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Resolution No. 06-C039
0 0 RESOLUTION NO. 06-C39 RESOLUTION OF THE CITY COUNCIL OF THE CITY. OF AZUSA ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) OF THE CITY OF AZUSA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IMPROVEMENT AREA NOS.1 AND 2 THEREOF WHEREAS, the City Council (the "City Council") of the City of Azusa (the "City") has heretofore adopted Resolution No. 06-C23. stating that a proposed community facilities district to be known as "Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa, County of Los Angeles, State of Califomia" (the "District"), is proposed to be established pursuant to Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code, commonly known as the "Mello -Roos Community Facilities Act of 1982" (the "Act"), establishing two improvements areas, Improvement Area No. 1 and Improvement Area No. 2 (each individually an "Improvement Area' and collectively the "Improvement Areas') within the District and fixing the time and place for a public hearing on the establishment of the District; and WHEREAS, the District is proposed to be formed for the purposes of financing construction, acquisition, fiunishing and equipping of public facilities to be owned by the City and other public agencies and certain other services to be provided by the City for police protection, fire protection and suppression, park, parkway and open space maintenance and other services which are necessary to meet increased demands placed upon the City as a result of the development of real property within the District described in Exhibit A attached hereto and hereby incorporated; and WHEREAS, within each Improvement Area, the City Council desires to levy special taxes to finance police protection, fire protection and suppression, park, parkway and open space maintenance and other services (the "Services") and levy special taxes and issue bonds of the District, the proceeds of which will be used to (a) finance the cost of acquisition, construction, furnishing equipping and maintenance of public facilities listed in Exhibit B hereto (the "Facilities"); and (b) paying the debt service on the bonds issued; and (c) paying the incidental expenses associated with the creation of the proposed community facilities district, issuance of bonds thereof, fund a reserve fund for the bonds, the payment of costs of issuance of the bonds, the determination of the amount and collection of the special taxes, and the payment of special taxes, and costs otherwise incurred in order to carry out the authorized purposes of the District; and WHEREAS, the bonds of each Improvement Area will be repaid from special taxes to be levied on the real property within the applicable linprovement Area of the District, as more fully described herein; WHEREAS, the District has entered into joint community facilities agreements with Azusa Unified School District (the "School District"), the Los Angeles RVPUB\BSK[NNER\713166.1 -t- to Pasadena Metro Blue Line Construction Authority (dba Metro Gold Line Foothill Extension Construction Authority), and the City of Glendora pursuant to Sections 53316.2, 53316.4 and 53316.6 of the California Government Code which provide for the financing of the Facilities with the proceeds of the issuance and sale of the bonds of the District and the levy of special taxes; and WHEREAS, pursuant to Section 53316.2 of the California Government Code, such joint community facilities agreements must be approved by adoption by the City Council and by each of the governing boards of the School District, Los Angeles to Pasadena Metro Blue Line Construction Authority and City of Glendora of a resolution declaring that such agreement will be beneficial to the residents of the City, the Los Angeles to Pasadena Metro Blue Line Construction Authority and the City of Glendora; and WHEREAS, the City Council has determined that it will be in the public interest and beneficial to the future residents of the District that it be authorized to incur bonded indebtedness to finance the Facilities; and WHEREAS, notice was published and mailed to the owners of all of the property in the District as required by law relative to the intention of the City Council to establish the District, the levy of special taxes therein, the provision of the Facilities and Services therein and the incurring of a bonded indebtedness by the District, and of the time and place of the public hearing; and WHEREAS, on June 5, 2006, at the time and place specified in the published and mailed notices, the City Council conducted a public hearing as required by law relative to the establishment of the District, the levy of special taxes therein, the provision of public facilities therein, and the incurring of a bonded indebtedness by the District; and WHEREAS, prior to the commencement of the hearing there was filed with the City Council a report (the 'Report") containing a description of the public facilities and services required to meet the needs of the District, and an estimate of the cost of financing such facilities and services, as required by Section 53321.5 of the California Government Code; and WHEREAS, at the public hearing all persons desiring to be heard on all matters pertaining to the establishment of the District, the levy of the special taxes, the provision of the Facilities and Services therein, and the incurring of the bonded indebtedness therefor were heard, and a full and fair hearing was held; and WHEREAS, at the public hearing evidence was presented to the City Council on the matters before it; and the City Council at the conclusion of the hearing was fully advised as to all matters relating to the establishment of. the District and Improvement Areas therein, the levy of the special taxes, the provision of the Facilities and Services and the incurrence of the bonded indebtedness therefor; and RVPUB\13SKU4NER\711166.1 -2- WHEREAS, the City Council may therefore proceed to establish the District; and WHEREAS, the City Clerk has advised the City Council that she has received a statement from the Registrar of Voters of the County of Los Angeles that there are no persons registered to vote in the territory of the District; NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF AZUSA AS FOLLOWS: Section 1. Fes. The City Council finds as follows: (a) All of the preceding recitals are true and correct; (b) On April 17, 2006, the City Council adopted Resolution No. 06- C23 which, pursuant to Section 53350 of the California Government Code, designated separate improvement areas for the separate portions of the property to be included within the boundaries of the District (i.e., Improvement Area No. 1 and Improvement Area No. 2) so that each property included within each Improvement Area will be responsible only for the payment of special taxes within such Improvement Area which will be levied for the payment of principal of and interest on the bonds of the District issued within the applicable Improvement Area which will be issued and sold to provide the Facilities for such portion of the property included within the Improvement Area; (c) On June 5, 2006, pursuant to notice thereof duly given as provided by law, the City Council conducted a public hearing with respect to the establishment of the District, the incurrence of a bonded indebtedness by and for the District, the annual levy of specified special taxes on the taxable property within the Improvement Areas of the District to pay principal of and interest on bonds to be issued by and for the District to finance the Facilities and Services and other obligations which are described in Section 3 hereof; (d) The boundary map of the District was recorded on April 26, 2006, pursuant to Sections 3111 and 3113 of the California Streets and Highways Code, at page 91 in Book 191 of Maps of Assessment and Community Facilities Districts, and as Instrument No. 06-0016873, in the official records of the County of Los Angeles. (e) All prior proceedings with respect to the establishment of the District prior to and during the hearing with respect to the establishment of the District which was conducted by the City Council on June 5, 2006, were valid and in conformity with the requirements of the Act; (f) No written protests were received at or prior to the time of the hearing, against the establishment of the District, or the levying of the special taxes, or the incurrence of a bonded indebtedness by the District, and the special taxes have, therefore, not been eliminated by majority protest pursuant to Section 53324 of the California Government Code; RVPUB\BSKINNER\713166.1 -3- (§ 0 0 (g) The City Council is, therefore; authorized to adopt a resolution of formation pursuant to Section 53325.1 of the California Goverment Code for the establishment of Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa, County of Los Angeles, State of California, and Improvement Area Nos. 1 and 2 and the District should be established; and (h) Twelve (12) persons have not been registered to. vote within the territory of the District for each of the 90 days preceding the close of the protest hearing on June 5, 2006, and pursuant to Section 53326 of the California Government Code, the vote in the consolidated special elections provided for in Section 12 hereof shall, therefore, be by the landowners of each Improvement Area of the District whose property would be subject to the special taxes if they were levied at the time of the election, and each landowner shall have one vote for each acre, or portion thereof, which he or she owns within each. Improvement Area of the District which would be subject to the proposed special taxes if they were levied at the time of the election. Section 2. Establishment of District and Improvement Areas Therein. Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa, County of Los Angeles, State of California, is hereby established and two Improvement Areas are hereby designated within the District as "Improvement Area No. 1" and "Improvement Areas No. 2." The boundaries of the District and the Improvement Areas therein are set forth and shown on the map entitled "Boundaries of Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa, County of Los Angeles, State of California," (the "Boundary Map's which is on file with the City Clerk, and those boundaries are hereby established. Section 3. Types of Facilities, Incidental Expenses. The types of public facilities and services proposed to be provided within and financed by each of Improvement Area No. 1 and Improvement Area No. 2 the District are set forth on Exhibit 'B" attached hereto and incorporated herein. Section 4. pcial Taxes. Except where funds are otherwise available, special taxes in each Improvement Area sufficient to pay costs for additional Services, to pay directly for the Facilities, and to pay the principal of and interest on the bonds of the respective Improvement Area of the District and the annual administrative expenses of the City and the District in determining, apportioning, levying and collecting such special taxes, and in paying the principal of and interest on such bonds, and the costs of registering, exchanging and transferring such bonds, secured by the recordation of a continuing lien against all taxable or nonexempt property in the District, and maintaining a reserve fund for such bonds, and paying any amounts that must be paid to the United States in order to preserve the tax-exempt status of such bonds shall be annually levied within the District. The rates and method of apportionment of said special taxes for each Improvement Area shall be as set forth in Exhibit "C" attached hereto .and by this reference made a part hereof. RVPU619SKWNERg13166.1 .4 0 0 Pursuant to Section 53340 of the California Government Code, said special taxes shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the California Streets and Highways Code, a continuing lien to secure each levy of the special taxes shall attach to all nonexempt real property in the District and that lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien cancelled in accordance with law or until collection of the special taxes ceases. The City Manager, located at 213 E. Foothill Boulevard, Azusa, CA 91702, telephone number (626) 812-5291, is designated as the office responsible for preparing annually a current roll of special tax levy obligations by assessor's parcel numbers, and for estimating future special tax levies pursuant to Section 53340.2 of the California Government Code. Section 5. Exempt Propertv. Pursuant to Section 53340 of the California Government Code, and except as provided in Section 53317.3 of said Code, properties of entities of the state, federal, and local governments shall be exempt from the levy of special taxes. In the event that a portion of the property within the District shall for any reason be or become exempt, wholly or partially, from the apportionment and levy of the special taxes pursuant to Exhibit "A" hereto, the City Council shall, on behalf of the District, increase the amount of special taxes to the extent necessary and permitted by law and these proceedings to be levied upon the remaining property within the District which is not exempt in order to provide the required debt service payments on any outstanding bonds of the District, or to prevent the District from defaulting on any of its other obligations or liabilities. Section 6. Necessity. The Facilities and Services are necessary to meet increased demands placed upon the City as a result of new development occurring within the boundaries of the District. Section 7. Bonded Indebtedness. The District shall be authorized to incur bonded indebtedness in an amount not to exceed $110,000,000 which are allocated to the finencing.o£the Facilities for the Improvement Areas as follows: Improvement Area No. 1 $80,000,000 Improvement Area No. 2 $30,000,000 Pursuant to Section 53350 of the California Government Code, all proceedings for purposes of a bond election with respect to the portion of the bonded indebtedness allocated above to each Improvement Area and for the purpose of levying special taxes for the payment of the principal of and interest on the bonds which may be issued and sold to represent such bonded indebtedness and to finance the design, construction and acquisition of the Facilities for each Improvement Area shall apply only to the applicable Improvement Area. RVPUB\BSKENMRk713166.1 -5- Section 8. Report. The Report is hereby approved and is made a part of the record of the public hearing regarding the formation of the District, and is ordered to be kept on file with the City Clerk as part of the transcript of these proceedings. Section 9. Annexation of Temtorv. Other property within the boundaries of the City may be annexed into the District upon the condition that parcels within that territory may be annexed only with the unanimous approval of the owner or owners of each parcel at the time that parcel or those parcels are annexed. Section 10. Repayment of Funds Advanced or Work-in-Kind. Pursuant to Section 53314.9 of the California Goverment Code, the City Council proposes to accept advances of funds or work-in-kind from private persons or private entities and to provide, by resolution, for the use of those funds or that work-in-kind for any authorized purpose, including but not limited to, paying any costs incurred by the City in creating the District, and to enter into agreements, by resolution, with the persons or entities advancing the funds or work-in-kind to repay funds advanced, or to reimburse the persons or entities for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council. Section 11. Prohibition of Owner Contracts. Pursuant to Section 53329.5 of the California Government Code, the City Council finds that the public interest will not be served by allowing the owners of property within. the District to enter into a contract in accordance with subdivision (a) of that section, and that such owners shall not be permitted to elect to perform the work and enter into a written contract with the City Council for the construction of the Facilities pursuant to Section 53329.5 of the California Government Code. Section 12. Description of Voting Procedures. The voting procedures to be followed in conducting the consolidated special elections on (i) the proposition of the District to incur a bonded indebtedness in an amount not to exceed $80,000,000 within Improvement Area No. 1 and in an aggregate principal amount within the District not to exceed $110,000,000, (ii) the proposition of the District to incur a bonded indebtedness in an amount not to exceed $30,000,000 within Improvement Area No. 2 and in an aggregate principal amount within the District not to exceed $110,000,000, (iii) the proposition with respect to the levy of special taxes on the land within improvement Area No. 1 of the District to pay the principal of and interest on the bonds thereof to finance the Facilities and the levy of special taxes to pay for the Facilities and the Services, (iv) the proposition with respect to the levy of special taxes on the land within Improvement Area No. 2 of the District to pay the principal of and interest on the bonds thereof to finance the Facilities and the levy of special taxes to pay for the 'Facilities and the Services, (v) the proposition with respect to the establishment of an appropriations limit for Improvement Area No. 1 in the amount of $15,000,000, and (vi) the proposition with respect to the establishment of an appropriations limit for Improvement Area No. 2 in the amount of $15,000,000, if the community facilities district is established and such consolidated special elections (the 'consolidated special elections") are held, shall be as follows: RVPUB\BSKINNER\713166.1 -6- 0 0 (a) If at least twelve (12) persons have been registered to vote within the territory of either Improvement Area for each of the ninety (90) days preceding the close of the public or protest hearing (the "protest hearing'), the vote in the consolidated special.elections shall be by the registered voters of the applicable Improvement Area with each voter having one vote. In that event, the consolidated special elections shall be conducted by the City Clerk, and shall be held on a date selected by the City Council in conformance with the provisions of Section 53326 of the California Government Code and pursuant to the provisions of the California Elections Code governing elections of cities, insofar as they may be applicable, and pursuant to said Section 53326 the ballots for the consolidated special elections shall be distributed to the qualified electors of the applicable Improvement Area by mail with return postage prepaid or by personal service, and the consolidated special elections shall be conducted as a mail ballot election. (b) If twelve (12) persons have not been registered to vote within the territory of an Improvement Area for each of the ninety (90) days preceding the close of the protest hearing, and pursuant to Section 53326 of the California Government Code, the vote is therefore to be by the landowners of the applicable Improvement Area with each landowner within the Improvement Area of record at the close of the protest hearing having one vote for each acre or portion of an acre of land that he or she owns within the Improvement Area the consolidated special elections shall be conducted by the City Clerk pursuant to Section 53326 of the California Government Code. Section 13. Tender of Bonds. This City Council hereby reserves the right, on behalf of the District to accept tenders of bonds in full or partial payment of special taxes to be levied within any Improvement Area pursuant to the Act. The procedures for conducting the consolidated special elections, if they are held, may be determined as the City Council may determine to be necessary or desirable by a .resolution subsequently adopted by the City Council. RvPUB\13SKDMR\713166.1 .-7- 0 0 PASSED, APPROVED PTED this 5th day.of June, 2006. Diane Chagnon U Mayor ATTEST: ra Mendoza City Clerk RVPUB\BSKINNRR1713166.1 -8- Q- 0 0 CERTIFICATION I, Vera Mendoza, City Clerk of the City of Azusa do hereby certify that the foregoing resolution no. 06-C39 was adopted by the City Council of the City of Azusa at a regular meeting thereof held on the 5th day of June, 2006, by the following vote of the Council: AYES: HARDISON, CARRELLO, ROCHA, HANKS, CHAGNON NOES: NONE ABSENT: NONE ABSTAINED: NONE IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Azusa this 5a' day of June, 2006. Vera Mendoza City Clerk (SEAL) RVPUBTSKINNERM3166.1 -9- 0 0 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I, Vera Mendoza, City Clerk of the City of Azusa, hereby certify this to be a true and correct copy of Resolution Number 06-C39. Witness my hand and the seal of the City of Azusa this 5a' day of June, 2006. Vera Mendoza City Clerk 0 0 EXHIBIT A LEGAL DESCRIPTION CITY OF AZUSA COMMUNITY FACILTPIES DISTRICT NO. 2005-1 (ROSEDALE) COUNTY OF LOS ANGELES City of Azusa Community Facilities District No. 2005-1 (Rosedale) shall consist of Assessor Parcel Numbers: 8608-003-001 8625-005-019 8608-003-002 8625-008-001 8608-003-003 8625-008-005 8608-003-005 8625-009-011 8608-003-006 8625-009-012 8608-003-903 8625-010-008 8608-003-904 8625-029-005 8625-001-001 8625-029-006 8625-001-003 8684-022-012 8625-004-129 8684-024-041 8625-004 130 8684-024-042, 8625-005-014 8684-024-043 8625-005-018 8684 024 902 Improvement Area No. 1 of City of Azusa Community Facilities District No. 2005-1 (Rosedale) shall consist of Lots 1— 20, 22 — 37, 40 and 45 of Tract No. 062150. Improvement Area No. 2 of City of Azusa Community Facilities District No. 2005-1 (Rosedale) shall consist of Lots 42 — 44 and 46 — 49 of Tract No. 062150. RVPl3B\BSKINNER\713166.1 A-1 SHEET 1 OF 2 CITY OF AZUSA COMMUNITY FACILITIES DISTRICT N0. 2005-1 (ROSEDALE) COUNTY OF LOS ANGELES STATE OF CALIFORNIA 1) Filed in the office of the City .Clark of the City of Azusa this _ day of , 2006. Vera Mendoza City Clerk, City of Azusa (2) I hereby certify that the within map showing the boundaries of City of -Azusa Community Facilities District No. 2006-1 (Rosedale), County of Los Angeles,, State of California, was approved by the City Council of the City of Azusa at a regular meeting thereof, 7)e1d on this day of , 2006, by its ResolutiT on No, Fiscal Year 2006-06 A88e99or PBrcel Vera Mendoza Numbers within CFD No. 2005-1 Boundaries: City Clark, City of Azusa 5808-008-001 8625.006-019 6608-008-0 a626-008-001 5808-009-008 5826-008-005 8808-008-008 8625.009-011 8808-008-006 8625-009-012 (par 8808-008-909 8828-010-008 (par 8608-008-908 -001-001 (portion) 8625-029.008 (par -001-002 (portion) 8626-029-006 (Por 8664-022-012 (par -001-009 (Portion) 8884-024-041 (Por -004-128 (portion) 8684-0244042 (par -004-180 (portion) -' _-- --. 8854-02+4-049 (par PMWed by Owl rwM;q k A.,.ciol>. mc. (8) Filed this — day of , 2008, at the hour of _ o'clock . m, in Book. of Nape of ASseesment and Community Facilities Districts at .Page and as Ithe 'nstrof-rice of the ument NO.in in the County of Los Angeles, sinof California. Canny S..MOCormack Registrar-Recorder/County Clerk, County of Los Angeles By Deputy Fee 0 • SHEET 2 OF 2 CITY OF AZUSA COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) COUNTY OF LOS ANGELES STATE OF CALIFORNIA _W� �rd Wd rr� i eefereme 1p hem} made to the Awommor mW Of tft CMMW or Lee Aresua and to Tract map No. awso recorded on December 7. 2006 With the Im N,aalaa • Ccurtty eeeletror-seea'der in same 1911 and at Pain 2e thrcuab o for a deacription of the 111w end dLeen vLone or paw parcou- 0 Ll LEGEND I v a,xmalaelaa or Ctty of aw.a r...r.. OoammLt7 F:al11t1u atmtrlct Mo. 2oc6-1 ploeadate�l�Lase ....n,..s ua' Anps7.a/ 0c16�VS r� tll ,m• Lot lhaeen at Treat 069160 AI. Improvement Area No. i and Zone 1 O Lots from Tract No. 062150: 12, 1, a through 7, 9 through 10, 14 through 19, 28 through 87. , L Improvement Area No. 1 and Zone 2 'Lots from Tract No. 062150: 8, 19, 20, 22, 40, 45. Improvement Area No. 2 and Zone 1 Lots from Tract No. 062150: ! ! ! 42, 43, 44, 46, 47, 49. Improvement Area No. 2 and Zone 2 N Lots from Tract No. 062150: , 49. eefereme 1p hem} made to the Awommor mW Of tft CMMW or Lee Aresua and to Tract map No. awso recorded on December 7. 2006 With the Im N,aalaa • Ccurtty eeeletror-seea'der in same 1911 and at Pain 2e thrcuab o for a deacription of the 111w end dLeen vLone or paw parcou- 0 Ll • . • CITY OF AZUSA COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) LIST OF FACILITIES AND SERVICES I. Facilities authorized to be financed by each of Improvement Area No. 1 and Improvement Area No. 2 of City of Azusa Community Facilities District No. 2005-1 (Rosedale) include all of the following: City of Azusa (a) Street and bridge improvements including costs of condemnation, removal, demolition, grading, paving, curbs and gutters, sidewalks, street lights, parkways, medians and landscaping related thereto; (b) Storm drains, sewer, water reservoirs, drainage channels and pumping facilities; (c) Park improvements including costs of acquisition and construction on parks, furnishings and equipment (including landscaping); (d) In -tract improvements; (e) Dry utility improvements; f) Site grading and excavation/clearing and grubbing; (g) Street signal ization and signage, including traffic mitigation fees; (h) Land, rights-of-way and easements necessary for any of the facilities specified in paragraphs (a) through (g) above; (i) Plan check and inspection fees; 0) Construction management fee in an amount not to exceed five percent (5%) of the total cost of improvement; and (k) The incidental expenses which will be incurred are: (i) the cost of engineering, planning and designing such facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the creation of the proposed community facilities district, issuance of the bonds thereof, the determination of the amount of and collection of taxes, the payment of taxes, and costs otherwise incurred in order to carry out the authorized purposes of the community facilities district, and (iii) any other expenses incidental to the construction, acquisition, completion, and inspection of such facilities. RVPUB\BSKINNER\713166.1 - B-1 0 Azusa Unified School District (a) Public school facilities, including, but not limited to, permanent, temporary and portable classrooms, and furniture, fixtures and equipment; (b) Park land and facilities; including landscaping; (c) Other facilities to be owned, operated or maintained by the School District; . (d) Land, rights-of-way and easements necessary for the school facilities and joint use park site specified in paragraphs (a) above; (e) Plan check and inspection fees; (f) Construction management fee in an amount not to exceed five percent (5%). of the total cost of improvement; and (g) The incidental expenses which will be incurred are: (i) the cost of engineering, planning and designing such facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the creation of the proposed community facilities district, issuance of the bonds thereof, the determination of the amount of and collection of taxes, the payment of taxes, and costs otherwise incurred in order to carry out the authorized purposes of the community facilities district, and (iii) any other expenses incidental to the construction, acquisition, completion, and inspection of such school facilities. Los Angeles to Pasadena Metro Blue Line Construction Authority (dba Metro Gold Line Foothill Extension Construction Authority) (a) Railroad improvements, including relocation of railroad tracks; (b) Bridge and overcrossing/undercrossing improvements; (c) Land, rights-of-way and easements necessary for the railroad improvements specified in paragraphs (a) above; facilities; (d) Street, public roadways, sidewalks, curbs, gutters and appurtenant (e) Plan check and inspection fees; (f) Construction management fee in an amount not to exceed five percent (5"/0) of the total cost of improvement; and (g) The incidental expenses which will be incurred are: (i) the cost of engineering, planning and designing such facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the creation of the proposed community facilities district, issuance of the bonds thereof, the determination of the amount of and collection of taxes, the RVPUB\BSKiNNERM3166.1 B-2 0 0 payment of taxes, and costs otherwise incurred in order to carry out the authorized purposes of the community facilities district, and (iii) any other expenses incidental to the construction, acquisition, completion, and inspection of such improvements. City of Glendora (a) Street improvements, including costs of condemnation, removal demolition, grading, paving curbs and gutters, sidewalks, street lights, parkways, and medians and landscaping related thereto; applicable; (b) Storm drains, and drainage channels including landscaping, if (c) Water and sewer improvements; (d) Street signalization and signage, including traffic fees; (e) Land, rights-of-way and easements necessary for any of the facilities specified in paragraphs (a) through (c) above; (f) Plan check and inspection fees; (g) Construction management fee in an amount not to exceed five percent (51/o) of the total cost of improvement; and (h) The incidental expenses which will be incurred are: (i) the cost of engineering, planning and designing such facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the creation of the proposed community facilities district, issuance of the bonds thereof, the determination of the amount of and collection of taxes, the payment of taxes; and costs otherwise incurred in order to carry out the authorized purposes of the community facilities district, and (iii) any other expenses incidental to the construction, acquisition, completion, and inspection of such facilities. II. Services authorized to be financed by the District include, but are not limited to, police protection, fire protection and suppression services, maintenance of park, parkways and open space, and any other services permitted to be financed pursuant to the Act. RVPUB\13SKINNER\713166.1 B-3 CITY OF AZUSA COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR IMPROVEMENT AREA NO.1 RVPUB\BSKINNER\713166.1 G1 RATE AND METHOD OF APPORTIONMENT FOR IMPROVEMENT AREA NO.1 OF CITY OF AZUSA COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) Special Taxes as hereinafter defined shall be levied on all Assessor's Parcels in Improvement Area No. l CIA No. 11 of the City of Azusa Community Facilities District No. 2005-1(Rosedale) ("CFD No.. 2005-1 ") and collected each Fiscal Year commencing in Fiscal Year 2006-2007, in an amount determined by the Council through the application of the appropriate Special Tax for "Developed Property," "Other Taxable Property," and "Undeveloped Property" as described below.. All of the real property in IA No. 1, 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. This Rate and Method of Apportionment employs terms defined below and terms defined in the Rate and Method of Apportionment for Improvement Area No. 2. When necessary, terms defined in the latter shall be distinguished from terms defined in the former by including the words "IA No. 2" prior to the defined term. The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or otherrecorded County parcel map. "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 following actual or reasonably estimated costs directly related to the administration of IA No. 1 and each Zone therein: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County or otherwise); the costs ofremittingthe Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge ofthe duties required of it under the Indenture; the costs to the City, IA No. I or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, IA No. I or any designee thereof of complying with City, IA No. l or obligatedpersons disclosure requirements associated with applicable federal and state securities laws and ofthe Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes or the Bonds; the costs of the City, IA No. 1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of fimds from an escrow account; that portion of the City's overhead and staff time related to the administration oflA No. 1; and the City's third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or IA No. l for any other administrative purposes City —0f Awsa AprU 13, 2006 M No. 1 of CFD No. 2005-1(Posedale) Y - Page I of IA No. 1, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the Assessor ofthe County designating parcels by Assessor's Parcel number. "Assigned Special Tax A" means the Special Tax A for each Land Use Class of Developed property within IA No. 1, as determined in accordance with Section C.1 below. "Backup Special Tax All means the Special Tax A applicable to each Assessor's Parcel of Developed Property within IA No. 1, as determined in accordance with Section C.1 below. "Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by IA No. 1 under the Act. "Builder" means an entity which owns a residential dwelling unit immediately prior to the issuance of a Certificate of Occupancy, and then enters into a contract to sell that dwelling unit for its Value to an Original Homeowner. "Certificate of Occupancy" means a document issued by the Citywhich permits the initial habitation of a newly constructed residential dwelling unit. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement for Facilities and the Special Tax Requirement for Services, and providing for the levy and collection of the Special Taxes. "CFD No. 2005-1" means City of Azusa Community Facilities District No. 2005-1 (Rosedale). "City" means the City of Azusa. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2005-1. "County" means the County of Los Angeles. "Developed Property" means, for each Fiscal Year, all Taxable Property, exclusive of Taxable Property Owner Association Property, or Taxable Public Property, for which a building permit fornew construction was issued after January 1, 2006 and as of May 1 ofthe previous Fiscal Year. "Final Map" means (i) a final trap, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots or parcels for which residential building permits may be issued, or (ii) for Crry of Azusa Apr1113, 2006 U No. l of CFD Na 2005-1(Rosedale) Page 2 0 0 condominiums, a final map approved by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 creating such individual lots or parcels. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Improvement Area No. 1" or "IA No. l" means Improvement Area No. 1 of CFD No. 2005-1, as identified on the boundary map for CFD No. 2005-1, and includes each Zone therein. "Improvement Area No. 2" or "IA No. 2" means Improvement Area No. 2 of CFD No. 2005-1, as identified on the boundary map for CFD No. 2005-1, and includes each Zone therein. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrpment pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time. "Land Use Class" means any of the classes listed in Table 1, Table 2, or Table 6, "Maximum Special Tax" means the Maximum Special Tax A and/or Maximum Special Tax B; as applicable. "Maximum Special Tax All means the Maximum Special Tax A, determined in accordance with Section C.1 below, that can be levied in any Fiscal Year on any Assessor's Parcel within IA No. 1. "Maximum Special Tax B" means the Maximum Special Tax B, determined in accordance with Section C.2 below, that can be levied in anyFiscal Year on any Assessor's Parcel within IA No. 1. "Non -Residential Property" means all Assessor's Parcels ofDevelopedProperty forwhich a building permit(s) was issued for a non-residential use. "One -Time Special Tax" means a one-time special tax payable by a Builder prior to issuance of a Certificate of Occupancy for a residential dwelling unit in order to reduce the. Maximum Special Tax A on such dwelling unit, so that the Total Tax and Assessment Obligation for the Fiscal Year in which a Certificate of Occupancy for such residential dwelling unit is expected to be issued will not exceed two percent (2.0%) of the Value of such residential dwelling unit. "Original Homeowner" means the first homeowner expected to purchase and close escrow on aresidential dwelling unit from a Builder after the issuance of a Certificate ofOccupancy. "Other Taxable Property" means Taxable Property Owner Association Property and Taxable Public Property. City of Azusa Apr813, 2006 IA Na 1 of CFD No. 2005-1(Rosedale) Page 3 "Outstanding Bonds" means all Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any Assessor's Parcel within the boundaries of IA No. 1 that was owned by or irrevocably offered for dedication to a property owner association, including any master or sub -association, as of January 1 of the previous Fiscal Year. "Proportion ately" means for Developed Property that the ratio of the actual Special Tax A levyto the Assigned Special Tax A is equal for all Assessor's Parcels ofDeveloped Property and that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is equal for all Assessor'sParcels ofDeveloped Property. For Undeveloped Property and Other Taxable Property, "Proportionately" means that the ratio ofthe actual Special Tax A levy per Acre to the Maximum Special Tax A per Acre is equal for all Assessor's Parcels of Undeveloped Property or Other Taxable Property and that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is equal for all Assessor's Parcels of Undeveloped Property or Other Taxable Property. "Public Property" means, for each Fiscal Year, (i) any property within theboundaries oflA No. 1 that was owned by or irrevocably offered for dedication to the federal government, the State, the City or any other public agency as of January 1 of the previous Fiscal Year; provided however that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use; or (ii) any property within the boundaries of CFD No. 2005-1 that was encumbered, as of January 1 of the previous Fiscal Year, by an unmanned utility easement making impractical its utilization for other than the purpose set forth in the easement. "Residential Floor Area" for any Residential Property means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or.similar area. The determination of Residential Floor Area shall be made byreference to the building permit(s) issued for each dwelling unit. "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. "RMA" means Rate and Method of Apportionment. "Special Tax" means the Special Tax A, Special Tax B, and/or One -Time Special Tax, as applicable. "Special Tax All means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement for Facilities. "Special Tax B" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement for Services. Cuy ofAasa ApdI Is, 2006 IA Ne.1 of CFD No. 2005-1(Rosedale) Page 4 0 0 "Special Tax Requirement for Facilities" means that amount required in any Fiscal Year for IA No. 1 to: (i) pay debt service on all Outstanding Bonds; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay all or a portion of Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve fiords for all Outstanding Bonds; (v) pay directly for acquisition or construction facilities eligible under the Act and authorized to be financed in IA No. 1 to the extent that inclusion of such amount does not increase the Special,Tax A levy on Undeveloped Property; and (vi), pay for reasonably anticipated Special Tax A delinquencies based on the delinquency rate for Special Taxes levied in the previousFiscal Year, less (vii) a credit for funds available to reduce the annual Special Tax A levy, as determined by the CFD Administrator pursuant to the Indenture. "Special Tax Requirement for Services" means that amount required in any Fiscal Year for CFD No. 2005-1 to: (i) pay directly for all public services eligible under the Act; (ii) pay Administrative Expenses not funded through the Special Tax Requirement for Facilities as determined by the CFD Administrator and IA No. 2 Administrative Expenses not funded through the IA No. 2 Special Tax Requirement for Facilities; less (iii) a credit for funds available to reduce the annual Special Tax B levy and the IA No. 2 Special Tax B levy, as detemvned by the CFD Administrator. The Special Tax Requirement for Services represents the total amount to be levied in any Fiscal Year within IA No. I and IA No. 2. "State" means the State of California "Taxable Property" means all of the Assessor's Parcels within the boundaries of IA -No. 1 which are not exempt from the Special Tax pursuant to law or Section F below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt from the Special Tax pursuant to Section F below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section F below. "Total Tax and Assessment Obligation" means for any residential dwelling unit, the sum of the projected ad valorem taxes and any other charges, special assessments, or taxes which are expected to be included on the annual property tax bill for the Fiscal Year in which a Certificate of Occupancy for such residential dwelling unit is expected to be issued. For purposes of this calculation, the CFD Administrator shall include the Maximum Special Tax A and Maximum Special Tax B for CFD No. 2005-1 plus estimated amounts for all other items expected to appear on the property tax bill. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property or Other Taxable Property. "Value" means the full sales price of a residential dwelling unit as determined prior to the Coy ofAZusa Aprll13, 2006 1A No. I of CFD No. 2005-1(Rosedale) Page 5 close of escrow by the Builder and the Original Homeowner, as listed on the preliminary escrow closing statement prepared by the title company for such sale, or if such preliminary. escrow closing statement is unavailable, as reasonablydetemilned by the CFD Administrator. "Zone" means Zone 1 and/or Zone 2, as applicable. "Zone 1" means the property identified as Zone I (Planning Areas 4A, 4B, 5A, 5B, and 7A) of IA No. 1, as identified on the boundary map for CFD No. 2005-1. "Zone 2" means the property identified as Zone 2 (Village Core and Garden Court) of IA No. 1, as identified on the boundary map for CFD No. 2005-1. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within IA No. 1 shall be assigned to Zone 1 or Zone 2 and classified as Developed Property, Other Taxable Property, or Undeveloped Property, and shall be subject to Special Taxes in accordance with the rate and method of apportionment determined pursuant to Sections C and D below. Developed Property shall be classified as Residential Property and Non -Residential Property. C. MAXIMUM SPECIAL TAX RATE 1. Special Tax A a. Developed Property Residential Property in Zone 1 shall be assigned to Land Use Classes I through 10 in Table 1, and Non -Residential Property in Zone 1 shall be assigned to Land Use Class 11 in Table 1. Residential Property in Zone 2 shall be assigned to Land Use Class 1 through 5 in Table 2, and Non - Residential Property in Zone 2 shall be assigned to Land Use Class 6 in Table 2. The Assigned Special Tax A forResidential Property shall be based on the Residential Floor Area ofthe dwelling units located on the Assessor's Parcel. The Assigned Special Tax A for Non -Residential Property shall be based on the Acreage of the Assessor's Parcel. (i) Maximum Special Tax A The Maximum Special Tax A for each Assessor's Parcel classified as Developed Property in 1A No. 1 shall be the greater of (i) the amount derived by application of the Assigned Special Tax A or (ii) the amount derived by application of the Backup Special Tax A. (ii) Assigned Special Tax A — Zone 1 The Fiscal Year 2006-07 Assigned Special Tax A for each Land Use Class within Zone 1 is shown below in Table 1. Clay ojAzasa April 13, 2006 IA No. I of CPD No. 2005-1(Rosedale) Page 6 0 TABLE 1 Assigned Special Tax A for Developed Property Fiscal Year 2006-2007 Zone 1 On each July 1, commencing July 1,:2007 the Assigned Special Tax A for each Land Use Class shall be increased by an amount equal to two percent (2a/a) of the amount in effect for the previous Fiscal Year. (iii) Assigned Special Tax A — Zone 2 The Fiscal Year 2006-07 Assigned Special Tax A for each Land Use Class within Zone 2 is shown below in Table 2. City of Azusa April l3, 2006 - IA No. I of CPD No. 1005-1(Rosedale) Page 7 N " .,.. y x;w eJ`v r is" ,•.�hbef: _r. 1 Residential Property > 4,150 SF $7,007.40 per unit 2 Residential Property 3,951— 4,150 SF $6,524.94 per unit 3 Residential Property 3,751— 3,950 SF $6,42498 per unit 4 Residential Property 3,551— 3,750 SF $6,163.86 per unit 5 Residential Property 3,351— 3,550 SF $5,977.20 per unit 6 Residential Property 3,151 — 3,350 SF $5,865.00 per unit 7 Residential Property 2,951-3,150 SF $5,621.22 per unit 8 Residential Property 2,751— 2,950 SF $5,304.00 per unit 9 Residential Property 2,551— 2,750 SF $4,866.42 per Unit 10 Residential Property < 2,551 SF $4,509.42 per trait 11 Non -Residential Property NA $30,600.00 per Acte On each July 1, commencing July 1,:2007 the Assigned Special Tax A for each Land Use Class shall be increased by an amount equal to two percent (2a/a) of the amount in effect for the previous Fiscal Year. (iii) Assigned Special Tax A — Zone 2 The Fiscal Year 2006-07 Assigned Special Tax A for each Land Use Class within Zone 2 is shown below in Table 2. City of Azusa April l3, 2006 - IA No. I of CPD No. 1005-1(Rosedale) Page 7 0 TABLE 2 Assigned Special Tax A for Developed Property Fiscal Year 2006-2007 Zone 2 I Residential Property > 2,700 SF $4,974.54 per unit 2 Residential Property 2,501— 2,700 SF $4,775.64 per unit 3 Residential Property 2,301— 2,500 SF $4,537.98 per unit 4 Residential Property 2,101— 2,300 SF $4,526.76 per unit 5 Residential Property < 2,101 SF $4,288.08 per unit 6 Non -Residential Property NA $30,600.00 per Acre On each July 1, commencing July 1, 2007 the Assigned Special Tax A for each Land Use Class shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (iv) Backup Special Tax A a. Residential Property The Fiscal Year 2006-07 Backup Special Tax A attributable to Residential Property within a Final Map will equal the amount indicated in Table 3 below for the applicable Final Map multiplied by the Acreage of all Taxable Property located within such Final Map, excluding current or expected Non -Residential Property or Other Taxable Property. The Fiscal Year 2006-07 Backup Special Tax A for each Assessor's Parcel of Residential Property in aFinal Map shall. be computed by dividing the aggregate Backup Special Tax A attributable to such Final Map by the number of Assessor's Parcels of Taxable Property for which building permits for residential construction have or may be issued (i.e., the number of residential -dwelling units). City of Am= APrU 13, 2006 LI No. I of CFD Na 2005-1(Rosedale) Page 8 0 0 TABLE 3 Backup Special Tax A Fiscal Year 2006-07 - for Final Maps in IA No. l Notwithstanding the foregoing, if all or any portion of a Final Map is subsequently changed or modified, then the Backup Special Tax A for each Assessor's Parcel of Residential Property in such Final Map that is changed or modified shall be a rate per Acre calculated as follows: Determine the total Backup Special Tax A anticipated to apply to the changed or modified Final Map prior to the change or modification. 2. The result of paragraph 1 above shall be divided by the total Acreage of Taxable Property excludingNon- Residential Property and Other Taxable Prbperty which is expected to exist in such changed or modified Final Map area, as reasonably determined by the CFD Administrator. City of Azusa April 13, 2006 24 No. l of CPD Na 2005-1(Rosedale) Page 9 ! 1 Zone 1 54057-8 $45,101.88 per Acre Zone 1 54057-12 $36,594.95 per Acre Zone 54057-18 $40,951.50 per Acre Zone 1 54057-20 $46,611.42 per Acre Zone 1 54057-3 $42,229.63 per Acre Zone 1 54057-9 $37,204.31 per Acre Zone 1 54057-19 $44,178.Z4 per Acre Zone 1 54057-13 $44,814.30 per Acre Zone 1 54057-7 $38,254.94 per Acre Zone 1 54057-10 $38,060.74per Acre Zone 1 54057-16 $37,810.34 per Acre Zone 1 54057-14 $36,423.64 per Acre Zone 1 540574 $45,298.06 pqr Acre Zone 1 54057-15 $38,512.52 per Acre Zone 1 54057-17 $37,009.35 par Acre Zone 1 54057-11 $42,864.33 per Acre Zone 1 54057-6 $33,559.60 per Acre Zone 1 54057-2 $31,709.12 per Acre Zone 1 54057-5 $33,405.16 per Acre Zone 1 Any Other Tract $43,421.02 per Acre Zone 2 63336 $74,329.9115 Acre Zone 2 64417 $74;791.09 per Acre Zone 2 An Other Tract $82,581.06 per Acre Notwithstanding the foregoing, if all or any portion of a Final Map is subsequently changed or modified, then the Backup Special Tax A for each Assessor's Parcel of Residential Property in such Final Map that is changed or modified shall be a rate per Acre calculated as follows: Determine the total Backup Special Tax A anticipated to apply to the changed or modified Final Map prior to the change or modification. 2. The result of paragraph 1 above shall be divided by the total Acreage of Taxable Property excludingNon- Residential Property and Other Taxable Prbperty which is expected to exist in such changed or modified Final Map area, as reasonably determined by the CFD Administrator. City of Azusa April 13, 2006 24 No. l of CPD Na 2005-1(Rosedale) Page 9 The result is the Backup Special Tax A per Acre which shall be applicable to all Assessor's Parcels of Residential Property in such changed or modified Final Map. The Backup Special Tax A shall not change for an Assessor's Parcel ofResidential Propertywithin a Final Map unless such Assessor's Parcel of Residential Property was changed or modified. On each July 1, commencing July 1, 2007 the Backup Special Tax A for each Final Map shall be increased by an amount equal to. two percent (2%) of the amount in effect for the previous Fiscal Year. b. Non -Residential Property The Fiscal Year 2006-07 Backup Special Tax A attributable to Non -Residential Property shall be the amount indicated in Table 4 below. TABLE 4 Backup Special Tax A for Non -Residential Property Fiscal Year 2006-07 Zone 1 and Zone 2 On each July 1, commencing July 1, 2007 the Backup Special Tax A for Non -Residential Property shall be increased by an amount equal to two percent (21/o) of the amount in effect for the previous Fiscal Year. (v) Multiple Land Use Classes in some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Assigned Special Tax A levied on an Assessor's Parcel shall be the sum of the Assigned Special Tax A for all Land Use Classes located on that Assessor's Parcel. The Maximum Special Tax A that can be levied on an City ojAzusa April 13, 2006 IA No. 1 of CFD No. 2005-1(Rosedale) _ Page 10 fs � F✓ 4.tjy,., .v.I e.. I , . . On each July 1, commencing July 1, 2007 the Backup Special Tax A for Non -Residential Property shall be increased by an amount equal to two percent (21/o) of the amount in effect for the previous Fiscal Year. (v) Multiple Land Use Classes in some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Assigned Special Tax A levied on an Assessor's Parcel shall be the sum of the Assigned Special Tax A for all Land Use Classes located on that Assessor's Parcel. The Maximum Special Tax A that can be levied on an City ojAzusa April 13, 2006 IA No. 1 of CFD No. 2005-1(Rosedale) _ Page 10 9 0 Assessor's Parcel shall be the sum of the Maximum Special Tax A that can be levied for all Land Use Classes located on that Assessor's Parcel. For an Assessor's Parcel that contains both Residential Property and Rion -Residential Property, the Acreage of such Assessor's Parcel shall be allocated to each type ofpropertybased on the amount ofAcreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. b. Undeveloped Prooertv and Other Taxable Property The Fiscal Year 2006-07 Maximum Special Tax A for Undeveloped Property and Other Taxable Property within each Zone is shown below in Table 5. TABLE 5 Maximum Special Tax A for Undeveloped Property and Other Taxable Property Fiscal Year 2006-07 Zone 1 and Zone 2 . On each July 1, commencing July 1, 2007 the Maximum Special Tax A for Undeveloped Property and Other Taxable Property in Zone 1 and Zone 2 shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. 2. Special Tax B a. Develoued Property (i) Maximum Special Tax B The Fiscal Year 2006-07 Maximum Special Tax B for each Assessor's Parcel classified as Developed Property in Zone 1 and Zone 2 shall be the amount shown below in Table 6. Citi, ofAvma April 13, 2006 1A No.1 of CFD No. 2005-1(Rosedale) Page 11 C> Z®ne ltlsaimurpk9$ecraYTic A, 1 $43,725.36 per Acre 2 $83,203.44 per Acre On each July 1, commencing July 1, 2007 the Maximum Special Tax A for Undeveloped Property and Other Taxable Property in Zone 1 and Zone 2 shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. 2. Special Tax B a. Develoued Property (i) Maximum Special Tax B The Fiscal Year 2006-07 Maximum Special Tax B for each Assessor's Parcel classified as Developed Property in Zone 1 and Zone 2 shall be the amount shown below in Table 6. Citi, ofAvma April 13, 2006 1A No.1 of CFD No. 2005-1(Rosedale) Page 11 C> TABLE 6 Maximum Special Tax B for Developed Property Fiscal Year 2006-07 Zone 1 and Zone 2 On each July 1, commencing July 1, 2007 the Maximum Special Tax B for Developed Property in Zone 1 and Zone 2 shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (ii) Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax B levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax B for all Land Use Classes located on that Assessor's Parcel. b. Undeveloped Prot) The Fiscal Year 2006-07 Maximum Special Tax B for Undeveloped Property within each Zone is shown below in Table 7. TABLE 7 Maximum Special Tax B for Undeveloped Property Fiscal Year 2006.07 Zone 1 and Zone 2 Y $1,773.46 per Acre © , per Acre City of Azusa AprO13, 2006 IA No. I of CFD No. 2005-1(Rosedale) Page 12 � v a r t . `�•hr x � vj ix3n u az f ; • 1 Residential Property $571.24 per unit $423.30 per unit 2 Non -Residential Property $3,621.52 per Acre $6,152.79 per Acre On each July 1, commencing July 1, 2007 the Maximum Special Tax B for Developed Property in Zone 1 and Zone 2 shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (ii) Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax B levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax B for all Land Use Classes located on that Assessor's Parcel. b. Undeveloped Prot) The Fiscal Year 2006-07 Maximum Special Tax B for Undeveloped Property within each Zone is shown below in Table 7. TABLE 7 Maximum Special Tax B for Undeveloped Property Fiscal Year 2006.07 Zone 1 and Zone 2 Y $1,773.46 per Acre © , per Acre City of Azusa AprO13, 2006 IA No. I of CFD No. 2005-1(Rosedale) Page 12 0 1 0 On each July 1, commencing July 1, 2007 the Maximum Special Tax B for Undeveloped Property in Zone 1 and Zone 2 shall be increased by an amount equal to two percent (29/o) of the amount in effect for the previous Fiscal Year. C. Property Owner Association RLoRgM and Public Prooertv There shall be no Special Tax B levied on Property Owner Association Property and Public Property. D. ONE -TIM SPECIAL TAX Prior to the issuance of a Certificate of Occupancy for a residential dwelling unit, the CFD Administrator shall make a one-time determination of whether or not a One -Time Special Tax payment is required for such dwelling unit. The CFD Administrator shall charge a fee for providing this determination. A One -Time Special Tax payment shall be paid bythe Builder for aresidential dwelling unit ifthe Total Tax and Assessment Obligation is expected to be greater than two percent (2.01/o) of the Value for such residential dwelling unit. The amount of the One -Time Special Tax for such residential dwelling unit shall equal that Partial Prepayment Amount calculated pursuant to Section I.2 which shall be sufficient to reduce the Total Tax and Assessment Obligation to two percent (2.0%) of the Value for such residential dwelling unit. If the Total Tax and Assessment Obligation for a residential dwelling unit is expected to be less than or equal to two percent (2.0%) of the Value of such residential dwelling unit, no One -Time Special Tax will be required. E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX 1. Special Tax A Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the Council shall levy the Special Tax A until the amount of Special Tax A equals the Special Tax Requirement for Facilities. The Special Tax A shall be levied each Fiscal Year as follows: First: The Special Tax A shall be levied Proportionately on each Assessor's Parcel of Developed Property in Zone 1 and Zone 2 at up to 100% of the applicable Assigned Special Tax A as needed to satisfy the Special Tax Requirement for Facilities; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities atter the first step has been completed, the Special Tax A shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property in Zone, l and Zone 2 at up to 1000/a of the Maximum Special Tax A for Undeveloped Property; City ofAzusa AprU 13, 2006 IA No. 1 of CFD No. 2005-1(Rosedale) Page 13 Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Special Tax A on each Assessor's Parcel ofDeveloped Property in Zone I and Zone 2 whose Maximum Special Tax A is determined through the application of the Backup Special Tax A shall be increased in equal percentages from the Assigned Special Tax A up to the Maximum Special Tax A for each such Assessor's Parcel; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax Ashall be levied Proportionately on each Assessor's Parcel of Other Taxable Property in Zone 1 and Zone 2 at up to the Maximum Special Tax A for Other Taxable Property. 2. Special Tax B Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement for Services and levy the Special Tax B, taking into consideration the levy of the IA No. 2 Special Tax B, until the amount of Special Tax B and IA No. 2 Special Tax B equals the Special Tax Requirement for Services. The Special Tax B shall be levied each Fiscal Year as follows: Fust: The Special Tax B shall be levied Proportionately on each Assessor's Parcel of Developed Property in Zone 1 and Zone 2 at up to 100% of the applicable Maximum Special Tax B as needed to satisfy the Special Tax Requirement for Services; and the Council shall be notified that under the terms of the IA No. 2 RMA, the IA No. 2 Special Tax B shall be levied on each Assessor's Parcel of IA No. 2 Developed Property in Zone I and Zone 2 at up to 100% of the applicable IA No. 2 Maximum Special Tax B as needed to satisfy the Special Tax Requirement for Services; Se nd: If additional monies are needed to satisfy the Special Tax Requirement for Services after the first step has been completed, the Special Tax B shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property in Zone I and Zone 2 at up to 100% of the Maximum Special Tax B for Undeveloped Property, the Council shall be notified that under the terms of the IA No. 2 RMA, the IA No. 2 Special Tax B shall be levied Proportionately on each Assessor's Parcel of IA No. 2 Undeveloped Property in Zone 1 and Zone 2 at up to 100% of the IA No. 2 Maximum Special Tax B for Undeveloped Property. 3. One -Time Special Tax The One -Time Special Tax may be levied on any Assessor's Parcel as required in Section D. Notwithstanding the above, under no circumstances will the Special Tax A or Special Tax B levied against any Assessor's Parcel of Residential Property for which a Certificate of Occupancy for private residential use has been issued be increased by more than tan percent City of Azusa Apr1113, 2006 M No. l of CFD No. 2005-1 (Rosettale) Page 14 as a consequence of delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2005-1. F. EXEMPTIONS Special Tax A No Special Tax A shall be levied on up to 97.36 Acres of Property Owner Association Property and Public Property in Zone 1 and up to 15.62 Acres of Property Owner Association Property and Public Property in Zone 2. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or Public Property its tax-exempt status will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Tax A under this section shall be subject to the levy of the Special Tax A and shall be taxed Proportionately as part of the fourth step in Section E.1 above, at up to 100% of the applicable Maximum Special Tax A for Other Taxable Property. 2. Special Tax B No Special Tax B shall be levied on Property OwnerAssociation Property and Public Property. G. APPEALS AND 17VTERPRETATIONS Any landowner or resident may file a written appeal of the Special Tax on his/ber property with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During the pendency of an appeal, all Special Takes.previously levied must be paid on or before the payment date established when the levywas made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax on the appellant's property and/or provide a refimd to the appellant. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has 30 days in which to appeal to the Council by. filing a written notice of appeal with the City Clerk, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for its disagreement with the CFD Administrator's determination. Interpretations may be made by the Council by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this Rate and Method of Apportionment. City of Azusa Apra 13, 2006 lA No. I of CFD No. 20054 (Rosedale) Page 15 IL MANNER OF COLLECTION The Special Tax A and Special Tax B shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that lA No. 1 may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. The One -Time Special Tax shall be paid directly to the City by, or on behalf of, the Builder. I. PREPAYMENT OF SPECIAL TAX The following definitions apply to this Section I: "CFD Public Facilities" means either $58.2 million in 2006 dollars, which shall increaseby the Construction Inflation Index on July 1, 2007, 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 to be provided byIANo. l under the authorized bonding program for 1A No. 1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taxes levied under this Rate and Method of Apportionment as described in Section E. "Construction Inflation Index" means the annual percentage change in the Engineerine 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 minus (i) public facility costs previously paid from the improvement Fund, (ii) moneys currently on deposit in the huprovement Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance public facilities costs. "Improvement Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct CFD Public Facilities eligible under the Act. "Outstanding Bonds" means all Previously Issued Bonds which are deemed to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year. "Previously Issued Bonds" means all Bonds that have been issued by IA No. 1 prior to the date of prepayment. City of Azusa April 13, 2006 IA No. l of CFD. No. 2005-1 (Rosedale) page 16 (. • 0 1. Prepayment in Full The obligation of an Assessor's Parcel to pay the Special Tax A may be prepaid and permanently satisfied as described herein; provided that a prepayment may bemade only for Assessor's Parcels of Developed Property or Undeveloped Property for which a building permit has been issued, and only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax A obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days ofreceipt of such written notice, the CFD Administrator shall notify such owner ofthe prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this service. Prepayment must be made not less than 45 days prior to the next occurring date that notice of redemption of Bonds from the proceeds of such prepayment may be given to the Trustee pursuant to the Indenture. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount Plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (de5nedbelow) shall be calculated as follows: Para¢raah No.: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. For Assessor's Parcels ofDeveloped Property, compute the Assigned Special Tax A and Backup Special Tax A. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax A and Backup Special Tax A for that Assessor's Parcel as though it was already designated as Devel3pedProperty, based upon the building permit which has already been issued for that Assessor's Parcel. 3. (a) Divide the Assigned Special Tax A computed pursuant to paragraph 2 by the total estimated Assigned Special Tax A for the entire IA No. 1 based on the Developed Property Special Tax A which could be charged in the current Fiscal Year on all expected development through buildout of IA No. 1, excluding any Assessor's Parcels which have been prepaid, and My of Azwa AprQ 13, 2006 IA No. I of CFD No..2005-1(Rosedate) Page 17 (b) Divide the Backup Special Tax A computed pursuant to paragraph 2 by the total estimated Backup Special Tax A at buildout for the entire IA No. 1, excluding any Assessor's Parcels which have been prepaid 4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium, if any, on the Outstanding Bonds tobe redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 8. Compute 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. 9. Determine the Special Tax A levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Future Facilities Amount and the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 11. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the amount computed pursuant to paragraph 10 (the "Defeasance Amount"). 12. Verify the administrative fees and expenses of IA No. 1, including the costs of computation ofthe prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses'). I3. The reserve fiord credit ("Reserve Fund Credit's shall equal the lesser of, (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associate with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. City of AWO April 13, 2006 IA Na 1 of CFD No. 2005-1(Rosedate) Page 18 14. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit'. 15. The Special Tax A prepayment is equal to the aur of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Prepayment Amount'. 16. From the Prepayment Amount, the amounts computed pursuant to paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained by IA No. 1. The Special Tax A Prepayment Amount maybe sufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereofwill be retained in the appropriate fund established under the Indenture to be used with the next prepayment of 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 under paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax A levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment ofSpwW Tax A and the release of the Special Tax A lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax A shall cease. Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Assigned Special Tax A that may be levied on Taxable Property (based on expected development at build out), both prior to and afterthe proposed prepayment, less expected Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year and such prepayment will not impair the security of all Outstanding Bonds, as reasonably determined by the CFD Administrator. The Special Tax B may not be prepaid. 2. Prepayment in Part The Special Tax A on an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be partially City ofAzusa AprQ 13, 2006 IA No. 1 of CFD No. 2005-1(Rosedale) Page 19 prepaid. The Partial Prepayment Amount shall be calculated as in Section I.1; except that a partial prepayment shall be calculated according to the following formula: PP = [(PE -AE) x F] +. AE These terms have the following meaning: AE = the Administrative Fees and Expenses PP — the partial prepayment PE — the Prepayment Amount calculated according to Section I.1 F = the percentage by which the owner of the Assessor's Parcel is partially prepaying the Special Tax A. The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax A and the . percentage by which the Special Tax A shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax A for an Assessor's Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Section I.1, and (ii) indicate in the records of IA No. 1 that there has been a partial prepayment of the Special Tax A and that a portion of the Special Tax A with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Special Tax A, shall continue to be levied on such Assessor's Parcel pursuant to Section E. Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Assigned Special Tax A that may be levied on Taxable Property (based on expected development at build out), bothpriorto and after the proposed prepayment, less expected Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be . redeemed by such prepayment and all priorprepayments) in each future Fiscal Year and such partial prepayment will not impair the security of all Outstanding Bonds, as reasonably determined by the CFD Administrator. J, TERM OF SPECIAL TAX The Special Tax A and the One -Time Special Tax shall be levied for a period not to exceed fifty years commencing with Fiscal Year 2006-07. The Special Tax B shall be levied as long as necessary to meet the Special Tax Requirement for Services. K:SCI WNT$2V w CLY%Melloktd 2005-1utMAVAi RMA_IO dW M o f� sa AprU 13, 2006 IA No. l of CFD No. 2005-1(Rosedale) Page 20 CITY OF AZUSA COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR IMPROVEMENT AREA NO.2 RVPUB%BSKINNM713166.1 C-2 RATE AND METHOD OF APPORTIONMENT FOR IMPROVEMENT AREA NO.2 OF CITY OF AZUSA COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) Special Taxes as hereinafter defined shall be levied on all Assessor's Parcels in Improvement Area No. 2 ("1A No. 2") of the City of Azusa Community Facilities District No. 2005-1(Rosedale) ("CFD No. 2005-1') and collected each Fiscal Year commencing in Fiscal Year 2006-2007, in an ainount determined by the Council through the application of the appropriate Special Tax for "Developed Property," "Other Taxable Property," and "Undeveloped Property" as described below. All of the real property in IA No. 2, 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. This Rate and Method of Apportionment employs terms defined below and terms defined in the Rate and Method of Apportionment for Improvement Area No. 1. When necessary, terms defined in the latter shall be distinguished from terms defined in the former by including the words "IA No. l" prior to the defined term. The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County parcel map. "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 following actual or reasonably estimated costs directly related to the administration of IA No. 2 and each Zone therein: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County or otherwise); the costs ofremittingthe Special Taxes to the Trustee; the costs ofthe Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, IA No. 2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, IA No. 2 or any designee thereof of complying with City, IA No. 2 or obligatedpersons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes or the Bonds; the costs of the City, IA No. 2 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; that portion of the City's overhead and staff time related to the administration of IA No. 2; and the City's third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or IA No. 2 for any other administrative purposes City ofArusa AprU 13, 2006 14 No. 2 of CFD No. 2005-1(Rosedale) Page I of IA No. 2, including attorney's fees and other costs related to commencing and pursuingto completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map ofthe Assessor of the County designating parcels by. Assessor's Parcel number. "Assigned Special Tax A" means the Special Tax A for each Land Use Class ofDeveloped Property within LkNo. 2, as determined in accordance with Section C.1 below. "Backup Special Tax All means the Special Tax A applicable to each Assessor's Parcel of Developed Property within IA No.2, as determined in accordance with Section C.1 below. "Bonds" means anybonds or other debt (as defined in Section 53317(d) ofthe Act), whether in one or more series, issued by I.A. No. 2 under the Act. "Builder" means an entity which owns a residential dwelling unit immediately prior to the issuance of a Certificate of Occupancy, and then enters into a contract to sell that dwelling unit for its Value to an Original Homeowner. "Certificate of Occupancy" means a document issued by the City which permits the initial habitation of a newly constructed residential dwelling unit. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement for Facilities and the Special Tax Requirement for Services, and providing for the levy and collection of the Special Taxes. "CFD No. 2005-1" means City of Azusa Community Facilities District No. 2005-1 (Rosedale). "City" means the City of Azusa. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2005-1. "County" means the County of Los Angeles. "Developed Property" means, for each Fiscal Year, all Taxable Property, exclusive of Taxable Property Owner Association Property, or Taxable Public Property, for which a building permit for new construction was issued after January 1, 2006 and as of May 1 ofthe previous Fiscal Year. "Final Map" means (i) a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots or parcels for which residential building permits may be issued, or (ii) for City of Azusa April I3, 2006 Ll No. 2 of CFD No. 2005-1(Rosedale) - _ page 2 condominiums, a final map approved by the City and a condaminium plan recordedpursuant to California Civil Code Section 1352 creating such individual lots or parcels. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Improvement Area No. l" or "IA No. l" means Improvement Area No. 1 of CFD No. 2005-1, as identified on the boundary map for CFD No. 2005-1, and includes each Zone therein. "Improvement Area No. 2" or "IA No. 2" means Improvement Area No. 2 of CFD No. 2005-1, as identified on the boundary map for CFD No. 2005-1, and includes each Zone therein. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time. "Land Use Class" means any of the classes listed in Table 1, Table 2, or Table 6. "Maximum Special Tax" means the Maximum Special Tax A and/or Maximum Special Tax B, as applicable. "Maximum Special Tax All means the Maximum Special Tax A, determined in accordance with -Section C.1 below, that can be levied in anyFiscal Year on any Assessor's Parcel within IA No. 2. "Maximum Special Tax B" means the Maximum Special Tax B, determined in accordance with Section C.2 below, that can be levied in any Fiscal Year on any Assessor's Parcel within IA No. 2. "Non -Residential Property" means all Assessor's Parcels ofDeveloped Property for which a building permit(s) was issued for a non-residential use. "One -Time Special Tag" means a one-time special tax payable by a Builder prior to issuance of a Certificate of Occupancy for a residential dwelling unit in order to reduce the Maximum Special Tax A on such dwelling unit, so that the Total Tax and Assessment Obligation for the Fiscal Year in which a Certificate of Occupancy for such residential dwelling unit is expected to be issued will not exceed two percent (2.0%) of the Value of such residential dwelling unit. "Original Homeowner" means the first homeowner expected to purchase and close escrow on a residential dwelling unit from a Builder after the issuance of a Certificate of Occupancy. "Other Taxable Property" means Taxable Property Owner Association Property and Taxable Public Property. ChyofAzusa Aprll13,2006 IA No. 2 of CFD Na 1005-1(Rosedale) page 3 "Outstanding Bonds" means all Bonds which are deemed to be outstanding under the Indenture. "Property Owner Association Property" means, for each Fiscal Year, any Assessor's Parcel within the boundaries of IA No. 2 that was owned by or irrevocably offered for dedication to a property owner association, including any master or sub -association, as of January 1 of the previous Fiscal Year. "Proportionately" means for Developed Property that the ratio of the actual Special Tax A levy to the Assigned Special Tax A is equal for all Assessor's Parcels ofDeveloped Property and that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is equal for all Assessor's Parcels ofDevelopedProperty. For Undeveloped Property and OtherTaxable Property, "Proportionately" means that the ratio of the actual Special Tax A levy per Acre to the Maximum Special Tax A per Acre is equal for all Assessor's Parcels of Undeveloped Property or Other Taxable Property and that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is equal for all Assessor's Parcels of Undeveloped Property or Other Taxable Property. "Public Property" means, for each Fiscal Year, (i) any property within the boundaries of IA No. 2 that was owned by or irrevocably offered for dedication to the federal government, the State, the City or any other public agency as of January 1 of the previous Fiscal Year; provided however that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 ofthe Act shall be.taxed and classified in accordance with its use; or (ii) any property within the boundaries of CFD No. 2005-1 that was encumbered, as of January 1 of the previous Fiscal Year, by an unmanned utility easement making impractical its utilization for other than the purpose set forth in the easement. "Residential Floor Area" for any Residential Property means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be made by reference to the building permit(s) issued for each dwelling unit. "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. "RMA" means Rate and Method of Apportionment. "Special Tax" means the Special Tax A, Special Tax B, and/or One -Time Special Tax, as applicable. "Special Tax A" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement for Facilities. "Special Tax B" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement for Services. cur ojAzwa — Apn7 rg, 2006 L4 No. 2 of CFD Na 2005-I (Rosedale) Page 4 "Special Tax Requirement for Facilities" means that amount required in any Fiscal Year for IA No. 2 to: (i) pay debt service on all Outstanding Bonds; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay all or a portion of Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) pay directly for acquisition or construction of facilities eligible under the Act and authorized to be financed in 1A No. 2 to the extent that inclusion of such amount does not increase the Special Tax A levy on Undeveloped Property; and (vi) pay for reasonably anticipated Special Tax A delinquencies based on the delinquency rate for Special Taxes levied in the previous Fiscal Year, less (vii) a credit for funds available to reduce the annual Special Tax A levy, as determined by the CFD Administrator pursuant to the Indenture. "Special Tax Requirement for Services" means that amount required in any Fiscal Year for CFD No. 2005-1 to: (i) pay directly for all public services eligible under the Act; (ii) pay Administrative Expenses not funded through the Special Tax Requirement for Facilities as determined by the CFD Administrator and IA No. 1 Administrative Expenses not funded through the IA No. 1 Special Tax Requirement for Facilities; less (iii) a credit for funds available to reduce the annual Special Tax B levy and the 1A No. 1 Special Tax B levy, as determined by the CFD Administrator. The Special Tax Requirement for Services represents the total amount to be levied in any Fiscal Year within IA No. 1 and IA No. 2. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of IA No. 2 which are not exempt from the Special Tax pursuant to law or Section F below. "Taxable Property Owner Association Property" means all Assessor's Parcels ofProperty Owner Association Properly that are not exempt from the Special Tax pursuant to Section F below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section F below. "Total Tax and Assessment Obligation" means for any residential dwelling unit, the sum of the projected ad valorem taxes and any other charges, special assessments, or taxes which are expected to be included on the annual property tax bill for the Fiscal Year in which a Certificate of Occupancy for such residential dwelling unit is expected to be issued For purposes of this calculation, the CFD Administrator shall include the Maximum Special Tax A and Maximum Special Tax B for CFD No. 2005-1 plus estimated amounts for all other items expected to appear on the property tax bill. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for eachFiscal Year, all Taxable Property not classified as Developed Property or Other Taxable Property. "Value" means the full sales price of a residential dwelling unit as determined prior to the . City of Azusa Aprll I3, 2006 IA No. 2 of CFD Na 1005-1 (Rosedale) Page 5 It, 0 10 close of escrow by the Builder and the Original Homeowner, as listed on the preliminary escrow closing statement prepared by the title company for such sale, or if such preliminary escrow closing statement is unavailable, as reasonably determined by the CFD Administrator. "Zone" means Zone I and/or Zone 2, as applicable. "Zone 1" means the property identified as Zone 1(Great Park and Transit 1) of IA No. 2, as identified on the boundary map for CFD No. 2005-1. "Zone 2" means the property identified as Zone 2 (Transit 2) of IA No. 2, as identified on the boundary map for CFD No. 2005-1. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within IA No. 2 shall be assigned to Zone 1 or Zone 2 and classified as Developed Property, Other Taxable Property, or Undeveloped Property, and shall be subject to Special Taxes in accordance with the rate and method of apportionment determined pursuant to Sections C and D below. Developed Property shall be classified as Residential Property and Non -Residential Property. C. MAX MUM SPECIAL TAX RATE 1. Special Tag A a. Developed Property Residential Property in Zone 1 shall be assigned to Land Use Classes 1 through 4 in Table 1, and Non -Residential Property in Zone 1 shall be assigned to Land Use Class 5 in Table 1. Residential Property in Zone 2 shall be assigned to Land Use Class 1 through 4 in Table 2, and Non -Residential Property in Zone 2 shall be assigned to Land Use Class 5 in Table 2. The Assigned Special Tax A for Residential Property shall be based on the Residential Floor Area of the dwelling units located on the Assessor's Parcel. The Assigned Special Tax A for Non -Residential Property shall be based on the Acreage of the Assessor's Parcel. (i) Maximum Special Tax A The Maximum Special Tax A for each Assessofs Parcel classified as Developed Property in IA No. 2 shall be the greater of (i) the amount derived by application of the Assigned Special Tax A or (ii) the amount derived by application of the Backup Special Tax A. (ii) Assigned Special Tax A — Zone 1 The Fiscal Year 2006-07 Assigned Special Tax A for each Land Use Class within Zone 1 is shown below in Table 1. C#y of Azusa AprU I3, 2006 L4 No. 2 of CPD Na 2005-1(Rosedale) Page 6 0 0 TABLE I Assigned Special Tax A for Developed Property Fiscal Year 2006-2007 Zone I I Residential Property > 1,800 SF $4,050A2 per unit 2 Residential Property 1,601-1,800 SF $3,748.50 per unit 3 Residential Property 1,401 —1,600 SF $3,788.28 per unit 4 Residential Property < 1,401 SF $3,151.80 per unit 5 5 Non -Residential Property NA $30,600.00 per Acre On each July 1, commencing July 1, 2007 the Assigned Special Tax A for each Land Use Class shall be increased by an amount equal to two percent (2%) ofthe amount in effect for the previous Fiscal Year. (iii) Assigned Special Tax A — Zone 2 The Fiscal Year 2006-07 Assigned Special Tax A for each Land Use Class within Zone 2 is shown below in Table 2. TABLE - Assigned Special Tax A for Developed Property Fiscal Year 2006-2007 Zone 2 CAOV VIAMsa ApPRI3,2006 M No. 2 of CFD No. 2005-1 Mosedak) Page 7 T Residential Property > 1,600 SF $3,605.70 per unit 2 Residential Property 1,401— 1,600 SF $3,311.94 per unit 3 Residential Property 1,201-1,400 SF $2,893.54 per unit 4 Residential Property < 1,201 SF $2,893.74 per unit 5 Non -Residential Property NA $30,600.00 per Acre CAOV VIAMsa ApPRI3,2006 M No. 2 of CFD No. 2005-1 Mosedak) Page 7 0 0 On each July 1, commencing July 1, 2007 the Assigned Special Tax A for each Land Use Class shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (iv) Backup Special Tax A a.. Residential Property The Fiscal Year 2006-07 Backup Special Tax A attributable to Residential Property within a Final Map will equal the amount indicated in Table 3 below for the applicable Final Map multiplied by the Acreage of all Taxable Property located within such Final Map, excluding current or expected Non -Residential Property or Other Taxable Property. The Fiscal Year 2006-07 Backup Special Tax A for each Assessor's Parcel ofResidential Property in aFinal Map shall be computed by dividing the aggregate Backup Special Tax A attributable to such Final Map by the number of Assessor's Parcels of Taxable Property for which building permits for residential construction have or may be issued (i.e., the number of residential dwelling units). TABLE 3 Backup Special Tax A Fiscal Year 2006-07 Notwithstanding the foregoing, if all or any portion ofaFinal Map is subsequently changed or modified, then the Backup Special Tax A for each Assessor's Parcel of Residential Property in such Final Map that is changed or modified shall be a rate per Acre calculated as follows: 1. Determine the total Backup Special Tax A anticipated to apply to the changed or modifiedFinal Map priorto the change or modification. City of Azusa Aprtr 13, 2006 iA No. 2 of CFD No. 2005-1(Rosedale) Page 8 :A Zone 1 $166,755.91 per Acre Zone 2 $171,909.04 per Acre Notwithstanding the foregoing, if all or any portion ofaFinal Map is subsequently changed or modified, then the Backup Special Tax A for each Assessor's Parcel of Residential Property in such Final Map that is changed or modified shall be a rate per Acre calculated as follows: 1. Determine the total Backup Special Tax A anticipated to apply to the changed or modifiedFinal Map priorto the change or modification. City of Azusa Aprtr 13, 2006 iA No. 2 of CFD No. 2005-1(Rosedale) Page 8 0 0 2. The result of paragraph 1 above shall be divided by thetotal Acreage ofTaxable Property excludiugNon- Residential Property and Other Taxable Property which is expected to exist in such changed or modified Final Map area, as reasonably determined by the CFD Administrator. 3. The result is the Backup Special Tax A per Acre which shall be applicable to all Assessor's Parcels of Residential Property in such changed or modified Final Map. The Backup Special Tax A shall not change for an Assessor's Parcel of Residential Property within aFinal Map unless such Assessor's Parcel of Residential Property was changed or modified. On each July 1, commencing July 1, 2007 the Backup Special Tax A for each Final Map shall be increased by an amount equal to two percent (20/9) of the amount in effect for the previous Fiscal Year. b. Non -Residential Property The Fiscal Year 2006-07 Backup Special Tax A attributable to Non -Residential Property shall be the amount indicated in Table 4 below. TAB E 4 Backup Special Tax A for Non -Residential Property Fiscal Year 2006-07 Zone I and Zone 2 On each July 1, commencing July 1, 2007 the Backup Special Tax A for Non -Residential Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. City of Azusa Aprll13, 2006 14 No. 2 of CFD No. 2005-1(Rosedale) Page 9 r C�-3tLsSs vx r i 4J F 1 $166,755.91 per Acre 2 $171,909.04 per Acre On each July 1, commencing July 1, 2007 the Backup Special Tax A for Non -Residential Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. City of Azusa Aprll13, 2006 14 No. 2 of CFD No. 2005-1(Rosedale) Page 9 (v) Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Assigned Special Tax A levied on an Assessor's Parcel shall be the sum of the Assigned Special Tax A for all Land Use Classes located on that Assessor's Parcel. The Maximum Special Tax A that can be levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax A that can be levied for all Land Use Classes located on that Assessor's Parcel. For an Assessor's Parcel that contains both Residential. Property and Non -Residential Property, the Acreage of such Assessor's Parcel shall be allocated to each type of propertybased on the amount ofAcreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The CFA Administrator's allocation to each type of property shall be final. b. Undeveloped:Property and Other Taxable Prooertv The Fiscal Year 2006-07 Maximum Special Tax A for Undeveloped Property and Other Taxable Property within each Zone is shown below in Table 5. TABLES Maximum Special Tax A for Undeveloped Property and Other Taxable Property Fiscal Year 2006-07 Zone 1 and Zone 2 $184,872.95 per Acre 1 2 1 $189,261.73 per Acre I On each July 1, commencing July 1, 2007 the Maximum Special Tax A for Undeveloped Property and Other Taxable Property in Zone 1 and Zone 2 shall be increased by an amount equal to two percent (29/0) of the amount in effect for the previous Fiscal Year. City of Azusa April 13, 2006 IA No. 2 of CFD No. 2005-1(Rosedale) Page 10 0 2. Special Tag B (i) Maximum Special Tax B 0 The Fiscal Year 2006-07 Maximum Special Tax B for each Assessor's Parcel classified as Developed Property in Zone I and Zone 2 shall be the amount shown below in Table 6. TABLE 6 Maximum Special Tag B for Developed Property Fiscal Year 2006-07 Zone 1 and Zone 2 On each July 1, commencing July 1, 2007 the Maximum Special Tax B for Developed Property in Zone 1 and Zone 2 shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (ii) Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax B levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax B for all Land Use Classes located on that Assessor's Parcel. b. Undeveloped Pronertv The Fiscal Year 2006-07 Maximum Special Tax B for Undeveloped Property within each Zone is shown below in Table 7. My ofAzasa AprN 13, 2006 14 No. 2 of CFD No. 2005-1 (Rosedale) _ Page 11 ltSaStL ". ' a s F is s - `yyt��'. Y 4d . �'. .� L -�� '1&n 1 Residential Property $306.66 per unit $289.63 per unit 2 Non -Residential Property $4,357.97 per Acre $4,340.11 per Acre On each July 1, commencing July 1, 2007 the Maximum Special Tax B for Developed Property in Zone 1 and Zone 2 shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. (ii) Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax B levied on an Assessor's Parcel shall be the sum of the Maximum Special Tax B for all Land Use Classes located on that Assessor's Parcel. b. Undeveloped Pronertv The Fiscal Year 2006-07 Maximum Special Tax B for Undeveloped Property within each Zone is shown below in Table 7. My ofAzasa AprN 13, 2006 14 No. 2 of CFD No. 2005-1 (Rosedale) _ Page 11 0 0 TABLE 7 Maximum Special Tax B for Undeveloped Property Fiscal Year 2006-07 Zone 1 and Zone 2 $1,773.46 per Acre 2 1 $1,773.46 per Acre On each July 1, commencing July 1, 2007 the Maximum Special Tax B for Undeveloped Property in Zone 1 and Zone 2 shall be increased by an amount equal to two percent (2"/0) of the amount in effect for the previous Fiscal Year. c. Property Owner Association Property and Public Property There shall be no Special Tax B levied on Property Owner Association Property and Public Property. D. ONE-TIME SPECIAL TAX Prior to the issuance of a Certificate of Occupancy for a residential dwelling unit, the CFD Administrator shall make a one-time determination of whether or not a One -Time Special Tax payment is required for such dwelling unit. The CFD Administrator shall charge a fee for providing this determination. A One -Time Special Tax payment shall be paid by the Builder for a residential dwelling unit if the Total Tax and Assessment Obligation is expected to be greater than two percent (2.0%) of the Value for such residential dwelling unit. The amount of the One -Time Special Tax for such residential dwelling unit shall equal that Partial Prepayment Amount calculated pursuant to Section I.2 which shall be sufficient to reduce the Total Tax and Assessment Obligation to two percent (2.0%) of the Value for such residential dwelling unit. If the Total Tax and Assessment Obligation for a residential dwelling unit is expected to be less than or equal to two percent (2.01/6) of the Value of such residential dwelling unit, no One -Time Special Tax will be required. City of Azusa Apra 13, 2006 rA No. 2 of CFD No. 2005-1(Rosedale) Page 12 E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX 1. Special Tax A Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the Council shall levy the Special Tax A until the amount of Special Tax A equals the Special Tax Requirement for Facilities. The Special Tax A shall be levied each Fiscal Year as follows: First: The Special Tax A shall be levied Proportionately on each Assessor's Parcel of Developed Property in Zone 1 and Zone 2 at up to 100% of the applicable Assigned Special Tax A as needed to satisfy the Special Tax Requirement for Facilities; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax A shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property in Zone 1 and Zone 2 at up to 100% of the Maximum Special Tax A for Undeveloped Property; Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Special Tax A on each Assessor's Parcel ofDeveloped Property in Zone I and Zone 2 whose Maximum Special Tax. A is determined through the application of the Backup Special Tax A shall be increased in equal percentages from the Assigned Special Tax A up to the Maximum Special Tax A for each such Assessor's Parcel; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax A shall be levied Proportionately on each Assessor's Parcel of Other Taxable Property in Zone 1 and Zone 2 at up to the Maximum Special Tax A for Other Taxable Property. 2. Special Tax B Commencing with Fiscal Year 2006-2007 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement for Services and levy the Special Tax B, taking into consideration the levy ofthe 1A No. l Special Tax B, until the amount of Special Tax B and 1A No. 1 Special Tax B equals the Special Tax Requirement for Services. The Special Tax B shall be levied each Fiscal Year as follows: Fust: The Special Tax B shall be levied Proportionately on each Assessor's Parcel of Developed Property in Zone 1 and Zone 2 at up to 100% ofthe applicable Maximum Special Tax B as needed to satisfy the Special Tax Requirement for Services; and the Council shall be notified that under the terms of the IA No. 1 RMA, the 1A No. 1 Special Tax B shall be levied on each Assessor's Parcel of IA No. 1 Developed Property in Zone 1 and Zone 2 at up to 100% of the applicable IA No. 1 Maximum Special Tax B as needed to satisfy the Special Tax Requirement for Services; City of Azusa April 13, 2006 IA Na 2 of CFD No. 2005-1(Rosedale) Page 13 F. 0 • Second: If additional monies are needed to satisfy the Special Tax Requirement for Services after the first step has been completed, the Special Tax B shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property in Zone 1 and Zone 2 at up to 100% of the Maximum Special Tax B for Undeveloped property; the Council shall be notified that under the terms of the IA No. 1 RMA, the IA No. 1 Special Tax B shall be levied Proportionately on each Assessor's Parcel of IA No. l Undeveloped Property in Zone 1 and Zone 2 at up to 100% of the IA No. 1 Maximum Special Tax B for Undeveloped Property. 3. . One -Time Special Tax The One -Time Special Tax may be levied on any Assessor's Parcel as required in Section D. Notwithstanding the above, under no circumstances will the Special Tax A or Special Tax B levied against any Assessor's Parcel of Residential Property for which a Certificate of Occupancy for private residential use has been issued be increased by more than ten percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2005-1. 1. Special Tax A No Special Tax A shall be levied on up to 18.94 Acres of Property Owner Association Property and Public Property in Zone 1 and up to 6.70 Acres of Property Owner Association Property and Public Property in Zone 2. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property or Public Property its tax-exempt status will be revoked. Property Owner Association Property or Public Property that is not exempt from Special Tax Aunder this section shall be subject to the levy of the Special TajCA and shall be taxed Proportionatelyas part of the fourth stop in Section E.1 above, at up to 100% of the applicable Maximum Special Tax A for Other Taxable Property. 2. Special Tax B No Special Tax B shall be levied on Property Owner Association Property and Public Property. G. APPEALS AND 1NPERPRETATIONS Any landowner or resident may file a written appeal of the Special Tax on his/her property with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. Dining the pendency of an appeal, all Special Taxes previously levied must C, of Azusa April 13, 2006 IA No. 2 of CFD No. 2005-1(Rosedale) Page 14 be paid on or before the payment date established when the levy was made. Theappealmust specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. if the CFD Administrator agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax on the appellant's property and/or provide a refund to the appellant. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has 30 days in which to appeal to the Council by filing a written notice of appeal with the City Clerk, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for its disagreement with the CFD Administrator's determination. Interpretations may be made by the Council by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this Rate and Method of Apportionment. EL MANNER OF COLLECTION The Special Tare A and Special Tax B shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that IA No. 2 may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually. foreclose on delinquent Assessor's Parcels as permitted by the Act. The One -Time Special Tax shall be paid directly to the City by, or on behalf of, the Builder. I. PREPAYMENT OF SPECIAL TAX The following definitions apply to this Section I: "CFD Public Facilities" means either $21.7 million in 2006 dollars, which shall increase by the Construction Inflation Index on July 1, 2007, 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 to be provided byIANo. 2 under the authorized bonding program forIANo. 2, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taxes levied under this Rate and Method of Apportionment as described in Section E. "Construction Inflation Index" means the annual percentage change in the En&eering 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 EngWeeringNews-RecordBuilding Cost Index for the City of Los Angeles. "Future Facilities Costs" means the CFD Public Facilities minus (i) public facility costs . previously paid from the Improvement Fund, (ii) moneys currently on deposit in the -City ojAmsa April l3, 2006 M No. 2 of CFD Na 2005-I (Rosedale) Page 15 Improvement Fund, and (iii) moneys currently on deposit in an escrow fiord that are expected to be available to finance public facilities costs. "Improvement Fund" means an account specifically identified in the Indenture to hold fiords which are currently available for expenditure to acquire or construct CFD Public Facilities eligible under the Act. "Outstanding Bonds" means all Previously Issued Bonds which are deemed to be outstanding under the Indenture after the first interest and/or principal .payment date following the current Fiscal Year. , "Previously Issued Bonds" means all Bonds that have been issued by IA No. 2 priorto the date of prepayment. 1. Prepayment in Full The obligation of an Assessor's Parcel to pay the Special Tax A may be prepaid and permanently satisfied as described herein; provided that a prepayment maybe made only for Assessor's Parcels of Developed Property or Undeveloped Property for which a building permit has been issued, and only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessoes Parcel intending to prepay the Special Tax A obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner ofthe prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this service. Prepayment must be made not less than 45 days prior to the next occurring date that notice ofredemption ofBonds from the proceeds of such prepayment may be given to the Trustee pursuant to the Indenture. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): . Bond Redemption Amount plus Redemption Premium Plus FutureFacilitiesAmount plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Prepayment Amount City of Azusa ApM 13, 2006 M No. 2 of CFD Na 2005-1(Rosedale) Page 16 G �J As ofthe proposed date ofprepayment, the Prepayment Amount (defined below) shall be calculated as follows: Parauaah No.: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. For Assessor's Parcels ofDeveloped Property, compute the Assigned Special Tax A and Backup Special Tax A. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax A and Backup Special Tax A for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has ah-eadybeenissued for that Assessor's Parcel. 3. (a) Divide the Assigned Special Tax A computed pursuant to paragraph 2 by the total estimated Assigned Special Tax A for the entire IA No. 2 based on the Developed Property Special Tax A which could be charged in the current Fiscal Year on all expected development through buildout of IA No. 2, excluding any Assessor's Parcels which have been prepaid, and (b) Divide the Backup Special Tax A computed pursuant to paragraph 2 by the total estimated Backup Special Tax A at buildout for the entire IA No. 2, excluding any Assessor's Parcels which have been prepaid. 4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount'7. 5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs. 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount!). 8. Compute 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. 9. Determine the Special Tax A levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. City of Azusa AprU 13, 2006 lA No. 2 of CFD Na 2005-1(Rosedale) page 17 • •. 10. Compute the minimum amount the CFD Administrator reasonably Meets to derive from the reinvestment of the Prepayment Amount less the Future Facilities Amount and the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 11. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the amount computed pursuant to paragraph 10 (the "Defeasance Amount"). 12. Verify the administrative fees and expenses of IA No. 2, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 13. The reserve fund credit ("Reserve Fund Credit') shall equal the lesser of (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associate with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fiord on the prepayment date, but in no event shall such amount be less than zero. 14. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the expected balance in the capitalized interest fund atter such first interest and/or principal payment (the' "Capitalized Interest Credit"). 15. The Special Tax A prepayment is equal to the srmm ofthe amounts computed pursuant to paragraphs 4, 5, 7, 11 and .12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Prepayment Amount"). 16. From the Prepayment Amount, the amounts computed pursuant to paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained by IA No. 2. The Special Tax A Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereofwill be retained in the appropriate fund established under the Indenture to beused with the next prepayment of bonds or to make debt service payments. As a result of the payment ofthe current Fiscal Year's Special Tax A levy as determined under paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax A levy for such Assessor's Parcel from the County tax rolls. With respect to Cuy, ofAW4 Aprll13, 2006 14 No.1 of CFD No. 1005-1(Rosedale) Page 18 0 0 any Assessor's Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Tax A and the release of the Special Tax A lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tae A shall cease. Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Assigned Special Tax A that may be levied on Taxable Property (based on expected development at build out), both prior to and after the proposed prepayment, less expected Administrative Expenses, shall be at least 1.1 times the regularly. scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all priorprepayments) in each future Fiscal Year and such prepayment will not impair the security of all Outstanding Bonds, as reasonably determined by the CFD Administrator. The Special Tax B may not be prepaid. 2. Prepayment in Part The Special Tax A on an Assessor's Parcel ofDeveloped Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be partially prepaid. The Partial Prepayment Amount shall be calculated as in Section I.1; except that a partial prepayment shall be calculated according to the following formula: PP = [(Pa -AE) x F] + AE These terms have the following meaning: AE = the Administrative Fees and Expenses PP = the partial prepayment Ps = the Prepayment Amount calculated according to Section I.1 F = the percentage by which the owner of the Assessor's Parcel is partially prepaying the Special Tax A. The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax A and the percentage by which the Special Tax A shall be prepaid. The CFD Administrator shall provide the owner with a statement ofthe amount required for the partial prepayment of the Special Tax A for an Assessor's Parcel within thirty (30) days ofthe request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Section L1, and (ii) indicate in the•records of IA No. 2 that there has been a partial prepayment of the Special Tax A and that a portion ofthe Special Tax A with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Special Tax A, shall continue to be levied on such Assessor's Parcel pursuant to Section E. Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Assigned Special Tax A that may be levied on Taxable Property (based on expected City of Awsa . Aprfi 13, 2006 IA No. 2 of CFD No. 2005-1(Rosedale) Page 19 development at build out), both prior to and after the proposed prepayment, less expected Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year and such partial prepayment will not impair the security of all Outstanding Bonds, as reasonably determined by the. CFD Administrator. J. TERM OF SPECIAL TAX The Special Tax A and the One -Time Special Tax shall be levied for a period not to exceed fifty years commencing with Fiscal Year 2006-07. The Special Tax B shall be levied as long as necessary to meet the Special Tax Requirement for Services. K:ICGFNrSWMLMMAWUQ d20M-IWAAVA2_RMA_4.dm Cky ofAzusa ApPH 13, 2006 lA No. 2 of CFD No. 2005-1(Rosedale) - Page 20 ts�