Agenda Item 9B — Torrance City Council, February 24, 2026

9B
Date: February 24, 2026
To: Honorable Mayor and Members of the City Council
From: Ian Dailey, Finance Director
By: Sheila Poisson, Deputy Finance Director | [email protected] Subject: Finance – Conduct a Public Hearing and Adopt RESOLUTIONS and ORDINANCE Relating to the Levy of a Special Tax Within Community Facilities District No. 2026-01. Expenditure: None.

RECOMMENDATION
Recommendation of the Finance Director that City Council:

1. Conduct a public hearing; and

2. Adopt a RESOLUTION of Formation to Establish Community Facilities District (CFD) No. 2026-01 (Public Services) and Future Annexation Area, Authorizing the Levy of a Special Tax and Establishing an Appropriations Limit; and

3. Adopt a RESOLUTION calling for a Special Landowner Election Relating to the Levy of a Special Tax and Establishing an Appropriations Limit; and

4. Adopt a RESOLUTION Declaring the Results of a Special Landowner Election Relating to the Levy of a Special Tax and Establishing an Appropriations Limit; and

5. Adopt an ORDINANCE Authorizing the Levy of a Special Tax Within CFD No. 2026-01.

FUNDING
None required.

DISCUSSION
The purpose of CFD No. 2026-01 is to mitigate the adverse fiscal impacts on municipal services associated with new development projects, including industrial and multi-family residential developments. Unlike Development Impact Fees which provide funding for one-time infrastructure costs only, CFD No. 2026-01 is intended to pay for ongoing municipal services. As permitted by the Mello-Roos Community Facilities Act of 1982, commencing with Section 53311 of the Government Code (the “Act”), CFD No. 2026-01 may provide one or more of the following eligible services to new projects:
• Police and public safety services, including emergency and non-emergency response, supporting facilities, equipment, vehicles, supplies, and personnel needed to maintain service levels;
• Maintenance and lighting of parks, parkways, streets, roads, and open space areas; • Flood control and storm-protection services, including infrastructure and maintenance; and
• Other public services authorized under Government Code §53313, as applicable. 1 City Council
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At the direction of the City Council, the following actions have been taken to date:
• January 23, 2024: City Council directed staff to proceed with the formation of a Citywide CFD to mitigate project-related service impacts.
• July 24, 2024: Planning Commission reviewed the draft Torrance Municipal Code amendment regarding CFD formation and recommended approval to Council. • September 10, 2024: City Council conducted a public hearing and adopted Ordinance No. 3937 and Resolution No. 2024-75, establishing policies and procedures for the creation and administration of a Citywide CFD pursuant to the Mello-Roos Community Facilities Act of 1982 (Government Code Sections 53311–53368.3). • November 5, 2025: Planning Commission approved a request by Vista Homes for the construction of a new residential development consisting of 449 residential units, being the first project eligible to be annexed into the CFD.
• January 13, 2026: City Council adopted Resolution No. 2026-10 to establish CFD No. 2026-01, directed staff to record the Boundary Map, and set a date of February 24, 2026 for a Public Hearing to consider formation of CFD No. 2026-01 and call for a Special Election of landowners
• January 28, 2026: Boundary Map was recorded with the Los Angeles County Recorder’s office. The Boundary Map also includes a “Future Voluntary Annexation Area,” which corresponds to the City’s boundaries. This will enable all future eligible development projects anywhere within the City to annex into CFD No. 2026-01 with unanimous approval of the property owner(s).
• February 13, 2026: Notice of Public Hearing was published in the Daily Breeze newspaper and posted at City Hall.
• February 19, 2026: Election ballot and instructions were electronically mailed to the landowners within the proposed boundary of CFD No. 2026-01. In addition, staff informed the landowner about the next steps in the formation process including the public hearing and election.

Once CFD No. 2026-01 is fully formed, certain projects that impose negative fiscal impacts on ongoing City services would be eligible to annex into the CFD. These projects are anticipated to primarily include new industrial development and new multi-family residential development of five (5) units or more, including new construction or projects involving demolition and redevelopment of an existing site. Eligibility criteria for new industrial and commercial projects would align with the same thresholds that trigger a requirement for a Conditional Use Permit or Minor Conditional Use Permit, or other form of discretionary approval, by whatever name. 2 City Council
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Alternatively, projects can mitigate their negative fiscal impacts with other financing options.

Below is a table summarizing the types of options available:

Financing Option Description
CFD Annexation –
City Preferred
Alternative
Under this option, the property owner would agree to annex the property of the proposed project into CFD 2026-01 and pay a special tax in perpetuity.

This option is preferred by the City and is often the most cost-effective option for developers.

Lump Sum Payment
Under this option, the developer would provide an upfront lump sum amount for 50 years of service at the CFD Fiscal Impact Analysis Rate or equivalent Alternative Rate(s).

Development
Agreement
Under this option, the developer would agree to pay the City at 15 percent above the CFD Fiscal Impact Analysis Rate or equivalent Alternative Rate(s) for a defined period not less than 55 years. A year prior to the end of the defined period, the developer would be required to participate in the same or another alternative mandatory financing option described in this table. The additional 15 percent covers the additional reporting requirements and administration costs. The developer may be required to post some security up front to ensure future years are taken care of if a lesser amount is required up front.

Other Other financing alternative arrangements may be considered and approved by the City on a case-by-case basis.

This evening’s recommended actions would establish CFD No. 2026-01 (Public Services) and its Future Annexation Area, authorize the levy of a special tax, and complete the required landowner election and related proceedings under the Mello-Roos Community Facilities Act. As part of the landowner ballot, approval is also requested for an annual appropriations limit of $10,000,000, to be adjusted annually by CPI. The appropriations limit is intentionally set at a level that provides long-term flexibility, as the special tax is perpetual and any future increase to the appropriations limit would require a subsequent landowner election involving all landowners annexed into the CFD at that time, which could be numerous. Requiring a future election would introduce administrative complexity and uncertainty, and could potentially jeopardize a funding source relied upon to support ongoing City services. Establishing an adequate appropriations limit at formation helps avoid these risks and ensures the City’s ability to fund eligible services over the long term.

ATTACHMENTS

1. Resolution of Formation

2. Resolution calling for a Special Landowner Election

3. Resolution Declaring the Results of a Special Landowner Election

4. Ordinance Authorizing the Levy of a Special Tax Within CFD No. 2026-01

5. Ordinance Summary

6. Proof of Publication

7. Final CFD Report
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RESOLUTION NO. _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF TORRANCE, CALIFORNIA, AUTHORIZING

FORMATION OF CITY OF TORRANCE COMMUNITY
FACILITIES DISTRICT NO. 2026-01 (PUBLIC SERVICES),

AUTHORIZING THE LEVY OF A SPECIAL TAX THEREIN,

PRELIMINARILY ESTABLISHING AN APPROPRIATIONS

LIMIT THEREFOR AND SUBMITTING LEVY OF THE

SPECIAL TAX AND THE ESTABLISHMENT OF THE

APPROPRIATIONS LIMIT TO THE QUALIFIED

ELECTORS THEREOF
WHEREAS , on January 13, 2026, this City Council adopted Resolution No. 10, entitled “Resolution of the City Council of the City of Torrance, California Declaring Its Intention to Establish the City of Torrance Community Facilities District No. 2026-01 (Public Services), and Future Annexation Areas, and to Authorize the Levy of Special Taxes Therein” (the “Resolution of Intention”), stating its intention to form City of Torrance Community Facilities District No. 2026-01 (Public Services) (the “CFD”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Section 53311 et seq . of the California Government Code (the “Act”); and WHEREAS , the Resolution of Intention, incorporating a map of the proposed boundaries of the CFD and Future Annexation Areas, stating the services to be provided, and the preliminary drafts of the rate and method of apportionment of the special tax to be levied within the CFD to pay the costs of providing such services, is on file with the City Clerk (the “Clerk”); and
WHEREAS , on this date, this City Council held a noticed public hearing as required by the Act and the Resolution of Intention with respect to the proposed formation of the CFD, Future Annexation Areas, the services to be provided therein, the levy of special taxes within the CFD; and
WHEREAS , at said hearing all interested persons desiring to be heard on all matters pertaining to the formation of the CFD and Future Annexation Areas, the services to be provided therein, the levy of said special tax, were heard and a full and fair hearing was held; and
WHEREAS , at said hearing evidence was presented to this City Council on said matters before it, including a report caused to be prepared pursuant to the Resolution of Intention (the “Report”) as to the services to be provided through the CFD and the costs thereof, a copy of which is on file with the Clerk, and this City Council at the conclusion of said hearing is fully advised in the premises; and,
WHEREAS , written protests with respect to the formation of the CFD, the furnishing of specified types of services, and the preliminary draft of the rate and method of apportionment of the special taxes have not been filed with the Clerk by fifty 4 ATTACHMENT 1
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percent (50%) or more of the registered voters residing within the territory of the CFD or property owners of one-half (1/2) or more of the area of land within the CFD and not exempt from the special tax; and
WHEREAS , the special tax proposed to be levied in the CFD to pay for the Services (defined herein), has not been eliminated by protest by fifty percent (50%) or more of the registered voters residing within the territory of the CFD or the owners of one-half (1/2) or more of the area of land within the CFD and not exempt from the special tax; and
NOW, THEREFORE, BE IT RESOLVED , by the City Council of the City of Torrance as follows:

Section 1. The foregoing recitals are true and correct.

Section 2. The proposed special tax to be levied within the CFD has not been precluded by majority protest pursuant to Section 53324 of the Act.

Section 3. All prior proceedings taken by this City Council in connection with the establishment of the CFD, and Future Annexation Areas, and the levy of the special tax within the CFD and Future Annexation Areas have been duly considered and are hereby found and determined to be valid and in conformity with the Act.

Section 4. This City Council has approved local goals and policies for community facilities districts of the City (“Goals and Policies”), and this City Council hereby finds and determines that the CFD is in conformity with said Goals and Policies.

Section 5. The CFD is designated “City of Torrance Community Facilities District No. 2026-01 (Public Services)” and is hereby established pursuant to the Act.

Section 6. The boundaries of the CFD, and Future Annexation Areas, as set forth in the map of the CFD heretofore recorded on January 28, 2026, in the Los Angeles County Recorder's Office as Document No. 2026-0065717 in Book 197, Pages 20 through 22 of Maps of Assessment and Community Facilities Districts, are hereby approved, are incorporated herein by reference and shall be the boundaries of the CFD and Future Annexation Areas.

Section 7. The types of services proposed to be financed by the CFD pursuant to the Act shall be the items listed on Exhibit A herein (the “Services”). Each and every Future Annexation Areas that may be designated (a “Future Annexation Area”) are authorized to finance all or any portion of the Services, regardless of the geographic location of the Services. The Report is hereby accepted by the City and incorporated herein by reference.

Section 8. Except to the extent that funds are otherwise available to the CFD to pay for the Services, a special tax sufficient to pay the costs thereof, secured by a continuing lien against all non-exempt real property in the CFD, will be levied annually within the CFD, and collected in the same manner and upon the same roll as ordinary, 5 809/062579-0133
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ad valorem real property taxes or in such other manner as this City Council shall determine, including direct billing of the affected property owners. The proposed rate and method of apportionment of special tax among the parcels of real property within the CFD (the "RMA"), in sufficient detail to allow each landowner within the CFD to estimate the probable maximum amount such owner will have to pay, is described in Exhibit B attached hereto and by this reference incorporated herein. The RMA has been modified from the form attached to the Resolution of Intention to correct certain grammatical and consistency issues, and the City Council hereby approves of such changes and finds that the changes do not increase the maximum special tax for the owners of property in the CFD. In no circumstances shall the special tax levied pursuant to the RMA against any parcel in the CFD used for private residential purposes (as defined in the Act), if any, be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the CFD by more than 10 percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. For purposes of this paragraph, a parcel shall be considered “used for private residential purposes” not later than the date on which an occupancy permit for private residential use is issued.

Section 9. It is hereby found and determined that the Services are necessary to meet increased demands placed upon the City as the result of development occurring in the CFD.

Section 10. The City Manager of the City (interim or permanent) of Torrance, California 90503, telephone number (310) 618-5880, or designee, is the officer of the City who will be responsible for preparing annually a current roll of special tax levy obligations by assessor's parcel number and will be responsible for estimating and levying future special tax levies for the CFD pursuant to the Act.

Section 11. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the Streets and Highways Code of California upon the property in the CFD, a continuing lien to secure the levy of the special tax pursuant to the RMA shall attach to all nonexempt real property in the CFD, and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the CFD ceases.

Section 12. In accordance with Section 53325.7 of the Act, the annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution, of the CFD, is hereby preliminarily established at a sum equal to the greater of $10,000,000 or two hundred percent (200%) of the amount of all proceeds of the special tax collected annually, and as defined by said Article XIIIB as adjusted for changes in the cost of living and changes in population, and said appropriations limit shall be submitted to the voters of the each Improvement Area therein, as hereafter provided. The proposition establishing said annual appropriations limit shall become effective if approved by the qualified electors voting thereon and shall be adjusted in accordance with the applicable provisions of Section 53325.7 of the Act. 6 809/062579-0133
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Section 13. Pursuant to the provisions of the Act, the proposition of the levy of the special tax and the proposition of the establishment of the appropriations limit specified above for the CFD shall be submitted to the qualified electors at an election the time, place and conditions of which election shall be as specified by a separate resolution of this City Council. The proposed voting procedure shall be by mail, hand- delivered ballot, or electronic ballot submitted through an approved electronic signature platform, among the landowners in the CFD, with each owner having one vote for each acre or portion of an acre such owner owns within the CFD.

Section 14. Parcels within the Future Annexation Areas as identified on the recorded Boundary Map shall be annexed to the CFD only with the unanimous approval of the owner or owners of each parcel or parcels at the time that the parcel or parcels are annexed without any requirement for further public hearings or additional proceedings, and that any property for which the owner or owners execute a unanimous approval that is accepted by the City Council shall be added to the CFD and the Clerk shall record an amendment to the Notice of Special Tax Lien for the Community Facilities District pursuant to Section 3117.5 of the Streets & Highways Code.

Section 15. The officers of the City are, and each of them is, hereby authorized and directed to do any and all things, and to execute and deliver any and all documents which said officers may deem necessary or advisable in order to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 16. This Resolution shall take effect immediately upon its adoption.

Section 17. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. 7 809/062579-0133
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INTRODUCED , APPROVED , and ADOPTED this 24th day of February, 2026.

Mayor George K. Chen
APPROVED AS TO FORM:

Patrick Q. Sullivan, City Attorney
________________________________
Tatia Y. Strader, Assistant City Attorney
ATTEST:
________________________________
Rebecca Poirier, MMC, City Clerk
Attachments:

Exhibit A – Authorized Services
Exhibit B – Rate & Method of Apportionment
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EXHIBIT A

AUTHORIZED SERVICES
The services to be funded, in whole or in part, by the Community Facilities District (the "District") include all direct and incidental costs related to providing for the maintenance of public infrastructure within the area of the District, the future voluntary annexation area, and areas adjacent to or in the vicinity of such areas. More specifically, the services may include, but not be limited to: (i) police and related services of the City of Torrance required to sustain the public safety service delivery capability for emergency and non-emergency services including related equipment, vehicles, services, supplies and personnel; (ii) maintenance and lighting of parks, parkways, streets, roads and open space; (iii) flood and storm protection services; as well as the provision of other public services authorized to be funded under Section 53313 of the California Government Code. The District may fund any of the following related to the services described in the preceding sentence: obtaining, constructing, furnishing, operating and maintaining equipment, apparatus or facilities related to providing the services and/ or equipment, apparatus, facilities or fixtures in areas to be maintained, paying the salaries and benefits of personnel necessary or convenient to provide the services, payment of insurance costs and other related expenses and the provision of reserves for repairs and replacements and for the future provision of services. It is expected that the services will be provided by the City of Torrance, either with its own employees or by contract with third parties, or any combination thereof. The services to be financed by the District are in addition to those provided in the territory of the District before the date of creation of the District, and will not supplant services already available within that territory when the District is created.

Administrative Expenses: The administrative expenses to be funded by the District include the direct and indirect expenses incurred by the City in carrying out its duties with respect to the District (including, but not limited to, the levy and collection of the special taxes) including the fees and expenses of attorneys, any fees of the County of Los Angeles related to the District or the collection of special taxes, an allocable share of the salaries of the City staff directly related thereto and a proportionate amount of the City's general administrative overhead related thereto, any amounts paid by the City from its general fund with respect to the District or the services authorized to be financed by the District, and expenses incurred by the City in undertaking action to foreclose on properties for which the payment of special taxes is delinquent, and all other costs and expenses of the City in any way related to the District. 11 1

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES

C ITY OF TORRANCE
COMMUNITY FACILITIES DISTRICT NO. 2026 -01
(PUBLIC SERVICES )
A Special Tax as hereinafter defined shall be levied on all Assessor’s Parcels in City of Torrance Community Facilities District No. 2026-01 (Public Services) ("CFD No. 2026-01") and collected each Fiscal Year commencing in Fiscal Year 2025-2026, in an amount determined by the Council, through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 2026-01, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.

A DEFINITIONS
T
he terms hereinafter set forth have the following meanings:
"Acre" o r "Acreage" m eans the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Map, parcel map, condominium plan, or other recorded County parcel map.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No 2026-01: 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 associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2026-01 or any designee thereof related to an appeal of the Special Tax; and the City’s annual administration fees and third party expenses.

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
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.
“Authorized Services” means those services eligible to be funded, as defined in the Resolution of Formation and authorized to be financed by CFD No. 2026-01 pursuant to Section 53313 and Section 53313.5 of the Act. C FD No. 2026-01 shall finance Authorized Services only to the extent that they are in addition to those provided in the territory before the CFD was created and such Authorized Services may not supplant services already available within CFD No. 2026-01 when the CFD was created.
"Building Permit" means the first legal document issued by the City giving official permission for the construction of a building on an Assessor’s Parcel. For purposes of this definition and application of the Special Tax, “Building Permit” may or may not include any subsequent building permits issued or changed after the first issuance, as determined by the CFD Administrator.
"CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and pro viding for the levy and collection of the Special Taxes.
"CFD No. 2026 -01 " means the City of Torrance Community Facilities District No. 2026-01 (Public Services).
“City” means the City of Torrance.
“Commercial Center Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing two or more acres in land area and building, or combination of buildings, greater than 25,000 gross square feet of commercial uses.   This definition also includes mixed-use developments, regardless of the land area size and/or building(s) square feet, that consist of a combination of residential and non-residential uses.  The City Manager, or his/her designee, shall make the decision whethe r an Assessor’s Parcel is Commercial Center Property, if the primary use is commercial. For mixed use developments, each use will be charged independentl y based on corresponding Land Use Class.
“Consumer Price Index” means, for each Fiscal Year, the Consumer Price Index published by the U.S. Bureau of Labor Statistics for Urban Wage Earners & Clerical Workers (CPI-W) in the Los Angeles – Long Beach – Anaheim Area, measured as of the month of December in the previous Fiscal Year. In the event this index ceases to be published, the Consumer Price Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Consumer Price Index for the Los Angeles – Long Beach – Anaheim Area.
"Cou ncil" means the City Council.
"County" means the County of Los Angeles.
"Single Family Residential Property" means Assessor’s Parcel of Developed Property for which Building Permits have been issued for Dwelling Units that are or are expected to be (i) each located on a separate lot designated by a Final Map, and (ii) surrounded by freestanding walls and that do not share an inside wall with any 13 3

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
other Dwelling Unit, as determined by the CFD Admin istrator. "Developed Property" means, for each Fiscal Year, all Taxable Property for which a Building Permit was issued prior to May 1 of the prior Fiscal Year. “Dwelling Unit” means one residential unit of any configuration, including, but not limited to, a single-family attached or detached dwelling, condominium, mobile home, or otherwise. A casita or additional dwelling unit ("ADU") of any configuration shall not be counted as a separate dwelling unit for purposes of this Rate and Method of Apportionment.
“Exempt Welfare Exemption Property” means, for each Fiscal Year, an Assessor’s Parcel that is (a) receiving a welfare exemption under subdivision (g) of Section 214 of the California Revenue and Taxation Code (or any successor statute), as indicated in the County’s assessor’s roll finalized as of January 1 of the previous Fiscal Year, and (b) exempt from the Special Tax pursuant to Section 53340(c) of the Act. "Final Map" means (i) a final map, or portion thereof, approved by the County pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots or parcels for which Building Permits may be issued without further subdivision, or (ii) for condominiums, a final map approved by the County and a condominium plan recorded pursuant to California Civil Code Section 4285 creating such individual lots or parcels.
"Fiscal Year" means the period starting July 1 and ending on the following June 30. “General Commercial Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing less than two acres in land area and building, or combination of buildings, less than 25,000 gross square feet of commercial uses. This definition also includes mixed-use developments that consist of a combination of residential and non-residential uses.   The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is General Commercial Property.
“Heavy Industrial Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for primary and secondary processing, manufacturing and remanufacturing or reprocessing o f all types, and freight forwarding/logistics use/distribution centers.  The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Heavy Industrial Property. “Industrial Business Park Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing more than one light and/or heavy industrial use.  The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Industrial Business Park Property. "Land Use Class" means any of the categories listed in Table 1 below. “Light Industrial Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for light manufacturing (not involving the processing of hazardous materials animal products), warehousing, processing, and distribution of goods and other low intensity industrial uses.  The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Light Industrial Property.
"Maximum Special Tax" means the maximum Special Tax, determined in accordance 14 4

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
with Section C below, that can be levied in any Fis cal Year on any Assessor’s Parcel. “Mixed-Use Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing a combination of residential uses with non-residential uses such as commercial or industrial uses. Each use will be charged independently based on corresponding Land Use Class.

"Multi-Family Residential Property" means Assessor’s Parcel of Developed Property for which Building Permits were issued for construction of a residential structure consisting of two or more Dwelling Units that share common walls, including garage walls. Dwelling Units to be included in this category shall include, but not be limited to, townhomes, condominiums, triplex units, and duplex units. “Non -Residential Floor Area” means the total building square footage of the non- residential building(s) located on an Assessor’s Parcel, measured from outside wall to outside wall, not including space devoted to stairwells, public restrooms, lighted courts, vehicle parking and areas incident thereto, and mechanical equipment incidental to the operation of such building. The determination of Non-Residential Floor Area shall be made by reference to the Building Permit(s) issued for such Assessor’s Parcel and/or to the appropriate records kept by the City, as reasonably determined by the CFD Administrator.
"Non -Residential Property" means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for General Commercial Property, Commercial Center Property, Light Industrial Property, Heavy Industrial Property, and Industrial Business Park Property.  The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Non-Residential Property. “Property Owner Association” means, collectively, any property owner association or homeowners association, including any master of sub-association, created for the property in CFD No. 2026-01.
"Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2026-01 that was owned by a Property Owner Association, as of January 1 of the prior Fiscal Year.
"Proportionately" means, for Developed Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor’s Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor’s Parcels of Undeveloped Property.
"Public Property" means, for each Fiscal Year, any property within CFD No. 2026-01 that is owned by, irrevocably offered for dedication to, or dedicated to the federal government, the State, the City, or any other public agency as of June 30 of the prior Fiscal Year; provided however that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. To ensure that property is classified as Public Property in the first Fiscal Year after it is acquired by, irrevocably offered for dedication to, or dedicated to a public agency, the property owner shall notify the CFD Administrator in writing of such acquisition, offer, or dedication not later than June 30 of the Fiscal Year in which the acquisition, offer, or dedication occurred. 15 5

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
“Rate and Method of Apportionment’ means this Rate and Method of Apportionment of Special Taxes, City of Torrance, Community Facilities District No. 2026-01 (Public Services).
"Reserve Fund" means a reserve fund to be used for one-time setup costs, capital replacement, and maintenance costs.
"Reserve Fund Requirement" means an amount equal to up to 100% of the anticipated annual cost of Authorized Services at buildout. “Resolution of Formation” means the resolution adopted by the Council pursuant to Section 53325.1 of the Act, establishing CFD No. 2026-01. "Special Tax" means a special tax levied in any Fiscal Year to pay the Special Tax Requirement.
“Special Tax Requirement” means that amount to (i) pay for Authorized Services; (ii) build up the Reserve Fund up to the Reserve Fund Requirement not to exceed in any given Fiscal Year 20% of Authorized Services; and (iii) pay Administrative Expenses; less (iv) a credit for funds available to reduce the Special Tax levy, if any, as determined by the CFD Administrator. Under no circumstances shall the Developed Property Special Tax Requirement include debt service payments for debt financings by CFD No. 2026-01.
"State" means the State of California.
"Taxable Property" means all of the Assessor’s Parcels within the boundaries of CFD No. 2026-01 which are not exempt from the Special Tax pursuant to law or Section G below.
"Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed Property, Public Property, or Property Owner’s Association Property.

B ASSIGNMENT TO LAND USE CLASSES
Each Fiscal Year, beginning with Fiscal Year 2025-2026, each Assessor’s Parcel of Taxable Property shall be classified as Developed Property, Undeveloped Property, Public Property, and/or Property Owner’s Association Property.

Assessor’s Parcels of Developed Property shall further be classified as Single Family Residential Property, Multi-Family Residential Property, General Commercial Property, Commercial Center Property, Light Industrial Property, Heavy Industrial Property, and Industrial Business Park Property.

C MAXIMUM SPECIAL TAX
C.1 Developed Property
Maximum Special Tax
The Maximum Special Tax for Fiscal Year 2025-2026 for Developed Property is shown below in Table 1.

16 6

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
Table 1 : Maximum Special Taxes for Developed Property
Land
Use
Class
Description Fiscal Year 2025 -2026
Maximum Special Tax
1 SINGLE FAMILY RESIDENTIAL PROPERTY $560 PER DWELLING UNIT 2 MULTI-FAMILY RESIDENTIAL PROPERTY $284 PER DWELLING UNIT 3 GENERAL COMMERCIAL PROPERTY $62.21 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
4 COMMERCIAL CENTER PROPERTY $0.00 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
5 LIGHT INDUSTRIAL PROPERTY $23.27 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
6 HEAVY INDUSTRIAL PROPERTY $30.06 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
7 INDUSTRIAL BUSINESS PARK PROPERTY $42.37 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
Multiple Land Use Classes
In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for all Land Use Classes located on the Assessor’s Parcel. The CFD Administrator’s allocation to each Land Use Class shall be final.

Increase in the Maximum Special Tax
On each July 1, commencing on July 1, 2026, the Max imum Special Tax for Developed Property shall be increased annually by the change in the Consumer Price Index during the 12 months prior to December of the previous Fiscal Year.

C.2 Undeveloped Property
There will be no Special Tax levied on Undeveloped Property.

D ANNEXATIONS
Additional properties may be annexed into CFD No. 2026-01 from time to time. For Land Use Classes not included in the initial boundaries of CFD No. 2026-01, a study and report describing the Authorized Services to be provided to such properties and the estimated cost of such Authorized Services shall be provided to the Council as the legislative body of the CFD No. 2026-01 in accordance with Section 53321.5 of the Mello-Roos Act. Based on this analysis, the property to be annexed, pursuant to California Government Code section 53339 et. seq. will be assigned an appropriate Maximum Special Tax rate by Land Use Class as provided herein or as defined and detailed when annexed.

E APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2025-2026 and for each following Fiscal Year, the City shall levy the Special Tax as follows:

First: Determine the Special Tax Requirement and Proportionately levy the Special Tax on each Assessor’s Parcel of Developed Property until the amount levied on Developed 17 7

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
Property is equal to the lesser of (i) the Special Tax Requirement, or (ii) 100% of the applicable Maximum Special Tax for Developed Property.

F PREPAYMENT
No prepayments of the Special Tax are permitted.

G EXEMPTIONS
No Special Tax shall be levied on (i) Assessor’s Parcels which are Public Property, Property Owner Association Property, Affordable Housing Property, or Exempt Welfare Exemption Property; (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 religio us organization; (iii) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement; (iv) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses; or (v) Assessor’s Parcels restricted to other types of public uses determined by the Council.

H APPEALS AND INTERPRETATIONS
Any taxpayer may file a written appeal of the Special Tax on his/her property with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes.

During the 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 eliminate or reduce the Special Tax on the appellant’s property and/or provide a refund to the appellant. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has 30 days in which to appeal to the Council by filing a written notice of appeal with the clerk of the Council, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for its disagreement with the CFD Administrator’s determination.

Interpretations may be made by the Council by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this Rate and Method of Apportionment.

I MANNER OF COLLECTION
The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2026-01 may directly bill the Special Tax, may collect the 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 TERM OF SPECIAL TA X
The Special Tax shall be levied in perpetuity as necessary to meet the Special Tax Requirement, unless no longer required to pay for Authorized Services as determined at the discretion of the Council.

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RESOLUTION NO. _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF TORRANCE, CALIFORNIA, CALLING A SPECIAL

ELECTION FOR THE PURPOSE OF APPROVING A

SPECIAL TAX IN THE CITY OF TORRANCE COMMUNITY
FACILITIES DISTRICT NO. 2026-01 (PUBLIC SERVICES),

AND ESTABLISHMENT OF AN APPROPRIATIONS LIMIT
WHEREAS , on this date, this City Council adopted Resolution No. _______ entitled “A Resolution of the City Council of the City of Torrance, California, Authorizing Formation of City of Torrance Community Facilities District No. 2026-01 (Public Services), Authorizing the Levy of a Special Tax Therein, Preliminarily Establishing an Appropriations Limit Therefor and Submitting Levy of the Special Tax and the Establishment of the Appropriations Limit to the Qualified Electors Thereof” (the “Resolution of Formation”), ordering the formation of City of Torrance Community Facilities District No. 2026-01 (Public Services) (the “CFD”), authorizing the levy of a special tax on property within the CFD, and preliminarily establishing an appropriations limit for the CFD; and
WHEREAS , pursuant to the provisions of said resolutions, the propositions of the levy of said special tax and the establishment of the appropriations limit must be submitted to the qualified electors of the CFD as required by the Mello-Roos Community Facilities Act of 1982, as amended, Section 53311 et seq . of the California Government Code (the “Act”).

NOW, THEREFORE, BE IT RESOLVED , by the City Council of the City of Torrance as follows:

1. Pursuant to Sections 53326, 53351 and 53325.7 of the Act, the issues of the levy of said special tax and the establishment of an appropriations limit shall be submitted to the qualified electors of the CFD at an election called therefor as provided below.

2. As authorized by Section 53353.5 of the Act, the propositions described in paragraph 1 above shall be combined into a single ballot measure, the form of which is attached hereto as Exhibit “A” and by this reference incorporated herein. Said form of ballot is hereby approved.

3. This City Council hereby finds that fewer than 12 persons have been registered to vote within the territory of the CFD for each of the ninety (90) days preceding the close of the public hearing heretofore conducted and concluded by this City Council for the purposes of these proceedings. Accordingly, pursuant to the Act, this City Council finds that for purposes of these proceedings the qualified electors are the landowners within the CFD and that the vote shall be by said landowners or their authorized representatives, each having one vote for each acre or portion thereof such landowner owns in the CFD as of the close of said public hearing. 19 ATTACHMENT 2
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4. This City Council hereby calls a special election to consider the measures described in paragraph 1 above, which election shall be held in the City Council chambers immediately following adoption of this Resolution. The City Clerk (the “Clerk”) is hereby designated as the official to conduct said election. It is hereby acknowledged that the Clerk has on file the Resolution of Formation, a certified map of the proposed boundaries of the CFD, and a sufficient description to allow the Clerk to determine the boundaries of the CFD. The voted ballots shall be returned to the Clerk immediately following the adoption of this Resolution.

5. This City Council hereby further finds that a provision of Section 53326 of the Act requiring a minimum of 90 days following the adoption of the Resolution of Formation to elapse before said special election is for the protection of the qualified electors of the CFD. A written waiver executed by all of the qualified electors of the CFD approving a shortening of the time for said special election to expedite the process of formation of the CFD and waiving any requirements for analysis and arguments in connection with the election has been received. Accordingly, this City Council finds and determines that said qualified electors have been fully apprised of and have agreed to the shortened time for the election and waiver of analysis and arguments, and have thereby been fully protected in these proceedings. This City Council also finds and determines that the Clerk has concurred in the shortened time for the election.

6. Pursuant to the Act, the election shall be conducted by hand-delivered ballot.

7. This City Council acknowledges that the Clerk has caused to be delivered to each of the qualified electors of the CFD a ballot in the form set forth in Exhibit “A” hereto. Each ballot indicates the number of votes to be cast by the respective landowner to which it pertains. Each ballot was accompanied by all supplies and written instructions necessary for the use and return of the ballot. The ballot contained the following: (a) the name and address of the landowner, (b) a declaration, under penalty of perjury, stating that the voter is the owner of record or authorized representative of the landowner entitled to vote and is the person whose name appears on the envelope, (c) the printed name, signature and address of the voter, (d) the date of signing and place of execution of the declaration pursuant to clause (b) above, and (e) a notice that the envelope contains an official ballot and is to be opened only by the canvassing official. Analysis and arguments and publication of notice of the election with respect to the ballot measures are hereby waived, as provided in Section 53327 of the Act.

8. The Clerk shall accept the ballots of the qualified electors in the meeting room of the Council Chambers upon and prior to the adoption of this Resolution, whether said ballots be personally delivered, received by mail, or electronically delivered. The Clerk shall have available ballots which may be marked at said location on the election day by said qualified electors.
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9. This Resolution shall take effect immediately upon its adoption.

INTRODUCED , APPROVED , and ADOPTED this 24th day of February, 2026.

Mayor George K. Chen
APPROVED AS TO FORM:

Patrick Q. Sullivan, City Attorney
________________________________
Tatia Y. Strader, Assistant City Attorney
ATTEST:
________________________________
Rebecca Poirier, MMC, City Clerk
Attachment: Exhibit A
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22 124/062579-0133
21711811.1 a02/12/26

CITY OF TORRANCE
COMMUNITY FACILITIES DISTRICT NO. 2026-01 (PUBLIC SERVICES)

OFFICIAL BALLOT

SPECIAL TAX ELECTION
(FEBRUARY 24, 2026)
This ballot is for a special landowner election. You must return this ballot in the enclosed envelope to the City Clerk of the City of Torrance upon the adoption of the Resolution of the City Council calling said election, either by mail or in person. The City Clerk's office is located at 3031 Torrance Blvd., Torrance, California 90503. To vote, mark a cross (X) on the voting line after the word “YES” or after the word “NO.” All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void. If you wrongly mark, tear, or deface this ballot, return it to the City Clerk and obtain another.

BALLOT MEASURE: Shall a special tax payable solely from property within the City of Torrance Community Facilities District No. 2026-01 (Public Services) (the “CFD”) be levied annually, upon property within the CFD in accordance with the Rate and Method of Apportionment attached as Exhibit B to the Resolution of Formation to fund certain services, and to pay for the costs of the City in administering the CFD; and shall the annual appropriations limit of the CFD be established in an amount equal to the greater of two hundred percent (200%) of the total of all proceeds of the special tax collected annually, or $10,000,000, and as defined by Article XIIIB of the California Constitution, as adjusted for changes in the cost of living and changes in population?
YES: _______
NO: ________
By execution in the space provided below, you also indicate your waiver of any and all time limits and timeframes pertaining to the conduct of the election, any and all notice requirements, any and all publication requirements, any and all requirements for form and content of the ballot, notice of and analysis and arguments with respect to the ballot measure, as such waivers are described and permitted by Sections 53326(a) and 53327(b) of the California Government Code.

Additionally, execution of this ballot constitutes a declaration under penalty of perjury that the undersigned is the owner of record of the property, or the duly authorized representative of the landowner, entitled to vote in this election, and that the undersigned is the person whose name appears on the ballot return envelope.

Number of Votes: ___
Property Owned by Property Owner: _________ Acres
Property Owner: _______________
Address of Property Owner: _______________________
Place of Execution: _______________
Date: __________, 2026.
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RESOLUTION NO. _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF TORRANCE, CALIFORNIA, DECLARING THE

RESULTS OF A SPECIAL ELECTION HELD IN THE CITY
OF TORRANCE COMMUNITY FACILITIES DISTRICT NO.
2026-01 (PUBLIC SERVICES) AND DIRECTING

RECORDING OF A NOTICE OF SPECIAL TAX LIEN
WHEREAS , in proceedings heretofore conducted by this City Council pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Section 53311, et seq ., of the California Government Code (the “Act”), this City Council on this date adopted Resolution No. _______ entitled “A Resolution Of The City Council Of The City of Torrance, California, Calling A Special Election for the Purpose Of Approving A Special Tax in the City of Torrance Community Facilities District No. 2026-01 (Public Services), And Establishment Of An Appropriations Limit,” calling a special election of the qualified electors within the City of Torrance Community Facilities District No. 2026-01 (Public Services) (the “CFD”); and
WHEREAS , pursuant to the terms of said resolution, which are by this reference incorporated herein, said special election was held on this date, and the City Clerk (the “Clerk”) has on file a Canvass and Statement of Results of Election, a copy of which is attached hereto as Exhibit “A” (the “Canvass”); and
WHEREAS , this City Council has reviewed said Canvass and hereby approves it.

NOW, THEREFORE, BE IT RESOLVED , by the City Council of the City of Torrance as follows:

1. The questions presented at said special election were the levy of a special tax within Improvement the CFD to be levied in accordance with the rate and method of apportionment heretofore approved by the City Council by Resolution No. _______ adopted this date, entitled “A Resolution of the City Council of the City of Torrance, California, Authorizing Formation of City of Torrance Community Facilities District No. 2026-01 (Public Services), Authorizing the Levy of a Special Tax Therein, Preliminarily Establishing an Appropriations Limit Therefor and Submitting Levy of the Special Tax and the Establishment of the Appropriations Limit to the Qualified Electors Thereof,” and the approval of an annual appropriations limit as specified in said resolution.

2. Pursuant to said Canvass on file with the Clerk, the issues presented at said special election were approved by the qualified electors of the CFD by more than two-thirds (2/3) of the votes cast at said special election.

3. Pursuant to said voter approval, the CFD is hereby declared to be fully formed and that the CFD has the authority to levy special taxes as heretofore provided in these proceedings and in the Act.
24 ATTACHMENT 3
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4. It is hereby found that all prior proceedings and actions taken by this City Council with respect to the CFD, were valid and in conformity with the Act.

5. The Clerk is hereby directed to execute and cause to be recorded in the office of the County Recorder of the County of Los Angeles a notice of special tax lien for the CFD in the form required by the Act, said recording to occur no later than fifteen (15) days following adoption by the City Council of this Resolution.

6. This Resolution shall take effect immediately upon its adoption.

INTRODUCED , APPROVED , and ADOPTED this 24th day of February, 2026.

Mayor George K. Chen
APPROVED AS TO FORM:

Patrick Q. Sullivan, City Attorney
________________________________
Tatia Y. Strader, Assistant City Attorney
ATTEST:
________________________________
Rebecca Poirier, MMC, City Clerk
Attachment: Exhibit A
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EXHIBIT A

CANVASS AND STATEMENT OF RESULTS OF ELECTION

OF THE CITY OF TORRANCE
COMMUNITY FACILITIES DISTRICT NO. 2026-01 (PUBLIC SERVICES) I hereby certify that on __________, 2026, I canvassed the returns of the election held on February 24, 2026, the City of Torrance Community Facilities District No. 2026- 01 (Public Services), and the total number of ballots cast and the total number of votes cast for and against the measure are as follows, and the totals as shown for and against the measure are full, true and correct.

Qualified
Landowner
Votes
Votes Cast YES NO
The City of Torrance
Community Facilities
District No. 2026-01
(Public Services)
Special Tax Election
February 24, 2026
BALLOT MEASURE: Shall a special tax payable solely from property within the City of Torrance Community Facilities District No. 2026-01 (Public Services) (the “CFD”) be levied annually, upon property within the CFD in accordance with the Rate and Method of Apportionment attached as Exhibit B to the Resolution of Formation to fund certain services, and to pay for the costs of the City in administering the CFD; and shall the annual appropriations limit of the CFD be established in an amount equal to the greater of two hundred percent (200%) of the total of all proceeds of the special tax collected annually, or $10,000,000, and as defined by Article XIIIB of the California Constitution, as adjusted for changes in the cost of living and changes in population? IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND THIS ___ day of __________, 2026.
________________________________
Rebecca Poirier, MMC, City Clerk
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ORDINANCE NO. _______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY

OF TORRANCE, CALIFORNIA, ACTING AS THE

LEGISLATIVE BODY OF THE CITY OF TORRANCE
COMMUNITY FACILITIES DISTRICT NO. 2026-01
(PUBLIC SERVICES) LEVYING SPECIAL TAXES WITHIN

CITY OF TORRANCE COMMUNITY FACILITIES DISTRICT
NO. 2026-01 (PUBLIC SERVICES)
WHEREAS , on January 13, 2026, this City Council (the “City Council”) adopted Resolution No. 10 entitled “Resolution of the City Council of the City of Torrance, California Declaring Its Intention to Establish the City of Torrance Community Facilities District No. 2026-01 (Public Services) and to Authorize the Levy of Special Taxes Therein” (the “Resolution of Intention”) stating its intention to establish City of Torrance Community Facilities District No. 2026-01 (Public Services) and Future Annexation Areas (the “CFD”) pursuant to Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311 of the California Government Code, known as the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), to finance certain services (the “Services”) as described in the Resolution of Intention; and WHEREAS , notice was published as required by the Act relative to the intention of this City Council to form the CFD and to provide for the Services; and WHEREAS , this City Council held a noticed public hearing as required by the Act relative to the determination to proceed with the formation of the CFD, and regarding the rate and method of apportionment of the special tax to be levied within the CFD to finance the costs of the Services; and
WHEREAS , at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD, the levy of said special taxes, were heard, substantial evidence was presented and considered by this City Council and a full and fair hearing was held; and
WHEREAS , subsequent to said public hearing the City Council adopted its resolutions entitled “A Resolution of the City Council of the City of Torrance, California, Authorizing Formation of City of Torrance Community Facilities District No. 2026-01 (Public Services), Authorizing the Levy of a Special Tax Therein, Preliminarily Establishing an Appropriations Limit Therefor and Submitting Levy of the Special Tax and the Establishment of the Appropriations Limit to the Qualified Electors Thereof” (the “Resolution of Formation”), and “A Resolution of the City Council of the City of Torrance, California Calling A Special Election for the Purpose of Approving a Special Tax in the City of Torrance Community Facilities District No. 2026-01 (Public Services), and Establishment of an Appropriations Limit,” which resolutions established the CFD, authorized the levy of special tax within the CFD, and called an election within the CFD on the propositions of levying a special tax, and establishing an appropriations limit within the CFD; and
28 ATTACHMENT 4
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WHEREAS , an election was held within the CFD in which the eligible landowner electors approved said propositions by more than the two-thirds vote required by the Act.

NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF TORRANCE , acting as the legislative body of the CFD, as follows:

Section 1. Levy of Special Tax. By the passage of this Ordinance, the City Council authorizes and levies special taxes within the CFD pursuant to Sections 53328 and 53340 of the Act, at the rates and in accordance with the method of apportionment set forth in Exhibit A (the “Rate and Method of Apportionment”). The special taxes are hereby levied commencing in fiscal year 2025-26 and in each fiscal year thereafter as provided in the Rate and Method of Apportionment.

Section 2. Annual Levy. The City Manager of the City is hereby further authorized and directed each fiscal year, to determine the specific special tax rates and amounts to be levied for the next ensuing fiscal year for each parcel of real property within the CFD, in the manner and as provided in the Rate and Method of Apportionment.

Section 3. Property Exempt From Tax. Subject to California Government Code Sections 53317.3 and 53317.5, properties or entities of the state, federal or local governments shall be exempt from any levy of the special taxes, to the extent set forth in the Rate and Method of Apportionment. In no event shall the special taxes be levied on any parcel within the CFD in excess of the maximum tax specified in the Rate and Method of Apportionment.

Section 4. Taxable Property. No other properties or entities are exempt from the authorized special tax unless the properties or entities are expressly exempted in the Rate and Method of Apportionment.

Section 5. Manner of Tax Collection. The special taxes shall be collected from time to time as necessary to meet the financial obligations of the CFD on the secured real property tax roll in the same manner as ordinary ad valorem taxes are collected, or other procedures as may be adopted by the City Council. The City Manager, or their designee, is hereby authorized and directed to provide all necessary information to the auditor/tax collector of the County of Los Angeles and to otherwise take all actions necessary in order to effect proper billing and collection of the special tax, so that the special tax shall be levied and collected in sufficient amounts and at times necessary to satisfy the financial obligations of the CFD in each fiscal year until any bonded indebtedness is paid in full, the Services have been paid for, and provision has been made for payment of all of the administrative costs of the CFD. The special taxes may be subject to the same penalties and the same procedure, sale, and lien priority in cases of delinquency as provided for ad valorem taxes. Notwithstanding the foregoing, the City Manager of the City, or their designee, may collect one or more installments of the special taxes by means of direct billing of the property owners within the CFD, if, (i) it is required or allowed in the Rate and Method of Apportionment or (ii) in 29 124/062579-0133
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the judgment of the City Manager, such means of collection will reduce the administrative burden of the City in administering the CFD where otherwise appropriate in the circumstances. In such event, the special taxes shall become delinquent if not paid when due as set forth in any such respective billing to the property owners.

Regardless of the manner of collection, the special taxes shall have the same lien priority, and be subject to the same penalties and the same procedure and sale in cases of delinquency as provided for ad valorem taxes. In addition, the provisions of Section 53356.1 of the Act shall apply to delinquent special tax payments.

Section 6. Cumulative Remedies. The City Council may exercise its rights under Section 53356.1 of the Act.

Section 7. Severability. If for any reason any portion of this Ordinance is found to be invalid, or if the special taxes are found inapplicable to any particular parcel within the CFD, by a court of competent jurisdiction, the balance of this Ordinance and the application of the special tax to the remaining parcels within the CFD shall not be affected.

Section 8. Publication of Ordinance. The Mayor shall sign this Ordinance and the City Clerk shall attest this Ordinance and cause the same to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated in the City.
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INTRODUCED , APPROVED , and ADOPTED this 24th day of February, 2026.

Mayor George K. Chen
APPROVED AS TO FORM:

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES

C MAXIMUM SPECIAL TAX
C.1 Developed Property
Maximum Special Tax
The Maximum Special Tax for Fiscal Year 2025-2026 for Developed Property is shown below in Table 1.

37 6

NON-RESIDENTIAL FLOOR AREA
4 COMMERCIAL CENTER PROPERTY $0.00 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
5 LIGHT INDUSTRIAL PROPERTY $23.27 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
6 HEAVY INDUSTRIAL PROPERTY $30.06 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
7 INDUSTRIAL BUSINESS PARK PROPERTY $42.37 PER 1,000 SQUARE FEET OF

C.2 Undeveloped Property
There will be no Special Tax levied on Undeveloped Property.

E APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2025-2026 and for each following Fiscal Year, the City shall levy the Special Tax as follows:

First: Determine the Special Tax Requirement and Proportionately levy the Special Tax on each Assessor’s Parcel of Developed Property until the amount levied on Developed 38 7

F PREPAYMENT
No prepayments of the Special Tax are permitted.

Interpretations may be made by the Council by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this Rate and Method of Apportionment.

39 ATTACHMENT E

ORDINANCE SUMMARY
This Ordinance formally levies special taxes within the City of Torrance Community Facilities District No. 2026-01 (Public Services) pursuant to the Mello-Roos Community Facilities Act of 1982. Following the required public hearing, adoption of the Resolution of Formation, and approval of the special tax by more than two-thirds of the eligible landowner voters, the City Council authorizes the annual levy of special taxes beginning in Fiscal Year 2025-2026 in accordance with the approved Rate and Method of Apportionment. The special taxes will fund authorized public services and related administrative costs within the Community Facilities District, subject to the maximum tax rates established.

The Ordinance further authorizes the City Manager, or their designee, to determine and levy the specific annual special tax amounts each fiscal year, provides for collection through the County property tax roll, and includes standard provisions regarding delinquency, remedies, severability, and publication.
40 ATTACHMENT 5

41 ATTACHMENT 6
42 www.FinanceDTA.com

COMMUNITY FACILITIES

DISTRICT REPORT

18201 Von Karman, Suite 220
Irvine, CA 92612www.FinanceDTA.com

CITY OF TORRANCE

COMMUNITY FACILITIES DISTRICT REPORT
COMMUNITY FACILITIES DISTRICT NO. 2026-01
(PUBLIC SERVICES)
Prepared for:

City of Torrance
3031 Torrance Blvd.

Torrance, CA 90503
Attention: Ian Dailey, Finance Director, Finance Department 44 TABLE

OF CONTENTS

SECTION PAGE
INTRODUCTION.............................................................. 1 PROJECT DESCRIPTION................................................2 I
II

III DESCRIPTION AND ESTIMATED COSTS OF
SERVICES ..........................................................................3 A
B
Description of Proposed Public Services....................... 3 Estimated Costs of Proposed Public Services...............4 Estimated Costs of Administering the District .............4 RATE AND METHOD OF APPORTIONMENT..............5
C
IV

V BOUNDARIES OF THE COMMUNITY FACILITIES
DISTRICT...........................................................................6 VI
A
GENERAL TERMS AND CONDITIONS .........................7 Substitution of Services..................................................... 7 Appeals and Interpretations............................................. 7B

APPENDICES

APPENDIX A RATE AND METHOD OF

APPORTIONMENT

APPENDIX B BOUNDARY MAP
45 SECTION I

INTRODUCTION
www.FinanceDTA.com

I INTRODUCTION
WHEREAS, the City Council of the City of Torrance (the "City") has determined that the formation of a community facilities district (the "CFD") over certain property in the City would be in the public interest; and
WHEREAS, pursuant to the Mello-Roos Community Facilities Act of 1982, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing at Section 53311, of the California Government Code, (the "Act"), the City Council (the "City Council") of the City is authorized to establish and desires to so establish, the City of Torrance Community Facilities District No. 2026-01 (Public Services) (the "Community Facilities District"), and Future Annexation Areas, for the purpose of financing certain services (the "Services"); and
WHEREAS, this City Council now desires to proceed with the establishment of the Community Facilities District, and Future Annexation Areas, under the Act in order to levy special taxes to finance the acquisition and construction of certain services (the "Services"); and WHEREAS, the City Council intends to annex additional areas to expand the boundaries of the Community Facilities District (the "Future Annexation Areas") pursuant to the unanimous approval of all of the landowners in the Future Annexation Areas, and each of them, at such future time as determined by the City Council, pursuant to the authority set forth in Sections 53329.6, 53339.2 and 53339.3 of the Act; and
WHEREAS, pursuant to Section 53340 of the Act, the legislative body may, by ordinance, provide for the levy of special taxes on parcels· that will be annexed to the Community Facilities District at the rate or rates to be approved unanimously by the owner or owners of each parcel or parcels to be annexed to the Community Facilities District and for apportionment and collection of the special taxes in the manner specified in the Resolution of Formation; and WHEREAS, the Resolution of Intention, Resolution No. 2026-10, in its Section 10, directs:

The City Manager, or designee, of the City, as the officer having charge and control of the Services in and for the Community Facilities District, is hereby directed to study said proposed Services and to make, or cause to be made, and file with the Clerk a report in writing, presenting the following: (a) a description of the Services by type, which will be required to adequately meet the needs of the Community Facilities District; and (b) an estimate of the fair and reasonable cost of financing the Services, and incidental expenses in connection with said financing, including the costs of bond financing and all other related costs as provided in Section 53345.3 of the Act.

NOW, THEREFORE, DTA does hereby submit the CFD Report.

City of Torrance February 24, 2026
Community Facilities District Report
1 46

SECTION II

PROJECT DESCRIPTION
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II PROJECT DESCRIPTION
The Community Facilities District (“CFD No. 2026-01” or the “District”) includes Assessor’s Parcel Number 7366-019-101 (the “Project”) and encompasses approximately 4.038 gross acres of land located at 3610 Torrance Boulevard, in the City. The Project is within the Hawthorne Boulevard Corridor Specific Plan-Del Amo Business District One (H-DA1 Zone) and at build-out, is anticipated to include approximately 449 residential units.

The balance of future development is included in the Future Annexation Area, and the annexation of the Future Annexation Area into CFD No. 2026-01 shall be conducted pursuant to the provisions of the Resolution of Formation and the Act.

City of Torrance February 24, 2026
Community Facilities District Report
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SECTION III

DESCRIPTION AND ESTIMATED

COSTS OF SERVICES
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III DESCRIPTION AND ESTIMATED COSTS OF SERVICES
The Authorized Services to be funded by the District and paid by the Special Taxes levied within the District are described below. For purposes of the District, the Authorized Services shall incorporate and have the meaning given to the term “services” in Section 53313 of the Mello-Roos Community Facilities Act of 1982.

A Description of Proposed Public Services
It is intended that the District will be authorized to finance all or a portion of the costs of any of the following types of services:

A.1 Public Services
Police and related services of the City of Torrance required to sustain the public safety service delivery capability for emergency and non-emergency services including related equipment, vehicles, services, supplies and personnel;
Maintenance and lighting of parks, parkways, streets, roads and open space; Flood and storm protection services;
Other public services authorized to be funded under Section 53313 of the California Government Code.

A.2 Other Expenses
It is anticipated that the expenses listed below may be incurred and paid directly from the proceeds of the Special Tax within the District:

Administrative expenses, including the cost incurred to determine, levy, and collect special taxes, including compensation of City employees for administrative work performed in relation to the District, the fees of consultants and legal counsel, the costs of collecting installments of special taxes upon the general tax rolls, preparation of required reports, and any other costs incurred in the administration of the District by the City.

Reimbursement of costs related to the formation of the District advanced by the City, the landowner(s) in the District or any party related to any of the foregoing, as well as reimbursement of any costs advanced by the City, the landowner(s) in the District, or any party related to any of the foregoing, for services, facilities, fees or other purposes or costs of the District.

The foregoing enumeration shall not be regarded as exclusive and shall be deemed to include any other incidental expenses of a like nature which may be incurred from time to time with respect to the District.

City of Torrance
Community Facilities District Report
February 24, 2026
3 48

SECTION III

DESCRIPTION AND ESTIMATED

COSTS OF SERVICES
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CFD No. 2026-01 shall only finance the above listed services only to the extent that they are in addition to existing public services provided within the boundaries of CFD No. 2026-01 before creation of the CFD and such Authorized Services may not supplant services already available within CFD No. 2026-01 at creation of said CFD. The Special Taxes required to finance the related annual costs of those public services will be apportioned as described in the Rate and Method of Apportionment of the Special Tax for CFD No. 2026-01.

B Estimated Costs of Proposed Public Services
The intent of the District is to fund the enhanced public services listed above. The estimated annual cost of providing such services for the Project is approximately $114,736, subject to future cost of living adjustments. The annual cost of providing public services for property in the Future Annexation Area will be estimated at the time any such property is annexed to the District. Importantly, actual amounts to be levied will be determined by the City on an annual basis.

C Estimated Costs of Administering the District
While the actual costs of administering the District may vary, it is anticipated that the cost of administering the District will be an amount not to exceed $15,000 per year.

City of Torrance February 24, 2026
Community Facilities District Report
4 49

SECTION IV

RATE AND METHOD OF

APPORTIONMENT
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IV RATE AND METHOD OF APPORTIONMENT
Pursuant to Section 53325.3 of the Act, the tax imposed in a community facilities district “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 benefit received by parcels of real property, the cost of making facilities or authorized services available to each parcel, or other reasonable basis as determined by the legislative body,” although the Special Tax may not be apportioned on an ad valorem basis pursuant to Article XIIIA of the California Constitution. The adopted Rate and Method of Apportionment (the “RMA”), attached herewith as Appendix A, provides information sufficient to allow each property owner within the District to estimate the maximum annual Special Tax he or she will be required to pay.

The RMA requires that all Assessor’s Parcels within the District be categorized as Developed Property, Undeveloped Property, Property Owner Association Property, or Public Property.

Importantly, only Developed Property is subject to the Special Tax. No Special Taxes will be levied on Undeveloped Property, Property Owner Association Property, or Public Property.

The principal assumption inherent in the calculation of Special Taxes as defined in the RMA is that the development within the District has requested an enhanced level of service, above and beyond that currently provided in the City.

Each Fiscal Year, the Special Tax levy shall be calculated in an amount sufficient to cover the costs required to meet the financial needs for the proposed Authorized Services, but not to exceed the maximum Special Tax for Developed Property. The maximum annual Special Tax for Authorized Services that can be levied within the District on Developed Property shall increase annually by the change in the Consumer Price Index for Urban Wage Earners & Clerical Workers (CPI-W) in Los Angeles-Long Beach-Anaheim during the twelve (12) months prior to December of the previous Fiscal Year.

In order to establish the Maximum Special Tax rates for the District as set forth in the Rate and Method of Apportionment, DTA has relied on information regarding land-use types, geographic location, and Taxable Property provided to it by others. DTA has not independently verified such data and disclaims responsibility for the impact of inaccurate data, if any, on the Rate and Method of Apportionment for the District, including the inability to meet the financial obligations within the District.

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Community Facilities District Report
5 50

SECTION V

BOUNDARIES OF THE COMMUNITY

FACILITIES DISTRICT
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V BOUNDARIES OF THE COMMUNITY FACILITIES DISTRICT
The boundaries of the District include all land on which the Special Taxes may be levied.

A reduced scale map showing the boundaries of the District is provided as Appendix B.

A full-scale map is on file with the Los Angeles County Recorder’s Office and was recorded on January 28, 2026, in Book 197 of “Assessment Maps” on Pages 20-22, as Document No. 2026-0065717, in the office of the County Recorder in the County of Los Angeles.

City of Torrance February 24, 2026
Community Facilities District Report
6 51

SECTION VI

GENERAL TERMS AND

CONDITIONS
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VI GENERAL TERMS AND CONDITIONS
A Substitution of Services
The descriptions of the public services, as set forth herein, are general in their nature. The final nature and location of the specific services to be funded by the District will be determined by the City Council. The actual services funded may show substitutes, in lieu or modifications to the proposed services that benefit the District, and any such substitution shall not be a change or modification in the proceedings as long as the services provided are of a type substantially similar to that as set forth in this Report.

B Appeals and Interpretations
Any landowner who feels that the amount of the Special Tax levied on his or her Assessor’s Parcel is in error may submit a written appeal to the CFD Administrator. The CFD Administrator shall review the appeal and if the CFD Administrator concurs, the amount of the Special Tax levied shall be appropriately modified through an adjustment to the Special Tax levy in the following Fiscal Year. No refunds shall be given. Interpretations may be made by the City Council by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in the Rate and Method of Apportionment for the District.

City of Torrance February 24, 2026
Community Facilities District Report
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APPENDIX A
City of Torrance
Community Facilities District Report
Community Facility District No. 2026-01 (Public Services)

RATE AND METHOD OF

APPORTIONMENT
53 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES

CITY OF TORRANCE
COMMUNITY FACILITIES DISTRICT NO. 2026-01
(PUBLIC SERVICES)
A Special Tax as hereinafter defined shall be levied on all Assessor’s Parcels in City of Torrance Community Facilities District No. 2026-01 (Public Services) ("CFD No. 2026-01") and collected each Fiscal Year commencing in Fiscal Year 2025-2026, in an amount determined by the Council, through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 2026-01, unless exempted by law or by the provisions hereof, 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:
"Acre" or "Acreage" means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Map, parcel map, condominium plan, or other recorded County parcel map.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No 2026-01: 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 associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2026-01 or any designee thereof related to an appeal of the Special Tax; and the City’s annual administration fees and third party expenses.

Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2026-01 for any other administrative purposes of CFD No. 2026-01, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure, or otherwise addressing the disposition of delinquent Special Taxes.
“Affordable Housing Property” means Dwelling Units, located on one or more Assessor’s Parcels for which a Building Permit for new construction was issued on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied, that are subject to deed restrictions, resale or rental restrictions, and/or regulatory agreements recorded in favor of the City providing affordable housing for households with incomes below 120% of the City of Torrance median income, and are therefore exempt from the Special Tax.
"Assessor’s Parcel" means any real property to which an Assessor’s Parcel Number is assigned as shown on an Assessor’s Parcel Map.
"Assessor’s Parcel Map" means an official map of the County Assessor of the County Rate and Method of Apportionment
CFD No. 2026-01 (Public Services) 1
54 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.
“Authorized Services” means those services eligible to be funded, as defined in the Resolution of Formation and authorized to be financed by CFD No. 2026-01 pursuant to Section 53313 and Section 53313.5 of the Act. CFD No. 2026-01 shall finance Authorized Services only to the extent that they are in addition to those provided in the territory before the CFD was created and such Authorized Services may not supplant services already available within CFD No. 2026-01 when the CFD was created.
"Building Permit" means the first legal document issued by the City giving official permission for the construction of a building on an Assessor’s Parcel. For purposes of this definition and application of the Special Tax, “Building Permit” may or may not include any subsequent building permits issued or changed after the first issuance, as determined by the CFD Administrator.
"CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes.
"CFD No. 2026-01" means the City of Torrance Community Facilities District No. 2026-01 (Public Services).
“City” means the City of Torrance.
“Commercial Center Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing two or more acres in land area and building, or combination of buildings, greater than 25,000 gross square feet of commercial uses. This definition also includes mixed-use developments, regardless of the land area size and/or building(s) square feet, that consist of a combination of residential and non-residential uses. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Commercial Center Property, if the primary use is commercial. For mixed use developments, each use will be charged independently based on corresponding Land Use Class.
“Consumer Price Index” means, for each Fiscal Year, the Consumer Price Index published by the U.S. Bureau of Labor Statistics for Urban Wage Earners & Clerical Workers (CPI-W) in the Los Angeles – Long Beach – Anaheim Area, measured as of the month of December in the previous Fiscal Year. In the event this index ceases to be published, the Consumer Price Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Consumer Price Index for the Los Angeles – Long Beach – Anaheim Area.
"Council" means the City Council.
"County" means the County of Los Angeles.
"Single Family Residential Property" means Assessor’s Parcel of Developed Property for which Building Permits have been issued for Dwelling Units that are or are expected to be (i) each located on a separate lot designated by a Final Map, and (ii) surrounded by freestanding walls and that do not share an inside wall with any Rate and Method of Apportionment
CFD No. 2026-01 (Public Services) 2
55 other Dwelling Unit, as determined by the CFD Administrator. "Developed Property" means, for each Fiscal Year, all Taxable Property for which a Building Permit was issued prior to May 1 of the prior Fiscal Year. “Dwelling Unit” means one residential unit of any configuration, including, but not limited to, a single-family attached or detached dwelling, condominium, mobile home, or otherwise. A casita or additional dwelling unit ("ADU") of any configuration shall not be counted as a separate dwelling unit for purposes of this Rate and Method of Apportionment.
“Exempt Welfare Exemption Property” means, for each Fiscal Year, an Assessor’s Parcel that is (a) receiving a welfare exemption under subdivision (g) of Section 214 of the California Revenue and Taxation Code (or any successor statute), as indicated in the County’s assessor’s roll finalized as of January 1 of the previous Fiscal Year, and (b) exempt from the Special Tax pursuant to Section 53340(c) of the Act. "Final Map" means (i) a final map, or portion thereof, approved by the County pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots or parcels for which Building Permits may be issued without further subdivision, or (ii) for condominiums, a final map approved by the County and a condominium plan recorded pursuant to California Civil Code Section 4285 creating such individual lots or parcels.
"Fiscal Year" means the period starting July 1 and ending on the following June 30. “General Commercial Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing less than two acres in land area and building, or combination of buildings, less than 25,000 gross square feet of commercial uses. This definition also includes mixed-use developments that consist of a combination of residential and non-residential uses. The City Manager,
or his/her designee, shall make the decision whether an Assessor’s Parcel is General Commercial Property.“Heavy Industrial Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for primary and secondary processing, manufacturing and remanufacturing or reprocessing of all types, and freight forwarding/logistics use/distribution centers. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Heavy Industrial Property. “Industrial Business Park Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing more than one light and/or heavy industrial use. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Industrial Business Park Property. "Land Use Class" means any of the categories listed in Table 1 below. “Light Industrial Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for light manufacturing (not involving the processing of hazardous materials animal products), warehousing, processing, and distribution of goods and other low intensity industrial uses. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Light Industrial Property.
"Maximum Special Tax" means the maximum Special Tax, determined in accordance Rate and Method of Apportionment
CFD No. 2026-01 (Public Services) 3
56 with Section C below, that can be levied in any Fiscal Year on any Assessor’s Parcel. “Mixed-Use Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing a combination of residential uses with non-residential uses such as commercial or industrial uses. Each use will be charged independently based on corresponding Land Use Class. "Multi-Family Residential Property" means Assessor’s Parcel of Developed Property for which Building Permits were issued for construction of a residential structure consisting of two or more Dwelling Units that share common walls, including garage walls. Dwelling Units to be included in this category shall include, but not be limited to, townhomes, condominiums, triplex units, and duplex units. “Non-Residential Floor Area” means the total building square footage of the non- residential building(s) located on an Assessor’s Parcel, measured from outside wall to outside wall, not including space devoted to stairwells, public restrooms, lighted courts, vehicle parking and areas incident thereto, and mechanical equipment incidental to the operation of such building. The determination of Non-Residential Floor Area shall be made by reference to the Building Permit(s) issued for such Assessor’s Parcel and/or to the appropriate records kept by the City, as reasonably determined by the CFD Administrator.
"Non-Residential Property" means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for General Commercial Property, Commercial Center Property, Light Industrial Property, Heavy Industrial Property, and Industrial Business Park Property. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Non-Residential Property. “Property Owner Association” means, collectively, any property owner association or homeowners association, including any master of sub-association, created for the property in CFD No. 2026-01.
"Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2026-01 that was owned by a Property Owner Association, as of January 1 of the prior Fiscal Year.
"Proportionately" means, for Developed Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor’s Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor’s Parcels of Undeveloped Property.
"Public Property" means, for each Fiscal Year, any property within CFD No. 2026-01 that is owned by, irrevocably offered for dedication to, or dedicated to the federal government, the State, the City, or any other public agency as of June 30 of the prior Fiscal Year; provided however that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. To ensure that property is classified as Public Property in the first Fiscal Year after it is acquired by, irrevocably offered for dedication to, or dedicated to a public agency, the property owner shall notify the CFD Administrator in writing of such acquisition, offer, or dedication not later than June 30 of the Fiscal Year in which the acquisition, offer, or dedication occurred.

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services) 4
57 “Rate and Method of Apportionment’ means this Rate and Method of Apportionment of Special Taxes, City of Torrance, Community Facilities District No. 2026-01 (Public Services).
"Reserve Fund" means a reserve fund to be used for one-time setup costs, capital replacement, and maintenance costs.
"Reserve Fund Requirement" means an amount equal to up to 100% of the anticipated annual cost of Authorized Services at buildout. “Resolution of Formation” means the resolution adopted by the Council pursuant to Section 53325.1 of the Act, establishing CFD No. 2026-01. "Special Tax" means a special tax levied in any Fiscal Year to pay the Special Tax Requirement.
“Special Tax Requirement” means that amount to (i) pay for Authorized Services; (ii) build up the Reserve Fund up to the Reserve Fund Requirement not to exceed in any given Fiscal Year 20% of Authorized Services; and (iii) pay Administrative Expenses; less (iv) a credit for funds available to reduce the Special Tax levy, if any, as determined by the CFD Administrator. Under no circumstances shall the Developed Property Special Tax Requirement include debt service payments for debt financings by CFD No. 2026-01.
"State" means the State of California.
"Taxable Property" means all of the Assessor’s Parcels within the boundaries of CFD No. 2026-01 which are not exempt from the Special Tax pursuant to law or Section G below.
"Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed Property, Public Property, or Property Owner’s Association Property.

C MAXIMUM SPECIAL TAX
C.1 Developed Property
Maximum Special Tax
The Maximum Special Tax for Fiscal Year 2025-2026 for Developed Property is shown below in Table 1.

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services) 5
58 Table 1: Maximum Special Taxes for Developed Property Land
Use
Class
Fiscal Year 2025-2026
Maximum Special TaxDescription
1 SINGLE FAMILY RESIDENTIAL PROPERTY

MULTI-FAMILY RESIDENTIAL PROPERTY
$560 PER DWELLING UNIT
$284 PER DWELLING UNIT2
$62.21 PER 1,000 SQUARE FEET OF
NON-RESIDENTIAL FLOOR AREA3
4 5
6 GENERAL COMMERCIAL PROPERTY

COMMERCIAL CENTER PROPERTY

LIGHT INDUSTRIAL PROPERTY

HEAVY INDUSTRIAL PROPERTY
$0.00 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
$23.27 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
$30.06 PER 1,000 SQUARE FEET OF

NON-RESIDENTIAL FLOOR AREA
$42.37 PER 1,000 SQUARE FEET OF
NON-RESIDENTIAL FLOOR AREA7 INDUSTRIAL BUSINESS PARK PROPERTY Multiple Land Use Classes
In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for all Land Use Classes located on the Assessor’s Parcel. The CFD Administrator’s allocation to each Land Use Class shall be final.

Increase in the Maximum Special Tax
On each July 1, commencing on July 1, 2026, the Maximum Special Tax for Developed Property shall be increased annually by the change in the Consumer Price Index during the 12 months prior to December of the previous Fiscal Year.

C.2 Undeveloped Property
There will be no Special Tax levied on Undeveloped Property.

ANNEXATIONSD
Additional properties may be annexed into CFD No. 2026-01 from time to time. For Land Use Classes not included in the initial boundaries of CFD No. 2026-01, a study and report describing the Authorized Services to be provided to such properties and the estimated cost of such Authorized Services shall be provided to the Council as the legislative body of the CFD No. 2026-01 in accordance with Section 53321.5 of the Mello-Roos Act. Based on this analysis, the property to be annexed, pursuant to California Government Code section 53339 et. seq. will be assigned an appropriate Maximum Special Tax rate by Land Use Class as provided herein or as defined and detailed when annexed.

E APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2025-2026 and for each following Fiscal Year, the City shall levy the Special Tax as follows:

First: Determine the Special Tax Requirement and Proportionately levy the Special Tax on each Assessor’s Parcel of Developed Property until the amount levied on Developed Rate and Method of Apportionment
CFD No. 2026-01 (Public Services) 6
59 Property is equal to the lesser of (i) the Special Tax Requirement, or (ii) 100% of the applicable Maximum Special Tax for Developed Property.

F PREPAYMENT
No prepayments of the Special Tax are permitted.

EXEMPTIONSG
No Special Tax shall be levied on (i) Assessor’s Parcels which are Public Property, Property Owner Association Property, Affordable Housing Property, or Exempt Welfare Exemption Property; (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 with public or utility easements making impractical their utilization for other than the purposes set forth in the easement; (iv) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses; or (v) Assessor’s Parcels restricted to other types of public uses determined by the Council.

Interpretations may be made by the Council by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this Rate and Method of Apportionment.

J TERM OF SPECIAL TAX
The Special Tax shall be levied in perpetuity as necessary to meet the Special Tax Requirement, unless no longer required to pay for Authorized Services as determined at the discretion of the Council.

Rate and Method of Apportionment
CFD No. 2026-01 (Public Services) 7
60 APPENDIX B
City of Torrance
Community Facilities District Report
Community Facility District No. 2026-01 (Public Services)

BOUNDARY MAP
61 62

63 64

65 www.FinanceDTA.com
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Torrance City CouncilFebruary 24, 2026

Torrance City Council
February 24, 2026