Agenda packet — Mayor and City Council, October 5, 2022 (part 2 of 4)

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RESOLUTION NO. 2022-217

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

DETERMINING THE NECESSITY TO INCUR A BONDED

INDEBTEDNESS FOR COMMUNITY FACILITIES
DISTRICT NO. 2022-1 (HIGHLAND/MEDICAL),

SUBMITTING TO THE QUALIFIED ELECTORS OF THE

COMMUNITY FACILITIES DISTRICT A PROPOSITION

TO AUTHORIZE THE LEVY OF A SPECIAL TAX

THEREIN, TO AUTHORIZE SUCH COMMUNITY

FACILITIES DISTRICT TO INCUR A BONDED

INDEBTEDNESS SECURED BY THE LEVY OF A SPECIAL

TAX THEREIN TO FINANCE CERTAIN TYPES OF

PUBLIC FACILITIES AND TO ESTABLISH AN

APPROPRIATIONS LIMIT FOR SUCH COMMUNITY

FACILITIES DISTRICT AND CALLING A SPECIAL

ELECTION FOR THE COMMUNITY FACILITIES

DISTRICT ON A PROPOSITION FOR INCURRING SUCH

BONDED INDEBTEDNESS
WHEREAS, on July 20, 2022, the City Council (the “City Council”) of the City of San Bernardino (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the “Act”), adopted Resolution No. 2022-142 declaring the necessity for Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California (“CFD No. 2022-1”), to incur a bonded indebtedness for the purpose of providing and financing the acquisition, design, construction of local and regional circulation systems, storm drain improvements, parkland and open space, and sewer and water improvements (the “Facilities”), which are necessary to meet increased demands placed upon the City as a result of development which will occur within CFD No. 2022-1, and calling a public hearing on the proposed indebtedness for September 7, 2022; and
WHEREAS, on August 17, 2022, the City Council adopted a Resolution Amending and Supplementing the Resolution Declaring Necessity to amend the date of the public hearing on the proposed indebtedness for CFD No. 2022-1 from September 7, 2022 to October 5, 2022; and WHEREAS, notice was published and mailed to the owner of all of the property in CFD No. 2022-1 relative to the intention of the City Council to establish CFD No. 2022-1, to incur a bonded indebtedness for CFD No. 2022-1the levy of special taxes therein, the provision of public facilities therein, and of the time and place of the public hearing; and WHEREAS, on October 5, 2022, at the time and place of the hearing and the notice thereof, the City Council conducted the public hearing and afforded all persons interested,

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including persons owning property within CFD No. 2022-1, an opportunity to be heard on the proposed authorization to incur bonded indebtedness, and no protests were received; and WHEREAS, on October 5, 2022, at the conclusion of the hearing, the City Council adopted the resolution of formation pursuant to Section 53325.1(a) of the Act (the “Resolution of Formation”), establishing CFD No. 2022-1; and
WHEREAS, the City Clerk has advised the City Council that she has received a statement from the Registrar of Voters of the County of San Bernardino that there are no persons registered to vote in the territory of CFD No. 2022-1; and WHEREAS, the City Council has determined that it is necessary that a bonded indebtedness for CFD No. 2022-1 be incurred to contribute to the financing of all or a portion of the Facilities and to authorize the submittal of a proposition to the qualified electors of CFD No. 2022-1, being the landowner of CFD No. 2022-1, all as authorized by the Act;

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. Necessity. It is necessary for CFD No. 2022-1 to incur a bonded indebtedness as authorized under the terms and provisions of the Act for the purpose of providing and financing the Facilities.

SECTION 2. Purpose for Bonded Indebtedness. The specific purposes for the proposed bonded indebtedness is to contribute to the financing of the acquisition or construction of the Facilities.

SECTION 3. Territory to Pay for Bonded Indebtedness. The property within CFD No. 2022-1 will pay for the bonded indebtedness.

SECTION 4. Bond Authorization. The amount of the bonded indebtedness of CFD No. 2022-1 may include all costs and estimated costs incidental to, or connected with, the accomplishment of the purpose for which the indebtedness is to be incurred as authorized pursuant to the Act. The amount of the indebtedness to be authorized for CFD No. 2022-1 is $5,000,000.

SECTION 5. Costs Included. The amount of the bonded indebtedness shall include all costs and estimated costs incidental to, or connected with, the accomplishment of the purposes for which the bonded indebtedness is to be incurred, including, but not limited to, the estimated costs of construction and acquisition of the Facilities, acquisition of land and rights-of-way, satisfaction of contractual obligations relating to expenses or the advancement of funds for expenses existing at the time the bonds are issued, architectural, inspection, legal, fiscal and financial consultant fees, bond and other reserve funds and interest on any bonds of CFD No. 2022-1 estimated to be due and payable within two years from the date of the issuance of such bonds, election costs, and all costs of issuance of the bonds, including, but not limited to, underwriter's discount, fees for bond counsel, disclosure counsel, appraisers, financial advisors,

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market absorption consultants and other consultants, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other credit enhancement costs, and printing costs.

SECTION 6. Terms of Bonds. The maximum term of the bonds and/or any series shall not exceed 40 years, and such bonds may be issued in differing series, at differing times. The maximum rate of interest to be paid on the bonds shall not exceed 12 percent per annum or the maximum interest rate permitted by law at the time of sale of any of such bonds. The bonds, except where other funds are made available, shall be paid exclusively from the annual levy of the special tax within CFD No. 2022-1, and are not secured by any other taxing power or the City.

SECTION 7. Proposition to be Submitted to Voters. The proposition to be submitted to the voters within CFD No. 2022-1 with respect to the proposed bonded indebtedness shall be as follows:

PROPOSITION B:

Shall Community Facilities District No. 2022-1
(Highland/Medical) of the City of San Bernardino, subject to accountability measures required pursuant to Government Code Sections 53410 and 53411, incur a bonded indebtedness in an amount not to exceed $5,000,000 for the specific purposes set forth in the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022?
SECTION 8. Election. The date of the special election with respect to the incurring of the aforementioned bonded indebtedness for CFD No. 2022-1, at which time the proposition set forth in Section 5 hereof shall be submitted to the appropriate qualified voters of CFD No. 2022- 1 is October 5, 2022, and that special election is hereby called for that date. Pursuant to Section 53326 of the Act, since at the time of the close of the public hearing, and for at least the preceding 90 days, less than 12 persons have been registered to vote within the territory of CFD No. 2022-1, the vote in the special election will be by the landowners of CFD No. 2022-1 whose property would be subject to the special taxes if they were levied at the time of the election, with each landowner of record at the close of the public hearing having one vote for each acre or portion of an acre of land that he or she owns within CFD No. 2022-1, and the special election shall be conducted by the City Clerk (the “City Clerk”). The special election shall be consolidated with the special election with respect to the propositions regarding (i) the levy of special taxes within CFD No. 2022-1 for the payment of the principal of and interest on the bonds to finance the acquisition or construction of all or a portion of the Facilities, and (ii) establishing an appropriations limit for CFD No. 2022-1 which has also been called for October 5, 2022. The consolidated special elections shall be conducted by the City Clerk pursuant to applicable provisions of the California Elections Code with respect to mail-ballot elections of cities and specifically Division 4 (commencing with Section 4000) of that Code, insofar as they may be applicable. Pursuant to Section 53326 of the Act, the official ballots shall be delivered by

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the City Clerk to the qualified electors by mail or personal service. The voted official ballots shall be received by the City Clerk by 7:00 p.m. on the date of the election; provided that if all qualified electors have voted, the election shall be closed with the concurrence of the City Clerk.

SECTION 9. Accountability Measures. Pursuant to and in compliance with Section 53410 of the Act, if the voters approve the proposition contained in the official ballots for the consolidated special elections with respect to CFD No. 2022-1 incurring bonded indebtedness for the purposes for which such indebtedness by CFD No. 2022-1, is to be incurred and bonds of CFD No. 2022-1 are to be issued (the “Bond Proposition”), the incurring of such bonded indebtedness and the issuance of bonds of CFD No. 2022-1 shall be subject to the following accountability measures:
(a) the Bond Proposition shall identify the specific purposes for which the bonds are to be issued;
(b) the proceeds of the bonds shall be applied only for the specific purposes identified in the Bond Proposition;
(c) an account or accounts shall be created pursuant to the fiscal agent agreement for such bonds into which the proceeds of the sale of such bonds shall be deposited; and (d) the City Manager or his designee shall file a report with the City Council as required by Section 53411 of the California Government Code.

The City Council finds that the Bond Proposition which will be set forth in the official ballot for the consolidated special elections, and which is set forth in Section 5 hereof, identifies the specific purposes for which CFD No. 2022-1 will incur bonded indebtedness and issue bonds.

SECTION 10. CEQA. The City Council finds this Resolution is not subject to the California Environmental Quality Act (“CEQA”) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 11. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 12. Effective Date. This Resolution shall become effective immediately.

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APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 5th day of October, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, City Clerk
Attest:

Sonia R. Carvalho, City Attorney

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Resolution No. 2022-___
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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-217 adopted at a regular meeting held on the 5 day of September, 2022 by the following vote:

Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ _____ _____ _______ _______
IBARRA _____ _____ _______ _______
FIGUEROA _____ _____ _______ _______
SHORETT _____ _____ _______ _______
REYNOSO _____ _____ _______ _______
CALVIN _____ _____ _______ _______
ALEXANDER _____ _____ _______ _______
WITNESS my hand and official seal of the City of San Bernardino this ____ day of __________, 2022.
______________________________
Genoveva Rocha, City Clerk

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Resolution No. 2022-218
RESOLUTION NO. 2022-218

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA

CALLING A SPECIAL ELECTION AND SUBMITTING TO

THE VOTERS OF COMMUNITY FACILITIES DISTRICT
NO. 2022-1 (HIGHLAND/MEDICAL) OF THE CITY OF

SAN BERNARDINO PROPOSITIONS REGARDING THE

ANNUAL LEVY OF SPECIAL TAXES WITHIN THE

COMMUNITY FACILITIES DISTRICT TO PAY

PRINCIPAL OF AND INTEREST ON BONDS THEREOF

AND TO PAY THE COSTS OF PUBLIC FACILITIES AND

ESTABLISHING AN APPROPRIATIONS LIMIT

THEREFOR
WHEREAS, pursuant to Section 53325.1 of the California Government Code, the City Council (the “City Council”) of the City of San Bernardino (the “City”) has adopted the resolution of formation of Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California (“CFD No. 2022-1”), establishing the Community Facilities District and the boundaries thereof (the “Resolution of Formation”); and
WHEREAS, pursuant to Section 53351 of the California Government Code, the City Council has also adopted a resolution determining that it is necessary that CFD No. 2022-1 incur a bonded indebtedness for the purpose of financing certain public facilities; and WHEREAS, by that resolution, the City Council called a special election on the proposition to be submitted to the voters with respect to CFD No. 2022-1 incurring a bonded indebtedness for the purpose of financing such public facilities; and WHEREAS, pursuant to Section 53326 of the California Government Code, it is necessary that the City Council also submit to the voters of CFD No. 2022-1 the proposition relating to the annual levy of special taxes on taxable property within CFD No. 2022-1 to pay the principal of and interest on the bonds thereof, if such bonds are authorized and issued; and WHEREAS, pursuant to Section 53325.7 of the California Government Code, the City Council may also submit to the voters of CFD No. 2022-1 a proposition with respect to establishing an appropriations limit for CFD No. 2022-1; and WHEREAS, the City Clerk (the “City Clerk”) has advised the City Council that she has received a statement from the Registrar of Voters of the County of San Bernardino that there are no persons registered to vote in the territory of CFD No. 2022-1.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. Findings. The City Council finds that: (i) the foregoing recitals are true and correct; (ii) 12 persons have not been registered to vote within the territory of CFD No.

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4 2022-1 for each of the 90 days preceding the close of the public hearing on October 5, 2022; (iii) pursuant to Section 53326 of the California Government Code, as a result of the findings set forth in clause (ii) above, the vote in the special election called by this resolution shall be by the landowners of CFD No. 2022-1 whose property would be subject to the special taxes if they were levied at the time of the election, and each landowner shall have one vote for each acre, or portion thereof, which he or she owns within CFD No. 2022-1 which would be subject to the proposed special taxes if they were levied at the time of the election; (iv) the owner of all of the property in CFD No. 2022-1 has by written consent (a) waived the time limits set forth in Section 53326 of the California Government Code for holding the election called by this resolution and the election on the proposition of CFD No. 2022-1 incurring bonded indebtedness, which pursuant to Section 4 hereof is consolidated with the election called hereby, (b) consented to the holding of the consolidated special elections on October 5, 2022, (c) waived notice and mailed notice of the time and date of the consolidated special elections, and (d) waived an impartial analysis of the ballot propositions pursuant to Section 9313 or 13119 of the California Elections Code and arguments and rebuttals pursuant to Sections 9314 to 9317, inclusive, mailing of a statement pursuant to Section 9401 of that Code and receipt of a ballot pamphlet as required by Section 3023 of that Code; and (v) the City Clerk has consented to the holding of the consolidated special elections on October 5, 2022.

SECTION 2. Call of Election. The City Council hereby calls and schedules special elections for October 5, 2022, within and for CFD No. 2022-1 on (i) the proposition with respect to the annual levy of special taxes on taxable property within CFD No. 2022-1 for the payment of principal of and interest on the bonds of CFD No. 2022-1, which may be issued and sold to finance certain public facilities, and (ii) the proposition with respect to establishing an appropriations limit for CFD No. 2022-1.

SECTION 3. Propositions.

The propositions to be submitted to the voters of CFD No. 2022-1 at such special election shall be as follows:

First Proposition: Shall Proposition A authorizing the levy of special taxes annually on taxable property within CFD No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California, to pay the principal of and interest on the bonds of the community facilities district which may be issued and sold for the purposes specified in the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022 (the “Resolution of Formation”), to replenish the reserve fund for the bonds, or to accumulate funds for future bond payments, including any amount required by federal law to be rebated to the United States with regard to the bonds, and to pay expenses incidental thereto, and to the levy and collection of the special tax, so long as the special tax is needed to pay the principal of and interest on the bonds and for such other purposes, at the special tax rates and pursuant to the method of apportioning the special tax set forth in Exhibit “A” to the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022 be approved?

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4 Third Proposition: Shall Proposition C authorizing an annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution, in the amount of $5,000,000 be approved?
SECTION 4. Consolidation of Elections. The special election called hereby on the propositions to be submitted to the voters of CFD No. 2022-1, as set forth in Section 3 hereof, shall be consolidated with the special election on the proposition of CFD No. 2022-1 incurring bonded indebtedness. The ballot for said consolidated elections shall be in the form attached hereto as Exhibit A.

SECTION 5. Conduct of Election. Except as otherwise provided in Section 6 hereof, the consolidated special elections shall be conducted by the City Clerk in accordance with the provisions of the California Elections Code governing mail ballot elections of cities, and in particular the provisions of Division 4 (commencing with Section 4000), of that Code, insofar as they may be applicable.

SECTION 6. Election Procedures. The procedures to be followed in conducting the consolidated special elections on (i) the proposition with respect to CFD No. 2022-1 incurring a bonded indebtedness, (ii) the proposition with respect to the levy of special taxes on taxable property within CFD No. 2022-1 to pay the principal of and interest on the bonds of CFD No. 2022-1, and (iii) the proposition with respect to establishing an appropriations limit for CFD No. 2022-1 in the amount of $5,000,000 (the “Consolidated Special Elections”) shall be as follows:
(a) Pursuant to Section 53326 of the California Government Code, ballots for the Consolidated Special Elections shall be distributed to the qualified electors by the City Clerk by mail or personal service.
(b) Pursuant to applicable sections of the California Elections Code governing the conduct of mail ballot elections of cities, and in particular Division 4 (commencing with Section 4000) of that Code with respect to elections conducted by mail, the City Clerk shall mail or deliver to each qualified elector an official ballot in the form attached hereto as Exhibit “A,” and shall also mail or deliver to all such qualified electors a ballot pamphlet and instructions to voter, including a sample ballot identical in form to the official ballot but identified as a sample ballot, a return identification envelope with prepaid postage thereon addressed to the City Clerk for the return of voted official ballots and a copy of the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022. (c) The official ballot to be mailed or delivered by the City Clerk to each landowner- voter shall have printed or typed thereon the name of the landowner-voter and the number of votes to be voted by the landowner-voter and shall have appended to it a certification to be signed by the person voting the official ballot which shall certify that the person signing the certification is the person who voted the official ballot, and if the landowner-voter is other than a natural person, that he or she is an officer of or other person affiliated with the landowner-voter entitled to vote such official ballot, that he or she has been authorized to vote such official ballot on behalf of the landowner-voter, that in voting such official ballot it was his or her intent, as well as the intent of the landowner-voter, to vote all votes to which the landowner-voter is entitled based on its land ownership on the propositions set forth in the official ballot as marked

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4 thereon in the voting square opposite each such proposition, and further certifying as to the acreage of the landowner-voter’s land ownership within CFD No. 2022-1. (d) The return identification envelope to be mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the following: (i) the name of the landowner, (ii) the address of the landowner, (iii) a declaration under penalty of perjury stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, (iv) the printed name and signature of the voter, (v) the address of the voter, (vi) the date of signing and place of execution of the declaration, and (vii) a notice that the envelope contains an official ballot and is to be opened only by the City Clerk.
(e) The instruction to voter form to be mailed or delivered by the City Clerk to the landowner-voters shall inform them that the official ballots shall be returned to the City Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon properly inserted by 7:00 p.m. on the date of the Consolidated Special Elections; provided that if all qualified electors have voted, the elections shall be closed with the concurrence of the City Clerk. (f) Upon receipt of the return identification envelopes which are returned prior to the voting deadline on the date of the elections, the City Clerk shall canvass the votes cast in the Consolidated Special Elections, and shall file a statement with the City Council as to the results of such canvass and the election on each proposition set forth in the official ballot.

SECTION 7. Accountability Measures. Pursuant to Section 53410 of the California Government Code, if the voters approve the proposition contained in the official ballot for the Consolidated Special Elections with respect to CFD No. 2022-1 incurring bonded indebtedness for the purposes for which such indebtedness is to be incurred (the “Bond Proposition”) and bonds of CFD No. 2022-1 are to be issued, the incurring of such bonded indebtedness and the issuance of bonds of CFD No. 2022-1 shall be subject to the following accountability measures:
(a) The Bond Proposition shall identify the specific purposes for which the bonds are to be issued;
(b) The proceeds of the bonds shall be applied only for the specific purposes identified in the Bond Proposition;
(c) An account or accounts shall be created pursuant to the fiscal agent agreement for such bonds into which the proceeds of the sale of such bonds shall be deposited; and (d) The City Manager of the City or his designee, shall file a report with the City Council which shall contain the information required by Section 53411 of the California Government Code.

The City Council finds that the Bond Proposition which is set forth in the official ballot for the consolidated special elections, which is attached as Exhibit “A” hereto, identifies the specific purposes for which CFD No. 2022-1 will incur bonded indebtedness and issue bonds.

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4 SECTION 8. CEQA. The City Council finds this Resolution is not subject to the California Environmental Quality Act (“CEQA”) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 9. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 10. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 5th day of October, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, City Clerk
Attest:

Sonia R. Carvalho, City Attorney

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4 CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-218, adopted at a regular meeting held on the 5th day of October, 2022 by the following vote:

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A-1

EXHIBIT A

OFFICIAL BALLOT

CONSOLIDATED SPECIAL ELECTIONS FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (HIGHLAND/MEDICAL)

OF THE CITY OF SAN BERNARDINO

COUNTY OF SAN BERNARDINO

STATE OF CALIFORNIA
October 5, 2022
To vote, mark a cross (+ or x) in the voting square after the word “YES” or after the word “NO”. All marks otherwise made are forbidden.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk and obtain another.

PROPOSITION A: Shall Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California, subject to accountability measures required pursuant to Government Code Section 50075.1 levy a special tax annually on taxable property within Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California, to pay the principal of and interest on the bonds of the community facilities district which may be issued and sold for the purposes specified in the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022 (the “Resolution of Formation”), to replenish the reserve fund for the bonds, or to accumulate funds for future bond payments, including any amount required by federal law to be rebated to the United States with regard to the bonds, and to pay expenses incidental thereto, and to the levy and collection of the special tax, so long as the special tax is needed to pay the principal of and interest on the bonds and for such other purposes, at the special tax rates and pursuant to the method of apportioning the special tax set forth in Exhibit A to the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022?
YES
NO
PROPOSITION B: Shall Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California, subject to accountability measures required pursuant to Government Code Sections 53410 and 53411, incur a bonded indebtedness in an amount not to exceed $5,000,000 for the specific purposes set forth in the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022? YES
NO

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PROPOSITION C: Shall Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California establish an annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution, in the amount of $5,000,000?
YES
NO

PROPOSITION A IS SUBJECT TO THE ACCOUNTABILITY MEASURES PRESCRIBED IN SECTION 50075 OF THE GOVERNMENT CODE OF THE STATE OF CALIFORNIA.

PROPOSITION B IS SUBJECT TO THE ACCOUNTABILITY MEASURES PRESCRIBED IN SECTIONS 53410 AND 53411 OF THE GOVERNMENT CODE OF THE STATE OF CALIFORNIA.

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Resolution No. 2022-219
RESOLUTION NO. 2022-219

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA

DECLARING THE RESULTS OF THE CONSOLIDATED

SPECIAL ELECTIONS WITHIN COMMUNITY
FACILITIES DISTRICT NO. 2022-1
(HIGHLAND/MEDICAL)
WHEREAS, on October 5, 2022, the City Council (the “City Council”) of the City of San Bernardino (the “City”) adopted a resolution determining the necessity for Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California (the “CFD No. 2022-1”), to incur a bonded indebtedness for CFD No. 2022-1 for the purposes of providing certain public facilities and calling a special election for CFD No. 2022-1 on the proposition for incurring such bonded indebtedness for October 5, 2022, and providing for the consolidation of said election with the election on the propositions with respect to (i) the annual levy of special taxes on taxable property within CFD No. 2022-1 to pay principal of and interest on such bonds, and (ii) establishing an appropriations limit for CFD No. 2022-1; and
WHEREAS, on October 5, 2022, the City Council also adopted a resolution calling a special election for October 5, 2022, for submitting to the qualified electors of CFD No. 2022-1 the proposition with respect to the annual levy of special taxes on taxable property within CFD No. 2022-1 to pay the principal of and interest on the bonds thereof and the proposition with respect to establishing an appropriations limit for CFD No. 2022-1, and providing for the consolidation of that election with the election on the proposition of CFD No. 2022-1 incurring a bonded indebtedness (the “Election Resolution”); and
WHEREAS, the City Council has received a statement from the City Clerk (the “City Clerk”), who pursuant to the Election Resolution was authorized to conduct the consolidated special elections for CFD No. 2022-1 and act as the election official therefor, with respect to the canvass of the ballot returned and the results of the consolidated special election, certifying that more than two-thirds of the votes cast upon the propositions submitted to the voters in the consolidated special election in CFD No. 2022-1 were cast in favor of all such propositions.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. Findings. The City Council finds that: (i) there were no persons registered to vote within the boundaries of CFD No. 2022-1 at the time of the close of the protest hearing on October 5, 2022, and pursuant to Section 53326 of the California Government Code (“Section 53326”) the vote in the consolidated special elections for CFD No. 2022-1 was, therefore, to be by the landowners owning land within CFD No. 2022-1, with each landowner having one vote for each acre or portion of an acre of land that he or she owned within CFD No. 2022-1 which would have been subject to the special tax if levied at the time of the consolidated special elections; (ii) pursuant to Section 53326 and the Election Resolution, the City Clerk distributed the ballot for the consolidated special elections to PI Properties, LLC, the owner of all of the

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5 taxable property included within the boundaries of CFD No. 2022-1 (the “Property Owner”) by mail or personal delivery; (iii) the Property Owner waived the time limits for holding the consolidated special elections and the election dates specified in Section 53326, and consented to the calling and holding of the consolidated special elections on October 5, 2022; (iv) the consolidated special elections have been properly conducted in accordance with all statutory requirements and the provisions of the Election Resolution; (v) pursuant to Section 53326, the Property Owner, which owns approximately 10.10 acres in CFD No. 2022-1, was entitled to a total of 11 votes; (vi) the ballot was returned by the Property Owner to the City Clerk prior to the hour on the date of the election specified by the City Council for the return of the voted ballot; (vii) the ballot returned to the City Clerk by the Property Owner voted all votes to which it was entitled in favor of all propositions set forth therein; (viii) more than two-thirds of the votes cast in the consolidated special elections in CFD No. 2022-1, on each such proposition were cast in favor thereof, and pursuant to Sections 53328, 53329 and 53355 of the California Government Code, all such propositions carried; (ix) the City Council, as the legislative body of CFD No. 2022-1, is therefore authorized to take the necessary action to have CFD No. 2022-1 incur a bonded indebtedness in an amount not to exceed $5,000,000, to annually levy special taxes on taxable property within CFD No. 2022-1, in an amount sufficient to pay the principal of and interest on such bonds, and (x) an appropriations limit for CFD No. 2022-1 has been established in the amount of $5,000,000.

SECTION 2. Declaration of Results. All votes voted in the consolidated special elections on the propositions with respect to (i) CFD No. 2022-1 incurring a bonded indebtedness in an amount not to exceed $5,000,000; (ii) the annual levy of special taxes on taxable property within CFD No. 2022-1 to pay the principal of and interest on the bonds of CFD No. 2022-1; and (iii) establishing an appropriations limit for CFD No. 2022-1 in the amount of $5,000,000 were voted in favor thereof, and all such propositions carried. The aggregate principal amount of the bonded indebtedness to be incurred by CFD No. 2022-1 shall not exceed $5,000,000.

SECTION 3. Effect of Elections. The effect of the results of the consolidated special elections, as specified in Section 2 hereof, is that the City Council, as the legislative body of CFD No. 2022-1, is authorized (i) to have CFD No. 2022-1 incur a bonded indebtedness in and for the purposes set forth in Proposition A of the Official Ballot for the consolidated special elections for CFD No. 2022-1; (ii) after CFD No. 2022-1 has incurred a bonded indebtedness and issued bonds therefor, to annually levy special taxes on taxable property within CFD No. 2022-1 in an amount sufficient to pay the principal of and interest on such bonds at the special tax rates and pursuant to the methodology for determining and apportioning such special taxes which are set forth in Exhibit A to the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022; and (iii) an appropriations limit has been established for CFD No. 2022-1 in the amount of $5,000,000.

SECTION 4. Notice of Special Tax Lien. The City Clerk shall record a notice of special tax lien pursuant to Section 53328.3 of the California Government Code and Section 3114.5 of the California Streets and Highways Code.

SECTION 5. CEQA. The City Council finds this Resolution is not subject to the California Environmental Quality Act (“CEQA”) in that the activity is covered by the general

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Resolution No. 2022-219
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5 rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 6. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 7. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 5th day of October, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, City Clerk
Attest:

Sonia R. Carvalho, City Attorney

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Resolution No. 2022-219
4 CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-219, adopted at a regular meeting held on the 5th day of October, 2022 by the following vote:

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Ordinance MC-1599
ORDINANCE NO. MC-1599

AN ORDINANCE OF THE MAYOR AND CITY COUNCIL

OF THE CITY OF SAN BERNARDINO, CALIFORNIA,

ACTING AS THE LEGISLATIVE BODY OF COMMUNITY
FACILITIES DISTRICT NO. 2022-1
(HIGHLAND/MEDICAL), AUTHORIZING THE LEVY OF

SPECIAL TAXES IN SUCH COMMUNITY FACILITIES

DISTRICT
WHEREAS, the City Council of the City of San Bernardino, California (the “City Council”), has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors authorizing the levy of special taxes in the community facilities district, all as authorized pursuant to the terms and provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1. Division 2, Title 5 of the Government Code of the State of California (the “Act”). This community facilities district shall hereinafter be referred to as Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, State of California (the “District”).

THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO,

CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-1 (HIGHLAND/MEDICAL), DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. This City Council does, by the passage of this ordinance, authorize the levy of special taxes on taxable properties located in the District pursuant to the Rate and Method of Apportionment for the District as set forth in Exhibit A attached hereto and incorporated herein by this reference (the “Rate and Method”).

SECTION 2. This City Council, acting as the legislative body of the District, is hereby further authorized, by resolution, to annually determine the special tax to be levied within the District for the then current tax year or future tax years; provided, however, the special tax to be levied shall not exceed the maximum special tax authorized to be levied pursuant to the Rate and Method.

SECTION 3. The special taxes herein authorized to be levied, to the extent possible, shall be collected in the same manner and at the same time as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes; provided, however, the District may utilize a direct billing procedure for any special taxes that cannot be collected on the County of San Bernardino tax roll or may, by resolution, elect to collect the special taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent assessor’s parcels as permitted by the Act.

SECTION 4. The special taxes authorized to be levied shall be secured by the lien imposed pursuant to Section 3114.5 and 3115.5 of the California Streets and Highways Code,

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Ordinance MC-1599
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6 which lien shall be a continuing lien and shall secure each levy of the special taxes. The lien of the Special Tax (as defined in the Rate and Method) shall continue in force and effect until the special tax obligation is prepaid, permanently satisfied and canceled in accordance with law or until the Special Tax ceases to be levied by the City Council.

SECTION 5. This Ordinance shall be effective thirty (30) days after its adoption.

Within fifteen (15) days after its adoption, the City Clerk shall cause this Ordinance, or a summary of it, to be published in a newspaper of general circulation in the City.

Introduced at a regular meeting of the City Council of the City of San Bernardino, California, on October 5, 2022.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 19th day of October, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, City Clerk
Attest:

Sonia R. Carvalho, City Attorney

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Ordinance MC-1599
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6 CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, City Clerk, hereby certify that the attached is a true copy of Ordinance No. MC-1599, which was regularly introduced at a regular meeting of the City Council of the City of San Bernardino duly held on the 5th day of October, 2022, and was adopted at a regular meeting of the City Council duly held on the 19th day of October, 2022 by the following vote:

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EXHIBIT A

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (HIGHLAND/MEDICAL)

OF THE CITY OF SAN BERNARDINO
A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino ("CFD No. 2022-1"). The amount of Special Tax to be levied in each Fiscal Year, on an Assessor’s Parcel, shall be determined by the City Council of the City of San Bernardino, acting in its capacity as the legislative body of CFD No. 2022-1 by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel as a Single Family Residential Property with a stand-alone Residential Unit.
"Acre” or “Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded parcel map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the actual or reasonably estimated costs related to the administration of CFD No. 2022-1, levy on the Special Tax therein and payment of debt service on the outstanding Bonds, including but not limited to, the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022-1 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2022-1 and any major property owner associated with applicable federal and state securities laws and the Act; litigation related to or arising out of CFD No. 2022-1; legal costs; compliance with continuing disclosure undertakings, the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special

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Taxes; the costs of the City, CFD No. 2022-1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2022- 1 for any other administrative purposes of CFD No. 2022-1, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
"Approved Property" means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied. "Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
"Assessor’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below. "Backup Special Tax" means the Special Tax of that name described in Section D below. "Bonds" means any obligation to 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, or long-term contracts, or any refunding thereof, to which Special Tax within CFD No. 2022-1 have been pledged. "Boundary Map" means a recorded map of the CFD which indicates the boundaries of the CFD.
"Building Permit" means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include expired or cancelled building permits, or any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator, provided that following such determination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses. "Building Square Footage" or "BSF" means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the Building Permit for such Assessor’s Parcel.

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"Calendar Year" means the period commencing January 1 of any year and ending the following December 31.
"CFD” or “CFD No. 2022-1" means Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino established by the City under the Act. “CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes.
“City” means the City of San Bernardino, State of California. "City Council" means the City Council of the City of San Bernardino, acting as the Legislative Body of CFD No. 2022-1, or its designee.
“Condominium Plan" means a condominium plan pursuant to California Civil Code, Section 6624 et seq.
"County" means the County of San Bernardino, State of California. "Developed Property" means all Assessor’s Parcels of Taxable Property that: (i) are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied. "Exempt Property" means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) o or recordation of a Condominium Plan pursuant to California Civil Code Section 6624 et seq. that creates individual lots for which Building Permits may be issued without further subdivision.
"Fiscal Year" means the period commencing on July 1 st of any year and ending the following June 30th.
“Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. “Land Use Category” means any of the categories listed in Table 1 of Section D. "Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2022-1 in any Fiscal Year on any Assessor’s Parcel.

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“Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator. "Non-Residential Property" means all Assessor's Parcels of Developed Property for which a Building Permit(s) was issued for a non-residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property. "Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2. "Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.
“Proportionately” means for Taxable Property for Special Tax that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property or Provisional Undeveloped Property. "Provisional Undeveloped Property" means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section F. "Residential Property" means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more Residential Units. “Residential Unit” or "RU" means a residential unit that is used or intended to be used as a domicile by one or more persons, as determined by the CFD Administrator. An Accessory Dwelling Unit that shares an Assessor’s Parcel with a Single Family Residential Property shall not be considered a Residential Unit for purposes of this RMA. “RMA" means this Rate and Method of Apportionment of Special Taxes. “Single Family Residential Property” means all Assessor’s Parcels of Residential Property other than Multifamily Property on an Assessor’s Parcel. "Special Tax" or “Special Taxes” means any of the special taxes authorized to be levied within CFD No. 2022-1 pursuant to the Act to fund the Special Tax Requirement. "Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve

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funds established under the Indenture in association with the Bonds to the extent that replenishment has not been included in the computation of the Special Tax Requirement in a previous Fiscal Year, (v) to cure any delinquencies in the amount of principal or interest on the Bonds that occurred in a previous Fiscal Year, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2022-1 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Undeveloped Property as set forth in Step Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture. "Taxable Property" means all Assessor’s Parcels within CFD No. 2022-1, which are not Exempt Property.
“Taxable Unit” means either a Residential Unit or an Acre. "Tract(s)" means an area of land within a subdivision identified by a particular tract number on a Final Map approved for the subdivision.
“Trustee” means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property, Provisional Undeveloped Property. "Welfare Exempt Property" means, in any Fiscal Year, all Assessor’s Parcels within the boundaries of CFD No. 2022-1 that have been granted a welfare exemption by the County under subdivision (g) of Section 214 of the Revenue and Taxation Code.

B. SPECIAL TAX
Commencing Fiscal Year 2022-2023 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax to fund the Special Tax Requirement.

C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2022-2023, each Assessor’s Parcel within CFD No. 2022-1 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property.

Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non-Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as a Single Family Residential Property or Multifamily Property. Each Assessor’s Parcel of Single Family Residential Property shall be further assigned to a Land Use Category based on its Building Square Footage.

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Map or Condominium Plan) on such parent Assessor’s Parcel, the amount of the Special Tax on such parent Assessor’s Parcel shall be determined as follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax levy for such Assessor’s Parcel, based on the classification of such Assessor’s Parcel as Undeveloped Property; (2) the amount of the Special Tax for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Developed Property Special Tax rates and such amounts shall be levied as Developed Property in accordance with Step 1 and, if applicable, Step 4 of Section E below; and (3) the amount of the Special Tax levy on the Taxable Property in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate levied on Undeveloped Property pursuant to Step 3 of Section E below, multiplied by the total of the amount determined in clause (1), less (B) the amount determined in clause (2).

D. MAXIMUM SPECIAL TAX

1. Developed Property
The Maximum Special Tax for each Assessor’s Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax or (ii) the Backup Special Tax.

The Maximum Special Tax for each Assessor’s Parcel of Non-Residential Property and Multifamily Property shall be the applicable Assigned Special Tax described in Table 1 of Section D.
a. Assigned Special Tax
Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property or Non-Residential Property shall be subject to an Assigned Special Tax. The Assigned Special Tax applicable to an Assessor's Parcel of Developed Property for Fiscal Year 2022-2023 shall be determined pursuant to Table 1 below.

TABLE 1

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2022-2023
Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 1,800 sq. ft $2,790

2. Single Family Residential Property RU 1,800 sq. ft to 2,000 sq. ft $3,080

3. Single Family Residential Property RU Greater than 2,000 sq. ft $3,209

4. Multifamily Property Acre N/A $49,620

5. Non-Residential Property Acre N/A $49,620

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b. Multiple Land Use Categories
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for each Taxable Unit for all Land Use Categories located on the Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final. c. Backup Special Tax
The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property shall be calculated according to the following formula.

B = (U x A) / L
The terms above have the following meanings:

B = Backup Special Tax per Assessor’s Parcel classified as Single Family Residential Property within the Final Map.

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

A = Acreage of net taxable Single Family Residential Property that exists or is expected to exist in such Final Map at the time of calculation, as determined by the Administrator.

L = Number of Assessor’s Parcels of Single Family Residential Property expected to exist after build out in such Final Map at the time of calculation, as determined by the Administrator.

In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $49,620 per Acre.

Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developer Property for which a certificate of occupancy has been granted may not be revised.

In the event any superseding Final Map is recorded as a Final Map within the boundaries of the CFD, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $49,620 per Acre. The Backup Special Tax shall not apply to Multifamily Residential Property or Non-Residential Property.

2. Approved Property
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Property shall be the Backup Special Tax computed pursuant to Section D.1.c above.

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The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Multifamily Residential Property or Non-Residential Property shall be $49,620 per Acre.

3. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property shall be $49,620 per Acre.

E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2022-2023 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance with the following steps:

Step One: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax rates in Table 1 to satisfy the Special Tax Requirement.

Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Annual Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax on each Assessor's Parcel of Developed Property whose Maximum Special Tax is the Backup Special Tax shall be increased in equal percentages from the Assigned Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special Tax Requirement.

Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for a private residential use has been issued as a result of a delinquency in the payment of the Special Tax applicable to any other Assessor’s Parcel be increased by more than ten percent (10%)

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above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default.

F. EXEMPTIONS
The City shall classify as Exempt Property, in the chronological order in which the property becomes exempt, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 6.46 Acres.

Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 6.46 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 6.46 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.

Welfare Exempt Property shall be exempt from the payment of the Special Tax so long as the property qualifies as a Welfare Exempt Property.

G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
“CFD Public Facilities” means $4,000,000 expressed in 2022 dollars, which shall increase by the Construction Inflation Index on July 1, 2023, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2022-1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax levied under this Rate and Method of Apportionment. “Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible under CFD No. 2022-1.
“Construction Inflation Index” means the annual percentage change in the Engineering News- Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction

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Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles. “Future Facilities Costs” means the CFD Public Facilities minus public facility costs available to be funded, or that were funded, through existing construction or escrow accounts or funded by the Outstanding Bonds or Special Taxes, and minus public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment. “Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.

1. Prepayment in Full
The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Approved or Undeveloped Property for which a Building Permit has not been issued, and (iv) Assessor’s Parcels of Provisional Undeveloped Property. The Maximum Special Tax obligation applicable to an Assessor’s Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay the Maximum Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel. Within 15 days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel.

Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes.

The Prepayment Amount shall be calculated as follows (some capitalized terms are defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

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2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Assessor’s Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, or Provisional Undeveloped Property to be prepaid, compute the Maximum Special Tax for the Assessor’s Parcel.

3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount of Special Taxes that could be levied the Maximum Special Tax assuming build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor’s Parcels of Developed Property not including any Assessor’s Parcels for which the Special Tax obligation has been previously prepaid.

4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the “Bond Redemption Amount”).

5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).

6. Determine the Future Facilities Costs.

7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor’s Parcel (the “Future Facilities Amount”).

8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax prepayments.

9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.

10. Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount.

11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).

12. Verify the administrative fees and expenses of the CFD, the cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Maximum Special Tax obligation for the

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Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”).

13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the 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.

14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit.

15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.

The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds.

In such event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next redemption from other Special Tax prepayments of Outstanding Bonds or to make debt service payments.

As a result of the payment of the current Fiscal Year’s Special Tax levy as determined pursuant to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year’s Special Tax levy for the Assessor’s Parcel from the County tax roll. With respect to any Assessor’s Parcel for which the Maximum Special Tax obligation is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Maximum Special Tax obligation and the release of the Special Tax lien for the Assessor’s Parcel, and the obligation to pay the Special Tax for such Assessor’s Parcel shall cease.

Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax that may be levied on all non-delinquent Assessor’s Parcels of Taxable Property after the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses.

Tenders of Bonds in prepayment of the Maximum Special Tax obligation may be accepted upon the terms and conditions established by the City Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the City Council.

2. Prepayment in Part
The Maximum Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property may be

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partially prepaid. For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the following formula:

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

PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1 F = the percent by which the owner of the Assessor’s Parcel(s) is partially prepaying the Maximum Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1 The owner of an Assessor’s Parcel who desires to partially prepay the Maximum Special Tax obligation for the Assessor’s Parcel shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the amount of a partial prepayment. Within 15 business days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial Prepayment Amount for the Assessor’s Parcel. A Partial Prepayment Amount must be made not less than 60 days prior to the redemption date for the Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment Amount.

With respect to any Assessor’s Parcel for which the Maximum Special Tax obligation is partially prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in Paragraph 15 of Section G.1, and (ii) indicate in the records of the CFD that there has been a Partial Prepayment Amount for the Assessor’s Parcel and that a portion of the Special Tax obligation equal to the remaining percentage (1.00 - F) of Special Tax obligation will continue on the Assessor’s Parcel pursuant to Section E.

H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2064-2065 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2022-1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2022-1 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected and (iv) all other obligations of CFD No. 2022-1 have been satisfied.

I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2022-1 may collect Special Tax at a

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different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.

J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes on his/her Assessor’s Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant’s Assessor’s Parcel(s). No refunds of previously paid Special Taxes shall be made.

The CFD Administrator shall interpret this Rate and Method of Apportionment and make determinations relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as herein specified.

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CITY OF SAN BERNARDINO
Public Hearing Report
CFD NO. 2022-1 (HIGHLAND/MEDICAL)
OCTOBER 5, 2022

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Table of Contents

Sections P age _____________________________________________ 1 Introduction ________________________________________________ 1 2 Description of Facilities ______________________________________________ 2 3 Cost Estimate ________________________________________________ 3 4 Proposed Development _____________________________________________ 4 5 Rate and Method of Apportionment ____________________________________ 5 6 Certifications ________________________________________________ 6

Tables Page
3-1 Cost Estimate ________________________________________________ 3

Appendices P age _____________________________________________ A Rate and Method of Apportionment _____________________________________ B Boundary Map _________________________________________________ C Resolution of Intention
D Amended Resolution of Intention _______________________________________

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1 Introduction Page | 1
City of San Bernardino
CFD No. 2022-1 (Highland/Medical)
Public Hearing Report
Background
On July 20, 2022, the Mayor and City Council of the City of San Bernardino (the “City”), adopted a Resolution of Intention to form Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino (the “CFD No. 2022-1” or “District”), Resolution No. 2022-141, pursuant to the provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, (the “Act”).

On August 17, 2022 the City adopted a Resolution Amending and Supplementing the Resolution of Intention to amend the date of the public hearing on the proposed formation of CFD No. 2022-1 from September 7, 2022 to October 5, 2022.

The CFD No. 2022-1 is currently comprised of Tract Map No. 20494 that includes one undeveloped parcel and approximately

10.10 gross acres. The proposed development includes 95 detached single family homes. The property is generally located south of W. Highland Ave. west of Medical Center Dr.

For a map showing the boundaries of CFD No. 2022-1 please see Appendix B.

Purpose of Public Hearing Report
WHEREAS, this Community Facilities District Report (“Report”) is being provided to the City Council and generally contains the following:

1. A brief description of CFD No. 2022-1;

2. A brief description of the Facilities and Services required at the time of formation to meet the needs of CFD No. 2022-1.

3. A brief description of the Boundaries of CFD No. 2022-1; and

4. An estimate of the cost of financing the bonds used to pay for the Facilities, including all costs associated with formation of the District, issuance of bonds, determination of the amount of any special taxes, collection of any special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the City with respect to the District, and any other incidental expenses to be paid through the proposed financing.

For particulars, reference is made to the Resolution of Inte ntion and Resolution Amending the Resolution of Intention as previously approved and adopted and is included in Appendix C and Appendix D, respectively.

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2 Description of Facilities Page | 2
City of San Bernardino
CFD No. 2022-1 (Highland/Medical)
Public Hearing Report
NOW, THEREFORE, the undersigned, authorized representative of Spicer Consulting Group, LLC, the appointed responsible officer, or person directed to prepare the Public Hearing Report, does hereby submit the following data:

Facilities
A Community Facilities District may pay for facilities which may include all amounts necessary to eliminate any fixed special assessment liens or to pay, repay, or defease any obligation to pay for any indebtedness secured by any tax, fee, charge, or assessment levied, provide for the pu rchase, construction, expansion, or reha bilitation for any real or other tangible property with an estimated useful life of five (5) years or longer, which is necessary to meet increased demands placed upon local agencies as a result of development and/or rehabilitation occurring within the District.

The types of facilities that are proposed by CFD No. 2022- 1 and financed with the proceeds of special taxes and bonds issued by CFD No. 2022-1 consist of the construction, purc hase, modification, expansion and/or improvement of (i) drainage, park, roadway, water and sewer, and other public facilities of the City, including the foregoing public facilities which are included in the City’s fee programs with respect to such facilities and auth orized to be financed under the Mello-Roos Community Facilities Act of 1982, as amended (the “Facilities”), and all appurtenances and appurtenant work in connection with the foregoing Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking, construction management and supervision for such Facilities, and to finance the incidental expenses to be incurred, including:
a) The cost of engineering, planning and designing the Facilities; and b) All costs, including costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District; and c) Any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.

Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for the District.

Incidental Expenses
The Incidental Expenses to be paid from bond proceeds and/or special taxes include:

All costs associated with the creation of CFD No. 2022-1, the issuance of bonds, the determination of the amount of special taxes to be levied, costs incurred in order to carry out the authorized purposes of CFD No. 2022-1, including legal fees, fees of consultants, engineering, planning, designing and the annual costs to administer CFD No. 2022-1 and any obligations.

The description of the eligible public facilities, services and incidental expenses above are preliminary and general in nature.

The final plans and specifications approved by the applicable public agency may show substitutes or modifications in order to accomplish the work or serve the new development and any such substitution or modification shall not constitute a change or modification in the proceedings relating to CFD No. 2022-1.

Bond Authorization Amounts
The maximum authorized bonded indebtedness is $5,000,000 for CFD No. 2022-1.

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3 Cost Estimate Page | 3
City of San Bernardino
CFD No. 2022-1 (Highland/Medical)
Public Hearing Report
Below is the estimated cost of facilities to be provided to the District. a) The cost estimate of facilities, including incidental expenses, to be financed through the issuance of CFD No. 2022- 1 Bonds is estimated to be $2,886,975 based upon current dollars (Fiscal Year 2022-23). b) The total facilities eligible to be funded by bond proceeds is $2,895,469, a summary of the facilities is detailed in the table below.
c) Pursuant to Section 53340 of the Act, the proceeds of any special tax levied and collected by CFD No. 2022-1 may be used only to pay for the cost of providing public facilities, services, and incidental expenses. As defined by the Act, incidental expenses include, but are not limited to, the annual costs associated with determination of the amount of special taxes, collection of special taxes, payment of special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District. The incidental expenses associated with the annual administration of CFD No. 2022-1 are estimated to be $2 5,000. However, it is antic ipated that the incidental expenses will vary due to inflation and other factors that may not be fores een today, and the actual incidental expenses may exceed these amounts accordingly.

Table 3-1
Cost Estimate
Facilities Total Bond Allocation(1)
City Facilities
Local Circulation Fee $22,129 $22,129
Regional Circulation Fee $231,325 $231,325
Storm Drain Fee $372,961 $372,961
Parkland and Open Space Fee $904,197 $904,197
Sewer Connection Fee (3 Bedroom Units) $35,280 $35,280 Sewer Connection Fee (4 Bedroom Units) $112,560 $112,560 Sewer Capacity Charge $332,500 $332,500
Water Connection Fee (3/4” Meter) $884,517 $876,023
Total City $2,895,469 $2,886,975

Total Eligible Fees/Improvements $2,895,469 $2,886,975
Incidental Financing Costs $653,025
Total Funded by Bond Proceeds $3,540,000

Total Fees/Improvements to be Funded by Developer $8,494 (1) Amounts are allocated based upon estimated bond sizing and may change abased upon market conditions at the time of bond issuance.

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4 Proposed Development Page | 4
City of San Bernardino
CFD No. 2022-1 (Highland/Medical)
Public Hearing Report
The CFD No. 2022-1 includes approximately 10.10 gross acre s on one undeveloped property within Tract 20494. The District is generally located south of W. Highland Ave. west of Medical Center Dr. As of Fiscal Year 2022-23 the proposed CFD No. 2022-1 includes the following Assessor's Parcel Numbers:

Assessor’s Parcel
Number
0143-191-59

A map showing the boundaries of CFD No. 2022-1 is included in Appendix B.

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5 Rate and Method of Apportionment Page | 5
City of San Bernardino
CFD No. 2022-1 (Highland/Medical)
Public Hearing Report
The Rate and Method of Apportionment allows each property owner within CFD No. 2022-1 to estimate the annual Special Tax amount that would be required for payment. The Rate and Method of Apportionment of the Special Tax established pursuant to these proceedings, is attached hereto as Appendix A (the “Rate and Method”). The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the CFD Administrator may directly bill the Special Taxes, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations, and provided further that CFD No. 2022-1 may covenant to foreclose and may actually foreclose on parcels having delinquent Special Taxes as permitted by the Act.

All of the property located within CFD No. 2022-1, unless exempted by law or by the Rate and Method proposed for CFD No. 2022-1, shall be taxed for the purpose of providing necess ary facilities to serve the District. The Boundary Map for CFD No. 2022-1 is attached hereto as Appendix B. Pursuant to Section 53325.3 of the Act, the tax imposed “is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property.” The Special Tax may be based on the benefit received by property, the co st of making facilities or authorized services available or other reasonable basis as determined by the City, although the Special Tax may not be apportioned on an ad valorem basis pursuant to Articl e XIIIA of the California Constitution. A property owner within the District may choose to prepay in whole or in part the Special Tax. The available method for so doing is described in Section G of the Rate and Method (“Prepayment of Special Tax”).

The Rate and Method includes special tax rates ranging from $2,790 to $3,209 per Residential Unit for Single Family Residential Property and $49,620 per Acre for Multifamily Property for Fiscal Year 2022-2023. For each year that any Bonds are outstanding the Special Tax shall be levied on all pa rcels subject to the Special Tax. If any delinquent Special Taxes remain uncollected prior to or after all Bonds are retired, the Special Tax may be levied to the extent necessary to reimburse CFD No. 2022-1 for uncollected Special Taxes associated with the levy of such Special Taxes, but the Special Tax shall not be levied after 2064-2065 Fiscal Year.

For particulars as to the Rate and Method for CFD No. 2022-1, see the attached and incorporated in Appendix A.

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6 Certifications Page | 6
City of San Bernardino
CFD No. 2022-1 (Highland/Medical)
Public Hearing Report
Based on the information provided herein, it is my opinion that the described facilities and services herein are those that are necessary to meet increased demands placed upon the City of San Bernardino as a result of development occurring within the CFD No. 2022-1 and benefits the lands within said CFD No. 2022-1. Further, it is my opinion that the special tax rates and method of apportionment, as set forth herein, are fair and equitable, uniformly applied and not discriminating or arbitrary.

Date: October 5, 2022 SPICER CONSULTING GROUP, LLC

__________________________

SHANE SPICER

SPECIAL TAX CONSULTANT FOR

CITY OF SAN BERNARDINO

SAN BERNARDINO COUNTY

STATE OF CALIFORNIA

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APPENDIX A
Rate and Method of Apportionment

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 1 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022‐1 (HIGHLAND/MEDICAL) OF THE CITY OF SAN BERNARDINO

A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of Community Facilities District No. 2022‐1 (Highland/Medical) of the City of San Bernardino ("CFD No. 2022‐ 1"). The amount of Special Tax to be levied in each Fiscal Year, on an Assessor’s Parcel, shall be determined by the City Council of the City of San Bernardino, acting in its capacity as the legislative body of CFD No. 2022‐1 by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s
Parcel as a Single Family Residential Property with a stand‐alone Residential Unit.

"Acre” or “Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded parcel map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.

"Act" means the Mello‐Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.

"Administrative Expenses" means the actual or reasonably estimated costs related to the administration of CFD No. 2022‐1, levy on the Special Tax therein and payment of debt service on the outstanding Bonds, including but not limited to, the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022‐1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022‐1 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2022‐1 and any major property owner associated with applicable federal and state securities laws and the Act; litigation related to or arising out of CFD No. 2022‐ 1; legal costs; compliance with continuing disclosure undertakings, the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2022‐1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2022‐1 for any other administrative purposes of CFD No. 2022‐1, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 2 "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 before May 1st preceding the Fiscal Year in which the Special Tax is being levied.

"Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.

"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.

"Assessor’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.

"Assigned Special Tax" means the Special Tax of that name described in Section D below.

"Backup Special Tax" means the Special Tax of that name described in Section D below.

"Bonds" means any obligation to 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, or long‐term contracts, or any refunding thereof, to which Special Tax within CFD No. 2022‐1 have been pledged.

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

"Building Permit" means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include expired or
cancelled building permits, or any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator, provided that following such determination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses.

"Building Square Footage" or "BSF" means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the Building Permit for such Assessor’s Parcel.

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

31. "CFD” or “CFD No. 2022‐1" means Community Facilities District No. 2022‐1 (Highland/Medical) of the City
of San Bernardino established by the City under the Act.

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

“City” means the City of San Bernardino, State of California.

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 3 "City Council" means the City Council of the City of San Bernardino, acting as the Legislative Body of CFD No. 2022‐1, or its designee.

“Condominium Plan" means a condominium plan pursuant to California Civil Code, Section 6624 et seq.

"County" means the County of San Bernardino, State of California.

"Developed Property" means all Assessor’s Parcels of Taxable Property that: (i) 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) a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.

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

"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment,
pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) o or recordation of a Condominium Plan pursuant to California Civil Code Section 6624 et seq. that creates individual lots for which Building Permits may be issued without further subdivision.

"Fiscal Year" means the period commencing on July 1st of any year and ending the following June 30th.

“Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.

“Land Use Category” means any of the categories listed in Table 1 of Section D.

"Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2022‐1 in any Fiscal Year on any Assessor’s Parcel.

“Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator.

"Non‐Residential Property" means all Assessor's Parcels of Developed Property for which a Building
Permit(s) was issued for a non‐residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non‐Residential Property.

"Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2.

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

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 4 for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property or Provisional Undeveloped Property.

"Provisional Undeveloped Property" means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section F.

"Residential Property" means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more Residential Units.

“Residential Unit” or "RU" means a residential unit that is used or intended to be used as a domicile by one or more persons, as determined by the CFD Administrator. An Accessory Dwelling Unit that shares an Assessor’s Parcel with a Single Family Residential Property shall not be considered a Residential Unit for purposes of this RMA.

“RMA" means this Rate and Method of Apportionment of Special Taxes.

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

"Special Tax" or “Special Taxes” means any of the special taxes authorized to be levied within CFD No. 2022‐1 pursuant to the Act to fund the Special Tax Requirement.

"Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established under the Indenture in association with the Bonds to the extent that replenishment has not been included in the computation of the Special Tax Requirement in a previous Fiscal Year, (v) to cure any delinquencies in the amount of principal or interest on the Bonds that occurred in a previous Fiscal Year, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2022‐1 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Undeveloped Property as set forth in Step Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture.

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

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

"Tract(s)" means an area of land within a subdivision identified by a particular tract number on a Final Map approved for the subdivision.

“Trustee” means the trustee, fiscal agent, or paying agent under the Indenture.

"Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed
Property, Approved Property, Provisional Undeveloped Property.

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 5 "Welfare Exempt Property" means, in any Fiscal Year, all Assessor’s Parcels within the boundaries of CFD No. 2022‐1 that have been granted a welfare exemption by the County under subdivision (g) of Section 214 of the Revenue and Taxation Code.

B. SPECIAL TAX

Commencing Fiscal Year 2022‐2023 and
for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax to fund the Special Tax Requirement.

C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX

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

Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non‐ Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as a Single Family Residential Property or Multifamily Property. Each Assessor’s Parcel of Single Family Residential Property shall be further assigned to a Land Use Category based on its Building Square Footage.

In the event that there are
parent Assessor’s Parcel(s) for which one or more Building Permits have been issued and the County has not yet assigned final Assessor’s Parcel Number(s) to the lots on which the Residential Unit(s) have been or will be built (in accordance with the Final Map or Condominium Plan) on such parent Assessor’s Parcel, the amount of the Special Tax on such parent Assessor’s Parcel shall be determined as follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax levy for such Assessor’s Parcel, based on the classification of such Assessor’s Parcel as Undeveloped Property; (2) the amount of the Special Tax for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Developed Property Special Tax rates and such amounts shall be levied as Developed Property in accordance with Step 1 and, if applicable, Step 4 of Section E below; and (3) the amount of the Special Tax levy on the Taxable Property in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate levied on Undeveloped Property pursuant to Step 3 of Section E below, multiplied by the total of the amount determined in clause (1), less (B) the amount determined in clause (2).

D. MAXIMUM SPECIAL TAX

1. Developed Property

The Maximum Special Tax for each Assessor’s Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax or (ii) the Backup Special Tax.

The Maximum Special Tax for each Assessor’s Parcel of Non‐Residential Property and Multifamily Property shall be the applicable Assigned Special Tax described in Table 1 of Section D.

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 6 a. Assigned Special Tax

Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property or Non‐Residential Property shall be subject to an Assigned Special Tax. The Assigned Special Tax applicable to an Assessor's Parcel of Developed Property for Fiscal Year 2022‐2023 shall be determined pursuant to Table 1 below.

TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2022‐2023

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

1. Single Family Residential Property RU Less than 1,800 sq. ft $2,790

2. Single Family Residential Property RU 1,800 sq. ft to 2,000 sq. ft $3,080

3. Single Family Residential Property RU Greater than 2,000 sq. ft $3,209

4. Multifamily Property Acre N/A $49,620

5. Non‐Residential Property Acre N/A $49,620

b. Multiple Land Use Categories

In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for each Taxable Unit for all Land Use Categories located on the Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final.

c. Backup Special Tax

The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property shall be calculated according to the following formula.

B = (U x A) / L

The terms above have the following meanings:

B = Backup Special Tax per Assessor’s Parcel classified as Single Family Residential Property within
the Final Map.

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

A = Acreage of net taxable Single Family Residential Property that exists or is expected to exist in such Final Map at the time of calculation, as
determined by the Administrator.

L = Number of Assessor’s Parcels of Single Family Residential Property expected to exist after build out in such Final Map at the time of calculation, as determined by the Administrator.

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 7 In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $49,620 per Acre.

Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developer Property for which a certificate of occupancy has been granted may not be revised.

In the event any superseding Final Map is recorded as a Final Map within the boundaries of the CFD, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $49,620 per Acre. The Backup Special Tax shall not
apply to Multifamily Residential Property or Non‐Residential Property.

2. Approved Property

The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Property shall be the Backup Special Tax computed pursuant to Section D.1.c above.

The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Multifamily Residential Property or Non‐Residential Property shall be $49,620 per Acre.

3. Undeveloped Property and Provisional Undeveloped Property

The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property shall be $49,620 per Acre.

E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX

Commencing Fiscal Year 2022‐2023 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance with the following steps:

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

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 8 Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.

F. EXEMPTIONS

The City shall classify as Exempt Property, in the chronological order in which the property becomes exempt, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 6.46 Acres.

Welfare Exempt Property shall be exempt from the payment of the Special Tax so long as the property qualifies as a Welfare Exempt Property.

G. PREPAYMENT OF SPECIAL TAX

The following additional definitions apply to this Section G:

“CFD Public Facilities” means $4,000,000 expressed in 2022 dollars, which shall increase by the Construction Inflation Index on July 1, 2023, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2022‐1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax levied under this Rate and Method of Apportionment.

“Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible under CFD No. 2022‐1.

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 9

“Construction Inflation Index” means the annual percentage change in the Engineering News‐Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News‐ Record Building Cost Index for the City of Los Angeles.

“Future Facilities Costs” means the CFD Public Facilities minus public facility costs available to be funded, or that were funded, through existing construction or escrow accounts or funded by the Outstanding Bonds or Special Taxes, and minus public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment.

“Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.

1. Prepayment in Full

The Maximum Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Approved or Undeveloped Property for which a Building Permit has not been issued, and (iv) Assessor’s Parcels of Provisional Undeveloped Property. The Maximum Special Tax obligation applicable to an Assessor’s Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay the Maximum Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non‐refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel. Within 15 days of receipt of such non‐refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes.

The Prepayment Amount shall be calculated as follows (some capitalized terms are defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount

The Prepayment Amount shall be determined as of the proposed prepayment date as follows:

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 10

5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).

6. Determine the Future Facilities Costs.

7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of
Future Facilities Costs for the Assessor’s Parcel (the “Future Facilities Amount”).

9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.

10. Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption
Premium from the date of prepayment until
the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount.

11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).

12. Verify the administrative fees and
expenses of the CFD, the cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Maximum Special Tax obligation for the Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”).

13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 11 redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero.

15. From the Prepayment
Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.

The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next redemption from other Special Tax prepayments of Outstanding Bonds or to make debt service payments.

Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax that may be levied on all non‐delinquent Assessor’s Parcels of Taxable Property
after the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses.

Tenders of Bonds in prepayment of the Maximum Special Tax obligation may be accepted upon the terms and
conditions established by the City Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case‐by‐case basis as specifically approved by the City Council.

2. Prepayment in Part

The Maximum Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property,
Undeveloped Property or Provisional Undeveloped Property may be partially prepaid. For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the following formula:

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

PP = Partial Prepayment Amount

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 12 PE = the Prepayment Amount calculated according to Section G.1 F = the percent by which the owner of the Assessor’s Parcel(s) is partially prepaying the Maximum Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1 The owner of an Assessor’s Parcel who desires to partially prepay the Maximum Special Tax obligation for the Assessor’s Parcel shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Maximum Special Tax obligation, (ii) the percentage of the Maximum Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the amount of the non‐refundable deposit determined to cover the cost to be incurred by the CFD in calculating the amount of a partial prepayment. Within 15 business days of receipt of such non‐refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial Prepayment Amount for the Assessor’s Parcel. A Partial Prepayment Amount must be made not less than 60 days prior to the redemption date for the Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment Amount.

With respect to any Assessor’s Parcel for which the Maximum Special Tax obligation is partially prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in Paragraph 15 of Section G.1, and (ii) indicate in
the records of the CFD that there has been a Partial Prepayment Amount for the Assessor’s Parcel and that a portion of the Special Tax obligation equal to the remaining percentage (1.00 ‐ F) of Special Tax obligation will continue on the Assessor’s Parcel pursuant to Section E.

H. TERMINATION OF SPECIAL TAX

For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2064‐2065 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2022‐1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2022‐1 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected and (iv) all other obligations of CFD No. 2022‐ 1 have been satisfied.

I. MANNER OF COLLECTION

The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2022‐1 may collect Special Tax at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.

J. APPEALS OF SPECIAL TAXES

Any taxpayer may file
a written appeal of the Special Taxes on his/her Assessor’s Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator

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City of San Bernardino
Community Facilities District No. 2022‐1 (Highland/Medical) Page 13 agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant’s Assessor’s Parcel(s). No refunds of previously paid Special Taxes shall be made.

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APPENDIX B
Boundary Map

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APPENDIX C
Resolution of Intention

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Resolution No. 2022-141
Resolution No. 2022-141
July 20, 2022

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RESOLUTION NO. 2022-141

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

DECLARING INTENTION TO ESTABLISH PROPOSED
COMMUNITY FACILITIES DISTRICT NO. 2022- 1
(HIGHLAND/MEDICAL) OF THE CITY OF SAN

BERNARDINO
WHEREAS, the City Council (the “City Council”) of the City of San Bernardino (the “City”) has received a written petition from the owner of certain real property (the “Owner”) within the City of San Bernardino (the “City”) requesting that the City Council initiate proceedings for the formation of a community facilities district, pursuant to Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code, commonly known as the “Mello-Roos Community Facilities Act of 1982,” (the “Act”) for the purpose of financing the public facilities which are necessary to meet increased demands placed upon the City as a result of the development of said real property; and
WHEREAS, the Owner is the owner of all of the property which is proposed to be included within the proposed community facilities district; and
WHEREAS, the Act provides that the City Council may initiate proceedings to establish a community facilities district only if it has first considered and adopted local goals and policies concerning the use of community facilities districts; and WHEREAS, the City Council has been presented with its Local Goals and Policies for all Community Facilities Districts of the City of San Bernardino (the “Policies”) for consideration, and the proposed public facilities comply with the Policies; and WHEREAS, pursuant to Section 53320 of the Act, havi ng received such a petition, the City Council is required to institute proceedings for the formation of the proposed community facilities district by the adoption of a resolution of intention pursuant to Section 53321 of the Act.

BE IT RESOLVED BY THE MAYO R AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. Findings. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2. Proposed Community Facilities District. A community facilities district is proposed to be established under the provisions of the Act. The name proposed for the community facilities district is “Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California” he rein referred to as CFD No. 2022-1.

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Resolution No. 2022-141
Resolution No. 2022-141
July 20, 2022

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SECTION 3. Description and Map of Boundaries. The boundaries of the proposed CFD No. 2022-1 are described and shown on the map entitled “Proposed Boundary Map Community Facilities District No. 2022 -1 ( Highland/Medical) City of San Bernardi no, County of San Bernardino, State of California,” which is on file with the City Clerk. Said map is approved and, pursuant to Section 3110 of the California Streets and Highways Code, the City Clerk shall, after conforming with the other requirements of Section 3111 of said Code, record the original of said map in her office, and not later than fifteen (15) days prior to the date of the public hearing set forth in Section 10 hereof shall file a copy of said map with the County Recorder of the County of San Bernardino.

SECTION 4. Types of Facilities; Incidental Expenses.

The types of public facilities to be financed by the proposed CFD No. 2022-1, which may be provided by the construction or acquisition thereof or the financing of impact fees to be used for the construction or acquisition thereof (herein, the “Facilities”) include but are not limited to:
(a) Acquisition, design, construction of local and regional circulation systems, storm drain improvements, parkland and open space, and sewer and water improvements; and
(b) The incidental expenses proposed to be incurred are: (i) the cost of planning and designing the public facilities and the cos t of environmental evaluations thereof, (ii) all costs associated with the formation of the proposed CFD No. 2022-1, the issuance of the bonds thereof, the determination of the amount of and collection of special taxes, the payment of special taxes, and costs otherwise incurred in order to carry out the authorized purposes of the proposed CFD No. 2022-1, and (iii) any other expenses incidental to the construction, completion, and inspection of the public Facilities (the “Incidental Expenses”).

SECTION 5. Special Taxes. Except where funds are otherwise available, a special tax sufficient to finance the Facilities and related Incidental Expenses secured by the recordation of a continuing lien against all taxable or nonexempt property in CFD No. 2022- 1, shall be annually levied within CFD No. 2022-1.

Under no circumstances will Special Taxes levied in any fiscal year against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within CFD No. 2022-1 by more than 10 percent (10%) above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. A parcel shall be considered “used for private residential purposes” not later than the date on which an occupancy permit or the equivalent for private residential use is issued and for such parcel.

For further particulars as to the rate and method of apportionment of the Special Taxes to be levied on parcels of taxable property in CFD No. 2022-1 reference is made to the attached and incorporated Exhibit A (the “Rate and Method”) which sets forth in sufficient detail the rate and

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Resolution No. 2022-141
Resolution No. 2022-141
July 20, 2022

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method of apportionment of the Special Taxes to allow each landowner o r resident within CFD No. 2022-1 to clearly estimate the maximum amount that such person will have to pay.

The conditions under which the obligation to pay Special Taxes may be prepaid and permanently satisfied are as set forth in the Rate and Method.

Pursuant to Section 53340 of the Ac t, said Special Taxes shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; pro vided however, that CFD No. 2022-1 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent assessor’s parcels as permitted by the Act.

Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the California Streets and Highways Code, a continuing lien to secure each levy of the Special Taxes shall attach to all non-exempt real property in CFD No. 2022-1, and that lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien is canceled in accordance with law or until collection of the Special Taxes ceases.

SECTION 6. Exempt Properties. Pursuant to Section 53340 of the Act, and except as provided in Section 53317.3 of the Act, properties of entities of the state, federal, and local governments shall be exempt from the levy of Special Taxes.

SECTION 7. Necessity. The City Council finds that the Facilities described in Section 4 hereof are necessary to meet increased demands placed upon the City as a result of new development occurring within the boundaries of proposed CFD No. 2022-1.

SECTION 8. Repayment of Funds Advanced or Work- in-Kind. Pursuant to Section 53314.9 of the Act, the City Council proposes to accept advances of funds or work- in-kind from private persons or private entities and to provide, by resolution, for the use of those funds or that work-in-kind for any authorized purpose, including but not limited to, paying any costs incurred by the City in creating proposed CFD No. 2022- 1, and to enter into an agreement, by resolution, with the per son or entity advancing the funds or work- in-kind to repay funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work- in-kind, as determined by the City Council.

SECTION 9. Prohibition of Owner Contracts . Pursuant t o Section 53329.5 of the Act, the City Council finds that the public interest will not be served by allowing the owners of property within proposed CFD No. 2022-1 to enter into a contract in accordance with subdivision (a) of that section, and that such owners shall not be permitted to elect to perform the work and enter into a written contract with the City for the construction for the Facilities pursuant to said Section 53329.5.

SECTION 10. Hearing. A public hearing on the formation of proposed CFD No. 2022-1 shall be held at 7:00 p.m. on September 7 , 2022 in the Bing Wong Auditorium of the Norman F.

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Resolution No. 2022-141
Resolution No. 2022-141
July 20, 2022

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Feldheym Public Library located at 555 W. 6th Street, San Bernardino, California or via teleconference as directed by the City due to COVID-19 social distancing guidelines.

SECTION 11. Notice of Hearing. The City Clerk shall publish a notice of the time and place of said hearing as required by Section 53322 of the Act, and may also give notice of the time and place of said hearing by first-class mail to each registered voter and to each landowner within CFD No. 2022-1 as prescribed by Section 53322.4 of said Code. Said notice shall be published at least seven (7) days and mailed at least fifteen (15) days before the date of the hearing, and shall contain the information required by said Section 53322.

SECTION 12. Report. The officers of the City who will be responsible for providing the proposed Facilities to be provided within and financed by proposed CFD No. 2022- 1, if it is established, shall study proposed CFD No. 2022-1, and, at or before the time of said hearing, file a report or reports with the City Council containing a brief description of the Facilities by type which will in their opinion be required to adequately meet the needs of propos ed CFD No. 2022- 1 and their estimate of the fair and reasonable cost of providing the Facilities and the related Incidental Expenses to be incurred in connection therewith. All such reports shall be made a part of the record of the hearing to be held pursuant to Section 10 hereof.

SECTION 13. Description of Voting Procedures. The voting procedures to be followed shall be pursuant to Section 53326 of the Act and pursuant to the applicable provisions of the California Election Code.

SECTION 14. Approval of Policies . The Polic ies are hereby approved as presented to the City Council at this meeting.

SECTION 15. CEQA. T he City Council finds this Resolution is not subject to the California Environmental Quality Act (“CEQA”) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 16. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 17. Effective Date. This Resolution shall become effective immediately.

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Resolution No. 2022-141
Resolution No. 2022-141
July 20, 2022

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APPROVED and ADOPTED by the City Council and signed by the Mayor and a ttested by the City Clerk this 20th day of July 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, CMC, City Clerk
Approved as to form:

Sonia R. Carvalho, City Attorney
/s/John Valdivia
/s/Genoveva Rocha
/s/Sonia Carvalho

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Resolution No. 2022-141
Resolution No. 2022-141
July 20, 2022

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CERTIFICATION
S

TATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )
I
, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-141, adopted at a regular meeting held on the 20 th day of July 2022 by the following vote:

Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ X _____ _______ _______
IBARRA X _____ _______ _______
FIGUEROA X _____ _______ _______
SHORETT X _____ _______ _______
REYNOSO X _____ _______ _______
CALVIN X _____ _______ _______
ALEXANDER X _____ _______ _______
WITNESS my hand and official seal of the City of San Bernardino this 21st day of July 2022.

Genoveva Rocha, CMC, City Clerk
/s/Genoveva Rocha

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A-1

EXHIBIT A

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (HIGHLAND/MEDICAL)

OF THE CITY OF SAN BERNARDINO

A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino ("CFD No. 2022- 1"). The amount of Special Tax to be levied in each Fiscal Year, on an Assessor’s Parcel, shall be determined by the City Council of the City of San Bernardino, acting in its capacity as the legislative body of CFD No. 2022- 1 by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel as a Single Family Residential Property with a stand -alone Residential Unit.

"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.

"Administrative Expenses" means the actual or reasonably estimated costs related to the administration of CFD No. 2022- 1, levy on the Special Tax therein and payment of debt service on the outstanding Bonds, including but not limited to, the costs of computing the Special Taxes and preparing the Special Tax collection schedul es (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022- 1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022-1 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2022 -1 and any major property owner associated with applicable federal and state securities laws and the Act; litigation related to or arising out of CFD No. 2022-1; legal costs; compliance with continuing disclosure undertakings, the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs

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of the City, CFD No. 2022- 1 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2022- 1 for any other administrative purposes of CFD No. 2022- 1, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.

"Approved Property" means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.

"Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.

"Assessor’s Parcel Map" means an official map of the Assessor of the Count y designating parcels by Assessor’s Parcel Number.

"Assessor’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.

"Assigned Special Tax" means the Special Tax of that name described in Section D below.

"Backup Special Tax" means the Special Tax of that name described in Section D below.

"Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long- term leases, loans from g overnment agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which Special Tax within CFD No. 2022-1 have been pledged.

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

"Building Permit" means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include expired or cancelled building permits, or any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator, provided that following such determination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses.

"Calendar Year" means the period commencing January 1 of any year and ending the following December 31.

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"CFD” or “CFD No. 2022- 1" means Community Facilities District No. 2022 -1 (Highland/Medical) of the City of San Bernardino established by the City under the Act.

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

“City” means the City of San Bernardino, State of California.

"City Council" means the City Council of the City of San Bernardino, acting as the Legislative Body of CFD No. 2022-1, or its designee.

“Condominium Plan" means a condominium plan pursuant to California Civil Code, Section 6624 et seq.

"County" means the County of San Bernardino, State of California.

"Developed Property" means all Assessor’s Parcels of Taxable Property that: (i) are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.

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

"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) o or recordation of a Condominium Plan pursuant to California Civil Code Section 6624 et seq. that creates individual lots for which Building Permits may be issued without further subdivision.

"Fiscal Year" means the period co mmencing on July 1 st of any year and ending the following June 30th.

“Land Use Category” means any of the categories listed in Table 1 of Section D.

"Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2022- 1 in any Fiscal Year on any Assessor’s Parcel.

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"Non-Residential Property" means all Assessor's Parcels of Developed Property for which a Building Permit(s) was issued for a non- residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property.

"Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2.

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

“Proportionately” means for Taxable Property for Special Tax that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property or Provisional Undeveloped Property.

"Residential Property" means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more Residential Units.

“RMA" means this Rate and Method of Apportionment of Special Taxes.

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

"Special Tax" or “Special Taxes” means any of the special taxes authorized to be levied within CFD No. 2022-1 pursuant to the Act to fund the Special Tax Requirement.

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construction of facilities authorized by CFD No. 2022-1 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Undeveloped Property as set forth in Step Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture.

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

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

"Tract(s)" means an area of land within a subdivision identified by a particular tract number on a Final Map approved for the subdivision.

“Trustee” means the trustee, fiscal agent, or paying agent under the Indenture.

"Undeveloped Pr operty" means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property, Provisional Undeveloped Property.

"Welfare Exempt Property" means, in any Fiscal Year, all Assessor’s Parcels within the boundaries of CFD No. 2022-1 that have been granted a welfare exemption by the County under subdivision (g) of Section 214 of the Revenue and Taxation Code.

B. SPECIAL TAX

Commencing Fiscal Year 2022-2023 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax to fund the Special Tax Requirement.

C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX

Each Fiscal Year, beginning with Fiscal Year 2022-2023, each Assessor’s Parcel within CFD No. 2022-1 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property.

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Tax for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Developed Property Special Tax rates and such amounts shall be levied as Developed Property in accordance with Step 1 and, if applicable, Step 4 of Section E below; and (3) the amount of the Special Tax levy on the Taxable Property in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate levied on Undeveloped Property pursuant to Step 3 of Section E below, multiplied by the total of the amount determined in clause (1), less (B) the amount determined in clause (2).

D. MAXIMUM SPECIAL TAX

1. Developed Property

The Maximum Special Tax for each Assessor’s Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax or (ii) the Backup Special Tax.

The Maximum Special Tax for each Assessor’s Parcel of Non -Residential Property and Multifamily Property shall be the applicable Assigned Special Tax described in Table 1 of Section D.

a. Assigned Special Tax

Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property or Non- Residential Property shall be subject to an Assigned Special Tax. The Assigned Special Tax applicable to an Assessor's Parcel of Developed Property for Fiscal Year 2022-2023 shall be determined pursuant to Table 1 below.

TABLE 1

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2022-2023
Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 1,800 sq. ft $2,790

2. Single Family Residential Property RU 1,800 sq. ft to 2,000 sq. ft $3,080

3. Single Family Residential Property RU Greater than 2,000 sq. ft $3,209

4. Multifamily Property Acre N/A $49,620

5. Non-Residential Property Acre N/A $49,620

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b. Multiple Land Use Categories

c. Backup Special Tax

The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property shall be calculated according to the following formula.

B = (U x A) / L

The terms above have the following meanings:

B = Backup Special T ax per Assessor’s Parcel classified as Single Family Residential Property within the Final Map.

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

A = Acreage of net taxable Single Family Residential Property that exists or is expected to exist in such Final Map at the time of calculation, as determined by the Administrator.

L = Number of Assessor’s Parcels of Single Family Residential Property expected to exist after build out in such Final Map at the time of calculation, as determined by the Administrator.

In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $49,620 per Acre.

Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developer Property for which a certificate of occupancy has been granted may not be revised.

2. Approved Property

The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Property shall be the Backup Special Tax computed pursuant to Section D.1.c above.

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The Maximum Special Tax for each Assessor’s Parcel of App roved Property expected to be classified as Multifamily Residential Property or Non-Residential Property shall be $49,620 per Acre.

3. Undeveloped Property and Provisional Undeveloped Property

The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property shall be $49,620 per Acre.

E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX

Commencing Fiscal Year 2022-2023 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance with the following steps:

Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Annual Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such As sessor’s Parcel as needed to satisfy the Special Tax Requirement.

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F. EXEMPTIONS

The City shall classify as Exempt Property, in the chronological order in which the property becomes exempt, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor’s Parcels restricted to other types of public use s determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 6.46 Acres.

Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 6.46 Acres. Assessor's Parcels which cannot be classified as Exempt Pro perty because such classification would reduce the Acreage of all Taxable Property to less than 6.46 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.

Welfare Exempt Proper ty shall be exempt from the payment of the Special Tax so long as the property qualifies as a Welfare Exempt Property.

G. PREPAYMENT OF SPECIAL TAX

The following additional definitions apply to this Section G:
“CFD Public Facilities” means $4,000,000 expressed in 2022 dollars, which shall increase by the Construction Inflation Index on July 1, 2023, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2022-1, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax levied under this Rate and Method of Apportionment.

“Construction Inflation Index” means the annual percentage change in the Engineering News - Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles.

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An owner of an Asse ssor’s Parcel intending to prepay the Maximum Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel.

Within 15 days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes.

The Prepayment Amount shall be calculated as follows (some capitalized terms are defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount

The Prepayment Amount shall be determined as of the proposed prepayment date as follows:

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

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2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Assessor’s Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, or Provisional Undeveloped Pr operty to be prepaid, compute the Maximum Special Tax for the Assessor’s Parcel.

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.

9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.

11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).

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The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.

Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax that may be levied on all non- delinquent Assessor’s Parcels of Taxable Property after the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses.

Tenders of Bonds in prepayment of the Maximum Special Tax obligation may be accepted upon the terms and conditions established by the City Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case- by-case basis as specifically approved by the City Council.

2. Prepayment in Part
The Maximum Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Proper ty may be partially prepaid.

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For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the following formula:

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

H. TERMINATION OF SPECIAL TAX

For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2064- 2065 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2022-1 Bonds have been paid; (ii) all authorized facilities of CFD No. 2022- 1 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected and (iv) all other obligations of CFD No. 2022-1 have been satisfied.

I. MANNER OF COLLECTION

The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2022- 1 may collect Special Tax at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.

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J. APPEALS OF SPECIAL TAXES

Any taxpayer may file a written appeal of the Special Taxes on his/her Assessor’s Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes.

During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant’s Assessor’s Parcel(s).

No refunds of previously paid Special Taxes shall be made.

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AP PEND I X D
Amended Resolution of Intention

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Resolution No. 2022-186
Resolution No. 2022-186
August 17, 2022

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RESOLUTION NO. 2022-186

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

AMENDING AND SUPPLEMENTING THE RESOLUTION

DECLARING INTENTION TO ESTABLISH PROPOSED
COMMUNITY FACILITIES DISTRICT NO. 2022- 1
(HIGHLAND/MEDICAL) OF THE CITY OF SAN

BERNARDINO
WHEREAS, on July 20, 2022, the City Council (the “City Council”) of the City of San Bernardino (the “City”), pursuant to Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code, commonly known as the “Mello- Roos Community Facilities Act of 1982,” adopted Resolution No. 2022-141 entitled “Resolution of the Mayor and City Council of the City of San Bernardino, California, Declaring Intention to Establish Proposed Community Facilities District No. 2022- 1 (Highland/Medical) of the City of San Bernardino” (the “Resolution of Intention”), stating its intention to establish the proposed Community Facilities District No. 2022 -1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California (the “CFD No. 2022-1”) for the purpose of financing the public facilities which are necessary to meet increased demands placed upon the City as a result of the development of said real property; and
WHEREAS, the Resolution of Intention set the date of the public hearing on the formation of proposed CFD No. 2022-1 on September 7, 2022 at 7:00 p.m. in the Bing Wong Auditorium of the Norman F. Feldheym Public Library located at 555 W. 6th Street, San Bernardino, California or via teleconference as directed by the City due to COVID-19 social distancing guidelines; and WHEREAS, the City Council has cancelled the September 7, 2022 meeting and therefore desires to amend the date of the public hearing to October 5, 2022.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. Findings. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2. Public Hearing. Section 10 of Resolution No. 2022-141 shall be deleted in its entirety and replaced by the following:

SECTION 10. Hearing. A public hearing on the formation of proposed CFD No. 2022-1 shall be held at 7:00 p.m. on October 5, 2022, in the Bing Wong Auditorium of the Norman F. Feldheym Public Library located at 555 W. 6th Street, San Bernardino, California or via teleconference as directed by the City due to COVID-19 social distancing guidelines.

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Resolution No. 2022-186
Resolution No. 2022-186
August 17, 2022

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SECTION 3. Amendment. This Resolution amends and supplements the Resolution of Intention and said resolution, as amended hereby, remains fully effective as therein specified SECTION 4. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and a ttested by the City Clerk this 17th day of August, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, CMC, City Clerk

Approved as to form:

Sonia R. Carvalho, City Attorney

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Resolution No. 2022-186
Resolution No. 2022-186
August 17, 2022

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )

I, Genoveva Rocha , CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-186, adopted at a regular meeting held on the 17 th day of August, 2022 by
the following vote:

WITNESS my hand and official seal of the City of San Bernardino this 18 th day of August, 2022.

______________________________
Genoveva Rocha, CMC, City Clerk

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FUNDING AND ACQUISITION AGREEMENT
Relating to

CITY OF SAN BERNARDINO
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(HIGHLAND/MEDICAL)
Between

THE CITY OF SAN BERNARDINO
and
WARMINGTON RESIDENTIAL CALIFORNIA, INC.,
a California corporation
______________ 1, 2022

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1 FUNDING AND ACQUISITION AGREEMENT
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(HIGHLAND/MEDICAL)

OF THE CITY OF SAN BERNARDINO
This FUNDING AND ACQUISITION AGREEMENT (the “Agreement”) is entered into the ______ day of _____________, 2022 by and between the CITY OF SAN BERNARDINO, a charter city and municipal organization organized and operating under the laws of the State of California (the “City”), and WARMINGTON RESIDENTIAL CALIFORNIA, a California corporation (“Developer”).

R E C I T A L S
A. PI Properties, LLC has purchased that certain real property located on approximately 10.10 gross acres of land within Tract Map No. 20494 including 95 residential lots, (the “Property”) located in the City, commonly known as “Highland/Medical.” B. The City, is in the process of establishing a community facilities district pursuant to the provisions of Chapter 2.5 (commencing with § 53311) of Part 1 of Division 2 of Title 5 of the Government Code, commonly known as the “Mello-Roos Community Facilities Act of 1982” (the “Act”), over and including the Property for the purpose of levying special taxes (the “Special Taxes”) and selling bonds, in one or more series (the “Bonds”), in an amount sufficient to finance the acquisition of certain local and regional circulation systems, storm drains, and parkland and open space, and sewer and water improvements (the “Acquisition Facilities”), and the design, planning, engineering, installation, and construction of certain public facilities and improvements, to be owned, operated or maintained by the City (the “Public Facilities”) to satisfy the obligation of the Property and the Developer for the payment of certain fees to the City. The Acquisition Facilities and Public Facilities are generally described in Exhibit A attached hereto, which Acquisition Facilities and Public Facilities are necessary to the development of the Property. Said community facilities district shall be known as the “Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino” (the “District”).

C. Section 53313.5 of the Act provides that a community facilities district may finance the purchase of facilities completed prior to the adoption of the resolution establishing the community facilities district, and may purchase facilities completed after the adoption of the resolution of formation establishing the community facilities district if the facilities have been constructed as if they had been constructed under the direction and supervision, or under the authority of, the local agency whose governing body is conducting proceedings for the establishment of the community facilities district.

D. The purpose of this Agreement is to provide for the levy of Special Taxes and the issuance and sale of the Bonds of the District secured by the Special Taxes to finance the acquisition of the Acquisition Facilities, and the design, planning, engineering, financing, installation, and construction of the Public Facilities and expenses incidental thereto.

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2 E. Capitalized terms used herein and not otherwise defined shall have the meaning set forth in Exhibit B attached hereto and by this reference herein incorporated.

AGREEMENTS
NOW, THEREFORE, in consideration of the preceding recitals and the mutual covenants hereinafter contained, the parties agree as follows:

Section 1. Establishment of District. The City shall initiate proceedings pursuant to the Act for the establishment of the District. Such proceedings include elections pursuant to Sections 53326, 53350 and 53353.5 of the Act on (i) the question of the issuance of the Bonds of the District to finance the acquisition of the Acquisition Facilities, and the design, planning, engineering, construction management, financing, installation and construction or acquisition of the Public Facilities, including the direct payment to the City for such Public Facilities, (ii) the question of the annual levy of the Special Taxes on those portions of the Property subject to the Special Taxes to pay directly for the Acquisition Facilities and the Public Facilities and to pay the principal of and interest on the Bonds and the annual administrative expenses of the City in levying and collecting such Special Taxes, paying the principal and interest on such Bonds and providing for the registration, exchange and transfer of such Bonds, including the fees of fiscal agents and paying agents, and any necessary replenishment of the reserve fund for such Bonds, and (iii) the question of the establishment of an appropriations limit for the District.

From time to time prior to the issuance of the Bonds, at the written request of Developer, and subject to Developer advancing funds as determined by the City as necessary to pay all costs related thereto in accordance with Section 4 below, the City shall use its reasonable best efforts to undertake proceedings which may be deemed necessary to amend the Rate and Method or to amend the boundaries of the District.

Section 2. Payment of City Fees as Deposit. Developer shall timely pay or deposit with the City in full when due all City Fees. Any payment or deposit of City Fees before Special Taxes are received or proceeds of the Bonds become available, including all City Fees paid prior to the execution of this Agreement, shall be held on deposit by the City in a separate account used exclusively for City Fees (the “Deposit Account”), and shall not be expended by the City, provided, however, earnings on the investment of funds in the Deposit Account shall be returned to the City. Except as otherwise provided below, if Bonds have not been issued for a period of 36 months from the date of payment of City Fees for the first phase of production units, then the City may use any funds remaining in the Deposit Account for their lawful purposes and such funds shall be deemed by the City as the payment of the City Fees for the applicable parcels of the Property for which payment was made, provided that if Developer requests that Bonds be issued within such 36 month time frame, then the City may not use any funds remaining in the Deposit Account as provided herein until 48 months from the date of payment of City Fees for the first phase of production units. If the City uses any of the funds remaining in the Deposit Account under either of the two foregoing scenarios, the Developer, or Developer’s designee, shall be reimbursed from the proceeds of Bonds subsequently issued even if such Bonds must be issued on a taxable basis.

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3 Immediately upon the City receiving proceeds of the Bonds in accordance with this Agreement, the City shall return to Developer, or Developer’s designee, all funds held in the Deposit Account. In addition, prior to the issuance of Bonds, to the extent Special Taxes in the Special Fund are available to be disbursed for Public Facilities in accordance with Section 6(a)(3) below, an equal amount of funds held in the Deposit Account shall be returned to Developer.

Section 3. Sale of Bonds. Upon Developer’s written request, the City shall use its reasonable best efforts, as hereinafter provided, to issue and sell Bonds, in one or more series, in accordance with the provisions of this Agreement and the Financing District Policy. Each series of Bonds is expected to have a debt service amortization schedule matching the annual Special Taxes available for debt service pursuant to the Rate and Method and for a term of not more than forty (40) years, for the purpose of raising an amount sufficient to pay for the design, planning, engineering, construction management, financing, installation and construction or acquisition of the Public Facilities and the Acquisition Facilities. In connection with the issuance of the first series of Bonds, the City on behalf of itself and the District shall establish criteria for the issuance of Additional Bonds which meet the criteria of the Financing District Policy. The timing of the issuance and sale of each series of Bonds, the aggregate principal amount thereof, and the terms and conditions upon which they shall be sold shall be as set forth in this Agreement and otherwise as determined by the City in its sole reasonable discretion after consultation with Developer. Not by way of limitation of the foregoing, the timing of the issuance and sale of the first series of Bonds and any Additional Bonds shall be as soon as reasonably practicable, as determined by the City in its sole reasonable discretion following consultation with its financial advisor, underwriter and other consultants and counsel after written request from Developer. Developer shall use its reasonable best efforts to cooperate with City in connection with any Bond sale.

Section 4. Advance of Certain Expenses. Pursuant to a Developer Deposit Agreement, between the City and Developer (the “Deposit Agreement”), Developer shall pay and advance all of the costs reasonably associated with the establishment of the District.

Developer shall deposit funds with the City for the City’s reasonable out-of-pocket expenses associated with a sale of each series of Bonds, including, but not limited to, (i) the fees and expenses of any consultants and legal counsel to the City employed in connection with the issuance of the Bonds, including an engineer, special tax consultant, financial advisor, bond counsel and any other consultant deemed necessary or advisable by the City, (ii) the costs of appraisals, market absorption and feasibility studies and other reports deemed necessary or advisable by the City in connection with the issuance of the Bonds, (iii) the costs of publication of notices and other costs related to any proceeding undertaken in connection with the issuance of the Bonds, (iv) reasonable charges for City staff time incurred in connection with the issuance of the Bonds, including a reasonable allocation of City overhead expense, and (v) any and all other actual costs and expenses incurred by the City in connection with the issuance of the Bonds (“Reimbursable Expenses”). If the Bonds are issued by the District, the City shall reimburse Developer from proceeds of the Bonds, without interest, for the portion of the Reimbursable Expenses deposits that have been expended or encumbered, said reimbursement to be made from the proceeds of the Bonds on the date of issuance of the Bonds or as soon as reasonably possible thereafter and only to the extent otherwise permitted under the Act, and refund any unexpended or encumbered deposited amounts. If the Special Taxes are levied and collected, the City may

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4 reimburse Developer from the receipts of Special Taxes (net of amounts required to pay District administrative expenses), without interest, for the portion of the deposits paid by Developer pursuant to the Deposit Agreement that have been expended or encumbered, said reimbursement from receipts of Special Taxes to be made on or before the end of each fiscal year; provided, however, that the City may retain such collected Special Taxes in the amounts that it deems reasonably necessary to facilitate the issuance of the Bonds.

The City shall keep records of all Reimbursable Expenses advanced by the City pursuant to this Section 4, which records shall be available for inspection by Developer during regular business hours. The sole source of funds for reimbursement of any advance expenditure made by the City or Developer shall be the uncommitted and unexpended payments made by Developer to the City, proceeds of the Bonds, or Special Tax receipts as determined by the City.

Section 5. Tax Requirements. The timing of the sale of each series of Bonds, the nature of the investments in which the proceeds of the Bonds shall be invested, the duration of such investments, and the timing of the expenditure of such proceeds shall be as set forth in this Agreement and the applicable fiscal agent agreement (the “Fiscal Agent Agreement”); provided, that in all such matters City shall comply with the requirements of and limitations prescribed by the provisions of Sections 103 and 141 through 150 of the Internal Revenue Code of 1986 (the “Code”), as amended, and the implementing regulations of the United States Department of the Treasury. The City shall not be required to take any such action which in the opinion of the City’s bond counsel could result in the Bonds being classified by the United States Department of the Treasury as “arbitrage bonds” or which could otherwise result in the interest on the Bonds being included in gross income for purposes of Federal income taxation. Should any change in or regulatory interpretation of any such requirement or limitation which may occur after the date of this Agreement require or necessitate, in the reasonable opinion of such bond counsel, any action on the part of the City in order to avoid such a classification or loss of tax exemption, the City shall notwithstanding any provision of this Agreement, forthwith take such action. In the event the City fails to comply with requirements set forth above in this Section 5, the City’s liability is limited to the Special Tax revenues generated by the District.

Section 6. Priority and Allocation of Special Taxes and Bond Proceeds. (a) Special Taxes Prior to the Issuance of Bonds.

Prior to the issuance of Bonds, Special Taxes may be levied at the discretion of the City on Developed Property pursuant to the Rate and Method in and following the first fiscal year in which an Assessor’s Parcel is classified as Developed Property until the issuance of the final series of Bonds.

Prior to the issuance of the first series of Bonds, the proceeds of the Special Taxes shall be allocated in the following priority:
(1) first, to pay all reasonable costs of administration of the District; (2) second, to pay eligible costs reasonably determined by the City to be necessary to facilitate the issuance of Bonds within the next six (6) months; and

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5 (3) third, the amount remaining after payment of the amounts for (1) and (2) shall be deposited in the Special Fund and disbursed first to reimburse prior deposits paid by Developer to City pursuant to the Deposit Agreement, then to fund the Acquisition Facilities and/or Public Facilities.
(b) Special Taxes Following the Issuance of Bonds. Following the issuance of the first series of Bonds and continuing until the issuance of the final series of Bonds, the City shall levy Special Taxes on all Assessor’s Parcels classified as Developed Property at the Assigned Special Tax amount pursuant to the Rate and Method or such lesser amount which complies with the Fiscal Agent Agreement. In years in which there is no levy of Special Taxes on Undeveloped Property, the priority for allocation of the Special Taxes collected from Developed Property shall be as follows:
(1) first, to fund an amount up to the annual Administrative Expense Requirement;
(2) second, to pay principal and interest on outstanding Bonds and to replenish the reserve fund to the applicable reserve fund requirement; (3) third, to fund all actual administrative expenses in excess of the Administrative Expense Requirement; and
(4) fourth, all remaining amounts shall reduce special tax levies in subsequent fiscal years.
(c) Bond Proceeds. The proceeds of all Bonds shall be allocated and disbursed according to the following priorities:
(1) first, to fund all costs of issuance of the Bonds including (i) a reserve fund for the Bonds which does not exceed the amount permitted under the Code or the Act, (ii) capitalized interest for at least the period required to collect sufficient Special Taxes through the annual levy, or a longer period requested by Developer, not to exceed an amount equal to two years interest, or such lesser amount as the City shall determine pursuant to the Financing District Policy, (iii) the underwriter’s discount, (iv) the Reimbursable Expenses, and (v) bond counsel fees, disclosure counsel fees, financial advisor, appraisal and market absorption consultant fees, special tax consultant fees, fiscal agent or trustee fees and other typical and reasonable out-of-pocket expenses incurred by the City in connection with the issuance and sale of the Bonds;
(2) second, to reimburse, without interest, prior deposits paid by Developer to City pursuant to the Deposit Agreement and this Agreement related to formation of the District and issuance of the Bonds; and
(3) third, to fund the Acquisition Facilities (including any costs incurred by the City for processing Payment Requests) and/or Public Facilities in satisfaction of an amount equal to City Fees for which Special Taxes were insufficient to pay, as may be determined by the City in consultation with Developer.

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6 Section 7. Construction of Acquisition Facilities. The Acquisition Facilities for which Developer seeks reimbursement under this Agreement shall be constructed and completed by Developer, as determined by the City pursuant to Section 53313.5 of the Act. Payment of the Purchase Price of the Acquisition Facilities shall be in the manner described in Section 8 hereof.

Section 8. Acquisition and Payment of Acquisition Facilities. (a) Inspection. City agrees that the Acquisition Facilities are eligible for payment, provided that the timing and amount of such payment shall be determined by the City pursuant to this Section 8 of this Agreement. No payment hereunder shall be made by the City to Developer for an Acquisition Facility until such Acquisition Facility has been inspected by the City or other applicable public entity or utility and found to be substantially completed in accordance with the approved Plans. An Acquisition Facility shall be considered “substantially complete” when it has been reasonably determined by the City or other applicable public entity to be usable, subject to final completion of such items as the final lift or any other items not essential to the primary use or operation of the Acquisition Facility. For Acquisition Facilities to be acquired by the City, Developer shall request inspection using applicable City procedures.

For Acquisition Facilities to be acquired by other public entities or utilities, Developer shall be responsible for obtaining such inspections and providing written evidence thereof to the City Engineer. Developer agrees to pay all inspection, permit and other similar fees of the City applicable to construction of the Acquisition Facilities, which fees are subject to reimbursement under this Agreement.
(b) Agreement to Sell and Purchase Acquisition Facilities. Developer hereby agrees to sell the Acquisition Facilities to the City and the City hereby agrees to use amounts available pursuant to the terms of this Agreement to pay the Purchase Price, as defined below, thereof to Developer, subject to the terms and conditions hereof. The City shall not be obligated to pay the Purchase Price for the Acquisition Facilities except from the proceeds of the Bonds and proceeds of the Special Tax as provided herein.
(c) Purchase Price. The Purchase Price for an Acquisition Facility shall be equal to the Actual Cost of such Acquisition Facility, as approved in accordance with the procedure set forth in subsection (e) below but subject to the limitations of this Section 8. (d) Payment Requests. In order to receive the Purchase Price for an Acquisition Facility, Developer shall deliver to the City Manager or his designee a Payment Request in the form of Exhibit C hereto, together with all attachments and exhibits required by this Section 8(d) to be included therewith. If the property on which the Acquisition Facility is located is not owned by the City at the time of the request, Developer shall provide a copy of the recorded documents conveying to the City Acceptable Title to the real property on, in or over which such Acquisition Facility is located, as described in Section 9(a) hereof. (e) Processing Payment Requests. Upon receipt of a Payment Request (and all accompanying documents), the City Manager or his designee shall conduct a review in order to confirm that such request is complete and to verify and approve the Actual Cost of the Acquisition Facility. The City Manager or his designee shall also conduct such review as is required in his/her discretion to confirm the matters certified in the Payment Request. Developer

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7 agrees to cooperate with the City Manager or his designee in conducting each such review and to provide the City Manager or his designee with such additional information and documentation as is reasonably necessary for the City Manager or his designee to conclude each such review.

Within 20 business days of receipt of the Payment Request, the City Manager or his designee expects to review the request for completeness and notify Developer whether such Payment Request is complete, and, if not, what additional documentation must be provided. If such Payment Request is complete, the City Manager or his designee expects to provide a written approval or denial (specifying the reason for any denial) of the request within 30 days of its submittal.
(f) Payment. Upon approval of the Payment Request by the City Manager or his designee, the City Manager or his designee shall sign the Payment Request and forward the same to the Finance Director of the City. Upon receipt of the reviewed and fully signed Payment Request, the Finance Director of the City shall, within the then current City financial accounting payment cycle but in any event within fifteen (15) business days of receipt of the approved Payment Request, cause the same to be paid by the Fiscal Agent under the applicable provisions of the Fiscal Agent Agreement, to the extent of funds then on deposit in the appropriate account.

The Purchase Price paid hereunder for the Acquisition Facilities shall constitute payment in full for the Acquisition Facilities, including, without limitation, payment for all labor, materials, equipment, tools and services used or incorporated in the work, supervision, administration, overhead, expenses and any and all other things required, furnished or incurred for completion of the Acquisition Facilities.
(g) Timing of Requisitions. The City and Developer acknowledge that (i) Developer may submit a Payment Request for an Acquisition Facility to the City in advance of when sufficient, if any, funds are available for payment of the Purchase Price; (ii) the Payment Request submitted when there are insufficient proceeds available will be reviewed by the City as set forth in this Agreement and, if appropriate, approved for payment when such funds are available and (iii) the payment approved in the preceding manner will be deferred until the date, if any, on which there are proceeds of Special Taxes or Bonds available to make all or part of such payment, at which time the city will pay from the Special Fund or direct the Fiscal Agent to wire transfer (or pay in another mutually acceptable manner) from Bond proceeds the funds available to the payee identified in such Payment Request. (h) Restrictions on Payments. Notwithstanding any other provisions of this Agreement, the following restrictions shall apply to any payments made to Developer under Sections 8(b) and 8(f) hereof:
(1) Amounts of Payments. Subject to the following paragraphs of this Section 8(h), payments for the Acquisition Facilities will be made only in the amount of the Purchase Price for the Acquisition Facilities.

Nothing herein shall require the City in any event (i) to pay more than the Actual Cost of the Acquisition Facilities, or (ii) to make any payment beyond the available funds in the Special Fund or the applicable accounts identified in the Fiscal Agent Agreement. The parties hereto acknowledge and agree that all payments to Developer for the Purchase Price of

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8 the Acquisition Facilities are intended to be reimbursements to Developer for monies already expended or for immediate payment by Developer (or directly by the City) to third parties in respect of the Acquisition Facilities.
(2) Joint or Third Party Payments. The City may make any payment jointly to Developer and any mortgagee or trust deed beneficiary, contractor or supplier of materials, as their interests may appear, or solely to any such third party, if Developer so requests the same in writing or as the City otherwise determines such joint or third party payment is necessary to obtain lien releases.
(3) Withholding Payments. The City shall be entitled, but shall not be required, to withhold any payment hereunder for the Acquisition Facilities if the Owner or any Affiliate is delinquent in the payment of ad valorem real property taxes, special assessments or taxes, or Special Taxes levied in the District. In the event of any such delinquency, the City shall only make payments hereunder directly to contractors or other third parties employed in connection with the construction of the Acquisition Facilities or to any assignee of Developer’s interests in this Agreement (and not to Developer or any Affiliate), until such time as Developer provides the City Manager with evidence that all such delinquent taxes and assessments have been paid.

The City shall withhold final payment for an Acquisition Facility constructed on land until Acceptable Title to such land is conveyed to the City, as described in Section 9 hereof.

Nothing in this Agreement shall be deemed to prohibit Developer from contesting in good faith the validity or amount of any mechanics or materialman’s lien nor limit the remedies available to Developer with respect thereto so long as such delay in performance shall not subject the Acquisition Facility to foreclosure, forfeiture or sale. In the event that any such lien is contested, Developer shall only be required to post or cause the delivery of a bond in an amount equal to the amount in dispute with respect to any such contested lien, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the City Manager or his designee.

Nothing in this Section 8(h) shall prevent payments pursuant to Section 6. (i) Modification of Acquisition Facilities and Public Facilities. The descriptions of the Acquisition Facilities and Public Facilities in Exhibit A may be modified, or new Acquisition Facilities and Public Facilities may be added to Exhibit A, through a Supplement executed by the City Manager and Developer provided the modifications or new Acquisition Facilities and Public Facilities are consistent with the facilities and costs authorized to be funded by the District pursuant to the formation proceedings and the Act.

Section 9. Ownership and Transfer of Acquisition Facilities. (a) Conveyance of Land and Easements to City. Acceptable Title to all property on, in or over which the Acquisition Facilities will be located, shall be deeded over to the City by way of grant deed, quitclaim, or dedication of such property, or easement thereon, if such conveyance of interest is approved by the City as being a sufficient interest therein to

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9 permit the City to properly own, operate and maintain the Acquisition Facilities located therein, thereon or thereover, and to permit Developer to perform its obligations as set forth in this Agreement. Developer agrees to assist the City in obtaining such documents as are required to obtain Acceptable Title. Completion of the transfer of title to land shall be accomplished prior to the payment of the Purchase Price for an Acquisition Facility and shall be evidenced by an irrevocable offer of dedication or recordation of the acceptance thereof by the City Council. (b) Facilities to be Owned by the City – Title Evidence. Upon the request of the City, Developer shall furnish to the City a preliminary title report for land with respect to the Acquisition Facilities that have not previously been dedicated or otherwise conveyed to the City, for review and approval at least fifteen (15) calendar days prior to the transfer of Acceptable Title of the Acquisition Facilities to the City. The City shall approve the preliminary title report unless it reveals a matter which, in the judgment of the City, could materially affect the City’s use and enjoyment of any part of the property or easement covered by the preliminary title report. In the event the City does not approve the preliminary title report, the City shall not be obligated to accept title to such Acquisition Facility or pay the Purchase Price for the Acquisition Facility until Developer has cured such objections to title to the satisfaction of the City. (c) Facilities Constructed on Private Lands. If any portion of an Acquisition Facility is located on privately-owned land, the owner thereof shall retain title to the land and the completed Acquisition Facility until the Acquisition Facility is accepted by City and transferred to City pursuant to this Section 9. Pending the completion of such transfer, Developer shall not be entitled to receive any payment for the Acquisition Facility. Developer shall, however, be entitled to receive payments pursuant to Section 8 of the Acquisition Facility upon making an irrevocable offer of dedication of such land in form and substance acceptable to the City Manager.
(d) Facilities Constructed on City Land. If any portion of an Acquisition Facility to be acquired is on land owned by the City, the City hereby grants to Developer a license to enter upon such land for purposes related to the construction (and maintenance pending acquisition) of the Acquisition Facility. The provisions for inspection and acceptance of the Acquisition Facilities otherwise provided herein shall apply.

Section 10. Indemnification. Developer shall promptly defend, indemnify and hold harmless the City, its officers, employees and agents, and each and every one of them, and the District from any and all claims, actions, liability, damages, losses, expenses and costs arising out of Developer’s performance of, or failure to perform, its duties hereunder or by reason of, or arising out of, this Agreement.

Section 11. City Policies. The Rate and Method, the sale of the Bonds and the ratio of the appraised market value of all parcels of property within the District to the total amount of the assessment and special tax obligation thereof after the issuance and sale of the Bonds (the “Value-to-Lien Ratio”) shall comply with the Financing District Policy of the City.

Section 12. Representations, Covenants and Warranties of Developer. Developer represents and warrants for the benefit of the City as follows:

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10 A. Organization. Developer is duly organized, validly existing and in good standing under the laws of the State of California, is duly qualified to conduct business as a corporation and is in good standing under the laws of the State of California and has the corporate power and corporate authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated.

B. Authority. Developer has the corporate power and corporate authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered by Developer, and this Agreement has been duly and validly executed and delivered by Developer.

C. Binding Obligation. This Agreement is a legal, valid and binding obligation of Developer, enforceable against Developer in accordance with its terms, subject to bankruptcy and other equitable principles.

D. Compliance with Laws. Developer shall not with knowledge commit, suffer or permit any act to be done in, upon or to the lands of Owner in the District in violation of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting the lands in the District or the Acquisition Facilities.

E. Requests for Payment. Developer represents and warrants that (i) it will not request payment from the City out of the Special Taxes or proceeds of the Bonds for the acquisition of any improvements other than the Acquisition Facilities, and (ii) it will diligently follow all procedures set forth in this Agreement with respect to the Payment Request for the Acquisition Facilities.

F. Additional Information. Developer agrees to cooperate with all reasonable written requests for nonproprietary information by the original purchasers of the Bonds or the City related to the status of construction of improvements within the District, the anticipated completion dates for future improvements, and any other matter material to the investment quality of the Bonds.

G. Continuing Disclosure. Developer agrees to comply with all of its obligations under any continuing disclosure agreement executed by it in connection with the offering and sale of any of the Bonds. Developer shall cooperate with City in complying with the requirements of Rule 15c2-12 of the Securities and Exchange Commission in connection with the issuance and sale of the Bonds. Developer shall provide information to the City regarding its operations and financial condition as such information has been disclosed in the Official Statement. The City, in consultation with the underwriter of the Bonds, may determine that some or all of such financial information will be included in the preliminary official statement and the final official statement for the Bonds. If Developer owns property within the District responsible for more than 20% of the Special Taxes levied in such fiscal year, then Developer acknowledges that it may be an “obligated person” for purposes of compliance with Rule 15c2-12(b)(5) of the Securities and Exchange Commission and that it may therefore be necessary that Developer enter into a continuing disclosure undertaking, at the time of and in connection with the issuance and sale of the Bonds, that so long as it remains an obligated person it will semi-annually, at the time

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11 specified in such undertaking, provide information regarding its financial condition, including, at the City’s discretion, such regularly submitted periodic reports and financial statements prepared by Developer’s certified public accountant which are available to the investing public (which may be consolidated with Developer’s parent company) and the status of development and residential and land sale activity within the District to be included within the semi-annual reports which Developer, or a dissemination agent designated in such undertaking, will file with the Nationally Recognized Municipal Securities Information Repositories which are identified by the Securities and Exchange Commission and any state information repository that may be designated for the State of California, as required by that rule. Copies of all such reports shall also be provided to the City and the underwriter of the Bonds. Developer further acknowledges that it may be an obligated person pursuant to such rule as long as it owns property within the District that is responsible for the payment of annual Special Taxes which represent 20% or more of the annual debt service on the Bonds. The Developer shall notify the Owner who owns property within the District which will be responsible for the payment of annual Special Taxes which represent 20% or more of the annual debt service on the Bonds that it will be an obligated person for purposes of the rule and that such entity will be required to enter into a continuing disclosure undertaking as provided in this section.

Section 13. Independent Contractor. Developer is an independent contractor and not the agent of the City or the District. This Agreement shall not and does not create a joint venture or partnership between the City and Developer. The City shall have no responsibility or liability for the payment of any amount to any employee or subcontractor of Developer.

Section 14. Special Taxes. The parties are entering into this Agreement and establishing the District for the purpose of creating a stream of Special Tax revenues that will be available to the District to pay directly the costs of acquisition, construction and/or equipping the Acquisition Facilities and Public Facilities and to pay debt service on the Bonds, the proceeds of which will be used to pay the costs of acquisition, construction and/or equipping of the Acquisition Facilities and Public Facilities. Developer and City hereby acknowledge and agree (i) that any reduction or termination of the Special Taxes by exercise of the initiative power or other action would constitute a substantial impairment of the Special Tax revenue stream that Developer and City intend to create for the purpose of providing an assured source of funding for construction, acquisition and/or equipping of the Acquisition Facilities and Public Facilities, and (ii) that this Agreement is being entered into, and the Special Taxes are being imposed upon the Property pursuant to the Rate and Method, in accordance with existing laws relating to the imposition of fees and charges as a condition of development of the Property and such Special Taxes are being incurred as an incident of the voluntary act of development of the Property.

Section 15. Disclosure of Special Taxes.
(a) From and after the date of this Agreement, Developer shall provide a “Notice of Special Tax” (as defined in Section 15(b) below) to each prospective purchaser of a home in the District prior to the execution by the home buyer of the sale contract for such home.

Developer shall (i) maintain records of each Notice of Special Tax for a period of five (5) years, and (ii) shall provide copies of each notice to City promptly following the giving of such notice.

Developer shall include the Notice of Special Tax in all Developer’s applications for Final

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12 Subdivision Reports required by the Department of Real Estate (“DRE”) which are filed after the effective date of this Agreement.

Developer shall require of a builder acquiring lots within the Property (a “Residential Builder”), prior to the close of escrow on any residential lot, to (i) maintain records of each Notice of Special Tax for a period of five (5) years, (ii) provide copies of each notice to City promptly following the giving of such notice, and (iii) include the Notice of Special Tax in all of such Residential Builder’s applications for Final Subdivision Reports required by DRE. (b) With respect to any parcel, the term “Notice of Special Tax” means a notice in the form prescribed by California Government Code Section 53341.5 which is calculated to disclose to the purchaser thereof (i) that the property being purchased is subject to the Special Taxes and other special taxes of the District; (ii) the classification of such property; (iii) the maximum annual amount of the Special Taxes and other special taxes of the District and the number of years for which they are authorized to be levied; and (iv) the types of facilities and services to be paid with the proceeds of the Special Taxes and other special taxes of the District. (c) City will file with the San Bernardino County Recorder’s office a notice of special tax lien that gives notice of the existence of the District and the levy of the Special Tax on property within the District for the benefit of subsequent property owners, pursuant to requirements of Section 3114.5 of the Streets and Highways Code. (d) Sample Property Tax Bill/Special Tax Information Sheet. Developer and its successors and assigns shall prepare and have available in its sales office, copies of either a sample property tax bill in a form reasonably acceptable for the City or special tax information sheet in substantially the form attached hereto as Exhibit D (the “Special Tax Information Sheet”), which shows the assigned annual Special Taxes and other special taxes authorized to be levied within the District under the Rate and Method. Developer and its successors and assigns shall make available to prospective homebuyers to take with them, copies of such sample property tax bill or Special Tax Information Sheet at the time written information regarding the base home price and property tax information for a specific home site is requested by and provided to such homebuyers. Developer intends to comply with this requirement by providing prospective homebuyers who request such additional written information, with the sample property tax bill in the Master Property Disclosure Report, a copy of which has presented to and approved by the City.

Section 16. Termination and Dissolution. Prior to the issuance of Bonds, Developer may elect to terminate this Agreement and request that the City cancel the Special Taxes by providing written notice to the City. Within thirty (30) days of such written notice, City shall record a notice of cancellation of the Special Taxes with respect to each parcel. Developer shall be responsible for reasonable City costs incurred relating to the cancellation of the Special Taxes and recordation of such notice; provided, however, that the City shall not terminate the Special Taxes for any lot for which a building permit has been issued, unless Developer pays all City fees or posts separate security therefore. Such termination of this Agreement and cancellation of Special Taxes shall have no effect on Developer’s obligations to pay City Fees upon issuance of a building permit.

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13 Section 17. Binding on Community Facilities District. The District shall automatically become a party to this Agreement, and all provisions hereof which apply to the City shall also apply to the District. The City Council of the City, acting as the legislative body of the District, shall perform all parts of this Agreement which require performance on the part of the District.

Section 18. Assignment. Upon the successful formation of the District, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto and shall run with the land without any further action of the City or Developer unless terminated in writing pursuant to Section 16.

Section 19. Prompt Action. All consents, approvals and determinations required of either the City or Developer pursuant to this Agreement shall be promptly given or made, and shall not be unreasonably withheld or conditioned.

Section 20. General. This Agreement and the Deposit Agreement contain the entire agreement between the parties with respect to the matters herein provided for. This Agreement may only be amended by a subsequent written agreement signed on behalf of both parties. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. This Agreement shall be construed and governed by the Constitution and laws of the State of California. Should either party to this Agreement commence a court action or proceeding against the other party with respect to this Agreement or the design and acquisition or construction of the Acquisition Facilities, the party prevailing in such action or proceeding shall be entitled to receive from the losing party its attorney’s fees, expert witness fees, court costs and other costs incurred by it in prosecuting or defending such action or proceeding. The captions of the sections of this Agreement are provided for convenience only, and shall not have any bearing on the interpretation of any section hereof. This Agreement may be executed in several counterparts, each of which shall be an original of the same agreement. [Signature Page Follows]

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S-1
IN WITNESS WHEREOF, the parties have caused this agreement to be signed as of the date first above written.

Dated: WARMINGTON RESIDENTIAL
CALIFORNIA, INC.,
a California corporation
By: ________________________________
_________________________
Authorized Agent
Dated: CITY OF SAN BERNARDINO
By: ________________________________
Robert D. Field
City Manager
ATTEST:

By:

City Clerk
APPROVED AS TO FORM:

By:

Bond Counsel
-Signature Page-
Funding and Acquisition Agreement

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A-1

EXHIBIT A

DESCRIPTION OF PUBLIC FACILITIES
The immediately following table lists the Acquisition Facilities to be constructed by Developer, including the current cost estimates related thereto, which are subject to change.

A. Acquisition Facilities Estimated
Local Circulation Improvements $22,129.00
Regional Circulation Improvements 231,325.00
Storm Drainage Improvements 372,961.00
Parkland and Open Space Improvements 904,197.00
Sewer Capacity 332,500.00
Sewer Connection (3 Bedroom) 35,280.00
Sewer Connection (4 Bedroom) 112,560.00
Water Connection (3/4” Meter) 884,517.00
GRAND TOTAL ELIGIBLE ACQUISITION FACILITIES $2,895,469.00

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B-1

EXHIBIT B

DEFINITIONS
The following terms shall have the meanings ascribed to them for purposes of this Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used herein shall have the meanings ascribed to them in the Fiscal Agent Agreement (as hereinafter defined). “Acceptable Title” means title to land or interest therein, in form acceptable to the Public Works Director, free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether or not recorded, but subject to any exceptions determined by the Public Works Director as not interfering with the actual or intended use of the land or interest therein.

Notwithstanding the foregoing, an irrevocable offer of dedication may constitute land with an “Acceptable Title” if (i) such offer is necessary to satisfy a condition to a tentative or final parcel map, (ii) such offer is in a form acceptable to the Public Works Director, (iii) the Public Works Director has no reason to believe that such offer of dedication will not be accepted by the applicable public agency, and (iv) the owner commits in writing not to allow any liens to be imposed on such property prior to its acceptance.
“Acceptance Date” means the date the City Council takes final action to accept dedication of or transfer of title to the Acquisition Facilities. “Acquisition Facilities” means the facilities described as such in Exhibit A to the Agreement.
“Additional Bonds” means any series of Bonds issued by or on behalf of the District after the first series of Bonds, in each case in compliance with and under supplements to the Fiscal Agent Agreement, which Additional Bonds shall be secured on a parity lien or subordinate lien position with other Bonds previously issued.
“Affiliate” mean, with respect to the Developer, any other Person who control, is controlled by or is under common control with the Developer, for purposes hereof, control means the power to exercise a controlling influence over the management or policies of a person, unless such power is solely the result of an official position with such person. “Agreement” means this Agreement, together with any Supplement hereto. “Act” means the Mello-Roos Community Facilities Act of 1982, Sections 53311 et seq. of the California Government Code, as amended.
“Actual Cost” means the substantiated cost of the Acquisition Facilities, which costs may include: (i) the costs incurred by the Developer for the construction of the Acquisition Facilities, including labor, material and equipment costs; (ii) the costs incurred by the Developer in preparing the Plans for the Acquisition Facilities and the related costs of environmental evaluations of the Acquisition Facilities; (iii) the fees paid to governmental agencies for obtaining permits, licenses or other governmental approvals for the Acquisition Facilities; (iv) a construction and project management fee of five percent (5%) of the costs described in clause (i) above incurred for the construction of the Acquisition Facilities; (v) professional costs incurred

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B-2
by the Developer or the City associated with the Acquisition Facilities, such as engineering, legal, accounting, inspection, construction staking, materials testing and similar professional services; (vi) costs directly related to the construction and/or acquisition of the Acquisition Facilities, such as costs of payment, performance and/or maintenance bonds, and insurance costs (including costs of any title insurance required hereunder); and (vii) costs of any real property or interest therein acquired from a third party, which real property or interest therein is either necessary for the construction of such Acquisition Facility (e.g., temporary construction easements, haul roads, etc.) or is required to be conveyed with such Acquisition Facility in order to convey Acceptable Title thereto to the City. Actual Cost shall not include any cost of carry or interest expense with respect to any construction loan obtained by the Developer with respect to the Acquisition Facilities.
“Administrative Expense Requirement” means $25,000 per year commencing in the first year of issuance of Bonds.
“Assessor’s Parcel” shall have the meaning ascribed to it in the Rate and Method. “Bonds” means any series of bonds issued by or on behalf of the District. “City Fees” means the following development impact fees imposed by the City; local and regional circulation system, storm drain, parkland and open space, sewer capacity, and water and sewer connection.
“Deposit Agreement” means the Deposit Agreement between the City and the Developer. “District Representative” means the City Manager of the City, or his or her designee. “Extraordinary Administrative Expenses” means administrative expenses required for extraordinary District events such as foreclosure actions against delinquent taxpayers within the District.
“Financing District Policy” means the City of San Bernardino Debt Policy and Procedures, dated September 16, 2015, as amended on July 1, 2020 or as further amended from time to time.
“Fiscal Agent” means the financial institution or other entity that enters into a Fiscal Agent Agreement with the City with respect to the Bonds. “Fiscal Agent Agreement” means, collectively, any agreement or agreements by that or similar name to be executed by the City, for and on behalf of the District, and the fiscal agent, which will provide for, among other matters, the issuance of the Bonds and the establishment of an Improvement Fund as originally executed by the City and the fiscal agent and as it may be amended from time to time.
“Owner” means PI PROPERTIES, LLC, a California limited liability company, as the owner of the Property, and its successors and assigns, other than individual homebuyers.

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B-3
“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.
“Plans” means the plans, specifications, schedules and related construction contracts for the Acquisition Facilities approved pursuant to the applicable standards of the City or other entity that will own, operate or maintain the Acquisition Facilities when completed and acquired. “Purchase Price” means the amount paid by the City for the Acquisition Facilities determined in accordance with Section 8 hereof, being an amount equal to the Actual Cost of such Acquisition Facilities, but subject to the limitations and reductions provided for in Section

8. “Rate and Method” means the rate and method of apportionment of special taxes approved for the District in accordance with the Act.
“Special Fund” means a discrete, interest-bearing special fund of the City to be established and administered pursuant to this Agreement. “Special Tax or Special Taxes” means the special tax designated in the Rate and Method.

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C-1

EXHIBIT C

FORM OF PAYMENT REQUEST
City of San Bernardino
Community Facilities District No. 2022-1
(Highland/Medical)
The undersigned, ______________________, a duly authorized representative of Developer, hereby requests payment of the Purchase Price of the Acquisition Facilities described in Attachment A attached hereto. Capitalized undefined terms shall have the meanings ascribed thereto in the Funding and Acquisition Agreement, dated as of ___________ 1, 2022 (the “Agreement”), by and between the City of San Bernardino (“City”) for the City of San Bernardino Community Facilities District No. 2022-1 (Highland/Medical) (the “CFD”), and WARMINGTON RESIDENTIAL CALIFORNIA, INC., a California corporation (“Developer”).

In connection with this Payment Request, the undersigned hereby represents and warrants to the CFD and the City as follows:

1. He (she) is a duly authorized representative of Developer, qualified to execute this request for payment on behalf of Developer and knowledgeable as to the matters set forth herein.

2. The Acquisition Facilities for which payment is being sought under this payment request have been substantially completed in accordance with the Agreement.

3. The true and correct Actual Cost of the Acquisition Facilities is set forth in Attachment A.

4. Attached hereto are invoices, receipts, worksheets and other evidence of costs which are in sufficient detail to allow the City to verify the Actual Cost of the Acquisition Facilities.

5. There has not been filed with or served upon Developer notice of any lien, right to lien or attachment upon, or claim affecting the right to receive the payment requested herein which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by operation of law.

Copies of lien releases for all work for which payment is requested hereunder are attached hereto.

6. Developer is in compliance with the terms and provisions of the Agreement.

The Purchase Price for the Acquisition Facilities shall be payable from the appropriate account created pursuant to the Fiscal Agent Agreement or the Special Fund established pursuant to the Agreement.

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C-2
I hereby certify that the above representations and warranties are true and correct.

Dated: WARMINGTON RESIDENTIAL
CALIFORNIA, INC., a California
corporation
By:

Name:

Title:

By execution of this Payment Request, the City does hereby approve of the payment as described in this Payment Request and directs the Fiscal Agent to pay such amounts, first, from bond proceeds held in the designated account pursuant to the Fiscal Agent Agreement and, second from any surplus Special Taxes held by the City as applicable, to the payee listed above and/or the City shall pay all or a portion thereof from funds designated by the City for such purpose.

CITY OF SAN BERNARDINO
for the City of San Bernardino Community
Facilities District No. 2022-1
(Highland/Medical)
By:

Name:

City Manager

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C-3

ATTACHMENT A
City Acquisition
Facility Estimated Cost Actual Cost Purchase Price
Total Purchase Price to be Paid $

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D-1

EXHIBIT D

CITY OF SAN BERNARDINO SPECIAL TAX INFORMATION SHEET
Community Facilities District No. 2022-1
(Highland/Medical)

1.WHAT IS COMMUNITY FACILITIES DISTRICT (CFD) NO. 2022-1? CFD No. 2022-1 (Highland/Medical) was formed pursuant to the “Mello-Roos Community Facilities Act of 1982” to finance certain public facilities.

2.WHO IS RESPONSIBLE TO PAY THE SPECIAL TAX AND HOW IS IT BILLED?
The property owner is responsible for paying the CFD No. 2022-1 (Highland/Medical) special taxes, which will appear as a separate line item on your property tax bill along with your regular property taxes.

3.HOW MUCH WILL MY SPECIAL TAX BE?
The special tax is based upon the size of the home. The assigned and maximum special taxes for CFD No. 2022-1 (Highland/Medical) for the 2022-23 fiscal year are summarized below.

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

1. Single Family Residential Property RU Less than 1,800 sq. ft $2,790

2. Single Family Residential Property RU 1,800 sq. ft to 2,000 sq. ft $3,080

3. Single Family Residential Property RU Greater than 2,000 sq. ft $3,209

4. Multifamily Property Acre N/A $49,620

5. Non-Residential Property Acre N/A $49,620

4.HOW LONG WILL I HAVE TO PAY THE CFD NO. 2022-1 SPECIAL TAX?
Special Taxes will not be collected after fiscal year 2064-2065.

5.CAN THE SPECIAL TAXES BE PREPAID?
Homeowners have the option of prepaying special taxes anytime. For prepayment information please contact the City of San Bernardino’s CFD No. 2022-1 (Highland/Medical) administrator, Spicer Consulting Group, LLC, 41619 Margarita Road, Suite 101, Murrieta, CA 92591, phone (866-504-2067).

6.WHERE CAN I GET MORE INFORMATION?
For more information in regards to CFD No. 2022-1, contact the City of San Bernardino’s CFD No. 2022-1 (Highland/Medical) administrator, Spicer Consulting Group, LLC, 41619 Margarita Road, Suite 101, Murrieta, CA 92591, phone (866-504-2067).

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7 PUBLIC HEARING
City of San Bernardino
Request for Council Action
Date: October 5, 2022
To: Honorable Mayor and City Council Members
From: Robert D. Field, City Manager; Barbara Whitehorn, Agency Director of Administrative Services
Department: Finance
Subject: Public Hearing on Proceedings to Form Proposed Community Facilities District No. 2022-2 (Palm)

Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1) Adopt Resolution No. 2022-212 of the Mayor and City Council of the City of San Bernardino, California, Establishing Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California, and the boundaries thereof and approving a Funding Agreement;
2) Adopt Resolution No. 2022-213 of the Mayor and City Council of the City of San Bernardino, California, Determining the Necessity to Incur a Bonded Indebtedness for Community Facilities District No. 2022-2 (Palm), Submitting to the Qualified Electors of the Community Facilities District a Proposition to Authorize the Levy of a Special Tax Therein, to Authorize such Community Facilities District to Incur a Bonded Indebtedness Secured by the Levy of a Special Tax Therein to Finance Certain Types of Public Facilities and to Establish an Appropriations Limit for such Community Facilities District and Calling a Special Election for the Community Facilities District on a Proposition for Incurring such Bonded Indebtedness;
3) Adopt Resolution No. 2022-214 of the Mayor and City Council of the City of San Bernardino, California Calling a Special Election and Submitting to the Voters of

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7 Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino Propositions Regarding the Annual Levy of Special Taxes within the Community Facilities District to Pay Principal of and Interest on Bonds Thereof and to Pay the Costs of Public Facilities and Establishing an Appropriations Limit Therefore; 4) Adopt Resolution No. 2022-215 of the Mayor and City Council of the City of San Bernardino, California Declaring the Results of the Consolidated Special Elections within Community Facilities District No. 2022-2 (Palm); and 5) Introduce, read by title only and waive further reading of Ordinance No. MC-1598 of the Mayor and City Council of the City of San Bernardino, California, Acting as the Legislative Body of Community Facilities District No. 2022-2 (Palm), Authorizing the Levy of Special Taxes in such Community Facilities District.

Background
The City has received petitions from Pacific West Company, the owner of APN Nos. 0285-211-21-0000, 0285-211-23-0000, and 0285-211-22-0000, and Hanhsing Li, Chenmei Cheng, and Ann C. Lau (the “Owners”), the owners of APN Nos. 0285-211- 05-0000 and 0285-211-25-0000 (the “Property”) requesting the formation of the proposed community facilities district (the “CFD”), encompassing the Property, to finance:
(a) Acquisition, design, construction of local and regional circulation systems, storm drain improvements, and parkland and open space (the “Facilities”); and (b) The incidental expenses proposed to be incurred are: (i) the cost of planning and designing the public facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the formation of the proposed CFD No. 2022-2, the issuance of the bonds thereof, the determination of the amount of and collection of special taxes, the payment of special taxes, and costs otherwise incurred in order to carry out the authorized purposes of the proposed CFD No. 2022-2, and (iii) any other expenses incidental to the construction, completion, and inspection of the public Facilities.

On July 20, 2022, this City Council approved Resolution Nos. 2022-143 and 2022-144, which initiated the formation of the CFD, approved the boundaries of the proposed CFD, described the facilities proposed to be financed, proposed a rate and method of apportionment of special taxes and declared the necessity to issue bonds secured by such special tax levy to finance the Facilities. Additionally, the resolutions set forth a public hearing to be held on September 7, 2022.

Due to cancellation of the September 7, 2022, meeting, on August 17, 2022, this City Council approved Resolution Nos. 2022-177 and 2022-178 to amend the date of the public hearing to October 5, 2022.

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7 Discussion
On October 5, 2022, this City Council will hold a public hearing regarding the formation of the proposed CFD and the issuance of bonded indebtedness therein. If a majority of the landowners within the boundaries of the proposed CFD do not register written or oral protest, then the City Council may consider adopting the following resolutions:

The Resolution of Formation specifies that special taxes will be levied on all parcels of taxable property within the CFD to pay principal of and interest on the bonds of the CFD which will be issued to finance the Facilities. The amounts of the special taxes that may be levied for these purposes are set forth in Exhibit A to the Resolution of Formation. The Resolution of Formation also approves the form of Funding Agreement which sets forth the terms and conditions under which the City will acquire improvements constructed by the developer, Warmington Residential California, Inc. (the “Developer”).

The purpose of the Funding Agreement is to provide for the levy of Special Taxes and the issuance and sale of the Bonds of the District secured by the Special Taxes to finance the design, planning, engineering, financing, installation, and construction of the Facilities and expenses incidental thereto.

The Resolution Determining Necessity authorizes the CFD to incur a bonded indebtedness in an aggregate principal amount not to exceed $4,000,000 for the purpose of financing the Facilities as described above and calls a special election for October 5, 2022, on the proposition of the CFD incurring a bonded indebtedness.

The Resolution Calling the Special Election schedules the elections for the CFD with respect to the annual levy of special taxes to pay principal of and interest on bonds of the CFD, with respect to the CFD incurring a bonded indebtedness, and with respect to establishing an annual appropriations limit of $4,000,000.

The City Clerk and the Owners have consented to hold the election on October 5, 2022. The County of San Bernardino Registrar of Voters has certified that there are no registered voters within the boundaries of the CFD. Following the adoption of the Resolution Calling the Special Election, the City Clerk will conduct the election and declare the election results.

Following the election, the City Council may adopt the Resolution Declaring Results of the Election which declares the results of the election. If the results are in favor of the levy of special taxes within the CFD and the incurrence of bonded indebtedness therein, the City Council may call for the first reading of the Ordinance Levying Special Taxes, which authorizes the levy of special taxes within the CFD. 2021-2025 Strategic Targets and Goals
This project is consistent with Key Target No. 1. Improved Operational & Financial Capacity and Key Target No. 4: Economic Growth & Development. This project will contribute to ensure that the City is clean and attractive and provide infrastructure

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7 designed for long-term economic growth.

Fiscal Impact
There is no fiscal impact to the City as the costs for formation of the CFD is paid through a deposit provided by the Developer, and on-going administrative costs are paid through the levy of special taxes within the CFD.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1) Adopt Resolution No. 2022-212 of the Mayor and City Council of the City of San Bernardino, California, Establishing Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California, and the boundaries thereof and approving a Funding Agreement;
2) Adopt Resolution No. 2022-213 of the Mayor and City Council of the City of San Bernardino, California, Determining the Necessity to Incur a Bonded Indebtedness for Community Facilities District No. 2022-2 (Palm), Submitting to the Qualified Electors of the Community Facilities District a Proposition to Authorize the Levy of a Special Tax Therein, to Authorize such Community Facilities District to Incur a Bonded Indebtedness Secured by the Levy of a Special Tax Therein to Finance Certain Types of Public Facilities and to Establish an Appropriations Limit for such Community Facilities District and Calling a Special Election for the Community Facilities District on a Proposition for Incurring such Bonded Indebtedness;
3) Adopt Resolution No. 2022-214 of the Mayor and City Council of the City of San Bernardino, California Calling a Special Election and Submitting to the Voters of Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino Propositions Regarding the Annual Levy of Special Taxes within the Community Facilities District to Pay Principal of and Interest on Bonds Thereof and to Pay the Costs of Public Facilities and Establishing an Appropriations Limit Therefore; 4) Adopt Resolution No. 2022-215 of the Mayor and City Council of the City of San Bernardino, California Declaring the Results of the Consolidated Special Elections within Community Facilities District No. 2022-2 (Palm); and 5) Introduce, read by title only and waive further reading of Ordinance No.MC-1598 of the Mayor and City Council of the City of San Bernardino, California, Acting as the Legislative Body of Community Facilities District No. 2022-2 (Palm), Authorizing the Levy of Special Taxes in such Community Facilities District.

Attachments

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7 Attachment 1 RES 2022-212 Resolution of Formation
Attachment 2 RES 2022-213 Resolution Determining Necessity to Incur a Bonded Indebtedness
Attachment 3 RES 2022-214 Resolution Calling a Special Election Attachment 4 RES 2022-215Resolution Declaring the Results of the Consolidated Special Elections
Attachment 5 MC -1598 Ordinance Authorizing the Levy of Special Taxes Attachment 6 CFD Report
Attachment 7 Funding Agreement
Ward:

Fourth Ward
Synopsis of Previous Council Actions:

On July 20, 2022, the Mayor and City Council adopted Resolution No. 2022-143, Declaring Intention to Form Community Facilities District No. 2022-2 (Palm), and Resolution No. 2022-144, Declaring Necessity for Community Facilities District No. 2022-2 (Palm) to Incur a Bonded Indebtedness.

On August 17, 2022, the Mayor and City Council adopted Resolution No. 2022-177, Amending and Supplementing the Resolution Declaring Intention, and Resolution No. 2022-178, Amending and Supplementing the Resolution Declaring Necessity, to amend the date of the public hearings called by both resolutions to October 5, 2022.

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Resolution No. 2022-212
RESOLUTION NO. 2022-212

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

ESTABLISHING COMMUNITY FACILITIES DISTRICT
NO. 2022-2 (PALM) OF THE CITY OF SAN BERNARDINO,

COUNTY OF SAN BERNARDINO, STATE OF

CALIFORNIA, AND THE BOUNDARIES THEREOF AND

APPROVING A FUNDING AGREEMENT
WHEREAS, on July 20, 2022, the City Council (the “City Council”) of the City of San Bernardino (the “City”) adopted the Resolution of Intention (the “Resolution of Intention) stating that a community facilities district to be known as “Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California” (“CFD No. 2022-2”), is proposed to be established pursuant to Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code, commonly known as the “Mello-Roos Community Facilities Act of 1982” (the “Act”), and fixing the time and place for a public hearing on the formation of CFD No. 2022-2 for September 7, 2022; and WHEREAS, on August 17, 2022, the City Council adopted a Resolution Amending and Supplementing the Resolution of Intention to amend the date of the public hearing on the proposed formation of CFD No. 2022-1 from September 7, 2022 to October 5, 2022; and WHEREAS, CFD No. 2022-2 is proposed to be established for the purpose of financing the public facilities which are necessary to meet increased demands placed upon the City as a result of the development of the property within CFD No. 2022-2 and the financing of the acquisition, design, construction of local and regional circulation systems, storm drain improvements, and parkland and open space, and it is proposed that CFD No. 2022-2 will be authorized to issue bonds and incur a bonded indebtedness for the purpose of financing such Facilities in the aggregate principal amount of $4,000,000; and
WHEREAS, notice was published and mailed to the owners of all of the property in CFD No. 2022-2 relative to the intention of the City Council to establish CFD No. 2022-2, the levy of special taxes therein, the provision of public facilities therein and the incurring of a bonded indebtedness by CFD No. 2022-2 for the purpose of financing such public facilities, and of the time and place of the public hearing; and
WHEREAS, there has been presented to the City Council an agreement entitled “Funding Agreement” (the “Funding Agreement”) to be entered into between the City, on behalf of CFD No. 2022-2, and Warmington Residential California, a California corporation; and WHEREAS, on October 5, 2022, the City Council conducted the public hearing as required by law relative to the formation of CFD No. 2022-2, the levy of special taxes therein, the provision of public facilities therein, and the incurring of a bonded indebtedness by CFD No. 2022- 2; and
WHEREAS, prior to the commencement of the public hearing there was filed with the City Council a report (the “Report”) containing a description of the public facilities required to

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adequately meet the needs of CFD No. 2022-2, and an estimate of the fair and reasonable costs of providing such public facilities, as required by Section 53321.5 of the Act; and WHEREAS, at the public hearing all persons desiring to be heard on all matters pertaining to the formation of CFD No. 2022-2, the levy of the special taxes therein, the provision of public facilities therein, and the incurring of the bonded indebtedness thereby were heard, and a full and fair hearing was held; and
WHEREAS, at the public hearing evidence was presented to the City Council on the matters before it, and the City Council, at the conclusion of the hearing, was fully advised as to all matters relating to the formation of CFD No. 2022-2, the levy of the special taxes therein, the provision of public facilities therein, and the incurring of the bonded indebtedness therefor; and WHEREAS, the City Council may, therefore, proceed to establish CFD No. 2022-2; and WHEREAS, the City Clerk has advised the City Council that she has received a statement from the Registrar of Voters of the County of San Bernardino that there are no persons registered to vote in the territory of CFD No. 2022-2.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. Findings. The City Council finds as follows:
(a) All of the preceding recitals are true and correct; (b) On October 5, 2022, pursuant to notice thereof duly given as provided by law, the City Council conducted a public hearing with respect to the formation of CFD No. 2022-2, and the incurring of bonded indebtedness by and for CFD No. 2022-2 and the annual levying of specified special taxes on the taxable property within CFD No. 2022-2 to pay principal of and interest on bonds to be issued by and for CFD No. 2022-2 to finance the Facilities and other obligations which are described in Section 3(a) hereof;
(c) The boundary map of CFD No. 2022-2 was recorded on July 26, 2022, pursuant to Sections 3111 and 3113 of the California Streets and Highways Code, at page 43 in Book 90 of Maps of Assessment and Community Facilities Districts, and as Instrument No. 2022-0258074 in the official records of the County of San Bernardino;
(d) All prior proceedings with respect to the formation of CFD No. 2022-2 prior to and during the public hearing with respect to the formation of CFD No. 2022-2 which was conducted by the City Council on October 5, 2022, were valid and in conformity with the requirements of the Act;
(e) No written protests were received, at or prior to the time of the public hearing, against the formation of CFD No. 2022-2, or the levying of the special taxes, or the incurring of a bonded indebtedness by CFD No. 2022-2, or the furnishing of specified types of public facilities, and the special taxes and public facilities have, therefore, not been eliminated by majority protest pursuant to Section 53324 of the Act;

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(f) The City Council is, therefore, authorized to adopt a resolution of formation pursuant to Section 53325.1 of the Act for the formation of Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California, and CFD No. 2022-2 should be established; and
(g) Twelve (12) persons have not been registered to vote within the territory of CFD No. 2022-2 for each of the 90 days preceding the close of the public hearing on October 5, 2022, and pursuant to Section 53326 of the Act, the vote in the Consolidated Special Elections (defined below) provided for in Section 10 hereof shall, therefore, be by the landowners of CFD No. 2022-2 whose property would be subject to the special taxes if they were levied at the time of the elections, and each landowner shall have one vote for each acre, or portion thereof, which he or she owns within CFD No. 2022-2 which would be subject to the proposed special taxes if they were levied at the time of the elections.

SECTION 2. Formation of District. Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California, is hereby established.

The boundaries of CFD No. 2022-2 are set forth and shown on the map entitled “Proposed Boundary Map - Community Facilities District No. 2022-2 (Palm) City of San Bernardino, County of San Bernardino, State of California,” which is on file with the City Clerk, and those boundaries are hereby established.

SECTION 3. Types of Facilities; Incidental Expenses.

A general description of public facilities proposed to be acquired or constructed and financed by CFD No. 2022-2 (the “Facilities”) include but are not limited to:
(a) Acquisition, design, construction of local and regional circulation systems, storm drain improvements, and parkland and open space; and (b) The incidental expenses proposed to be incurred are: (i) the cost of planning and designing the public facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the formation of the proposed CFD No. 2022-2, the issuance of the bonds thereof, the determination of the amount of and collection of special taxes, the payment of special taxes, and costs otherwise incurred in order to carry out the authorized purposes of the proposed CFD No. 2022-2, and (iii) any other expenses incidental to the construction, completion, and inspection of the public Facilities (the “Incidental Expenses”).

SECTION 4. Special Taxes. Except where funds are otherwise available, a special tax sufficient to finance the Facilities and related Incidental Expenses (the “Special Taxes”), secured by the recordation of a continuing lien against all taxable or nonexempt property in CFD No. 2022- 2, shall be annually levied within CFD No. 2022-2.

Under no circumstances will the Special Tax levied in any fiscal year against any parcel used for private residential purposes be increased as consequence of delinquency or default by the owner of any other parcel or parcels within CFD No. 2022-2 by more than 10 percent (10%) above the amount that would have been levied in that fiscal year had there never been any such

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delinquencies or defaults. A parcel shall be considered “used for private residential purposes” not later than the date on which an occupancy permit or the equivalent for private residential use is issued for such parcel.

For further particulars as to the rate and method of apportionment of the Special Taxes to be levied on parcels of taxable property in CFD No. 2022-2 reference is made to the attached and incorporated Exhibit “A” (the “Rate and Method”) which sets forth in sufficient detail the rate and method of apportionment of the Special Taxes to allow each landowner or resident within each CFD No. 2022-2 to clearly estimate the maximum amount that such person will have to pay.

The conditions under which the obligation to pay the Special Taxes may be prepaid and permanently satisfied are as set forth in the Rate and Method.

Pursuant to Section 53340 of the Act, said Special Taxes shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided however, that CFD No. 2022-2 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent assessor’s parcels as permitted by the Act.

Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the California Streets and Highways Code, a continuing lien to secure each levy of the Special Taxes shall attach to all non-exempt real property in CFD No. 2022-2, and that lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien is canceled in accordance with law or until collection of the Special Taxes ceases.

SECTION 5. Exempt Properties. Pursuant to Section 53340 of the Act, and except as provided in Section 53317.3 of the Act, properties of entities of the state, federal, and local governments shall be exempt from the levy of Special Taxes.

SECTION 6. Report. The Report is hereby approved and is made a part of the record of the public hearing regarding the formation of CFD No. 2022-2, and is ordered to be kept on file with the City Clerk as part of the transcript of these proceedings.

SECTION 7. Repayment of Funds Advanced or Work-in-Kind. Pursuant to Section 53314.9 of the Act, the City Council proposes to accept advances of funds or work-in-kind from private persons or private entities and to provide, by resolution, for the use of those funds or that work-in-kind for any authorized purpose, including but not limited to, paying any costs incurred by the City in creating CFD No. 2022-2, and to enter into an agreement, by resolution, with the person or entity advancing the funds or work-in-kind to repay funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council.

SECTION 8. Prohibition of Owner Contracts. Pursuant to Section 53329.5 of the Act, the City Council finds that the public interest will not be served by allowing the owners of property within CFD No. 2022-2 to enter into a contract in accordance with subdivision (a) of that section, and that such owners shall not be permitted to elect to perform the work and enter into a written contract with the City for the construction for the Facilities pursuant to said Section 53329.5.

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SECTION 9. Description of Voting Procedures. Except as otherwise provided in this section, the consolidated special elections on the propositions identified below shall be conducted by the City Clerk in accordance with the provisions of the California Elections Code governing mail ballot elections of cities, insofar as they may be applicable. The voting procedures to be followed in conducting the consolidated special elections on (i) the proposition with respect to CFD No. 2022-2 incurring a bonded indebtedness, (ii) the proposition with respect to the levy of special taxes on parcels of taxable property within CFD No. 2022-2 to pay the principal of and interest on the bonds of CFD No. 2022-2, and (iii) the proposition with respect to establishing an appropriations limit for CFD No. 2022-2 in the amount of $4,000,000 (the “Consolidated Special Elections”) shall be as follows:
(a) The Consolidated Special Elections shall be held on the earliest date, following the adoption by the City Council of this resolution, the resolution determining the necessity for CFD No. 2022-2 to incur a bonded indebtedness pursuant to Section 53351 of the Act, and a resolution pursuant to Section 53326 of the Act submitting to the qualified electors of CFD No. 2022-2 the propositions with respect to (i) CFD No. 2022-2 incurring a bonded indebtedness, (ii) the levy of special taxes to pay the principal of and interest on the bonds of CFD No. 2022-2, and (iii) establishing an appropriations limit for the community facilities district to the qualified electors of the community facilities district, upon which such elections can be held pursuant to Section 53326 which may be selected by the City Council, or such earlier date as the owners of land within CFD No. 2022-2 and the City Clerk agree and concur is acceptable. (b) Pursuant to Section 53326 of the Act, the Consolidated Special Elections may be held earlier than 90 days following the close of the public hearing if the qualified electors of CFD No. 2022-2 waive the time limits for conducting the elections set forth in said Section 53326 by unanimous written consent and the City Clerk concurs in such earlier election date as shall be consented to by the qualified electors.
(c) Pursuant to Section 53326 of the Act, ballots for the Consolidated Special Elections shall be distributed to the qualified electors by the City Clerk by mail with return postage prepaid, or by personal service.
(d) Pursuant to applicable sections of the California Elections Code governing the conduct of mail ballot elections of cities, and specifically Division 4 (commencing with Section 4000) of the California Elections Code with respect to elections conducted by mail, the City Clerk shall mail or deliver to each qualified elector an official ballot in a form specified by the City Council in the resolutions calling and consolidating the Consolidated Special Elections, and shall also mail or deliver to all such qualified electors a ballot pamphlet and instructions to voter, including a sample ballot identical in form to the official ballot but identified as a sample ballot, a statement pursuant to Section 9401 of that Code, an impartial analysis by the City Attorney pursuant to Section 9280 of that Code with respect to the ballot propositions contained in the official ballot, arguments and rebuttals, if any, pursuant to Sections 9281 to 9287, inclusive, and 9295 of that Code, a return identification envelope with prepaid postage thereon addressed to the City Clerk for the return of voted official ballots, and a copy of the Resolution of Formation provided, however, that such statement, analysis and arguments may be waived with the unanimous consent of all the landowners who are qualified electors and shall be so stated in the

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resolution adopted by the City Council calling the Consolidated Special Elections. Such statement, impartial analysis and arguments, if any, shall be prepared by the City Attorney. (e) The official ballot to be mailed or delivered by the City Clerk or her designee to each landowner-voter shall have printed or typed thereon the name of the landowner-voter and the number of votes to be voted by the landowner-voter and shall have appended to it a certification to be signed by the person voting the official ballot which shall certify that the person signing the certification is the person who voted the official ballot, and if the landowner-voter is other than a natural person, that he or she is an officer of or other person affiliated with the landowner-voter entitled to vote such official ballot, that he or she has been authorized to vote such official ballot on behalf of the landowner-voter, that in voting such official ballot it was his or her intent, as well as the intent of the landowner-voter, to vote all votes to which the landowner-voter is entitled based on its land ownership on the propositions set forth in the official ballot as marked thereon in the voting square opposite each such proposition, and further certifying as to the acreage of the landowner-voter’s land ownership within CFD No. 2022-2. (f) The return identification envelope mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the following: (i) the name of the landowner, (ii) the address of the landowner, (iii) a declaration under penalty of perjury stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, (iv) the printed name and signature of the voter, (v) the address of the voter, (vi) the date of signing and place of execution of the declaration, and (vii) a notice that the envelope contains an official ballot and is to be opened only by the City Clerk.
(g) The instruction to voter form to be mailed or delivered by the City Clerk to the landowner-voters shall inform them that the official ballots shall be returned to the City Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon properly inserted by the hour on the date of the election which is specified by the City Council in the resolution calling the Consolidated Special Elections for the receipt of voted ballots; provided that if all qualified voters have voted, the elections shall be closed with the concurrence of the City Clerk. (h) Upon receipt of the return identification envelopes which are returned prior to the voting deadline on the date of the elections, the City Clerk shall canvass the votes cast in the Consolidated Special Elections, and shall file a statement with the City Council as to the results of such canvass and the election on each proposition set forth in the official ballot.

The procedures set forth in this section for conducting the consolidated special elections, if they are held, may be modified as the City Council may determine to be necessary or desirable by a resolution subsequently adopted by the City Council.

SECTION 10. Funding Agreement. The Funding Agreement is approved and the City Manager and the City Clerk are authorized to execute and deliver the Funding Agreement on behalf of the City in the form presented to the City Council at the meeting at which this resolution is

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adopted, with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 11. CEQA. The City Council finds this Resolution is not subject to the California Environmental Quality Act (“CEQA”) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 12. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 13. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and Attested by the City Clerk this 5th day of October, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, City Clerk
Attest:

Sonia R. Carvalho, City Attorney

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-212, adopted at a regular meeting held on the 5th day of October, 2022 by the following vote:

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EXHIBIT A

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-2 (PALM)

OF THE CITY OF SAN BERNARDINO
A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino ("CFD No. 2022-2"). The amount of Special Tax to be levied in each Fiscal Year, on an Assessor’s Parcel, shall be determined by the City Council of the City of San Bernardino, acting in its capacity as the legislative body of CFD No. 2022-2 by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel as a Single Family Residential Property with a stand-alone Residential Unit.
"Acre” or “Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded parcel map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the actual or reasonably estimated costs related to the administration of CFD No. 2022-2, levy on the Special Tax therein and payment of debt service on the outstanding Bonds, including but not limited to, the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022-2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022-2 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2022-2 and any major property owner associated with applicable federal and state securities laws and the Act; litigation related to or arising out of CFD No. 2022-2; legal costs; compliance with continuing disclosure undertakings, the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs

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of the City, CFD No. 2022-2 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2022-2 for any other administrative purposes of CFD No. 2022-2, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Approved Property" means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied. "Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
"Assessor’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below. "Backup Special Tax" means the Special Tax of that name described in Section D below. "Bonds" means any obligation to 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, or long-term contracts, or any refunding thereof, to which Special Tax within CFD No. 2022-2 have been pledged. "Boundary Map" means a recorded map of the CFD which indicates the boundaries of the CFD. "Building Permit" means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include expired or cancelled building permits, or any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator, provided that following such determination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses.
"Building Square Footage" or "BSF" means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the Building Permit for such Assessor’s Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the following December 31.

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"CFD” or “CFD No. 2022-2" means Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino established by the City under the Act. “CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes.
“City” means the City of San Bernardino, State of California. "City Council" means the City Council of the City of San Bernardino, acting as the Legislative Body of CFD No. 2022-2, or its designee.
“Condominium Plan" means a condominium plan pursuant to California Civil Code, Section 6624 et seq.
"County" means the County of San Bernardino, State of California. "Developed Property" means all Assessor’s Parcels of Taxable Property that: (i) are included in a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied. "Exempt Property" means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) o or recordation of a Condominium Plan pursuant to California Civil Code Section 6624 et seq. that creates individual lots for which Building Permits may be issued without further subdivision.
"Fiscal Year" means the period commencing on July 1 st of any year and ending the following June 30th.
“Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Category” means any of the categories listed in Table 1 of Section D. "Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2022-2 in any Fiscal Year on any Assessor’s Parcel.
“Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator.

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"Non-Residential Property" means all Assessor's Parcels of Developed Property for which a Building Permit(s) was issued for a non-residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property. "Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2. "Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.
“Proportionately” means for Taxable Property for Special Tax that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property or Provisional Undeveloped Property. "Provisional Undeveloped Property" means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would be reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section F. "Residential Property" means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more Residential Units. “Residential Unit” or "RU" means a residential unit that is used or intended to be used as a domicile by one or more persons, as determined by the CFD Administrator. An Accessory Dwelling Unit that shares an Assessor’s Parcel with a Single Family Residential Property shall not be considered a Residential Unit for purposes of this RMA. “RMA" means this Rate and Method of Apportionment of Special Taxes. “Single Family Residential Property” means all Assessor’s Parcels of Residential Property other than Multifamily Property on an Assessor’s Parcel.
"Special Tax" or “Special Taxes” means any of the special taxes authorized to be levied within CFD No. 2022-2 pursuant to the Act to fund the Special Tax Requirement. "Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established under the Indenture in association with the Bonds to the extent that replenishment has not been included in the computation of the Special Tax Requirement in a previous Fiscal Year, (v) to cure any delinquencies in the amount of principal or interest on the Bonds that occurred in a previous Fiscal Year, and (vi) the collection or accumulation of funds for the acquisition or

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construction of facilities authorized by CFD No. 2022-2 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Undeveloped Property as set forth in Step Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture.
"Taxable Property" means all Assessor’s Parcels within CFD No. 2022-2, which are not Exempt Property.
“Taxable Unit” means either a Residential Unit or an Acre. "Tract(s)" means an area of land within a subdivision identified by a particular tract number on a Final Map approved for the subdivision.
“Trustee” means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property, Provisional Undeveloped Property. "Welfare Exempt Property" means, in any Fiscal Year, all Assessor’s Parcels within the boundaries of CFD No. 2022-1 that have been granted a welfare exemption by the County under subdivision (g) of Section 214 of the Revenue and Taxation Code.

C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2022-2023, each Assessor’s Parcel within CFD No. 2022-2 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property.

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Tax for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Developed Property Special Tax rates and such amounts shall be levied as Developed Property in accordance with Step 1 and, if applicable, Step 4 of Section E below; and (3) the amount of the Special Tax levy on the Taxable Property in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate levied on Undeveloped Property pursuant to Step 3 of Section E below, multiplied by the total of the amount determined in clause (1), less (B) the amount determined in clause (2).

D. MAXIMUM SPECIAL TAX

TABLE 1

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2022-2023
Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 1,800 sq. ft $1,552

2. Single Family Residential Property RU 1,800 sq. ft to 1,950 sq. ft $1,595

3. Single Family Residential Property RU 1,951 sq. ft to 2,100 sq. ft $1,637

4. Single Family Residential Property RU 2,101 sq. ft to 2,250 sq. ft $1,764

5. Single Family Residential Property RU 2,251 sq. ft to 2,400 sq. ft $1,806

6. Single Family Residential Property RU Greater than 2,400 sq. ft $1,849

7. Multifamily Property Acre N/A $27,459

8. Non-Residential Property Acre N/A $27,459

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B = (U x A) / L
The terms above have the following meanings:

B = Backup Special Tax per Assessor’s Parcel classified as Single Family Residential Property within the Final Map.

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

A = Acreage of net taxable Single Family Residential Property that exists or is expected to exist in such Final Map at the time of calculation, as determined by the Administrator.

L = Number of Assessor’s Parcels of Single Family Residential Property expected to exist after build out in such Final Map at the time of calculation, as determined by the Administrator.

In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $27,459 per Acre.

Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developer Property for which a certificate of occupancy has been granted may not be revised.

In the event any superseding Final Map is recorded as a Final Map within the boundaries of the CFD, the Backup Special Tax for all Assessor’s Parcels within such Final Map shall be $27,459 per Acre. The Backup Special Tax shall not apply to Multifamily Residential Property or Non- Residential Property.

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The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Multifamily Residential Property or Non-Residential Property shall be $27,459 per Acre.

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F. EXEMPTIONS
The City shall classify as Exempt Property, in the chronological order in which the property becomes exempt, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 9.11 Acres.

Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 9.11 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 9.11 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.

Welfare Exempt Property shall be exempt from the payment of the Special Tax so long as the property qualifies as a Welfare Exempt Property.

G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
“CFD Public Facilities” means $3,000,000 expressed in 2022 dollars, which shall increase by the Construction Inflation Index on July 1, 2023, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2022-2, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax levied under this Rate and Method of Apportionment.
“Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible under CFD No. 2022-2.
“Construction Inflation Index” means the annual percentage change in the Engineering News- Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles.

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“Future Facilities Costs” means the CFD Public Facilities minus public facility costs available to be funded, or that were funded, through existing construction or escrow accounts or funded by the Outstanding Bonds or Special Taxes, and minus public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment. “Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.

An owner of an Assessor’s Parcel intending to prepay the Maximum Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel.

The Prepayment Amount shall be calculated as follows (some capitalized terms are defined below):

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property

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for which a Building Permit has been issued, compute the Maximum Special Tax for the Assessor’s Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, or Provisional Undeveloped Property to be prepaid, compute the Maximum Special Tax for the Assessor’s Parcel.

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.

9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.

11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).

13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the

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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.

The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.

For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the following formula:

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

H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2064- 2065 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2022-2 Bonds have been paid; (ii) all authorized facilities of CFD No. 2022-2 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected and (iv) all other obligations of CFD No. 2022-2 have been satisfied.

I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2022-2 may collect Special Tax at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.

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J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes on his/her Assessor’s Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes.

No refunds of previously paid Special Taxes shall be made.

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RESOLUTION NO. 2022-213

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

DETERMINING THE NECESSITY TO INCUR A BONDED

INDEBTEDNESS FOR COMMUNITY FACILITIES
DISTRICT NO. 2022-2 (PALM), SUBMITTING TO THE

QUALIFIED ELECTORS OF THE COMMUNITY

FACILITIES DISTRICT A PROPOSITION TO AUTHORIZE

THE LEVY OF A SPECIAL TAX THEREIN, TO

AUTHORIZE SUCH COMMUNITY FACILITIES DISTRICT

TO INCUR A BONDED INDEBTEDNESS SECURED BY

THE LEVY OF A SPECIAL TAX THEREIN TO FINANCE

CERTAIN TYPES OF PUBLIC FACILITIES AND TO

ESTABLISH AN APPROPRIATIONS LIMIT FOR SUCH

COMMUNITY FACILITIES DISTRICT AND CALLING A

SPECIAL ELECTION FOR THE COMMUNITY

FACILITIES DISTRICT ON A PROPOSITION FOR

INCURRING SUCH BONDED INDEBTEDNESS
WHEREAS, on July 20, 2022, the City Council (the “City Council”) of the City of San Bernardino (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the “Act”), adopted Resolution No. 2022-144 declaring the necessity for Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California (“CFD No. 2022-2”), to incur a bonded indebtedness for the purpose of providing and financing the acquisition, design, construction of local and regional circulation systems, storm drain improvements, and parkland and open space (the “Facilities”), which are necessary to meet increased demands placed upon the City as a result of development which will occur within CFD No. 2022-2, and calling a public hearing on the proposed indebtedness for September 7, 2022; and
WHEREAS, on August 17, 2022, the City Council adopted a Resolution Amending and Supplementing the Resolution Declaring Necessity to amend the date of the public hearing on the proposed indebtedness for CFD No. 2022-2 from September 7, 2022 to October 5, 2022; and WHEREAS, notice was published and mailed to the owners of all of the property in CFD No. 2022-2 relative to the intention of the City Council to establish CFD No. 2022-2, to incur a bonded indebtedness for CFD No. 2022-2, the levy of special taxes therein, the provision of public facilities therein, and of the time and place of the public hearing; and WHEREAS, on October 5, 2022, at the time and place of the hearing and the notice thereof, the City Council conducted the public hearing and afforded all persons interested, including persons owning property within CFD No. 2022-2, an opportunity to be heard on the proposed authorization to incur bonded indebtedness, and no protests were received; and

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WHEREAS, on October 5, 2022, at the conclusion of the hearing, the City Council adopted the resolution of formation pursuant to Section 53325.1(a) of the Act (the “Resolution of Formation”), establishing CFD No. 2022-2; and
WHEREAS, the City Clerk has advised the City Council that she has received a statement from the Registrar of Voters of the County of San Bernardino that there are no persons registered to vote in the territory of CFD No. 2022-2; and
WHEREAS, the City Council has determined that it is necessary that a bonded indebtedness for CFD No. 2022-2 be incurred to contribute to the financing of all or a portion of the Facilities and to authorize the submittal of a proposition to the qualified electors of CFD No. 2022-2, being the landowners of CFD No. 2022-2, all as authorized by the Act;

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. Necessity. It is necessary for CFD No. 2022-2 to incur a bonded indebtedness as authorized under the terms and provisions of the Act for the purpose of providing and financing the Facilities.

SECTION 2. Purpose for Bonded Indebtedness. The specific purposes for the proposed bonded indebtedness is to contribute to the financing of the acquisition or construction of the Facilities.

SECTION 3. Territory to Pay for Bonded Indebtedness. The property within CFD No. 2022-2 will pay for the bonded indebtedness.

SECTION 4. Bond Authorization. The amount of the bonded indebtedness of CFD No. 2022-2 may include all costs and estimated costs incidental to, or connected with, the accomplishment of the purpose for which the indebtedness is to be incurred as authorized pursuant to the Act. The amount of the indebtedness to be authorized for CFD No. 2022-2 is $4,000,000.

SECTION 5. Costs Included. The amount of the bonded indebtedness shall include all costs and estimated costs incidental to, or connected with, the accomplishment of the purposes for which the bonded indebtedness is to be incurred, including, but not limited to, the estimated costs of construction and acquisition of the Facilities, acquisition of land and rights-of-way, satisfaction of contractual obligations relating to expenses or the advancement of funds for expenses existing at the time the bonds are issued, architectural, inspection, legal, fiscal and financial consultant fees, bond and other reserve funds and interest on any bonds of CFD No. 2022-2 estimated to be due and payable within two years from the date of the issuance of such bonds, election costs, and all costs of issuance of the bonds, including, but not limited to, underwriter's discount, fees for bond counsel, disclosure counsel, appraisers, financial advisors, market absorption consultants and other consultants, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other credit enhancement costs, and printing costs.

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SECTION 6. Terms of Bonds. The maximum term of the bonds and/or any series shall not exceed 40 years, and such bonds may be issued in differing series, at differing times. The maximum rate of interest to be paid on the bonds shall not exceed 12 percent per annum or the maximum interest rate permitted by law at the time of sale of any of such bonds. The bonds, except where other funds are made available, shall be paid exclusively from the annual levy of the special tax within CFD No. 2022-2, and are not secured by any other taxing power or the City.

SECTION 7. Proposition to be Submitted to Voters. The proposition to be submitted to the voters within CFD No. 2022-2 with respect to the proposed bonded indebtedness shall be as follows:

PROPOSITION B:

Shall Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, subject to accountability measures required pursuant to Government Code Sections 53410 and 53411, incur a bonded indebtedness in an amount not to exceed $4,000,000 for the specific purposes set forth in the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022?
SECTION 8. Election. The date of the special election with respect to the incurring of the aforementioned bonded indebtedness for CFD No. 2022-2, at which time the proposition set forth in Section 5 hereof shall be submitted to the appropriate qualified voters of CFD No. 2022- 2 is October 5, 2022, and that special election is hereby called for that date. Pursuant to Section 53326 of the Act, since at the time of the close of the public hearing, and for at least the preceding 90 days, less than 12 persons have been registered to vote within the territory of CFD No. 2022-2, the vote in the special election will be by the landowners of CFD No. 2022-2 whose property would be subject to the special taxes if they were levied at the time of the election, with each landowner of record at the close of the public hearing having one vote for each acre or portion of an acre of land that he or she owns within CFD No. 2022-2, and the special election shall be conducted by the City Clerk (the “City Clerk”). The special election shall be consolidated with the special election with respect to the propositions regarding (i) the levy of special taxes within CFD No. 2022-2 for the payment of the principal of and interest on the bonds to finance the acquisition or construction of all or a portion of the Facilities, and (ii) establishing an appropriations limit for CFD No. 2022-2 which has also been called for October 5, 2022. The consolidated special elections shall be conducted by the City Clerk pursuant to applicable provisions of the California Elections Code with respect to mail-ballot elections of cities and specifically Division 4 (commencing with Section 4000) of that Code, insofar as they may be applicable. Pursuant to Section 53326 of the Act, the official ballots shall be delivered by the City Clerk to the qualified electors by mail or personal service. The voted official ballots shall be received by the City Clerk by 7:00 p.m. on the date of the election; provided that if all qualified electors have voted, the election shall be closed with the concurrence of the City Clerk.

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SECTION 9. Accountability Measures. Pursuant to and in compliance with Section 53410 of the Act, if the voters approve the proposition contained in the official ballots for the consolidated special elections with respect to CFD No. 2022-2 incurring bonded indebtedness for the purposes for which such indebtedness by CFD No. 2022-2, is to be incurred and bonds of CFD No. 2022-2 are to be issued (the “Bond Proposition”), the incurring of such bonded indebtedness and the issuance of bonds of CFD No. 2022-2 shall be subject to the following accountability measures:
(a) the Bond Proposition shall identify the specific purposes for which the bonds are to be issued;
(b) the proceeds of the bonds shall be applied only for the specific purposes identified in the Bond Proposition;
(c) an account or accounts shall be created pursuant to the fiscal agent agreement for such bonds into which the proceeds of the sale of such bonds shall be deposited; and (d) the City Manager or his designee shall file a report with the City Council as required by Section 53411 of the California Government Code.

SECTION 12. Effective Date. This Resolution shall become effective immediately.

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October 5, 2022
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APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 5th day of October, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, City Clerk
Attest:

Sonia R. Carvalho, City Attorney

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-213 adopted at a regular meeting held on the 5th day of October, 2022 by the following vote:

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Resolution No. 2022-214
RESOLUTION NO. 2022-214

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA

CALLING A SPECIAL ELECTION AND SUBMITTING TO

THE VOTERS OF COMMUNITY FACILITIES DISTRICT
NO. 2022-2 (PALM) OF THE CITY OF SAN BERNARDINO

PROPOSITIONS REGARDING THE ANNUAL LEVY OF

SPECIAL TAXES WITHIN THE COMMUNITY

FACILITIES DISTRICT TO PAY PRINCIPAL OF AND

INTEREST ON BONDS THEREOF AND TO PAY THE

COSTS OF PUBLIC FACILITIES AND ESTABLISHING AN

APPROPRIATIONS LIMIT THEREFOR
WHEREAS, pursuant to Section 53325.1 of the California Government Code, the City Council (the “City Council”) of the City of San Bernardino (the “City”) has adopted the resolution of formation of Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California (“CFD No. 2022-2”), establishing the Community Facilities District and the boundaries thereof (the “Resolution of Formation”); and WHEREAS, pursuant to Section 53351 of the California Government Code, the City Council has also adopted a resolution determining that it is necessary that CFD No. 2022-2 incur a bonded indebtedness for the purpose of financing certain public facilities; and WHEREAS, by that resolution, the City Council called a special election on the proposition to be submitted to the voters with respect to CFD No. 2022-2 incurring a bonded indebtedness for the purpose of financing such public facilities; and WHEREAS, pursuant to Section 53326 of the California Government Code, it is necessary that the City Council also submit to the voters of CFD No. 2022-2 the proposition relating to the annual levy of special taxes on taxable property within CFD No. 2022-2 to pay the principal of and interest on the bonds thereof, if such bonds are authorized and issued; and WHEREAS, pursuant to Section 53325.7 of the California Government Code, the City Council may also submit to the voters of CFD No. 2022-2 a proposition with respect to establishing an appropriations limit for CFD No. 2022-2; and
WHEREAS, the City Clerk (the “City Clerk”) has advised the City Council that she has received a statement from the Registrar of Voters of the County of San Bernardino that there are no persons registered to vote in the territory of CFD No. 2022-2.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. Findings. The City Council finds that: (i) the foregoing recitals are true and correct; (ii) 12 persons have not been registered to vote within the territory of CFD No. 2022-2 for each of the 90 days preceding the close of the public hearing on October 5, 2022; (iii) pursuant to Section 53326 of the California Government Code, as a result of the findings set forth in clause

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7 (ii) above, the vote in the special election called by this resolution shall be by the landowners of CFD No. 2022-2 whose property would be subject to the special taxes if they were levied at the time of the election, and each landowner shall have one vote for each acre, or portion thereof, which he or she owns within CFD No. 2022-2 which would be subject to the proposed special taxes if they were levied at the time of the election; (iv) the owners of all of the property in CFD No. 2022-2 have by written consent (a) waived the time limits set forth in Section 53326 of the California Government Code for holding the election called by this resolution and the election on the proposition of CFD No. 2022-2 incurring bonded indebtedness, which pursuant to Section 4 hereof is consolidated with the election called hereby, (b) consented to the holding of the consolidated special elections on October 5, 2022, (c) waived notice and mailed notice of the time and date of the consolidated special elections, and (d) waived an impartial analysis of the ballot propositions pursuant to Section 9313 or 13119 of the California Elections Code and arguments and rebuttals pursuant to Sections 9314 to 9317, inclusive, mailing of a statement pursuant to Section 9401 of that Code and receipt of a ballot pamphlet as required by Section 3023 of that Code; and (v) the City Clerk has consented to the holding of the consolidated special elections on October 5, 2022.

SECTION 2. Call of Election. The City Council hereby calls and schedules special elections for October 5, 2022, within and for CFD No. 2022-2 on (i) the proposition with respect to the annual levy of special taxes on taxable property within CFD No. 2022-2 for the payment of principal of and interest on the bonds of CFD No. 2022-2, which may be issued and sold to finance certain public facilities, and (ii) the proposition with respect to establishing an appropriations limit for CFD No. 2022-2.

SECTION 3. Propositions.

The propositions to be submitted to the voters of CFD No. 2022-2 at such special election shall be as follows:

First Proposition: Shall Proposition A authorizing the levy of special taxes annually on taxable property within CFD No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California, to pay the principal of and interest on the bonds of the community facilities district which may be issued and sold for the purposes specified in the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022 (the “Resolution of Formation”), to replenish the reserve fund for the bonds, or to accumulate funds for future bond payments, including any amount required by federal law to be rebated to the United States with regard to the bonds, and to pay expenses incidental thereto, and to the levy and collection of the special tax, so long as the special tax is needed to pay the principal of and interest on the bonds and for such other purposes, at the special tax rates and pursuant to the method of apportioning the special tax set forth in Exhibit “A” to the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022 be approved?
Third Proposition: Shall Proposition C authorizing an annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution, in the amount of $4,000,000 be approved?

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7 SECTION 4. Consolidation of Elections. The special election called hereby on the propositions to be submitted to the voters of CFD No. 2022-2, as set forth in Section 3 hereof, shall be consolidated with the special election on the proposition of CFD No. 2022-2 incurring bonded indebtedness. The ballot for said consolidated elections shall be in the form attached hereto as Exhibit A.

SECTION 6. Election Procedures. The procedures to be followed in conducting the consolidated special elections on (i) the proposition with respect to CFD No. 2022-2 incurring a bonded indebtedness, (ii) the proposition with respect to the levy of special taxes on taxable property within CFD No. 2022-2 to pay the principal of and interest on the bonds of CFD No. 2022-2, and (iii) the proposition with respect to establishing an appropriations limit for CFD No. 2022-2 in the amount of $4,000,000 (the “Consolidated Special Elections”) shall be as follows:
(a) Pursuant to Section 53326 of the California Government Code, ballots for the Consolidated Special Elections shall be distributed to the qualified electors by the City Clerk by mail or personal service.
(b) Pursuant to applicable sections of the California Elections Code governing the conduct of mail ballot elections of cities, and in particular Division 4 (commencing with Section 4000) of that Code with respect to elections conducted by mail, the City Clerk shall mail or deliver to each qualified elector an official ballot in the form attached hereto as Exhibit “A,” and shall also mail or deliver to all such qualified electors a ballot pamphlet and instructions to voter, including a sample ballot identical in form to the official ballot but identified as a sample ballot, a return identification envelope with prepaid postage thereon addressed to the City Clerk for the return of voted official ballots and a copy of the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022.
(c) The official ballot to be mailed or delivered by the City Clerk to each landowner- voter shall have printed or typed thereon the name of the landowner-voter and the number of votes to be voted by the landowner-voter and shall have appended to it a certification to be signed by the person voting the official ballot which shall certify that the person signing the certification is the person who voted the official ballot, and if the landowner-voter is other than a natural person, that he or she is an officer of or other person affiliated with the landowner-voter entitled to vote such official ballot, that he or she has been authorized to vote such official ballot on behalf of the landowner-voter, that in voting such official ballot it was his or her intent, as well as the intent of the landowner-voter, to vote all votes to which the landowner-voter is entitled based on its land ownership on the propositions set forth in the official ballot as marked thereon in the voting square opposite each such proposition, and further certifying as to the acreage of the landowner-voter’s land ownership within CFD No. 2022-2.

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7 (d) The return identification envelope to be mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the following: (i) the name of the landowner, (ii) the address of the landowner, (iii) a declaration under penalty of perjury stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, (iv) the printed name and signature of the voter, (v) the address of the voter, (vi) the date of signing and place of execution of the declaration, and (vii) a notice that the envelope contains an official ballot and is to be opened only by the City Clerk.
(e) The instruction to voter form to be mailed or delivered by the City Clerk to the landowner-voters shall inform them that the official ballots shall be returned to the City Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon properly inserted by 7:00 p.m. on the date of the Consolidated Special Elections; provided that if all qualified electors have voted, the elections shall be closed with the concurrence of the City Clerk. (f) Upon receipt of the return identification envelopes which are returned prior to the voting deadline on the date of the elections, the City Clerk shall canvass the votes cast in the Consolidated Special Elections, and shall file a statement with the City Council as to the results of such canvass and the election on each proposition set forth in the official ballot.

SECTION 7. Accountability Measures. Pursuant to Section 53410 of the California Government Code, if the voters approve the proposition contained in the official ballot for the Consolidated Special Elections with respect to CFD No. 2022-2 incurring bonded indebtedness for the purposes for which such indebtedness is to be incurred (the “Bond Proposition”) and bonds of CFD No. 2022-2 are to be issued, the incurring of such bonded indebtedness and the issuance of bonds of CFD No. 2022-2 shall be subject to the following accountability measures:
(a) The Bond Proposition shall identify the specific purposes for which the bonds are to be issued;
(b) The proceeds of the bonds shall be applied only for the specific purposes identified in the Bond Proposition;
(c) An account or accounts shall be created pursuant to the fiscal agent agreement for such bonds into which the proceeds of the sale of such bonds shall be deposited; and (d) The City Manager of the City or his designee, shall file a report with the City Council which shall contain the information required by Section 53411 of the California Government Code.

SECTION 8. CEQA. The City Council finds this Resolution is not subject to the California Environmental Quality Act (“CEQA”) in that the activity is covered by the general rule

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Resolution No. 2022-214
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7 that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 10. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 5th day of October, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, City Clerk
Attest:

Sonia R. Carvalho, City Attorney

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Resolution No. 2022-214
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7 CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-214, adopted at a regular meeting held on the 5th day of October, 2022 by the following vote:

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Resolution No. 2022-____
A-1

EXHIBIT A

OFFICIAL BALLOT

CONSOLIDATED SPECIAL ELECTIONS FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-2 (PALM)

OF THE CITY OF SAN BERNARDINO

COUNTY OF SAN BERNARDINO

STATE OF CALIFORNIA
October 5, 2022
To vote, mark a cross (+ or x) in the voting square after the word “YES” or after the word “NO”. All marks otherwise made are forbidden.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk and obtain another.

PROPOSITION A: Shall Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California, subject to accountability measures required pursuant to Government Code Section 50075.1 levy a special tax annually on taxable property within Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California, to pay the principal of and interest on the bonds of the community facilities district which may be issued and sold for the purposes specified in the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022 (the “Resolution of Formation”), to replenish the reserve fund for the bonds, or to accumulate funds for future bond payments, including any amount required by federal law to be rebated to the United States with regard to the bonds, and to pay expenses incidental thereto, and to the levy and collection of the special tax, so long as the special tax is needed to pay the principal of and interest on the bonds and for such other purposes, at the special tax rates and pursuant to the method of apportioning the special tax set forth in Exhibit A to the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022? YES
NO
PROPOSITION B: Shall Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California, subject to accountability measures required pursuant to Government Code Sections 53410 and 53411, incur a bonded indebtedness in an amount not to exceed $4,000,000 for the specific purposes set forth in the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022?
YES
NO

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Resolution No. 2022-____
A-2
PROPOSITION C: Shall Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California establish an annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution, in the amount of $4,000,000?
YES
NO

PROPOSITION A IS SUBJECT TO THE ACCOUNTABILITY MEASURES PRESCRIBED IN SECTION 50075 OF THE GOVERNMENT CODE OF THE STATE OF CALIFORNIA.

PROPOSITION B IS SUBJECT TO THE ACCOUNTABILITY MEASURES PRESCRIBED IN SECTIONS 53410 AND 53411 OF THE GOVERNMENT CODE OF THE STATE OF CALIFORNIA.

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Resolution No. 2022-215
RESOLUTION NO. 2022-215

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA

DECLARING THE RESULTS OF THE CONSOLIDATED

SPECIAL ELECTIONS WITHIN COMMUNITY
FACILITIES DISTRICT NO. 2022-2 (PALM)
WHEREAS, on October 5, 2022, the City Council (the “City Council”) of the City of San Bernardino (the “City”) adopted a resolution determining the necessity for Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, County of San Bernardino, State of California (the “CFD No. 2022-2”), to incur a bonded indebtedness for CFD No. 2022-2 for the purposes of providing certain public facilities and calling a special election for CFD No. 2022-2 on the proposition for incurring such bonded indebtedness for October 5, 2022, and providing for the consolidation of said election with the election on the propositions with respect to (i) the annual levy of special taxes on taxable property within CFD No. 2022-2 to pay principal of and interest on such bonds, and (ii) establishing an appropriations limit for CFD No. 2022-2; and WHEREAS, on October 5, 2022, the City Council also adopted a resolution calling a special election for October 5, 2022, for submitting to the qualified electors of CFD No. 2022-2 the proposition with respect to the annual levy of special taxes on taxable property within CFD No. 2022-2 to pay the principal of and interest on the bonds thereof and the proposition with respect to establishing an appropriations limit for CFD No. 2022-2, and providing for the consolidation of that election with the election on the proposition of CFD No. 2022-2 incurring a bonded indebtedness (the “Election Resolution”); and
WHEREAS, the City Council has received a statement from the City Clerk (the “City Clerk”), who pursuant to the Election Resolution was authorized to conduct the consolidated special elections for CFD No. 2022-2 and act as the election official therefor, with respect to the canvass of the ballots returned and the results of the consolidated special election, certifying that more than two-thirds of the votes cast upon the propositions submitted to the voters in the consolidated special election in CFD No. 2022-2 were cast in favor of all such propositions.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. Findings. The City Council finds that: (i) there were no persons registered to vote within the boundaries of CFD No. 2022-2 at the time of the close of the protest hearing on October 5, 2022, and pursuant to Section 53326 of the California Government Code (“Section 53326”) the vote in the consolidated special elections for CFD No. 2022-2 was, therefore, to be by the landowners owning land within CFD No. 2022-2, with each landowner having one vote for each acre or portion of an acre of land that he or she owned within CFD No. 2022-2 which would have been subject to the special tax if levied at the time of the consolidated special elections; (ii) pursuant to Section 53326 and the Election Resolution, the City Clerk distributed the ballots for the consolidated special elections to Pacific West Company, Hanhsing Li, Chenmei Cheng, and Ann C. Lau, the owners of all of the taxable property included within the boundaries of CFD No. 2022-2 (the “Property Owners”) by mail or personal delivery; (iii) the Property Owners

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Resolution No. 2022-215
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8 waived the time limits for holding the consolidated special elections and the election dates specified in Section 53326, and consented to the calling and holding of the consolidated special elections on October 5, 2022; (iv) the consolidated special elections have been properly conducted in accordance with all statutory requirements and the provisions of the Election Resolution; (v) pursuant to Section 53326, Pacific West Company, which owns approximately 6.599 acres in CFD No. 2022-2, was entitled to a total of 7 votes, Hanhsing Li, who owns approximately 3.412 acres in CFD No. 2022-2, was entitled to a total of 4 votes, Chenmei Cheng, who owns approximately 4.265 acres in CFD No. 2022-2, was entitled to a total of 5 votes, and Ann C. Lau, who owns approximately 0.853 acres in CFD No. 2022-2, was entitled to a total of 1 vote; (vi) the ballots were returned by the Property Owners to the City Clerk prior to the hour on the date of the election specified by the City Council for the return of the voted ballots; (vii) the ballots returned to the City Clerk by the Property Owners voted all votes to which they were entitled in favor of all propositions set forth therein; (viii) more than two-thirds of the votes cast in the consolidated special elections in CFD No. 2022-2, on each such proposition were cast in favor thereof, and pursuant to Sections 53328, 53329 and 53355 of the California Government Code, all such propositions carried; (ix) the City Council, as the legislative body of CFD No. 2022-2, is therefore authorized to take the necessary action to have CFD No. 2022-2 incur a bonded indebtedness in an amount not to exceed $4,000,000, to annually levy special taxes on taxable property within CFD No. 2022-2, in an amount sufficient to pay the principal of and interest on such bonds, and (x) an appropriations limit for CFD No. 2022-2 has been established in the amount of $4,000,000.

SECTION 2. Declaration of Results. All votes voted in the consolidated special elections on the propositions with respect to (i) CFD No. 2022-2 incurring a bonded indebtedness in an amount not to exceed $4,000,000; (ii) the annual levy of special taxes on taxable property within CFD No. 2022-2 to pay the principal of and interest on the bonds of CFD No. 2022-2; and (iii) establishing an appropriations limit for CFD No. 2022-2 in the amount of $4,000,000 were voted in favor thereof, and all such propositions carried. The aggregate principal amount of the bonded indebtedness to be incurred by CFD No. 2022-2 shall not exceed $4,000,000.

SECTION 3. Effect of Elections. The effect of the results of the consolidated special elections, as specified in Section 2 hereof, is that the City Council, as the legislative body of CFD No. 2022-2, is authorized (i) to have CFD No. 2022-2 incur a bonded indebtedness in and for the purposes set forth in Proposition A of the Official Ballots for the consolidated special elections for CFD No. 2022-2; (ii) after CFD No. 2022-2 has incurred a bonded indebtedness and issued bonds therefor, to annually levy special taxes on taxable property within CFD No. 2022-2 in an amount sufficient to pay the principal of and interest on such bonds at the special tax rates and pursuant to the methodology for determining and apportioning such special taxes which are set forth in Exhibit A to the Resolution of Formation adopted by the City Council of the City of San Bernardino on October 5, 2022; and (iii) an appropriations limit has been established for CFD No. 2022-2 in the amount of $4,000,000.

SECTION 5. CEQA. The City Council finds this Resolution is not subject to the California Environmental Quality Act (“CEQA”) in that the activity is covered by the general rule

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Resolution No. 2022-215
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8 that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 7. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 5th day of October, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, City Clerk
Attest:

Sonia R. Carvalho, City Attorney

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Resolution No. 2022-215
4 CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-215, adopted at a regular meeting held on the 5th day of October, 2022 by the following vote:

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Ordinance MC-1598
ORDINANCE NO. MC-1598

AN ORDINANCE OF THE MAYOR AND CITY COUNCIL

OF THE CITY OF SAN BERNARDINO, CALIFORNIA,

ACTING AS THE LEGISLATIVE BODY OF COMMUNITY
FACILITIES DISTRICT NO. 2022-2 (PALM),

AUTHORIZING THE LEVY OF SPECIAL TAXES IN SUCH

COMMUNITY FACILITIES DISTRICT
WHEREAS, the City Council of the City of San Bernardino, California (the “City Council”), has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors authorizing the levy of special taxes in the community facilities district, all as authorized pursuant to the terms and provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1. Division 2, Title 5 of the Government Code of the State of California (the “Act”). This community facilities district shall hereinafter be referred to as Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino, State of California (the “District”).

THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO,

CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-2 (PALM), DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 4. The special taxes authorized to be levied shall be secured by the lien imposed pursuant to Section 3114.5 and 3115.5 of the California Streets and Highways Code, which lien shall be a continuing lien and shall secure each levy of the special taxes. The lien of the Special Tax (as defined in the Rate and Method) shall continue in force and effect until the special

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Ordinance MC-1598
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9 tax obligation is prepaid, permanently satisfied and canceled in accordance with law or until the Special Tax ceases to be levied by the City Council.

SECTION 5. This Ordinance shall be effective thirty (30) days after its adoption. Within fifteen (15) days after its adoption, the City Clerk shall cause this Ordinance, or a summary of it, to be published in a newspaper of general circulation in the City.

Introduced at a regular meeting of the City Council of the City of San Bernardino, California, on October 5, 2022.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 19th day of October, 2022.

John Valdivia, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, City Clerk
Attest:

Sonia R. Carvalho, City Attorney

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Ordinance MC-1598
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9 CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, City Clerk, hereby certify that the attached is a true copy of Ordinance No. MC-1598, which was regularly introduced at a regular meeting of the City Council of the City of San Bernardino duly held on the 5th day of October, 2022, and was adopted at a regular meeting of the City Council duly held on the 19th day of October, 2022 by the following vote:

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Ordinance MC-1598
A-1

EXHIBIT A

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-2 (PALM)

OF THE CITY OF SAN BERNARDINO
A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino ("CFD No. 2022-2"). The amount of Special Tax to be levied in each Fiscal Year, on an Assessor’s Parcel, shall be determined by the City Council of the City of San Bernardino, acting in its capacity as the legislative body of CFD No. 2022-2 by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel as a Single Family Residential Property with a stand-alone Residential Unit.
"Acre” or “Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded parcel map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the actual or reasonably estimated costs related to the administration of CFD No. 2022-2, levy on the Special Tax therein and payment of debt service on the outstanding Bonds, including but not limited to, the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022-2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022-2 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2022-2 and any major property owner associated with applicable federal and state securities laws and the Act; litigation related to or arising out of CFD No. 2022-2; legal costs; compliance with continuing disclosure undertakings, the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs

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D. MAXIMUM SPECIAL TAX

TABLE 1

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2022-2023
Land Use Category
Taxable
Unit Building Square Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 1,800 sq. ft $1,552

2. Single Family Residential Property RU 1,800 sq. ft to 1,950 sq. ft $1,595

3. Single Family Residential Property RU 1,951 sq. ft to 2,100 sq. ft $1,637

4. Single Family Residential Property RU 2,101 sq. ft to 2,250 sq. ft $1,764

5. Single Family Residential Property RU 2,251 sq. ft to 2,400 sq. ft $1,806

6. Single Family Residential Property RU Greater than 2,400 sq. ft $1,849

7. Multifamily Property Acre N/A $27,459

8. Non-Residential Property Acre N/A $27,459

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B = (U x A) / L
The terms above have the following meanings:

B = Backup Special Tax per Assessor’s Parcel classified as Single Family Residential Property within the Final Map.

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

A = Acreage of net taxable Single Family Residential Property that exists or is expected to exist in such Final Map at the time of calculation, as determined by the Administrator.

L = Number of Assessor’s Parcels of Single Family Residential Property expected to exist after build out in such Final Map at the time of calculation, as determined by the Administrator.

In the event any portion of the Final Map is changed or modified, the Backup Special Tax for all Assessor’s Parcels within such changed or modified area shall be $27,459 per Acre.

Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developer Property for which a certificate of occupancy has been granted may not be revised.

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A-8
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Multifamily Residential Property or Non-Residential Property shall be $27,459 per Acre.

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Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 9.11 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 9.11 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.

Welfare Exempt Property shall be exempt from the payment of the Special Tax so long as the property qualifies as a Welfare Exempt Property.

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An owner of an Assessor’s Parcel intending to prepay the Maximum Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel.

The Prepayment Amount shall be calculated as follows (some capitalized terms are defined below):

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property

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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.

9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.

11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).

13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the

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The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.

For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the following formula:

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A-13
PP = ((PE –A) x F) +A
These terms have the following meaning:

H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax. The Special Tax shall cease not later than the 2064- 2065 Fiscal Year, however, Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2022-2 Bonds have been paid; (ii) all authorized facilities of CFD No. 2022-2 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Tax remain uncollected and (iv) all other obligations of CFD No. 2022-2 have been satisfied.

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No refunds of previously paid Special Taxes shall be made.

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CITY OF SAN BERNARDINO
Public Hearing Report
CFD NO. 2022-2 (PALM)
OCTOBER 5, 2022

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Table of Contents

Tables Page
3-1 Cost Estimate ________________________________________________ 3

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1 Introduction Page | 1
City of San Bernardino
CFD
No. 2022-2 (Palm)
Public Hearing Report
Background
On July 20, 2022, the Mayor and City Council of the City of San Bernardino (the “City”), adopted a Resolution of Intention to form Community Facilities District No. 2022-2 (Palm) of the City of San Bernardino (the “CFD No. 2022-2” or “District”), Resolution No. 2022-143, pursuant to the pr ovisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, (the “Act”).

The CFD No. 2022-2 is currently comprised of Tract Map No. 20495 that includes one undeveloped parcel and approximately

15.51 gross acres. The proposed development includes 133 detached single family homes. The property is generally located at the northwest intersection of E Highland Ave. and N Palm Ave.

For a map showing the boundaries of CFD No. 2022-2 please see Appendix B.

Purpose of Public Hearing Report
WHEREAS, this Community Facilities District Report (“Repor t”) is being provided to the City Council and generally contains the following:

1. A brief description of CFD No. 2022-2;

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

3. A brief description of the Boundaries of CFD No. 2022-2; and

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2 Description of Facilities Page | 2
City of San Bernardino
CFD No. 2022-2 (Palm)
Public Hearing Report
NOW, THEREFORE, the undersigned, authorized representative of Spicer Consulting Group, LLC, the appointed responsible officer, or person directed to prepare the Public Hearing Report, does hereby submit the following data:

The types of facilities that are proposed by CFD No. 2022- 2 and financed with the proceeds of special taxes and bonds issued by CFD No. 2022-2 consist of the construction, purc hase, modification, expansion and/or improvement of (i) drainage, park, roadway, water and sewer, and other public facilities of the City, including the foregoing public facilities which are included in the City’s fee programs with respect to such facilities and auth orized to be financed under the Mello-Roos Community Facilities Act of 1982, as amended (the “Facilities”), and all appurtenances and appurtenant work in connection with the foregoing Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking, construction management and supervision for such Facilities, and to finance the incidental expenses to be incurred, including:
a) The cost of engineering, planning and designing the Facilities; and b) All costs, including costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District; and c) Any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.

Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for the District.

Incidental Expenses
The Incidental Expenses to be paid from bond proceeds and/or special taxes include:

All costs associated with the creation of CFD No. 2022-2, the issuance of bonds, the determination of the amount of special taxes to be levied, costs incurred in order to carry out the authorized purposes of CFD No. 2022-2, including legal fees, fees of consultants, engineering, planning, designing and the annual costs to administer CFD No. 2022-2 and any obligations.

The description of the eligible public facilities, services and incidental expenses above are preliminary and general in nature.

Bond Authorization Amounts
The maximum authorized bonded indebtedness is $4,000,000 for CFD No. 2022-2.

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3 Cost Estimate Page | 3
City of San Bernardino
CFD No. 2022-2 (Palm)
Public Hearing Report
Below is the estimated cost of facilities to be provided to the District. a) The cost estimate of facilities, including incidental expenses, to be financed through the issuance of CFD No. 2022- 2 Bonds is estimated to be $2,124,125 based upon current dollars (Fiscal Year 2022-23). b) The total facilities eligible to be funded by bond proceeds is $2,352,760, a summary of the facilities is detailed in the table below.
c) Pursuant to Section 53340 of the Act, the proceeds of any special tax levied and collected by CFD No. 2022-2 may be used only to pay for the cost of providing public facilities, services, and incidental expenses. As defined by the Act, incidental expenses include, but are not limited to, the annual costs associated with determination of the amount of special taxes, collection of special taxes, payment of special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District. The incidental expenses associated with the annual administration of CFD No. 2022-2 are estimated to be $2 5,000. However, it is antic ipated that the incidental expenses will vary due to inflation and other factors that may not be fores een today, and the actual incidental expenses may exceed these amounts accordingly.

Table 3-1
Cost Estimate
Facilities Total Bond Allocation(1)
City Facilities
Local Circulation Fee $30,981 $30,981
Regional Circulation Fee $323,855 $323,855
Storm Drain Fee $522,146 $522,146
Storm Drain Fee (Credit) ($170,097) ($170,097)
Parkland and Open Space Fee $1,265,875 $1,265,875
City Facilities $380,000 $151,365
Total City $2,352,760 $2,124,125

Total Eligible Fees/Improvements $2,352,760 $2,124,125
Incidental Financing Costs $555,875
Total Funded by Bond Proceeds $3,540,000

Total Fees/Improvements to be Funded by Developer $228,635 (1) Amounts are allocated based upon estimated bond sizing and may change abased upon market conditions at the time of bond issuance.

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4 Proposed Development Page | 4
City of San Bernardino
CFD No. 2022-2 (Palm)
Public Hearing Report
The CFD No. 2022-2 includes approximately 15.51 gross acres on five undeveloped property within Tract 20495. The District is generally located at the northwest intersection of E Highland Ave. and N Palm Ave. As of Fiscal Year 2022-23 the proposed CFD No. 2022-2 includes the following Assessor's Parcel Numbers:

Assessor’s Parcel
Number
0285-211-05
0285-211-21
0285-211-22
0285-211-23
0285-211-25

A map showing the boundaries of CFD No. 2022-2 is included in Appendix B.

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5 Rate and Method of Apportionment Page | 5
City of San Bernardino
CFD No. 2022-2 (Palm)
Public Hearing Report
The Rate and Method of Apportionment allows each property owner within CFD No. 2022-2 to estimate the annual Special Tax amount that would be required for payment. The Rate and Method of Apportionment of the Special Tax established pursuant to these proceedings, is attached hereto as Appendix A (the “Rate and Method”). The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the CFD Administrator may directly bill the Special Taxes, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations, and provided further that CFD No. 2022-2 may covenant to foreclose and may actually foreclose on parcels having delinquent Special Taxes as permitted by the Act.

All of the property located within CFD No. 2022-2, unless exempted by law or by the Rate and Method proposed for CFD No. 2022-2, shall be taxed for the purpose of providing necess ary facilities to serve the District. The Boundary Map for CFD No. 2022-2 is attached hereto as Appendix B. Pursuant to Section 53325.3 of the Act, the tax imposed “is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property.” The Special Tax may be based on the benefit received by property, the co st of making facilities or authorized services available or other reasonable basis as determined by the City, although the Special Tax may not be apportioned on an ad valorem basis pursuant to Articl e XIIIA of the California Constitution. A property owner within the District may choose to prepay in whole or in part the Special Tax. The available method for so doing is described in Section G of the Rate and Method (“Prepayment of Special Tax”).

The Rate and Method includes special tax rates ranging from $1,552 to $1,849 per Residential Unit for Single Family Residential Property and $27,459 per Acre for Multifamily Property for Fiscal Year 2022-2023. For each year that any Bonds are outstanding the Special Tax shall be levied on all pa rcels subject to the Special Tax. If any delinquent Special Taxes remain uncollected prior to or after all Bonds are retired, the Special Tax may be levied to the extent necessary to reimburse CFD No. 2022-2 for uncollected Special Taxes associated with the levy of such Special Taxes, but the Special Tax shall not be levied after 2064-2065 Fiscal Year.

For particulars as to the Rate and Method for CFD No. 2022-2, see the attached and incorporated in Appendix A.

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6 Certifications Page | 6
City of San Bernardino
CFD No. 2022-2 (Palm)
Public Hearing Report
Based on the information provided herein, it is my opinion that the described facilities and services herein are those that are necessary to meet increased demands placed upon the City of San Bernardino as a result of development occurring within the CFD No. 2022-2 and benefits the lands within said CFD No. 2022-2. Further, it is my opinion that the special tax rates and method of apportionment, as set forth herein, are fair and equitable, uniformly applied and not discriminating or arbitrary.

Date: October 5, 2022 SPICER CONSULTING GROUP, LLC

__________________________

SHANE SPICER

SPECIAL TAX CONSULTANT FOR

CITY OF SAN BERNARDINO

SAN BERNARDINO COUNTY

STATE OF CALIFORNIA

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APPENDIX A
Rate and Method of Apportionment

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City of San Bernardino
Community Facilities District No. 2022‐2 (Palm) Page 1 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022‐2 (PALM)
OF THE CITY OF SAN BERNARDINO

A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of Community Facilities District No. 2022‐2 (Palm) of the City of San Bernardino ("CFD No. 2022‐2"). The amount of Special Tax to be levied in each Fiscal Year, on an Assessor’s Parcel, shall be determined by the City Council of the City of San Bernardino, acting in its capacity as the legislative body of CFD No. 2022‐2 by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

"Administrative Expenses" means the actual or reasonably estimated costs related to the administration of CFD No. 2022‐2, levy on the Special Tax therein and payment of debt service on the outstanding Bonds, including but not limited to, the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022‐2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022‐2 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2022‐2 and any major property owner associated with applicable federal and state securities laws and the Act; litigation related to or arising out of CFD No. 2022‐ 2; legal costs; compliance with continuing disclosure undertakings, the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2022‐2 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2022‐2 for any other administrative purposes of CFD No. 2022‐2, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.

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City of San Bernardino
Community Facilities District No. 2022‐2 (Palm) Page 2 "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 before May 1st preceding the Fiscal Year in which the Special Tax is being levied.

"Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.

"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.

"Assessor’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.

"Assigned Special Tax" means the Special Tax of that name described in Section D below.

"Backup Special Tax" means the Special Tax of that name described in Section D below.

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

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

31. "CFD” or “CFD No. 2022‐2" means Community Facilities District No. 2022‐2 (Palm) of the City of San
Bernardino established by the City under the Act.

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

“City” means the City of San Bernardino, State of California.

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City of San Bernardino
Community Facilities District No. 2022‐2 (Palm) Page 3 "City Council" means the City Council of the City of San Bernardino, acting as the Legislative Body of CFD No. 2022‐2, or its designee.

“Condominium Plan" means a condominium plan pursuant to California Civil Code, Section 6624 et seq.

"County" means the County of San Bernardino, State of California.

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

"Fiscal Year" means the period commencing on July 1st of any year and ending the following June 30th.

“Land Use Category” means any of the categories listed in Table 1 of Section D.

"Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2022‐2 in any Fiscal Year on any Assessor’s Parcel.

"Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2.

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

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City of San Bernardino
Community Facilities District No. 2022‐2 (Palm) Page 4 for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property or Provisional Undeveloped Property.

"Residential Property" means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more Residential Units.

“RMA" means this Rate and Method of Apportionment of Special Taxes.

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

"Special Tax" or “Special Taxes” means any of the special taxes authorized to be levied within CFD No. 2022‐2 pursuant to the Act to fund the Special Tax Requirement.

"Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established under the Indenture in association with the Bonds to the extent that replenishment has not been included in the computation of the Special Tax Requirement in a previous Fiscal Year, (v) to cure any delinquencies in the amount of principal or interest on the Bonds that occurred in a previous Fiscal Year, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2022‐2 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Undeveloped Property as set forth in Step Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture.

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

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

"Tract(s)" means an area of land within a subdivision identified by a particular tract number on a Final Map approved for the subdivision.

“Trustee” means the trustee, fiscal agent, or paying agent under the Indenture.

"Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed
Property, Approved Property, Provisional Undeveloped Property.

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City of San Bernardino
Community Facilities District No. 2022‐2 (Palm) Page 5 "Welfare Exempt Property" means, in any Fiscal Year, all Assessor’s Parcels within the boundaries of CFD No. 2022‐1 that have been granted a welfare exemption by the County under subdivision (g) of Section 214 of the Revenue and Taxation Code.

B. SPECIAL TAX

C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX

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

D. MAXIMUM SPECIAL TAX

1. Developed Property

The Maximum Special Tax for each Assessor’s Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax or (ii) the Backup Special Tax.

The Maximum Special Tax for each Assessor’s Parcel of Non‐Residential Property and Multifamily Property shall be the applicable Assigned Special Tax described in Table 1 of Section D.

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City of San Bernardino
Community Facilities District No. 2022‐2 (Palm) Page 6 a. Assigned Special Tax