RESOLUTION NO. XXXX
RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF RIALTO TO ESTABLISH CITY OF RIALTO COMMUNITY FACILITIES DISTRICT NO. 2024-1 (RENAISSANCE) AND APPROVAL OF DEPOSIT AGREEMENT WHEREAS, the City Council (the “Council”) of the City of Rialto (the “City”) has received a petition (the “Petition”) requesting the institution of proceedings for (i) formation of a community facilities district (the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, (the “Act”) being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, (ii) authorization of issuance of bonds for the District, and (iii) establishment of an appropriations limit for the District; and WHEREAS, the Council has determined that the Petition complies with the requirements of Government Code Section 53318(c) and now intends to initiate such proceedings; and WHEREAS, it is the intention of the Council to finance maintenance and operation of public safety services, fire services, lighting, parkways, streets, roads, open space and any real property or other tangible property with an estimated useful life of five or more years that is owned by the City that are in addition to those provided in the territory within the District prior to the formation of the District and do not supplant services already available within the territory proposed to be included in the District (the “Services”) through the formation of the District subject to the levy of a special tax to pay for the Services, being approved at an election to be held within the boundaries of the District; and WHEREAS, it is the intention of the Council to finance the purchase, construction, expansion, modification, rehabilitation or improvement of certain public capital improvements and fees related thereto with an estimated useful life of five years or longer, which the District is authorized by law to construct, own, operate or provide and that are necessary to meet increased demands placed upon the City as a result of development occurring within the proposed District (the “Facilities”) through the formation of the District, subject to the authorization of bonds and the levy of a special tax to pay lease payments, installment purchase payments or other payments, or principal and interest on bonds, being approved at an election to be held within the boundaries of the District.
WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred.
NOW, THEREFORE, the City Council hereby resolves, determines, and orders as follows:
SECTION 1. The Council hereby determines to institute proceedings for the formation of a community facilities district under the terms of the Act. The Council hereby determines that the formation of a community facilities district to fund public facilities and services necessary as a result of development within the area of development is consistent with its Fiscal Policy for New Development and Annexations, as adopted November 1, 2005 by the City Council, which permits the funding of services authorized by the Act.
SECTION 2. The exterior boundaries of the District are hereby specified and described to be as shown on that certain map now on file in the office of the Clerk entitled “Boundary of City of Rialto Community Facilities District No. 2024-1 (Renaissance),” which map indicates by a boundary line the extent of the territory included in the proposed District and shall govern for all details as to the extent of the District. On the original and one copy of the map of such District on file in the City Clerk’s office, the City Clerk shall endorse the certificate evidencing the date and adoption of this resolution. The City Clerk shall file the original of such map in her office and, within fifteen (15) days after the adoption of this Resolution, the City Clerk shall file a copy of such map so endorsed in the records of the County Recorder, County of San Bernardino, State of California:
SECTION 3. The name of the proposed District shall be “City of Rialto Community Facilities District No. 2024-1 (Renaissance)”.
SECTION 4. The Facilities which are authorized to be financed by the District are described and included in Exhibit “B” attached hereto and by this reference incorporated herein. Such Facilities need not be physically located within the District.
SECTION 5. The Services which are authorized to be provided and financed by the District are described in Exhibit “C” attached hereto and by this reference incorporated herein.
SECTION 6. Except where funds are otherwise available, it is the intention of the District to levy annually in accordance with procedures contained in the Act (i) a facilities special tax within the District (the “Special Tax A”) sufficient to pay for the costs of financing the acquisition and/or construction of the Facilities and incidental expenses, including the principal and interest and other periodic costs on bonds or other indebtedness proposed to be issued to finance the Facilities, including incidental expenses, the establishment and replenishment of reserve funds, the credit enhancement fees, the costs of administering the levy and collection of the Special Tax A and all other costs of the levy of the Special Tax A and issuance of the bonds, including any foreclosure proceedings, architectural, engineering, inspection, legal, fiscal, and financial consultant fees, discount fees, capitalized interest on bonds, election costs and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel, disclosure counsel, financing consultants and printing costs, and all other administrative costs of the tax levy and bond issue, and (ii) a services special tax within the District sufficient to fund the Services (the “Special Tax B”) including the costs of administering the levy and collection of the Special Tax B and incidental expenses related thereto. The Special Tax A and Special Tax B shall be referred to collectively as the “Special Taxes.” The Special Taxes shall be secured by the recordation of a notice of the continuing lien against all nonexempt real property in the District. In the first year in which such a Special Taxes are levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred to the District pursuant to Section 53314 of the Act and interest thereon. The City may extend such payments as provided in the Act. The rate and method of apportionment and manner of collection of the Special Taxes (the “RMA”) is as described in detail in Exhibit “D” attached hereto and incorporated herein by this reference. The Special Taxes are based upon the cost of financing the Facilities and Services in the District, the demand that each parcel will place on the Facilities and the benefit (direct and/or indirect) received by each parcel from the Facilities and other reasonable factors. The RMA allows each landowner within the District to estimate the maximum amount that may be levied against each parcel.
SECTION 7. If Special Tax A is levied against any parcel used for private residential purposes, (i) the maximum Special Tax A shall not be increased over time except that it may be increased by an amount not to exceed two percent (2%) per year to the extent permitted in the RMA; (ii) Special Tax A shall be levied for a period not to exceed fifty (50) years commencing with Fiscal Year 2024-25, as further described in the RMA; and (iii) under no circumstances will Special Tax A be increased more than ten percent (10%) as a consequence of delinquency or default by the owner of any other parcels within the District by more than ten percent. The Special Tax B shall be levied in perpetuity or until the District determines the Special Tax B no longer needs to be levied.
SECTION 8. The Special Taxes are based on the expected demand that each parcel of real property within the District will place on the Facilities and Services, on the benefit that each parcel derives from the right to access the Facilities and Services and on other factors. The Council hereby determines the RMA set forth in Exhibit “D” to be reasonable. The Special Taxes are apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act and such Special Taxes are not based upon the value or ownership of real property. In the event that a portion of the property within the District shall become for any reason exempt, wholly or partially, from the levy of the Special Taxes specified on Exhibit “D”, the Council shall, on behalf of the District, cause the levy to be increased, subject to the limitation of the maximum special tax for a parcel as set forth in Exhibit “D” to the extent necessary upon the remaining property within the District which is not delinquent or exempt in order to yield the special tax revenues required for the purposes described herein. The obligation to pay special taxes may be prepaid as set forth in Exhibit “D”.
SECTION 9. Pursuant to Section 53340 of the Act, and except as provided in Section 53317.3 of the Act or in the Rate and Method, properties of entities of the state, federal, and local governments shall be exempt from the levy of the Special Taxes.
SECTION 10. A public hearing (the “Hearing”) on the establishment of the District and the proposed rate and method of apportionment of the Special Taxes shall be held on August 27, 2024, at 6:00 p.m., or as soon thereafter as practicable, at the chambers of the City Council of the City of Rialto, 150 S. Palm Avenue, Rialto, California, 92376. Should the Council determine to form the District as described in this Resolution, a special election will be held within the District to authorize such Special Taxes in accordance with the procedures contained in Government Code Section 53326. If held, and there are less than 12 registered voters in the District, the proposed voting procedure at the elections will be a landowner vote with each landowner who is the owner of record of land within the District at the close of the Hearing, or the authorized representative thereof, having one vote for each acre or portion thereof owned within the District. Ballots for the special election may be distributed by mail or by personal service.
SECTION 11. At the time and place set forth above for the Hearing, any interested person, including all persons owning lands or registered to vote within the District, may appear and be heard.
SECTION 12. Each City officer who is or will be responsible for the Facilities and Services to be financed by the District, is hereby directed to study the proposed changes to the District and, at or before the time of the above-mentioned Hearing, file a report with the Council, and which is to be made a part of the record of the Hearing, containing a brief description of the Facilities and Services by type which will in his or her opinion be required to adequately meet the needs of the District and his or her estimate of the cost of providing the Facilities and Services, including an estimate of the fair and reasonable cost of all incidental expenses, including the cost of planning and designing the Facilities to be financed pursuant to the Act, the cost of environmental evaluations of such Facilities, all costs associated with the formation of the District, issuance of bonds, determination of the amount of the Special Taxes, collection of the Special Taxes, or costs otherwise incurred in order to carry out the authorized purposes of the City with respect to the District, including the Services, and any other expenses incidental to the construction, completion and inspection of the authorized work to be paid through the District.
SECTION 13. The City may accept advances of funds or work-in-kind from any sources, including private persons or private entities, and is authorized and directed to use such funds for any authorized purpose, including any cost incurred in creating the District or changes to the District. The District may enter into an agreement to repay all of such funds as are not expended or committed for any authorized purpose at the time of the election, if the proposal to create the District should fail, and to repay all of such funds advanced if the levy of the Special Taxes shall be approved by the qualified electors.
SECTION 14. The proposed form of Deposit and Reimbursement Agreement (the “Deposit Agreement”), by and between Lewis-Hillwood Rialto Company, LLC and the City, in substantially the form presented at this meeting, is hereby approved. The City Manager, or his authorized designee, and the City Clerk are hereby authorized and directed, on the District’s behalf, to execute, attest and deliver the Deposit Agreement, in substantially said form, with such additions thereto or changes therein as recommended or approved by the City Manager, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Deposit Agreements by the District.
SECTION 15. The City Clerk is hereby directed to publish a notice (“Notice”) of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the District. Such Notice shall contain the text or a summary of this Resolution, state the time and place of the Hearing, a statement that the testimony of all interested persons or taxpayers will be heard, a description of the protest rights of the registered voters and landowners in the District as provided in Section 53324 of the Act and a description of the proposed voting procedure for the election required by the Act. Such publication shall be completed at least seven (7) days prior to the date of the Hearing.
SECTION 16. The City Clerk may send a copy of the Notice of the Hearing by first-class mail, postage prepaid, to each registered voter and to each landowner within the District as shown on the last equalized assessment roll. Said mailing shall be completed not less than fifteen (15) days prior to the date of the Hearing.
SECTION 17. Pursuant to Section 53344.1 of the Act, the Council hereby reserves to itself, in its sole discretion, the right and authority by subsequent resolution to allow any owner of property within the District, subject to the provisions of Section 53344.1 of the Act and those conditions as it may impose, and any applicable prepayment penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the District treasurer in full payment or partial payment of any installment of the Special Taxes or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bond or other obligation to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender.
SECTION 18. The voting procedure with respect to the levy of the Special Taxes shall be by hand delivered ballot election.
SECTION 19. The Council hereby approves the appointment of the following consultants in connection with the formation of the District: (a) Norton Rose Fulbright US LLP, as special counsel, (b) Fieldman Rolapp & Associates, as municipal advisor, (c) Webb Municipal Finance, LLC, as special tax consultant, and (d) Empire Economics, Inc., as price point consultant, upon such terms and conditions as approved by the Finance Director.
SECTION 20. The City Clerk shall certify the adoption of this Resolution.
SECTION 21. The Mayor shall sign the passage and adoption of this resolution and thereupon the same shall take effect and be in force.
PASSED, APPROVED AND ADOPTED this 23rd day of July, 2024. _________________________________
DEBORAH ROBERTSON, MAYOR
ATTEST:
__________________________________
BARBARA MCGEE, CITY CLERK
APPROVED AS TO FORM:
__________________________________
ERIC S. VAIL, CITY ATTORNEY
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss
CITY OF RIALTO )
I, BARBARA MCGEE, City Clerk of the City of Rialto, do hereby certify that the foregoing Resolution No. _________ was duly passed and adopted at a regular meeting of the City Council of the City of Rialto held on the ______ day of ___________________, 2024.
Upon motion of Councilmember _______________, seconded by Councilmember ___________________, the foregoing Resolution No. _________ was duly passed and adopted.
Vote on the motion:
AYES:
NOES:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and the Official Seal of the City of Rialto this ______ day of __________________, 2024. ________________________________
BARBARA MCGEE, CITY CLERK
Exhibit “A”
CITY OF RIALTO COMMUNITY FACILITIES DISTRICT NO. 2024-1 (RENAISSANCE)
PROPOSED BOUNDARY MAP
Exhibit “B”
CITY OF RIALTO COMMUNITY FACILITIES DISTRICT NO. 2024-1 (RENAISSANCE)
Description of facilities
The General Description of the Facilities that may be purchased, constructed, expanded, modified, rehabilitated or improved are certain public capital improvements and fees related thereto with an estimated useful life of five years or longer, which the District is authorized by law to construct, own, operate or provide, including as follows:
Storm control facilities, including, but not limited to, storm drains, revetments, channels, detention basins, headwalls, riprap pads, retention and/or catch basins and appurtenant facilities, including line B; City development impact fees and other capital improvement, capacity or connection fees, including but not limited to, open space fees, street median fees, general facilities fees, police facilities fees, fire facilities and fire protection fees, library facilities fees, park fees, storm drain fees, wastewater collection fees, wastewater treatment fees, water connection and capacity fees, water supply fees, fire flow fees, transportation facilities, traffic mitigation and regional traffic fees, including RSP traffic mitigation fee and Alder/210 Freeway fees, specific plan fees, capital facilities fees and other city or public agency fees and all capital facilities which are part of these fee programs and capital improvement programs; Incidental expenses.
OTHER
The District may also finance any of the following:
1. Bond related expenses, including underwriters’ discount, reserve fund, capitalized interest, financial advisor fees and expenses, bond and disclosure counsel, special tax consultant fees and expenses, dissemination agent fees and all other incidental expenses.
2. Administrative fees of the District or City and the Bond trustee or fiscal agent related to the District and the Bonds.
3. Reimbursement of costs related to the formation of the District advanced by the City or any related entity, or any landowner or developer within the District, as well as reimbursement of any costs advanced by the City or any related entity, or any landowner or developer within the District, for facilities or other purposes or costs of the District.
This description of the public capital facilities is general in nature. The final nature and location of improvements and facilities will be determined upon the preparation of final plans and specifications. The final plans and specifications may show substitutes in lieu of, or modifications to, proposed work. Any such substitution shall not be a change or modification in the proceedings as long as the facilities provide a service substantially similar to that as set forth in the Report.
Exhibit “C”
CITY OF RIALTO COMMUNITY FACILITIES DISTRICT NO. 2024-1 (RENAISSANCE)
Description of SERVICES
The Services to be funded by the District include the following services and all incidental expenses related to such services, all of which are authorized by the Act:
police protection services, fire protection and suppression services, ambulance and paramedic services; maintenance, operation and lighting of parks, parkways, streets, roads and open space; flood and storm protection services, including maintenance of storm drains; and maintenance and operation of any real property or other tangible property with an estimated useful life of five years or more that is owned by the City.
The services include operational and maintenance costs associated with providing such services. Authorized services shall also include the following: (i) related reserves for the replacement of facilities, and (ii) a sinking fund for services that could not otherwise be funded in a given fiscal year.
Administrative Expenses
The administrative expenses to be funded by the District include the direct and indirect expenses incurred by the District in carrying out its duties with respect to the District including, but not limited to, the levy and collection of special taxes, fees and expenses of attorneys, any fees of the County of San Bernardino related to the District or the collection of special taxes, an allocable share of the salaries of the City staff related thereto, and expenses incurred by the City in undertaking action to foreclose on properties for which the payment of special taxes is delinquent, and all other costs and expenses of the City in any way related to the District.
Exhibit “D”
CITY OF RIALTO COMMUNITY FACILITIES DISTRICT NO. 2024-1 (RENAISSANCE)
Proposed rate and method of apportionment of special tax A Special Tax A and a Special Tax B shall be levied on all Taxable Property within the boundaries of City of Rialto Community Facilities District No. 2024-1 (Renaissance) (“CFD No. 2024-1”) and collected each Fiscal Year commencing in Fiscal Year 2024-2025, in an amount determined by the CFD Administrator through the application of the procedures described below. All of the real property within CFD No. 2024-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.
1. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“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, or if the land area is not shown on the applicable Final Map, the land area as calculated by the CFD Administrator. An Acre means 43,560 square feet of land. “Act” means 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. “Administrative Expenses” means the actual or reasonably estimated costs related to the administration of CFD No. 2024-1 including, but not limited to: the costs of preparing and computing the Special Tax levy (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City, the County or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2024-1, or any designee thereof complying with arbitrage rebate requirements, including without limitation rebate liability costs and periodic rebate calculations; the costs to the City, CFD No. 2024-1, or any designee thereof complying with disclosure or reporting requirements of the City or CFD No. 2024-1, associated with applicable federal and State laws; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs to the City, CFD No. 2024-1, or any designee thereof related to an appeal of the Special Taxes; and the City’s annual administration fees and third party expenses directly related to CFD No. 2024-1. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2024-1 for any other administrative purposes of CFD No. 2024-1, including attorney’s fees and other costs related to commencing and pursuing any foreclosure of delinquent Special Taxes. “Approved Property” means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a Building Permit on or prior to the May 1st preceding the Fiscal Year in which the Special Tax is being levied. “Assessor” means the Assessor of the County of San Bernardino. “Assessor’s Parcel” means a lot, unit, 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 Assessor designating parcels by Assessor’s Parcel Number. “Assessor’s Parcel Number” means the number assigned to an Assessor’s Parcel by the County for purposes of identification. “Assigned Special Tax A” means the Special Tax of that name described in Section 3.A below. “Backup Special Tax A” means the Special Tax of that name described in Section 3.B below. “Base Year” means the Fiscal Year beginning July 1, 2024, and ending June 30, 2025. “Bonds” means any bonds or other Debt of CFD No. 2024-1, whether in one or more series, secured by the levy of Special Taxes. “Boundary Map” means the Boundary Map of the boundaries of CFD No. 2024-1 recorded in the San Bernardino County Recorder’s Office. “Building Permit” means a building permit for construction of a Residential Unit within CFD No. 2024-1 issued by the City. “Building Square Footage” means all of the square footage of usable area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, or similar area. The determination of Building Square Footage shall be made by reference to the Building Permit(s) issued for such structure and/or by reference to appropriate records kept by the City. “Calendar Year” means the period commencing January 1st of any year and ending the following December 31st. “CFD Administrator” means an authorized representative of the City, or designee thereof, responsible for determining the Special Tax Requirement for Facilities and the Special Tax Requirement for Services, for preparing the Special Tax roll and/or calculating the Backup Special Tax A. “CFD No. 2024-1” means City of Rialto Community Facilities District No. 2024-1 (Renaissance). “City” means the City of Rialto, California.
“Consumer Price Index” means the Consumer Price Index for All Urban Consumers published by the U.S. Bureau of Labor Statistics for the Riverside-San Bernardino-Ontario, CA metropolitan area in the December preceding the Fiscal Year. In the event this index ceases to be published, the Consumer Price Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the original index. “Council” means the City Council of the City acting as the legislative body of CFD No. 2024-1 under the Act. “County” means the County of San Bernardino, California. “Debt” means any binding obligation to pay or repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, pledge agreements or other long-term contracts. “Debt Service” means for each Fiscal Year, the total amount of principal and interest payable on any Outstanding Bonds during the Calendar Year commencing on January 1st of such Fiscal Year. “Developed Property” means for each Fiscal Year, all Taxable Property, exclusive of Provisional Property, for which a Building Permit was issued prior to May 1st of the previous Fiscal Year. An Assessor’s Parcel classified as Developed Property but for which the Building Permit that caused such Assessor’s Parcel to be classified as Developed Property has been cancelled and/or voided prior to the Fiscal Year for which Special Taxes are being levied shall be reclassified as Approved Property, provided that the levy of the Special Taxes on such Assessor’s Parcel after such reclassification does not cause the total Special Tax A authorized to be collected within CFD No. 2024-1 to be less than 1.1 times the annual Debt Service on all Outstanding Bonds plus Administrative Expenses, for each future Fiscal Year. If Bonds have not been issued, an Assessor’s Parcel classified as Developed Property for which such a Building Permit has been cancelled and/or voided shall be reclassified as Approved Property. “Exempt Property” means for each Fiscal Year, all Assessor’s Parcels designated as being exempt from Special Taxes pursuant to Section 8 below. “Facilities” means the public facilities authorized to be financed, in whole or in part, by CFD No. 2024-1, as identified in the list of authorized facilities approved by the Resolution of Formation of CFD No. 2024-1 adopted by the Council when the CFD was formed. “Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual lots or units for which Building Permits may be issued without further subdivision. “Fiscal Year” means the period starting on July 1st and ending the following June 30th. “Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. “Land Use Class” means any of the classes listed in Table 1 under Section 3 below. “Lot” means an Assessor’s Parcel created by a Final Map on which one or more Residential Units can be constructed. “Maximum Special Tax A” means for each Assessor’s Parcel, the Maximum Special Tax A, determined in accordance with Sections 3.C and 3.D below, which may be levied in a given Fiscal Year on such Assessor’s Parcel of Taxable Property. “Maximum Special Tax B” means for each Assessor’s Parcel, the maximum Special Tax B, determined in accordance with Section 3.A below, which may be levied in a given Fiscal Year on such Assessor’s Parcel of Taxable Property. “Minimum Sale Price” means the minimum price at which Residential Units of a given Land Use Class have sold or are expected to be sold in a normal marketing environment and shall not include prices for such Residential Units that are sold at a discount to expected sales prices for the purpose of stimulating the initial sales activity with respect to such Land Use Class. “Multi-Family Property” means all Assessor’s Parcels of Residential 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. “Non-Residential Property” means all Assessor’s Parcels for which a building permit has been issued prior to May 1st of the previous Fiscal Year for the purpose of constructing one or more non-residential units or facilities. “Outstanding Bonds” means all Bonds, which are deemed to be outstanding under the Indenture. “PACE Charges” means a contractual assessment or special tax as established by a public agency pursuant to AB811 or SB555, respectively, levied on certain parcels to fund eligible improvements to private property and entered into voluntarily by the property owner. “Prepayment Amount” means the amount required to prepay the Special Tax A Obligation in full for an Assessor’s Parcel as described in Section 6.A below. “Price Point Consultant” means any consultant or firm of such consultants selected by CFD No. 2024-1 that (a) has substantial experience in performing price point studies for residential units within community facilities districts established under the Act or otherwise estimating or confirming pricing for residential units in such community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the pricing of residential units in such community facilities districts, (c) is in fact independent and not under the control of CFD No. 2024-1 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD No. 2024-1, (ii) the City, (iii) any owner of real property in CFD No. 2024-1, or (iv) any real property in CFD No. 2024-1, and (e) is not connected with CFD No. 2024-1 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 2024-1 or the City. “Price Point Study” means a price point study or a letter updating a previous price point study prepared by the Price Point Consultant pursuant to Section 3 herein. “Property Owner Association Property” means any Assessor’s Parcel within the boundaries of CFD No. 2024-1 owned in fee by a property owner association, including any master or sub-association. “Proportionately” or “Proportionate” means for Developed Property, that the ratio of the actual Special Tax A levy to the applicable Assigned Special Tax A or Backup Special Tax A is equal for all Assessor’s Parcels of Developed Property. For Approved Property, Provisional Property or Undeveloped Property, “Proportionately” means that the ratio of the actual Special Tax A levy per Acre to the Maximum Special Tax A per Acre is equal for all Assessor’s Parcels of Approved Property, Provisional Property or Undeveloped Property. “Proportionately” may similarly be applied to other categories of Taxable Property as listed in Section 4 below. “Provisional Property” means all Assessor’s Parcels of Public Property, Property Owner Association Property, Non-Residential Property or property that would otherwise be classified as Exempt Property pursuant to the provisions of Section 8 but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage as set forth in Section 8. “Public Property” means any property within the boundaries of CFD No. 2024-1, which is owned by, or irrevocably offered for dedication to the federal government, the State of California, the County, the City or any other public agency; provided however that any property owned by a public agency and leased to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. “Rate and Method” means this Rate and Method of Apportionment of Special Tax applicable to the property shown on the Boundary Map of CFD No. 2024-1. “Residential Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing one or more Residential Units. “Residential Unit” means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental, separate from adjacent residential dwelling units. “Services” means the services authorized to be funded, in whole or in part, by CFD No. 2024-1, as identified in the list of authorized services approved by the Resolution of Formation of CFD No. 2024-1 adopted by the Council when the CFD was formed. “Special Tax” means any special tax levied within CFD No. 2024-1 pursuant to the Act and this Rate and Method. “Special Tax A Obligation” means the total obligation of an Assessor’s Parcel of Taxable Property to pay the Special Tax A for the remaining term of Special Tax A pursuant to Section 7 below. “Special Tax Requirement for Facilities” means that amount required in any Fiscal Year to: (i) pay regularly scheduled Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding Bonds; (iii) pay a proportionate share of Administrative Expenses and other costs of CFD No. 2024-1, as applicable; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) accumulate funds to pay directly for Facilities, provided that the inclusion of such amount does not cause an increase in the Special Tax A to be levied on Approved Property, Undeveloped Property, or Provisional Property; and (vi) pay for reasonably anticipated Special Tax A delinquencies based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (vii) a credit for funds available to reduce the Special Tax A levy, as determined by the CFD Administrator pursuant to the Indenture. “Special Tax Requirement for Services” means that amount required in any Fiscal Year to: (i) pay directly for Services in the Calendar Year commencing in such Fiscal Year; (ii) pay a proportionate share of Administrative Expenses and other costs of CFD No. 2024-1, as applicable; (iii) pay for reasonably anticipated Special Tax B delinquencies based on the delinquency rate for Special Tax B levied in the previous Fiscal Year; less (iv) a credit for funds available to reduce the Special Tax B levy, as determined by the CFD Administrator. “State” means the State of California.
“Taxable Property” means all of the Assessor’s Parcels within the boundaries of CFD No. 2024-1, which are not exempt from the levy of the Special Taxes pursuant to law or Section 8 below. “Total Tax Burden” means for any Residential Unit, the annual Assigned Special Tax A and Maximum Special Tax B, together with ad valorem property taxes, special assessments, special taxes for any overlapping community facilities district, and any other taxes, fees, and charges which are levied and imposed on such Residential Unit and the real property on which it is located and collected by the County on ad valorem tax bills and which are secured by such Residential Unit and the real property on which it is located, assuming such Residential Unit had been completed, sold, and subject to such levies and impositions, excluding PACE Charges (or any other charge entered into voluntarily by the property owner) and service charges such as those related to sewer and trash. “Tract Map No. 20448” means City of Rialto Tract Map No. 20448 for condominium purposes. “Trustee” means the trustee or fiscal agent under the Indenture. “Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Approved Property, or Provisional Property.
2. LAND USE CLASSIFICATION
Each Fiscal Year, beginning with Fiscal Year 2024-2025, each Assessor’s Parcel within CFD No. 2024-1 shall be classified as Taxable Property or Exempt Property. In addition, all Taxable Property shall further be classified as Developed Property, Approved Property, Undeveloped Property or Provisional Property, and all such Taxable Property shall be subject to the levy of Special Taxes in accordance with this Rate and Method determined pursuant to Sections 3 and 4 below. Furthermore, each Assessor’s Parcel of Developed Property shall be assigned to a Land Use Class according to its land use type based on its Building Square Footage as applicable.
3. SPECIAL TAX RATES
Prior to the issuance of Bonds, CFD No. 2024-1 may select and engage a Price Point Consultant, and the CFD Administrator shall request the Price Point Consultant to prepare a Price Point Study setting forth the Minimum Sale Price of Residential Units within each Land Use Class of Residential Property. If, based upon such Price Point Study, the CFD Administrator calculates that the Total Tax Burden applicable to Residential Units within one or more Land Use Classes of Residential Property to be constructed within CFD No. 2024-1 exceeds 2.00% of the Minimum Sale Price of such Residential Units, the Assigned Special Tax A shall be reduced to the extent necessary to cause the Total Tax Burden applicable to Residential Units within such Land Use Class(es) not to exceed 2.00% of the Minimum Sale Price of such Residential Units. Each Assigned Special Tax A reduction for a Land Use Class shall be calculated by the CFD Administrator separately, and it shall not be required that such reduction be proportionate among Land Use Classes.
If the Assigned Special Tax A for any Land Use Class is reduced pursuant to the preceding paragraph, the CFD Administrator shall calculate a reduced Maximum Special Tax A for Undeveloped Property, Approved Property and Provisional Property as well as a reduced Backup Special Tax A for Developed Property. The revised Maximum Special Tax A shall be equal to the Maximum Special Tax A as set forth in Table 2 below, reduced by a percentage equal to the weighted average percentage reduction in the Assigned Special Tax A for all Land Use Classes of Residential Property. The weighted average percentage will be calculated by taking the sum of the products of the number of Residential Units constructed or expected to be constructed in each Land Use Class multiplied by the percentage change in the Assigned Special Tax A for each Land Use Class (or 0 for Land Use Classes that are not changing). This amount is then divided by the total number of Residential Units constructed or expected to be constructed and converted to a percentage. The reduced Maximum Special Tax A shall be used to compute the reduced Backup Special Tax A, as determined by the CFDF Administrator.
The Special Tax reductions, if required pursuant to this section, shall be reflected in an amended notice of Special Tax lien, which CFD No. 2024-1 shall cause to be recorded by executing a certificate in substantially the form attached herein as Exhibit B.
A. Assigned Special Tax A and Maximum Special Tax B for Developed Property The Assigned Special Tax A and Maximum Special Tax B applicable to an Assessor’s Parcel classified as Developed Property for the Base Year shall be determined pursuant to Table 1 below.
Table 1
Base Year Assigned Special Tax A and Maximum Special Tax B (Fiscal Year 2024-2025)
Land Use Class
Land Use Type
Building
Square Footage
Assigned
Special Tax A
Maximum
Special Tax B
1 Residential Property
Less than 1,500
$2,030 per Residential Unit
$448 per Residential Unit
2 Residential Property
1,500 to 1,615
$2,096 per Residential Unit
$448 per Residential Unit
3 Residential Property
1,616 to 1,730
$2,162 per Residential Unit
$448 per Residential Unit
4 Residential Property
1,731 to 1,845
$2,228 per Residential Unit
$448 per Residential Unit
5 Residential Property
1,846 to 1,960
$2,294 per Residential Unit
$448 per Residential Unit
6 Residential Property
1,961 to 2,075
$2,360 per Residential Unit
$448 per Residential Unit
7 Residential Property
2,076 to 2,190
$2,426 per Residential Unit
$448 per Residential Unit
8 Residential Property
Greater than 2,191
$2,492 per Residential Unit
$448 per Residential Unit
9 Multi-Family Property
N/A
$40,292 per Acre
$448 per Residential Unit
For each subsequent Fiscal Year following the Base Year, the Assigned Special Tax A in Table 1 above shall be increased by two percent (2%) of the amount in effect the prior Fiscal Year, and the Maximum Special Tax B shall be increased by the lesser of (i) the twelve month percentage change increase in the Consumer Price Index since the prior Fiscal Year or (ii) three percent (3%) of the amount in effect the prior Fiscal Year. In the event the Consumer Price Index is negative, there will be no change to the Maximum Special Tax B from the amount in effect the prior Fiscal Year.
B. Backup Special Tax A for Developed Property
Each Fiscal Year, each Assessor's Parcel of Developed Property shall be subject to a Backup Special Tax A. The Backup Special Tax A for an Assessor's Parcel of Developed Property, not classified as Multi-Family Property, within a Final Map shall be $2,505 per Residential Unit for Fiscal Year 2024-2025, subject to increases as described below. The Backup Special Tax A for Multi-Family Property shall be equal to the Assigned Special Tax A.
Each July 1, commencing July 1, 2025, the Backup Special Tax A shall be increased by two percent (2.00%) of the amount in effect the prior Fiscal Year.
C. Maximum Special Tax A for Developed Property
The Maximum Special Tax A for each Assessor’s Parcel of Developed Property shall be the greater of the Assigned Special Tax A for such Assessor’s Parcel of Developed Property or the Backup Special Tax A for such Assessor’s Parcel of Developed Property.
D. Maximum Special Tax A for Provisional Property, Approved Property and Undeveloped Property The Base Year Maximum Special Tax A for Provisional Property, Approved Property and Undeveloped Property shall be determined in accordance with Table 2 below. For each subsequent Fiscal Year following the Base Year, the Maximum Special Tax A rate for Provisional Property, Approved Property and Undeveloped Property shall be increased by two percent (2%) of the amount in effect the prior Fiscal Year.
Table 2
Base Year Maximum Special Tax A
Provisional Property, Approved Property and Undeveloped Property (Fiscal Year 2024-2025)
Maximum
Special Tax A
$40,292 per Acre
4. METHOD OF APPORTIONMENT
A. Special Tax A
For each Fiscal Year, commencing Fiscal Year 2024-2025, the CFD Administrator shall levy the Special Tax A on all Taxable Property in accordance with the following steps:
Step 1: The Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Developed Property up to 100% of the applicable Assigned Special Tax A; Step 2: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after Step 1 has been completed, the Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Approved Property in an amount up to 100% of the Maximum Special Tax A for Approved Property; Step 3: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after Step 2 has been completed, the Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property in an amount up to 100% of the Maximum Special Tax A for Undeveloped Property; Step 4: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax A amount determined in Step 1 shall be increased Proportionately on each Assessor’s Parcel of Developed Property in an amount up to 100% of the Maximum Special Tax A for such Assessor’s Parcel of Developed Property.
Step 5: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first four steps have been completed, then the Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Provisional Property in an amount up to 100% of the Maximum Special Tax A for Provisional Property.
In the event Building Permits have been issued prior to May 1st of the previous Fiscal Year for one or more Residential Units on a single Assessor’s Parcel, causing such Assessor’s Parcel to be classified as Developed Property, and the County has not yet assigned final Assessor’s Parcel Number(s) to such Residential Unit(s) in accordance with the Final Map applicable to such Assessor’s Parcel, the amount of the Special Tax A levy on such Assessor’s Parcel shall be determined as follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax A for such Assessor’s Parcel, based on the classification of such Assessor’s Parcel as Undeveloped Property; (2) the amount of the Special Tax A levy for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Developed Property Assigned Special Tax A rates and such amount shall be levied as Developed Property in accordance with Step 1 above; and (3) the amount of the Special Tax A on the Taxable Property in such Assessor’s Parcel not subject to the Special Tax A levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax A rate levied on all other Undeveloped Property pursuant to Step 2 above multiplied by the total of the amount determined in clause (1), less (B) the amount determined in clause (2).
Notwithstanding the above, under no circumstances will the Special Tax A levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased as a result of a delinquency or default in the payment of the Special Tax A applicable to any other Assessor’s Parcel within CFD No. 2024-1 by more than ten percent (10%) above what would have been levied in the absence of such delinquencies or defaults.
B. Special Tax B
For each Fiscal Year, commencing Fiscal Year 2024-2025, the CFD Administrator shall levy the Special Tax B Proportionately on all Assessor’s Parcels of Developed Property up to 100% of the applicable Maximum Special Tax B to satisfy the Special Tax Requirement for Services.
5. COLLECTION OF SPECIAL TAXES
Collection of the Special Taxes shall be made by the County in the same manner as ordinary ad valorem property taxes are collected and the Special Taxes shall be subject to the same penalties and the same lien priority in the case of delinquency as ad valorem taxes; provided, however, that the Council may provide for (i) other means of collecting the Special Taxes, including direct billings thereof to the property owners; and (ii) judicial foreclosure of delinquent Special Taxes.
6. PREPAYMENT OF SPECIAL TAX A OBLIGATION
A. Prepayment in Full
Property owners may prepay and permanently satisfy the Special Tax A Obligation by a cash settlement with the City as permitted under Government Code Section 53344. The following definitions apply to this Section 6. “Bond Index” means the national Bond Buyer Revenue Bond Index, commonly referenced as the 25-Bond Revenue Index. In the event the 25-Bond Revenue Index ceases to be published, the Bond Index used shall be based on a comparable index for revenue bonds maturing in 30 years with an average rating equivalent to Moody’s A1 and S&P’s A-plus, as reasonably determined by the City. “Bond Yield” means the yield of the last series of Bonds issued. For purposes of this calculation, the yield of the Bonds shall be the yield calculated at the time such Bonds are issued, pursuant to Section 148 of the Internal Revenue Code of 1986, as amended, for the purpose of the Non-Arbitrage (Tax) Certificate or another similar bond issuance document. “CFD Estimated Proceeds” means $14,258,464 or such lower number as (i) shall be determined by the CFD Administrator as the estimated aggregate net proceeds of all bonds for CFD No. 2024-1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds (except refunding bonds). “Construction Fund” means the fund (regardless of its name) established pursuant to the Indenture to hold funds, which are currently available for expenditure to acquire or construct the facilities or pay fees authorized to be funded by CFD No. 2024-1. “Future Facilities Costs” means the CFD Estimated Proceeds minus (i) costs previously paid from the Construction Fund to acquire or construct the facilities, (ii) monies currently on deposit in the Construction Fund, and (iii) monies currently on deposit in an escrow or other designated fund that are expected to be available to finance CFD Estimated Proceeds. “Outstanding Bonds” means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following the current Fiscal Year excluding Bonds to be redeemed at a later date with proceeds of prior Special Tax prepayments. “Present Value” means the net present value of a stream of Special Tax payments for a specific number of future Fiscal Years attributable to an Assessor’s Parcel, using as the discount rate either (i) the Bond Yield if Bonds have been issued, or (ii) the most recently published Bond Index if Bonds have not been issued. “Previously Issued Bonds” means all Bonds that have been issued prior to the date of prepayment.
The Special Tax A Obligation applicable to an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Property may be prepaid and the obligation to pay the Special Tax A for such Assessor’s Parcel permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor’s Parcel only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment and such prepayment does not reduce the aggregate value to lien ratio of remaining Developed Property below the aggregate value to lien ratio of Developed Property at the time of issuance of the latest Previously Issued Bonds or other requirements within the Indenture. An owner of an Assessor’s Parcel eligible to prepay the Special Tax A Obligation shall provide the CFD Administrator with written notice of intent to prepay and designate or identify the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the Prepayment Amount for such Assessor’s Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. Prepayment must be made at least sixty (60) days prior to any redemption date for the CFD No. 2024-1 Bonds to be redeemed with the proceeds of such prepaid Special Taxes, unless a shorter period is acceptable to the Trustee and the City.
The Prepayment Amount shall be calculated for each applicable Assessor’s Parcel or group of Assessor’s Parcels 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
plus Present Value of the Pay-Go Obligation
less Reserve Fund Credit
less Capitalized Interest 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 Parcel and other conditions of the Indenture are met.
2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax A for the Assessor’s Parcel as though all Assessor’s Parcels of Taxable Property within CFD No. 2024-1 have been built out. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax A for such 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, Undeveloped Property or Provisional Property for which a Building Permit has not been issued, compute the Maximum Special Tax A for the Assessor’s Parcel.
3. Divide the Maximum Special Tax A derived pursuant to paragraph 2 by the estimated total amount of Special Tax A that could be levied at build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax A for all such Assessor’s Parcels of Taxable Property not including any Parcels for which the Special Tax A 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 portion of the Future Facilities Costs applicable to 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 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.
10. Subtract the amount derived pursuant to paragraph 9 from the amount derived pursuant to paragraph 8 (the “Defeasance Amount”).
11. Verify the administrative fees and expenses associated with the prepayment, including 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 Special Tax A Obligation for the Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”).
12. Multiply the Maximum Special Tax A derived pursuant to paragraph 2 by nine percent (9%) (“Following Year Pay-Go Obligation”).
13. Subtract the number of years the Special Tax A has been levied (including the current Fiscal Year) from 30 (“Remaining Pay-Go Years”).
14. Compute the Present Value of a stream of payments starting with the Following Year Pay-Go Obligation and escalating that amount by two percent (2%) each year so that the total number of payments is equal to the Remaining Pay-Go Years calculated in paragraph 13 (“Present Value of Pay-Go Obligation”).
15. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve 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.
16. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 3 by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the “Capitalized Interest Credit”).
17. The amount to prepay the Special Tax A Obligation is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount, the Administrative Fees and Expenses and the Present Value of the Pay-Go Obligation, less the Reserve Fund Credit and the Capitalized Interest Credit.
18. 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 and the Present Value of the Pay-Go Obligation shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by CFD No. 2024-1.
The Prepayment Amount may be sufficient to redeem an amount other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to redeem Bonds to be used with the next prepayment of Bonds.
The CFD Administrator will confirm that all previously levied Special Taxes have been paid in full. With respect to any Assessor’s Parcel for which the Special Tax A Obligation is prepaid in full, once the CFD Administrator has confirmed that all previously levied Special Taxes have been paid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax A and the release of the Special Tax A lien on such Assessor’s Parcel, and the obligation of the owner of such Assessor’s Parcel to pay the Special Tax A shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the aggregate amount of Maximum Special Tax A less Administrative Expenses that may be levied on Taxable Property after the proposed prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal Year.
B. Partial Prepayment
The Special Tax A for an Assessor’s Parcel of Developed Property, Approved Property, or Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section 6.A.; except that a partial prepayment shall be calculated according to the following formula:
PP = (PE-A) x F+A
These terms have the following meaning:
PP = the partial prepayment
PE = the Prepayment Amount calculated according to Section 6.A F = the percentage by which the owner of the Assessor’s Parcel(s) is partially prepaying the Special Tax A Obligation A = the Prepayment Administrative Fees and Expenses from Section 6.A The owner of any Assessor’s Parcel who desires such partial prepayment shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Special Tax A Obligation, (ii) the percentage by which the Special Tax A Obligation shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax A Obligation for an Assessor’s Parcel within sixty (60) days of the request and may charge a reasonable fee for providing this service.
With respect to any Assessor’s Parcel for which the Special Tax A is partially prepaid, the City shall (i) distribute the funds remitted to it according to Section 6.A., and (ii) indicate in the records of CFD No. 2024-1 that there has been a partial prepayment of the Special Tax A Obligation and that a portion of the Special Tax with respect to such Assessor’s Parcel, equal to the outstanding percentage (1.00 - F) of the Maximum Special Tax A, shall continue to be levied on such Assessor’s Parcel.
Notwithstanding the foregoing, no partial prepayment shall be allowed unless the aggregate amount of Maximum Special Tax A less Administrative Expenses that may be levied on Taxable Property after the proposed partial prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal Year.
The Special Tax B cannot be prepaid.
7. TERM OF SPECIAL TAX
The Special Tax A shall be levied as long as necessary to meet the Special Tax Requirement for Facilities for a period not to exceed fifty (50) Fiscal Years commencing with Fiscal Year 2024-2025, provided however that the Special Tax may cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined that all required interest and principal payments on all Outstanding Bonds have been paid.
The Special Tax B shall be levied in perpetuity as necessary to satisfy the Special Tax Requirement for Services.
8. EXEMPTIONS
The CFD Administrator shall classify as Exempt Property (i) Assessor’s Parcels of Public Property, (ii) Assessor’s Parcels of Property Owner Association Property, or (iii) 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, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, and (v) Assessor’s Parcels classified as Non-Residential Property as determined reasonably by the CFD Administrator, provided that no such classification would reduce the Acreage of Taxable Property of CFD No. 2024-1 to less than the Acreage amount listed in Table 3 below.
TABLE 3
MINIMUM TAXABLE ACRES
Acres
26.67 Assessor’s Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of Taxable Property to less than the Acreage shown in Table 3 shall be classified as Provisional Property and will continue to be subject to the CFD No. 2024-1 Special Taxes accordingly. Tax exempt status for the purpose of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes eligible for classification as Exempt Property, except for Non-Residential Property, which will be assigned tax exempt status only after all other eligible property types have been classified as Exempt Property.
If the use of an Assessor’s Parcel of Exempt Property changes so that such Assessor’s Parcel is no longer classified as one of the uses set forth in the first paragraph of Section 8 above that would make such Assessor’s Parcel eligible to be classified as Exempt Property, such Assessor’s Parcel shall cease to be classified as Exempt Property and shall be deemed to be Taxable Property.
9. APPEALS
Any landowner who pays the Special Tax and claims the amount of the Special Tax levied on his or her Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error not later than thirty-six (36) months after first having paid the first installment of the Special Tax that is disputed. If following such consultation, the CFD Administrator determines that an error has occurred, then the CFD Administrator shall take any of the following actions, in order of priority, in order to correct the error:
(i) Amend the Special Tax levy on the landowner’s Assessor’s Parcel(s) for the current Fiscal Year prior to the payment date, (ii) Require the CFD to reimburse the landowner for the amount of the overpayment to the extent of available CFD funds, or (iii) Grant a credit against, eliminate or reduce the future Special Taxes on the landowner’s Assessor’s Parcel(s) in the amount of the overpayment If following such consultation and action by the CFD Administrator the landowner believes such error still exists, such person may file a written notice of appeal with the Council. Upon the receipt of such notice, the Council or designee may establish such procedures as deemed necessary to undertake the review of any such appeal. If the Council or designee determines an error still exists, the CFD Administrator shall take any of the actions described as (i), (ii) and (iii) above, in order of priority, in order to correct the error.
10. INTERPRETATIONS
The Council or designee thereof shall interpret this Rate and Method for purposes of clarifying any ambiguities and make determinations relative to the administration of the Special Tax and any landowner appeals. The decision of the Council or designee shall be final.
EXHIBIT A
CERTIFICATE OF MODIFICATION OF SPECIAL TAX
(PAGE 1 OF 4)
CITY OF RIALTO CFD NO. 2024-1 CERTIFICATE
1. Pursuant to Section 3 of the Rate and Method of Apportionment of Special Tax for City of Rialto Community Facilities District No. 2024-1 (Renaissance) (“CFD No. 2024-1”), the Assigned Special Tax A for Residential Property within CFD No. 2024-1 has been modified.
The information in Table 1 relating to the Assigned Special Tax A for Developed Property within CFD No. 2024-1, as stated in Section 3.A. of the Rate and Method of Apportionment, has been modified as follows:
CERTIFICATE OF MODIFICATION OF SPECIAL TAX
(PAGE 2 OF 4)
Table 1
Base Year Assigned Special Tax A
(Fiscal Year [ - ])
Land Use Class
Land Use Type
Building
Square Footage
Assigned
Special Tax A
Maximum
Special Tax B
1 Residential Property
Less than 1,500
$_____ per Residential Unit
$___ per Residential Unit
2 Residential Property
1,500 to 1,615
$_____ per Residential Unit
$___ per Residential Unit
3 Residential Property
1,616 to 1,730
$_____ per Residential Unit
$___ per Residential Unit
4 Residential Property
1,731 to 1,845
$_____ per Residential Unit
$___ per Residential Unit
5 Residential Property
1,846 to 1,960
$_____ per Residential Unit
$___ per Residential Unit
6 Residential Property
1,961 to 2,075
$_____ per Residential Unit
$___ per Residential Unit
7 Residential Property
2,076 to 2,190
$_____ per Residential Unit
$___ per Residential Unit
8 Residential Property
Greater than 2,191
$_____ per Residential Unit
$___ per Residential Unit
9 Multi-Family Property
N/A
$______ per Acre
$___ per Residential Unit
B. Backup Special Tax A for Developed Property
Each Fiscal Year, each Assessor's Parcel of Developed Property shall be subject to a Backup Special Tax A. The Backup Special Tax A for an Assessor's Parcel of Developed Property, not classified as Multi-Family Property, within a Final Map shall be $____ per Residential Unit for Fiscal Year 20__-20__, subject to increases as described below. The Backup Special Tax A for Multi-Family Property shall be equal to the Assigned Special Tax A.
Each July 1, commencing July 1, 2025, the Backup Special Tax A shall be increased by two percent (2.00%) of the amount in effect the prior Fiscal Year.
CERTIFICATE OF MODIFICATION OF SPECIAL TAX
(PAGE 3 OF 4)
Table 2
Base Year Maximum Special Tax A
Provisional Property, Approved Property and Undeveloped Property (Fiscal Year [ - ])
Maximum
Special Tax A
$[ ] per Acre
2. Special Tax A may only be modified prior to the first issuance of CFD No. 2024-1 Bonds.
3. Upon execution of this certificate by CFD No. 2024-1, CFD No. 2024-1 shall cause an amended notice of Special Tax lien for CFD No. 2024-1 to be recorded reflecting the modifications set forth herein.
CERTIFICATE OF MODIFICATION OF SPECIAL TAX
(PAGE 4 OF 4)
By execution hereof, the undersigned acknowledge, on behalf of the City and CFD No. 2024-1, receipt of this certificate and modification of the Rate and Method of Apportionment of Special Tax as set forth in this certificate.
CITY OF RIALTO COMMUNITY FACILITIES DISTRICT NO. 2024-1 (RENAISSANCE) By:_________________________________ Date:______________________ -11-
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