WPFA CFD No. 2022-2 1 August 15, 2022
EXHIBIT B
WEST PATTERSON FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2022-2
(BALDWIN RANCH INFRASTRUCTURE)
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax applicable to each Assessor’s Parcel in the West Patterson Financing Authority Community Facilities District No. 2022-2 (Baldwin Ranch Infrastructure) [herein “CFD No. 2022- 2”] shall be levied and collected according to the tax liability determined by the Board of Directors of the West Patterson Financing Authority or its designee, through the application of the appropriate amount or rate for Taxable Property, as described below. All of the property in CFD No. 2022-2, unless exempted by law or by the provisions of Section F below, shall be taxed for the purposes, to the extent, and in the manner herein provided, including property subsequently annexed to CFD No. 2022-2 unless the Board adopts, and the owners of the annexed land unanimously approve, a separate Rate and Method of Apportionment of Special Tax for the annexation area.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Accessory Unit” means a second residential unit of limited size (e.g., granny cottage, second unit) that shares a Parcel with a Unit of Single Family Property. “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 any or all of the following: the fees and expenses of any fiscal agent or trustee (including any fees or expenses of its counsel) employed in connection with any Bonds, and the expenses of the Authority or the City in carrying out their respective duties with respect to CFD No. 2022-2 and the Bonds, including, but not limited to, the levying and collection of the Special Tax, the fees and expenses of their respective counsel, charges levied by the County Auditor’s Office, Tax Collector’s Office, and/or the County Treasurer’s Office, costs related to annexing property into CFD No. 2022-2, costs related to property owner inquiries regarding the Special Tax, amounts needed to pay rebate to the federal government with respect to Bonds, costs related to complying with continuing disclosure requirements under the California Government Code with respect to the Bonds and the Special Tax, and all other costs and expenses of the Authority and the City in any way related to the establishment or administration of CFD No. 2022-2. “Administrator” means the person or firm designated by the Authority to administer the Special Tax according to this Rate and Method of Apportionment of Special Tax.
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“Assessor’s Parcel” or “Parcel” means a lot or parcel shown on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
“Assessor’s Parcel Map” means an official map of the County Assessor designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means, with respect to an Assessor’s Parcel, that number assigned to such Assessor’s Parcel by the County for purposes of identification. “Authority” means the West Patterson Financing Authority. “Board” means the Board of Directors of the Authority, acting as the legislative body of CFD No. 2022-2.
“Bonds” means bonds or other debt (as defined in the Act), whether in one or more series, issued, insured, or assumed by CFD No. 2022-2 related to public infrastructure and/or improvements that will serve property included within CFD No. 2022-2.
“CFD No. 2022-2” means the West Patterson Financing Authority Community Facilities District No. 2022-2 (Baldwin Ranch Infrastructure).
“City” means the City of Patterson.
“County” means the County of Stanislaus.
“Developed Property” means, in any Fiscal Year, all Taxable Property in CFD No. 2022-2 for which a building permit for new construction was issued by the City prior to June 1 of the preceding Fiscal Year, but not prior to June 1, 2021.
“Final Map” means a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates lots which do not need to be further subdivided prior to issuance of a building permit for a residential or non-residential structure.
“Fiscal Year” means the period starting July 1 and ending on the following June 30. “Indenture” means the bond indenture, fiscal agent agreement, trust agreement, resolution, or other instrument pursuant to which Bonds are issued, as modified, amended, and/or supplemented from time to time, and any instrument replacing or supplementing the same. “Land Use Class” means any of the classes listed in Table 1 below. “Maximum Special Tax” means the maximum amount of Special Tax, determined in accordance with Section C below, which can be levied in any Fiscal Year.
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“Net Acre” or “Net 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 Subdivision Map or other recorded County parcel map. Net Acreage shall include a proportional allocation of road right-of-way included within the Subdivision Map, as applicable. The Net Acreage of a Parcel or Subdivision Map shall be determined in the sole discretion of the City.
“Non-Residential Property” means, in any Fiscal Year, all Parcels of Developed Property that have or will have a commercial, office, lodging, institutional (e.g., churches, private schools), or industrial building(s) constructed on them.
“Other Residential Property” means Developed Property that has or will have Units constructed on the Parcel, other than Units of Single Family Property. “Proportionately” means, in any Fiscal Year, that the ratio of the actual Special Tax to the Maximum Special Tax is equal for all Assessor’s Parcels of Developed Property within CFD No. 2022-2.
“Public Property” means any property within the boundaries of CFD No. 2022-2 that is owned by or irrevocably offered for dedication to the federal government, State of California, or other local government or public agency.
“RMA” means this Rate and Method of Apportionment of Special Tax. “Single Family Attached Property” means, in any Fiscal Year, all Parcels of Developed Property for which a building permit or use permit was issued for construction of a residential structure consisting of two or more Units that share common walls, have separate Assessor’s Parcel Numbers assigned to them (except for a duplex, triplex, or fourplex unit, which may share a Parcel with another duplex, triplex, or fourplex Unit(s)), and may be purchased by individual homebuyers (which shall still be the case even if the Units are purchased and subsequently offered for rent by the owner of the Unit), including such residential structures that meet the statutory definition of a condominium project contained in Civil Code Section 4125.
“Single Family Detached Property” means, in any Fiscal Year, all Parcels of Developed Property for which a building permit was issued for construction of a Unit that does not share a common wall with another Unit.
“Single Family Property” means all Assessor’s Parcels of Single Family Attached Property and Single Family Detached Property.
“Special Tax” means a special tax levied in any Fiscal Year that will be used to pay the Special Tax Requirement.
“Special Tax Requirement” means the amount necessary in any Fiscal Year (i) to pay principal and interest on Bonds that is due in the calendar year which begins in such Fiscal Year, (ii) to create or replenish reserve funds, (iii) to cure any delinquencies in the payment of principal or interest on
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Bonds which have occurred in the prior Fiscal Year, (iv) to pay Administrative Expenses, and (v) to pay the costs of public improvements and public infrastructure authorized to be financed by CFD No. 2022-2. The amounts referred to in clauses (i) and (ii) of the preceding sentence may be reduced in any Fiscal Year by (i) interest earnings on or surplus balances in funds and accounts for the Bonds to the extent that such earnings or balances are available to apply against debt service pursuant to the Indenture, Bond resolution, or other legal document that set forth these terms, (ii) proceeds from the collection of penalties associated with delinquent Special Taxes, and (iii) any other revenues available to pay debt service on the Bonds as determined by the Administrator. “Subdivision Map” means a Final Map, large lot subdivision map, condominium plan, or other map recorded with the County that results in the subdivision of an original Parcel into two or more successor Parcels.
“Taxable Property” means all Parcels within the boundary of CFD No. 2022-2 that are not exempt from the Special Tax pursuant to law or Section F below. “Unit” means an individual single-family detached or attached home, townhome, condominium, apartment, or other residential dwelling unit, including each separate living area within a half-plex, duplex, triplex, fourplex, or other residential structure. An Accessory Unit that shares a Parcel with a single-family detached unit shall not be considered a separate Unit for purposes of this RMA.
B. DATA FOR ADMINISTRATION OF SPECIAL TAXES
On or about July 1 of each Fiscal Year, the Administrator shall identify the current Assessor’s Parcel Numbers for all Parcels of Developed Property within CFD No. 2022-2. The Administrator shall also determine: (i) the Net Acreage of each Parcel; (ii) which Parcels of Developed Property are Single Family Property, Other Residential Property, and Non-Residential Property; and (iii) the Special Tax Requirement for the Fiscal Year.
In any Fiscal Year, if it is determined that (i) a Subdivision Map for property in the CFD No. 2022-2 was recorded after January 1 of the prior Fiscal Year (or any other date after which the County Assessor will not incorporate the newly-created Parcels into the then current tax roll), (ii) because of the date the Subdivision Map was recorded, the County Assessor does not yet recognize the new Parcels created by the Subdivision Map, and (iii) a building permit was issued prior to June 1 of the prior Fiscal Year for development on one or more of the newly-created Parcels, the Administrator shall calculate the Special Tax for Units or Net Acreage within the subdivided area and levy such Special Tax on the Parcel(s) that was subdivided by recordation of the Subdivision Map.
C. MAXIMUM SPECIAL TAX
The Maximum Special Tax rates in Table 1 below apply to all Parcels of Residential Property, Other Residential Property, and Non-Residential Property within CFD No. 2022-2:
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Table 1
MAXIMUM SPECIAL TAX RATES
Land Use Class Maximum Special Tax
(Fiscal Year 2022-23) *
Single Family Property $1,740 per Unit
Other Residential Property $2,500 per Net Acre
Non-Residential Property $2,500 per Net Acre
* Beginning July 1, 2023, and each July 1 thereafter, all of the Maximum Special Tax rates shown in Table 1 above shall be increased by an amount equal to two percent (2.0%) of the amount in effect for the prior Fiscal Year.
Pursuant to Section 53321(d) of the Act, the Special Tax levied against a Parcel used for private residential purposes shall under no circumstances increase by more than ten percent (10%) in any year as a consequence of delinquency or default by the owner of any other Parcel or Parcels and shall, in no event, exceed the Maximum Special Tax in effect for the Fiscal Year in which the Special Tax is being levied.
In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Taxes levied on an Assessor’s Parcel shall be the sum of the Maximum Special Taxes for all Units of Single Family Property and the Maximum Special Taxes for all Net Acres of Other Residential Property and Non-Residential Property (based on the applicable Subdivision Map, parcel map, development plan, condominium plan, or other recorded County map) located on that Assessor’s Parcel.
D. METHOD OF LEVY AND COLLECTION OF THE SPECIAL TAX
Each Fiscal Year, the Administrator shall identify the current Assessor’s Parcel Number for each Parcel of Taxable Property within CFD No. 2022-2.
Each Fiscal Year prior to the sale of Bonds, the Maximum Special Tax shall be levied on all Parcels of Developed Property within CFD No. 2022-2. Each Fiscal Year after Bonds have been sold, the Administrator shall determine the Special Tax Requirement, and the Special Tax shall be levied Proportionately on each Parcel of Developed Property, up to 100% of the Maximum Special Tax assigned to each Parcel, until the amount levied is equal to the Special Tax Requirement.
E. MANNER OF COLLECTION
The Special Tax for CFD No. 2022-2 shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that the City may directly bill the Special
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Tax, may collect Special Taxes at a different time or in a different manner, and may collect delinquent Special Taxes through foreclosure or other available methods.
The Special Tax shall be levied and collected until principal and interest on Bonds have been repaid and authorized facilities to be constructed directly from Special Tax proceeds have been completed.
However, in no event shall Special Taxes be levied after Fiscal Year 2072-73.
F. EXEMPTIONS
Notwithstanding any other provision of this Rate and Method of Apportionment of Special Tax, no Special Tax shall be levied on Public Property, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act.
G. PREPAYMENT OF SPECIAL TAX
The following definitions apply to this Section G:
“Remaining Facilities Costs” means the Public Facilities Requirement minus public facility costs funded by Outstanding Bonds, direct funding through the annual CFD No. 2022-2 Special Tax levy, developer equity, and/or any other source of funding. “Outstanding Bonds” means all Previously Issued Bonds that remain outstanding, with the following exception: if a Special Tax has been levied against, or already paid by, an Assessor’s Parcel making a prepayment, and a portion of the Special Tax will be used to pay a portion of the next principal payment on the Bonds that remain outstanding (as determined by the Administrator), that next principal payment shall be subtracted from the total Bond principal that remains outstanding, and the difference shall be used as the amount of Outstanding Bonds for purposes of this prepayment formula. “Previously Issued Bonds” means all Bonds that have been issued prior to the date of prepayment.
“Public Facilities Requirement” means either $10,850,000 in 2022 dollars, which shall increase on January 1, 2023, and on each January 1 thereafter by the percentage increase, if any, in the Construction Cost Index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News-Record or other comparable source if the Engineering News-Record is discontinued or otherwise not available, or such other number as shall be determined by the Administrator in coordination with the City as sufficient to fund improvements that are authorized to be funded by CFD No. 2022-2. Notwithstanding the foregoing, the Administrator shall recalculate the Public Facilities Requirement to include the estimated public facilities costs that will be funded by the increased Maximum Special Tax revenue generated by property that annexes into CFD No. 2022-2
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The Special Tax obligation applicable to an Assessor’s Parcel in CFD No. 2022-2 may be prepaid and the obligation of the Assessor’s Parcel to pay the Special Tax 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 Special Tax obligation shall provide the City with written notice of intent to prepay. Within 30 days of receipt of such written notice, the City or its designee shall notify such owner of the prepayment amount for such Assessor’s Parcel. Prepayment must be made not less than 75 days prior to any redemption date for Bonds to be redeemed with the proceeds of such prepaid Special Taxes. Only full prepayments may be made; partial prepayments are not allowed.
The Prepayment Amount shall be calculated as follows (capitalized terms as defined below):
Bond Redemption Amount
plus Remaining Facilities Amount
plus Redemption Premium
plus Defeasance Requirement
plus Administrative Fees and Expenses
less Reserve Fund Credit (if applicable)
equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount shall be determined by application of the following steps:
Step 1. Compute the total Maximum Special Tax that could be levied on an Assessor’s Parcel, as if it were Developed Property (if not already Developed Property), whose owner is requesting to prepay the Special Tax in the Fiscal Year in which prepayment would be received by the City.
Step 2. Divide the Maximum Special Tax computed pursuant to Step 1 for such Assessor’s Parcel by the revenue that could be generated at the time of the prepayment if the Maximum Special Tax was levied on all Parcels, as if they were Developed Property (if not already Developed Property), inside CFD No. 2022-2.
Step 3. Multiply the quotient computed pursuant to Step 2 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the “Bond Redemption Amount”).
Step 4. Compute the current Remaining Facilities Costs (if any).
Step 5. Multiply the quotient computed pursuant to Step 2 by the amount determined pursuant to Step 4 to compute the amount of Remaining Facilities Costs to be prepaid (the “Remaining Facilities Amount”).
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Step 6. Multiply the Bond Redemption Amount computed pursuant to Step 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).
Step 7. Compute the amount needed to pay interest on the Bond Redemption Amount starting with the first Bond interest payment date after which the prepayment has been received until the earliest redemption date for the Outstanding Bonds. However, if Bonds are callable at the first interest payment date after the prepayment has been received, Steps 7, 8 and 9 of this prepayment formula will not apply.
Step 8: Compute the amount of interest the City reasonably expects to derive from reinvestment of the Bond Redemption Amount plus the Redemption Premium from the first Bond interest payment date after which the prepayment has been received until the redemption date for the Outstanding Bonds.
Step 9: Take the amount computed pursuant to Step 7 and subtract the amount computed pursuant to Step 8 (the “Defeasance Requirement”).
Step 10. Administrative fees and expenses of CFD No. 2022-2 are as calculated by the Administrator and include the costs of computing the prepayment, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the “Administrative Fees and Expenses”).
Step 11. If and to the extent so provided in the Indenture, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the “Reserve Fund Credit”).
Step 12. The Special Tax prepayment is equal to the sum of the amounts computed pursuant to Steps 3, 5, 6, 9, and 10, less the amount computed pursuant to Step 11 (the “Prepayment Amount”).
Once a full prepayment of a Parcel’s Special Tax obligation has been received, a Notice of Cancellation of Special Tax Lien shall be recorded against the Parcel to reflect the discharge of the Parcel’s obligation to pay the Special Tax. However, a Notice of Cancellation of Special Tax Lien shall not be recorded until all Special Taxes levied on the Parcel in the current or prior Fiscal Years have been collected.
H. INTERPRETATION OF SPECIAL TAX FORMULA
The Authority reserves the right to make minor administrative and technical changes to this document that do not materially affect the rate and method of apportioning the Special Tax. In addition, the interpretation and application of any section of this document shall be left to the Authority’s
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discretion. Interpretations may be made by the Authority by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this RMA.
I. APPEAL OF SPECIAL TAX LEVY
Any property owner claiming that the amount or application of the Special Tax is not correct may file a written notice of appeal with the Administrator not later than one calendar year after having paid the Special Tax that is disputed. The Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and decide the appeal. If the property owner disagrees with the Administrator’s decision relative to the appeal, the owner may then file a written appeal with the Board whose subsequent decision shall be binding. If the decision of the Administrator (if the appeal is not filed with the Board) or the Board (if the appeal is filed with the Board) requires the Special Tax to be modified or changed in favor of the property owner, no cash refund shall be made for prior years’ Special Tax levies, but an adjustment shall be made to the next Special Tax levy. This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to any legal action by such owner.