RES-8545 Calling Special Election Regarding Alteration of the Rate and Method of Apportionment of Special Taxes Community Facilities District No. 91-2RESOLUTION NO. 8545
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF ORANGE CALLING SPECIAL ELECTION
REGARDING ALTERATION OF THE RATE AND
METHOD OF APPORTIONMENT OF SPECIAL TAXES
FOR THE CITY OF ORANGE COMMUNITY
FACILITIES DISTRICT NO. 91-2 (SERRANO
HEIGHTS PUBLIC
IMPROVEMENTS).WHEREAS, in its proceedings for the City of Orange Community Facilities District
No,91-2 (Serrano Heights Public Improvements) (the "District"), this City Council, on
December 17,1991, adopted a resolution entitled " A Resolution of the City Council of the City of
Orange of Fonnation of City of Orange Community Facilities District No. 91-2 (
Serrano Heights Public Improvements), Authorizing the Levy of a Special Tax within
the District, Preliminarily Establishing an Appropriations Limit for the District and Submitting Levy of the
Special Tax and the Establishment of the Appropriations Limit to the Qualified Electors of
the District" (the Resolution of Fonnation"). which resolution established the District and authorized the
levy of a special tax
within the District;WHEREAS, on October 10, 1995, this City Council adopted a
resolution entitled "A Resolution of the City Council of the City of Orange of Consideration to Alter
the Rate and Method of Apportionment of Special Taxes Within the City of
Orange Community Facilities District No, 91-2 (Serrano Heights Public Improvements)" (
the "Resolution of Consideration"),proposing to amend and restate the rate and method of apportionment of the
special taxes to be levied within the District (the "Rate and Method of Apportionment"),
pursuant to the Mello-Roos Community Facilities Act of
1982, an amended (the "Act");WHEREAS, the Resolution of Consideration, which makes reference
to the map of the boundaries of the District and contains a description of the
proposed amended and restated Rate and Method of Apportionment, is on file with the City Clerk
and the provisions thereof are incorporated herein by this reference as
if fully set forth herein;WHEREAS, on this date, this City Council held a noticed
public hearing as required by the Act and the Resolution of Consideration relative to the
proposed amended and restatedRateand Method of Apportic:,ment for the District as set forth in Exhibit
A hereto, which has been provided to and reviewed hy the representatives of the owner of all of
the land in the District;WHEREAS, at said hearing all interested persons desiring to
be heard on all matters pertaining to the proposed amended and restated Rate and
Method of Apportionment were heard and a full
and fair hearing was held;WHEREAS, at said hearing evidence was presented to this
City Council on said matters before it and this City Council at the conclusion of said hearing is
fully advised in the premises;WHEREAS, written protests with respect to the proposed
amended and restated Rate and Method of Apportionment for the District have not been filed with the
City Clerk by fifty percent 50%) of more of the registered voters residing within the territory
of the District or property owners of one-half (1/2) or more of the area of land within the
District and not exempt from the
WHEREAS, the proposition of the amended and restatement of the Rate and Method of
Apportionment for the District shan be submitted to the qualified electors of the District as
required by the Act,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES
HEREBY RESOLVE AS FOLLOWS:
Section 1. The foregoing recitals are true and correct,
Section 2. The proposed amended and restated Rate and Method of Apportionment of the
special tax to be levied within the District has not been precluded by majority protest pursuant to
Section 53337 of the Act,
Section 3. All prior proceedings taken by this City Council in connection with the
proposed alteration of the Rate and Method of Apportionment for the District as set forth in the
Resolution of Consideration have been duly considered and are hereby found and determined to be
valid and in conformity with the requirements of the Act.
Section 4. The Rate and Method of Apportionment for the District is hereby altered from
that specified in the Resolution of F onnation and shall be as specified in the Rate and Method of
Apportionment for the City of Orange Community Facilities District No. 91-2 (Serrano
Heights Public Improvements) sct forth in Exhibit A attached hereto and hereby made a part
hereof.Section 5. Pursuant to Section 53338(a) of the Act, the issue of the alteration of the
Rate and Method of Apportionment of the special tax to be levied within the District shan be
submitted to the qualified electors of the District at an election called therefore as provided
below.Section 6. The proposition to alter the Rate and Method of Apportionment for the
District shall be submitted to the qualified electors of the District in a banot measure, the form of which
is attached hereto as Exhibit B and by this reference incorporated herein. Said form of banot
is hereby
approved,Section 7. This City Council hereby finds that fewer than 12 persons have been
registered to vote within the territory of the District for each of the 90 days preceding the close of the
public hearing heretofore conducted and concluded by the City Council for the purposes of
these proceedings, Accordingly, and pursuant to Section53326(b) of the Act, this City Council
finds that for purposes of these proceedings the qualified electors are the landowners within the
District and that the vote shall be by said landowners or their authorized representatives, each having
one vote for each acre or portion thereof such landowner owns in the District as of the close of
said public
hearing.Section 8. The City Council hereby calls a special election to consider the
measure described in Section 6 hereof, which election shan be held in the City Council
Chambers inunediately fonowing the adoption of this Resolution. The City Clerk is hereby designated as
the official to conduct said election. The City Clerk has been provided with a copy of this
Resolution,a map of the boundaries of the District and a sufficient description to allow the City Clerk
to determine the boundaries of the
District.RESO NO. 8545 2-
The voted ballots shall be returned to the City Clerk not later than immediately following the
adoption of this Resolution, and, when all of the qualified voters have voted, the election shall be
closed and canvassed,
Section 9. Pursuant to Section 53327 of the Code, the election shall be conducted by mail
or band delivered ballot pursuant to Section 4000 of the California Elections Code. This City
Council hereby finds that paragraphs (a), (b), (c)(l) and (c)(3) of said Section 4000 are applicable
to this special election,
Section 10. The City Clerk has caused to be delivered to each of the qualified electors of
the District a ballot in the form set forth in Exhibit B hereto, Each ballot indicated the number of
voters to be voted by the respective landowner to which it pertains,
Each ballot was accompanied by all supplies and written instructions necessary for the use
and return of the ballot. The envelope to be used to return the ballot was enclosed with the ballot,
with the return postage prepaid, and contained the following: (a) the name and address of the
landowner, (b) a declaration, under penalty of perjury, stating that the voter is the owner of record
or the authorized representative of the landowner entitled to vote and is the person whose name
appears on the envelope, (c) the printed name, signature and address of the voter , (d) the date of
signing and place of execution of the declaration pursuant to clause (b) above, and ( e) a notice that
the envelope contained an official ballot and was to be opened only by the canvassing board,
Analysis and arguments with respect to the ballot measures are hereby waived, as provided
in Section 53327(b) of the Act.
Section 11. The City Clerk shall accept the ballots of the qualified electors received prior
to or immediately following the adoption of this Resolution, whether said ballots be personally
delivered or received by mail. The City Clerk shall have available ballots which may be marked on
the election day by said qualified electors,
Section 12. The City Council hereby further finds that to the extent that the provisions of
Section 53326 of the Act require a minimum of 90 days following the adoption of this Resolution
to elapse before said special election, such provisions are for the protection of the qualified electors
of the District, This City Council finds and determines that the qualified elector has been fully
apprised of and has agreed to waive such minimum time for the election, as evidenced by the
inclusion of such waiver in the ballot of such landowner, and has thereby been fully protected in
these proceedings. The City Council also finds and determines that the City Clerk has concurred in
the shortened time for the election.
Section 13. This Resolution shall take effect immediately upon its adoption,
RESO NO. 8545 3-DPWE-
ADOPTED this 14th day of November. 1995,
h~7
JOl!ime Coontz, Mayor of the City 0 range
ATTEST:
I hereby certify that the foregoing Resolution was duly and regularly adopted by the City
Council of the City of Orange at a regular meeting thereof held on the 14th day of November,
1995, by the following vote:
AYES:COUNCIL MEMBERS: MURPHY, BARRERA I MAYOR CCONTZ, SPURGEON,
SLATER
COUNCIL MEMBERS: NONENOES:
ABSENT:COUNCIL MEMBERS: NONE
ABSTAIN:COUNCIL MEMBERS: NONE
RESO NO, 8545 4-DPWE-
EXIllBITA
RATE AND METHOD OF APPORTIONMENT FOR
THE CITY OF ORANGE
COMMUNITY FACILITIES DISTRICT NO. 91-
2 SERRANO HEIGHTS PUBLIC
IMPROVEMENTS)A Special Tax shall be levied and collected in the City of Orange Community Facilities
District No. 91-2 (Serrano Heights Public Improvements) each Fiscal Year, in an amount
determined by the Finance Director of the City or his designee through the application of
the procedures described below. All of the real property in CFD No, 91-2, 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. DEFINITIONS The terms used herein shall have
the following meanings:Act" means the Mello-Roos Community Facilities Act of
1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code
of
the State of California.Atlmini<<trative Expenses" means any or all of the following: the
fees and expenses of any fiscal agent (including any fees or expenses of its counsel) employed
by the City in connection with any bonds of CFD No. 91-2, the expenses of
the City in carrying out its duties under any fisca1 agent agreement with respect to
such bonds, including, but not limited to, the levy and collection of the Special Tax, any
City charges and including the fees and expenses of its counsel, an allocable share of the
salaries of City staff directly related thereto and a proportionate amount
of City general administrative overhead related thereto, and all other costs and expenses of the City
or any fiscal agent incurred in connection with the discharge of their respective
duties under any fiscal agent agreement with respect to such bonds and, in the case of the City,
in any way related to the
administration of CFD No. 91-2.Apartment" means any Parcel of Residential Property
that consists of a building or buildings comprised of attached residential units
available for rental, but not purchase,by the
general public and under common management.Assessor's Parcel" or "Parcel" means a lot or
parcel with a parcel number assigned
CFD No. 91-
2 Page
2 Assigned Special Tax" means the Special Tax described in Section C that applies
to Parcels of Developed
Property.Backup Special Tax" means that Special Tax described in Section C that may
apply to Parcels of Developed
Property.CFD No. 91-2" means Community Facilities District No. 91-2 (
Serrano Heights Public Improvements) established by the City under the Act, including
any annexations thereto.City" means the City
of Orange, California.Condominium" means a unit meeting the statutory defInition
of a condominium contained in California Civil
Code, Section 1351.Council" means the City Council of the City, acting as the legislative
body of
CFD No. 91-2.County" means
the County of Orange.Developed Property" means for any Fiscal Year, any Parcel
of Taxable Property for which a building pennit was issued, as of March I of
the prior Fiscal Year.Development Projection" means an annual projection of the
number of residential units and non-residential acres expected to be developed
within CFD No. 91-2. The Development Projection for each Planning Area in CFD
No. 91-2 shall include (i) the number and square footage of existing units in each
Land Use Class and the number of existing acres of Non-Residential Property
and (ii) a projection of all future development,including the acreage, projected number
of units in each Land Use Class, projected building square footage,
projected non-residential acres, and an absorption schedule for all future development in
CFD No. 91-2. The Development Projection shall be dated as of March I and prepared
each Fiscal Year, at the discretion of the Finance
Director,by either the Master Developer or an independent consultant.Final Residential
Subdivision" means a subdivision of property by recordation of a final map, parcel map, or
lot line adjustment, approved by the City pursuant to the Subdivision Map
Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan
pursuant to California Civil Code 1352 that creates individual lots
for which building pennits may be issued without further subdivision.Finance Director" means the official
of the City who is the chief fmancial offIcer or other comparable officer
of the City or designee thereof responsible for detennining the Special Tax Requirement and
providing for the levy and collection of the Special Taxes.Fiscal Year" means the period starting
any July I and ending on the following June 30.F1at" means any
CFD No, 91-
2 Page
3 than Apartments, in which more than fIfty percent of the individual units are
stacked above or below other units in the
structure.Home Owner Association Property" means, for any Fiscal Year, any real
property within the boundaries of CFD No. 91-2 that is owned by, or irrevocably
offered for dedication to a home owner's association on or before March 1 of the
previous Fiscal Year; provided however; that real property that has been irrevocably dedicated
will only be included if a copy of the offer is provided to the Finance Director on or
before
March 1.Land Use Class" or "Class" means any of the classes listed in Table
I below.Master Developer" means the owner or owners of the predominant
amount of Undeveloped Property in CFD
No. 91-2.Maximum Special Tax" means the maximum Special Tax,
determined in accordance with Section C, that can be levied in CFD No. 91-2 in any
Fiscal Year on Undeveloped Property and each Land Use Class of
Developed Property, as applicable.Non-Residential Property" means any Parcel
of Developed
Property other than Residential Property.Planning Areas" means those areas shown on Exhibit
A. Minor adjustments in the boundaries of the planning areas may be made
to accommodate adjustments in the tentative
maps prepared for these areas.Proportionately" or "Proportioned" shall mean for
Developed Property that the ratio of the actual Special Tax levy to the Assigned Special Tax is
equal for all Assessor's Parcels of Developed Property. "Proportionately"
or "Proportioned" shall mean for Undeveloped Property that the ratio of the actual Special
Tax levy to the Maximum Special Tax for Undeveloped Property is equal for all
Assessor'
s Parcels of Undeveloped Property.Public Property" means property within the boundaries of
CFD No. 91-2 owned by,or irrevocably offered for dedication (in a final map approved
by the City) to, the federal government, State of California, or other public
agency or easements for the exclusive
use of a public utility provider.Residential Property" means any Parcel of
Developed Property for which a building permit was issued for purposes of
constructing a residential dwelling unit(s).Single Family" means any Parcel of
Residential Property other
than Apartments, Flats,and Town Homes.Special Tax" means the Special Tax that may be levied
by CFD No. 91-2 each Fiscal
CFD No. 91-
2 Page
4 Special Tax Requirement" means that amount required in any Fiscal Year to pay: (
1)debt service and other periodic costs on the bonds or other indebtedness of CFD
No.91-2 due in the calendar year commencing in such Fiscal Year, (2) the cost
of acquisition or construction of authorized facilities of CFD No. 91-2, (
3) Administrative Expenses,4) costs of authorized services of CFD No. 91-2, (5) any
amount required to replenish any reserve fund established in association with bonds issued for CFD
No. 91-2, (6) an amount equal to the estimated delinquencies expected in payment
of the Special Tax not otherwise taken into account, as determined by the Finance
Director or his designee, and 7) the costs of remarketing, credit enhancement and
liquidity facility fees (including such fees for instruments that serve as the basis of a reserve
fund related to any
indebtedness in lieu of cash).Taxable Property" means any Parcel in or annexed to CFD
No. 91-2 which is not Public
Property or Home Owner Association Property.Town Home" means any building of
Residential Property that consists of attached units, other than Apartments, in which fIfty percent or
more of the individual units are side by side and not stacked above or
below other units in the structure.Undeveloped Property" means, for any Fiscal
Year, any Parcel of Taxable Property that is not classified as Developed Property as of March
1 of the previous Fiscal Year.
B. ASSIGNMENT TO LAND USE CATEGORIES For each Fiscal Year, all Taxable Property shall
be classified as Developed Property or Undeveloped Property as of March 1 of the prior Fiscal Year
and shall be subject to the Special Tax in accordance with the rate
and method of apportionment described in Sections C and D below. For purposes
of determining the applicable Assigned Special Tax in each Fiscal Year. all Developed Property
shall be assigned by the Finance Director to one of the Land Use Classes designated in Table I
below as of March 1 of the prior Fiscal Year. Non-Residential
Property shall be assigned to
Class 5.C,
MAXIMUM SPECIAL TAX RATES 1. Developed Property The Maximum Special Tax per unit and
per building square foot for any Fiscal Year for each Assessor's Parcel
classified as Developed Property shall be the greater of (i) the Backup Special Tax for
the Parcel, or (ii) the amount derived by
application of the applicable
Assigned Special Tax.a. Assigned Special Tax The Assigned Special Tax per unit
and per building square foot for each Land Use Class is shown by Table
I. The Assigned Special Tax for each dwelling unit shall be the sum of the
8 ~
t:f-
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58-
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JJ
5U
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1$ ~
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e 0
1)8- ~ "r.-.
C (; 8
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CFD No. 91-
2 Page
6 of the special tax per square foot multiplied by the building square
footage of the unit. The square footage of a dwelling unit shall be determined
by the Director of Public Works at the time of issuance of the
original building permit for the building. by reference to the square footage
shown on such building permit, exclusive of garages, common areas, and
other structures which are not used as living space. Once determined, the
square footage assigned to a residential unit shall not be subject to
change despite the issuance of additional permits for changes or modifications
to the
structure).TABLE
I Assigned Special Taxes
for Developed Property in CFD No.
91-2 Assigned Special
Tax
Rates 1995-96
Per Square Foot 1 Single
Family $530 $.49 2 Town
Home $570 $.37 3
Flat $410 $.40 4
Apartment $408 NA 5 Non-Residential N/A $
16,125
per net taxable acre On each July 1, commencing July 1, 1996, the
Assigned Special Tax rates for each Class shall be increased to 102 percent
of the respective Assigned Special Tax in effect in
the previous Fiscal Year.
b. Backup Special Tax The Backup Special Tax for each of the Planning
Areas shown in Exhibit A shall be the amounts
CFD No. 91-
2 Page
7 TABLE
II Backup Special Taxes
for Developed Property in CFD No.
91-
2 SiLt.: :Ba.
I:kUP
piiCi:itT~~ilji!ii ~~95-
9(i i
1 $130,638
2 $205,328
3 $138,280
4 $175,506
5 $218,272
6 $94,638
7 $192,924
8 $254,618
9 $223,836
10 $129,626 Total $
1,763,666 Upon the subdivision of these Planning Areas in a manner
that creates a Final Residential Subdivision, the Backup Special Tax
of the Planning Area shall be
allocated as follows:i) If a Final Residential Subdivision includes all
of the Taxable Property in a Planning Area, then the Backup Special
Tax for the Final Residential Subdivision shall equal the
Backup Special Tax of the Planning Area as shown in Table II, and
shall be allocated equally to each Parcel in such subdivision for
which the issuance of a building permit for purposes of construction
of a residential dwelling unit or units is permitted. In the case
of a Final Residential Subdivision which creates
Condominiums, the Backup Special Tax shall be allocated equally among
the dwelling units specified in the condominium plan. In the case
of a Final Residential Subdivision that will include
Apartments, the Backup Special Tax shall be allocated equally on the basis of
the total units allowed to be built on any Parcel compared to
the total units allowed to be built in
CFD No. 91-
2 Page
8 ii) If a Final Residential Subdivision is recorded for only
a portion of the Taxable Property in a Planning Area and
additional Final Residential Subdivisions have been recorded or
are anticipated for such Planning Area, the Backup Special Tax
for such Final Residential Subdivision, assuming that a
mandatory prepayment is not required pursuant to Section K, shall equal
the Backup Special Tax for the Planning Area as shown in Table
II multiplied by the quotient of the acres of Taxable Property in
such Final Residential Subdivision divided by the estimated acres
of Taxable Property in the Planning Area as shown in Table III.
The Backup Special Tax for the Final Residential Subdivision shall
then be allocated to each residential unit as described
above.
TABLEm Estimated Acres
of Taxable Property in CFD No.
91-2 l'ra""
ing EStimated Area '
I'axllbleAtres I
11.4 2
12.1 3
9.34
10.4 5
18.8 6
8.0 7
14.0 8
21.7 9
7.8 10
12.7 All reallocations of the Backup Special Tax shall be made in
a manner such that the sum of the reallocated Backup Special Tax equals
the Backup Special Tax prior to the reallocation, unless, however, there has
been a mandatory prepayment pursuant to
Section K.The Backup Special Tax for any Parcel of Non-
Residential Property shall be $.37 per square foot of the area
CFD No. 91-
2 Page
9 On each July 1, commencing July 1, 1996, the Backup Special Tax
shall be increased to 102 percent of the respective Backup Special Tax in
effect in the previous Fiscal
Year.c. Limits on Special Tax on Residential
Property Pursuant to Section 53321 of the Act, under no circumstances shall
the Special Tax levied against any Parcel of Residential Property be
increased by more than ten percent as a consequence of delinquency or default
by the owner of any other Parcel. An increase of ten percent or more
shall be determined by comparison to what the levy of Special Tax would
be for any Parcel if there were no delinquencies or
defaults.2. Undeveloped
Property The 1995-96 Maximum Special Tax for Undeveloped Property shall be $
16,125
per acre.On each July 1, commencing July 1, 1996, the Maximum Special
Tax for Undeveloped Property shall be increased to 102 percent of the
Maximum Special Tax in effect in the previous
Fiscal Year,D. METHOD OF APPORTIONMENT OF THE
SPECIAL TAX Commencing with Fiscal Year 1996-97, and for each following Fiscal
Year, the Finance Director shall determine the Special Tax Requirement for the applicable
Fiscal Year and shall levy the Special Tax, as provided below, until the aggregate amount
of the levy equals the Special Tax Requirement for
such Fiscal Year:First: The Special Tax shall be levied Proportionately on each Assessor'
s Parcel of Developed Property up to 91 percent of the applicable Assigned Special
Tax for each Land Use Class
of Developed Property.Second: If additional monies are needed after the fIrst step has
been completed, the Special Tax shall be levied Proportionately on each Assessor's
Parcel of Undeveloped Property, up to 91 percent of the Maximum Special Tax
for Undeveloped Property.Third: If additional monies are needed after the first two steps have
been completed, then the levy of the Special Tax on each Assessor's Parcel of
Developed Property and Undeveloped Property shall be increased in equal percentages
from the amounts calculated pursuant to steps 1 and 2 above, up to 100 percent of
the applicable Assigned Special Tax for Developed Property and up to 100 percent of the
Maximum Special Tax
for Undeveloped Property.Fourth: If additional monies are needed after the fIrst three steps
have been completed,then the levy of the Special Tax on each Assessor's Parcel of
CFD No. 91-
2 Page
10 Maximum Special Tax is determined through the application of the Backup Special
Tax shall be increased in equal percentages from the Assigned Special Tax up to
the Maximum Special
Tax.E.
EXEMPTIONS The Finance Director shall not levy a Special Tax on up to406.5 acres of
Public Property and Home Owner Association Property. Tax-exempt status will
be irrevocably assigned by the Finance Director in the chronological order in which
property is designated Public Property or Home Owner Association Property and in
the following order
of priority:First: Public Property owned by entities of the federal government, State
of California,or any local government agency and easements for the exclusive use of
public utility providers, as of the date of formation of CFD
No. 91-2;Second: Public Property acquired by the public agency or public
utility provider through a gift, dedication, negotiated transaction, eminent domain, or any
other form of conveyance, including granting of an easement, subsequent to the date
of formation of CFD No. 91-2, with priority in order of the
acquisition of the property;Third:Home Owner Association Property, with acres made exempt
such that the number of acres that are not exempt are equal in proportion to the number
of dwelling
units for each association.Public Property and Home Owner Association Property that is
not exempt from Special Taxes by this section shall be subject to the levy of the Special Tax
and shall be taxed as if the property were Undeveloped Property. However, on a year
to year basis, the Finance Director may exempt such Parcels from the levy of the Special
Tax in any Fiscal Year provided the Special Tax Requirement can be satisfied without
imposing a
levy on said Parcels.
F. MANNER OF COLLECTION The Special Tax will be collected in the same manner and at the
same time as ordinary ad valorem real property taxes, provided, however, that CFD
No. 91-2 may collect Special Taxes at a different time or in a different manner
as determined by the Finance Director, if necessary
to meet its fmancial obligations,
G. TERMINATION OF SPECIAL TAX Except for any delinquent Special Taxes and related
penalties and interest, Special Taxes used to pay for either or both the acquisition and construction
of any public facilities for CFD No. 91-2 (through the issuance of bonds or
otherwise) and levied on any Parcel shall not be levied after the thirtieth (30th) Fiscal Year
in which such Parcel was taxed as Developed Property, After such thirtieth (30th) Fiscal
CFD No. 91-
2 Page
11 delinquent Special Taxes, penalties and interest, the Finance Director shall cause
a document substantially in the form required by the Act evidencing such termination
of the levy and collection to be recorded in the office of the recorder of the
County.H. APPEALING THE LEVY OF SPECIAL
TAXES Any property owner claiming that the amount or application of the Special Tax is
not correct and requesting a refund may fIle a written notice of appeal and refund to
that effect with the Finance Director not later than one calendar year after having paid
the Special Tax that is disputed. The Finance Director shall promptly review the appeal,
and if n"'CeSsary, meet with the property owner, consider written and oral evidence
regarding the amount of the Special Tax, and decide the appeal. If the Finance Director's
decision requires the Special Tax be modified or changed in favor of the property owner, a
cash refund shall not be made (except for the last year of levy), but an adjustment shall
be made to the next Special Tax levy. Any dispute over the decision of the
Finance Director shall be referred to the City Council of the City and the decision of the
City Council shall be final. This procedure shall be exclusive and its exhaustion by
any property owner shall be a condition precedent to any legal action by such
owner.I. FULL PREPAYMENT OF SPECIAL
TAX The Special Tax on any Parcel of Developed Property may be fully prepaid at any
time and the obligation to pay the Special Tax permanently satisfied by payment of the
sum of the
following:1. A sum equal to (a) delinquent Special Taxes on such Parcel, including
any applicable penalties and related costs, and (b) Special Taxes due on such
Parcel but not yet paid for the Fiscal Year in which such prepayment is
made.2. A sum equal to the principal portion of the amount of prepayment determined
as
follows:P = PVST + 1.
10 Where the terms have the following
meaning:
P=
PVST =the principal portion of the
prepayment the net present value of the Maximum Special Tax for the
Parcel The net present value of the Maximum Special Tax shall be calculated based
on the Maximum Special Tax that may be levied on the Parcel until the
termination date of Special Taxes for the Parcel calculated pursuant to Section G hereto,
using as the discount rate the combined aggregate yield of the outstanding bonds (
Le.,the yield that when computing the net present value of the remaining
CFD No. 91-
2 Page
12 of principal and interest on the bonds produces an amount equal to the
face amount of the remaining outstanding
bonds.)3. The principal portion of the prepayment shall be decreased by an adjustment
for a reserve fund credit. The adjustment shall be equal to a percent of the
principal portion of the prepayment equal to the lesser of the following: (i) the
amount required to be in the reserve fund, as a percent of the bonds outstanding, and (
ii)the amount actua1ly in the reserve fund, as a percent of the bonds
outstanding.4. The amount calculated in steps 2-3, if used to redeem bonds, shall
be rounded up to the nearest $5,000, less the interest expected to be earned
on the prepayment until such bonds are redeemed; however, if prepayment is
made for two or more Parcels together, the aggregate principal of all of
the prepayments may be rounded up to the nearest $5,000, with the addition due to
the rounding apportioned to each prepayment based on the proportion of each
of the prepayments to the
total prepayment.5. The amount needed to pay interest on the outstanding bonds to be
redeemed until the earliest call date for
outstanding bonds.6. A sum equal to applicable redemption premiums, if any, on the bonds
to
be redeemed.7. A sum equal to administrative fees and expenses of the City associated
with
the prepayment.The amounts calculated in the preceding steps shall be paid to the City and
shall be distributed by the City according to the fiscal agent agreement. Upon the
payment of such prepayment amount to the City, the obligation to pay Special Tax shall
be deemed to be permanently satisfied, the Special Tax shall not be levied thereafter, and
the City shall cause a notice of cessation of the Special Tax to be recorded within
30 working days of receipt of such
prepayment amount.The Finance Director may disallow the right to prepay Special Taxes, if in
the reasonable determination of the Finance Director, such prepayment would negatively
affect the security of the remaining
outstanding bonds.J. PARTIAL PREPAYMENT OF
SPECIAL TAX Under the conditions set forth below, the Special Tax on Developed Property
may be partially prepaid on all of the Parcels within a Planning Area, or all of the
Parcels within a Planning Area owned by a single owner, and that portion of the Special
Tax obligation permanently satisfied. The amount of the prepayment shall be calculated as
in Section I; except, however, the principal portion shall be calculated according to
the
CFD No. 91-
2 Page
13 Pp = PE X
P Where the terms have the following
meaning:Pp = the principal portion of the partial
prepayment PE = the principal portion of the prepayment calculated according to Section 1.
2 P = the percent by which the owner of the Parcels within the Planning
Area is to partially prepay the Special
Tax The partial prepayment of Special Taxes shall be collected at the close of escrow of
each Parcel in the Planning Area. An owner of the Parcels within a Planning Area
shall notify the Finance Director of (i) such owner's intent to partially prepay the Special
Tax on all of the Parcels within a Planning Area or all of those Parcels within a
Planning Area that are owned by such owner, (ii) the percentage by which the Special Tax
shall be prepaid, (ill) the size of units being built by the owner on such Parcels and
the average parcel size, and (iv) the company or agency that will be acting as the
escrow agent. The owner shall provide instructions to the escrow agent and the
Finance Director, which instructions shall direct the escrow agent to collect the
partial prepayment of the Special Taxes as calculated pursuant to this Section J and to remit
this amount to the City. The Finance Director shall provide the owner and the escrow
agent with a statement of the amount required for the partial prepayment of the Special Tax
for a Parcel within five (5) working days of notice of the pending close of an escrow.
The notice to the Finance Director must include confmnation of the square footage of
the unit, calculated consistent with Section C herein. The Finance Director may charge
a reasonable fee for providing this
figure.With respect to any Parcel so partially prepaid, the City shall (i) distribute the
funds remitted to it by the escrow agent according to the fiscal agent agreement, (ii) cause
a suitable notice to be recorded in compliance with the Act within 30 days of receipt
of such prepayment of Special Taxes, to indicate the partial prepayment of Special
Taxes and the release of the Special Tax lien in such amount, (ill) indicate in the records
of CFD No. 91-2 that there has been a partial prepayment of the Special Tax and
that this portion of the Special Tax shall not be levied thereafter. A partial prepayment
of Special Taxes shall reduce both the Backup Special Tax and the Assigned Special Tax
of the Parcel in equal percentages. Following a partial prepayment of the Special
Tax with respect to any Parcel, the outstanding percentage (1.00 - P) of the Special Tax
shall continue to be levied on such
Parcel.The Finance Director may disallow the right to prepay Special Taxes, if in the
reasonable determination of the Finance Director, such prepayment would negatively affect
the security of the remaining outstanding
CFD No. 91-
2 Page
14 K. MANDATORY
PREPAYMENT Before each Final Residential Subdivision is recorded, the Finance Director, or
his designee,
shall:1. Calculate the Assigned Special Taxes that can be generated in each future
Fiscal Year by all existing and future (based on the Development Projection)
Developed Property in CFD No. 91-2. Multiply this number by 1.25 to
determine the adjusted Assigned Special Taxes for CFD
No. 91-2.2. If, in each future Fiscal Year, the adjusted Assigned Special
Taxes calculated in Step 1 are greater than or equal to 11 0 percent of the annual
debt service on outstanding bonds, then mandatory prepayment is not necessary. If,
in any future Fiscal Year, the adjusted Assigned Special Taxes calculated in Step
I are less than 110 percent of the annual debt service on outstanding
bonds, then continue
to Step 3.3. Calculate the Assigned Special Taxes that can be generated in
each future Fiscal Year by all existing and future (based on the
Development Projection) Developed Property in the Planning Area in which the
proposed Final Residential Subdivision is located. Multiply this number by 1.25 to
determine the adjusted Assigned Special Taxes for
the Planning Area.4. Divide the Backup Special Tax for the Planning Area in which
the proposed Final.Residential Subdivision is located by the total Backup Special Tax
for all Planning Areas and, for each remaining Fiscal Year, multiply the quotientby110percentoftheannualdebtservice
on outstanding bonds.5. If, in each future Fiscal Year, the adjusted Assigned Special
Taxes for the Planning Area calculated in Step 3 are greater than or equal to
110 percent of the annual debt service for the Planning Area calculated in
Step 4, then mandatory prepayment is not necessary for this
Final Residential Subdivision.If, in any future Fiscal Year, the adjusted Assigned Special
Taxes calculated in Step 3 are less than 110 percent of the annual debt service calculated
in Step 4,then continue
to Step 6.6. Calculate the present value of the annual shortfall between
the adjusted Assigned Special Taxes calculated in Step 3 and the annual debt servicecalculatedinStep4usingtheaggregateyieldoftheoutstandingbondscomputed
pursuant to Section 1.2. as
the discount rate.7. Divide the Planning Area shortfall calculated in Step 6 by
the future dwelling units in the Planning Area, and multiply the quotient by number
of dwelling units in the proposed
Final Residential Subdivision.The mandatory prepayment shall be calculated as in Section I;
CFD No. 91-
2 Page
lS principal portion shall be the amount calculated in Step 7 above. Payment of
such mandatory prepayment must be made prior to the recordation of the proposed
Final Residential Subdivision. The Assigned Special Taxes for Developed Property within
the Final Residential Subdivision shall not change as a result of the mandatory
prepayment.However, the Backup Special Tax allocated to the Final Residential Subdivision shall
be reduced based on the percentage of outstanding bonds allocable to such Final
Residential Subdivision that were prepaid as a result of the mandatory
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EXHIBITB
CITY OF ORANGE
COMMUNITY FACILITIES DISTRICT NO. 91-
2 SERRANO HEIGHTS PUBLIC
IMPROVEMENTS)OFFICIAL
BALLOT SPECIAL ELECTION REGARDING AL TERA TION
OF RATE AND METHOD OF APPORTIONMENT OF SPECIAL
TAXES November 14,
1995)This ballot is for a special, landowner election. You must return this ballot in the
enclosed postage paid envelope to the office of the City Clerk of the City of Orange no later
than immediately after the adoption of the resolution of the City Council of the City calling
said election, either by mail or in person. The City Clerk's office is located at 300 East
Chapman Avenue, Orange, California
92666.To vote, mark a cross (X) on the voting line after the work ''YES'' or after the work "
NO".All marks otherwise made are forbidden. All distinguishing marks are forbidden and make
the ballot
void.If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City
of Orange and obtain
another.BALLOT MEASURE: Shall the rate and method of apportionment of the special taxes
to be levied within the City of Orange Community Facilities District No. 91-1 (
Serrano Heights Public Improvements) be altered as described in the resolution of the City Council of the
City of Orange, adopted November 14, 1995, entitled "A Resolution of the City Council of the
City of Orange Calling Special Election Regarding Alteration of the Rate and Method of
Apportionment of Special Taxes for the City of Orange Community Facilities District No. 91-
2 (Serrano
Heights Public
By execution in the space provided below, you also indicate your waiver of the time limit
pertaining to the conduct of the election and any requirement for analysis and arguments with
respect to the ballot measure, as such waivers are described and permitted by Sections 53326(a)
and 53327(b) of the California Government Code.
Number of Votes:
Property Owners:
517
California Quartet, a California Limited Partnership
CALIFORNIA QUARTET,
a California limited partnership
By: Aradi, Ltd., a Nevada limited
partnership, its general partner
By: Aradi, Inc., a Nevada corporation
its general partner
By:
President
EXlllBITB 2-DPWE-