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HomeMy WebLinkAbout16-02 TPFA Resolution RESOLUTION NO. TPFA 16-02 ' A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY DECLARING ITS INTENTION TO ESTABLISH A COMMUNITY FACILITIES DISTRICT AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES THEREIN — RORIPAUGH RANCH PHASE 2 THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Under the Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the California Government Code (the "Law"), this Board of Directors may commence proceedings for the establishment of a community facilities district. Section 2. There have been submitted to this Board of Directors a Petition (Including Waivers) of Roripaugh Valley Restoration, LLC and a Petition (Including Waivers) of Wingsweep Corporation (collectively, the "Petitions'), requesting the formation by this Board of Directors of a community facilities district under the Law to be known as the Temecula Public Financing Authority Community Facilities District No. 16- ' 01 (Roripaugh Ranch Phase 2) (the "District'). Section 3. Under the Law, this Board of Directors is the legislative body for the proposed District and is empowered with the authority to establish the District and levy special taxes within the District. Section 4. This Board of Directors proposes to begin the proceedings necessary to establish the District pursuant to the Law. Receipt of the Petitions to form the District is hereby acknowledged. Section 5. The name proposed for the District is Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2). Section 6. The proposed boundaries of the District are as shown on the map of the District on file with the Secretary, which boundaries are hereby preliminarily approved. The Secretary is hereby directed to record, or cause to be recorded, the map of the boundaries of the District in the office of the County Recorder as soon as practicable after the adoption of this Resolution. Section 7. The special taxes proposed to be prepaid by the District (the "CFD 03-02 Special Tax Prepayment'), and the types of public facilities (the "Facilities") and of municipal services (the "Services") proposed to be eligible for funding by the District, in each case pursuant to the Law, shall consist of those items listed on Exhibit A hereto under the headings "CFD 03-02 Special Tax Prepayment," "Facilities" and "Services," respectively, which Exhibit is by this reference incorporated herein. TPFA Resos 16-02 1 This Board of Directors hereby determines that the Facilities and the Services to ' be financed by the District are necessary to meet increased demands placed upon local agencies as a result of development occurring and expected to occur in the territory included in the District. This Board of Directors hereby expresses its opinion that the public interest will not be served by allowing property owners to enter into contracts as contemplated by Section 53329.5(a) of the Law, and does not intend to let property owners avail themselves of the actions otherwise permitted by said Section 53329.5(a). The Executive Director is hereby authorized and directed to enter into a joint community facilities agreement with the City of Temecula, the Temecula Community Services District, the County of Riverside and any other public entity that will own and/or operate any of the Facilities, or that will provide any of the Services, with any such agreements to be in a form provided by Bond Counsel. Section 8. Except to the extent that funds are otherwise available to the District to pay for the Facilities and the Services, to make the CFD 03-02 Special Tax Prepayment and/or pay the principal and interest as it becomes due on bonds of the District issued to provide for the CFD 03-02 Special Tax Prepayment and to finance the Facilities, a special tax sufficient to pay the costs thereof, secured by recordation of a continuing lien against all non-exempt real property in the District, will be levied within ' the District and collected in the same manner as ordinary ad valorem property taxes or in such other manner as this Board of Directors or its designee shall determine, including direct billing of the affected property owners. The proposed rate and method of apportionment of the special tax among the parcels of real property within the District, in sufficient detail to allow each landowner within the proposed District to estimate the maximum amount such owner will have to pay, and which specifies the tax year after which no further special tax will be levied on land used for private residential purposes and which otherwise complies with applicable provisions of the Act is described in Exhibit B attached hereto which Exhibit is by this reference incorporated herein. This Board of Directors finds that the provisions of Section 53313.6, 53313.7 and 53313.9 of the Law (relating to adjustments to ad valorem property taxes and schools financed by a community facilities district) are inapplicable to the District. Section 9. It is the intention of this Board of Directors, acting as the legislative body for the District, to cause bonds of the Authority to be issued for the District pursuant to the Law to provide for the CFD 03-02 Special Tax Prepayment and to finance the costs of the Facilities. If so issued, the bonds shall be in the aggregate principal amount of not to exceed $60,000,000, shall bear interest payable semi- annually or in such other manner as this Board of Directors shall determine, at a rate not to exceed the maximum rate of interest as may be authorized by applicable law at the time of sale of such bonds, and shall mature not to exceed 40 years from the date of ' the issuance thereof. TPFA Resos 16-02 2 Section 10. This Board of Directors reserves to itself the right and authority to ' allow any interested owner of property in the District, subject to the provisions of Section 53344.1 of the Law and such requirements as it may otherwise impose, and any applicable prepayment penalties as prescribed in the indenture or fiscal agent agreement for any bonds of the Authority for the District, to tender to the Treasurer of the Authority in full payment or part payment of any installment of special taxes or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, in the manner described in Section 53344.1 of the Law. Section 11. The levy of said proposed special tax shall be subject to the approval of the qualified electors of the District at a special election. The proposed voting procedure shall be by mailed or hand-delivered ballot among the landowners in the proposed District, with each owner having one vote for each acre or portion of an acre of land such owner owns in the District. Section 12. Except as may otherwise be provided by the Law or the rate and method of apportionment of the special tax for the District, all lands owned by any public entity, including the United States, the State of California and/or the City of Temecula, or any departments or political subdivisions of any thereof, shall be omitted from the levy of the special tax to be made to cover the costs and expenses of the Facilities, the issuance of bonds by the Authority for the District and any expenses of the District. ' Section 13. The Director of Public Works of the City of Temecula is hereby directed to study the CFD 03-02 Special Tax Prepayment, the Facilities and the Services and to make, or cause to be made, and file with the Secretary a report in writing, presenting the following: (18) A brief description of the special taxes to be prepaid and of the Facilities and the Services. (b) An estimate of the fair and reasonable cost of providing for the CFD 03-02 Special Tax Prepayment, the Facilities and the Services, including the incidental expenses in connection therewith, including the costs of the proposed bond financing, any Authority or City of Temecula administrative costs and all other related costs. Said report shall be made a part of the record of the public hearing provided for below. Section 14. Tuesday, April 26, 2016, at 7:00 p.m. or as soon thereafter as the matter may be heard, in the regular meeting place of this Board of Directors, City Council Chambers, Temecula City Hall, 41000 Main Street, Temecula, California, be, and the same are hereby appointed and fixed as the time and place when and where ' this Board of Directors, as legislative body for the District, will conduct a public hearing on the establishment of the District and consider and finally determine whether the public interest, convenience and necessity require the formation of the District and the levy of said special tax. TPFA Resos 16-02 3 Section 15. The Secretary is hereby directed to cause notice of said public ' hearing to be given by publication one time in a newspaper published in the area of the District. The publication of said notice shall be completed at least seven days before the date herein set for said hearing. Said notice shall be substantially in the form of Exhibit C hereto. Section 16. The Board of Directors may in the future, by resolution, approve an agreement pursuant to Section 53314.9 of the Law, to accept an advance or advances of funds or work-in-kind from one or more landowners in the District or related entities, which advances may be repaid and work-in-kind may be reimbursed to the person or entity which advanced the funds or work-in-kind subject to compliance with the applicable provisions of Section 53314.9 of the Law. Section 17. The Board of Directors hereby determines that the contemplated formation of a community facilities district and issuance of community facilities district special tax bonds involving the Authority and the District, in accordance with Section 15061(b) of the California Environmental Quality Act (CEQA) Guidelines is not a "Project," as defined in Section 15378 of the CEQA Guidelines, and is therefore exempt from the requirements of CEQA. Pursuant to CEQA Guidelines Sections 15061(d) and 15062, the Secretary is hereby directed to cause a Notice of Exemption to be prepared, executed and filed in regard to the foregoing determination. ' Section 18. This Resolution shall take effect upon its adoption. PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Temecula Public Financing Authority this 22ntl day of March, 2016. lam^ )(� Michael S. Naggar, Chair A ST• Rani o I, Secretary [SEAL] 1 TPFA Resos 16-02 4 STATE OF CALIFORNIA ) ' COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, Secretary of the Temecula Public Financing Authority, do hereby certify that the foregoing Resolution No. TPFA 16-02 was duly and regularly adopted by the Board of Directors of the Temecula Public Financing Authority at a meeting thereof held on the 22nd day of March, 2016, by the following vote: AYES: 3 BOARD MEMBERS: Edwards, McCracken, Rahn NOES: 0 BOARD MEMBERS: None ABSTAIN: 0 BOARD MEMBERS: None ABSENT: 2 BOARD MEMBERS: Comerchero, Naggar Randi Johl, Secretary TPFA Resos 16-02 5 EXHIBIT A TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) DESCRIPTION OF CFD 03-02 SPECIAL TAXES TO BE PREPAID, AND FACILITIES AND SERVICES TO BE FUNDED BY THE DISTRICT CFD 03-02 SPECIAL TAX PREPAYMENT The special taxes to be prepaid are those being levied for the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) on property to be included in the District, with the prepayment to be in an amount as necessary to repay the portion of the indebtedness of such community facilities district secured by such special taxes. FACILITIES It is intended that the District will finance all or a portion of the costs of the following facilities: Butterfield Stage Road Butterfield Stage Road (BSR) from La Serena to Rancho California Road: Improvements include grading full right-of-way with 2:1 slopes, paving, curb and gutter, median curb, sidewalk, street lights, traffic signals including a new traffic signal at La Serena and signal modifications at Rancho California Road, signing and striping, landscaping, irrigation, storm drain, sewer and water pipelines, and other appurtenant improvements necessary to complete Butterfield Stage Road. Nicolas Road Nicolas Road BSR to the Easterly Metropolitan Water District (MWD) R/W: Improvements include grading right-of-way with 2:1 slopes, paving, asphalt berms, curb and gutter, sidewalk, asphalt path, split rail fence, street lights, landscaping, irrigation, storm drain, underground sewer and water pipelines, and other appurtenant improvements necessary to complete Nicolas Road. Nicolas Road from the Easterly MWD RAN to Liefer Road including construction of Calle Garisol realignment to Nicolas Road: Improvements include grading partial right-of-way (40' travel way) with 2:1 slopes, paving, asphalt berms, curb and gutter, sidewalk, asphalt path, utility relocations, traffic detour, split rail fence, street lights, signing and striping, landscaping, irrigation, sewer, storm drain, bridge over Santa Gertrudis Creek (including channel lining and transition structure to bridge), access road, exit structure and other appurtenant improvements necessary to complete ' Nicolas Road. A-1 Long Valley Channel Long Valley Channel from BSR to the Easterly Project Boundary: Improvements include grading of channel, flow-by detention basin, construction of drop structures, trapezoidal channel lining, transition structures to Butterfield Stage Road Bridge, rip-rap, grading and paving of access roads, fencing, and other appurtenant improvements necessary to complete Long Valley Channel. Santa Gertrudis Creek Santa Gertrudis Creek from the Habitat Area to the exit channel at MWD RM: Improvements include a flow-by detention basin, headwalls, trapezoidal channel lining and transition structures; grading, fencing and paving for access roads, desilting and detention basins, rip-rap protection, rip-rap dissipaters, berms, grading of exit structure and other appurtenant improvements necessary to complete Santa Gertrudis Creek. Environmental Mitigation Mitigation for the Long Valley Channel and Santa Gertrudis Creek improvements: Creation of 8.2 acres of habitat within open space to include grading, access road, electrical service, irrigation, plant and seed installation and other appurtenant improvements necessary to complete resource agency conditioned environmental mitigation for the Long ' Valley Channel and Santa Gertrudis Creek improvements. Sports Park Sports Park at the SE comer of the intersection of Loop Road and BSR: Construct 19.7-acre Sports Park including grading, parking, building, lighting landscaping, irrigation, playing fields, basketball courts, children's play area, equipment with a useful life of five (5) years or more and other appurtenant improvements necessary to complete the Sports Park. Loop Road Loop Road from North BSR intersection to South BSR intersection (public section only): Improvements,include grading full right-of-way with 2:1 slopes, paving, curb and gutter, median curb, sidewalk, street lights, signing and striping, landscaping, irrigation, storm drain, sewer and water pipelines, and other appurtenant improvements necessary to complete the public segment of the Loop Road East of BSR. The Facilities shall include the acquisition of right-of-way, the costs of design, engineering and planning, the costs of any environmental or traffic studies, surveys or other reports, the cost of any required environmental mitigation and any required noise mitigation measures, landscaping and irrigation, soils testing, permits, plan check and inspection fees, insurance, legal and related overhead costs, coordination and supervision and any other costs or appurtenances related to any ' of the foregoing- A-2 SERVICES ' Is it intended that the District be eligible to fund all or a portion of the costs of the following municipal services: • Public safety services, including police and fire protection, provided to the area within the District. • Maintenance of landscaping in public areas, public easements and public right of way in the area of the District, including along or near Butterfield Stage Road, Murrieta Hot Springs Road, "Loop" Road, Roripaugh Valley Road, and Fiesta Ranch Road, Skyview Park, the Sports Park, such maintenance to include but not be limited to maintenance of planting areas, trees, bioretention filters, multipurpose trails, and the furnishing of water for irrigation. • Maintenance of sidewalks in the area of the District, including Butterfield Stage Road, Murrieta Hot Springs Road, "Loop" Road, Roripaugh Valley Road, and Fiesta Ranch Road. • Maintenance of public signage in the District, including signage along Butterfield Stage Road, Murrieta Hot Springs Road, "Loop" Road, Roripaugh Valley Road, and Fiesta Ranch Road. • Maintenance of stone drainage systems within the area of the District, including those along or adjacent to Butterfield Stage Road, Murrieta Hot Springs Road, "Loop" ' Road, Roripaugh Valley Road, and Fiesta Ranch Road, and including storm drain pipes, culverts, detention/desilting basins, manholes, catch basins and drop inlets, cleanout of storm drains and catch basin cleaning and inspection. • Maintenance of streets and roadways within the area of the District, including Butterfield Stage Road, Murrieta Hot Springs Road, "Loop" Road, Roripaugh Valley Road, and Fiesta Ranch Road, and including slurry, overlay, curbs and gutters, curb ramps, striping and street sweeping. • Maintenance of street lighting located within the District, including street lights along Butterfield Stage Road, Murrieta Hot Springs Road, "Loop" Road, Roripaugh Valley Road, and Fiesta Ranch Road, and including decorative lighting and pull box assemblies. • Maintenance of traffic signals within the District, including traffic signals in or near Butterfield Stage Road, Murrieta Hot Springs Road, and including electrical, LED replacement, maintenance and replacement. • Graffiti removal from public improvements within the District. The District may fund any of the following related to the services described above: the furnishing of services and materials for the ordinary and usual maintenance, operation and servicing of the improvements, including repair, removal or replacement of all or part of any of the improvements, the furnishing of water for the irrigation and the furnishing of electric current or energy, for any lights or irrigation facilities, obtaining, constructing, furnishing, operating and maintaining equipment, ' apparatus or facilities related to providing the services and/or equipment, apparatus, facilities or fixtures in areas to be maintained, obtaining supplies or appurtenant facilities necessary for such maintenance, paying the salaries and benefits of personnel necessary or convenient to provide the A-3 services, payment of insurance costs and other related expenses and the provision of reserves for ' repairs and replacements and for the future provision of services. It is expected that the services will be provided by the City of Temecula, either with its own employees or by contract with third parties, or any combination thereof. The services to be financed by the District shall be in addition to those provided in the territory of the District before the date of creation of the District, and will not supplant services already available within that territory when the District is created. OTHER The District may also finance any of the following: 1. Bond related expenses, including underwriters discount, financial advisor fees and expenses, appraisal and price point study costs, reserve fund, capitalized interest, bond and disclosure counsel fees and expenses, landowner counsel fees and expenses and all other incidental expenses. 2. Administrative fees of the Authority, the City of Temecula and the Bond trustee or fiscal agent related to the District and the Bonds. 3. Reimbursement of costs related to the formation of the District advanced by the Authority, the City of Temecula, any landowner in the District, or any party related to any of the foregoing, as well as reimbursement of any costs advanced by the Authority, the City of Temecula, any landowner in the District or any party related to any of the foregoing, for facilities, fees or other purposes or costs of the District. 1 A-4 RATE AND METHOD OF APPORTIONMENT FOR TEMECULA PUBLIC FINANCING AUTHORITY ' COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) The following sets forth the Rate and Method of Apportionment for the levy and collection of an Annual Special Tax A and an Annual Special Tax B in the Temecula Public Financing Authority ("PFA") Community Facilities District No. 16-01 ("CFD No. 16-01"). An Annual Special Tax A and an Annual Special Tax B shall be levied on and collected in CFD No. 16-01 each Fiscal Year,in an amount determined through the application of the Rate and Method of Apportionment described below. All of the real property within CFD No. 16-01,unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. SECTION 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 the Assessor's Parcel Map, the land area as shown on the applicable Final Map,or if the land area is not shown on the applicable Final Map,the land area as calculated by the CFD Administrator or City Engineer. ' "Act" means the Mello-Roos Community Facilities Act of 1982 as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses"means the actual or reasonably estimated costs directly related to the administration of CFD No. 16-01, including but not limited to the following: (i) the costs of computing Special Tax A and Special Tax B(the "Special Taxes") and of preparing the annual Special Tax A and Special Tax B collection schedules (whether by the CFD Administrator or designee thereof, or both); (ii) the costs of collecting the Special Taxes (whether by the Authority, County, City, or otherwise); (iii) the costs of remitting the Special Taxes to the fiscal agent or trustee for any Bonds; (iv) the costs of commencing and pursuing to completion any foreclosure action arising from delinquent Special Tax A; (v) the costs of the fiscal agent or trustee (including its legal counsel) in the discharge of the duties required of it under any Indenture; (vi) the costs of the Authority, City, or designee of complying with arbitrage rebate,mandated reporting and disclosure requirements of applicable federal and State of California laws, and responding to property owner or Bond owner inquiries regarding the Special Taxes; (vii) the costs associated with the release of funds from any escrow account; (viii) the costs of the Authority, City, or designee related to any appeal of a Special Tax; and (ix) an allocable share of the salaries of the City staff and City overhead expense directly relating to the foregoing. Administrative Expenses shall also include amounts advanced by the City or the Authority for any administrative purposes of CFD No. 16-01. ' "Annual Special Tax A"means for each Assessor's Parcel, the Special Tax A actually levied in a given Fiscal Year on any Assessor's Parcel. Page I "Annual Special Tax B"means for each Assessor's Parcel,the Special Tax B actually levied in a given Fiscal Year on any Assessor's Parcel. ' "Approved Property" means all Assessor's Parcels of Taxable Property other than Provisional Exempt Property: (i) that are included in a Final Map that was recorded prior to the January 1 st immediately preceding the Fiscal Year in which the Special Tax A is being levied,and(ii)that have not been issued a building permit on or before the April 1 st immediately preceding the Fiscal Year in which the Special Tax A is being levied. "Assessor" means the County Assessor of the County. "Assessor's Parcel"means a lot or parcel of land designated on an Assessor's Parcel Map with an assigned Assessor's Parcel Number within the boundaries of CFD No. 16-01. "Assessor's Parcel Map"means an official map of the Assessor designating parcels by Assessor's Parcel Number. "Assessor's Parcel Number"means that number assigned to a lot or parcel of land by the Assessor for purposes of identification. "Assigned Annual Special Tax A" means the Special Tax A as described in Section D below. "Backup Annual Special Tax A" means the Special Tax A as described in Section E below. ' "Board of Directors"means the Board of Directors of the Temecula Public Financing Authority, acting as the legislative body of CFD No. 16-01, or its designee. "Bonds"means any bonds or other indebtedness (as defined in the Act), whether in one or more series, the repayment of which is secured by the levy of Special Tax A on Assessor's Parcels within CFD No. 16-01. "Boundary Map"means a recorded map of the CFD No. 16-01 which indicates the boundaries of CFD No. 16-01. "Building Permit"means the first legal document issued by the City giving official permission for new construction. For purposes of this definition, "Building Permit" may or may not include any subsequent building permits issued or changed after the first issuance, as determined by the CFD Administrator. "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 application for such Assessor's Parcel and subject to verification by the CFD Administrator. "Calendar Year" means the period commencing January 1 of any year and ending the following ' December 31. "CFD No. 16-01" or "CFD" means Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) established by the Authority under the Act. Page 2 "CFD Administrator" means the Finance Director of the City, or designee thereof, responsible for,among other things,determining the Special Tax A Requirement for Special Tax A and the Special Tax B Requirement for Special Tax B and providing for the levy and collection of said Special Tax A and Special Tax B. "City" means the City of Temecula, California. "Consumer Price Index" or "CPI" means, for each Fiscal Year, the Consumer Price Index published by the U.S. Bureau of Labor Statistics for"All Urban Consumers: in the Los Angeles— Anaheim—Riverside Area",measured as of the month of December in the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published,the Consumer Price Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Consumer Price Index for the City of Los Angeles. "County" means the County of Riverside. "Developed Property"means all Assessor's Parcels of Taxable Property that: (i)are included in a Final Map that was recorded prior to January 1 st preceding the Fiscal Year in which Special Tax A and Special Tax B are being levied, and (ii) a building permit was issued on or before April 1st preceding the Fiscal Year in which either or both of the Special Taxes are being levied. "Exempt Property" means all Assessor's Parcels designated as being exempt from the Special Taxes provided for in Section M. "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 4285 that creates individual lots that do not need,and are not expected,to be further subdivided prior to the issue of a building permit. "Fiscal Year" means the period commencing July l of any year and ending the following June 30. "Indenture"means the bond indenture,fiscal agent agreement,trust agreement,resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Type" means Residential Property, Multifamily Residential Property, or Non- Residential Property. "Maximum Special Tax A"means for each Assessor's Parcel of Taxable Property,the maximum Special Tax A, determined in accordance with Section C that can be levied in any Fiscal Year on such Assessor's Parcel. "Maximum Special Tax B" means for each Assessor's Parcel of Taxable Property,the maximum Special Tax B,determined in accordance with Section I that can be levied in any Fiscal Year on such ' Assessor's Parcel. "Multifamily Residential 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 Page 3 of attached Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator. ' "Non-Residential Property" means all Assessor's Parcels of Developed Property for which a building permit was issued for any type of non-residential use. "Partial Prepayment Amount"means the amount required to prepay a portion of the Special Tax A obligation for an Assessor's Parcel, as described in Section H. "Prepayment Amount"means the amount required to prepay the Special Tax A obligation in full for an Assessor's Parcel, as described in Section G. "Proportionately" means for Special Tax A that the ratio of the Annual Special Tax A levy to the applicable Assigned Annual Special Tax A is equal for all applicable Assessor's Parcels. In the case of Special Tax B, "Proportionately" means that the ratio of the Annual Special Tax B levy to the applicable Maximum Special Tax B is equal for all applicable Assessor's Parcels. In the case of Developed Property subject to the apportionment of the Annual Special Tax A under Step Four of Section F,"Proportionately"means that the quotient of(a)Annual Special Tax A less the Assigned Annual Special Tax A divided by(b) the Backup Annual Special Tax A less the Assigned Annual Special Tax A, is equal for all applicable Assessor's Parcels. "Provisional Exempt Property" means all Assessor's Parcels of Taxable Property subject to Special Tax A that would otherwise be classified as Exempt Property pursuant to the provisions of Section M,but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property within the applicable Zone below the required minimum Acreage set forth in Section M. "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 dwelling units,which are not Multifamily Residential Property. "Services" means services authorized to be funded by CFD No. 16-01. "Special Tax A"means any of the Special Taxes authorized to be levied on Taxable Property within and by CFD No. 16-01 pursuant to the Act to fund the Special Tax A Requirement. "Special Tax B"means any of the Special Taxes authorized to be levied on Taxable Property within and by CFD No. 16-01 pursuant to the Act to fund the Special Tax B Requirement. "Special Tax A Requirement"means,subject to the Maximum Special Tax A,the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses (apportioned between Special Tax A and Special Tax B), (iii) any amount required to establish or replenish any reserve funds established in association with the Bonds, and (iv)the collection or accumulation of funds for the acquisition or construction of facilities or payment of fees authorized by CFD No. 16- ' 01 by the levy on Developed Property of the Assigned Annual Special Tax A provided that the inclusion of such amount does not cause an increase in the levy of Special Tax A on Approved Property or Undeveloped Property as set forth in Step Two and Three of Section F., less (v) any Page 4 amount available to pay debt service or other periodic costs on the Bonds pursuant to any applicable fiscal agent agreement, or trust agreement. ' "Special Tax B Requirement" means, subject to the Maximum Special Tax B,that amount to be collected in any Fiscal Year to pay for certain Services as required to meet the needs of CFD No. 16- 01. The costs of Services to be covered shall be the direct costs for (i) Services, and (ii) Administrative Expenses(apportioned between Special tax A and Special Tax B); less(iii)a credit for funds available to reduce the Annual Special Tax B levy, if any, as determined by the CFD Administrator. Under no circumstances shall the Special Tax B Requirement include funds for Bonds. "Taxable Property" means all Assessor's Parcels within CFD No. 16-01, which are not Exempt Property. "Temecula Public Financing Authority"or"PFA"or"Authority"means the Temecula Public Financing Authority, or its designee. "Undeveloped Property" means all Assessor's Parcels of Taxable Property which are not Developed Property, Approved Property or Provisional Exempt Property. "Unit" means any residential structure. "Zone(s)" means Zone 1, Zone 2, Zone 3 or Zone 4 as geographically identified on the Boundary Map of CFD No. 16-01. "Zone I" means the specific area identified on the Boundary Map as Zone 1 of CFD 16-01. "Zone 2" means the specific area identified on the Boundary Map as Zone 2 of CFD 16-01. "Zone 3" means the specific area identified on the Boundary Map as Zone 3 of CFD 16-01. "Zone 4" means the specific area identified on the Boundary Map as Zone 4 of CFD 16-01. SECTION B CLASSIFICATION OF ASSESSOR'S PARCELS Each Fiscal Year,beginning with Fiscal Year 2016-17,each Assessor's Parcel within CFD No. 16- 01 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 Exempt Property. In addition, each Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property and Provisional Exempt Property shall be classified as being within Zone 1,Zone 2, Zone 3 or Zone 4. If an Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Exempt Property is located within more than one Zone, it shall be deemed to be entirely within the Zone in which the largest portion of its Acreage is located. In addition, each Assessor's Parcel of Developed Property shall ' further be classified as Residential Property, Multifamily Residential Property or Non-Residential Property. Assessor's Parcels of Residential Property shall be further categorized based on the Building Square Footage of each such Assessor's Parcel. Page 5 SECTION C MAXIMUM SPECIAL TAX A I. Developed Proper( The Maximum Special Tax A for each Assessor's Parcel of Residential Property, Multifamily Residential Property or Non-Residential Property in any Fiscal Year shall be the greater of(i)the Assigned Annual Special Tax A or(ii)the Backup Annual Special Tax A. 2. Approved Property. Undeveloped Property, and Provisional Exempt Property The Maximum Special Tax A for each Assessor's Parcel classified as Approved Property, Undeveloped Property, or Provisional Exempt Property in any Fiscal Year shall be the Assigned Annual Special Tax A. SECTION D ASSIGNED ANNUAL SPECIAL TAX A 1. Developed Property Each Fiscal Year, each Assessor's Parcel of Residential Property, Multifamily Residential Property or Non-Residential Property shall be subject to an Assigned Annual Special Tax A. The Assigned Annual Special Tax A applicable to an Assessor's Parcel of Developed Property shall be determined using the Tables below. TABLE 1 ASSIGNED ANNUAL SPECIAL TAX A RATES FOR DEVELOPED PROPERTY WITHIN ZONE 1 Land Use Type Building Square Footage Rate Residential Property Less than 1,900 $2,110 per Unit Residential Property 1,900—2,199 $2,320 per Unit Residential Property 2,200—2,499 $2,670 per Unit Residential Property 2,500—2,799 $2,860 per Unit Residential Property 2,800—3,099 $2,975 per Unit Residential Property 3,100—3,399 $3,115 per Unit Residential Property Greater than 3,399 $3,235 per Unit Multifamily Residential Property N/A $22,941 per Acre Non-Residential Property N/A $22,941 per Acre TABLE 2 ASSIGNED ANNUAL SPECIAL TAX A RATES FOR DEVELOPED PROPERTY WITHIN ZONE 2 ' and Use Type Building Square Foota a Rate Residential Property Less than 4,000 $4,920 per Unit Residential Property 4,000—4,299 $5,185 pa Unit Page 6 Residential Property Greater than 4,299 $5,455 per Unit Multifamily Residential Pro N/A $7,783 per Acre ' Non-Residential Property N/A $7,783 Der Acre TABLE 3 ASSIGNED ANNUAL SPECIAL TAX A RATES FOR DEVELOPED PROPERTY WITHIN ZONE 3 Land Use Type Building Square Footage Rate Residential Property Less than 1,900 $2,110 per Unit Residential Property 1,900 - 2,199 $2,335 per Unit Residential Property Greater than 2,199 $2,665 per Unit Multifamily Residential Property N/A $32,894 per Acre Non-Residential Property N/A $32,894 per Acre TABLE 4 ASSIGNED ANNUAL SPECIAL TAX A RATES FOR DEVELOPED PROPERTY WITHIN ZONE 4 Land Use Type Buildinp Square Footage Rate Residential Property Less than 4,000 $3,235 per Unit Residential Property 4,000 or Greater $3,890 per Unit Multifamily Residential Property N/A $9,121 per Acre ' Non-Residential Property N/A $9,121 per Acre 2. Approved Property, Undeveloped Property and Provisional Exempt Property Each Fiscal Year,each Assessor's Parcel of Approved Property,Undeveloped Property and Provisional Exempt Property shall be subject to an Assigned Annual Special Tax A. The Assigned Annual Special Tax A rate for an Assessor's Parcel classified as Approved Property, Undeveloped Property or Provisional Exempt Property shall be determined pursuant to Table 5 below: TABLE 5 ASSIGNED ANNUAL SPECIAL TAX RATES FOR APPROVED PROPERTY, UNDEVELOPED PROPERTY, AND PROVISIONAL EXEMPT PROPERTY Zone Rate Zone 1 $22,941 per Acre Zone 2 $7,783 per Acre Zone 3 $32,894 per Acre Zone 4 $9,121 per Acre 1 Page 7 SECTION E BACKUP ANNUAL SPECIAL TAX A ' At the time a Final Map is recorded, the CFD Administrator shall determine which Zone the Final Map area lies within and the Backup Annual Special Tax A for all Assessor's Parcels classified or reasonably expected to be classified as Residential Property within such Final Map area shall be determined by multiplying the Maximum Special Tax A rate for Undeveloped Property for the applicable Zone by the total Acreage of Taxable Property, excluding the Provisional Exempt Property Acreage,Non-Residential Property Acreage or Multifamily Residential Property Acreage if any, in such Final Map area and any Acreage reasonably expected to be classified as Exempt Property, and dividing such amount by the total number of such Assessor's Parcels of Residential Property. If the Final Map area described in the preceding paragraph lies within more than one Zone, the Backup Annual Special Tax A for Assessor's Parcels of Residential Property or Assessor's Parcels expected to be classified as Residential Property shall be determined by calculating a Backup Special Tax A rate based upon the weighted average of the Maximum Special Tax A rate for Undeveloped Property for the Zones which the Assessor's Parcel overlaps using the acreage of the Assessor's Parcel that lies within each overlapping Zone and multiplying that weighted average Maximum Special Tax A rate by the total Acreage of the subject Assessor's Parcel. The Backup Annual Special Tax A rate for Multifamily Residential Property or Non-Residential Property shall be its Annual Assigned Special Tax A rate. ' Notwithstanding the foregoing, if Assessor's Parcels which are classified or to be classified as Residential Property,Non-Residential Property or Multifamily Property are subsequently changed by recordation of a lot line adjustment, Final Map amendment, new Final Map or similar instrument, then the Backup Annual Special Tax A shall be recalculated within the area that has been changed to equal the amount of Backup Annual Special Tax A that would have been generated if such change did not take place. SECTION F METHOD OF APPORTIONMENT OF THE ANNUAL SPECIAL TAX A Commencing Fiscal Year 2016-17 and for each subsequent Fiscal Year,the Board of Directors shall levy Annual Special Tax A in accordance with the following steps: Step One: The Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to 1001/o of the applicable Assigned Annual Special Tax A rates in Tables 1, 2, 3 and 4 to satisfy the Special Tax A Requirement. Step Two: If additional moneys are needed to satisfy the Special Tax A Requirement after the first step has been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100%of the applicable Assigned Annual Special Tax A to satisfy the Special Tax A Requirement. ' Step Three: If additional moneys are needed to satisfy the Special Tax A Requirement after the first two steps have been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% of Page 8 the Assigned Annual Special Tax A for Undeveloped Property applicable to each such Assessor's Parcel as needed to satisfy the Special Tax A Requirement. ' Step Four: If additional moneys are needed to satisfy the Special Tax A Requirement after the first three steps have been completed, the Annual Special Tax A on each Assessor's Parcel of Developed Property for which the Maximum Special Tax A is the Backup Annual Special Tax A shall be increased Proportionately from the Assigned Annual Special Tax A up to 100%of the Backup Annual Special Tax A as needed to satisfy the Special Tax A Requirement. Step Five: If additional moneys are needed to satisfy the Special Tax A Requirement after the first four steps have been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Provisional Exempt Property up to 100% of the Assigned Annual Special Tax A applicable to each such Assessor's Parcel as needed to satisfy the Special Tax A Requirement. SECTION G PREPAYMENT OF ANNUAL SPECIAL TAX A The following definitions apply to this Section G: "CFD Public Facilities Amount" means $13,000,000 expressed in 2016 dollars, which shall increase by the Construction Inflation Index on July 1, 2017, and on each July 1 thereafter, or such lower number as(i)shall be determined by the CFD Administrator as sufficient to provide the public ' facilities under the authorized bonding program,or(ii)shall be determined by the Board of Directors concurrently with a covenant that the CFD will not issue any more Bonds. "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 CFD Administrator 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 Amount minus (i) Bond proceeds deposited in Improvement Funds and accounts and (ii) other amounts (special taxes, interest earnings, etc.)allocated to Improvement Funds and accounts that were available to fund such CFD Public Facilities Amount prior to the date of prepayment. "Improvement Fund" means, collectively, an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct public facilities eligible under the Act and any account established prior to the issuance of Bonds for such purpose. "Outstanding Bonds"means all previously issued Bonds,which will remain outstanding after the payment of principal from the amount of Special Tax A that have been levied,excluding Bonds to be ' redeemed at a later date with the proceeds of prior prepayments of Maximum Special Tax A. Prepayment in Full Page 9 The Maximum Special Tax A 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 or Undeveloped Property for which a Building Permit has not been issued, and (iv) Assessor's Parcels of Provisional Exempt Property that are not Exempt Property pursuant to Section M. The Maximum Special Tax A obligation applicable to a Assessor's Parcel may be fully prepaid and the obligation to pay the Special Tax A for such Assessor's Parcel permanently satisfied as described herein;provided that a prepayment may be made only if there are no delinquent Special Tax A 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 A 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 business 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 A delinquencies apply to such Assessor's Parcel. 2. For an Assessor's Parcel of Developed Property, compute the Maximum Special Tax A 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 A 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, Provisional Exempt Property, to be prepaid, compute the Maximum Special Tax A for the Assessor's Parcel. 3. Divide the Maximum Special Tax A derived pursuant to paragraph 2 by the ' total amount of Special Tax A that could be levied at the Maximum Special Tax A for all Assessor's Parcels of Taxable Property based on the applicable Maximum Special Tax A, including for Assessor's Parcels of Approved Page 10 Property or Undeveloped Property for which a Building Permit has been issued, the Maximum Special Tax A for the Assessor's Parcel as though it was already designated as Developed Property,not including any Assessor's Parcels for which the Special Tax A obligation has been previously prepaid. 4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the "Bond Redemption Amount"). 5. Multiply the Bond Redemption Amount by the applicable redemption premium,if any,on the Outstanding Bonds to be redeemed(the"Redemption Premium"). 6. Determine the Future Facilities Costs. 7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor's Parcel (the "Future Facilities Amount"). 8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding ' Bonds on which Bonds can be redeemed from Special Tax prepayments. 9. Determine the Special Tax A 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 Page I I 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 Improvement 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 A prepayments of Outstanding Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax A levy as determined pursuant to ' paragraph 9 above, if applicable, the CFD Administrator shall remove the current Fiscal Year's Special Tax A levy for the Assessor's Parcel from the County tax roll. With respect to any Assessor's Parcel for which the Maximum Special Tax A obligation is prepaid,the Board shall cause a suitable notice to be recorded in compliance with the Act,to indicate the prepayment of Maximum Special Tax A obligation and the release of the Special Tax A lien for the Assessor's Parcel,and the obligation to pay the Special Tax A for such Assessor's Parcel shall cease. Notwithstanding the foregoing,no Special Tax A prepayment shall be allowed unless the amount of Maximum Special Tax A that may be levied on all Assessor's Parcels of Taxable Property,excluding all Provisional Exempt Property and all Assessor's Parcels with delinquent Special Taxes,after the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses. Tenders of Bonds in prepayment of the Maximum Special Tax A obligation may be accepted upon the terms and conditions established by the Board 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 Board. SECTION H PARTIAL PREPAYMENT OF ANNUAL SPECIAL TAX A ' The Maximum Special Tax A 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 shall be modified as provided by the following formula: Page 12 PP =((PE—A) x F) +A 1 These terms have the following meaning: PP = Partial Prepayment PE = the Prepayment Amount calculated according to Section G F=the percent by which the owner of the Assessor's Parcel(s)is partially prepaying the Maximum Special Tax A obligation A= the Administrative Fees and Expenses determined pursuant to Section G The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax A obligation for the Assessor's Parcel shall notify the CFD Administrator of(i)such owner's intent to partially prepay the Maximum Special Tax A obligation,(ii)the percentage of the Maximum Special Tax A obligation such owner wishes to prepay,and(iii)the company or agency that will be acting as the escrow agent, if any. Within 5 business 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 for the Assessor's Parcel. A Partial Prepayment 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. ' With respect to any Assessor's Parcel for which the Maximum Special Tax A obligation is partially prepaid,the CFD Administrator shall(i)distribute the Partial Prepayment as provided in Paragraph 15 of Section G and(ii)indicate in the records of the CFD that there has been a Partial Prepayment for the Assessor's Parcel and that a portion of the Special Tax A obligation equal to the remaining percentage(1.00-F)of Special Tax A obligation will continue on the Assessor's Parcel pursuant to Section F. SECTION I MAXIMUM SPECIAL TAX B 1. Developed Property Maximum Special Tax B Each Fiscal Year,each Assessor's Parcel of Residential Property or Multifamily Residential Property shall be subject to a Maximum Annual Special Tax B. The Maximum Annual Special Tax B applicable to an Assessor's Parcel of Developed Property shall be determined using the Table 6 below. TABLE 6 MAXIMUM SPECIAL TAX B RATES ' FOR DEVELOPED PROPERTY Land Use Type Rate Residential Pro $432 per Unit Page 13 Non-Residential Property $2,766 per Acre Multifamily Residential $2,766 per Acre Property 2. Approved Property, Undeveloped Property and Provisional Exempt Property No Special Tax B shall be levied on Approved Property, Undeveloped Property and Provisional Exempt Property. 3. Increase in the Maximum Special Tax B On each July 1,commencing July 1,2017,the Maximum Special Tax B shall be increased by an amount equal to CPI or two percent(2%),whichever is greater,of the amount in effect for the previous Fiscal Year. SECTION J METHOD OF APPORTIONMENT OF THE ANNUAL SPECIAL TAX B Commencing with Fiscal Year 2016-17 and for each following Fiscal Year,the City shall levy the Special Tax B at up to 100% of the applicable Maximum Special Tax B, Proportionately on each Assessor's Parcel of Developed Property until the amount of Special Tax B equals the Special Tax B Requirement. ' SECTION K PREPAYMENT OF ANNUAL SPECIAL TAX B No prepayments of Annual Special Tax B are permitted. SECTION L TERM OF THE SPECIAL TAX A AND SPECIAL TAX B For each Fiscal Year that any Bonds are outstanding the Annual Special Tax A shall be levied on all Assessor's Parcels subject to the Annual Special Tax A. If any delinquent Annual Special Tax A amounts remain uncollected prior to or after all Bonds are retired,the Annual Special Tax A may be levied to the extent necessary to reimburse CFD 16-01 for uncollected Annual Special Tax A amounts associated with the levy of such Annual Special Tax A amounts,but not later than the 2061- 62 Fiscal Year. For each Fiscal Year, Special Tax B shall be levied in perpetuity as long as the Services are being provided. SECTION M EXEMPT PROPERTY ' The CFD Administrator shall classify as Exempt Property within the applicable Zone,(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 Page 14 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) other types of public uses determined by the CFD Administrator. The CFD Administrator shall classify such Assessor's Parcels as Exempt Property in the chronological order in which property becomes Exempt. Notwithstanding the foregoing,the CFD Administrator for purposes of levying the Special Tax shall not classify an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property within the applicable Zone to less than the Acreage amounts listed in Table 7 below. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property within the applicable Zone to less than the Acreage amounts listed in Table 7 will be classified as Provisional Exempt Property, and will be subject to the levy of Special Tax pursuant to Step Five in Section F. TABLE 7 MINIMUM TAXABLE ACRES Zone Acres Zone 1 116.64 Zone 2 52.65 ' Zone 3 9.65 Zone 4 22.54 SECTION N APPEALS AND INTERPRETATIONS Any property owner claiming that the amount or application of the Annual Special Tax A or Annual Special Tax B is not correct may file a written notice of appeal with the CFD Administrator not later than twelve months after having paid the first installment of the Special Tax A or Annual Special Tax B that is disputed. The CFD Administrator of CFD No. 16-01 shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Annual Special Tax A or Annual Special Tax B, and rule on the appeal. If the CFD Administrator's decision requires that the Annual Special Tax A or Annual Special Tax B for an Assessor's Parcel be modified or changed in favor of the property owner,a cash refund shall not be made(except for the last year of levy in the case of the Annual Special Tax A),but an adjustment shall be made to the Annual Special Tax A or Annual Special Tax B on that Assessor's Parcel in the subsequent Fiscal Year(s). The Board of Directors may interpret this Rate and Method of Apportionment of Annual Special Tax A and Annual Special Tax B for purposes of clarifying any ambiguity and make determinations relative to the amount of Administrative Expenses. ' SECTION O MANNER OF COLLECTION Page 15 The Annual Special Tax A and Annual Special Tax B shall be collected in the same manner and at the same time as ordinary ad valorem property taxes,provided,however,that CFD 16-01 may collect ' the Annual Special Tax A and Annual Special Tax B at a different time or in a different manner if necessary to meet its financial obligations. 1 Page 16 EXHIBIT C ' TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) NOTICE OF PUBLIC HEARING Notice is hereby given that the Board of Directors of the Temecula Public Financing Authority will conduct a public hearing on Tuesday, April 26, 2016 at 7:00 p.m. or as soon thereafter as practicable, in the Temecula City Council chambers located at 41000 Main Street, Temecula, California, to consider the following: INTENT TO FORM TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO 16-01 (RORIPAUGH RANCH PHASE 2) On March 22, 2016, the Board of Director's of the Temecula Public Financing Authority adopted a Resolution entitled "A Resolution of the Board of Directors of the Temecula Public Financing Authority Declaring Its Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes Therein — Roripaugh Ranch Phase 2" (the "Resolution of Intention"). Reference is hereby made to the Resolution of Intention on file in the office of the Secretary of the Temecula Public Financing Authority for further particulars. ' In the Resolution of Intention, the Board of Directors declared its intention to form the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) to fund costs of prepaying certain special taxes, and to fund costs of certain public improvements and municipal services identified in an exhibit to the Resolution of Intention. The proposed boundaries of the community facilities district were identified, and the Resolution of Intention identified a proposed special tax to be levied on real property to be included in the community facilities district to pay for costs of prepaying certain special taxes, and to fund costs of the public improvements and the municipal services, and/or to pay debt service on bonds to be issued, in a principal amount not to exceed $60,000,000, for the community facilities district to finance costs of prepaying certain special taxes and of costs of the public improvements. In the Resolution of Intention, the Board of Directors provided that the levy of the special tax will be subject to a mailed ballot election among the landowners in the community facilities district. The Board of Directors authorized the Executive Director of the Temecula Public Financing Authority to execute a joint community facilities agreement with the City of Temecula, the Temecula Community Services District, the County of Riverside and any other public entity that will own and/or operate any of the public improvements, or that will provide any of the services, to be funded by the community facilities district, ordered the Director of Public Works of the City to prepare a report on the community facilities district, and called for a public hearing on the community facilities district. At the hearing, the testimony of all interested persons or taxpayers for or against the establishment of the community facilities district, the extent of the community facilities district or the prepayment of the special taxes and the furnishing of specified types of public improvements and services will be heard. Any person interested may file a protest in writing with the Secretary. If fifty percent or more of the registered voters, or six registered voters, whichever is more, residing in the territory proposed to be included in the community facilities district, or the owners of one-half or more of ' the area of land in the territory proposed to be included in the community facilities district and not exempt from the special tax file written protests against the establishment of the community facilities district and the protests are not withdrawn to reduce the value of the protests to less than a majority, the Board of C-1 Directors of the Authority shall take no further action to establish the community facilities district or ' authorize the special taxes for a period of one year from the date of the decision of the Board of Directors, and if the majority protests of the registered voters or the landowners are only against the prepayment of special taxes or the furnishing of a type or types of public improvements or services within the community facilities district, or against levying a specified special tax, that prepayment, those types of public improvements or services, or the specified special tax, will be eliminated from the proceedings to form the community facilities district. Any person interested in these matters is invited to attend and present testimony either for or against the above item. If you challenge the proposed action in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice or in written correspondence delivered to the Board of Directors of the Authority at or prior to the public hearing. /s/ Randi Johl Secretary, Temecula Public Financing Authority 1 1 C-2 SHEET 1 OF 1 SHEET PROPOSED BOUNDARY MAP FIIEII IN THE OFFICE OF THE SECRETARY OF THE TEMECULA PUBLIC FINANCING AUTHORITY TEMECULA M c FINANCING AUTIORm THIS COMMUNITY FACILITIES DISTRICT NO. 16-01 MY OF 2016. (RORIPAUGH RANCH PHASE 2), COUNTY OF RIVERSIDE, STATE OF CALIFORNIA SECRETARY TE"ECUA PUBLIC FINANCING AUTHORITY ZONE 1 APN's ZONE J APN I HERESY CERTIFY THAT THE WITHIN MAP SHOWING 964-160-004 964A60-009 PROPOSED TEMECULA PUSUC FINANCING AUTHORm COMMUNITY FACILITIES DISTRICT NO. 16-01 _ 964-180-005 (RMPAUGH RANCH PHASE 2),COUNTY OF RIVERSIDE, -- 964-180-017 ZONE 4 APN's STATE OF r•„FORNU,WAS APPROVED BY THE BOARD 964-180-018 OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING 964-180-020 964-460-003 AlIT1K)0.1TY AT A REGULAR MEETING THEREOF 964-460-005 Q�� — 964-180-023 20—w,ITS RESoUInON j 964-460-007 Tm� 964-180-024 964-460-008 LD 964-180-025 964-460-017 SECRETARY 964-460-018 TEMECUU FUBLIC FINANCING AUTHORITY ZONE 2 APN's 964-460-019 RECORDED THIS _ DAY OF 20 964-180-019 AT THE HOUR OF_O'CLOCK_M M BOOK_ 964-180-026 PAGE_OF MAPS OF ASSESSMENT AND CDMMUNITY -_ 964-160-027 FACILITIES DISTRICTS IN THE OFFICE OF THE COUNTY RECORDER, IN THE COUNTY Of RIVERSIDE, STATE OF GUFgtNU1 mil°}n N PET9l ALDMM,ASSESSOR,COUNTY CLERK,RECORDER W Y rMm BY DEPUTY LEGEND NOT�rA E !-N COMMUNITY FACILITIES DISTRICT BOUNDARY PARCEL LINE .�., .....” 100(-)00(-)20( ASSESSOR'S PARCEL NUMBER " N '+ Y ® ZONE 1 " .E.. rM0 \ ® ZONE 2 ® ZONE4 THIS BOY. Y CORREC1Y sNOws THE LOT OR NIRCfl WEBB °nDIwr111U DWTHRNTT41tsC Nl NE LINES AND FKllfI1E5 DISTRILT FOR REARS CONCERNING T LINES ANO NOT TO SCALE 'N O C ATE 9 DIMENSIONS A LOTS OF YEAR REFER 01 THE COUNTY ASSESSOR'S HIPS FOP f15G4 YFA2 10151016. W.O. 15 0019