City of Cathedral City June 14, 2022
CFD No. 2022-1 (Cathedral City Park & Recreation Services) Page 1
RATE AND METHOD OF APPORTIONMENT FOR
CITY OF CATHEDRAL CITY
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(CATHEDRAL CITY PARK & RECREATION SERVICES)
A Special Tax, as hereinafter defined , shall be levied on all Assessor’s Parcels in the City of Cathedral City (the “City”) Community Facilities District No. 2022-1 (Cathedral City Park & Recreation Services ) and collected each Fiscal Year commencing in Fiscal Year 2023/24, in an amount determined by the City or its designee, through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 2022-1, 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. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Accessory Dwelling Unit " means a secondary residential unit of limited size , as defined in California Government Code Section 658 52.2 as that may be amended from time to time, that is accessory to a single-unit dwelling. The ADU of Developed Property may be on the same Assessor’s Parcel as the single- unit dwelling or on a separate Assessor’s Parcel. For purposes of clarification, where an ADU and primary Unit are on the same Assessor’s Parcel, the ADU located on such Assessor’s Parcel is considered a separate Unit from the primary Unit on such Assessor’s Parcel for purposes of the Special Tax. Should an Assessor’s Parcel contain only an ADU, such Assessor’s Parcel will be taxed as an ADU only. "Acre” or “Acreage" means that acreage shown on the Assesso r’s Parcel Map or in the Assessor’s Data for each Assessor’s Parcel. In the event that the Assessor’s Parcel Map or A ssessor’s Data shows no acreage, the Acreage for any Assessor’s Parcel may be determined by the CFD Administrator based upon the applicable Final Subdivision Map or parcel map, or by using available spatial data and GIS. "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.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2022-1: the costs of any paying agents/fiscal agents/trustees related to Bond payments (including the fees and expenses of its counsel), banking and management; the costs of computing the Special Tax Requirement , the Special Taxes and of preparing the collection schedules for the Special Taxes; the costs of collecting the Special Taxes, including any charges levied by the County Auditor’s Office, Tax Collector’s Office or Treasurer’s Office; the costs of the City or designee in complying with the disclosure requirements of the California Government Code (including the Act) and the federal securities laws; costs of responding to public inquiries regarding the Special Taxes; the costs of the City or designee related to an appeal of the Special Tax es or interpretation of the Rate and Method of Apportionment; amounts needed to pay rebate to the federal government related to Bonds; and the costs of commencing and pursuing to completion any foreclosure action arising from delinquent Special Taxes in the City. Administrative Expenses shall also include an allocable share of the salaries of City staff and an allocable portion of City overhead costs relating to the foregoing, or costs of the City in any way related City of Cathedral City June 14, 2022
CFD No. 2022-1 (Cathedral City Park & Recreation Services) Page 2 to the establishment or administration of the City. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2022-1 for any other administrative purposes of CFD No. 2022-1.
"Agricultural Property" means all Assessor’s Parcels devoted primarily to agricultural, timber, or livestock uses and being used for the commercial production of agricultural, timber, or livestock products. Typical County Use Codes include those starting with “A” including: A01, A01R, A02, A02R, A03, A04, A04R, A05, A05R, A06, A06R, A07, A07R, A08, A08R, A09, A10, A10R, A11, A11R, A11R, A12, Z12R, A13, A13R, A14, A14R, A15, A15R, A16, A17, A18, A19, A20, A21R, A22, A23, A25M, A25MF, A25ML, A25MO, A25MR, A28, A29, A30, AP115, AP999, APA01, APA01R, APA02, APA02R, APA03, APA04, APA04R, APA06, APA06R, APA07, APA07R, APA08, APA08R, APA10, APA10R, APA11, APA11R, APA12, APA12R, APA13, APA13R, APA14R, APA15, APA15R, APA16, APA17, APA19, APA20, APA21R, APA22, APA25M, APA25MF, APA30, APC27, APRX, APS01, APS04, CTA05R, CTA16.
"Assessor’s Data " means the property characteristic data compiled and maintained by the County Assessor for each Assessor’s Parc el, including, but not limited to, Assessor’s Parcel Number, Use Code, Acreage, and Units.
"Assessor’s Parcel" means a lot or parcel shown in an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
"Assessor’s Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor’s Parcel Number.
"Assessor’s Parcel Number" or "APN" means, with respect to an Assessor’s Parcel, that number assigned to such Assessor’s Parcel by the County for purposes of identification. "Authorized Facilities" means the public facilities authorized to be financ ed, in whole or in part, by CFD No. 2022-1, including by the proceeds of any CFD No. 2022-1 Bonds. The Special Tax to fund Authorized Facilities may only be levied prior to the Transition Year. "Authorized Services" means the services authorized to be funded, in whole or in part, by CFD No. 2022-
1. "Bonds" means bonds or other debt (as defined in the Act), whether in one or more series, issued or assumed by or on behalf of CFD No. 2022-1 under the Act . Bonds also includes any bonds issued to refinance a previous bond issue.
"Building Square Footage" means the structural square footage of an Assessor ’s Parcel as shown in the County Assessor’s data or as otherwise known by the CFD Administrator. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes. "CFD No. 2022-1" means City of Cathedral City Community Facilities District No. 2022-1 (Cathedral City Park & Recreation Services).
"City" means the City of Cathedral City.
"City Council" means the City Council of the City, acting as the legislative body of CFD No. 2022-1.
City of Cathedral City June 14, 2022
CFD No. 2022-1 (Cathedral City Park & Recreation Services) Page 3 "County" means the County of Riverside.
"Debt Service" means for each Debt Year, the total amount of principal and interest due for any Bonds of CFD No. 2022-12022-1.
"Debt Year" means each 12-month period designated as such, or by a similar term, in the Indenture for each series of Bonds.
"Developed Property" means for each Fiscal Year, all Taxable Property, exclusive of Taxable Public Property, for which the County has assigned a Use Code indicating residential or non-residential use which are not vacant.
"District" means Desert Recreation District.
"Fiscal Year" means the period starting July 1 and ending on the following June 30. "GIS" or "Geographic Information System" means a system designed to capture, store, manipulate, analyze, manage, and present spatial or geographic data. "Indenture" means the indenture, fiscal agent agreement, resolution, or other instrument pursuant to which Bonds for CFD No. 2022-12022-1 are issued, as modified, amended, and/or supplemented from time to time, and any instrument replacing or supplementing the same. "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 of Taxable Property. "Multi-family Residential Property" means all Assessor’s Parcels of Developed Property that consist of Units available for lease or rent in a multi-unit building or on a Parcel, including duplex, triplex, fourplex, apartments, mobile home parks and RV parks . Typical County Use Codes include : 30, 33, 34, 41, 42, 43, 44, 45, 46, 100, 103, 104, CT25, MF, MS, MV, MX, MY, MAR04, CTR04. "Non-residential Property" means all Assessor’s Parcels of Developed Property used for non -residential purposes such as commercial or industrial use. Possessory interest and golf course property are not included in Non-residential Property. Typical County Use Codes include: 80, 115, 120, 122, 130, 131, 132, 140, 150, 151, 152, 153, 160, 161, 170, 172, 180, 182, 183, 191, 200, 201, 202, 210, 220, 221, 223, 230, 232, 250, 251, 305, 310, 320, 321, 322, 323, 350, 351, 352, 353, 361, 600, 602, 603, 611, 612, 614, 615, 620, 621, C01H, C02, C06C, C07C, C07M, C08C, C12F, C19, CarWash, CT115, CT120, CT132, CT140, CT150, CT160, CT170, CT180, CT191, CT200, CT210, CT320, CT321, CT353, CT360, CT361, CT80, OFF132. "Outstanding Bonds" means all Bonds that are outstanding under and in accordance with the provisions of the Indenture.
"Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2022-12022-1 that is owned by a property owner association, including any master or sub - association, as of January 1 of the prior Fiscal Year.
"Proportionately" means for Developed Property that the ratio of the Special Tax levy to the Maximum Special Tax is equal for all Ass essors’ Parcels of Developed Property within CFD No. 2022-12022-1. For Taxable Contingent Property, “Proportionately” means that the ratio of the actual Special Tax levy to the City of Cathedral City June 14, 2022
CFD No. 2022-1 (Cathedral City Park & Recreation Services) Page 4 Maximum Special Tax is equal for all Assessor’s Parcels of Taxable Contingent Property within CFD No. 2022-12022-1.
"Public Property" means property within the boundaries of CFD No. 2022-1 owned by, irrevocably offered or dedicated to, or for which an easement for purposes of public right -of-way has been granted to the federal government, the State, the County, the City, the City , or any local government or other public agency, provided 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 according to its use. “Residential Condominium Property” means, in any Fiscal Year, all Assessor’s Parcels of Developed Property with one Unit with a single Assessor’s Parcel Number that is a condominium pursuant the definition in Civil Code Section 4125 or a townhouse. Typical County Use Codes include: 21, 27 , CT21, MA21.
"Single Family Residential Property " means all Assessor’s Parcels of Developed Property with a residential structure intended for a single dwelling unit. Typical County Use Codes include: 20, 28, 60, 61, 62, 63, 64, 65, 67, MA20, CT20.
"Special Tax(es)" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property within CFD No. 2022-1 to fund the Special Tax Requirement. "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2022-1:
Before the Transition Year, to (1) pay Debt Service on all Outstanding Bonds which is due in such Fiscal Year; (2) pay for Authorized Services; (3) pay Administrative Expenses ; (4) provide any amount required to establish or replenish a reserve fund in connection with any Bonds; (5) provide any amount required to establish or replenish any operating reserve held by the City for Authorized Services and/or Administrative Expenses ; (6) provide an amount equal to reasonably anticipated Special Tax delinquencies based on the delinquency rate for Special Taxes levied in the previous Fiscal Year as determined by the CFD Administrator, as limited by the Act, and without duplicating any amounts described in clauses ( 4) or ( 5). The amounts referred to in clauses (1) through (6) of the preceding sentence may be reduced in any Fiscal Year (in the City's sole discretion) by (i) interest earnings on or surplus balances in funds and accounts for Bonds to the extent that such earnings or balances are available to apply against Debt Service pursuant to the Indenture, (ii) proceeds from the collection of penalties associated with delinquent Special Tax, and (iii) any other revenues available to pay Debt Service on the Outstanding Bonds or other indebtedness as determined by the CFD Administrator.
Beginning in the Transition Year, to (1) pay for Authorized Services; (2) pay Administrative Expenses; (3) provide any amount required to establish or replenish any operating reserve held by the City for Authorized Services and/or Administrative Ex penses; (4) provide an amount equal to reasonably anticipated Special Tax delinquencies based on the delinquency rate for Special Tax es levied in the previous Fiscal Year as determined by the CFD Administrator, as limited by the Act; less (5) a credit for funds available, if any, to reduce the Special Tax levy. "State" means the State of California.
City of Cathedral City June 14, 2022
CFD No. 2022-1 (Cathedral City Park & Recreation Services) Page 5 "Tax Exempt Property" means all of the Assessor’s Parcels within the boundaries of CFD No. 2022-1 which are exempt from the Special Tax pursuant to the Act or Section E below. "Taxable Contingent Property" means any Assessor’s Parcel that was previously classified and l evied as Taxable Property, but has changed ownership or use such that it would subsequently be classified as Property Owner Association Property or Public Property, or other property , as Tax Exempt Property pursuant to the provisions of Section E.
"Taxable Property" means all of the Assessor’s Parcels within the boundaries of CFD No. 2022-1 which are not exempt from the Special Tax pursuant to the Act or Section E below. "Timeshare Property " means all Assessor’s Parcels of Developed Property w hich include Units of timeshare estates in a timeshare project pursuant to California Revenue and Taxation Code Section 2188.9. Typical County Use Codes include: TE, TED, TU, TUD. "Transition Event " means the earlier of (i) Fiscal Year 2057/58 or (ii) the Fiscal Year when the CFD Administrator determines that both of the following events have occurred (i) all Bonds secured by the levy and collection of the Special Tax in CFD No. 2022-1 have been fully repaid and the City determines that no additional Bonds are to be issued , (ii) all Administrative Expenses from prior Fiscal Years have been paid or reimbursed to the City.
"Transition Year" means the first year in which the CFD Administrator determines that the Tran sition Event occurred in the prior Fiscal Year.
"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 Taxable Contingent Property.
"Unit" means an individual residential living space. The number of Units assigned to each Assessor’s Parcel may be determined by (i) referencing Assessor’s Data, (ii) site surveys and physical unit counts, and/or (iii) reviewing City building permit data . An Accessory Dwelling Unit shall not be considered a Unit for the purposes of the Special Tax.
"Use Code" means that code assigned by the County for the purpose of identifying the primary activity for which an Assessor’s Parcel is being used.
"Welfare Exempt Property" means, in any Fiscal Year, all Parcels within the boundaries of CFD No. 2022- 01 that have been granted a welfare exemption by the County under subdivision (g) of Section 214 of the Revenue and Taxation Code.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, the CFD Administrator shall determine the valid Assessor’s Parcel Numbers for all Taxable Property within CFD No. 2022-1. If any Assessor’s Parcel Numbers are no longer valid from the previous Fiscal Year, the CFD Administrator shall determine the new Assessor’s Parcel Number or Numbers that are in effect for the current Fiscal Year. To the extent an Assessor’s Parcel(s) of Taxable Property are subdivided, consolidated or otherwise reconfigured, the Special Tax rates shall be assigned to the new Assessor’s Parcel(s) pursuant to Section C.
City of Cathedral City June 14, 2022
CFD No. 2022-1 (Cathedral City Park & Recreation Services) Page 6 Each Fiscal Year, all Assessor’s Parcels within CFD No. 2022-1 shall be classified as follows:
1. Each Assessor’s Parcel shall be determined to be Taxable Property or Tax Exempt Property.
2. Each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Taxable Contingent Property, or Undeveloped Property. Taxable Property shall be subject to Special Taxes in accordance with the r ate and method of apportionment determined pursuant to Sections C and D below.
3. Each Assessor’s Parcel of Developed Property and Taxable Contingent Property shall be further classified as Single Family Residential Property, Accessory Dwelling Unit, Resident ial Condominium Property, Multi-family Residential Property or Non-residential Property. For Single Family Residential Property the Building Square Footage shall be determined. For Accessory Dwelling Units, Residential Condominium Property and Multi-family Property, the number of Units shall be determined.
C. MAXIMUM SPECIAL TAX RATES
Notwithstanding the below, under no circumstances will the Special Tax levied in any Fiscal Year against any Assessor’s Parcel for which an occupancy permit for private residential use has been issued be increased by more than ten percent above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default by the owner(s) of any other Assessor’s Parcel within CFD No. 2022-1.
PRIOR TO THE TRANSITION EVENT
1. Developed Property
The Maximum Special Tax for each Assessor’s Parcel of Developed Property is shown in Table 1.
TABLE 1
MAXIMUM SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2023/24
Property Type Maximum Special Tax Per
Single Family Residential Property $0.15 Building Square Foot Accessory Dwelling Unit 123.00 Unit
Residential Condominium Property 196.00 Unit
Multi-family Residential Property 172.00 Unit
Non-residential Property 734.00 Parcel
2. Taxable Contingent Property
Maximum Special Tax
The Maximum Special Tax for each Assessor’s Parcel of Taxable Contingent Property shall be assigned as shown in Table 1 according to the previous Taxable Property type and use.
City of Cathedral City June 14, 2022
CFD No. 2022-1 (Cathedral City Park & Recreation Services) Page 7
AFTER THE TRANSITION EVENT
The Maximum Special Tax for each Assessor’s Parcel that may be levied in any Fiscal Year after the Transition Event is determined as, an amount equal to 100% of the Maximum Special Tax in the Fiscal Year prior to the Transition Year, adjusted for any parcel that prepaid in part their Special Tax by adding an amount equal to the Special Tax that would have been due in the Fiscal Year prior to the Transition Year if such Parcel had not prepaid.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAXES
Commencing with Fiscal Year 2023/24 and for each following Fiscal Yea r, the CFD Administrator shall determine the Special Tax Requirement, and shall levy the Special Tax until the amount of the Special Tax equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows:
First: The Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property at a rate up to 100% of the applicable Maximum Special Tax to satisfy the Special Tax Requirement.
Second: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on all Taxable Contingent Property at a rate up to 100% of the Maximum Special Tax for Taxable Contingent Property.
E. EXEMPTIONS
No Special Ta x shall be levied on Agricultural Property, Timeshare Property, Public Property and Undeveloped Property. However, should an Assessor’s Parcel no longer be classified as Public Property or Undeveloped Property its tax -exempt status will be revoked. In the case of Public Property and pursuant to Section 53317.3 of the Act, if property not otherwise exempt from the Special Tax levied pursuant to this chapter is acquired by a public entity through a negotiated transaction, or by gift or devise, the special tax shall, notwithstanding Section 53340, continue to be levied o n the property acquired and shall be enforceable against the public entity that acquired the property. However, the public agency that acquires the property may prepay in part and satisfy the obligation to pay the tax pursuant to Section I below.
Taxable Contingent Property shall be subject to the levy of the Special Tax, assigned to a Property Type in accordance with the use of the property, and shall be taxed Proportionately as part of the second step in Section D above, at up to 100% of the applicable Maximum Special Tax.
Prior to the Transition Event, any property that is granted a welfare exemption pursuant to Section 53340(c) under the Act under subdivision (g) of Section 214 of the Revenue and Taxation Code prior to the first series of CFD No. 2022-1 Bonds shall be exempt from the Special Tax in each Fiscal Year it is Welfare Exempt Property. Any property that is granted a welfare exemption pursuant to Section 53340(c) under the Act under subdivision (g) of Section 214 of the Revenue and Taxation Code after the first series of CFD No. 2022-1 Bonds have been issued shall not be considered Welfare Exempt Property for the Special Taxes - Facilities and shall not be exempt from Special Tax - Facilities.
After the Transition Event, any property that is granted a welfare exemption pursuant to Section 53340(c) under the Act under subdivision (g) of Section 214 of the Revenue and Taxation Code shall be exempt from the Special Tax in each Fiscal Year it is Welfare Exempt Property.
City of Cathedral City June 14, 2022
CFD No. 2022-1 (Cathedral City Park & Recreation Services) Page 8 F. APPEALS
Any property owner may file a written appeal of the Special Tax es with the CFD Administrator claiming that the amount or application of the Special Taxes is not correct. The appeal must be filed not later than one calendar year after having paid the Special Taxes that are disputed, and the appellant must be current in all payments of Special Taxes. In addition, during the term of the appeal process, all Special Taxes 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 es are 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 property owner disagrees with the CFD Administrator’s decision relative to the appeal, the owner may then file a written appeal with the City Council whose subsequent decision shall be final and binding on all interested parties. If the decision of the CFD Administrator or subsequent decision by the City Council requires the Special Tax es to be modified or changed in favor of the property owner, the CFD Administrator shall determine if sufficient Special Tax revenue is available to make a cash refund. If a cash refund cannot be made, then an adjustment shall be made to credit future Special Taxes.
This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to filing any legal action by such owner.
G. INTERPRETATIONS
The City may, by resolution or ordinance, interpret, clarify and/or revise this Rate and Method of Apportionment to correct any inconsistency, vagueness, or ambiguity as it relates to the Special Taxes, method of apportionment, classification of Parcels, or any de finition used herein, as long as such correction does not materially affect the levy and collection of Special Taxes. In addition, the interpretation and application of any section of this document shall be at the City’s discretion.
H. MANNER OF COLLECTION
The Special Taxes shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the CFD Administrator may, at the sole discretion of the City, directly bill the Specia l Tax, may collect the Special Tax at a different time or in a different manner as necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on Assessor's Parcels of Taxable Property that are delinquent in the payment of the Special Tax.
I. PREPAYMENT OF SPECIAL TAX
The Special Tax may not be prepaid.
J. TERM
The Special Tax shall be levied and collected , as needed to fund the Special Tax Requirement, in perpetuity. However, no portion of the Special Tax shall be levied for Authorized Facilities after Fiscal Year 2057/58, which shall be the last Fiscal Year in which the Transition Event may occur: provided, however, that a Special Tax that was lawfully levied for Authorized Facilities in or before Fiscal year 2057/58 and that remains delinquent may be collected in subsequent years.