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City of Chino
Community Facilities District No. 2003-3
Improvement Area No. 11
Prepared for:
November 2024
Community Facilities District Report
Table of Contents
Sections
Section 1. Introduction ______________________________________________________________ 1 Section 2. Description of Facilities/Improvements and Services ______________________________ 2 Section 3. Cost Estimate _____________________________________________________________ 4 Section 4. Proposed Development _____________________________________________________ 6 Section 4. Proposed Development _____________________________________________________ 6 Section 5. Rate and Method of Apportionment __________________________________________ 7
Tables
Table 3-1. Cost Estimate ______________________________________________________ 4
Appendices
Appendix A. Rate and Method of Apportionment
Appendix B. Boundary Map
1. Introduction
City of Chino Community Facilities District Report
CFD 2003-3 Improvement Area No. 11 1
AGENCY: CITY OF CHINO
PROJECT: COMMUNITY FACILITIES DISTRICT NO. 2003-3
IMPROVEMENT AREA NO. 11
TO: CITY COUNCIL
CITY OF CHINO
SAN BERNARDINO COUNTY
STATE OF CALIFORNIA
Whereas, the City Council of the CITY OF CHINO, SAN BERNARDINO COUNTY, CALIFORNIA (herei nafter referred to as the “City Council ”), did, pursuant to the provisions of the “Mello -Roos Community Facilities Act of 1982”, being chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, and specifically Section 53321.5 thereof, (the “Act”) expressly ordere d the filing of a written Public Report (the “Report”) for a proposed COMMUNITY FACILITIES DISTRICT NO. 2003-3 IMPROVEMENT AREA NO. 11. This Community Facilities District shall be referred to as COMMUNITY FACILITIES DISTRICT NO. 2003-3 IMPROVEMENT AREA NO. 11 of the CITY OF CHINO (hereinafter referred to as the “District” and “CFD No. 2003-3 IA NO. 11”); and,
Whereas, on October 1 , 202 4, the City Council adopted Resolution No. 202 4-049 (the “Resolution”), and the Resolution ordering said Report, did direct that said Report generally contain the following:
• A description of the public facilities and services by type proposed to be financed by CFD No. 2003-3 IA No. 11;
• An estimate setting forth costs of providing such facilities and services; • The rate and method of apportionment of the Special Tax in sufficient detail to allow each landowner or resident within the proposed District to estimate the annual amount of payment thereof.
NOW, THEREFORE, the undersigned, authorized representative of WEBB MUNICIPAL FINANCE, LLC, the appointed Special Tax Consultant and responsible officer or person directed to prepare the Report, pursuant to the provisions of the Act, does hereby submit the following data:
2. Description of Facilities/Improvements and Services
City of Chino Community Facilities District Report
CFD 2003-3 Improvement Area No. 11 2
Pursuant to Section 53340 of the Act, the proceeds of any Special Tax levied and collected by CFD No. 2003-3 IA No. 11 may be used only to pay for the cost of providing public facilities, services, and incidental expenses. As defined by the Act, incidental expenses include, but are not limited to, the annual cost associated with determination of the amount of Special Taxes, collection of Special Taxes, payment of Special Taxes, or costs otherwise incurred in order to carry out the authorized purposes of the community facilities district.
A general description of the proposed facilities and services for the District is as follows:
Facilities/Improvements
The types of Facilities that are proposed by CFD No. 2003-3 IA No. 11 and financed with t he proceeds of Special Taxes and bonds issued by CFD No. 2003-3 IA No. 11 consist of backbone infrastructure needed for new development, such as roadway, bridge, sewer, water, reclaimed water, dry utilities, storm drain, street and parkway landscaping, curb and gutter, medians, median landscaping, traffic signals, entry signage, parks, trails, fire facilities, library facilities and public community facilities, and appurtenances and appurtenant work, and development impact fees that are used by the City to construct infrastructure.
Services
The types of Services that are proposed to be provided by CFD No. 2003-3 and funded with the proceeds of special taxes levied by CFD No. 2003 -3 consist of services permitted under the Mello -Roos Community Facilities Act of 1982 including, without limitation, maintenance of parks, parkways and open space, flood and storm protection services the operation of storm drainage systems, and public safety services. All of the services financed must be provided within the boundaries of or for the benefit of CFD No. 2003-3.
Incidental Expenses
The Incidental Expenses to be paid from bond proceeds and/or Special Taxes include: all costs associated with the creation of CFD No. 2003-3 IA No. 11, the issuance of bonds (which may include, but is not limited to, funding the reserve fund, capitalized interest, underwriter discount, underwriter premium, and cost of issuance) , the determination of the amount of S pecial Taxes to be levied, costs otherwise incurred in order to carry out the authorized purposes of CFD No. 2003-3 IA No. 11, including legal fees, fees of consultants, engineering, planning, designing and the annual administration cost of CFD No. 2003-3 IA No. 11.
The description of the eligible public facilities, services and incidental expenses above are preliminary and general in nature. The final plans and specifications approved by the applicable public agency may show substitutes or modifications in order to accomplish the work or serve the new development and any suc h substitution or modification shall not constitute a change or modification in the pro ceedings relating to CFD No. 2003-3 IA No.
11. Based upon the preceding, it is my opinion that the facilities and services being funded are those that are necessary to meet certain increased demands placed upon the City of Chino , as a result of development and/or rehabilitation occurring within the boundaries of the District.
2. Description of Facilities/Improvements and Services
City of Chino Community Facilities District Report
CFD 2003-3 Improvement Area No. 11 3
DATED: November 5, 2024 WEBB MUNICIPAL FINANCE, LLC
By: _______________________________
SPECIAL TAX CONSULTANT FOR
CITY OF CHINO
SAN BERNARDINO COUNTY
STATE OF CALIFORNIA
3. Cost Estimate
City of Chino Community Facilities District Report
CFD 2003-3 Improvement Area No. 11 4
1. The cost estimate, including I ncidental Expenses, to be financed thr ough the issuance of CFD No. 2003-3 IA No. 11 Bonds is estimated to be $17,180,000 based upon current dollars (Fiscal Year 2024-25).
2. For further particulars, reference is made to Table 3 -1 on the following pages and incorporated herein by reference.
3. Pursuant to Section 53340 of the Act, the proceeds of any Special Tax levied and collected by CFD No. 2003-3 IA No. 11 may be used only to pay for the cost of providing public facilities, services, and incidental expenses.
As defined by the Act, incidental expenses include, but are not limited to, the annual costs associated with determination of the amount of Special Taxes, collection of Special Taxes, payment of Special T axes, or costs otherwise incurred in order to carry out the authorized purposes of th e Community Facilities District. The incidental expenses associated with the annual administration of CFD No. 2003-3 IA No. 11 are estimated to be $30,000 in the initial Fiscal Year. However, it is anticipated that the incidental expenses will vary due to inflation and other factors that may not be foreseen today, and the actual incidental expenses may exceed these amounts accordingly.
Table 3-1
Cost Estimate (1)
Item Estimated Cost
Park Improvements
Van Vliet Perimeter Streetscape $1,305,142
Nature Trail South $1,197,786
Van Vliet SCE Corridor Landscape $1,402,104
Urban Park (Market – Legacy) $10,725,000
Urban Park Land $1,852,500
Tr. 16420-4 Backbone Landscape $2,829,935
Tr. 16420-5 Backbone Landscape $1,636,680
Tr. 16420-6 Backbone Landscape $1,278,228
Subtotal Eligible Park Improvements: $22,227,375
Street Improvements
Block 4 Backbone Street Improvements $3,600,000
TR16420-3 Main Street Backbone Improvements $3,199,157
Tr. 16420-4 Block 9 Street Improvements $3,500,000
Pine Ave 5-Lane Improvements inc. Traffic Signals $7,896,000 Tr. 16420-5 Backbone Streets $2,800,416
Tr. 16420-6 Backbone Streets $2,175,854
Subtotal Eligible Street Improvements: $23,171,427
Wet Utility Improvements
Tr. 16420-3 Backbone Storm Drain, Sewer, Water, Recycled Water $2,460,000 Pine Ave 5-Lane Backbone Improvements $540,000
Tr. 16420-4 Backbone Storm Drain, Sewer, Water, Recycled Water $3,000,000 Line "F" Backbone Storm Drain Improvements $4,200,000
3. Cost Estimate
City of Chino Community Facilities District Report
CFD 2003-3 Improvement Area No. 11 5
Tr. 16420-5 Backbone Wet Utilities $2,435,138
Tr. 16420-6 Backbone Wet Utilities $1,825,272
Subtotal Eligible Wet Utility Improvements: $14,460,410
Misc. Residential Amenities
Community Core - Misc Residential Amenities (Pine - Market) $1,500,000 Community Core - Misc Residential Amenities Main St- Market to Legacy Park $1,500,000 Subtotal Eligible Mic. Residential Amenities: $3,000,000
City Fees
Law Enforcement $148,549
DIF Administration Fee $1,003,768
Public Use (Community Center) Facilities Fee - or Construction $1,236,307 General Government Fees $44,772
Congestion Management Plan Fees $139,265
Fire Fees $306,834
Streets DIF Prepayment (Pine Ave) $1,422,041
Storm Drain DIF Payment (Pine Ave) $645,470
Park Fees $1,148,000
Subtotal Eligible City Fees $6,095,006
Grand Total Eligible Improvements $68,954,218
Estimated Bond Issuance: $17,180,000
Estimated Incidentals: ($2,120,780)
Estimated Project Funds Available: $15,059,220
Estimated Unfunded Eligible Improvements: $53,894,998
(1) Cost Estimate is Subject to Review and Approval
DATED: November 5, 2024 WEBB MUNICIPAL FINANCE, LLC
By: _______________________________
SPECIAL TAX CONSULTANT FOR
CITY OF CHINO
SAN BERNARDINO COUNTY
STATE OF CALIFORNIA
City of Chino Community Facilities District Report
CFD 2003-3 Improvement Area No. 11 6
4. Proposed Development
Zone 1 is planned to contain approximately 6.68 net taxable acres within Tract Number 20446-1. Zone 1 is planned to be developed into 59 single-family detached units and is generally located northwest of Chino Corona Road and east of East Preserve Loop in the City of Chino. The proposed Zone 1 boundaries include a portion of the following Assessor Parcel Numbers: 1057-481-01-0000 and 1057-491-01-0000.
Zone 2 is planned to contain approximately 7.25 net taxable acres within Tract Number 20446. Zone 2 is planned to be developed into 55 single-family detached units and is generally located northwest of Chino Corona Road and east of East Preserve Loop in the City of Chino. The proposed Zone 2 boundaries include a portion of the following Assessor Parcel Numbers: 1057-481-02-0000 and 1057-481-03-0000.
The Boundary Map for CFD No. 2003-3 IA No. 11 is attached hereto as Appendix B (the “Boundary Map”).
5. R ate and Method of Apportionment
City of Chino Community Facilities District Report
CFD 2003-3 Improvement Area No. 11 7
1. The Rate and Method of Apportionment allows each property owner within the proposed District to estimate the annual amount that would be required for payment. The Rate and Method of Apportionment of the Special Tax for the District, established pursuant to these proceedings, is attached hereto as Appendix A (the “Rate and Method of Apportionment”). The Special Tax will be collected in the same manner and at the same time as ad valorem property taxes and subject to the same penalties and provisions; however, the Special Tax may be collected at a different time or in a different manner if necessary for CFD No. 2003-3 IA No. 11 to meet its financial obligations and may covenant to foreclose on delinquent parcels as permitted by the Act.
2. All o
f the property located within CFD No. 2003-3 IA No. 11, unless exempted by law or by the Special Tax proposed for CFD No. 2003-3 IA No. 11, shall be taxed for the purpose of providing necessary facilities and services to serve the District. The Boundary Map for CFD No. 2003-3 IA No. 11 is attached hereto as Appendix B. P
ursuant to Section 53325.3 of the Act, the tax imposed “is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property.” The Special Tax may be based on benefit received by property, the cost of making facilities or authorized services available or other reasonable basis as determined by the City Council, although the Special Tax may not be apportion ed o
n an ad valorem basis pursuant to Article XIIIA of the California Constitution. A property owner within the District may choose to prepay in who le or in part the Special Tax A. The available method for so doing i s d
escribed in Sections G and H of the Rate and Method (“Prepayment of Special Tax A”). Special Tax B may not be prepaid.
Fo
r each year that any Bonds are outstanding, the Special Tax shall be levied on all Parcels in accordance with this Rate and Method of Apportionment. If any delinquent Special Taxes remain uncollected prior to or after all Bonds are retired, the Special Tax may be levied to the extent necessary to reimburse the CFD for uncollected Special Taxes and costs associated with the levy of such Special Taxes, but the Special Tax sh all not be levied after the 2068-2069 Fiscal Year.
3. Fo
r particulars as to the Rate and Method of Apportionment, see the attached and incorporated Appendix A.
It
is my opinion that the Rate and Method of Apportionment, described above and set forth in Appendix A , is fair and reasonable.
Thi
s Report has been prepared and consolidated by the Special Tax Consultant, Webb Municipal Finance, LLC, and is herewith submitted to the Board pursuant to the applicable provisions of the Mello -Roos Community Facilities Act of 1982.
D
ATED: November 5, 2024 WEBB MUNICIPAL FINANCE, LLC
B
y: _______________________________
SPECIAL TAX CONSULTANT FOR
CITY OF CHINO
SAN BERNARDINO COUNTY
STATE OF CALIFORNIA
APPENDIX A
Rate and Method of Apportionment
RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 2003-3
OF THE CITY OF CHINO
(IMPROVEMENT AREA NO. 11)
The following sets forth the Rate and Method of Apportionment for the levy and collection of Annual Special Tax A and Annual Special Tax B in Improvement Area No. 11 of the City of Chino (“City”) Community Facilities District No. 2003-3 (“CFD No. 2003-3”). An Annual Special Tax A and Annual Special Tax B shall be levied on and collected in Improvement Area No. 11 of CFD No. 2003- 3 each Fiscal Year, in an amount determined through the application of the Rate and Method of Apportionment described below. All of the real property within Improvement Area No. 11, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.
SECTION A
DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acquisition Agreement” means the Acquisition Agreement dated as of May 18, 2004 by and between the City and Chino Development Corporation, et al, as it may be amended. “Acre” or “Acreage” means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on the Assessor’s Parcel Map, the land area as shown on the applicable Final Map, or if the land area is not shown on the applicable Final Map, the land area shall be calculated by the City Engineer.
“Act” means the Mello -Roos Community Facilities Act of 1982 as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. “Administrative Expenses” means any ordinary and necessary expenses allocable to the Special Tax A Requirement and to the Special Tax B Requirement which are incurred by the City on behalf of Improvement Area No. 11 related to the determination of the amount of the levy of Special Tax A and Special Tax B, the collection of Special Tax A and Special Tax B including the expenses of collecting delinquencies, the administration of Bonds, the payment of salaries and benefits of any City employee whose duties are directly related to the administration of Improvement Area No. 11, and costs otherwise incurred in order to carry out the authorized purposes of CFD No. 2003 -3 relating to Improvement Area No. 11.
“Administrator” means an official of the City, or designee thereof, responsible for, among other things, determining the annual amount of the levy and collection of the Special Tax A and Special Tax B.
“Agricultural Buffer Property” means all Assessor’s Parcels which have a restriction on development due to their location being within 100 feet of existing animal use pursuant to the “DEVELOPMENT PLAN, General Development Standards, Right-to-Farm, Development Standards” section of the Preserve Specific Plan approved on March 25, 2003.
“Annual Special Tax A” means for each Assessor’s Parcel, the Special Tax A actually levied in a given Fiscal Year on any Assessor’s Parcel.
“Annual Special Tax B” means for each Assessor’s Parcel, the Special Tax B actually levied in a given Fiscal Year on any Assessor’s Parcel.
“Approved Property” means all Assessor’s Parcels of Taxable Property other than Provisional Undeveloped Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax A is being levied, and (ii) that have not been issued a building permit on or before March 1st preceding the Fiscal Year in which the Special Tax A is being levied.
“Assessor’s Parcel” means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number within the boundaries of Improvement Area No. 11. “Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means that number assigned to a lot or parcel of land by the County Assessor for purposes of identification.
“Assigned Annual Special Tax A” means the Special Tax A of that name described in Section D below.
“Backup Annual Special Tax A” means the Special Tax A of that name described in Section E below. “Bonds” means those bonds issued by or on behalf of CFD No. 2003-3 Improvement Area No. 11, or any refunding thereof, to which Special Tax A within Improvement Area No. 11 has been pledged. “Boundary Map” means a recorded map of the CFD No. 2003-3 which indicates the boundaries of Improvement Area No. 11 of CFD No. 2003-3.
“Building Square Footage” or “BSF” means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the building permit application for such Assessor’s Parcel and subject to verification by City Staff. “Calendar Year” means the period commencing January 1 of any year and ending the following December 31.
“CFD No. 2003- 3” means Community Facilities District No. 2003 -3 Improvement Area No. 11 established by the City under the Act.
“City” means the City of Chino, or its designee.
“City Council” means the City Council of the City of Chino, acting as the legislative body of CFD No. 2003-3, or its designee.
"Consumer Price Index" or “CPI” means the index published monthly by the U.S. Department of Labor, Bureau of Labor Statistics for all urban consumers in the Riverside-San Bernardino-Ontario area. In the event this index ceases to be published, the Consumer Price Index shall be another index as determined by the Administrator that is reasonably comparable to the Consumer Price Index for the Riverside-San Bernardino-Ontario.
“County” means the County of San Bernardino.
“Developed Property” means all Assessor’s Parcels of Taxable Property other than Provisional Undeveloped Property that: (i) are included in a Final Map that was recorded prior to January 1st preceding the Fiscal Year in which the Special Tax A is being levied, and (ii) a building permit was issued on or before March 1st preceding the Fiscal Year in which the Special Tax A or Special Tax B is being levied.
“Exempt Property” means all Assessor’s Parcels designated as being exempt from both Special Tax A and Special Tax B as provided for in Section L.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual lots for which building permits may be issued without further subdivision. “Fiscal Year” means the period commencing July 1 of any year and ending the following June 30. “Improvement Area No. 11” means Improvement Area No. 11 of CFD No. 2003-3, as identified on the boundary map for CFD No. 2003-3 Improvement Area No. 11. “Land Use Type” means Residential Property, Multifamily Residential Property, or Non-Residential Property.
“Maximum Special Tax A” means for each Assessor’s Parcel of Taxable Property, the maximum Special Tax A, determined in accordance with Section C that can be levied in any Fiscal Year on such Assessor’s Parcel.
“Maximum Special Tax B” means for each Assessor’s Parcel of Developed Property, the maximum amount of Special Tax B, determined in accordance with Section I that can be levied in any Fiscal Year on such Assessor’s Parcel.
“Multifamily Residential Property” means all Parcels of Developed Property for which a building permit has been issued for the purpose of constructing a building or buildings comprised of attached Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the Administrator.
“Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit was issued for any type of non-residential use. “Partial Prepayment Amount” means the amount required to prepay a portion of the Special Tax A obligation for an Assessor’s Parcel, as described in Section H.
“Prepayment Amount” means the amount required to prepay the Special Tax A obligation in full for an Assessor’s Parcel, as described in Section G.
“Proportionately” means for Special Tax A that the ratio of the Annual Special Tax A levy to the applicable Assigned Annual Special Tax A is equal for all applicable Assessor’s Parcels. In the case of Special Tax B, means that the ratio of the Annual Special Tax B levy to the applicable Maximum Special Tax B is equal for all applicable Assessor’s Parcels. In case of Developed Property subject to the apportionment of the Annual Special Tax A under Step Four of Section F, “Proportionately” means that the quotient of (a) Annual Special Tax A less the Assigned Annual Special Tax A divided by (b) the Backup Annual Special Tax A less the Assigned Annual Special Tax A, is equal for all applicable Assessor’s Parcels.
“Provisional Undeveloped Property” means all Assessor’s Parcels of Taxable Property subject to Special Tax A that would otherwise be classified as Exempt Property pursuant to the provisions of Section L, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property within the applicable Zone below the required minimum Acreage set forth in Section L.
“Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units, which is not Multifamily Residential Property.
“Services” means services permitted under the Act including, without limitation, maintenance of parks, parkways and open space, flood and storm protection services the operation of storm drainage systems, and public safety services. All of the services financed must be provided within the boundaries of or for the benefit of CFD No. 2003-3. “Special Tax A” means any of the special taxes authorized to be levied on Taxable Property within Improvement Area No. 11 by CFD No. 2003- 3 pursuant to the Act to fund the Special Tax A Requirement.
“Special Tax B” means the special tax authorized to be levied in each Fiscal Year on each Assessor's Parcel of Developed Property to fund the Special Tax B Requirement. “Special Tax A Requirement” means, subject to the Maximum Special Tax A, the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses (apportioned between Special Tax A and Special Tax B), (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, and (v) the collection or accumulation of funds for the acquisition or construction of facilities or payment of fees authorized by CFD No. 2003 -3 by the levy on Developed Property of the Assigned Annual Special Tax A, as required by the Acquisition Agreement provided that the inclusion of such amount does not cause an increase in the levy of Special Tax A on Approved Property or Undeveloped Property as set forth in Step Two and Three of Section F, less (vi) any amount available to pay debt service or other periodic costs on the Bonds pursuant to any applicable fiscal agent agreement, or trust agreement.
P age 5
“Special Tax B Requirement” means, subject to the Maximum Special Tax B, that amount to be collected in any Fiscal Year to pay for Services as required to meet the needs of CFD No. 2003-3 in both the current Fiscal Year and the next Fiscal Year. The costs of Services to be covered shall be the direct costs for (i) Services, and (ii) Administrative Expenses (apportioned between Special Tax A and Special Tax B); less (iii) a credit for funds available to reduce the Annual Special Tax B levy, if any, as determined by the Administrator. Under no circumstances shall the Special Tax B Requirement include funds for Bonds.
“Taxable Property” means all Assessor’s Parcels within Improvement Area No. 11, which are not Exempt Property.
“Undeveloped Property” means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property or Provisional Undeveloped Property. “Unit” means any residential structure.
“Zone(s)” means Zone 1 or Zone 2 as identified below.
“Zone 1” means the specific area identified on the Boundary Map as Zone 1 of Improvement Area No. 11, consisting of Lots 1 through 59 of Tract 20446-1. “Zone 2” means the specific area identified on the Boundary Map as Zone 2 of Improvement Area No. 11, consisting of Lots 1 through 55 of Tract 20446.
SECTION B
CLASSIFICATION OF ASSESSOR’S PARCELS
Each Fiscal Year, beginning with Fiscal Year 2025-26, each Assessor’s Parcel within Improvement Area No. 11 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property, or Provisional Undeveloped Property. In addition, each Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property and Provisional Undeveloped Property shall be classified as being within Zone 1 or Zone 2. If an Assessor’s Parcel of Approved Property, Undeveloped Property, or Provisional Undeveloped Property is located within more than one Zone, it shall be deemed to be entirely within the Zone in which the largest portion of its Acreage is located. In addition, each Assessor’s Parcel of Developed Property shall further be classified as Residential Property, Multifamily Residential Property, or Non-Residential Property.
SECTION C
MAXIMUM SPECIAL TAX A
1. Developed Property
The Maximum Special Tax A for each Assessor’s Parcel of Residential Property, Multifamily Residential Property, or Non-Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Annual Special Tax A or (ii) the Backup Annual Special Tax A.
2. Approved Property, Undeveloped Property, and Provisional Undeveloped Property The Maximum Special Tax A for each Assessor’s Parcel classified as Approved Property, Undeveloped Property, or Provisional Undeveloped Property in any Fiscal Year shall be the Assigned Annual Special Tax A.
SECTION D
ASSIGNED ANNUAL SPECIAL TAX A
1. Developed Property
Each Fiscal Year, each Assessor’s Parcel of Residential Property, Multifamily Residential Property, or Non-Residential Property shall be subject to an Assigned Annual Special Tax A.
The Assigned Annual Special Tax A applicable to an Assessor's Parcel of Developed Property shall be determined using the Tables below.
TABLE 1
ASSIGNED ANNUAL SPECIAL TAX A RATES
FOR DEVELOPED PROPERTY WITHIN ZONE 1
Land Use Type Building Square Footage Rate
Residential Property Less than 2,800 $8,710 per Unit
Residential Property 2,800 – 3,000 $9,035 per Unit
Residential Property 3,001 – 3,200 $9,360 per Unit
Residential Property Greater than 3,200 $9,685 per Unit Multifamily Residential Property N/A $80,952 per Acre
Non-Residential Property N/A $80,952 per Acre
TABLE 2
ASSIGNED ANNUAL SPECIAL TAX A RATES
FOR DEVELOPED PROPERTY WITHIN ZONE 2
Land Use Type Building Square Footage Rate
Residential Property Less than 2,700 $8,620 per Unit
Residential Property 2,700 – 2,900 $8,900 per Unit
Residential Property 2,901 – 3,100 $9,180 per Unit
Residential Property 3,101 – 3,300 $9,460 per Unit
Residential Property 3,301 – 3,500 $9,740 per Unit
Residential Property 3,501 – 3,700 $10,020 per Unit
Residential Property Greater than 3,700 $10,300 per Unit Multifamily Residential Property N/A $75,283 per Acre
Non-Residential Property N/A $75,283 per Acre
2. Approved Property, Undeveloped Property, and Provisional Undeveloped Property Each Fiscal Year, each Assessor’s Parcel of Approved Property, Undeveloped Property, and Provisional Undeveloped Property shall be subject to an Assigned Annual Special Tax A. The Assigned Annual Special Tax A rate for an Assessor’s Parcel classified as Approved Property, Undeveloped Property, or Provisional Undeveloped Property shall be determined pursuant to Table 3 below:
TABLE 3
ASSIGNED ANNUAL SPECIAL TAX A RATES
FOR APPROVED PROPERTY, UNDEVELOPED PROPERTY,
AND PROVISIONAL UNDEVELOPED PROPERTY
Zone Minimum Taxable Acreage Rate
Zone 1 6.68 $80,952 per Acre
Zone 2 7.25 $75,283 per Acre
If an Assessor’s Parcel of Approved Property or Undeveloped Property includes an area that would be classified as Agricultural Buffer Property, the Acreage of the Assessor’s Parcel for purposes of levying the Assigned Annual Special Tax A shall exclude the Acreage of the area that would be classified as Agricultural Buffer Property.
SECTION E
BACKUP ANNUAL SPECIAL TAX A
For each Zone, at the time a Final Map is recorded, the City shall determine which Zone the Final Map area lies within and the Backup Annual Special Tax A for all Assessor’s Parcels classified or reasonably expected to be classified as Residential Property within such Final Map area shall be determined by multiplying the Maximum Special Tax A rate for Undeveloped Property for the applicable Zone by the total Acreage of Taxable Property, excluding the Provisional Undeveloped
Property Acreage area, or Multifamily Residential Property and/or Non- Residential Property Acreage area if any, in such Final Map area and any Acreage reasonably expected to be classified as Exempt Property, and dividing such amount by the total number of such Assessor’s Parcels of Residential Property. In no circumstance shall the total Acreage of Taxable Property in each Zone be less than the acreage set forth in Table 3.
If the Final Map area described in the preceding paragraph lies within more than one Zone, the Backup Special Tax for Parcels of Residential Property or Parcels expected to be classified as Residential Property shall be determined by multiplying the Maximum Special Tax A rate for Undeveloped Property for the applicable Zone in which the majority of each Assessor Parcel lies by the total Acreage of each Assessor Parcel.
The Backup Annual Special Tax A for Multifamily Residential Property shall be its Annual Assigned Special Tax A Rate.
Notwithstanding the foregoing, if Assessor’s Parcels which are classified or to be classified as Residential Property or Multifamily Residential Property are subsequently changed by recordation of a lot line adjustment, Final Map amendment, new Final Map or similar instrument, then the Backup Annual Special Tax A shall be recalculated within the area that has been changed to equal the amount of Backup Annual Special Tax A that would have been generated if such change did not take place.
SECTION F
METHOD OF APPORTIONMENT OF THE ANNUAL SPECIAL TAX A
Commencing Fiscal Year 2025-26 and for each subsequent Fiscal Year, the City Council shall levy Annual Special Tax A in accordance with the following steps:
Step One: The Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Developed Property at up to 100% of the applicable Assigned Annual Special Tax A rates in Table 1 and Table 2 to satisfy the Special Tax A Requirement.
Step Two: If additional moneys are needed to satisfy the Special Tax A Requirement after the first step has been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the applicable Assigned Annual Special Tax A to satisfy the Special Tax A Requirement.
Step Three: If additional moneys are needed to satisfy the Special Tax A Requirement after the first two steps have been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% of the Assigned Annual Special Tax A for Undeveloped Property applicable to each such Assessor's Parcel as needed to satisfy the Special Tax A Requirement.
Step Four: If additional moneys are needed to satisfy the Special Tax A Requirement after the first three steps have been completed, then the Annual Special Tax A on each Assessor's Parcel of Developed Property for which the Maximum Special Tax A is the
Backup Annual Special Tax A shall be increased Proportionately from the Assigned Annual Special Tax A up to 100% of the Backup Annual Special Tax A as needed to satisfy the Special Tax A Requirement.
Step Five: If additional moneys are needed to satisfy the Special Tax A Requirement after the first four steps have been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Provisional Undeveloped Property up to 100% of the Assigned Annual Special Tax A applicable to each such Assessor's Parcel as needed to satisfy the Special Tax A Requirement.
SECTION G
PREPAYMENT OF ANNUAL SPECIAL TAX A
The following definition applies to this Section G:
“Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax A which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Maximum Special Tax A.
Prepayment:
The Special Tax A obligation of an Assessor's Parcel of Developed Property, an Assessor's Parcel of Approved Property, an Assessor's Parcel of Undeveloped Property, and an Assessor’s Parcel of Provisional Undeveloped Property may be prepaid in full, provided that there are no delinquent Special Tax A, penalties, or interest charges outstanding with respect to such Assessor’s Parcel at the time the Special Tax A obligation would be prepaid. The Prepayment Amount for an Assessor’s Parcel eligible for prepayment shall be determined as described below.
An owner of an Assessor’s Parcel intending to prepay the Special Tax A obligation shall provide the City with written notice of intent to prepay, and within five (5) days of receipt of such notice, the City shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by Improvement Area No. 11 in calculating the proper amount of a prepayment.
Within fifteen (15) days of receipt of such non-refundable deposit, the City shall notify such owner of the prepayment amount of such Assessor’s Parcel.
The Prepayment Amount for each applicable Assessor's Parcel shall be calculated according to the following formula (capitalized terms defined below):
Payoff Amount
plus Administrative Fee
equals Prepayment Amount
As of the date of prepayment, the Prepayment Amount shall be calculated as follows:
1. For an Assessor’s Parcel of Developed Property and Provisional Undeveloped Property, compute the Assigned Annual Special Tax A applicable to the Assessor’s Parcel. For an Assessor’s Parcel of Approved
Property, compute the Assigned Annual Special Tax A as though it was already designated as Developed Property based upon the building permit issued or expected to be issued for that Assessor’s Parcel. For an Assessor’s Parcel of Undeveloped Property compute the Assigned Annual Special Tax A as though it was already designated as Developed Property based upon the building permit issued or expected to be issued for that Assessor’s Parcel.
For each Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Undeveloped Property to be prepaid, compute the present value of the remaining Annual Assigned Special Tax A payments using a discount rate that is equal to the weighted average interest rate on the Outstanding Bonds and the remaining term of the Outstanding Bonds determined by a Financial Advisor selected by the City.
For any prepayment that occurs prior to the first issuance of Bonds, the discount rate used in this calculation shall be 5.5% and the term shall be the period in which the Special Tax A may be levied as provided in Section K less ten years. This is the “Payoff Amount.”
2. For each Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Undeveloped Property to be prepaid, divide the Assigned Annual Special Tax A computed pursuant to the first paragraph in paragraph 1 of this Section G for such Assessor's Parcel by the sum of the estimated Assigned Annual Special Tax applicable to all Assessor’s Parcels of Taxable Property at build out, as reasonably determined by the City.
3. Multiply the quotient computed pursuant to paragraph 2 by the Outstanding Bonds. The product shall be the “Bond Redemption Amount”.
4. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed with the proceeds of the Bond Redemption Amount. This product is the “Redemption Premium.”
5. Compute the amount needed to pay interest on the Bond Redemption Amount to be redeemed with the proceeds of the Prepayment Amount until the earliest call date for the Outstanding Bonds.
6. Determine the amount of interest earnings to be derived from the reinvestment of the Bond Redemption Amount plus the Redemption Premium in State and Local Government Series Treasury Obligations until the earliest call date for the Outstanding Bonds.
7. Subtract the amount computed pursuant to paragraph 6 from the amount computed pursuant to paragraph 5. This difference is the “Defeasance Cost.”
8. Estimate the administrative fees and expenses associated with the prepayment, including the costs of computation of the Prepayment Amount, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption. This amount is the “Administrative Fee.”
9. Calculate the “Reserve Fund Credit” as the lesser of: (a) the expected reduction in the applicable reserve requirements, if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirements in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the applicable reserve funds on the prepayment date.
Notwithstanding the foregoing, if the reserve fund requirement is satisfied by a surety bond or other instrument at the time of the prepayment, then no Reserve Fund Credit shall be given. Notwithstanding the foregoing, the Reserve Fund Credit shall in no event be less than zero.
10. The “Amount to Call Bonds” is equal to the sum of the Bond Redemption Amount, the Redemption Premium, and the Defeasance Cost, less the Reserve Fund Credit (the Amount to Call Bonds will be transferred to the debt service fund and used to defease or call bonds).
11. The Prepayment Amount is the sum of the Payoff Amount and the Administrative Fee.
12. From the Prepayment Amount, the Amount to Call Bonds will be transferred to the debt service fund and used to defease or call bonds pursuant to the fiscal agent agreement or escrow agreement; the Administrative Fee will be transferred to the Administrative Fund or functionally equivalent fund or account pursuant to the fiscal agent agreement and used to pay administrative expenses; the remainder will be transferred to the Surplus Taxes Fund or functionally equivalent fund or account pursuant to the fiscal agent agreement.
With respect to the Special Tax A obligation that is prepaid pursuant to this Section G, the City Council shall indicate in the records of Improvement Area No. 11 that there has been a prepayment of the Special Tax A obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such prepayment to indicate the prepayment of the Special Tax A obligation and the release of the Special Tax A lien on such Assessor’s Parcel, and the obligation of such Assessor’s Parcel to pay such Special Tax A shall cease.
Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Special Tax A that may be levied on Taxable Property after such full prepayment, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all Outstanding Bonds in each future Fiscal Year.
SECTION H
PARTIAL PREPAYMENT OF ANNUAL SPECIAL TAX A
The Special Tax A obligation of an Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Undeveloped Property, for which a building permit has been issued or is expected to be issued, as calculated in this Section H below, may be partially prepaid, provided that there are no delinquent Special Tax A, penalties, or interest charges outstanding with respect to such Assessor’s Parcel at the time the Special Tax A obligation would be prepaid.
The Partial Prepayment Amount shall be calculated according to the following formula:
PP = PG x F
The terms above have the following meanings:
PP = the Partial Prepayment Amount.
PG = the Prepayment Amount calculated according to Section G.
F = the percent by which the owner of the Assessor’s Parcel is partially prepaying the Special Tax A obligation.
With respect to any Assessor’s Parcel that is partially prepaid, the City Council shall indicate in the records of Improvement Area No. 11 that there has been a partial prepayment of the Special Tax A obligation and shall cause a suitable notice to be recorded in compliance with the Act within thirty (30) days of receipt of such partial prepayment of the Special Tax A obligation, to indicate the partial prepayment of the Special Tax A obligation and the partial release of the Special Tax A lien on such Assessor’s Parcel, and the obligation of such Assessor’s Parcel to pay such prepaid portion of the Special Tax A shall cease.
Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Special Tax A that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently Outstanding Bonds in each future Fiscal Year.
SECTION I
MAXIMUM SPECIAL TAX B
1. Developed Property
Maximum Special Tax B
The Maximum Special Tax B for each Assessor’s Parcel of Developed Property for each Land Use Type is shown in the Tables below.
On each July 1, commencing July 1, 2025, the Maximum Special Tax for Residential Property for the prior Fiscal Year shall be increased by (i) an amount equal to the percentage change increase in the Consumer Price Index for the twelve month period ending in March of the prior Fiscal Year, not to exceed 7%.
The Maximum Special Tax for Multifamily Residential Property and Non -Residential Property shall not increase.
TABLE 4
MAXIMUM SPECIAL TAX B RATES
FOR DEVELOPED PROPERTY WITHIN ZONE 1
Land Use Type Building Square Footage Rate
Residential Property Less than 2,800 $1,082 per Unit
Residential Property 2,800 – 3,000 $1,125 per Unit
Residential Property 3,001 – 3,200 $1,168 per Unit
Residential Property Greater than 3,200 $1,200 per Unit Multifamily Residential Property N/A $10,054 per Acre
Non-Residential Property N/A $10,054 per Acre
TABLE 5
MAXIMUM SPECIAL TAX B RATES
FOR DEVELOPED PROPERTY WITHIN ZONE 2
Land Use Type Building Square Footage Rate
Residential Property Less than 2,700 $1,071 per Unit
Residential Property 2,700 – 2,900 $1,115 per Unit
Residential Property 2,901 – 3,100 $1,146 per Unit
Residential Property 3,101 – 3,300 $1,195 per Unit
Residential Property 3,301 – 3,500 $1,220 per Unit
Residential Property 3,501 – 3,700 $1,241 per Unit
Residential Property Greater than 3,700 $1,276 per Unit Multifamily Residential Property N/A $9,334 per Acre
Non-Residential Property N/A $9,334 per Acre
2. Approved Property, Undeveloped Property, and Provisional Undeveloped Property No Special Tax B shall be levied on Approved Property, Undeveloped Property , or Provisional Undeveloped Property.
3. Method of Apportionment of the Maximum Special Tax B Commencing with Fiscal Year 2025-26 and for each following Fiscal Year, the City shall levy the Special Tax B at up to 100% of the applicable Maximum Special Tax B, Proportionately on each Assessor’s Parcel of Developed Property until the amount of Special Tax B equals the Special Tax B Requirement.
SECTION J
PREPAYMENT OF ANNUAL SPECIAL TAX B
Special Tax B cannot be prepaid.
SECTION K
TERM OF SPECIAL TAX A AND SPECIAL TAX B
For each Fiscal Year that any Bonds are outstanding the Annual Special Tax A shall be levied on all Assessor’s Parcels subject to the Annual Special Tax A. If any delinquent Annual Special Tax A amounts remain uncollected prior to or after all Bonds are retired, the Annual Special Tax A may be levied to the extent necessary to reimburse Improvement Area No. 1 1 for uncollected Annual Special Tax A amounts associated with the levy of such Annual Special Tax A amounts, but not later than the 2068-69 Fiscal Year.
Special Tax B shall be levied in perpetuity as long as the Services are being provided.
SECTION L
EXEMPT PROPERTY
The City shall classify as Exempt Property within the applicable Zone, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses or classified as Agricultural Buffer Property, or (vi) other types of public uses determined by the City Council.
Notwithstanding the foregoing, the City Council for purposes of levying the Special Tax A shall not classify an Assessor's Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property within the applicable Zone to less than the Acreage amounts listed in Table 6
below. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property within the applicable Zone to less than the Acreage amounts listed in Table 6 will be classified as Provisional Undeveloped Property, and will be subject to the levy of Special Tax A pursuant to Step Five in Section F.
TABLE 6
MINIMUM TAXABLE ACRES
Zone Acres
Zone 1 6.68
Zone 2 7.25
SECTION M
APPEALS AND INTERPRETATIONS
Any property owner claiming that the amount or application of the Special Tax A or Special Tax B is not correct may file a written notice of appeal with the City Council not later than twelve months after having paid the first installment of the Special Tax A or Special Tax B that is disputed. A representative(s) of CFD No. 2003-3 shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of Special Tax A or Special Tax B, and rule on the appeal. If the representative’s decision requires that the Special Tax A or Special Tax B for an Assessor’s Parcel be modified or changed in favor of the property owner, The representative shall take any of the following actions, in order of priority, to correct the error:
(i) if possible, amend the Special Tax levy on the property owner’s Assessor’s Parcel(s) for the current Fiscal Year, if prior to the payment date, (ii) require the CFD to reimburse the property owner for the amount of the overpayment to the extent of available CFD funds, or
(iii) grant a credit against, eliminate, or reduce the future Special Taxes on the property owner’s Assessor’s Parcel(s) in the amount of the overpayment.
The City may interpret this Rate and Method of Apportionment of Special Tax for purposes of clarifying any ambiguity and make determinations relative to the amount of Administrative Expenses.
SECTION N
MANNER OF COLLECTION
The Annual Special Tax A or Annual Special Tax B shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that Improvement Area No. 11 may collect Annual Special Tax A and Annual Special Tax B at a different time or in a different manner if necessary to meet its financial obligations.
APPENDIX B
Boundary Map
Corporate Headquarters
3750 McCray Street
Riverside, CA 92506
951.686.1070
Murrieta Office
41870 Kalmia Street #160
Murrieta, CA 92562
951.686.1070