone 1.
"Tax Zone 2" means all property located within CFD No. 2022-3 IA 3 and identified on the Amended
Boundary Map as Tax Zone 2.
"Tax Zone 3" means all property located within CFD No. 2022-3 IA 3 and identified on the Amended
Boundary Map as Tax Zone 3.
"Taxable Property" means all Assessor's Parcels within CFD No. 2022-3 IA 3, 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.
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"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 2024-2025 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 2024-2025, each Assessor's Parcel within CFD No. 2022-
3 IA 3 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 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.
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TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 1
Land Use Category
Taxable
Unit
Building Square
Foota a
Assigned
Special Tax
Per Taxable
Unit
1. Single
Family
Residential Property
RU
Less than 1,400 s .
ft
$2,692.56
2. Single
Family
Residential Property
RU
1,400 s . ft to 1,600 s
. ft
$2,925.60
3. Single
Family
Residential Property
RU
1,601 s . ft to 1,800 s
. ft
$2,975.54
4. Single
Family
Residential Property
RU
1,801 s . ft to 2,000 s
. ft
$2,992.19
5. Single
Family
Residential Property
RU
2,001 s . ft to 2,200 s
. ft
$3,086.87
6. Single
Family
Residential Property
RU
2,201 s . ft to 2,400 s
. ft
$3,214.84
7. Single
Family
Residential Property
RU
Greater than 2,400 s
. ft
$3,265.82
8. Multifamily Property
Acre
N/A
$25,106.00
9. Non -Residential Property
Acre
N/A
$25,106.00
On each July 1, commencing July 1, 2025, the Assigned Special Tax rate for Developed Property
shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
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TABLE 2
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 2
Land Use Category
Taxable
Unit
Building Square
Footage
Assigned
Special Tax
Per Taxable
Unit
1. Single Family Residential Property
RU
Less than 1,900 sq. ft
$2,841.33
2. Single Family Residential Property
RU
1,900 sq. ft to 2,100 sq. ft
$3,013.00
3. Single Family Residential Property
RU
2,101 sq. ft to 2,300 sq. ft
$3,073.34
4. Single Family Residential Property
RU
2,301 sq. ft to 2,500 sq. ft
$3,179.46
5. Single Family Residential Property
RU
2,501 sq. ft to 2,700 sq. ft
$3,234.60
6. Single Family Residential Property
RU
Greater than 2,700 sq. ft
$3,324.08
7. Multifamily Property
Acre
N/A
$24,428.00
8. Non -Residential Property
Acre
N/A
$24,428.00
On each July 1, commencing July 1, 2025, the Assigned Special Tax rate for Developed Property
shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
TABLE 3
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 3
Land Use Category
Taxable
Unit
Building Square
Footage
Assigned
Special Tax
Per Taxable
Unit
1. Single Family Residential Property
RU
RU
Less than 2,100 sq. ft
$2,962.02
2. Single Family Residential Property
2,100 sq. ft to 2,400 s . ft
$3,111.84
3. Single Family Residential Property
RU
2,401 sq. ft to 2,700 sq. ft
$3,243.97
4. Single Family Residential Property
RU
2,701 sq. ft to 3,000 sq. ft
$3,273.10
5. Single Family Residential Property
RU
3,001 sq. ft to 3,300 sq. ft
$3,336.56
6. Single Family Residential Property
RU
Greater than 3,300 sq. ft
$3,624.75
7. Multifamily Property
Acre
N/A
$21,349.00
8. Non -Residential Property
Acre
N/A
$21,349.00
On each July 1, commencing July 1, 2025, the Assigned Special Tax rate for Developed Property
shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
b. Multiple Land Use Cateaories
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.
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:
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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
Maximum Special
Tax Zone Tax per Acre
1 $25,106
2 $24,428
3 $21,349
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, 2025, 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 Property shall be the Backup Special Tax computed pursuant to Section
D.1.c above.
The Maximum Special Tax for each Assessor's Parcel of Approved Property expected to be
classified as Multifamily Residential Property or Non -Residential Property shall be $25,106 per Acre
for Tax Zone 1, $24,428 per Acre for Tax Zone 2, and $21,349 per Acre for Tax Zone 3.
On each July 1, commencing July 1, 2025, 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 $25,106 per Acre
for Tax Zone 1, $24,428 per Acre for Tax Zone 2, and $21,349 per Acre for Tax Zone 3 multiplied by
the Acreage of such Assessor's Parcel.
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On each July 1, commencing July 1, 2025, the Maximum Special Tax rate for Undeveloped 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 2024-2025 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 Annual 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 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
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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
23.86
2
10.03
3
12.49
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 $17,500,000 expressed in 2024 dollars, which shall increase by the
Construction Inflation Index on July 1, 2025, 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. 2022-3 IA 3, or (ii) determined by the City Council concurrently with a covenant
that it will not issue any more Bonds to be supported by Special Tax levied under this Rate and Method
of Apportionment.
"Construction Fund" means an account specifically identified in the Indenture or functionally
equivalent to hold funds, which are currently available for expenditure to acquire or construct public
facilities eligible to be financed by CFD No. 2022-3 IA 3.
"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 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. 2022-3 IA 3 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
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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 Property Owner's Association 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 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):
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
2. 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, Property
Owner's Association Property, or Provisional Undeveloped Property to be prepaid 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").
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6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined
pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor's
Parcel (the "Future Facilities Amount").
8. Determine the amount needed to pay interest on the Bond Redemption Amount from the
first bond interest and/or principal payment date following the current Fiscal Year until the earliest
redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax
prepayments.
9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year
which have not yet been paid.
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 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
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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 Bonds that will remain outstanding after the prepayment plus the estimated annual
Administrative Expenses.
Tenders of 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
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For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor's
Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2064-2065 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. 2022-3 IA 3
Bonds have been paid; (ii) all authorized facilities of CFD No. 2022-3 IA 3 have been acquired and all
reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected
and (iv) all other obligations of CFD No. 2022-3 IA 3 have been satisfied.
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. 2022-3 IA 3 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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STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss
CITY OF MENIFEE )
I, Stephanie Roseen, Acting City Clerk of the City of Menifee, do hereby certify that the
foregoing City Council Resolution No. 24-1500 was duly adopted by the City Council of the City
of Menifee at a meeting thereof held on the 2nd Day of October 2024 by the following vote:
Ayes:
Estrada, Deines, Karwin, Sobek, Zimmerman
Noes:
None
Absent:
None
Abstain:
None
t&anieRoseen, Acting City Clerk