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08-13-2019 CC Rpt 22COUNCIL AGENDA STAFF REPORTCOUNCIL AGENDA STAFF REPORT TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS DATE: AUGUST 13, 2019 FROM: CITY MANAGER ITEM NO:22 SUBJECT:AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN COMMUNITY FACILITIES DISTRICT NO. 2015-1 (VILA BORBA) RECOMMENDATION: Adopt a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2015-1 (VILA BORBA), AUTHORIZING THE ANNUAL LEVY OF SPECIAL TAXES FOR FISCAL YEAR 2019-20. BACKGROUND/ANALYSIS: The 336 acres located east and west of Butterfield Ranch Road, south of Pine Avenue is currently being developed into a multi-tract community with 513 residential units known as "Vila Borba." Community Facilities District (CFD) No. 2015-1 was formed in July 2015 to finance certain maintenance services within Vila Borba. The services to be provided may include all or a portion of the following: maintenance of parks, landscaping, lighting, public streets, trail improvements and other services authorized or to be authorized by the Mello- Roos Community Facilities Act. The CFD levies an annual special tax on properties within the boundaries of the CFD and the special tax is used to pay for these services provided by the City. As of June 1, 2019, a total of 326 permits were issued for residential properties, initiating the levy on five new parcels. Staff is recommending a reserve contribution of $18,971 so that the prior year assessment of $869.15 would be continued in the 2019-20 fiscal year while staff evaluates the reserve needs. The individual homeowner share of the cost is established by the Rate and Method of Apportionment section shown in the formation documents for CFD 2015-1 that is attached to this report. ENVIRONMENTAL (CEQA) REVIEW: This action is not a project within the meaning of the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.) Section 15378 and is therefore exempt from CEQA. FISCAL IMPACT: If the City Council approves the CFD special tax levy for fiscal year 2019-20, it will provide funding for certain maintenance within the CFD. The annual escalation of the Maximum Special Tax shown in "Exhibit A" reflects a four percent increase over prior year rates. However, a reserve contribution of $18,971 and a levy of $869.15 per parcel will provide sufficient funding to cover the proposed fiscal year 2019-20 budget. 408/658 REVIEWED BY OTHERS: This agenda item has been reviewed by the Finance Director. Respectfully Submitted,Recommended By: Attachments Resolution Exhibit A Formation Documents 409/658 Daniel Bobadilla Director of Public Works/City Engineer 1 of 3 RESOLUTION NO. 2019R- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2015-1 (VILA BORBA), AUTHORIZING THE ANNUAL LEVY OF SPECIAL TAXES FOR FISCAL YEAR 2019-20 WHEREAS, the City Council (“Council”) of the City of Chino Hills (“City”) has previously undertook proceedings under and pursuant to the terms and provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Titles 5 of the Government Code of the State of California, to form Community Facilities District No. 2015-1 (the “District”), to authorize the levy of special taxes upon land within the District to maintain certain facilities; and WHEREAS, this Council, by Ordinance as authorized by Section 53340 of the Government Code of the State of California, has authorized the levy of a special tax to payfor costs and expenses related tosaidDistrict, and this Council isdesirous to establish the specific rate of the special tax for the District to be collected for the next fiscalyear. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CHINO HILLS DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the above recitals are all true and correct. SECTION 2. That inaccordance with the Act and Ordinance, there is hereby levied upon all parcels within the District which are not otherwise exempt from taxation, the special taxes for fiscal year 2019-20 at rates up to the amounts set forth in the attached referenced and incorporated Exhibit “A”. SECTION 3. That the rate determined and as set forth above does not exceed the amount as previously authorized by Ordinance of this Council, and isnot inexcess of that as previously approved by the qualified electors of the District, and is therefore exempt from Proposition 218, Section XIIID of the California State Constitution. SECTION 4. That the proceeds of the special tax shall be used to pay in whole or in part, the costs of the following: (1) park maintenance services; (2) landscaping maintenance services; (3) street lighting; (4) public street maintenance services; (5) trail maintenance services; (6) recreational facilities maintenance services; and (7) incidental expenses related to financing and administering the District. 410/658 ---- 2 of 3 The proceeds of the special taxes shall be used as set forth above, and shall not be used for any other purpose. SECTION 5. The special tax shall be collected in the same manner as ordinary ad valorem property taxes are collected, and shall be subject to the same penalties and same procedure and sale in cases of any delinquency for ad valorem taxes, and the Tax Collector is hereby authorized to deduct reasonable administrative costs incurred in collecting any said special tax. SECTION 6. All monies collected shall be paidin to the District funds, including any reserve fund. SECTION 7. The City Clerk is hereby authorized to transmit a certified copy of this Resolution to the County of San Bernardino (“County”) Office of the Auditor-Controller (“County Auditor”). The County Auditor is hereby directed to enter in the next County assessment roll on which taxes will become due, opposite each lot or parcel of land effected the installment of the special tax, and for the exact rate and amount of said tax, reference is made to the attached Exhibit “A”. SECTION 8. This Resolution relating to the levy of the special tax shall take effect immediately upon its final passage in accordance with the provisions of Government Code Section 53340, as amended. SECTION 9. The City Clerk shall certify as to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED this 13th day of August, 2019. CYNTHIA MORAN, MAYOR ATTEST: CHERYL BALZ, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY 411/658 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) § CITY OF CHINO HILLS ) I, Cheryl Balz, City Clerk of the City of Chino Hills, DO HEREBY CERTIFY that the foregoing Resolution No. 2019R- ______was duly adopted at a regular meeting of the City Council of the City of Chino Hills held on the 13th day of August, 2019, by the following vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Chino Hills, California, this xxxx day of Xxxxxxxxx, 2019. CHERYL BALZ, CITY CLERK 412/658 EXHIBIT "A" COMMUNITY FACILITIES DISTRICT NO. 2015-1 (VILA BORBA) FISCAL YEAR 2019-2020 MAXIMUM SPECIAL TAX RATES Tax Classification FY 2018/2019 FY 2019/2020 Residential Property per Unit $1,421.83 $1,478.70 Non-Residential Property per Acre $7,965.15 $8,283.76 Multi-Family Residential $1,421.83 $1,478.70 Approved Property per Lot $1,421.83 $1,478.70 Undeveloped Property per Acre $7,965.15 $8,283.76 *Based on the Rate and Method of Apportionment, the maximum assigned special tax rates have been escalated by four percent over the prior fiscal year. ACTUAL SPECIAL TAX RATES Tax Classification FY 2018/2019 FY 2019/2020 Residential Property per Unit $869.15 $869.15 Non-Residential Property per Acre $0.00 $0.00 Multi-Family Residential $0.00 $0.00 Approved Property per Lot $0.00 $0.00 Undeveloped Property per Acre $0.00 $0.00 *Based on 326 residential properties. Fiscal year 2018/19 was based on 321 actual residential properties. A more detailed description of the Rate and Method of Apportionment can be found in Exhibit A of the formation documents for CFD 2015-1. 413/658 414/658 CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT No. 2015-1 (VILA BORBA) PUBLIC REPORT JULY 14, 2015 415/658 CITY OF CHINO HILLS CITY COUNCIL CYNTHIA MORAN, MAYOR ART BENNETT, VICE MAYOR ED GRAHAM, COUNCIL MEMBER RAY MARQUEZ, COUNCIL MEMBER PETER ROGERS, COUNCIL MEMBER CITY MANAGER KONRADT BARTLAM COMMUNITY DEVELOPMENT DIRECTOR JOANN LOMBARDO PUBLIC WORKS DIRECTOR NADEEM MAJAJ SEAN O'CONNOR MAINTENANCE AND OPERATIONS MANAGER CITY ATTORNEY MARK HENSLEY FINANCE DIRECTOR JUDY LANCASTER CITY ENGINEER STEVE NIX KIM ZUPPIGER PLANNER SPECIAL COUNSEL MARYANN GOODKIND 416/658 TABLE OF CONTENTS INTRODUCTION ........................................................................................................................................ 1 A. DESCRIPTION OF CFD NO. 2015-1. .............................................................................................. 1 B. DESCRIPTION OF MAINTENANCE SERVICES ........................................................................ 2 C. BOUNDARIES OF THE COMMUNITY FACILITIES DISTRICT ............................................. 2 D. COST ESTIMATE .............................................................................................................................. 2 E. RATE AND METHOD OF APPORTIONMENT ........................................................................... 4 F. GENERAL TERMS AND CONDITIONS ....................................................................................... 4 EXHIBIT A-MAP OF PROPOSED MAINTENANCE AREAS ....................................................... A-1 EXHIBIT B -BOUNDARY MAP ........................................................................................................... B-1 EXHIBIT C-RATE AND METHOD OF APPORTIONMENT ........................................................ C-1 July 14, 2015 City Community Facilities District No. 2015-1 (Vila Borba) 417/658 Introduction The City Council of the City of Chino Hills (the "Council") did, pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), on June 9, 2015 adopt Resolution Number 2015R-25 entitled "A-Resolution of the City Council of the City of Chino Hills, California, Declaring Its Intention to Establish Community Facilities District No. 2015-1 (Vila Borba) and To Authorize the Levy of a Special Tax within Said District" (the "Resolution of Intention"). In the Resolution of Intention the Council expressly ordered the preparation of a written Community Facilities District Report (the "Report"), for the proposed City of Chino Hills Community Facilities District No. 2015-1 (Vila Borba) (the "CFD No. 2015-1" or the "District"). The Resolution of Intention ordering the Report did direct that the Report generally contain the following: I. a brief description of the additional Maintenance Services which are required to adequately meet the needs of the new development expected to occur within CFD No. 2015-1; and 2. an estimate of the cost of providing such Maintenance Services and an estimate of the incidental expenses related thereto. For particulars, reference is made to the Resolution of Intention (Resolution Number 2015R-25) for the District, as previously approved and adopted by Council. Now, Therefore Koppel & Gruber Public Finance, the appointed firm directed to prepare the Report, does hereby submit the following: A. Description ofCFD No. 2015-1 CFD No. 2015-1 is comprised of approximately 91.60 acres of taxable land in the southwestern part the City of Chino Hills. A map showing the boundaries of the CFD No. 2015-1 is included in Exhibit "B" of this Report. Tract Number 15989 16338/16413 16414 TOTAL 14,2015 No. of Projected Taxable Units 183 168 162 513 1 Minimum Taxable Acrea2e 36.10 34.40 21.10 91.60 Community Facilities District No. 2015-1 (Vila Borba} 418/658 B. Description of Maintenance Services The purpose of CFD No. 2015-1 is to provide for the cost of providing Maintenance Services in the Vila Borba area, including but not limited to providing maintenance and lighting of parks, landscaping, public streets, and trail improvements that are in addition to those provided in the territory within the District and prior to the formation of the District and do not supplant services already available within the territory proposed to be included in the District, the costs of administering the levy and collection of the Special Tax and all other costs of the levy of the Special Tax, including any foreclosure proceedings, legal, fiscal, and financial consultant fees, election costs, and all other administrative costs of the tax levy. A map is includes as Exhibit "A" to illustrate the location of the maintenance areas anticipated to be funded through the CFD. C. Boundaries of the Community Facilities District A reduced map of the boundaries ofCFD No. 2015-1 titled "Map of Proposed City of Chino Hills Boundaries of Community Facilities District No. 2015-1 (Vila Borba)" is included in Exhibit "B" and is incorporated herein. A full scale map is on file with the Clerk of the City of Chino Hills and was recorded with the County Recorder in the County of San Bernardino in Book 86 of Maps of Assessment and Community Facilities Districts, Page 88, Document Number 020150254922. D. Cost Estimate As discussed above, CFD No. 2015-1 includes only the costs of the Maintenance Services. The initial budget for Maintenance Services is estimated not to exceed $648,643 annually at build out assuming the ability to tax 513 units of Developed Residential Property at the highest Special Tax Rate of $1,264.00 per Residential Unit. It is expected that the budget will increase over time based on increased labor, equipment and supplies. 2 City of Chino Hills Community Facilities District No. 2015-1 (Vila Borba) 419/658 Budget The budget below reflects the estimated maintenance costs for CFD No. 2015- 1. The Special Tax will be levied each fiscal year according to the required budget and based on the methodology set out in the Rate and Method of Apportionment. Budget items below may change from year to year as required to perform the required Maintenance Services. Fiscal Year 2015/2016 Budget Direct Costs Trail Hardscape Street Lighting Park Subtotal Reserve Collection 1 Trail Park Hardscape Cash Flow Reserve Subtotal Indirect Costs City Administration Overhead Professional Fees for Administration County Costs Misc Expenses Subtotal Total Number of Units Annual Special Tax per Unit/Lot2 Undeveloped Special Tax Rate per Acre2 $14,660 10,481 22,673 123,392 $171,206 $2,600 115,157 109,433 194,593 $421,783 $50,000 5,000 154 500 $55,654 $648,643 513 $1,264 $7,081 1 Replacement Reserve assumes replacement of certain hardscape with a 2% escalator in cost. Cash Flow Reserves calculated at 30% of Total Costs for an ultimate collection of 50% of Total Costs 2 Annual Special Tax subject to escalation as set forth in the Rate and Method of Apportionment. 3 City of Chino Hills Community Facilities District No. 2015-1 (Vila Borba) 420/658 E. Rate and Method of Apportionment The Rate and Method of Apportionment of Special Tax (the "RMA") provides sufficient information to allow a property owner within CPD No. 2015-1 to estimate the Maximum Special Tax for his or her property. The rates as set in the RMA Table I may increase in future years as described in the RMA. For particulars on the rate and method of apportionment, reference is made to Exhibit "C" of this Report. F. General Terms and Conditions The description of the Maintenance Services is general in nature. The final nature of the Maintenance Services that will be provided will be determined by the City. 14, 2015 City Hills Community Facilities District No. 2015-1 (Vila Borba) 421/658 EXHIBIT A MAP OF PROPOSED MAINTENANCE AREAS 14, 2015 A-1 Community Facilities District No. 2015-1 (Vila Borba) 422/658Gl/'1~// t•MP'IUl\'H-IIXl\SI n111x1\_r.:,·;cq\ ~ .:10 ~ 133HS 'vlN~0.:117\f~ .:10 31\flS 'ONIC~'vN~38 N'vS .:10 A.lNno~ 'SlllH ONIH~ .:10 All~ g ~oi ·a A ,nr :a3l!Vd3lld 3.L va ' '18~08 '171/\ ,----' ' ' ' ' ' ' ' ' ' ------~:r,-n--------:'.,\I --.,_,'I' ----///1 I I !/_! , i// \ I I , / t l //" I I I // / \ -.i'.:/ I \ I >:, ":=-:•;:, I ·1 I . " ,fr I \ I .. .__,~_ .. , ~ ~ ' t~t9~ 18 £~t9~ '8££9~ '686S ' ~ "ON l:JV~l \\. 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I -/I-'-\ -0 di:: -~ 0 di:: -F F WI; WI; """ jl> """ Im '7g) jl> ;,gJ "" ----...,_ ' ' 423/658 EXHIBITB BOUNDARY MAP FOR CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO. 2015-1 (VILA BORBA) A reduced copy of the Boundary Map follows. The original of such map is on file in the Office of the City Clerk and in the records of the County Recorder, County of San Bernardino, State of California. 14, 2015 B • I City of Chino Community Facilities District No. 2015-1 (Vila Borba) 424/658 EXHIBITC RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO. 2015-1 (VILA BORBA) A Special Tax of the City of Chino Hills Community Facilities District No. 2015-1 (Vila Borba) ("CFD") shall be levied on all Assessor's Parcels in the CFD and collected each Fiscal Year commencing in Fiscal Year 2015-16 in an amount determined through the application of the rate and method of apportionment of the Special Tax set forth below. All of the real property in the CFD, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent map or instrument recorded in the Office of the County Recorder. 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, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the actual or estimated costs incurred by the City, acting for and on behalf of the CFD as the administrator thereof, to determine, levy and collect the Special Taxes, including a reasonable allocation of salaries of City employees and a proportionate amount of the City's general administrative overhead related thereto, and the fees of consultants and legal counsel providing services related to the administration of the CFD; the costs of collecting installments of the Special Taxes; and any other costs required to administer the CFD as determined by the City. July 14, 2015 C • I City Community Facilities District No. 2015-1 (Vila Borba) 425/658 "Approved Property" means a Lot for which a building permit has not been issued prior to June I preceding the Fiscal Year in which the Special Tax is being levied. "Assessor's Parcel" means a Lot or parcel shown in 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. "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" means the City of Chino Hills Community Facilities District No. 2015-1 (Vila Borba). "City" means the City of Chino Hills, California. "City Clerk" means the City Clerk of the City of Chino Hills, California. "City Council" means the City Council of the City of Chino Hills, California, acting as the legislative body ofCFD No. 2015-1. "City Manager" means the City Manager for the City of Chino Hills or his or her designee. "County" means the County of San Bernardino, California. "Developed Property" means all Taxable Property for which a building permit was issued after January I, 2014, but prior to the June !st preceding the Fiscal Year in which the Special Tax is being levied. "Dwelling Unit" means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental separate from adjacent residential dwelling units. "Final Subdivision Map" means a subdivision of property creating single family residential buildable lots by recordation of a final subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.), or recordation of a condominium plan pursuant to California Civil Code 1352, that creates individual lots for which building permits may be issued without further subdivision and is recorded prior to March I preceding the Fiscal Year in which the Special Tax is being levied. "Fiscal Year" means the period starting July I and ending on the following June 30. C-2 City Community Facilities District No. 2015-1 (Vila Borba) 426/658 "Land Use Class" means any of the classes listed in Table 1. "Lot" means an individual legal lot, identified and numbered on a recorded Final Subdivision Map, on which a building permit has been or is permitted to be issued for construction of a Dwelling Unit without further subdivision of the lot and for which no further subdivision of the lot is anticipated. "Maintenance" means the labor, material, administration, personnel, equipment and utilities necessary to maintain park, landscaping, public streets, and trail improvements, including but not limited to recreational facilities, trees, plant material, sod, irrigation systems, sidewalks, traffic signals, street lighting drainage facilities, weed control and other abatements, public restrooms, signs, monuments, parking lots and associated appurtenant facilities located within the CPD,. "Maintenance Requirement" means, for any Fiscal Year in which Special Taxes are levied, the amount equal to the budgeted costs for Maintenance applicable to the CPD for such Fiscal Year. "Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section C below, that may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property. "Non-Residential Property" means all Assessor's Parcels of Developed Property for which a building permit( s) has been issued for a structure or structures for non-residential use. Non-Residential Property does not include structures intended for storage or housing of animals. "Operating Fund" means a fund that shall be maintained for the CPD for each Fiscal Year to pay for Maintenance and Administrative Expenses. "Operating Fund Requirement" means, for any Fiscal Year, the sum of the applicable Maintenance Requirement. "Property Owner Association Property" means any property within the CPD boundaries that is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder to, a property owner association, including any master or sub-association. "Proportionately" means in a manner such that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels of Taxable Property within each Land Use Class. "Public Property" means any property within the CPD boundaries that is, at the time of the CPD formation, expected to be used for any public purpose and is owned by or dedicated to the federal government, the State, the County, the City or any other public agency. C-3 Community Facilities District No. 20 I 5-1 (Vila Borba) 427/658 "Reserve Fund" means a fund that shall be maintained for the CFO for each Fiscal Year to provide necessary cash flow for the first six months of each Fiscal Year, reserve capital to cover monitoring, maintenance and repair cost overruns and delinquencies in the payment of Special Taxes and a reasonable buffer to prevent large variations in annual Special Tax levies. "Reserve Fund Requirement" means an amount equal to up to 100% of the Operating Fund Requirement for any Fiscal Year. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit(s) has been issued for purposes of constructing one or more residential Dwelling Unit(s). "Special Tax" means the Special Tax levied pursuant to the prov1s10ns of Sections C and D below in each Fiscal Year on each Assessor's Parcel of Developed Property and Undeveloped Property in the CFO to fund the Special Tax Requirement. "Special Tax Requirement" means that amount required in any Fiscal Year for the CFO to: (a) (i) pay the Maintenance Requirement; (ii) pay reasonable Administrative Expenses; (iii) pay any amounts required to establish or replenish the Reserve Fund to the Reserve Fund Requirement; (iv) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (b) a credit for funds available to reduce the annual Special Tax levy, including the excess, if any, in the Reserve Fund above the Reserve Fund Requirement. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of the CFO that are not exempt from the Special Tax pursuant to law or as defined below. "Tax-Exempt Property" means an Assessor's Parcel not subject to the Special Tax. Tax-Exempt Property includes: (i) Public Property, or (ii) Property Owner Association Property, or (iii) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement. "Taxable Property Owner Association Property" means all Property Owner Association Property which is not exempt from the Special Tax pursuant to Section E below. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Approved Property, Developed Property or Taxable Property Owners Association Property. July 14, 2015 C-4 City Community Facilities District No. 2015-1 (Vila Borba) 428/658 B. C. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year using the definitions above, all Taxable Property within the CPD shall be classified as Developed Property, Approved Property, Undeveloped Property or Taxable Property Owners Association Property, and shall be subject to Special Taxes pursuant to Sections C and D below. Developed Property shall be further assigned to a Land Use Class as specified in Table I. Once the Land Use Class of an Assessor's Parcel of Residential Property or Non-Residential is determined it cannot be changed. MAXIMUM SPECIAL TAX RATE 1. Developed Property TABLE 1 Maximum Special Tax for Developed Property Community Facilities District No. 2015-1 Land Maximum Special Use Class Descriotion Tax for FY 2015-16 I Residential Property $1,264.00 per Dwelling Unit 2 Non-Residential Prooertv $7,081.00 oer Acre 2. Approved Property The Maximum Special Tax that may be levied on an Assessor's Parcel classified as Approved Property shall be $1,264.00 per Lot. 3. Undeveloped Property and Taxable Property Owner Association Property The Maximum Special Tax for Undeveloped Property and Taxable Property Owner Association Property shall be $7,081.00 per Acre. 4. Annual Escalation of Maximum Special Tax On July I, 2016 for Fiscal Year 2016-17 and on each subsequent July I for the Fiscal Year then commencing, the Maximum Special Tax rates for all Assessor's Parcels of Taxable Property shown above shall be increased annually by the percentage increase in the Engineering News Record Common Labor Index since the beginning of the preceding Calendar Year or by four percent (4%), whichever is greater. C-5 City Community Facilities District No. 2015-1 (Vila Borba) 429/658 D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2015-16, and for each following Fiscal Year, the City shall levy the CFD Special Tax at the rates established pursuant to steps 1 through 4 below so that the amount of the Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property up to 100% of the applicable Maximum Special Tax; Second: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Lot of Approved Property at up to 100% of the Maximum Special Tax for Approved Property to satisfy the Special Tax Requirement; Third: If additional monies are needed to satisfy the Special Tax Requirement after the second step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Undeveloped Property to satisfy the Special Tax Requirement; Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, the Special Tax shall be levied proportionately on each Assessor's Parcel of Taxable Property Owner Association Property at up to 100% of the Maximum Special Tax for Taxable Property Owner Association Property. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent annually up to the Maximum Special Tax as a consequence of delinquency or default by the owner of any other Assessor's Parcel within the CFD. E. EXEMPTIONS The CFD Administrator shall classify as exempt property (i) Assessor's Parcels defined as Public Property, and (ii) Assessor's Parcels with public or utility easements, and (iii) two conservation easements granted to a conservation district pursuant to (I) United States Army Corps of Engineers' ("ACOE") Section 404 Permit No. 199915475-AJS and any amendments thereto (the "Section 404 Permit"), (2) the Regional Water Quality Control Board ("RWQCB") Waste Discharge Requirements Order No. R8-2007-0011 and any amendments thereto (the "WDR Order"), (3) the California Department of Fish and Wildlife 14,2015 C-6 City Community Facilities District No. 2015-1 (Vila Borba) 430/658 F. G. ("CDFW") Section 1600 Stream bed Alteration Agreement No. 1600-2011-0234- R6 and any amendments thereto (the "Section 1600 Agreement"), (4) the CDFW Consistency Determination no. 2080-2013-001-06 and any amendments thereto, and (5) revised biological opinion no. FWS-SB-12BO 145-12F0333 ("Biological Opinion") rendered by the United States Fish and Wildlife Service ("USFWS") on December 18, 2012 and any amendments thereto, making impractical their utilization for other than the purposes set forth in the easement. The CFD Administrator shall classify as exempt property those Assessor's Parcels defined as Property Owner's Association Property provided that no such classification would reduce the sum of all Taxable Property to less than 91.60 Acres. Assessor's Parcels defined as Property Owner Association Property that cannot be classified as exempt property will be classified as Taxable Property Owner Association Property and shall be taxed as part of the third step in Section D. The CFD Administrator will assign Tax-Exempt status in the chronological order in which property becomes exempt. APPEALS Any taxpayer subject to the Special Tax and believes that the amount of the Special Tax levied on their Assessor's Parcel is in error shall first consult with the CFD Administrator regarding such error. If following such consultation, the CFD Administrator determines that an error has occurred, the CFD Administrator may amend the amount of the Special Tax levied on such Assessor's Parcel. If following such consultation and action, if any by the CFD Administrator, the taxpayer believes such error still exists, such person may file a written notice with the City Clerk appealing the amount of the Special Tax levied on such Assessor's Parcel. Upon the receipt of any such notice, the City Clerk shall forward a copy of such notice to the City Manager who shall establish as part of the proceedings and administration of the CFD, a special three-member Review/ Appeal Committee. The Review/ Appeal Committee may establish such procedures, as it deems necessary to undertake the review of any such appeal. The Review/ Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any taxpayer appeals, as herein specified. The decision of the Review/ Appeal Committee shall be final and binding as to all persons. MANNER OF COLLECTION Special Taxes levied pursuant to Section D above shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the CFD Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to C-7 Community Facilities District (Vila Borba) 431/658 meet the financial obligations of the CFD or as otherwise determined appropriate by the CFD Administrator. H. TERM OF SPECIAL TAX Taxable Property in the CFD shall remain subject to the Special Tax in perpetuity or as long as the City provides Maintenance. July 14, 2015 C-8 City Community Facilities District 2015-1 (Vila Borba)