ATTACHMENT E
Exhibit A – Rate and Method of Apportionment of Special Tax for CFD No. 98-02 Improvement Area No. F-59
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COMMUNITY FACILITIES DISTRICT NO. 98-02
(LIGHTING, LANDSCAPING, OPEN SPACE
AND PRESERVE MAINTENANCE)
IMPROVEMENT AREA NO. F-59
Exhibit A
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
Section 1. Introduction
Special Taxes shall be annually levied on all Assessor's Parcels (as hereinafter defined) in that territory included within Improvement Area No. F-59 (the "Territory") of Community Facilities District No. 98-02 of the City of San Marcos, County of San Diego, State of California (the "District"), in accordance with this Rate and Method of Apportionment of Special Tax (the "RMA") hereinafter set forth. All of the property within the Territory, unless otherwise exempted by law or the express provisions of the RMA, shall be taxed to the extent and in the manner provided below.
Section 2. Definitions
Acre: means 43,560 square feet of land.
Acreage: The area of an Assessor's Parcel as shown on the latest map of the County Assessor of the County of San Diego, or if the area of an Assessor's Parcel is not shown on such a map, the area shown on a current recorded subdivision map, parcel map, record of survey or other recorded document creating or describing the Assessor's Parcel. If the preceding maps are not available, the area shall be determined by the City Engineer. The Acreage attributable to the non-residential portion of a mixed-use building, with mixed-use meaning both residential and non-residential uses located within the same building, shall be the lesser of (i) the Acreage for the Assessor's Parcel on which such building is or is to be located or (ii) the non-residential building square footage multiplied by three and then divided by 43,560. If such non-residential building square footage is subdivided into one or more Condominiums pursuant to a Condominium Plan, then the Acreage for each such Condominium for purposes of (i) above shall be equal to the Acreage of the common interest property for such Condominium as determined by the City Engineer. Notwithstanding the foregoing, the Acreage attributable to a residential Condominium shall be computed by dividing the sum of the land area for the lot on which such Condominium is or will be located by the approved number of Condominiums for such lot.
Act: means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
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Administrative Expenses: Costs incurred to determine, levy and collect the special taxes, including compensation of City employees for administrative work performed in relation to the Improvement Area and a proportionate amount of the City's general administrative overhead related thereto, the fees of consultants and legal counsel, the costs of collecting installments of the special taxes upon the general tax rolls, preparation of required reports, and any other costs incurred for the administration of the Improvement Area or Community Facilities District No. 98- 02 by the City.
Approved Property: Assessor's Parcels that have been annexed to the District and the Territory and for which a final subdivision map or a Condominium Plan has been recorded prior to the January 1 preceding the Fiscal Year for which the S pecial Tax is being levied but for which a building permit has not been issued by the City by the January 1 preceding the Fiscal Year for which the Special Tax is being levied.
Assessor's Parcel: A parcel of land or Condominium in the Territory designated and assigned a discrete identifying number on an Assessor's Parcel Map of the County Assessor of the County of San Diego.
Assessor's Parcel Map : An official map of the County Assessor of the County of San Diego designating parcels by Assessor's Parcel number.
Authorized Services: The Authorized Services means the Citywide Services and Improvement Area Services as described below:
(i) Citywide Services means Zone A – Street Lighting, Zone B – Traffic Signals, Zone D – Citywide Parks, and Zone E – Citywide Trails, as described in the "Special Tax Report Community Facilities District No. 98-02 City of San Marcos Mello-Roos Community Facilities Act of 1982 Citywide Landscaping and Lighting" dated August 25, 1998; and (ii) Improvement Area Services means the Improvement Area Services as described in the "Special Tax Report Community Facilities District No. 98-02, Improvement Area F-59, City of San Marcos Mello-Roos Community Facilities Act of 1982 Citywide Landscaping and Lighting."
City: The City of San Marcos.
Condominium: A condominium as defined in California Civil Code Section 4125, as may be amended.
Condominium Plan: A condominium plan pursuant to California Civil Code Sections 4120 and 4285, as may be amended.
Developed Property: Assessor's Parcels that have been annexed to the District and the Territory and for which a building permit and/or a conditional use permit, director 's permit, or other equivalent permit has been issued by the City after the Territory was created but prior to the March A-3
1 preceding the Fiscal Year for which the Special Tax is being levied. Notwithstanding the preceding sentence, in the case of redeveloped property, only that portion of such Assessor's Parcel that has been redeveloped , as determined by the City, shall be classified as Developed Property for purposes of this RMA.
District: Community Facilities District No. 98 -02 (Lighting, Landscaping, Open Space and Preserve Maintenance) of the City.
Equivalent Dwelling Unit(s) or EDU(s): Residential dwelling units are assigned an EDU value of one. The EDUs for the portion of an Assessor's Parcel that is classified as Non- Residential are calculated by multiplying the Acreage classified as Non-Residential by 2.65.
Exempt Property: Property owned by, conveyed, dedicated, or irrevocably offered for dedication to a public agency; land that is in the public right -of-way; utility easements that are not occupied on a regular basis by employees of the benefiting utility and which make utilization of the property encumbered by such easement for purposes other than that set forth in the grant of such easement impractical; private ly owned, common area property, streets and parks, and open space lots including, but not limited to, such property owned by a property owners association; property zoned as open space; and property used as a golf course, other than clubhouse facilities. Pursuant to Section 53340(i) of the Act, properties receiving a welfare exemption under Revenue and Taxation Code Section 214 shall be exempt from the special tax and shall be classified as Exempt Property unless a waiver of such exemption is executed by the applicable property owner.
Furthermore, property owned by a public agency but leased to an end-user for purposes other than public use will not be classified as exempt.
Extraordinary Special Tax: That special tax levied as applicable pursuant to the provisions of Section 7 below.
Fiscal Year: The period beginning on July 1 and ending on the following June 30.
Index: The Consumer Price Index for the San Diego Region as published by the United States Department of Labor, Bureau of Labor Statistics.
Maximum Annual Special Tax : The maximum special tax that can be levied on any Assessor's Parcel in any Fiscal Year.
Maximum Annual Special Tax Rate : The maximum annual special tax rate or rates as set forth in Section 4 below.
Operating Reserve: As applicable, a fund established and maintained from Special Taxes in an amount not to exceed the following (the "Operating Reserve Requirement"): 150% of the Special Tax Requirement, or such lower amounts which may be determined at the discretion of the City.
Property Classification: A classification of property specified in Section 3 below.
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eserve for Repairs, Removals, Replacements, and Rehabilitation: A s applicable, a fund established and maintained from Special Taxes in addition to the Operating Reserve for repairs, removals, replacements, and rehabilitation of the facilities to be maintained, operated, and managed pursuant to the Authorized Services.
Reserve Fund: As applicable, a fund or funds established and maintained from Special Taxes for purposes of the Operating Reserve and Reserve for Repairs, Removals, Replacements, and Rehabilitation.
Reserve Fund Requirement: The Operating Reserve Requirement plus the required Reserves for Repairs, Removals, Replacements, and Rehabilitation as determined by the City.
Revenue and Taxation Code : means the Revenue and Taxation Code of the State of California, as amended.
Special Tax: The special tax levied on each Assessor's Parcel pursuant to this RMA for any Fiscal Year to meet the Special Tax Requirement. The Special Tax is comprised of the Citywide Special Tax and the Improvement Area Special Tax as described below:
(i) Citywide Special Tax means the Special Tax determined by the application of the Maximum Annual Special Tax Rates for Citywide Services; and (ii) Improvement Area Special Tax means the Special Tax determined by the application of the Maximum Annual Special Tax Rates for Improvement Area Services.
Special Tax Requirement: The amount sufficient (i) to pay the Territory's proportional share of direct costs to the City, the District, and their contractors, agents , or assigns associated with providing the Authorized Services, (ii) to pay for the Administrative Expenses allocable to the Territory and associated with providing the Authorized Services, and (iii) to establish and replenish the Reserve Fund balance to the Reserve Fund Requirement. Citywide Services shall be funded from the Special Taxes produ ced by the application of the Maximum Annual Special Tax Rate s for Citywide Services and Improvement Area Services shall be funded from the Special Taxes produced by the application of the Maximum Annual Special Tax Rate for Improvement Area Services. In addition, the Special Taxes collected by the application of the Maximum Annual Special Tax Rates for Citywide Services may be expended for any of the Citywide Services, including applicable Administrative Expenses and Reserve Funds, and the Special Taxes collected by the application of the Maximum Annual Special Tax Rate for Improvement Area Services may be expended for any of the Improvement Area Services, including applicable Administrative Expenses and Reserve Funds.
Taxable Assessor's Parcel : An Assessor's Parcel all or a portion of which is classified as Developed, Approved, or Undeveloped Property and that is not Exempt Property.
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Undeveloped Property : All Taxable Assessor's Parcel s which are not classified as Developed Property or Approved Property.
Zone: An area consisting of a group of Assessor's Parcels, which may or may not be contiguous, which will participate in the cost of providing a particular facility or service.
Section 3. Property Classifications
The Property Classifications to which Assessor's Parcels in the Territory shall be assigned are Developed Property, Approved Property, Undeveloped Property, and Exempt Property. As of July 1 of each Fiscal Year, commencing with July 1, 2025, using the definitions in Section 2 above, the District shall cause each Assessor's Parcel to be classified into one of the Property Classifications noted above.
Section 4. Maximum Annual Special Tax Rates
The EDUs for each Property Classification will be determined in accordance with Table 1 below. The Maximum Annual Special Tax R ates are specified in T able 2 below. The Maximum Annual Special Tax for a Taxable Assessor's Parcel shall be equal to the EDUs applicable to such Assessor's Parcel as determined from Table 1 below multiplied by the Maximum Annual Special Tax rates in Table 2 below. Notwithstanding the assignment of an Assessor's Parcel to one of the four Property Classifications above, each Assessor's Parcel may be comprised of residential as well as non- residential land uses , in which case the Maximum Annual Special Tax for the Assessor's Parcel shall be the sum of the Maximum Annual Special Taxes for both land uses, with non-residential based upon the proportion of the acreage applicable to the non-residential land use.
TABLE 1
EQUIVALENT DWELLING UNITS
PROPERTY
CLASSIFICATION
CITYWIDE
SERVICES
ZONES A, D, AND E
CITYWIDE
SERVICES
ZONE B
IMPROVEMENT
AREA
SERVICES
Developed Property
Residential 1 EDU/Residential Unit 1 EDU/Residential Unit 1 EDU/Residential Unit Non-Residential
Commercial 2.65 EDUs/Acre 40.00 EDUs/Acre 2.65 EDUs/Acre Industrial 2.65 EDUs/Acre 10.00 EDUs/Acre 2.65 EDUs/Acre All Others 2.65 EDUs/Acre 10.00 EDUs/Acre 2.65 EDUs/Acre A-6
TABLE 1
EQUIVALENT DWELLING UNITS
PROPERTY
CLASSIFICATION
CITYWIDE
SERVICES
ZONES A, D, AND E
CITYWIDE
SERVICES
ZONE B
IMPROVEMENT
AREA
SERVICES
Approved Property1
Residential 1 EDU/Residential Unit 1 EDU/Residential Unit 1 EDU/Residential Unit Non-Residential
Commercial 2.65 EDUs/Acre 40.00 EDUs/Acre 2.65 EDUs/Acre Industrial 2.65 EDUs/Acre 10.00 EDUs/Acre 2.65 EDUs/Acre All Others 2.65 EDUs/Acre 10.00 EDUs/Acre 2.65 EDUs/Acre Undeveloped Property1
Residential 1 EDU/Residential Unit 1 EDU/Residential Unit 1 EDU/Residential Unit Non-Residential
Commercial 2.65 EDUs/Acre 40.00 EDUs/Acre 2.65 EDUs/Acre Industrial 2.65 EDUs/Acre 10.00 EDUs/Acre 2.65 EDUs/Acre All Others 2.65 EDUs/Acre 10.00 EDUs/Acre 2.65 EDUs/Acre Exempt Property NA NA NA
TABLE 2
MAXIMUM ANNUAL SPECIAL TAX RATES
FISCAL YEAR 2025-2026
AUTHORIZED SERVICE
MAXIMUM ANNUAL
SPECIAL TAX RATE
PER EDU2
Citywide Services
Zone A $45.27
Zone B $14.34
Zone C NA
Zone D $253.24
Zone E $14.12
Improvement Area Services $651.67
4.1 Assignment of Maximum Annual Special Tax: A Maximum Annual Special Tax will be assigned to all Taxable Assessor's Parcels classified as Developed Property , Approved 1 For Approved Property and Undeveloped Property, the City in its discretion will determine the number of anticipated or planned residential units and non -residential Acres for an Assessor's Parcel from the applicable zoning, tentative map, or conditional or other development permit.
2 The FY 2025-2026 Maximum Annual Special Tax Rates in Table 2 have been rounded to the nearest penny.
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Property, or Undeveloped Property as of July 1 of the Fiscal Year in which such classification occurs.
4.2 Increasing the Maximum Annual Special Tax : Beginning with Fiscal Year 2026-2027 the Maximum Annual Special Tax Rates set forth above may be increased annually by the greater of the annual percentage change in the Index or two percent (2.00%).
Section 5. Determination of Special Tax Requirement
The City shall annually determine the Special Tax Requirement for each Fiscal Year, commencing with Fiscal Year 2026-2027. The Special Tax Requirement for each Fiscal Year shall include the cost of those Authorized Services that the City is or will be responsible to provide during all or any portion of such Fiscal Year; the proportionate share of the related Administrative Expenses allocable to the Territory; and the funding or replenishment of the Reserve Fund to the Reserve Fund Requirement. The initial funding of the Reserve Fund shall be accomplished only through the levy of Special Taxes on Developed Property or Extraordinary Special Taxes on Approved Property and/or Undeveloped Property as provided for herein.
In any Fiscal Year during which a developer, builder, or property owner is or will be responsible for providing any Improvement Area Services, the Special Tax Requirement for such Fiscal Year shall include the Developed Properties' proportionate share of the estimated cost of providing the Improvement Area Services by the Cit y from the estimated date following the end of the developer's warranty period upon which the City will assume such maintenance responsibility to the next date thereafter on which the C ity will receive Special Taxes to finance such Improvement Area Services. For example, assume that in preparing the Fiscal Year 2026- 2027 Special Tax Requirement, the District determines that the City will become responsible for providing certain Improvement Area Services commencing on May 1, 2027. Assume that from that date the City is responsible for such maintenance costs until the end of Fiscal Year 2026-2027 (i.e., May 1, 2027 to June 30, 2027), the City's share of the cost of providing services is $2,500.
In addition, assume that the cost of providing services during Fiscal Year 2027-2028 is $10,000 such that the cost of providing services for Fiscal Year 2027-2028 until the first receipt of Special Taxes (i.e., July 1, 2027 to December 31, 2027) is $5,000. On May 1, 2027, the City will need to have on deposit $7,500 to f und the services from May 1, 2027 until December 31, 2027. To accomplish this, the Special Tax Requirement for Fiscal Year 2026-20276 shall include this additional $7,500.
Section 6. Method of Apportionment of Special Taxes
6.1. As of July 1 of each Fiscal Year, commencing with July 1, 2026 all Taxable Assessor 's
Parcels within the Territory shall be assigned to one of the Property Classifications specified in Section 3.
6.2. The City shall determine for each Fiscal Year the Special Tax Requirement.
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6.3. The City shall levy the Special Taxes for each Fiscal Year, commencing on July 1, 2025, in the following order of priority to fund the Special Tax Requirement for such Fiscal Year:
(a) Levy the Special Tax proportionately up to the Maximum Annual Special Tax upon all Developed Property to generate Special Taxes to fund the Special Tax Requirement; (b) If, after levying Special Taxes pursuant to (a) above, additional Special Taxes are needed to generate sufficient Special Taxes to fund the Special Tax Requirement, then levy the Special Tax proportionately up to the Maximum Annual Special Tax upon all Approved Property; and
(c) If, after levying Special Taxes pursuant to (a) and (b) above, additional Special Taxes are needed to generate sufficient Special Taxes to fund the Special Tax Requirement, then levy the Special Tax proportionately up to the Maximum Annual Special Tax upon all Assessor's Parcels of Undeveloped Property which are subject to the levy of Special Taxes.
Section 7. E xtraordinary Special Tax
Prior to the acceptance by the City of areas or improvements to be maintained as a part of the Improvement Area Services and assumption by the City of responsibility for providing such Improvement Area Services, the District shall determine, if applicable, (i) the amount, if any, in addition to those funds received from the levy of the Special Taxes on Developed Properties which are allocated to pay for Improvement Area Services, which the City will need to pay for such Improvement Area Services from the da te following the end of the developer's warranty period upon which the City will assume such maintenance responsibility to the next date thereafter on which the City will receive Special Taxes to finance such Improvement Area Services and (ii) the amount, if any, in addition to those funds received from the levy of Special Taxes on Developed Properties which are allocated t o funding the Reserve Fund, which will be necessary to increase the amount on deposit in the Reserve Fund to the Reserve Fund Requirement at the commencement of the Fiscal Year following the date of the assumption by the City of responsibility for providing such Improvement Area Services. Subject to the limitations on the Maximum Annual Special Tax contained in Section 4 above, the sum of (i) and (ii) above shall be levied as an Extraordinary Special Tax by direct billing on all remaining Approved Property and Undeveloped Property and such amount shall become due and payable within sixty (60) calendar days from and after the date of such direct billing.
The City shall not accept any areas or improvements or assume responsibility for providing those Improvement Area Services for which an Extraordinary Special Tax has been levied until such Special Tax has been received by the District. No further building permits shall be issued for Assessor's Parcels within the Territory if any Extraordinary Special Tax levied pursuant to this Section 7 is not paid within the time period set forth in the preceding paragraph.
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Section 8. Manner of Collection of Special Taxes
With the exception of the Extraordinary Special Tax which shall be billed directly, the Special Taxes levied in each Fiscal Year shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes; provided, however, the City Council may, by resolution, establish and adopt an alternative or supplemental collection procedure, including direct billing. The Special Taxes when levied shall be secured by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each levy of Special Taxes. The lien of the Special Taxes shall continue in force and effect until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government Code.
Section 9. Prepayment of Special Tax
The Maximum Annual Special Tax for an individual Assessor's Parcel within the Territory of the District may be discharged through the prepayment of the special tax obligation provided that there are no delinquent special taxes with respect to that Assessor's Parcel at the time of prepayment.
Proof of payment of delinquent taxes will be provided to the City prior to the discharge of the special tax obligation. An owner of an Assessor's Parcel intending to prepay the Maximum Annual Special Tax shall provide the District with a written notice of intent to prepay. Within 30 days of receipt of such written notice, the District shall notify such owner of the prepayment amount of such Assessor's Parcel.
The Prepayment Amount shall be calculated as the present value of the Maximum Annual Special Tax escalated at 2%, through each fiscal year which is seventy -five years from the fiscal year in which the prepayment shall be made plus the current fiscal year special tax obligation, an amount to cover the administrative fees and expenses of the District, as calculated by the City, including, but not limited to, the costs of computation of the prepayment, the costs of removing any special taxes from the Roll, and the costs of recording a notice of special tax lien release and any additional actions required to evidence the prepayment. The assumptions to be used when calculating the present value of the Maximum Annual Special Tax are as follows:
The discount rate shall be equal to the rate of return earned on the City's general fund investment portfolio for the preceding twelve months. A 360-day year.
The Maximum Annual Special Tax will be discounted from July 1 of each Fiscal year.
The payment in full of the amount calculated, plus the applicable administrative expenses and recording fee, fully discharges any further obligation of the parcel for the improvements funded within the District.
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he City shall cause a suitable notice to be recorded in compliance with the Act within 30 days of receipt of such prepayment of the Maximum Annual Special Tax, to indicate the prepayment of the Maximum Annual Special Tax and the release of the special lien on such Assessor's Parcel.
Section 1 0. Appeals
Any landowner or resident may file a written appeal of the Special Tax on his/her property with the Finance Director, provided that the appellant is current in his/her payments of Special Taxes.
During the pendency of an appeal, all Special Taxes 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 Finance Director shall review the appeal, meet with the appellant if the Finance Director deems necessary, and advise the appellant of its determination. If the Finance Director agrees with the appellant, the Finance Director shall eliminate or reduce the Special Tax on the appellant 's property and/or provide a refund to the appellant. If the Finance Director disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has thirty (30) days in which to appeal to the City Council by filing a written notice of appeal with the City Clerk, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for the appellant's disagreement with the Finance Director's determination.
Section 11. Interpretations
Interpretations may be made by resolution of the City Council for purposes of clarifying any vagueness or ambiguity as it relates to any provision of this RMA.