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HomeMy WebLinkAboutE-22 Staff Report - Resolution of Intention CFD 2005-1 Annexation-c1CONSENT ITEM E-22 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: TALIKA JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES DATE: SEPTEMBER 18, 2023 SUBJECT: CONSIDERATION OF ADOPTION OF A RESOLUTION OF INTENTION DECLARING INTENTION TO ANNEX TERRITORY TO THE DESIGNATED IMPROVEMENT AREA NO. 3 OF THE COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) OF THE CITY OF AZUSA AND ADOPTING A MAP OF THE AREA PROPOSED TO BE ANNEXED THERETO (ANNEXATION NO. 1) BACKGROUND: The City Council previously formed the Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa (the “CFD”), all pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”). In connection therewith, the City Council called an election of the landowners within the territory of the CFD regarding the levy of special taxes therein. The landowners approved the formation of the CFD and levy of special taxes with over a two-thirds majority vote of the voters voting. the City Council has received a written petition from Rosedale Land Partners II LLC, a Delaware limited liability company (the “Developer”), the owner of certain real property within the City, requesting that such property be annexed to the CFD in newly-designated Improvement Area No. 3 (“Improvement Area No. 3”) in order that such property may receive the benefit of services that will be financed by the annual levy of special taxes on said property for the purpose of financing 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 (the “Services”); and agreeing to the annual levy of special taxes on said property sufficient to pay the costs of such Services and costs incidental thereto. RECOMMENDATION: Staff recommends the City Council take the following action: 1) Adopt a Resolution No. 2023-C55, A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, DECLARING INTENTION TO ANNEX TERRITORY TO THE DESIGNATED IMPROVEMENT Approved City Council September 18, 2023 CFD NO. 2005-1 (Rosedale) Annexation of Improvement Area No. 3 September 18, 2023 Page 2 AREA NO. 3 OF COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) OF THE CITY OF AZUSA AND ADOPTING A MAP OF THE AREA PROPOSED TO BE ANNEXED THERETO (ANNEXATION NO. 1) ANALYSIS: The City Council will need to consider approval of the resolution of intention to annex territory to Improvement Area No. 3 of the CFD and adopt a boundary map, which is being presented at this meeting. Resolution No. 2023-C55 describes the boundaries of the proposed annexation and adopts the boundary map; 2) describes the types of services that will be financed with the special taxes; 3) describes the rate and method of apportionment of the special taxes to be levied on the annexation property; and 4) calls for a public hearing to be held on November 6, 2023 at 7:30 p.m. in the City Council chamber. If Resolution No. 2023-C55 is adopted, the City must publish a public notice in a local paper and mail such public notice to the property owner of the territory to be annexed to Improvement Area No. 3. At its November 6, 2023, meeting, the City Council will conduct the public hearing. After the public hearing has been held, the City Council may adopt the resolution authorizing the annexation into Improvement Area No. 3 of the CFD and calling an election regarding the levy of special taxes within the CFD. The annexation of the territory to the Improvement Area No. 3 of the CFD and the levy of the proposed special taxes within such area shall be subject to approval of the qualified electors of the annexation area at a special election for the CFD, which can be held on the same day as the respective public hearing if the land owner consents to such date in writing. Ballots will be provided to the qualified electors in accordance with the Act. The ballots are then counted, and if the annexation is approved by the qualified electors, the City adopts the resolution calling the election results for the election. Following adoption of such resolutions, the City Council will consider adoption of an ordinance for the CFD authorizing the levy of special taxes within the annexation area. FISCAL IMPACT: The annexation of the property to the CFD will allow for the levy of special taxes on the property. If levied at the maximum authorized rate, for FY 2024/25 the gross special tax amount for Improvement Area No. 3 will be $18,768 and in accordance with the Rate & Method of Apportionment (i.e. Special Tax Formula), this amount will increase two-percent (2%) annually until such time as it is determined that the levy of such special taxes is not required to fund services. The tax revenues offset the cost the City pays for services such as police protection, fire protection and suppression services, maintenance of park, parkways and open space, and any other allowable services. CFD NO. 2005-1 (Rosedale) Annexation of Improvement Area No. 3 September 18, 2023 Page 3 Prepared By: Reviewed and Approved: Talika M. Johnson Sergio Gonzalez Director of Administrative Services City Manager Attachments: 1. Resolution No. 2023-C55 2. Annexation Proceedings Deposit Agreement 45635.01442\40878389.2 1 RESOLUTION NO. 2023-C55 RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, DECLARING INTENTION TO ANNEX TERRITORY TO THE DESIGNATED IMPROVEMENT AREA NO. 3 OF COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) OF THE CITY OF AZUSA AND ADOPTING A MAP OF THE AREA PROPOSED TO BE ANNEXED THERETO (ANNEXATION NO. 1) WHEREAS, the City Council (the “City Council”) of the City of Azusa (the “City”) has established the Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa, County of Los Angeles, State of California (the “District”) and designated Improvement Area No. 1 and Improvement Area No. 2 therein for the purpose of levying special taxes on parcels of taxable property therein for the purpose of providing, among other things, certain services that are necessary to meet increased demands placed upon the City as a result of the development of said real property; and WHEREAS, the City Council has received a written petition from Rosedale Land Partners II LLC, a Delaware limited liability company (the “Developer”), the owner of certain real property within the City, requesting that such property be annexed to the District in newly- designated Improvement Area No. 3 (“Improvement Area No. 3”) in order that such property may receive the benefit of services which will be financed by the annual levy of special taxes on said property for the purpose of financing 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 (defined below) (the “Services”); and agreeing to the annual levy of special taxes on said property sufficient to pay the costs of such Services and costs incidental thereto; and WHEREAS, the City Council is authorized by Article 3.5 (commencing with Section 53339) of Chapter 2.5 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”), to designate Improvement Area No. 3 in conjunction with the annexation of territory to the District by complying with the procedures set forth in said Article 3.5. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Recitals. The above recitals are true and correct and are hereby incorporated into this resolution. SECTION 2. Name of District. The name of the existing community facilities district is “Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa, County of Attachment 1 45635.01442\40878389.2 2 Los Angeles, State of California.” The name of the newly-designated improvement area pursuant to Section 53350(a) of the Act shall be “Improvement Area No. 3.” SECTION 3. Intention. The City Council declares its intention to conduct proceedings pursuant to said Article 3.5 for the designation of and annexation to Improvement Area No. 3 of the District of the territory described in Exhibit “A” attached hereto. The City Council determines that the public convenience and necessity require that such territory be annexed to Improvement Area No. 3 of the District but only to finance Services. The territory to be annexed to Improvement Area No. 3 of the District shall not finance public facilities other than those that fall under the definition of Services. SECTION 4. Description of Territory Proposed To Be Annexed; Annexation Map. The territory that is included in the District and each existing improvement area is described on the boundary map of the District recorded on April 26, 2006, in Book 191 of Maps of Assessment and Community Facilities Districts, page 91 and 92, and as Instrument No. 06- 0016873 in the office of the County Recorder for the County of Los Angeles, State of California. The territory proposed to be designated as Improvement Area No. 3 as it is annexed to the District is described in Exhibit “A” attached hereto and by this reference made a part hereof. Such territory is also shown and described on the map thereof entitled “Annexation Map No. 3, Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa, County of Los Angeles, State of California,” which is on file with the City Clerk (the “Annexation Map”). SECTION 5. Types of Services; Incidental Expenses. Improvement Area No. 3 shall be authorized to finance Services only. The Services authorized to be financed by Improvement Area No. 3 include 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. Improvement Area No. 3 shall also finance costs associated with the determination of the amount of and the levy and collection of special taxes that are levied to provide such services and costs otherwise incurred in order to carry out the authorized purposes of Improvement Area No. 3. SECTION 6. Special Taxes. Except where funds are otherwise available, special taxes sufficient to pay the costs of the Services provided for in Section 5 above and the annual administrative expenses of the City and the District in determining, apportioning, levying and collecting such special taxes in Improvement Area No. 3, shall be annually levied within Improvement Area No. 3. Pursuant to Section 53339.3(d) of the Act, the special tax proposed to pay for Services in the territory proposed to be annexed into Improvement Area No. 3 is equal to the special tax levied to pay for the same Services in Improvement Area No. 1 of the District. Pursuant to Section 53340 of the California Government Code, the 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, provided, however, the District may provide to the property owners a direct bill in the event it is unable to enroll the special taxes on the County tax roll in any year. The rate and method of apportionment of said special taxes for Improvement Area No. 3 shall be as set forth in Exhibit “B” attached hereto and by this reference made a part hereof. 45635.01442\40878389.2 3 SECTION 7. Adoption of Annexation Map. Pursuant to Section 3110.5 of the Streets and Highways Code, the City Council adopts the Annexation Map as the map of the area proposed to be annexed to Improvement Area No. 3 of the District. Pursuant to Section 3111 of the Streets and Highways Code, the City Clerk shall file the original of the Annexation Map in his or her office and shall file a copy of the Annexation Map with the County Recorder of the County of Los Angeles no later than 15 days after adoption of this Resolution. SECTION 8. Exempt Properties. Pursuant to Section 53340 of the California Government Code, properties of entities of the state, federal, and local governments shall be exempt from the levy of special taxes of Improvement Area No. 3 of the District. SECTION 9. Necessity. The City Council finds that the Services described in Section 5 hereof are necessary to meet increased demands placed upon the City as a result of development occurring within the boundaries of the proposed annexation of territory to Improvement Area No. 3 of the District. SECTION 10. Hearing on Annexation of Territory. A public hearing on the designation of and annexation of territory into Improvement Area No. 3 of the District shall be held at 7:30 p.m. on November 6, 2023, in the Azusa Civic Auditorium, 213 E. Foothill Blvd., Azusa, CA 91702 or via teleconference as directed by the City due to COVID-19 social distancing guidelines. SECTION 11. Notice. The City Clerk shall publish a notice of the time and place of said hearing as required by Section 53322 and Section 53339.4 of the California Government Code, and shall also give notice of the time and place of said hearing by first-class mail to each registered voter and to each landowner within the territory proposed to be annexed into Improvement Area No. 3 of the District as prescribed by Section 53322.4 and Section 53339.4 of the California Government Code. Said notice shall be published at least seven (7) days and mailed at least fifteen (15) days before the date of the hearing, and shall contain the information required by said Section 53322. SECTION 12. Report. The officers of the City who are responsible for providing the Services to be financed by Improvement Area No. 3 of the District are hereby directed to amend the Community Facilities District report prepared in connection with the formation of the District. All such reports shall be made a part of the record of the hearing to be held pursuant to Section 10 hereof. SECTION 13. Description of Voting Procedures. The voting procedures to be followed in conducting the election on the proposition with respect to the levy of special taxes within the territory proposed to be annexed to Improvement Area No. 3 of the District shall be as follows: (a) If at the time of the close of the public or protest hearing (hereinafter referred to as the “protest hearing”) at least 12 persons are registered to vote within the territory proposed to be annexed to Improvement Area No. 3 of the District, the election 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 45635.01442\40878389.2 4 Government Code (“Section 53326”) and pursuant to the applicable provisions of law regulating elections of the City, insofar as they may be applicable, and pursuant to Section 53326 the ballots for the election shall be distributed to the qualified electors of the territory proposed to be annexed to Improvement Area No. 3 of the District by mail with return postage prepaid and the election shall be conducted as a mail ballot election. (b) If at the time of the close of the protest hearing, and for at least the preceding 90 days, less than 12 persons have been registered to vote within the territory proposed to be annexed to Improvement Area No. 3 of the District, and pursuant to Section 53326, the vote is therefore to be by the landowners of that territory, with each landowner 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, the election shall be conducted by the City Clerk as follows: (1) The election shall be held on the earliest date following the conclusion of the protest hearing upon which it can be held pursuant to Section 53326, which may be selected by the City Council, or such earlier date as the owners of land within the territory proposed to be annexed to Improvement Area No. 3 of the District and the City Clerk agree and concur is acceptable. (2) Pursuant to Section 53326, the election may be held earlier than 90 days following the close of the protest hearing if the qualified electors of the territory proposed to be annexed to Improvement Area No. 3 of the District waive the time limits for conducting the election set forth in Section 53326 by unanimous written consent and the City Clerk concurs in such earlier election date, as shall be consented to by the qualified electors. (3) Pursuant to Section 53326, ballots for the election shall be distributed to the qualified electors by the City Clerk by mail with return postage prepaid or by personal service. (4) Pursuant to applicable provisions of law regulating elections of the City, which govern the conduct of mail ballot elections, and Division 4 (commencing with Section 4000) of the California Elections Code with respect to elections conducted by mail, the City Clerk shall mail or deliver to each qualified elector an official ballot in a form specified by the City Council in the resolution calling the election, and shall also mail or deliver to all such qualified electors a ballot pamphlet and instructions to voter, including a sample ballot identical in form to the official ballot but identified as a sample ballot, a statement pursuant to Section 9401 of the said Code, an impartial analysis by the City Attorney pursuant to Section 9280 of the said Code with respect to the ballot proposition contained in the official ballot, ballot arguments and rebuttals, if any, pursuant to Sections 9281 to 9287, inclusive, of said Code, a return identification envelope with prepaid postage thereon addressed to the City Clerk for the return of voted official ballots, and a copy of this resolution; provided, however, that such statement, analysis and arguments may be waived with the unanimous consent of all the landowners of the 45635.01442\40878389.2 5 territory proposed to be annexed to Improvement Area No. 3 of the District and shall be so stated in the resolution adopted by the City Council calling the election. (5) The official ballot to be mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the name of the landowner-voter and the number of votes to be voted by the landowner-voter, and shall have appended to it a certification to be signed by the person voting the official ballot, which shall certify that the person signing the certification is the person who voted the official ballot, and if the landowner-voter is other than a natural person, that he or she is an officer of or other person affiliated with the landowner-voter entitled to vote such official ballot, that he or she has been authorized to vote such official ballot on behalf of the landowner-voter, that in voting such official ballot it was his or her intent, as well as the intent of the landowner-voter, to vote all votes to which the landowner-voter is entitled based on its land ownership on the proposition set forth in the official ballot as marked thereon in the voting square opposite such proposition, and further certifying as to the acreage of the landowner- voter’s land ownership within the territory proposed to be annexed to Improvement Area No. 3 of the District. (6) The return identification envelope delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the following: (i) the name of the landowner, (ii) the address of the landowner, (iii) a declaration under penalty of perjury stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, (iv) the printed name and signature of the voter, (v) the address of the voter, (vi) the date of signing and place of execution of said declaration, and (vii) a notice that the envelope contains an official ballot and is to be opened only by the City Clerk. (7) The information-to-voter form to be mailed or delivered by the City Clerk to the landowner-voters shall inform them that the official ballots shall be returned to the City Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon properly inserted by 7:30 o’clock p.m. on the date of the election. (8) Upon receipt of the return identification envelopes that are returned prior to the voting deadline on the date of the election, the City Clerk shall canvass the votes cast in the election, and shall file a statement with the City Council at the same meeting regarding the results of such canvass and the election. The procedures set forth in this section for conducting the election may be modified as the City Council may determine to be necessary or desirable by a resolution subsequently adopted by the City Council. 45635.01442\40878389.2 6 SECTION 14. Certification. The City Clerk shall certify the passage and adoption of this resolution. PASSED, APPROVED AND ADOPTED this 18th day of September, 2023, by the following vote: By: Robert Gonzales, Mayor I HEREBY CERTIFY that the foregoing Resolution No. 2023-C55 was duly adopted by the City Council of the City of Azusa at a regular meeting held on the 18th day of September 2023, by the following vote of the City Council: AYES: NOES: ABSENT: ABSTAIN: Jeffrey Lawrence Cornejo Jr., City Clerk 45635.01442\40878389.2 A-1 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY The Property that is subject to this petition is identified as LOTS 1 THROUGH 23 AND LOTS “A” THROUGH “F” OF TRACT NO. 083344, IN THE CITY OF AZUSA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1441, PAGES 51 THROUGH 56, INCLUSIVE, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. 45635.01442\40878389.2 B-1 EXHIBIT B RATE AND METHOD OF APPORTIONMENT FOR IMPROVEMENT AREA NO. 3 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. 3 ("IA No. 3") 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 2024-2025, in an amount determined by the Council through the application of the appropriate Special Tax for "Developed Property" and "Undeveloped Property" as described below. All of the real property in IA No. 3, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre” or “Acreage" means the land area of an Assessor’s Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final 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. 3 including: 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 associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, IA No. 3 or any designee thereof related to an appeal of the Special Tax; that portion of the City’s overhead and staff time related to the administration of IA No. 3; and the City’s third party expenses related to the administration of IA No. 3. Administrative Expenses shall also include amounts estimated or advanced by the City or IA No. 3 for any other administrative purposes of IA No. 3, 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 of the County designating parcels by Assessor's Parcel number. 45635.01442\40878389.2 2 "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement for Services, and providing for the levy and collection of the Special Taxes. "CFD No. 2005-1" means Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa. "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 for which a building permit for new construction was issued after January 1, 2023, and as of May 1 of the previous Fiscal Year. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Improvement Area No. 3" or "IA No. 3" means Improvement Area No. 3 of CFD No. 2005-1, as identified on the annexation map for CFD No. 2005-1, Improvement Area No. 3. "Land Use Class" means any of the classes listed in Table 1. "Maximum Special Tax " means the Maximum Special Tax, determined in accordance with Section C below, that can be levied in any Fiscal Year on any Assessor’s Parcel within IA No. 3. "Non-Residential Property" means all Assessor’s Parcels of Developed Property for which one or more building permits have been issued for non-residential use. "Property Owner Association Property" means, for each Fiscal Year, any Assessor’s Parcel within the boundaries of IA No. 3 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 levy to the Maximum Special Tax is equal for all Assessor’s Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor’s Parcels of Undeveloped Property. "Public Property" means, for each Fiscal Year, (i) any property within the boundaries of IA No. 3 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 IA No. 3 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 Property" means all Assessor’s Parcels of Developed Property for which a building permit has been issued for the purposes of constructing one or more residential dwelling units. "RMA" means this Rate and Method of Apportionment. "Special Tax" 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. 45635.01442\40878389.2 3 "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 as determined by the CFD Administrator; less (iii) a credit for funds available to reduce the annual Special Tax 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. 3. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of IA No. 3 which are not exempt from the Special Tax pursuant to law or Section E below. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within IA No. 3 shall be classified as Developed 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 The Fiscal Year 2024-25 Maximum Special Tax for each Assessor’s Parcel classified as Residential Property, Non-Residential Property and Undeveloped Property shall be the amount shown below in Table 1. TABLE 1 Maximum Special Tax for Fiscal Year 2024-25 Land Use Class Land Use Description FY 2024-25 Maximum Special Tax 1 Residential Property $816 Per dwelling unit 2 Non-Residential Property $4,697 Per Acre 3 Undeveloped Property $4,697 Per Acre On each July 1, commencing on July 1, 2025, the Maximum Special Tax applicable to Land Use Class 1-3 shall be increased by two-percent (2%) of the amount in effect for the previous Fiscal Year. There shall be no Special Tax levied on Property Owner Association Property and Public Property. In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for all Land Use Classes located on that Assessor’s Parcel. 45635.01442\40878389.2 4 D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2024-2025 and for each following Fiscal Year, the City shall determine the Special Tax Requirement for Services and levy the Special Tax as follows: First: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Residential Property at up to 100% of the applicable Maximum Special Tax for Residential Property as needed to satisfy the Special Tax Requirement for Services. Second: If additional monies are needed to satisfy the Special Tax Requirement for Services after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Non- Residential Property at up to 100% of the Maximum Special Tax for Non-Residential Property. Third: If additional monies are needed to satisfy the Special Tax Requirement for Services after the second step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Undeveloped Property E. EXEMPTIONS No Special Tax shall be levied on Property Owner Association Property or Public Property. F. APPEALS AND INTERPRETATIONS 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. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall 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 the purpose of clarifying any vagueness or ambiguity in this Rate and Method of Apportionment. G. MANNER OF COLLECTION The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that IA No. 3 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. H. TERM OF SPECIAL TAX The Special Tax shall be levied as long as necessary to meet the Special Tax Requirement for Services. 45635.01442\40877879.2 1 COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) OF THE CITY OF AZUSA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA (IMPROVEMENT AREA NO. 3) ANNEXATION PROCEEDINGS DEPOSIT AGREEMENT THIS ANNEXATION PROCEEDINGS DEPOSIT AGREEMENT is made and entered into this 1st day of August, 2023 (the “Agreement”), by and between the CITY OF AZUSA, a municipal corporation (the “City”), and ROSEDALE LAND PARTNERS II LLC, a Delaware limited liability company (the “Applicant”). R E C I T A L S A.The Applicant has requested that the City initiate proceedings under the provisions of the “Mello- Roos Community Facilities Act of 1982,” as amended (Government Code Section 53311 and following) (the “Act”), to designate Improvement Area No. 3 of Community Facilities District No. 2005-1 (Rosedale) of the City of Azusa, County of Los Angeles, State of California (the “District”) and to annex certain property owned by the Applicant (the “Property”) to Improvement Area No. 3 of the District. B.The City shall incur certain costs in conducting the proceedings to annex the Property to Improvement Area No. 3 of the District (the “Annexation Proceedings”). C.The City has determined that the Applicant’s request will not be acted upon by the City until the Applicant has paid to the City a fee (the “Annexation Fee”) that the City Council of the City has determined is sufficient to compensate the City for all costs incurred conducting the Annexation Proceedings (the “Annexation Costs”). D.The Applicant agrees to pay the Annexation Fee to the City, as provided for herein for the payment of all costs incurred by the City in conducting the Annexation Proceedings. E.The parties hereto wish to enter into this Agreement to memorialize the terms and conditions pursuant to which the Applicant shall pay the Annexation Fee. A G R E E M E N T The parties hereto, for mutual consideration, agree as follows: Section 1. Annexation Fee Payments. (a) The Applicant shall pay the Annexation Fee to the City in such amounts and at such times as specified below to pay all Annexation Costs incurred by the City in conducting the Annexation Proceedings. The Annexation Costs shall include, without limitation, the following costs incurred by the City, City staff, City Attorney, City special counsel and City special tax consultant time, if any, utilized in the following tasks: (1)Preparation of this Agreement; Attachment 2 45635.01442\40877879.2 2 (2) Determination and verification of property ownership; (3) Preparation of the rate and method of apportionment of the special tax for Improvement Area No. 3; (4) Preparation of the consent and waiver form for execution by the Applicant, ballot materials, the staff report pertaining to the resolution certifying the results of the election, such resolution itself and the amendment to notice of special tax lien; (5) Request for verification from the Registrar of Voters of the County of Los Angeles that no voters are registered to vote within the Property; (6) Preparation of the annexation map of the Property; (7) Publication of notice of public hearing; (8) Review of executed consent and waiver form, verification of ownership of the Property and authorization of the Applicant’s representative to execute the consent and waiver form on behalf of the Applicant; (9) Canvass of the ballot; (10) Recordation of the amendment to notice of special tax lien; and (11) Providing information to the Applicant or the Applicant’s representative regarding the Annexation Proceedings and responding to questions from the Applicant or the Applicant’s representative. Nothing contained herein shall preclude the City from contracting with its special tax consultant, special counsel or other consultant to provide any one or more of the above tasks. All such costs and expenses are collectively referred to as the “Annexation Costs.” (b) The Annexation Fee payments shall be made to the City pursuant to the following schedule: (1) The Applicant has paid an initial Annexation Fee installment in the amount of $20,000, receipt of which is hereby acknowledged by the City. (2) It is anticipated that the Annexation Costs may exceed the initial payment set forth in clause 1 above, and that it may be necessary that the Applicant pay additional installments to the City in order to pay the full amount of Annexation Costs. If, at any time, the amount of the available funds from the payments on deposit with the City falls below $5,000 and the City reasonably determines that the remaining Annexation Costs will exceed the remaining amount of payments on deposit with the City, the City shall notify Applicant, in writing, of that determination and of the estimated additional amount that the Applicant must pay to the City in order for the City to pay the additional amount of the Annexation Costs. Upon receipt of such notification, the Applicant shall pay the additional amount specified therein with the City within ten (10) business days of the date thereof. If the Applicant fails to pay any such additional amount to the City, the City may suspend the Annexation Proceedings until such time as the additional amounts are paid to the City. The sole source for the payment of the Annexation 45635.01442\40877879.2 3 Costs shall be the amounts paid by the Applicant to the City pursuant to this Agreement, and the City's responsibility to pay the Annexation Costs shall be limited to the amounts so paid by the Applicant. Section 2. Records. The City agrees to keep records consistent with its regular accounting practices of the amount of monies paid to the City by the Applicant and the expenditure of such monies. Additionally, the City shall enter into and maintain contracts with all consultants, if any, that shall specify the scope of services pertaining to the Annexation Proceedings and compensation to be paid to such consultants for such services. Such records and contracts shall be available for review by the Applicant during normal business hours and upon reasonable notice to the City. Section 3. Reimbursement. There will be no obligation on the part of the City or the District to reimburse the Applicant for any monies previously paid by the Applicant to the City and expended to pay Annexation Costs pursuant to this Agreement. However, following the completion of the Annexation Proceedings or following the determination that the Annexation Proceedings have been terminated, the City shall return to the Applicant any monies previously paid by the Applicant that remain on deposit with the City and that the City determines are in excess of the amount necessary to pay for any outstanding Annexation Costs previously incurred by the City. Section 4. No Obligation to Annex the Property to the District. The Applicant acknowledges that the decision of the City Council to annex the Property to Improvement Area No. 3 of the District is an exercise of the legislative authority of the City Council and that the City may not enter into a contract to obligate the City Council to exercise its legislative discretion in a particular manner. This Agreement does not, therefore, in any way create a contractual, legal or equitable obligation of or commitment by the City to approve the annexation of the Property to Improvement Area No. 3 of the District. The City expressly reserves the right to abandon the Annexation Proceedings for any reason at any time prior to the completion thereof. Section 5. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 6. Authority to Execute Agreement. The City and the Applicant represent that the individuals signing this Agreement have full right and authority to bind their respective parties to this Agreement. Section 7. Successor and Assigns. This Agreement shall be binding on and inure to the benefit of the respective parties and their respective heirs, legal representatives, successors and assigns. The Applicant may not assign its rights or obligations hereunder except upon written notice to the City within ten (10) days of the date of such assignment indicating the name and address of the assignee. Upon such notice and the assumption by the assignee in writing delivered to the City of the rights, duties and obligations of the Applicant arising under or from this Agreement, the Applicant shall be released for all future duties or obligations arising under or from this Agreement. Section 8. Singular and Plural; Gender. Whenever used herein, the singular number shall include the plural, the plural number shall include the singular, and the masculine feminine or neuter gender shall include the others whenever the context of the Agreement so indicates. 45635.01442\40877879.2 4 Section 9. Entire Agreement. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof. This Agreement may not be altered, modified or amended except by an instrument in writing executed by all of the parties. Section 10. Governing Law. This Agreement has been executed in and shall be governed by the laws of the State of California. Section 11. Construction. This Agreement has been reviewed by legal counsel for both the City and the Applicant and shall be deemed for all purposes to have been jointly drafted by the City and the Applicant. No presumption or rule that ambiguities shall be construed against the drafting party shall apply to the interpretation or enforcement of this Agreement. The language in all parts of this Agreement, in all cases, shall be construed as a whole and in accordance with its fair meaning and not strictly for or against any party and consistent with the provisions hereof, in order to achieve the objectives of the parties hereunder. The captions of the sections and subsections of this Agreement are for convenience only and shall not be considered or referred to in resolving questions of construction. Section 12. Severability. In the event that any one or more of the provisions of this Agreement that is or are material to the entering into this Agreement by either the Applicant or the City shall for any reason be held to be unenforceable in any material respect by a court of competent jurisdiction, the Applicant and the City may mutually agree that such unenforceability shall not affect any other provision of this Agreement, and that this Agreement shall be construed as if such unenforceable provision or provisions had never been contained herein. If the Applicant and the City fail to so mutually agree, this Agreement shall terminate, without penalty to either party, after the giving by one party of thirty (30) days’ prior written notice to the other party. In such event, the City shall use all efforts to minimize any and all Annexation Costs and shall return to the Applicant any monies previously advanced that remain on deposit with the City and that the City determines are in excess of the amount necessary to pay for any outstanding Annexation Costs previously incurred by the City. Section 13. Notices. All notices and demands shall be given in writing by personal delivery or first-class mail, postage prepaid. Notices shall be addressed as appears below for the respective party; provided that, if any party gives notice of a change of name of address, notices to the giver of that notice shall thereafter be given as demanded in that notice. Notices shall be deemed received seventy-two (72) hours after deposit in the United States mail. CITY: City of Azusa 213 E Foothill Blvd, Azusa, CA 91702 Attention: City Manager APPLICANT: Rosedale Land Partners II, LLC 888 San Clemente Drive, Suite 200, Newport Beach, CA 92660 Attention: Bill Holman, Vice President Section 14. Time of the Essence. Time is of the essence in the performance of the parties respective obligations herein contained. 45635.01442\40877879.2 5 Section 15. Waiver. The waiver by one party of the performance of any covenant, condition or promise shall not invalidate this Agreement, nor shall it be considered a waiver by such party of any other covenant, condition or promise. The waiver by either or both parties of the time for performing any act shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later time. The exercise of any remedy provided in this Agreement shall not be a waiver of any consistent remedy provided by law, and any provision of this Agreement for any remedy shall not exclude other consistent remedies unless they are expressly excluded. Section 16. Amendment. No provision of this Agreement may be modified, waived, amended or added to except by a writing signed by the party against which the enforcement of such modification, waiver, amendment or addition is or may be sought. Section 17. Termination. Either party may terminate this Agreement by giving the other party ten (10) business days prior written notice, and in the case of the Applicant, by also paying to the City an amount of money that, together with the remaining balance of the payments paid by the Applicant pursuant to Section 1 above, will be sufficient to pay all costs incurred to the date of termination pursuant to the terms of this Agreement, and in the case of the City, by also refunding to the Applicant any remaining balance of the amounts paid by the Applicant pursuant to Section 1 above after payment of all costs incurred to the date of termination. [Remainder of this page intentionally left blank.] 45635.01442\40877879.2 S-1 Signature Page to Annexation Proceedings Deposit Agreement between the City of Azusa and Applicant IN WITNESS WHEREOF, the City and the Applicant have executed this Agreement thereby indicating that they have read and understood same, and indicate their full and complete consent to its terms. CITY OF AZUSA By: Title: Sergio, Gonzalez, City Manager APPLICANT: ROSEDALE LAND PARTNERS II, LLC a Delaware limited liability company by: CDG ROSEDALE INVESTMENT, LLC, a Delaware limited liability company its Administrative Member By: ________________________________ Daniel O’Bannon, Chief Financial Officer