Agenda packet — Menifee City Council, September 21, 2022 (part 9 of 18)

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designation of Improvement Area No. 1 and Improvement Area No. 2 therein. The next step in the proceedings is to hold a public hearing on September 21, 2022, to conduct an election in each of Improvement Area No. 1 and Improvement Area No. 2 and to declare the results of those elections.

The developer, BLC Fleming, LLC, a Delaware limited liability company (“BLC”), is proposing to develop a residential community of 1,022 homes on approximately 263 gross acres within the City. The property is located to the northwest of Antelope Boulevard and Chambers Avenue and south of Rouse Road. BLC has requested that the City form CFD No. 2022-3 and Improvement Area No. 1 and Improvement Area No. 2 therein in accordance with the Mello-Roos Community Facilities Act of 1982, as amended, to finance the costs of certain public improvements through the levy of a special tax and the issuance of bonds in an amount not-to-exceed $40,000,000 for Improvement Area No. 1 and $45,000,000 for Improvement Area No. 2 for a total of $85,000,000.

BLC requested that the boundaries of CFD No. 2022-3 include the area described in “Attachment A” of the Resolution of Intention and that special taxes be levied within the boundaries of Improvement Area No. 1 in accordance with the Rate and Method of Apportionment (the “Improvement Area No. 1 RMA”) as described in “Attachment C” to the Resolution of Intention and within the boundaries of Improvement Area No. 2 in accordance with the Rate and Method of Apportionment (the “Improvement Area No. 2 RMA” and together with the Improvement Area No. 1 RMA, the “RMAs” and each an “RMA”) as described in “Attachment D" to the Resolution of Intention, which are included as appendices to the attached Public Hearing Report.

The Resolution of Intention called for a public hearing to be held on September 21, 2022, for the City Council to formally consider the approval of the formation of the CFD, the designation of Improvement Area No. 1 and Improvement Area No. 2 therein and the approval of the levy of the special taxes within each of Improvement Area No. 1 and Improvement Area No. 2. Notice of the public hearing was published in the Press Enterprise and mailed to BLC in accordance with the Mello-Roos Act.

In connection with the public hearing, Spicer Consulting Group has prepared a Public Hearing Report which describes and analyzes the facilities to be financed by the CFD and the estimated costs of such facilities. Following the close of the public hearing, the City Council will be asked to adopt the Resolution of Formation and the Resolution Determining the Necessity to Incur Debt which, together, approve the formation of the CFD, the designation of Improvement Area No. 1 and Improvement Area No. 2 therein, and the levy of the special taxes within each of Improvement Area No. 1 and Improvement Area No. 2 in accordance with the applicable RMA and determines the necessity for the CFD to issue bonds in an amount not-to-exceed $40,000,000 for Improvement Area No. 1 and $45,000,000 for Improvement Area No. 2. Such Resolutions call for elections to submit to the qualified voters in each of Improvement Area No. 1 and Improvement Area No. 2, ballot measures on the approval of the special taxes, the issuance of the bonds and an appropriations limit for the CFD.

In addition, the Resolution of Formation, approves the execution and delivery of the following agreements in the forms presented to the City Council: (i) the Acquisition, Construction and Funding Agreement with BLC (the “Funding Agreement”); and (ii) the Joint Community Facilities Agreement with BLC and Eastern Municipal Water District (“Joint Community Facilities Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 2
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Formation of Community Facilities District No. 2022-2, Legado September 21, 2022

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Agreement”). The Funding Agreement sets forth the terms, among others, pursuant to which the CFD will finance improvements to be constructed by BLC. In accordance with the Mello-Roos Act, the approval and execution of the Joint Community Facilities Agreement allows for the CFD to finance improvements to be owned and operated by Eastern Municipal Water District, which benefit the development within the CFD.

On file with the City Clerk are Certificates of the Registrar of Voters of Riverside County, attached for reference, certifying that there are no registered voters residing within the boundaries of the CFD. Accordingly, under the Mello-Roos Act, only landowners in each of Improvement Area No. 1 and Improvement Area No. 2 are eligible to vote at the election with each owner having one vote for each acre (or portion thereof) that they own within the applicable Improvement Area.

BLC, as the sole landowner in each Improvement Area, has executed a consent and waiver of certain election procedures for the election within each Improvement Area, including certain timing requirements with respect to the election in accordance with the Mello-Roos Act.

Accordingly, if the City Council approves the Resolution of Formation and the Resolution Determining the Necessity to Incur Debt, the City Clerk will conduct the elections. The City Clerk would announce the election results and the City Council would be asked to adopt the Resolution Certifying the Election Results. Based upon certification that two thirds of the votes cast are in favor of the propositions voted upon for an Improvement Area, the Resolution Certifying the Election Results directs the City Clerk to record a notice of special tax lien on the property within such Improvement Area. The City Council would then be asked to introduce the Ordinance authorizing the levy of the special tax within each Improvement Area in accordance with the applicable RMA.

STRATEGIC PLAN OBJECTIVE
Responsive and Transparent Community Government

FISCAL IMPACT
The CFD would be required to annually levy special taxes on all of the taxable property within the CFD in order to pay for the costs of facilities, debt service on bonds and administration of the CFD. Any bonds issued by the CFD are not obligations of the City and would be secured solely by the special taxes levied in the applicable Improvement Area. BLC has made a deposit to pay for the costs of forming the CFD. The Resolution of Intention, Section 13 approved a form of a Reimbursement Agreement to reimburse BLC for these costs if and when bonds are issued for CFD.

ATTACHMENTS

1. Resolution Establishing CFD No. 2022-3

2. Resolution Determining Necessity to Incur Debt for CFD No. 2022-3

3. Resolution Certifying Election Results for CFD No. 2022-3

4. Ordinance Authorizing the Levy of Special Taxes

5. Public Hearing CFD Report

6. Certificates of Registrar of Voters

7. Funding Agreement CFD No. 2022-3

8. Joint Community Facilities Agreement (EMWD)
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 3
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RESOLUTION NO. 22-__

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)

OF THE CITY OF MENIFEE AND IMPROVEMENT AREAS THEREIN,

AUTHORIZING THE LEVY OF A SPECIAL TAX THEREIN, CALLING AN

ELECTION WITHIN EACH IMPROVEMENT AREA AND APPROVING AND

AUTHORIZING CERTAIN ACTIONS RELATED THERETO
WHEREAS, the City Council (the “City Council”) of the City of Menifee (the “City”) has heretofore adopted Resolution No. 22-1187 stating its intention to form Community Facilities District No. 2022-3 (Legado) of the City of Menifee (“Community Facilities District No. 2022-3” or the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”) and to form two improvement areas within proposed Community Facilities District No. 2022-3 to be known as “Improvement Area No. 1 of Community Facilities District No. 2022-3 (Legado) of the City of Menifee (“Improvement Area No. 1”) and “Improvement Area No. 2 of Community Facilities District No. 2022-3 (Legado) of the City of Menifee” (“Improvement Area No. 2” and together with Improvement Area No. 1, the “Improvement Areas” and each individually an “Improvement Area”); and
WHEREAS, a copy of Resolution No. 22-1187 setting forth a description of the proposed boundaries of Community Facilities District No. 2022-3 and each of the Improvement Areas, the facilities and incidental expenses to be financed by the District and the rate and method of apportionment of the special tax proposed to be levied within each Improvement Area is on file with the City Clerk; and
WHEREAS, notice was published and mailed to all landowners of the land proposed to be included within the District as required by law relative to the intention of this City Council to form proposed Community Facilities District No. 2022-3 and the Improvement Areas and to levy a special tax (the “Special Tax”) within each Improvement Area and to incur bonded indebtedness in the maximum aggregate amount of up to $40,000,000 within proposed Improvement Area No. 1 and $45,000,000 within proposed Improvement Area No. 2 therein to finance the facilities and incidental expenses described in Resolution No. 22-1187; and WHEREAS, on September 21, 2022, this City Council conducted a noticed public hearing as required by law relative to the proposed formation of Community Facilities District No. 2022-3 and the Improvement Areas, the levy of the Special Tax within each Improvement Area and the issuance of bonded indebtedness by the District for each Improvement Area; and WHEREAS, at the September 21, 2022 public hearing there was filed with this City Council a report containing a description of the facilities necessary to meet the needs of the District and an estimate of the cost of such facilities as required by Section 53321.5 of the Act (the “Engineer’s Report”); and
WHEREAS, at the September 21, 2022 public hearing all persons desiring to be heard on all matters pertaining to the formation of Community Facilities District No. 2022-3 and the Improvement Areas, the levy of the Special Tax within each Improvement Area and the issuance of bonded indebtedness by the District for each of the Improvement Areas were heard and full and fair hearings were held; and
WHEREAS, following the public hearing, this City Council has determined to authorize the formation of the District to finance the types of facilities (the “Facilities”) and the incidental expenses (the “Incidental Expenses”) set forth in Attachment A hereto, which are described in more detail in the Engineer’s Report; and
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 4
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2 WHEREAS, at the public hearing evidence was presented to this City Council on the matters before it, and the proposed Special Tax to be levied within each of the Improvement Areas was not precluded by a majority protest of the type described in Section 53324 of the Act, and this City Council at the conclusion of the hearing was fully advised as to all matters relating to the formation of the District and the Improvement Areas, the levy of the Special Tax and the issuance of bonded indebtedness within each of the Improvement Areas; and WHEREAS, this City Council has determined, based on a Certificate of Registrar of Voters of the County of Riverside on file in the office of the City Clerk, that no registered voters have been residing in the proposed boundaries of Community Facilities District No. 2022-3 for each of the 90 days prior to September 21, 2022 and that the qualified electors in Community Facilities District No. 2022-3 are the landowners within the District; and WHEREAS, on the basis of all of the foregoing, this City Council has determined to proceed with the establishment of Community Facilities District No. 2022-3 and the Improvement Areas and to call an election within each Improvement Area to authorize (i) the levy of a Special Tax within Improvement Area No. 1 pursuant to the rate and method of apportionment of the special tax, as set forth in Attachment C to Resolution No. 22-1187 (the “Improvement Area No. 1 Rate and Method”), (ii) the levy of a Special Tax within Improvement Area No. 2 pursuant to the rate and method of apportionment of the special tax, as set forth in Attachment D to Resolution No. 22-1187 (the “Improvement Area No. 2 Rate and Method”) (iii) the issuance of bonds within each of the Improvement Areas to finance the Facilities and Incidental Expenses, and (iv) the establishment of an appropriations limit for Community Facilities District No. 2022-3; and
WHEREAS, in order to facilitate the funding of the Facilities, the legislative body of the District desires to enter into an Acquisition, Construction and Funding Agreement (the “Agreement”) with BLC Fleming, LLC, a Delaware limited liability company (the “Developer”) and the form of the Agreement is on file with the City Clerk; and WHEREAS, in connection with the proposed formation of the District, the City proposes to enter into a Joint Community Facilities Agreement (the “JCFA”) with Eastern Municipal Water District (the “Water District”) and the Developer, relating to certain facilities proposed to be financed by the District and owned and operated by the Water District and the form of the JCFA is on file with the City Clerk;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee, California:

Section 1.Each of the above recitals is true and correct.

Section 2.A community facilities district to be designated “Community Facilities District No. 2022-3 (Legado) of the City of Menifee” is hereby established pursuant to the Act and Improvement Area No. 1 and Improvement Area No. 2 are hereby designated within the District in accordance with 53350 of the Act. The City Council hereby finds and determines that all prior proceedings taken with respect to the establishment of the District were valid and in conformity with the requirements of law, including the Act. This finding is made in accordance with the provisions of Section 53325.1(b) of the Act.

Section 3.The boundaries of Community Facilities District No. 2022-3 and each of the Improvement Areas are established as shown on the map designated “Proposed Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 5
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3 Boundary Map of Community Facilities District No. 2022-3 (Legado) of the City of Menifee, County of Riverside, State of California”, which map is on file in the office of the City Clerk and was recorded pursuant to Sections 3111 and 3113 of the Streets and Highways Code in the County Book of Maps of Assessment and Community Facilities Districts in the Assessor-County Clerk-Recorder’s office of the County of Riverside in Book No. 89 Page Nos. 44-47 on August 9, 2022 as Instrument No. 2022-0350782.

Section 4.The types of Facilities and Incidental Expenses authorized to be provided for Community Facilities District No. 2022-3 are those set forth in Attachment A attached hereto. The estimated cost of the Facilities and Incidental Expenses to be financed is set forth in the Engineer’s Report, which estimates may change as the Facilities are designed and bid for construction and acquisition, as applicable.

The City is authorized by the Act to contribute revenue to, or to construct or acquire the Facilities, all in accordance with the Act. The City Council finds and determines that the proposed Facilities are necessary to meet the increased demand that will be placed upon local agencies and public infrastructure as a result of new development within the District and that the Facilities to be financed, including those to be financed pursuant to the JCFA to be entered into with the Water District, benefit residents of the City and the future residents of the District.

Section 5.Except where funds are otherwise available, it is the intention of this City Council, subject to the approval of the eligible voters within each Improvement Area, to levy annually a Special Tax at the rates set forth in the Improvement Area No. 1 Rate and Method and the Improvement Area No. 2 Rate and Method, on all non- exempt property within Improvement Area No. 1 and Improvement Area No. 2, respectively, sufficient to pay for (i) the Facilities, (ii) principal and interest and other periodic costs on the bonds proposed to be issued to finance the Facilities and Incidental Expenses to be financed by such Improvement Area, including the establishment and replenishment of reserve funds, any remarketing, credit enhancement and liquidity facility fees and other expenses of the type permitted by Section 53345.3 of the Act, and (iii) the Incidental Expenses. The District expects to incur, and in certain cases has already incurred, Incidental Expenses in connection with the creation of the District, the issuance of bonds, the levying and collecting of the Special Tax, the completion and inspection of the Facilities and the annual administration of the bonds and the District. The Improvement Area No. 1 Rate and Method is described in detail in Attachment C to Resolution No. 22-1187 and is incorporated herein by this reference, and the City Council hereby finds that the Improvement Area No. 1 Rate and Method contains sufficient detail to allow each landowner within Improvement Area No. 1 to estimate the maximum amount that may be levied against each parcel. The Improvement Area No. 2 Rate and Method is described in detail in Attachment D to Resolution No. 22-1187 and is incorporated herein by this reference, and the City Council hereby finds that the Improvement Area No. 2 Rate and Method contains sufficient detail to allow each landowner within Improvement Area No. 2 to estimate the maximum amount that may be levied against each parcel. As described in greater detail in the Engineer’s Report, which is incorporated by reference herein, the Special Tax to be levied within an Improvement Area is based on the expected demand that each parcel of real property within the Improvement Area will place on the Facilities and on the benefit that each parcel Item Title: 11.9
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4 will derive from the right to access the Facilities and, accordingly, is hereby determined to be reasonable. The Special Tax within the Improvement Areas shall be levied on each assessor’s parcel in accordance with the Improvement Area No. 1 Rate and Method and the Improvement Area No. 2 Rate and Method, as applicable, provided, however, that the Special Tax within the Improvement Areas shall not be levied after Fiscal Year 2064-65. The Special Tax is apportioned to each parcel within an Improvement Area on the foregoing bases pursuant to Section 53325.3 of the Act and such Special Tax is not on or based upon the ownership of real property or the assessed value of real property.

If Special Taxes of an Improvement Area are levied against any parcel used for private residential purposes, (i) the maximum Special Tax rate shall be specified as a dollar amount which shall be calculated and established not later than the date on which the parcel is first subject to the Special Tax because of its use for private residential purposes and shall not be increased over time except as authorized under the rate and method of apportionment of the Special Tax for such Improvement Area; (ii) the Special Tax within the Improvement Area shall not be levied after Fiscal Year 2064-65, and (iii) under no circumstances will the Special Tax levied in any fiscal year against any such parcel used for private residential uses be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within such Improvement Area by more than ten percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults.

The City Manager of the City of Menifee, or his or her designee, will be responsible for preparing annually, or authorizing a designee to prepare, a current roll of special tax levy obligations by assessor’s parcel number and will be responsible for estimating future special tax levies pursuant to Section 53340.2 of the Act.

Section 6.In the event that a portion of the property within Improvement Area No. 1 shall become for any reason exempt, wholly or partially, from the levy of the Special Tax specified in the Improvement Area No. 1 Rate and Method, or in the event of delinquencies in the payment of Special Taxes levied, the City Council shall, on behalf of Community Facilities District No. 2022-3, increase the levy to the extent necessary and permitted by law and these proceedings upon the remaining property within Improvement Area No. 1 which is not exempt or delinquent in order to yield the required debt service payments on any outstanding bonds of the District for Improvement Area No. 1, or to prevent the District from defaulting on any other of its obligations or liabilities payable from Improvement Area No. 1 special taxes; provided, however, under no circumstances will the Special Tax levied against any parcel in Improvement Area No. 1 used for private residential uses be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within Improvement Area No. 1 by more than ten percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. The amount of the Special Tax for parcels within Improvement Area No. 1 will be set in accordance with the Improvement Area No. 1 Rate and Method. The obligation to pay Special Taxes may be prepaid only as set forth in Section G of the Improvement Area No. 1 Rate and Method.

Item Title: 11.9
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5 In the event that a portion of the property within Improvement Area No. 2 shall become for any reason exempt, wholly or partially, from the levy of the Special Tax specified in the Improvement Area No. 2 Rate and Method, or in the event of delinquencies in the payment of Special Taxes levied, the City Council shall, on behalf of Community Facilities District No. 2022-3, increase the levy to the extent necessary and permitted by law and these proceedings upon the remaining property within Improvement Area No. 2 which is not exempt or delinquent in order to yield the required debt service payments on any outstanding bonds of the District for Improvement Area No. 2, or to prevent the District from defaulting on any other of its obligations or liabilities payable from Improvement Area No. 2 special taxes; provided, however, under no circumstances will the Special Tax levied against any parcel in Improvement Area No. 2 used for private residential uses be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within Improvement Area No. 2 by more than ten percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. The amount of the Special Tax for parcels within Improvement Area No. 2 will be set in accordance with the Improvement Area No. 2 Rate and Method. The obligation to pay Special Taxes may be prepaid only as set forth in Section G of the Improvement Area No. 2 Rate and Method.

Section 7.Upon recordation of a notice of special tax lien for an Improvement Area pursuant to Section 3114.5 of the Streets and Highways Code, a continuing lien to secure each levy of the Special Tax shall attach to all non-exempt real property in such Improvement Area and this lien shall continue in force and effect until the Special Tax obligation is prepaid and permanently satisfied and the lien canceled with respect to such Improvement Area in accordance with law or until collection of the Special Tax for such Improvement Area by the District ceases.

Section 8.Consistent with Section 53325.6 of the Act, the City Council finds and determines that the land within Community Facilities District No. 2022-3, if any, devoted primarily to agricultural, timber or livestock uses and being used for the commercial production of agricultural, timber or livestock products is contiguous to other land within Community Facilities District No. 2022-3 and will be benefited by the Facilities proposed to be provided within Community Facilities District No. 2022-3.

Section 9.It is hereby further determined that there is no ad valorem property tax currently being levied on property within proposed Community Facilities District No. 2022- 3 for the exclusive purpose of paying the principal of or interest on bonds or other indebtedness incurred to finance the construction of capital facilities which provide the same services to the territory of Community Facilities District No. 2022-3 as are proposed to be provided by the Facilities to be financed by Community Facilities District No. 2022-3.

Section 10.Written protests against the establishment of the District and the designation of the Improvement Areas have not been filed by one-half or more of the registered voters within the boundaries of the District or either Improvement Area or by the property owners of one-half (1/2) or more of the area of land within the District or either Improvement Area. The City Council hereby finds that the proposed Special Tax has not been precluded by a majority protest pursuant to Section 53324 of the Act.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 8
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6 Section 11.An election is hereby called for Improvement Area No. 1 on the propositions of levying the Special Tax on the property within Improvement Area No. 1 and establishing an appropriations limit for the District pursuant to Section 53325.7 of the Act and shall be consolidated with the election on the proposition of incurring bonded indebtedness for Improvement Area No. 1, pursuant to Sections 53351 and 53353.5 of the Act. The language of the propositions to be placed on the ballot is attached hereto as Attachment B.

An election is hereby called for Improvement Area No. 2 on the propositions of levying the Special Tax on the property within Improvement Area No. 2 and establishing an appropriations limit for the District pursuant to Section 53325.7 of the Act and shall be consolidated with the election on the proposition of incurring bonded indebtedness for Improvement Area No. 2. Pursuant to Section 53351 and 53353.5 of the Act. The language of the propositions to be placed on the ballot is attached hereto as Attachment C.

Section 12.The date of the elections for each of the Improvement Areas on the propositions of incurring the bonded indebtedness, authorizing the levy of the Special Tax and establishing an appropriations limit for the District shall be September 21, 2022, or such later date as is consented to by the City Clerk or any Acting City Clerk (referred to herein as the “City Clerk”) of the City of Menifee; provided that, if the election is to take place sooner than 90 days after September 21, 2022, then the unanimous written consent of each qualified elector within such Improvement Area to such election date must be obtained. The polls shall be open for said election immediately following the close of the public hearing on September 21, 2022. The election shall be conducted by the City Clerk. Except as otherwise provided by the Act, the election shall be conducted in accordance with the provisions of law regulating elections of the City of Menifee insofar as such provisions are determined by the City Clerk to be applicable. The City Clerk is authorized to conduct the election following the adoption of this resolution, and all ballots shall be received by, and the City Clerk shall close the election by, 11:00 p.m. on the election day; provided the election shall be closed at such earlier time as all qualified electors have voted as provided in Section 53326(d) of the Act. Pursuant to Section 53326 of the Act, the ballots for the special election shall be distributed in person or by mail with return postage prepaid, to the qualified electors within each of the Improvement Areas. The City Clerk has secured certificates from the Registrar of Voters of the County of Riverside certifying that there were no registered voters within the District as of July 27, 2022. Accordingly, since there were fewer than 12 registered voters within the District for each of the 90 days preceding September 21, 2022, the qualified electors shall be the landowners within each of the Improvement Areas and each landowner, or the authorized representative thereof, shall have one vote for each acre or portion thereof that such landowner owns within the respective Improvement Area, as provided in Section 53326 of the Act. The sole landowner within Improvement Area No. 1 has executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on September 21, 2022, which waiver is on file with the City Clerk. The sole landowner within Improvement Area No. 2 has executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on September 21, 2022, which waiver is on file with the City Clerk.

Item Title: 11.9
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7 Section 13.The preparation of the Engineer’s Report is hereby ratified. The Engineer’s Report, as submitted, is hereby approved and was made a part of the record of the public hearing regarding the formation of Community Facilities District No. 2022-3. The Engineer’s Report is ordered to be kept on file with the transcript of these proceedings and open for public inspection.

Section 14.The District may accept advances of funds or work-in-kind from any source, including, but not limited to, private persons or private entities, for any authorized purpose, including, but not limited to, paying any cost incurred in creating Community Facilities District No. 2022-3. The District may enter into an agreement with the person or entity advancing the funds or work-in-kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council, with or without interest.

Section 15.The form of the Agreement on file with the City Clerk is approved as to form, and each of the City Manager, the Assistant City Manager, and their written designees, is authorized to execute the Agreement in substantially the form on file with the City Clerk, together with such changes as are approved by the officer executing the same, with the approval of such changes to be conclusively evidenced by the execution and delivery thereof. Notwithstanding City Policy No. FN-09, the City Council hereby waives the requirement for the approval of the Agreement prior to the adoption of the resolution of intention to establish the District. The City Council hereby finds that such waiver is reasonable given that the projects as listed in the Agreement are expected to provide public benefits to the future residents in the District.

Section 16.The form of the JCFA on file with the City Clerk is approved as to form, and each of the City Manager, the Assistant City Manager, and their written designees, is authorized to execute the JCFA in substantially the form on file with the City Clerk, together with such changes as are approved by the officer executing the same, with the approval of such changes to be conclusively evidenced by the execution and delivery thereof.

Section 17.This Resolution shall be effective upon its adoption.

PASSED, APPROVED AND ADOPTED this 21st day of September, 2022.

ATTEST: APPROVED:

Stephanie Roseen, Acting City Clerk Bill Zimmerman, Mayor APPROVED AS TO FORM:

Jeffrey T. Melching, City Attorney
Item Title: 11.9
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A-1

ATTACHMENT A
Types of Facilities To Be
Financed By Community
Facilities District No. 2022-3
The proposed types of public facilities and expenses to be financed by the District include:

The construction, purchase, modification, rehabilitation, expansion and/or improvement of (i) drainage, library, park, roadway, traffic, administration and general government facilities, animal shelter facilities, fire and safety, 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 (the “City Facilities”); (ii) water and sewer facilities including the acquisition of capacity in the sewer system and/or water system of the Eastern Municipal Water District which are included in Eastern Municipal Water District’s water and sewer capacity and connection fee programs (the “Water District Facilities”); and (iii) interim and permanent school facilities of Menifee Union School District and Perris Union High School District, including classrooms, multi-purpose facilities, administration and auxiliary space at school facilities, athletic fields, playgrounds and recreational facilities and improvements thereto, landscaping, access roadways, drainage, sidewalks and 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, and to finance the incidental expenses to be incurred, including:
a. The cost of engineering, planning and designing the Facilities; 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.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 11
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B-1

ATTACHMENT B

BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2022-39 (LEGADO)

OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 1

SPECIAL TAX AND SPECIAL BOND ELECTION
September 21, 2022
PROPOSITION A: Shall Community Facilities District
No. 2022-3 (Legado) of the City of Menifee (the
“District”) incur an indebtedness and issue bonds in the maximum principal amount of $40,000,000 for
Improvement Area No. 1 therein (the “Improvement
Area”) with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the
Facilities and the Incidental Expenses described in
Resolution No. 22-1187 of the City Council of the City of Menifee?
PROPOSITION B: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 22-1187 of the City Council of the City of Menifee be levied to pay for the Facilities, Incidental Expenses and other purposes described in
Resolution No. 22-1187, including the payment of the
principal of and interest on bonds issued by the District for the Improvement Area to finance the Facilities and
Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION C: For each year commencing with
Fiscal Year 2022-2023, shall the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, for Community Facilities
District No. 2022-3 be an amount equal to $40,000,000?
YES______
NO_______
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 12
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C-1

ATTACHMENT C

BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)

OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 2

SPECIAL TAX AND SPECIAL BOND ELECTION
September 21, 2022
PROPOSITION D: Shall Community Facilities District
No. 2022-3 (Legado) of the City of Menifee (the
“District”) incur an indebtedness and issue bonds in the maximum principal amount of $45,000,000 for
Improvement Area No. 2 therein (the “Improvement
Area”) with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the
Facilities and the Incidental Expenses described in
Resolution No. 22-1187 of the City Council of the City of Menifee?
PROPOSITION E: Shall a special tax with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 22-1187 of the City Council of the City of Menifee be levied to pay for the Facilities, Incidental Expenses and other purposes described in
Resolution No. 22-1187, including the payment of the
principal of and interest on bonds issued by the District for the Improvement Area to finance the Facilities and
Incidental Expenses?
YES______
NO_______
YES______
NO_______
PROPOSITION F: For each year commencing with
Fiscal Year 2022-2023, shall the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, for Community Facilities
District No. 2022-3 be an amount equal to $40,000,000?
YES______
NO_______
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 13
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RESOLUTION NO. 22- ___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO) OF THE CITY OF MENIFEE DETERMINING THE

NECESSITY TO INCUR BONDED INDEBTEDNESS WITHIN IMPROVEMENT AREA NOS. 1 AND 2 OF COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO) OF THE CITY OF MENIFEE IN AN AMOUNT NOT TO EXCEED $40,000,000 WITHIN IMPROVEMENT AREA NO. 1 AND $45,000,000 WITHIN IMPROVEMENT AREA NO. 2, AND CALLING ELECTIONS THEREIN
WHEREAS, on August 3, 2022, the City Council of the City of Menifee (the “City Council”) adopted Resolution No. 22-1187 stating its intention to form Community Facilities District No. 2022-3 (Legado) of the City of Menifee (“Community Facilities District No. 2022-3” or the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”) and to form two improvement areas within proposed Community Facilities District No. 2022-3 to be known as “Improvement Area No. 1 of Community Facilities District No. 2022-3 (Legado) of the City of Menifee” (“Improvement Area No. 1”) and “Improvement Area No. 2 of Community Facilities District No. 2022-3 (Legado) of the City of Menifee” (“Improvement Area No. 2” and together with Improvement Area No. 1, the “Improvement Areas” and each individually an “Improvement Area”); and
WHEREAS, on August 3, 2022, the City Council also adopted Resolution No. 22-1188 stating its intention to incur bonded indebtedness in the amount of up to $40,000,000 within proposed Improvement Area No. 1 and $45,000,000 within proposed Improvement Area No. 2 to finance (1) the purchase, construction, modification, expansion, improvement and/or rehabilitation of public facilities identified in Attachment B to Resolution No. 22-1187, and (2) the incidental expenses to be incurred in financing such public facilities and services and forming and administering the District, as identified in Attachment B to Resolution No. 22-1187; and WHEREAS, notice was published as required by law relative to the intention of the City Council to form proposed Community Facilities District No. 2022-3, to designate the Improvement Areas and to incur bonded indebtedness in the amount of up to $40,000,000 within the boundaries of proposed Improvement Area No. 1 and $45,000,000 within the boundaries of proposed Improvement Area No. 2; and
WHEREAS, on September 21, 2022, this City Council conducted a noticed public hearing to determine whether it should proceed with the formation of Community Facilities District No. 2022-3 and the designation of the Improvement Areas, issue bonds within the Improvement Areas to pay for the facilities and incidental expenses described in Resolution No. 22-1187 and authorize a rate and method of apportionment of a special tax for each of the Improvement Areas to be levied within such Improvement Areas for the purposes described in Resolution No. 22-1187; and
WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of Community Facilities District No. 2022-3, the designation of the Improvement Areas, the levy of a special tax and the issuance of bonds with respect to each Improvement Area to pay for the cost of the proposed facilities and incidental expenses were heard and a full and fair hearing was held; and
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 14
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2 WHEREAS, the City Council subsequent to such hearing adopted Resolution No. 22- ___ establishing Community Facilities District No. 2022-3 (the “Resolution of Formation”), designating the Improvement Areas and authorizing the financing of the public facilities (the “Facilities”) and the incidental expenses (the “Incidental Expenses”) described in Attachment A thereto; and
WHEREAS, the City Council desires to make the necessary findings to incur bonded indebtedness within each of the Improvement Areas, to declare the purpose for said debt, and to authorize the submittal of a proposition to issue bonded indebtedness to the voters of each of the Improvement Areas, being the landowners therein, all as authorized and required by law; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee, California:

Section 1.It is necessary to incur bonded indebtedness in one or more series in a maximum aggregate principal amount not to exceed $40,000,000 within Improvement Area No. 1 and $45,000,000 within Improvement Area No. 2.

Section 2.The indebtedness is to be incurred for the purpose of financing the costs of purchasing, constructing, modifying, expanding, improving, and/or rehabilitating the Facilities and financing the Incidental Expenses, as described in the Resolution of Formation, and carrying out the powers and purposes of Community Facilities District No. 2022-3, including, but not limited to, financing the costs of selling the bonds, establishing and replenishing bond reserve funds and paying remarketing, credit enhancement and liquidity facility fees and other expenses of the type authorized by Section 53345.3 of the Act.

Section 3.The whole of the property within Improvement Area No. 1, other than property exempted from the special tax pursuant to the provisions of the rate and method of apportionment attached to Resolution No. 22-1187 as Attachment C, shall pay for the bonded indebtedness issued by the District for Improvement Area No. 1 pursuant to the levy of the special tax for Improvement Area No. 1 authorized by the Resolution of Formation.

The whole of the property within Improvement Area No. 2, other than property exempted from the special tax pursuant to the provisions of the rate and method of apportionment attached to Resolution No. 22-1187 as Attachment D, shall pay for the bonded indebtedness issued by the District for Improvement Area No. 2 pursuant to the levy of the special tax for Improvement Area No. 2 authorized by the Resolution of Formation.

Section 4.The maximum term of any series of bonds to be issued to finance Facilities shall in no event exceed thirty-five (35) years from the date of issuance of the bonds, or such longer term as is then permitted by law.

Section 5.The bonds shall bear interest at the rate or rates not to exceed the maximum interest rate permitted by law, payable annually or semiannually, or in part annually and in part semiannually, except the first interest payment may be for a period of less than six months, with the actual rate or rates and times of payment to be determined at the time or times of sale thereof.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 15
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3 Section 6.The bonds may bear a variable or fixed interest rate, provided that such variable rate or fixed rate shall not exceed the maximum rate permitted by Section 53531 of the Act, or any other applicable provision of law limiting the maximum interest rate on the bonds.

Section 7.Pursuant to Section 53351 of the Act, a special election is hereby called for Improvement Area No. 1 on the proposition of incurring the bonded indebtedness. The proposition relative to incurring bonded indebtedness in the maximum aggregate principal amount of $40,000,000 shall be in the form of Proposition A set forth in Attachment A hereto. In accordance with Sections 53351(h) and 53353.5 of the Act, the election shall be consolidated with the special election called on the proposition of levying a special tax within Improvement Area No. 1 as described in the Resolution of Formation, which proposition shall be in the form of Proposition B set forth in Attachment A, and on the proposition of establishing an appropriations limit for the District, which proposition shall be in the form of Proposition C set forth in Attachment A.

Pursuant to Section 53351 of the Act, a special election is hereby called for Improvement Area No. 2 on the proposition of incurring the bonded indebtedness therein. The proposition relative to incurring bonded indebtedness in the maximum aggregate principal amount of $45,000,000 shall be in the form of Proposition D set forth in Attachment B hereto. In accordance with Section 53351(h) and 53353.5 of the Act, the election shall be consolidated with the special election called on the proposition of levying a special tax within Improvement Area No. 2 as described in the Resolution of Formation, which proposition shall be in the form of Proposition E set forth in Attachment B, and on the proposition of establishing an appropriations limit for the District, which proposition shall be in the form of Proposition F set forth in Attachment B.

Section 8.The date of the special elections for the Improvement Areas on the propositions of incurring the bonded indebtedness, authorizing the levy of the special tax and setting an appropriations limit shall be September 21, 2022, or such later date as is consented to by the City Clerk, or any Acting City Clerk of the City (referred to herein as the “City Clerk”); provided that, if the election for an Improvement Area is to take place sooner than 90 days after September 21, 2022, then the unanimous written consent of each qualified elector within such Improvement Area to such election date must be obtained. The polls shall be open for said election immediately following the public hearing on September 21, 2022. The election shall be conducted by the City Clerk. Except as otherwise provided by the Act, the election shall be conducted in accordance with the provisions of law regulating elections of the City of Menifee insofar as such provisions are determined by the City Clerk to be applicable. The City Clerk is authorized to conduct the election following the adoption of the Resolution of Formation, and this resolution and all ballots shall be received by and the City Clerk shall close the election by 11:00 p.m. on the election day; provided the election shall be closed at such earlier time as all qualified electors have voted as provided in Section 53326(d) of the Act. Pursuant to Section 53326 of the Act, the ballots for the special elections shall be distributed in person, or by mail with return postage prepaid, to the qualified electors within each of the Improvement Areas. The City Clerk has secured a certificate of the Registrar of Voters of the County of Riverside certifying that there were no registered voters within the District as of Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 16
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4 July 27, 2022. Accordingly, since there were fewer than 12 registered voters within the District for each of the 90 days preceding September 21, 2022, the qualified electors shall be the landowners within each of the Improvement Areas and each landowner, or the authorized representative thereof, shall have one vote for each acre or portion thereof that such landowner owns within the respective Improvement Areas, as provided in Section 53326 of the Act. The sole landowner within Improvement Area No. 1 has executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on September 21, 2022, which waiver is on file with the City Clerk. The sole landowner within Improvement Area No. 2 has executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on September 21, 2022, which waiver is on file with the City Clerk.

Section 9.This Resolution shall be effective upon its adoption.

PASSED, APPROVED AND ADOPTED this 21st day of September, 2022.

ATTEST: APPROVED:

Stephanie Roseen, Acting City Clerk Bill Zimmerman, Mayor APPROVED AS TO FORM:

Jeffrey T. Melching, City Attorney
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 17
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A-1

ATTACHMENT A

BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(LEGADO) OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 1

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B-1

ATTACHMENT B

BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(LEGADO) OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 2

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RESOLUTION NO. 22-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE,

CALIFORNIA ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO) OF THE CITY OF

MENIFEE CERTIFYING ELECTION RESULTS
WHEREAS, the City Council of the City of Menifee called and duly held elections on September 21, 2022 within the boundaries of Improvement Area No. 1 (“Improvement Area No. 1”) and within the boundaries of Improvement Area No. 2 (“Improvement Area No. 2”) of Community Facilities District No. 2022-3 (Legado) of the City of Menifee (“Community Facilities District No. 2022-3” or the “District”) pursuant to Resolution Nos. 2022-__ and 2022-__ for the purpose of presenting to the qualified electors within Improvement Area No. 1, Propositions A, B and C, attached hereto as Attachment A, and to the qualified electors within Improvement Area No. 2, Propositions D, E and F, attached hereto as Attachment B; and WHEREAS, there has been presented to this City Council a certificate of the City Clerk or Acting City Clerk (referred to herein as the “City Clerk”) canvassing the results of the election within Improvement Area No. 1 and the results of the election within Improvement Area No. 2, copies of which are attached hereto as Attachment C;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee, California:

Section 1.Each of the above recitals is true and correct and is adopted by the legislative body of the District.

Section 2.Propositions A, B and C set forth in Attachment A hereto presented to the qualified electors of Improvement Area No. 1 on September 21, 2022, were approved by more than two-thirds of the votes cast at said election and Propositions A, B and C each has carried. The City Council, acting as the legislative body of the District, is hereby authorized to levy on the land within Improvement Area No. 1 the special tax described in Proposition B set forth in Attachment A hereto for the purposes described therein and to take the necessary steps to levy the special tax authorized by Proposition B and to issue bonds in an amount not to exceed $40,000,000 specified in Proposition A set forth in Attachment A hereto.

Section 3.Propositions D, E and F set forth in Attachment B hereto presented to the qualified electors of Improvement Area No. 2 on September 21, 2022, were approved by more than two-thirds of the votes cast at said election and Propositions D, E and F each has carried. The City Council, acting as the legislative body of the District, is hereby authorized to levy on the land within Improvement Area No. 2 the special tax described in Proposition E set forth in Attachment B hereto for the purposes described therein and to take the necessary steps to levy the special tax authorized by Proposition E and to issue bonds in an amount not to exceed $45,000,000 specified in Proposition D set forth in Attachment B hereto.

Section 4.The City Clerk is hereby directed to record in the Assessor-County Clerk- Recorder’s office of the County of Riverside within fifteen days of the date hereof a notice of special tax lien with respect to Improvement Area No. 1 and a notice Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 20
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2 of special tax lien with respect to Improvement Area No. 2, which Bond Counsel to the District shall prepare in the form required by Streets and Highways Code Section 3114.5.

Section 5.This Resolution shall be effective upon its adoption.

PASSED, APPROVED AND ADOPTED this 21st day of September, 2022.

ATTEST: APPROVED:

Stephanie Roseen, Acting City Clerk Bill Zimmerman, Mayor APPROVED AS TO FORM:

Jeffrey T. Melching, City Attorney
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 21
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A-1

ATTACHMENT A

BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2022-39 (LEGADO)

OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 1

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B-1

ATTACHMENT B

BALLOT PROPOSITIONS
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO)

OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 2

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C-1

ATTACHMENT C

CERTIFICATE OF CITY CLERK

AS TO THE RESULTS OF THE CANVASS OF THE ELECTION RETURNS I, Sarah Manwaring, City Clerk of the City of Menifee, do hereby certify that I have examined the returns of the Special Tax and Bond Election for Improvement Area No. 1 of Community Facilities District No. 2022-3 (Legado) of the City of Menifee (the “City”). The election was held in the City Council Chambers, 29844 Haun Road, Menifee, California, on September 21, 2022. I caused to be delivered ballots to each qualified elector. ___ (_) ballots were returned.

I further certify that the results of said election and the number of votes cast for and against Propositions A, B and C for Improvement Area No. 1 are as follows:

PROPOSITION A PROPOSITION B PROPOSITION C
YES: YES: YES:

NO: NO: NO:

TOTAL: TOTAL: TOTAL:

I further certify that I have examined the returns of the Special Tax and Bond Election for Improvement Area No. 2 of Community Facilities District No. 2022-3 (Legado) of the City. The election was held in the City Council Chambers, 29844 Haun Road, Menifee, California, on September 21, 2022. I caused to be delivered ballots to each qualified elector. ___ (_) ballots were returned.

I further certify that the results of said election and the number of votes cast for and against Propositions D, E and F for Improvement Area No. 2 are as follows:

PROPOSITION D PROPOSITION E PROPOSITION F
YES: YES: YES:

NO: NO: NO:

TOTAL: TOTAL: TOTAL:

Dated this ____ day of ________, 2022.

Stephanie Roseen, Acting City Clerk
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 24
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ORDINANCE NO. 22-___

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MENIFEE,

CALIFORNIA ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-3 (LEGADO) OF THE CITY OF

MENIFEE AUTHORIZING THE LEVY OF SPECIAL TAXES WITHIN
IMPROVEMENT AREA NO. 1 AND IMPROVEMENT AREA NO. 2
WHEREAS, on August 3, 2022, the City Council (the “City Council”) of the City of Menifee (the “City”) adopted Resolution No. 22-1187 declaring its intention to form Community Facilities District No. 2022-3 (Legado) of the City of Menifee (the “District”) and Improvement Area No. 1 (“Improvement Area No. 1”) and Improvement Area No. 2 (“Improvement Area No. 2” and together with Improvement Area No. 1, the “Improvement Areas” and each an “Improvement Area”) therein pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, comprising Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”), and its Resolution No. 22-1188 declaring its intention to incur bonded indebtedness for each of Improvement Area No. 1 and Improvement Area No. 2; and WHEREAS, on September 21, 2022, after providing all notice required by the Act, the City Council conducted a noticed public hearing required by the Act relative to the proposed formation of the District, the designation of the Improvement Areas, the proposed levy of a special tax therein to finance certain public facilities described in Resolution No. 22-1187 and to secure the payment of any bonded indebtedness of the District for the Improvement Areas, and the proposed issuance of up to $40,000,000 of bonded indebtedness for Improvement Area No. 1 and up to $45,000,000 of bonded indebtedness for Improvement Area No. 2, as described in Resolution No. 22-1188; and
WHEREAS, at the September 21, 2022 public hearing, all persons desiring to be heard on all matters pertaining to the formation of the District, the designation of the Improvement Areas and the proposed levy of the special tax to finance the facilities described in Resolution No. 22-1187 and to secure the payment of up to $40,000,000 of bonded indebtedness for Improvement Area No. 1 and of up to $45,000,000 of bonded indebtedness for Improvement Area No. 2 as described in Resolution No. 22-1188 (together, the “Bonds”) were heard and a full and fair hearing was held; and
WHEREAS, on September 21, 2022, the City Council adopted Resolution Nos. 2022- ___ and 2022-___ which formed the District, designated the Improvement Areas and called a special election within each of Improvement Area No. 1 and Improvement Area No. 2 on September 21, 2022 in each case on three propositions relating to the levy of a special tax within each Improvement Area, the issuance of the Bonds by the District for each Improvement Area and the establishment of an appropriations limit within the District; and WHEREAS, on September 21, 2022, a special election was held within Improvement Area No. 1 at which the qualified electors therein approved by more than a two-thirds vote Propositions A, B and C set forth in Attachment B to Resolution No. 2022-___ authorizing the levy of a special tax within Improvement Area No. 1 for the purposes described in Resolution No. 22-__, the issuance of the Bonds for Improvement Area No. 1 as described in Resolution No. 22-__ and establishing an appropriations limit for the District; and WHEREAS, on September 21, 2022, a special election was held within Improvement Area No. 2 at which the qualified electors therein approved by more than a two-thirds vote Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 25
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2 Propositions D, E and F set forth in Attachment C to Resolution No. 2022-___ authorizing the levy of a special tax within Improvement Area No. 2 for the purposes described in Resolution No. 22-__, the issuance of the Bonds for Improvement Area No. 2 as described in Resolution No. 22-__ and establishing an appropriations limit for the District; and NOW, THEREFORE, the City Council of the City of Menifee, California does ordain as follows:

Section 1.The above recitals are all true and correct.

Section 2.By the passage of this Ordinance, the City Council authorizes and levies special taxes within Improvement Area No. 1 and Improvement Area No. 2 pursuant to Sections 53328 and 53340 of the Act at the rates and in accordance with the rate and method of apportionment set forth in Attachment C to Resolution No. 22-1187 as to Improvement Area No. 1 and the rate and method of apportionment set forth in Attachment D to Resolution No. 22- 1187 as to Improvement Area No. 2, which are incorporated by reference herein (each a “Rate and Method”). The special taxes are hereby levied commencing in the fiscal year specified in the Rate and Method for such Improvement Area and in each fiscal year thereafter until payment in full of the Bonds issued by the District for such Improvement Area (including any bonds issued to refund the Bonds), payment of all costs of the public facilities and services authorized to be financed by the District for such Improvement Area, and payment of all costs of administering the District allocable to such Improvement Area.

Section 3.Each of the Mayor, the City Manager, the Assistant City Manager, or their written designees (each, an “Authorized Officer”), acting alone, is hereby authorized and directed each fiscal year to determine the specific special tax rates and amounts to be levied in such fiscal year on each parcel of real property within Improvement Area No. 1 and Improvement Area No. 2, in the manner and as provided in the Rate and Method applicable to such Improvement Area. The special tax rate levied on a parcel pursuant to each Rate and Method shall not exceed the maximum rate set forth in the Rate and Method for such parcel, but the special tax may be levied at a lower rate. Each Authorized Officer is hereby authorized and directed to provide all necessary information to the Treasurer-Tax Collector of the County of Riverside and to otherwise take all actions necessary in order to effect proper billing and collection of the special tax within each Improvement Area, so that the special tax shall be levied and collected in sufficient amounts and at times necessary to satisfy the financial obligations of the District for such Improvement Area in each fiscal year, and with respect to Special Tax, until the Bonds issued by the District for such Improvement Area are paid in full, the facilities financed for such Improvement Area have been paid for, and provision has been made for payment of all of the administrative costs of the District.

Section 4.Properties or entities of the state, federal or other local governments shall be exempt from the special tax for each Improvement Area, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act and Section F of each Rate and Method. No other properties or entities within each of the Improvement Areas are exempt from the special tax unless the properties or entities are expressly exempted in Resolution No. 2022-___ or in a resolution of consideration to levy a new special tax or special taxes or to alter the applicable Rate and Method or an existing special tax as provided in Section 53334 of the Act.

Section 5.All of the collections of the special tax within each Improvement Area shall be used as provided for in the Act, the Rate and Method for such Improvement Area and Resolution No. 2022-___.

Item Title: 11.9
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3 Section 6.The special tax within each Improvement Area shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes (which such procedures include the exercise of all rights and remedies permitted by law to make corrections, including, but not limited to, the issuance of amended or supplemental tax bills), as such procedure may be modified by law or by this City Council from time to time.

Section 7.As a cumulative remedy, if any amount levied as a special tax for payment of the interest or principal of the Bonds issued by the District for an Improvement Area (including any bonds issued to refund such Bonds), together with any penalties and other charges accruing under this Ordinance, are not paid when due, the City Council may, not later than four years after the due date of the last installment of principal on such Bonds (including any bonds issued to refund such Bonds), order that the same be collected by an action brought in the superior court to foreclose the lien of such special tax within the applicable Improvement Area, as authorized by the Act.

Section 8.The Mayor of the City shall sign this Ordinance and the City Clerk or any Acting City Clerk (referred to herein as the “City Clerk”) shall attest to the Mayor’s signature and then cause the same to be published within fifteen (15) days after its passage at least once in The Press Enterprise, a newspaper of general circulation published and circulated in the City of Menifee.

Section 9.The specific authorization for adoption of this Ordinance is pursuant to the provisions of Section 53340 of the Act.

Section 10.The City Clerk is hereby authorized to transmit a certified copy of this ordinance to the Treasurer-Tax Collector of the County of Riverside, and to perform all other acts which are required by the Act, this Ordinance or by law in order to accomplish the purpose of this Ordinance.

Section 11.A full reading of this Ordinance is dispensed with prior to its final passage, a written or printed copy having been available to the City Council and the public a day prior to its final passage.

Section 12.This Ordinance shall take effect thirty days after its final passage.

Item Title: 11.9
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4 This Ordinance was introduced and read on 21st day of September, 2022 and APPROVED AND ADOPTED this __ day of _____, 2022.

ATTEST: APPROVED:

Stephanie Roseen, Acting City Clerk Bill Zimmerman, Mayor APPROVED AS TO FORM:

Jeffrey T. Melching, City Attorney
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 28
Menifee

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CITY OF MENIFEE
Public Hearing Report
COMMUNITY FACILITIES DIST RICT NO. 2 022 -3
(LEGADO)
Septemb er 21, 2022
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 29
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Table of Contents

Sections P age _____________________________________________ 1 Introduction ______________________________________________________ 1 2 Description of Facilities ____________________________________________________ 2 3 Cost Estimate ______________________________________________________ 3 4 Proposed Development ___________________________________________________ 5 5 Rate and Method of Apportionment __________________________________________ 6 6 Certifications ______________________________________________________ 9

Tables Page
3-1 Cost Estimate ______________________________________________________ 3 5-1 Assigned Special Tax for Developed Property for Improvement Area 1 – Tax Zone 1 ___ 6 5-2 Assigned Special Tax for Developed Property for Improvement Area 1 – Tax Zone 2 ___ 7 5-3 Assigned Special Tax for Developed Property for Improvement Area 1 – Tax Zone 3 ___ 7 5-4 Assigned Special Tax for Developed Property for Improvement Area 2 – Tax Zone 1 ___ 7 5-5 Assigned Special Tax for Developed Property for Improvement Area 2 – Tax Zone 2 ___ 8 5-6 Assigned Special Tax for Developed Property for Improvement Area 2 – Tax Zone 3 ___ 8

Appendices P age _____________________________________________ A Rate and Method of Apportionment for Improvement Area 1 B Rate and Method of Apportionm ent for Improvement Area 2 __________________ C Proposed Boundary Map _________________________________________ D Resolution of Intention

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 30
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1 Introduction Page | 1
City of Menifee
CFD No. 2022-3 (Legado)
Public Hearing Report
Background
On August 3, 2022, the City Council (the “City Council”) of the City of Menifee (the “City”), adopted a Resolution of Intention to form Community Facilities District No. 2022-3 (Legado) Improvement Areas 1 and 2 of the City of Menifee (“CFD No. 2022-3” or “District”), Resolution No. 22-1187, 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, (“Act”).

The District is currently comprised of 2 parcels and approximately 263 gross acres to include a total of 1,022 residential properties at buildout. There are two separate Improvement Ar eas included within the boundaries of CFD No. 2022-3.

Improvement Area 1 includes three separate Tax Zones, Tax Zo nes 1 (150 Lots), 2 (174 Lots), and 3 (158 Lots) inclusive of Tract Maps TR 37408-1, TR 37408-2, TR 37408-3, TR 37409-1, TR 37409-2, and TR 37409-3 to include a total of 491 proposed detached residential properties at build-out. Improvement Area 2 includes also includes three separate Tax Zones, Tax Zones 1 (180 Lots), 2 (154 Lots), and 3 (197 Lots) inclus ive of Tract Maps TR 37408-5, TR 37408-6, TR 37409-4, TR 37409-5, TR 37409-6, and TR 37409-8 to include a total of 531 proposed detached residential properties at build-out. The property is located
northwest of Antelope Boulevard and Chambers Avenue and south of Rouse Road.

For a map showing the boundaries of CFD No. 2022-3 please see Appendix C.

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. 2022-3;

2. A brief description of the Facilities required at the time of formation to meet the needs of CFD No. 2022-3.

3. A brief description of the Boundaries of CFD No. 2022-3; 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 D.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 31
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2 Description of Facilities Page | 2
City of Menifee
CFD No. 2022-3 (Legado)
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. 2022- 3 and financed with the proceeds of special taxes and bonds issued by CFD No. 2022-3 consist of the construction, purchase, modification, rehabilitation, expansion and/or improvement of (i) drainage, library, park, roadway, traffic, administration and general go vernment facilities, animal shelter facilities, fire and safety, 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 (the “City Facilities”); (ii) water and sewer facilities including th e acquisition of capa city in the sewer system and/or water system of the Eastern Municipal Water District which are included in Eastern Municipal Water District’s water and sewer capacity and connection fee programs (the “Water District Facilities”); and (iii) interim and permanent school facilities of Menifee Union School District and Perris Union High School District, including classrooms, multi-purpose facilities, administration and auxiliary space at school facilities, athletic fields, playgrounds and recreational facilities a nd improvements thereto, landscaping, access roadways, drainage, sidewalks and 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, coor dination, 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. 2022-3, 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. 2022-3, including legal fees, fees of consultants, engineering, planning, designing and the annual costs to administer CFD No. 2022-3 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. 2022-3.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 32
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3 Cost Estimate Page | 3
City of Menifee
CFD No. 2022-3 (Legado)
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. 2022- 3 Bonds is estimated to be $23,079,160 for Improvement Area 1 and $26,174,453 for Improvement Area 2 based upon current dollars (Fiscal Year 2022-23).
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. 2022-3 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. 2022-3 are estimated to be $30,000 per Improvement Area 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

City Fees Total Cost
IA 1
Bond Allocation(1)
IA 2
Bond Allocation(1)
Total
Allocation
Law Enforcement $236,082 $113,421 $122,661 $236,082
Fire Facilities $627,508 $301,474 $326,034 $627,508
General Government $1,043,462 $501,311 $542,151 $1,043,462 Public Use Facilities $157,388 $75,614 $81,774 $157,388 Park – Land Acquisition $219,730 $105,565 $114,165 $219,730 City Facilities $456,834 $219,477 $237,357 $456,834
Fair Share Traffic Impact Fee $4,604,283 $2,212,038 $2,392,245 $4,604,283 Total City Fees $7,345,287 $3,528,900 $3,816,387 $7,345,287

City Facilities Total Cost
IA 1
Bond Allocation(1)

IA 2
Bond Allocation(1)

Total
Allocation
Circulation Facilities $15,686,150 $7,536,105 $8,150,045 $15,686,150 Less: Circulation Reimbursements ($780,157) ($374,811) ($405,346) ($780,157) Net Circulation Facilities $14,905,993 $7,161,294 $7,744,699 $14,905,993

Storm Drain Facilities $9,332,211 $4,483,479 $4,848,732 $9,332,211 Less: Storm Drain Reimbursements ($1,681,428) ($807,809) ($873,619) ($1,681,428) Net Storm Drain Facilities $7,650,783 $3,675,670 $3,975,113 $7,650,783

Park Facilities $11,000,000 $5,284,736 $5,715,264 $11,000,000 Less: Park Reimbursements ($2,324,458) ($1,116,741) ($1,207,717) ($2,324,458) Net Park Facilities $8,675,542 $4,167,995 $4,507,547 $8,675,542

Interior Road Improvements $23,726,250 $4,545,301 $6,252,889 $10,798,190 Total City Facilities $54,958,568 $19,550,260 $22,480,248 $42,030,508

Total City Fees and Facilities $62,303,855 $23,079,160 $26,296,635 $49,375,795

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 33
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3 Cost Estimate Page | 4
City of Menifee
CFD No. 2022-3 (Legado)
Public Hearing Report

Table 3-1 (Cont’d)

Cost Estimate

Eastern Municipal Water District Fees Total Cost
IA 1
Bond Allocation(1)
IA 2
Bond Allocation(1)
Total
Allocation
Sewer Financial Participation $3,278,576 $0 $0 $0
Sewer Treatment Capacity $6,214,782 $0 $0 $0
Water Financial Participation $6,995,590 $0 $0 $0
Water Supply Development Fee $380,184 $0 $0 $0
1" Meter Drop-In Fee $385,294 $0 $0 $0
Landscape Meter Connection Fees
1 @ 3" $207,113 $0 $0 $0
7 @ 1.5" $217,490 $0 $0 $0
7 @ 1" $86,996 $0 $0 $0
Total EMWD Fees $17,766,025 $0 $0 $0

Total Eligible Fees/Improvements $80,069,880 $23,079,160 $26,174,453 $49,253,613 Incidental Financing Costs $3,565,840 $4,005,547 $7,571,387 Total Funded by Bond Proceeds $26,645,000 $30,180,000 $56,825,000

Total Funded by Developer $30,816,267
(1) Amounts are allocated based upon estimated bond sizing and may change based upon market conditions at the time of bond issuance. Allocation of bond proceeds between facility types to be determined at the time of bond issuance.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 34
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4 Proposed Development Page | 5
City of Menifee
CFD No. 2022-3 (Legado)
Public Hearing Report
The CFD No. 2022-3 includes approximately 263 gross acres to include a total of 1,022 residential properties at buildout.

The District is made up of two separate Improvement Areas included within the boundaries. Improvement Area 1 includes three separate Tax Zones, Tax Zones 1 (150 Lots), 2 (174 Lots), and 3 (158 Lots) inclusive of Tract Maps TR 37408-1, TR 37408-2, TR 37408-3, TR 37409-1, TR 37409-2, and TR 37409-3 to include a total of 491 proposed detached residential properties at build-out. Improvement Area 2 includes also includes three separate Tax Zones, Tax Zones 1 (180 Lots), 2 (154 Lots), and 3 (197 Lots) inclusive of Tract Maps TR 37408-5, TR 37408-6, TR 37409-4, TR 37409-5, TR 37409-6, and TR 37409-8 to include a total of 531 proposed detached residential properties at build-out. The property is located northwest of Antelope Boulevard and Chambers Avenue and south of Rouse Road. As of Fiscal Year 2022-23 the proposed CFD No. 2022-3 includes the following Assessor's Parcel Numbers:

Assessor’s Parcel
Number
333-020-011
333-020-019
A map showing the boundaries of CFD No. 2022-3 is included in Appendix C.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 35
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5 Rate and Method of Apportionment Page | 6
City of Menifee
CFD No. 2022-3 (Legado)
Public Hearing Report
The Rate and Method of Apportionment allows each property owner within CFD No. 2022-3 Improvement Area 1 and Improvement Area 2 are to estimate the annual Special Tax amount that would be required for payment. The Rate and Method of Apportionment of the Special Taxes established pursuant to these proceedings, is attached hereto as Appendix A and Appendix B (the “Rate and Methods”). 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. 2022-3, and provided further that CFD No. 2022-3 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. 2022-3, unless exempted by law or by the Rate and Methods proposed for CFD No. 2022-3, shall be taxed for the purpose of providing necessary facilities to serve the District. The Boundary Map for CFD No. 2022-3 is attached hereto as Appendix C. 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 Methods (“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. 2022-3 for uncollected Special Taxes associated with the levy of such Special Taxes, but the Special Tax shall not be levied after 2064-65 Fiscal Year.

Table 5-1
Assigned Special Tax for Developed Property for Improvement Area 1 – Tax Zone 1 Fiscal Year 2022-23
Land Use Category
Taxable
Unit Building Square Footage
Assigned Special
Tax Per Taxable
Unit

1. Single Family Residential Property RU Less than 1,400 sq. f t $2,588.00

2. Single Family Residential Property RU 1,400 sq. ft to 1,600 sq. f t $2,812.00

3. Single Family Residential Property RU 1,601 sq. ft to 1,800 sq. f t $2,860.00

4. Single Family Residential Property RU 1,801 sq. ft to 2,000 sq. f t $2,876.00

5. Single Family Residential Property RU 2,001 sq. ft to 2,200 sq. f t $2,967.00

6. Single Family Residential Property RU 2,201 sq. ft to 2,400 sq. f t $3,090.00

7. Single Family Residential Property RU Greater than 2,400 sq. f t $3,139.00

8. Multifamily Property Acre N/A $24,742.00

9. Non-Residential Property Acre N/A $24,742.00

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 36
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5 Rate and Method of Apportionment Page | 7
City of Menifee
CFD No. 2022-3 (Legado)
Public Hearing Report
Table 5-2
Assigned Special Tax for Developed Property for Improvement Area 1 – Tax Zone 2 Fiscal Year 2022-23
Land Use Category
Taxable
Unit Building Square Footage
Assigned Special
Tax Per Taxable
Unit

2. Single Family Residential Property RU Less than 1,900 sq. f t $2,731.00

2. Single Family Residential Property RU 1,900 sq. ft to 2,100 sq. f t $2,896.00

3. Single Family Residential Property RU 2,101 sq. ft to 2,300 sq. f t $2,954.00

4. Single Family Residential Property RU 2,301 sq. ft to 2,500 sq. f t $3,056.00

5. Single Family Residential Property RU 2,501 sq. ft to 2,700 sq. f t $3,109.00

6. Single Family Residential Property RU Greater than 2,700 sq. f t $3,195.00

7. Multifamily Property Acre N/A $22,586.00

8. Non-Residential Property Acre N/A $22,586.00
Table 5-3
Assigned Special Tax for Developed Property for Improvement Area 1 – Tax Zone 3 Fiscal Year 2022-23
Land Use Category
Taxable
Unit Building Square Footage
Assigned Special
Tax Per Taxable
Unit

3. Single Family Residential Property RU Less than 2,100 sq. f t $2,847.00

2. Single Family Residential Property RU 2,100 sq. ft to 2,400 sq. f t $2,991.00

3. Single Family Residential Property RU 2,401 sq. ft to 2,700 sq. f t $3,118.00

4. Single Family Residential Property RU 2,701 sq. ft to 3,000 sq. f t $3,146.00

5. Single Family Residential Property RU 3,001 sq. ft to 3,300 sq. f t $3,207.00

6. Single Family Residential Property RU Greater than 3,300 sq. f t $3,484.00

7. Multifamily Property Acre N/A $19,319.00

8. Non-Residential Property Acre N/A $19,319.00
Table 5-4
Assigned Special Tax for Developed Property for Improvement Area 2 – Tax Zone 1 Fiscal Year 2022-23
Land Use Category
Taxable
Unit Building Square Footage
Assigned Special
Tax Per Taxable
Unit

4. Single Family Residential Property RU Less than 1,400 sq. f t $2,588.00

2. Single Family Residential Property RU 1,400 sq. ft to 1,600 sq. f t $2,812.00

3. Single Family Residential Property RU 1,601 sq. ft to 1,800 sq. f t $2,860.00

4. Single Family Residential Property RU 1,801 sq. ft to 2,000 sq. f t $2,876.00

5. Single Family Residential Property RU 2,001 sq. ft to 2,200 sq. f t $2,967.00

6. Single Family Residential Property RU 2,201 sq. ft to 2,400 sq. f t $3,090.00

7. Single Family Residential Property RU Greater than 2,400 sq. f t $3,139.00

8. Multifamily Property Acre N/A $24,486.00

9. Non-Residential Property Acre N/A $24,486.00

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 37
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5 Rate and Method of Apportionment Page | 8
City of Menifee
CFD No. 2022-3 (Legado)
Public Hearing Report
Table 5-5
Assigned Special Tax for Developed Property for Improvement Area 2 – Tax Zone 2 Fiscal Year 2022-23
Land Use Category
Taxable
Unit Building Square Footage
Assigned Special
Tax Per Taxable
Unit

5. Single Family Residential Property RU Less than 1,900 sq. f t $2,731.00

2. Single Family Residential Property RU 1,900 sq. ft to 2,100 sq. f t $2,896.00

3. Single Family Residential Property RU 2,101 sq. ft to 2,300 sq. f t $2,954.00

4. Single Family Residential Property RU 2,301 sq. ft to 2,500 sq. f t $3,056.00

5. Single Family Residential Property RU 2,501 sq. ft to 2,700 sq. f t $3,109.00

6. Single Family Residential Property RU Greater than 2,700 sq. f t $3,195.00

7. Multifamily Property Acre N/A $22,018.00

8. Non-Residential Property Acre N/A $22,018.00
Table 5-6
Assigned Special Tax for Developed Property for Improvement Area 2 – Tax Zone 3 Fiscal Year 2022-23
Land Use Category
Taxable
Unit Building Square Footage
Assigned Special
Tax Per Taxable
Unit

6. Single Family Residential Property RU Less than 2,100 sq. f t $2,847.00

2. Single Family Residential Property RU 2,100 sq. ft to 2,400 sq. f t $2,991.00

3. Single Family Residential Property RU 2,401 sq. ft to 2,700 sq. f t $3,118.00

4. Single Family Residential Property RU 2,701 sq. ft to 3,000 sq. f t $3,146.00

5. Single Family Residential Property RU 3,001 sq. ft to 3,300 sq. f t $3,207.00

6. Single Family Residential Property RU Greater than 3,300 sq. f t $3,484.00

7. Multifamily Property Acre N/A $20,857.00

8. Non-Residential Property Acre N/A $20,857.00

Escalation of Special Taxes
On each July 1, commencing on July 1, 2023 the Assigned Special Tax shall increase by two percent (2.0%), of the amount in effect in the prior Fiscal Year.

For particulars as to the Rate and Methods for CFD No. 2022-3, see the attached and incorporated in Appendix A and B.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 38
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6 Certifications Page | 9
City of Menifee
CFD No. 2022-3 (Legado)
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 Menifee as a result of development occurring within the CFD No. 2022- 3 and benefits the lands within said CFD No. 2022-3. 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: September 21, 2022 SPICER CONSULTING GROUP, LLC

__________________________

SHANE SPICER

SPECIAL TAX CONSULTANT FOR

CITY OF MENIFEE

RIVERSIDE COUNTY

STATE OF CALIFORNIA

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 39
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APPENDIX A
Rate and Method of Apportionment
for Improvement Area 1
Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 40
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City of Menifee
Community Facilities District No. 2022‐3 (Legado) Page 1

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022‐3 (LEGADO)
OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 1

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 Improvement Area No. 1 of the City of Menifee Community Facilities District No. 2022‐3 (Legado) ("CFD No. 2022‐3 IA 1"). 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 Menifee, acting in its capacity as the legislative body of CFD No. 2022‐3 IA 1, 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, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that
shares an Assessor’s Parcel as a Single Family Residential 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 Community 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 Government Code of the State of California.

"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2022‐3 IA 1: 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 Indenture; the costs to the City, CFD No. 2022‐3 IA 1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022‐3 IA 1 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2022‐3 IA 1 and any major property owner associated with applicable federal and state 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. 2022‐3 IA 1 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 the 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. 2022‐3 IA 1 for any other administrative purposes of CFD No. 2022‐3 IA 1, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 41
Menifee

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"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, (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.

"Assessor’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 Map" means a recorded map of the CFD which indicates the boundaries of the CFD.

"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 permit 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 determination the Maximum Special Tax that may be levied in each Fiscal Year on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding CFD No. 2022‐3 IA 1 Bonds plus the estimated annual Administrative Expenses for such Fiscal Year.

"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 Administrator" means an
official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes.

“CFD” or "CFD No. 2022‐3" means Community Facilities District No. 2022‐3 (Legado) established by the City under the Act.

“CFD No. 2022‐3 IA
1" means Improvement Area No. 1 of CFD No. 2022‐3 as identified on the boundary map for CFD No. 2022‐3.

"CFD No. 2022‐3 IA 1 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 Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 42
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loans from banks, other financial institutions, private businesses, or individuals, or long‐term contracts, or any refunding thereof, to which Special Tax of CFD No. 2022‐3 IA 1 have been pledged.

“City” means the City of Menifee.

"City Council" means the City Council of the City of Menifee, acting as the Legislative Body of CFD No. 2022‐3 IA 1.

“Condominium Plan" means a condominium plan as set forth in the California Civil Code, Section 4285.

"County" means the County of Riverside.

"Developed Property" means all Assessor’s Parcels: (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, and (ii) that have 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) for which 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 Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 4285 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 CFD No. 2022‐3 IA 1 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.

"Maximum 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. 2022‐3 IA 1 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.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 43
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"Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.

“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 Approved 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.

"Provisional 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 Acreage 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 Property.

"Special Tax" means any of the special taxes authorized to be levied within CFD No. 2022‐3 IA 1 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 periodic costs on all outstanding CFD No. 2022‐3 IA 1 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 CFD No. 2022‐3 IA 1 Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax delinquencies, (vi) for debt service on CFD No. 2022‐3 IA 1 Bonds anticipated to be issued, and (vii) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2022‐3 IA 1, provided that the inclusion of such amount does not cause 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 CFD No. 2022‐3 IA 1 Bonds pursuant to the Indenture.

“Tax
Zone(s)” means the geographical area(s) within CFD No. 2022‐3 IA 1 identified as Tax Zone 1, Tax Zone 2, or Tax Zone 3 as shown on the Boundary Map.

“Tax Zone 1” means all property located within CFD No. 2022‐3 IA 1 and on the Boundary Map as Tax

Zone 1.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 44
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“Tax Zone 2” means all property located within CFD No. 2022‐3 IA 1 and on the Boundary Map as Tax Zone 2.

“Tax Zone 3” means all property located within CFD No. 2022‐3 IA 1 and on the Boundary Map as Tax Zone 3.

"Taxable Property" means all Assessor’s Parcels within CFD No. 2022‐3 IA 1, which are not Exempt Property.

“Taxable Unit” means either a Residential Unit or an Acre.

“Trustee” means 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.

B. SPECIAL TAX

Commencing Fiscal Year 2022‐2023 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 Fiscal Year 2022‐2023, each Assessor’s Parcel within CFD No. 2022‐3 IA 1 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 or Provisional Undeveloped Property shall be further classified as being within Tax Zone 1, Tax Zone 2, or Tax Zone 3.

Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non ‐
Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as 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 Special 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 Special Tax levy for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Assigned Special Tax rates for Developed Property and shall be taxed as Developed Property in accordance with Step 1 of Section E below; and (3) the amount of the Special Tax levy on the Acreage of 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 Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 45
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Undeveloped Property multiplied by the 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 described in Table 1, Table 2, and Table 3 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, Table 2, and Table 3 below.

TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 1

Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 1,400 sq. ft $2,588.00

2. Single Family Residential Property RU 1,400 sq. ft to 1,600 sq. ft $2,812.00

3. Single Family Residential Property RU 1,601 sq. ft to 1,800 sq. ft $2,860.00

4. Single Family Residential Property RU 1,801 sq. ft to 2,000 sq. ft $2,876.00

5. Single Family Residential Property RU 2,001 sq. ft to 2,200 sq. ft $2,967.00

6. Single Family Residential Property RU 2,201 sq. ft to 2,400 sq. ft $3,090.00

7. Single Family Residential Property RU Greater than 2,400 sq. ft $3,139.00

8. Multifamily Property Acre N/A $24,742.00

9. Non‐Residential Property Acre N/A $24,742.00
On each July 1, commencing July 1, 2023, 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.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 46
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TABLE 2
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 2

Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 1,900 sq. ft $2,731.00

2. Single Family Residential Property RU 1,900 sq. ft to 2,100 sq. ft $2,896.00

3. Single Family Residential Property RU 2,101 sq. ft to 2,300 sq. ft $2,954.00

4. Single Family Residential Property RU 2,301 sq. ft to 2,500 sq. ft $3,056.00

5. Single Family Residential Property RU 2,501 sq. ft to 2,700 sq. ft $3,109.00

6. Single Family Residential Property RU Greater than 2,700 sq. ft $3,195.00

7. Multifamily Property Acre N/A $22,586.00

8. Non‐Residential Property Acre N/A $22,586.00
On each July 1, commencing July 1, 2023, 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.

TABLE 3
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
WITHIN TAX ZONE 3

Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 2,100 sq. ft $2,847.00

2. Single Family Residential Property RU 2,100 sq. ft to 2,400 sq. ft $2,991.00

3. Single Family Residential Property RU 2,401 sq. ft to 2,700 sq. ft $3,118.00

4. Single Family Residential Property RU 2,701 sq. ft to 3,000 sq. ft $3,146.00

5. Single Family Residential Property RU 3,001 sq. ft to 3,300 sq. ft $3,207.00

6. Single Family Residential Property RU Greater than 3,300 sq. ft $3,484.00

7. Multifamily Property Acre N/A $19,319.00

8. Non‐Residential Property Acre N/A $19,319.00
On each July 1, commencing July 1, 2023, 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 Category. 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 final.

c. Backup Special Tax
When a Final Map is recorded, the Administrator shall determine which Tax Zone the Final Map area lies within and the Backup Special Tax for an Assessor’s Parcel within the Final Map classified or to be classified as Single Family Property shall calculated according to the following formula.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 47
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B = (U x A) / L

The terms above have the following meanings:

B = Backup Special Tax per per Assessor’s Parcel within the Final Map

U = Maximum Special Tax per Acre of Undeveloped Property per Section D.3 below

A = Acreage of Single Family Residential Property expected to exist in such Final Map at the time
of calculation, as determined by the Administrator

L = Number of Residential Units expected to exist in such Final Map at the time of calculation, as determined by the Administrator.

In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all
Assessor’s Parcels within such changed or modified area shall be determined by Table 4 below:

TABLE 4
MAXIMUM SPECIAL TAX PER ACRE

Tax Zone
Maximum Special Tax
per Acre
1 $24,742
2 $22,586
3 $19,319

In the event any superseding Final Map is recorded as a Final Map within the Boundaries of the CFD, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be on the rate per Acre shown in the table above. The Backup Special Tax shall not apply to Multifamily Residential Property, or Non‐Residential Property.

On each July 1, commencing July 1, 2023, 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 $24,742 per Acre for Tax Zone 1, $22,586 per Acre for Tax Zone 2, and $19,319 per Acre for Tax Zone 3.

On each July 1, commencing July 1, 2023, 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.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 48
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3. Undeveloped Property and Provisional Undeveloped Property that is not Exempt Property pursuant to the provisions of Section F

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 $24,742 per Acre for Tax Zone 1, $22,586 per Acre for Tax Zone 2, and $19,319 per Acre for Tax Zone 3 multiplied by the Acreage of such Assessor’s Parcel.

On each July 1, commencing July 1, 2023, 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 2022‐2023 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance 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 rate to satisfy the Special Tax Requirement.

Step Two: If additional moneys are needed to satisfy the Special Tax Requirement 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 Three: 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 Requirement.

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 increased Proportionately from the Assigned Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special Tax Requirement.

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.

Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 49
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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, 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 (vi) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the total Acreage of all Taxable Property to less than the amounts shown in Table 5 below.

TABLE 5
MINIMUM TAXABLE ACRES

Tax Zone Acres
1 20.86
2 25.60
3 28.89

Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the total Acreage of all Taxable Property to less than the Acres shown in Table 5 per Tax Zone. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than the Acres shown in Table 5 per Tax Zone will be classified as Provisional Undeveloped 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 $26,000,000 expressed in 2022 dollars, which shall increase by the Construction Inflation Index on July 1, 2023, 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. 2022‐3 IA 1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax 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. 2022‐3 IA 1.

“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 previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 50
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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 (i) public facility costs previously funded from the Construction Fund, (ii) public facility costs available to be funded through existing construction or escrow accounts funded by the Outstanding Bonds, and minus (iii) 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 outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding CFD No. 2022‐3 IA 1 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 permanently 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 prepayment 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 prepay, 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 Special 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 Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which Item Title: 11.9
Ordinance Introduction and Formation of Community Facilities District No. 2022-3, Legado Item Page Number: 51
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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 amount 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 premium, 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 Amount”).

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 Taxes 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 Outstanding 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, the 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”).

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 Item Title: 11.9
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redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (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.

15. From the Prepayment
Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under 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 CFD No. 2022‐3 IA 1.

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 payment 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 prepaid, 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 foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax that may be levied each Fiscal Year on all Assessor’s Parcels of Taxable Property after the proposed prepayment will be at least 1.1 times annual debt service for such Fiscal Year on the Bonds that will remain outstanding 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 specifically 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 modified as provided by the following formula:

PP = ((PE – A) x F) + A
These terms have the following meaning:

PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1 Item Title: 11.9
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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 the 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 the 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 business 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 redeemed 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 records 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 2064‐2065 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2022‐3 IA 1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2022‐3 IA 1 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected and (iv) all other obligations of CFD No. 2022‐3 IA 1 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. 2022‐3 IA 1 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.

APPEALS OF SPECIAL TAXES

Any taxpayer may file a written appeal 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 must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator Item Title: 11.9
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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.

Item Title: 11.9
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APPENDIX B
Rate and Method of Apportionment
for Improvement Area 2
Item Title: 11.9
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City of Menifee
Community Facilities District No. 2022‐3 (Legado) Page 1

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022‐3 (LEGADO)
OF THE CITY OF MENIFEE
IMPROVEMENT AREA NO. 2

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 Improvement Area No. 2 of the City of Menifee Community Facilities District No. 2022‐3 (Legado) ("CFD No. 2022‐3 IA 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 Menifee, acting in its capacity as the legislative body of CFD No. 2022‐3 IA 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, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

"Act" means the Mello‐Roos Community 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 Government Code of the State of California.

"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2022‐3 IA 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 Indenture; the costs to the City, CFD No. 2022‐3 IA 2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022‐3 IA 2 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2022‐3 IA 2 and any major property owner associated with applicable federal and state 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. 2022‐3 IA 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 the 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. 2022‐3 IA 2 for any other administrative purposes of CFD No. 2022‐3 IA 2, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.

Item Title: 11.9
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"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.

"Assessor’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 Map" means a recorded map of the CFD which indicates the boundaries of the CFD.

"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 permit 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 determination the Maximum Special Tax that may be levied in each Fiscal Year on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding CFD No. 2022‐3 IA 2 Bonds plus the estimated annual Administrative Expenses for such Fiscal Year.

"Calendar Year" means the period commencing January 1 of any year and ending the following December

31. “CFD Administrator" means an
official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes.

"CFD” or “CFD No. 2022‐3" means Community Facilities District No. 2022‐3 (Legado) established by the City under the Act.

“CFD No. 2022‐3 IA
2" means Improvement Area No. 2 of CFD No. 2022‐3 as identified on the boundary map for CFD No. 2022‐3.

"CFD No. 2022‐3 IA 2 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 Item Title: 11.9
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“City” means the City of Menifee.

"City Council" means the City Council of the City of Menifee, acting as the Legislative Body of CFD No. 2022‐3 IA 2.

“Condominium Plan" means a condominium plan as set forth in the California Civil Code, Section 4285.

"County" means the County of Riverside.

"Exempt Property" means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.

"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 CFD No. 2022‐3 IA 2 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.

"Maximum 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. 2022‐3 IA 2 in any Fiscal Year on such Assessor’s Parcel.

"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.

Item Title: 11.9
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"Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.

"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.

“Single Family Residential Property” means all Assessor’s Parcels of Residential Property other than Multifamily Property.

"Special Tax" means any of the special taxes authorized to be levied within CFD No. 2022‐3 IA 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 periodic costs on all outstanding CFD No. 2022‐3 IA 2 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 CFD No. 2022‐3 IA 2 Bonds, (v) an amount equal to any anticipated shortfall due to Special Tax delinquencies, (vi) for debt service on CFD No. 2022‐3 IA 1 Bonds anticipated to be issued, and (vii) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2022‐3 IA 2, provided that the inclusion of such amount does not cause 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 CFD No. 2022‐3 IA 2 Bonds pursuant to the Indenture.

“Tax
Zone(s)” means the geographical area(s) within CFD No. 2022‐3 IA 2 identified as Tax Zone 1, Tax Zone 2, or Tax Zone 3 as shown on the Boundary Map.

“Tax Zone 1” means all property located within CFD No. 2022‐3 IA 1 and identified on the Boundary Map as
Tax Zone 1.

Item Title: 11.9
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“Tax Zone 2” means all property located within CFD No. 2022‐3 IA 1 and identified on the Boundary Map as Tax Zone 2.

“Tax Zone 3” means all property located within CFD No. 2022‐3 IA 1 and identified on the Boundary Map as Tax Zone 3.

"Taxable Property" means all Assessor’s Parcels within CFD No. 2022‐3 IA 2, which are not Exempt Property.

“Taxable Unit” means either a Residential Unit or an Acre.

“Trustee” means 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.

B. SPECIAL TAX

C. ASSIGNMENT TO LAND
USE CATEGORY FOR SPECIAL TAX

Each Fiscal Year, beginning with Fiscal Year 2022‐2023, each Assessor’s Parcel within CFD No. 2022‐3 IA 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. In addition, each Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property shall be further classified as being within Tax Zone 1, Tax Zone 2, or Tax Zone 3.

Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non‐
Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as 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 Special Tax rate.

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