CITY OF LAKE ELSINORE
Public Hearing Report
CFD NO. 2023-2 (COAS TAL MISSION TRAILS)
OCTOBER 24
, 2023
Table of Contents
Sections P age _____________________________________________ 1 Introduction ________________________________________________ 1 2 Description of Facilities ______________________________________________ 2 3 Cost Estimate ________________________________________________ 3 4 Proposed Development _____________________________________________ 4 5 Rate and Method of Apportionment ____________________________________ 5 6 Certifications ________________________________________________ 6
Tables Page
3-1 Cost Estimate ________________________________________________ 3
Appendices P age _____________________________________________ A Rate and Method of Apportionment _____________________________________ B Boundary Map _________________________________________________ C Resolution of Intention _______________________________________________
1 Introduction Page | 1
City of Lake Elsinore
CFD No. 2023-2 (Coastal Mission Trails)
Public Hearing Report
Background
On September 12, 2023, the City Council (the “City Council”) of the City of Lake Elsinore (the “City”), adopted a Resolution of Intention to form Community Facilities District No. 2023-2 (Coastal Mission Trails) of the City of Lake Elsinore (the “CFD No. 2023-2”), Resolution No. 2023-078 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, (the “Act”).
CFD No. 2023-2 is currently comprised of three parcels and approximately 18 gross acres. A Tract Map 38378 includes 191 proposed single family residential lots. The properties are generally located on the northwest corner of Mission Trail Road and Lemon Street.
For a map showing the boundaries of CFD No. 2023-2 please see Appendix B.
Purpose of Public Hearing Report
WHEREAS, this Community Facilities District Report (“Report”) is being provided to the City Council and generally contains the following:
1. A brief description of CFD No. 2023-2;
2. A brief description of the Facilities required at the time of formation to meet the needs of CFD No. 2023-2;
3. A brief description of the Boundaries of CFD No. 2023-2; and
4. An estimate of the cost of financing the bonds used to pay for the Facilities, including all costs associated with formation of the District, issuance of bonds, determination of the amount of any special taxes, collection of any special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the City with respect to the District, and any other incidental expenses to be paid through the proposed financing.
For particulars, reference is made to the Resolution of Intention as previously approved and adopted and is included in Appendix C.
2 Description of Facilities Page | 2
City of Lake Elsinore
CFD No. 2023-2 (Coastal Mission Trails)
Public Hearing Report
NOW, THEREFORE, the undersigned, authorized representative of Spicer Consulting Group, LLC, the appointed responsible officer, or person directed to prepare this Report, does hereby submit the following data:
Description of the Facilities
A Community Facilities District may pay for facilities which may include all amounts necessary to eliminate any fixed special assessment liens or to pay, repay, or defease any obligation to pay for any indebtedness secured by any tax, fee, charge, or assessment levied, provide for the pu rchase, construction, expansion, or reha bilitation for any real or other tangible property with an estimated useful life of five (5) years or longer, which is necessary to meet increased demands placed upon local agencies as a result of development and/or rehabilitation occurring within the District.
The types of facilities that are proposed by CFD No. 2023- 2 and financed with the proceeds of special taxes and bonds issued by CFD No. 2023-2 consist of the construction, purchase, modification, expansion, rehabilitation and/or improvement of (i) drainage, library, park, fire, roadway, traffic, administration and community center facilities, marina/lakeside and animal shelter facilities, and other public facilities of the City, including the foregoing public facilities which are included in the City’s fee programs with respect to such facilities and authorized to be financed under the Mello-Roos Community Facilities Act of 1982, as amended, (ii) water and sewer facilities including th e acquisition of capacity in the sewer system and/or water system of the Elsinore Valley Municipal Water District which are included in Elsinore Valley Municipal Water District’s water and sewer capacity and connecti on fee programs (the “Water District Faciliti es”), and (iii) interim and permanent school facilities of Lake Elsinore Unified School District, including classrooms, multi-purpose facilities, administration and auxiliary space at school facilitie s, athletic fields, playgrounds and recreational facilities and im provements thereto, landscaping, access roadways, drainage, sidewalks a nd gutters and utility lines, furniture, equipment and technology, including technology upgrades and mobile devices and infrastructure therefore, with a useful life of at least five (5) years at such school facilities (the “School Facilities” and together, with the City Facilities and the Water Facilities, the “Facilities”), and all appurtenances and appurtenant work in connection with the foregoing Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking, construction management and supervision for such Facilities.
Incidental Expenses
The Incidental Expenses to be paid from bond proceeds and/or special taxes include:
a) The cost of engineering, planning and designing the Facilities; and b) All costs, including costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District; and c) Any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.
Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for the District.
All costs associated with the creation of CFD No. 2023-2, the issuance of bonds, the determination of the amount of special taxes to be levied, costs incurred in order to carry out the authorized purposes of CFD No. 2023-2, including legal fees, fees of consultants, engineering, planning, designing and the annual costs to administer CFD No. 2023-2 and any obligations.
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 such substitution or modification shall not constitute a change or modification in the proceedings relating to CFD No. 2023-2.
3 Cost Estimate Page | 3
City of Lake Elsinore
CFD No. 2023-2 (Coastal Mission Trails)
Public Hearing Report
Below is the estimated cost of facilities to be provided to the District. a) The cost estimate of facilities, including incidental expenses, to be financed through the issuance of CFD No. 2023- 2 Bonds is estimated to be $8,539,684 based upon current dollars (Fiscal Year 2023-24). b) For further particulars please reference Table 3-1 below and incorporated herein by reference. c) Pursuant to Section 53340 of the Act, the proceeds of any special tax levied and collected by CFD No. 2023-2 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 taxes, or costs otherwise incurred in order to carry out the authorized purposes of the District. The incidental expenses associated with the annual administration of CFD No. 2023-2 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 fores een today, and the actual incidental expenses may exceed these amounts accordingly.
Table 3-1
Cost Estimate
City of Lake Elsinore Total Bond Allocation(1)
Park Fee $305,600 $305,600
Traffic Fee $261,479 $261,479
Library $28,650 $28,650
City Hall $154,519 $154,519
Community Center $104,095 $104,095
Lakeside Facilities $148,789 $148,789
Animal Shelter $66,468 $66,468
Fire Facility $143,441 $143,441
Drainage Fee $61,884 $61,884
City Additional Facilities $254,985 $254,985
Total City Fees and Facilities $1,529,910 $1,529,910
Elsinore Valley Municipal Water District Total Bond Allocation(1) 3/4" Water Meter Fee $3,143,096 $3,143,096
Regional Sewer Fee $1,779,356 $1,779,356
Landscape Meter Fee $109,324 $109,324
Total Elsinore Valley Municipal Water District $5,031,776 $5,031,776
Lake Elsinore Unified School District Total Bond Allocation(1) Level I School Fee $1,570,972 $1,570,972
School Fee Premium $471,291 $407,026
Total Lake Elsinore Unified School District $2,042,263 $1,977,998
Total Eligible Fees/Improvements $8,603,949 $8,539,684
Incidental Financing Costs $1,995,316
Total Funded by Bond Proceeds $10,535,000
Total Fees/Improvements to be Funded by Developer $64,265 (1) Amounts are allocated based upon estimated bond sizing and may change abased upon market conditions at the time of bond issuance.
4 Proposed Development Page | 4
City of Lake Elsinore
CFD No. 2023-2 (Coastal Mission Trails)
Public Hearing Report
The CFD No. 2023-2 includes approximately 18 gross acres on three undeveloped assessor’s parcels in Tract 38378 located in the City. The property within CFD No. 2023-2 is expected to be developed with 191 single family residential units. The District is located on the northwest corner of Mission Trail Road and Lemon Street. As of Fiscal Year 2023-24 the proposed CFD No. 2023-2 includes the following Assessor's Parcel Numbers:
Assessor
Parcel Number
370-050-019
370-050-020
370-050-032
A map showing the boundaries of CFD No. 2023-2 is included in Appendix B.
5 Rate and Method of Apportionment Page | 5
City of Lake Elsinore
CFD No. 2023-2 (Coastal Mission Trails)
Public Hearing Report
The Rate and Method of Apportionment allows each property owner within CFD No. 2023-2 to estimate the annual Special Tax amount that would be required for payment. The Rate and Method of Apportionment of the Special Tax established pursuant to these proceedings, is attached hereto as Appendix A (the “Rate and Method”). The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the CFD Administrator may directly bill the Special Taxes, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of CFD No. 2023-2, and provided further that CFD No. 2023-2 may covenant to foreclose and may actually foreclose on parcels having delinquent Special Taxes as permitted by the Act.
All of the property located within CFD No. 2023-2, unless exempted by law or by the Rate and Method proposed for CFD No. 2023-2, shall be taxed for the purpose of providing necessary facilities to serve the District. The Boundary Map for CFD No. 2023-2 is attached hereto as Appendix B. Pursuant 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 the benefit received by property, the co st of making facilities or authorized services available or other reasonable basis as determined by the City, although the Special Tax may not be apportioned on an ad valorem basis pursuant to Articl e XIIIA of the California Constitution. A property owner within the District may choose to prepay in whole or in part the Special Tax. The available method for so doing is described in Section G of the Rate and Method (“Prepayment of Special Tax”).
For each year that any Bonds are outstanding the Special Tax shall be levied on all parcels subject to the Special Tax. 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 CFD No. 2023-2 for uncollected Special Taxes associated with the levy of such Special Taxes, but the Special Tax shall not be levied after 2070-2071 Fiscal Year.
For particulars as to the Rate and Method for CFD No. 2023-2, see the attached and incorporated in Appendix A.
6 Certifications Page | 6
City of Lake Elsinore
CFD No. 2023-2 (Coastal Mission Trails)
Public Hearing Report
Based on the information provided herein, it is my opinion that the described services herein are those that are necessary to meet increased demands placed upon the City of Lake Elsinore as a result of development occurring within the CFD No. 2023-2 and benefits the lands within said CFD No. 2023-2. Further, it is my opinion that the special tax rates and method of apportionment, as set forth herein, are fair and equitable, uniformly applied and not discriminating or arbitrary.
Date: October 24, 2023 SPICER CONSULTING GROUP, LLC
__________________________
SHANE SPICER
SPECIAL TAX CONSULTANT FOR
CITY OF LAKE ELSINORE
RIVERSIDE COUNTY
STATE OF CALIFORNIA
APPENDIX A
Rate and Method of Apportionment
City of Lake Elsinore
Community Facilities District No. 2023‐2 (Coastal Mission Trails) Page 1
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2023‐2 (COASTAL MISSION TRAILS) OF THE CITY OF LAKE ELSINORE
A Special Tax (all capitalized terms are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of the City of Lak e Elsinore Community Facilities District No. 2023‐2 (Coastal Mission Trails) ("CFD No. 2023‐2”). The amount of Special Tax to be levied in each Fiscal Year on an Assessor’s Parcel shall be determined by the City Council of the City of Lake Elsinore, acting in its capacity as the legislative body of CFD No. 2023‐2, by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, sha ll 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 residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel as a Single Family Reside
ntial Property with a stand‐alone Residential Unit.
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel
map, condominium plan, or other recorded County parcel map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.
"Act" means the Mello‐Roos Communities Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Governm ent Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2023‐2: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indent
ure; the costs to the City, CFD No. 2023‐2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2023‐2 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2023‐2 or obligated persons associated with applicable federal and sta
te securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2023‐2 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and th e City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2023‐2 for any other administrative purposes of CFD No. 2023‐2, including attorney’s fees and other costs related to comm
encing and pursuing to completion any foreclosure of
delinquent Special Taxes.
"Approved Property" means all Assessor’s Parcels of Taxable 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 is being levied,
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Community Facilities District No. 2023‐2 (Coastal Mission Trails) Page 2
(ii) and has an assigned Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year in which the Special Tax 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.
"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
"Assess
or’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below.
"Backup Special Tax" means the Special Tax of that name described in Section D below.
"Boundary Ma
p" means a recorded map of the CFD which indicates the boundaries of the CFD.
"Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long‐term leases, loans from government agencies, or loans from banks, other financial institutions, priva te businesses, or individuals, or long‐term contracts, or any refunding thereof, to which Special Tax of CFD No. 2023‐2 have been pledged.
"Building Permit" means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include any subsequent building perm
it document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator as necessary to fairly allocate Special Tax to the Assessor’s Parcel, provided that following such determ
ination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times maximum annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses.
"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 for such Assessor’s Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the following December
31. "CFD” or “CFD No. 2023‐2” means Community Facilities District No. 2023‐2 (Coastal Mission Trails) established by the City un
der the Act.
“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.
“City” means the City of Lake Elsinore.
City of Lake Elsinore
Community Facilities District No. 2023‐2 (Coastal Mission Trails) Page 3
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD No. 2023‐2.
“Condominium Plan" means a condominium plan as set forth in the California Civil Code, Section 6624.
"County" means the County of Riverside.
"Developed Property" means all Assessor’s Parcels that: (i) are included in a Fin al Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) has an Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.
"Exempt Property" means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivisio
n Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 6624 that creates individual lots for which Building Permits may be issued without further subdivision.
"Fiscal Year" means the period commencing on July 1st of any year and ending the following June 30th.
“Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Category” means any of the categories listed in Table 1 of Section D.
"Maxim
um Special Tax" means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2023‐2 in any Fiscal Year on such Assessor’s Parcel.
“Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued
for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator.
"Non‐Residential Property" or “NR” means all Assessor's Parcels for which a building permit (s) was issued
or will be issued for a non‐residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non‐Residential Property.
"Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2.
"Pre
payment Amount" means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.
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Community Facilities District No. 2023‐2 (Coastal Mission Trails) Page 4
“Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approv
ed Property, and (iii) Undeveloped Property, or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property, or Provisional Undeveloped Property, as applicable.
"Pr
ovisional Undeveloped Property" means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property below the required minimum Acre age set forth in Sections F.
"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 Units.
“Residential Unit” or "RU" means a residential unit that is used or intended to be used as a domicile by one or more persons,
as determined by the CFD Administrator. An Accessory Dwelling Unit that shares an Assessor’s Parcel with a Single Family Residential Property shall not be considered a Residential Unit for purposes of this RMA.
“Single Family Residential Property” means all Assessor’s Parcels of Residential Property other than Multifamily Pro
perty.
"Special Tax" or “Special Taxes” means any of the special taxes authorized to be levied within CFD No. 2023‐2 pursuant to the Act to fund the Special Tax Requirement.
"Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the period
ic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to replenish any reserve funds established in association with the Bonds, (v) an amount equa
l to any anticipated shortfall due to Special Tax delinquencies, and (vi) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2023‐2 or the payment of debt services on Bonds anticipated to be issued, provided that the inclusion of such amount does not caus
e an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture.
"Taxable Pr
operty" means all Assessor’s Parcels within CFD No. 2023‐2, which are not Exempt Property.
“Taxable Unit” means either a Residential Unit or an Acre.
"Tract(s)" means an area of land within a subdivision identified by a particular tract number on a Final Map approved for the subdivision.
“Trustee” me
ans the trustee, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property, Provisional Undeveloped Property.
City of Lake Elsinore
Community Facilities District No. 2023‐2 (Coastal Mission Trails) Page 5
B. SPECIAL TAX
Commencing Fiscal Year 2023‐2024 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax, to fund the Special Tax Requirement.
C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fis cal Year 2023‐2024, each Assessor’s Parcel within CFD No. 2023‐2 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.
Assessor’s Parcels of Developed Property shall furt her be classified as Residential Property or Non‐ Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as a Single Family Residential Property, or Multifamily Property. Each Assessor’s Parcel of Single Family Residential Property shall be further categorized into Land Use Categories based on its Building Square Footage and assigned to its appropriate Assigned Spec
ial Tax rate.
In the event that an Assessor’s Parcel for which one or more Building Permits have been issued and the County has not yet assigned final Assessor’s Parcel Number(s) to the Residential Unit(s) (in accordance with the Final Map or Condominium Plan) on such Assessor’s Parcel, the amount of the Special Tax levy
on such Assessor’s Parcel for each Fiscal Year shall be determined as follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax levy for such Assessor’s Parcel, based on the classification of such Assessor’s Parcel as Undeveloped Property; (2) the amount of the Spec ial Tax levy for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Developed Property Special Tax rates and shall be taxed as Developed Property in accordance with Step 1 of Section E below; and (3) the amount of the Sp ecial Tax levy on the Taxable Property in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate levied on all other Undeveloped Property multiplied by th e total of the amount determined in clause (1), less the amount determined in clause (2).
D. MAXIMUM SPECIAL TAX
1. Developed Property
The Maximum Special Tax for each Assessor’s Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax or (ii) the Backup Special Tax.
The Maximum Special Tax for each Assessor’s Parcel of Non‐Residential or Multifamily Residential Property shall be the applicable Assigned Special Tax describe d in Table 1 of Section D.
a. Assigned Special Tax
Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property or Non‐Residential shall be subject to an Assigned Special Tax. The Assigned Special Tax applicable to an Assessor's Parcel of Developed Property shall be determined pursuant to Table 1 below.
City of Lake Elsinore
Community Facilities District No. 2023‐2 (Coastal Mission Trails) Page 6
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2023‐2024
Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit
1. Single Family Residential Property RU Less than 1,475 sq. ft $3,189.00
2. Single Family Residential Property RU 1,475 sq. ft to 1,625 sq. ft $3,338.00
3. Single Family Residential Property RU 1,626 sq. ft to 1,775 sq. ft $3,432.00
4. Single Family Residential Property RU 1,776 sq. ft to 1,925 sq. ft $3,619.00
5. Single Family Residential Property RU Greater than 1,925 sq. ft $3,927.00
6. Multifamily Property Acre N/A $70,068.00
7. Non‐Residential Property Acre N/A $70,068.00
On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
b. Multiple Land Use Categories
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for all Land Use Categories located on the Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be fin al.
c. Backup Special Tax
The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property shall be $3,892 per Residential Unit.
Notwithstanding the foregoing, if all or any portion of the applicable Final Maps and/or condominium plan contained within the boundaries of CFD No. 2023‐2 is subsequently changed or modi fied, then the Backup Special Tax for Single Family Residential Property or Approved Property in such Final Map or condominium plan area that is changed or modified shall be recalculated as follows:
1. Determine the total Backup Special Taxes anticipated to apply to the changed or modified Final Map or condominium plan area prior to the chan
ge or modification.
2. The result of paragraph 1 above shall be divided by the total number of Residential Units constructed and/or anticipated to be constructed within such changed or modified Final Map or condominium plan area, as reasonably determined by the CFD Administrator.
The result of paragraph 2 is the Backup Special Ta
x per Residential Unit which shall be applicable to
Assessor’s Parcels of Single Family Residential Property or Approved Property in such changed or modified Final Map or condominium plan area contained within the boundaries of CFD No. 2023‐2.
Notwithstanding the foreg
oing, the Backup Special Tax for an Assessor’s Parcel of Developed Property for which a certificate of occupancy has been granted may not be revised.
City of Lake Elsinore
Community Facilities District No. 2023‐2 (Coastal Mission Trails) Page 7
On each July 1, commencing July 1, 2024, the Backup Special Tax rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
2. Approved Property
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Property shall be the Backup Special Tax computed pursuant to Section D.1.c above.
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Multifamily Residential Property or Non‐Residential Property shall be $70,068 per Acre.
On each July 1,
commencing July 1, 2024, the Maximum Special Tax rate for Approved Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
3. Undeveloped Property and Provisional Undeveloped Property
The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property that is not Exempt Property shall be equal to the product of $70,068 multiplied by the Acreage of such Assessor’s Parcel.
On each July 1, commencing July 1, 2024, the Maximum Special Tax rate for Undeveloped and Provisional
Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2023‐2024 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accorda nce with the following steps:
Step One: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax rates in Table 1 to satisfy the Special Tax Requirement.
Step Two: If additional moneys are needed to satisfy the Special Tax Require ment after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.
Step Thre
e: If additional moneys are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Annual Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requir
ement.
Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax levy on each Assessor's Parcel of Developed Property for which the Maximum Special Tax is the Backup Special Tax shall be inc
reased Proportionately from the Assigned Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special Tax Requirement.
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Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.
Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year against any Assessor’s Parcel of Residential Property as a result of a delinquency in the payment of the Special Tax applicable to any other Assessor’s Parcel be increased by more than ten percent (10%) above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default.
F. EXEMPTIONS
The City shall classify as Exempt Property, in the following order of priority, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, en cumbered 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 dedi cation, 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 (vi) Asses
sor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than
10.61 Acres.
Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if
such classification would reduce the sum of all Taxable Property to less than 10.61 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 10.61 Acres will be classified as Provisional Un developed Property, and will be subject to Special Tax pursuant to Step Five in Section E.
G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
“CFD Public Facilities” means $10,500,000 expressed in 2023 dollars, which shall increase by the Construction Inflation Index on July 1, 2024, and on each July 1 thereafter, or such lower amount (i)
determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2023‐2, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Ta x levied under this Rate and Method of Apportionment.
“Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible to be financed by CFD No. 2023‐ 2.
“Construction Inflation Index” means the annual percentage change in the Engineering News‐Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the
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previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News‐ Record Building Cost Index for the city of Los Angeles.
“Future Facilities Costs” means the CFD Public Facilities minus public facili ty costs available to be funded through existing construction or escrow accounts funded by the Outstanding Bonds, and minus public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment.
“Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax which will remain outstan
ding 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 Special Tax.
1. Prepayment in Full
The Maximum Special Tax obligation may be prepaid and perm anently satisfied for (i) Assessor’s Parcels
of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Approved Property or Undeveloped Property for which a Building Permit has not been issued and (iv) Assessor’s Parcels of Public Property or Property Owner’ s Association Property, or Provisional Undeveloped Property that are not Exempt Property pursuant to Section F. The Maximum Special Tax obligation applicable to an Assessor’s Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein; provided that a prepayme
nt may be made only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay the Maximum Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to pr
epay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non‐refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel. Within 15 days of receipt of such non‐refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Spec ial Taxes.
The Prepayment Amount (defined below) shall be calculated as follows (capitalized terms are defined below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as
of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.
2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the
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Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Assessor’s Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, Public Property, Property Owner’s Association Property, or Provisional Undeveloped Property to be prepaid compute the Maximum Special Tax for the Assessor’s Parcel.
3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total am ount of Special Taxes that could be levied at the Maximum Special Tax at build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor’s Parcels of Developed Property not including any Assessor’s Parcels for which the Special Tax obligation has been previously prepaid.
4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the “Bond Redemption Amount”).
5. Multiply the Bond Redemption Amount by the applicable redemption premiu m, if any, on the
Outstanding Bonds to be redeemed (the “Redemption Premium”).
6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor’s Parcel (the “Future Facilities Am
ount”).
8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax prepayments.
9. Determine the Special Ta
xes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.
10. Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until the redemption date for the O utstanding Bonds to be redeemed with the Prepayment Amount.
11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).
12. Verify the administrative fees and expenses of the CFD, including the cost of computation of the Prepayment Amount, th
e cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Maximum Special Tax obligation for the Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”).
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13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), 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 require ment (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemp tion Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established und er the Indenture and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next redemption from other Special Tax prepayments of Outstanding Bonds or to make debt service payments.
As a result of the paymen t of the current Fiscal Year’s Special Tax levy as determined pursuant to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year’s Special Tax levy for the Assessor’s Parcel from the County tax roll. With respect to any Assessor’s Parcel for which the Maximum Special Tax obligation is pr epaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Maximum Special Tax obligation and the release of the Special Tax lien for the Assessor’s Parcel, and the obligation to pay the Special Tax for such Assessor’s Parcel shall cease.
Notwithstanding the fore
going, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property after the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain outstandin
g after the prepayment plus the estimated annual Administrative Expenses.
Tenders of Bonds in prepayment of the Maximum Special Tax obligation may be accepted upon the terms and conditions established by the City Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case‐by‐case basis as specif ically approved by the City Council.
2. Prepayment in Part
The Maximum Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property or Undeveloped Property may be partially prepaid. For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modifi
ed as provided by the following formula:
PP = ((PE – A) x F) + A
These terms have the following meaning:
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PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1 F = the percent by which the owner of the Assessor’s Parcel(s) is partially prepaying the Maximum Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1 The owner of an Assessor’s Parcel who desires to partially prepay th e Maximum Special Tax obligation for the Assessor’s Parcel shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as th e escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the amount of the non‐refundable deposit determined to cover the cost to be incurred by the CFD in calculating the amount of a partial prepayment. Within 15 busin ess days of receipt of such non‐refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial Prepayment Amount for the Assessor’s Parcel. A Partial Prepayment Amount must be made not less than 60 days prior to the redemption date for the Outstanding Bonds to be redeeme d with the proceeds of the Partial Prepayment Amount.
With respect to any Assessor’s Parcel for which the Maximum Special Tax obligation is partially prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in Paragraph 15 of Section G.1, and (ii) indicate in the re cords of the CFD that there has been a Partial Prepayment for the Assessor’s Parcel and that a portion of the Maximum Special Tax obligation equal to the remaining percentage (1.00 ‐ F) of the Maximum Special Tax obligation will continue to be levied on the Assessor’s Parcel pursuant to Section E.
H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2070‐71 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administra tor has determined (i) that all the required interest and principal payments on the CFD No. 2023‐2 Bonds have been paid; (ii) all authorized facilities of CFD No. 2023‐2 have been acquired and all reimbursements to the developer have been paid, (iii) no delinqu ent Special Tax remain uncollected and (iv) all other obligations of CFD No. 2023‐ 2 have been satisfied.
I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2023‐ 2 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.
J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written a
ppeal of the Special Taxes on his/her Assessor’s Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal mu st specify the reasons why the appellant claims the
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Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant’s Assessor’ s Parcel(s). No refunds of previously paid Special Taxes shall be made.
The CFD Administrator shall interpret this Rate and Method of Apportionment and make determinations relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as herein specified.
APPENDIX B
Boundary Map
APPENDIX C
Resolution of Intention