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HomeMy WebLinkAboutCity Council - 2002-26 Res.No.2002-26 RESOLUTION NO 2002-26 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH DECLARING ITS INTENTION TO ESTABLISH A COMMUNITY FACILITIES DISTRICT AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES THEREIN WHEREAS, under the provisions of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the City of Huntington Beach (the "Code") and, as applicable under the Code, the Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the California Government Code (the "Act," and, together with the Code, the "Law"), this City Council may commence proceedings for the establishment of a community facilities district; and There has been submitted to this City Council a Petition (Including Waiver) of McDonnell Douglas Corporation (the "Petition"), requesting the formation by this City Council of a community facilities district under the Law to be known as the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) (the "District") comprised of two separate improvement areas; and There has also been submitted to this City Council a Deposit/Reimbursement Agreement (the "Deposit Agreement") wherein the petitioner has agreed to pay all costs of the City of Huntington Beach (the "City") related to the formation of the District, subject to possible reimbursement through the District as provided in the Deposit Agreement; and Under the Law, this City Council is the legislative body for the proposed District and is empowered with the authority to establish the District and levy special taxes within the District; and This City Council now desires to proceed with the actions necessary to consider the establishment of the District and the designation of improvement areas therein. NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of Huntington Beach as follows: Section 1. This City Council proposes to begin the proceedings necessary to establish the District pursuant to the Law. Receipt of the Petition to form the District and the Deposit Agreement is hereby acknowledged. The City Administrator is hereby authorized to execute the Deposit Agreement and the Director of Administrative Services of the City, working with the City Treasurer, is hereby authorized to cash the deposit referenced therein and to expend the deposits for costs of formation of the District, as contemplated by the Deposit Agreement. Section 2. The name proposed for the District is City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Paris). Pursuant to Section 53350 of the Act, the City Council hereby designates a portion of the District as "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)" ("Area A"), and a portion of the District as "Improvement Area B of the City of Res.No.2002-26 Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)" ("Area B"). Section 3. The proposed boundaries of Area A and of Area B of the District are as shown on the map of the District on file with the City Clerk of the City, which boundaries are hereby preliminarily approved: The City Clerk is hereby directed to record, or cause to be recorded, the map of the boundaries of the District in the office of the County Recorder as soon as practicable after the adoption of this Resolution. Section 4. The type of public facilities (the"Area A Facilities") proposed to be eligible for funding by Area A and pursuant to the Law shall consist of those items listed on Exhibit A hereto under the heading"Facilities,"which Exhibit is by this reference incorporated herein. The type of public facilities (the "Area B Facilities") proposed to be eligible for funding by Area B and pursuant to the Law shall consist of those items listed on Exhibit B hereto under the heading"Facilities," which Exhibit is by this reference incorporated herein. Section 5. Except to the extent that funds are otherwise available to Area A of the District to pay for the Area A Facilities and/or pay the principal and interest as it becomes due on bonds of Area A of the District issued to finance the Area A Facilities, a special tax sufficient to pay the costs thereof, secured by recordation of a continuing lien against all non-exempt real property in Area A of the District, will be levied within Area A of the District and collected in the same manner as ordinary ad valorem property taxes or in such other manner as this City Council or its designee shall determine, including direct billing of the affected property owners. The proposed rate and method of apportionment of the special tax among the parcels of real property within Area A of the District, in sufficient detail to allow each landowner within the proposed Area A of the District to estimate the maximum amount such owner will have to pay, is described in Exhibit C attached hereto which Exhibit is by this reference incorporated herein. Except to the extent that funds are otherwise available to Area B of the District to pay for the Area B Facilities and/or pay the principal and interest as it becomes due on bonds of Area B of the District issued to finance the Area B Facilities, a special tax sufficient to pay the costs thereof, secured by recordation of a continuing lien against all non-exempt real property in Area B of the District,will be levied within Area B of the District and collected in the same manner as ordinary ad valorem property taxes or in such other manner as this City Council or its designee shall determine, including direct billing of the affected property owners. The proposed rate and method of apportionment of the special tax among the parcels of real property within Area B of the District, in sufficient detail to allow each landowner within the proposed Area B of District to estimate the maximum amount such owner will have to pay, is described in Exhibit D attached hereto which Exhibit is by this reference incorporated herein. This City Council finds that the provisions of Section 53313.6, 53313.7 and 53313.9 of the Act (relating to adjustments to ad valorem property taxes and schools financed by a community facilities district) are inapplicable to either Area A or Area B of the District. Section 6. It is the intention of this City Council, acting as the legislative body for Area A of the District, to cause bonds of the City to be issued for Area A of the District pursuant to the Law to -2- Res.No.2002-26 finance a portion of the costs of the Area A Facilities. If so issued, the bonds shall be issued in one or more series in an aggregate principal amount of not to exceed $13,000,000, shall bear interest payable semi-annually or in such other manner as this City Council shall determine, at a rate not to exceed the maximum rate of interest as may be authorized by applicable law at the time of sale of such bonds, and shall mature not to exceed 40 years from the date of the issuance thereof. It is the intention of this City Council, acting as the legislative body for Area B of the District, to cause bonds of the City to be issued for Area B of the District pursuant to the Law to finance a portion of the costs of the Area B Facilities. If so issued, the bonds shall be issued in one or more series in an aggregate principal amount of not to exceed $13,000,000, shall bear interest payable semi-annually or in such other manner as this City Council shall determine, at a rate not to exceed the maximum rate of interest as may be authorized by applicable law at the time of sale of such bonds, and shall mature not to exceed 40 years from the date of the issuance thereof. Section 7. This City Council reserves to itself the right and authority to allow any interested owner of property in either Area A or Area B of the District, subject to the provisions of Section 53344.1 of the Act and such requirements as it may otherwise impose, and any applicable prepayment penalties as prescribed in the indenture or fiscal agent agreement for any bonds of the City for the respective improvement area of the District, to tender to the Director of Administrative Services of the City(who shall remit the same to the City Treasurer) in full payment or part payment of any installment of special taxes for such improvement area of the District or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, in the manner described in Section 53344.1 of the Act. Section S. The levy of the proposed special tax in each improvement area of the District shall be subject to the approval of the qualified electors of such improvement area at a special election. The proposed voting procedure shall be by mailed or hand-delivered ballot among the landowners in the proposed improvement area of the District, with each owner having one vote for each acre or portion of an acre of land such owner owns in the respective improvement area of the District. Section 9. Except as may otherwise be provided by law or the rate and method of apportionment of the special tax for the respective improvement area of the District, all lands owned by any public entity, including the United States, the State of California and/or the City, or any departments or political subdivisions of any thereof, shall be omitted from the levy of the special tax to be made to cover the costs and expenses of the facilities, the issuance of bonds by the City for such improvement area of the District and any expenses of the respective improvement area of the District. Section 10. The Director of Public Works of the City is hereby directed to study said proposed facilities for each improvement area of the District and to make, or cause to be made, and file with the City Clerk a report in writing, presenting the following: -3- Res.No.2002-26 (a) A brief description of the facilities for each improvement area of the District. (b) An estimate of the fair and reasonable cost of providing the facilities for each improvement area of the District, including the incidental expenses.in connection therewith, including the costs of the proposed bond financing, any City administrative costs and all other related costs. Said report shall be made a part of the record of the public hearing provided for below. Section 11. Monday, May 6, 2002, at 7:00 p.m. or as soon thereafter as the matter may be heard, in the regular meeting place of this City Council, City Council Chambers, City Hall, 2000 Main Street, Huntington Beach, California,be, and the same are hereby appointed and fixed as the time and place when and where this City Council, as legislative body for the District, will conduct a public hearing on the establishment of each improvement area of the District and consider and finally determine whether the public interest, convenience and necessity require the formation of each improvement area of the District and the levy of said special tax within the respective improvement area. Section 12. The City Clerk is hereby directed to cause notice of said public hearing to be given by publication one time in a newspaper published in the area of the District. The publication of said notice shall be completed at least seven days before the date herein set for said hearing. Said notice shall be substantially in the form of Exhibit E hereto. Section 13. The firms of Michael Swan Consulting and Quint & Thimmig LLP are hereby designated as special tax consultant and bond counsel and disclosure counsel, respectively, to the City for the District. The City Director of Administrative Services and the City Attorney, respectively, are hereby authorized to execute agreements with said firms for their services related to the District provided that all fees and expenses of such firms are payable solely from a deposit by the landowner in the District or the proceeds of the bonds, if any, issued by the City for either of the improvement areas of the District. -4- Res.No.2002-26 Section 14. This Resolution shall take effect upon its adoption. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Huntington Beach on this 151 day of April,2002. Mayor ATTEST: APPROVED AS TO FORM: City Clerk Q4-67-dl 2(r0 z City Attorney f 21�Jti REVIEWED AND APPROVED: INITIATED AND APPROVED: Sd ? City-Administrator Director of Economic Development 08003.07_J6058 3/19/02 -5- Res.No.2002-26- Ex.A EXHIBIT A IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) DESCRIPTION OF FACILITIES ELIGIBLE TO BE FUNDED BY IMPROVEMENT AREA A OF THE DISTRICT FACILITIES It is intended that Improvement Area A of the District will finance all or a portion of the costs of any of the following: I. The construction of sewer lines in existing Skylab Road,new Delta Lane and new Astronautics Lane. 2. The construction of streets, curbs, and gutters from the extension of Skylab Road from its current terminus at Astronautics Lane west to approximately 400 feet west of new Delta Lane. 3. The construction of streets, curbs, and gutters from the new Delta Lane between Skylab Road north to new Astronautics Lane. 4. The construction of streets, curbs, and gutters for the new Astronautics Lane from its current terminus west to Rancho Road. 5. The construction of street, curbs, and gutters for the new Skylab Lane from new Astronautics Lane south approximately 200 feet. 6. The construction of the waterline in Rancho Road connecting its current terminus east of Bolsa Chica Road to the existing waterline north of the Navy Railroad. 7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane and new Astronautics Lane. 8. The construction of conduit and fixtures for new street lighting in extended Skylab Road,new Delta Lane,and new Astronautics Lane. 9. The construction of street, curbs, and gutters for the new Delta Lane from Bolsa Avenue north to Skylab Road. 10. The construction of a waterline in new Delta Lane from Bolsa Avenue to Skylab Road. A-1 Res.No.2002-26 Ex.A 11. The construction of storm drains in new Skylab Road, new Delta Lane new Astronautics Lane and new Skylab Lane. 12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane including modifications to the existing traffic signal. 13. Roadway improvements at the intersection of Rancho Road and Astronautics Lane including construction of the new traffic signal. 14. Roadway improvements to Rancho Road consisting of installation of new sidewalk. The Improvements to be financed shall include the costs of the acquisition of right-of- way (including right-of-way that is intended to be dedicated by the recording of a final map), the costs of design, engineering and planning, the costs of any environmental or traffic studies, surveys or other reports, costs related to landscaping and irrigation, soils testing,permits,plan check and inspection fees, insurance, legal and related overhead costs, coordination and supervision and any other costs or appurtenances related to any of the foregoing. OTHER Improvement Area A of the District may also finance any of the following: 1. Bond related expenses, including underwriters discount, reserve fund, capitalized interest, letter of credit fees and expenses,bond and disclosure counsel fees and expenses,bond remarketing costs, and all other incidental expenses. 2. Administrative fees of the City of Huntington Beach and the Bond trustee or fiscal agent related to the District and the Bonds. 3. Reimbursement of costs related to the formation of the District advanced by the City of Huntington Beach, the landowner in the District, or any party related to any of the foregoing, as well as reimbursement of any costs advanced by the City of Huntington Beach, the landowner in the District or any party related to any of the foregoing, for facilities, fees or other purposes or costs of the District. A-2 Res.No.2002-26` Ex.B EXHIBIT B IMPROVEMENT AREA B OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) DESCRIPTION OF FACILITIES ELIGIBLE TO BE FUNDED BY IMPROVEMENT AREA B OF THE DISTRICT FACILITIES It is intended that Improvement Area B of the District will finance all or a portion of the costs of any of the following: 1. The construction of sewer lines in existing Skylab Road,new Delta Lane and new Astronautics Lane. 2. The construction of streets, curbs, and gutters from the extension of Skylab Road from its current terminus at Astronautics Lane west to approximately 400 feet west of new Delta Lane. 3. The construction of streets, curbs, and gutters from the new Delta Lane between Skylab Road north to new Astronautics Lane. 4. The construction of streets, curbs, and gutters for the new Astronautics Lane from its current terminus west to Rancho Road. 5. The construction of street, curbs, and gutters for the new Skylab Lane from new Astronautics Lane south approximately 200 feet. 6. The construction of the waterline in Rancho Road connecting its current terminus east of Bolsa Chica Road to the existing waterline north of the Navy Railroad. 7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane and new Astronautics Lane. S. The construction of conduit and fixtures for new street lighting in extended Skylab Road,new Delta Lane,and new Astronautics Lane. 9. The construction of street, curbs, and gutters for the new Delta Lane from Bolsa Avenue north to Skylab Road. 10. The construction of a waterline in new Delta Lane from Bolsa Avenue to Skylab Road. B-1 Res.No.2002-26 Ex.B 11. The construction of storm drains in new Skylab Road, new Delta Lane new Astronautics Lane and new Skylab Lane. 12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane including modifications to the existing traffic signal. 13. Roadway improvements at the intersection of Rancho Road and Astronautics Lane including construction of the new traffic signal. 14. Roadway improvements to Rancho Road consisting of installation of new sidewalk. The Improvements to be financed shall include the costs of the acquisition of right-of- way (including right-of-way that is intended to be dedicated by the recording of a final map), the costs of design, engineering and planning, the costs of any environmental or traffic studies, surveys or other reports, costs related to landscaping and irrigation, soils testing, permits,plan check and inspection fees, insurance, legal and related overhead costs, coordination and supervision and any other costs or appurtenances related to any of the foregoing. OTHER Improvement Area B of the District may also finance any of the following: 1. Bond related expenses, including underwriters discount,,reserve fund, capitalized interest, letter of credit fees and expenses,bond and disclosure counsel fees and expenses,bond remarketing costs, and all other incidental expenses. 2. Administrative fees of the City of Huntington Beach and the Bond trustee or fiscal agent related to the District and the Bonds. 3. Reimbursement of costs related to the formation of the District advanced by the City of Huntington Beach, the landowner in the District, or any party related to any of the foregoing, as well as reimbursement of any costs advanced by the City of Huntington Beach, the landowner in the District or any party related to any of the foregoing, for facilities,fees or other purposes or costs of the District. B-2 Res.No.2002-26 Ex.C EXHIBIT C IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 . (MCDONNELL CENTRE BUSINESS PARK RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX A Special Tax applicable to each Assessor's Parcel of Taxable Property in the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) (herein "CFD No. 2002-1") shall be levied and collected according to the special tax liability determined by the Administrator through the application of the procedures described below. The real property in Improvement Area A of CFD No. 2002-1, unless exempted by law or by the provisions hereof, shall be specially taxed for the purposes, to the extent, and in the manner herein provided. A. DEFINITIONS The capitalized terms hereinafter set forth have the following meanings when used in this Rate and Method of Apportionment of Special Tax: Acre or Acreage means the land area of an Assessor's Parcel as shown on the applicable final snap, parcel map, or other parcel map recorded with the County Recorder. If the Acreage of a particular Parcel is unclear after reference to available maps, the Administrator shall determine the appropriate Acreage for that Parcel. Act means Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the City of Huntington Beach and, as applicable, the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311), Part 1, Division 2, of Title 5 of the Government Code of the State of California. Administrative Expenses means any or all of the following actual or reasonably estimated costs directly related to the administration of Improvement Area A of CFD No. 2002-1: the fees and expenses of any Fiscal Agent (including any fees and expenses of its counsel) employed in connection with any Bonds; any costs associated with the marketing or remarketing of the Bonds;, costs related to credit enhancement for the Bonds; the expenses of the Administrator and the City in carrying out their duties under any Indenture, including, but not limited to, the levy and collection of the Special Tax, the fees and expenses of legal counsel, Bond redemption expenses, charges levied by the County or any division or office thereof in connection with the levy and collection of the 1 Res.No.2002-26 Ex.C Special Tax, audits, and amounts needed to pay arbitrage rebate to the federal government with respect to the Bonds; costs associated with complying with continuing disclosure requirements; costs associated with responding to public inquiries regarding Special Tax levies and appeals; attorneys' fees and other costs associated with commencement or pursuit of foreclosure for any delinquent Special Tax; and all other costs and expenses of City, the Administrator, the County, and any Fiscal Agent, escrow agent or trustee related to the administration of Improvement Area A of CFD No. 2002-1 or any Bonds. Administrator means the Director of Administrative Services of the City or such other person or entity designated by the City Administrator or the City Council to administer the Special Tax according to this Rate and Method of Apportionment of Special Tax. Assessor's Parcel or Parcel means a lot, parcel or airspace parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel Number that is located within Improvement Area A of CFD No. 2002-1. Assessor's Parcel Map means an official map of the Assessor of the County designating Parcels by Assessor's Parcel Number. Bonds mean any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by the City for Improvement Area A of CFD No. 2002-1 under the Act. Band Fund means the fund or account created pursuant to the Indenture in which the collections of the Special Tax are deposited. Bond Year means the one year period from September 2 to the following September 1. City means the City of Huntington Beach. City Council means the City Council of the City of Huntington Beach, acting as the legislative body of CFD No. 2002-1. County means the County of Orange. Delinquencies mean the amount, if any, equal to delinquencies in payment of the Special Tax levied in Improvement Area A of CFD No. 2002-1 in the previous Fiscal Year. Exempt Land means (1) any real property within the boundaries of Improvement Area A of CFD No. 2002-1 which is owned by a governmental agency for public right of way purposes, including, but not limited to, streets, water well production facilities, public walkway corridors, and slopes as determined in each Fiscal Year by the Administrator, and (2) any Assessor's Parcel for which the Special Tax has been paid in full. Fiscal Agent means the fiscal agent or trustee who is a party to the Indenture. 2 Res.No.2002-2f- Ex.C Fiscal Year means the period commencing on July 1 and ending on the following June 30, in any year in which the Bonds are outstanding. Improvement Area A means any real property within the boundaries of CFD No. 2002- 1 as depicted on the boundary map for said CFD entitled "Proposed Boundaries of The City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park), County of Orange, State of California" and approved by the City Council. Said Improvement Area A is comprised generally of Parcels 4 through 11, the proposed public well site and adjacent portions of the following roadway right-of-way; Skylab Road, Astronautics Road, Street `B' and Street `C'; as shown on Tentative Parcel Map No. 2001-122 on file with the City. Said Improvement Area A is also envisioned to include Parcels 1 through 8, the proposed public well site and adjacent portions of the following roadway right-of-way; Skylab Road, Delta Lane and Astronautics Lane; as shown on proposed Final Parcel Map No. 2001-226 and encompassing approximately 40.339 gross acres and 33.286 net taxable acres. In no case shall the net taxable acres in Improvement Area A be less than 33.286. Indenture means the indenture, fiscal agent agreement, resolution or other instrument approved pursuant to the Resolution of Issuance and pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. Infrastructure means the public improvements authorized to be financed by Improvement Area A of CFD No. 2002-1 in accordance with the terms of the Act. Interest Payment Date means any date on which regularly scheduled principal and/or interest payments are due on the Bonds. Maximum Special Tax means, with respect to any Assessor's Parcel of Taxable Property, the maximum Special Tax determined in accordance with Section C that can be levied in any Fiscal Year on such Assessor's Parcel. Outstanding Bonds means all Bonds that are then outstanding under the Indenture. Property Owner means the owner of an Assessor's Parcel within the boundaries of Improvement Area A of CFD No. 2002-1 as determined from the latest equalized tax rolls of the County or as proved through some other acceptable manner to the Administrator. Reserve Fund means the fund of that name created under the Indenture. Special Tax means the special tax to be levied pursuant to the Act and this Rate and Method of Apportionment of Special Tax on Taxable Property within Improvement Area A of CFD No. 2002-1. 3 Res.No.2002-26 Ex.C Special Tax Requirement means the amount required in any Fiscal Year for Improvement Area A of CFD No. 2002-1 necessary: (i) to pay the annual scheduled debt service on the Outstanding Bonds due in the next succeeding Bond Year which commences in such Fiscal Year, (ii) to pay any amounts required to establish or replenish the Reserve Fund for all Outstanding Bonds, (iii)to pay Administrative Expenses due and estimated by the Administrator to become due prior to the next levy of the Special Tax, and (iv) to cure any Delinquencies in the payment of principal or interest on indebtedness of Improvement Area A of CFD No. 2002-1. The Special Tax Requirement shall be reduced by the following: (i) any credit from interest earnings on the Reserve Fund or other Bond funds the earnings on which are available under the terms of the Indenture to pay debt service on the Bonds, (ii) the collection of delinquent Special Tax since the last Special Tax Levy, and (iii) any other funds legally available to apply against the Special Tax Requirement as determined by the Administrator. Taxable Property means all of the Assessor's Parcels within the boundaries of Improvement Area A of CFD No. 2002-1, which are not Exempt Land, or otherwise exempt from the Special Tax pursuant to the Act. B. IDENTIFYING TAXABLE PROPERTY On or about each July I", the Administrator shall determine which Assessor's Parcels in Improvement Area A of CFD No. 2002-1 are Taxable Property. The Taxable Property shall be subject to the Special Tax in accordance with the rate and method of apportionment described in Sections C and D below. C. MAXIMUM SPECIAL TAX The Maximum Special Tax for each Parcel of Taxable Property is $11,200 per Acre commencing in Fiscal Year 2002-2003 and such Maximum Special Tax shall increase in every Fiscal Year thereafter by two percent (2%) of the Maximum Special Tax for the prior Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2002-2003, and during each Fiscal Year thereafter, the City Council or its designee shall levy the Special Tax proportionally on each Assessor's Parcel of Taxable Property at up to one hundred percent (100%) of the Maximum Special T Tax for that Fiscal Year, as described in Section C, above, as needed to satisfy the - Special Tax Requirement. 4 Res.No.2002-2& Ex.C E. LIMITATIONS No Special Tax shall be levied on an Assessor's Parcel after such Assessor's Parcel becomes Exempt Land. The: Special Tax may be levied and collected on Taxable Property commencing with Fiscal Year 2002-2003, and for each Fiscal Year thereafter, and until the date on which principal and interest on all Outstanding Bonds have been paid in full (or provision for their payment has been made). Upon determination by the Administrator that this requirement has been met, the Special Tax lien shall be removed from all Assessor's Parcels in Improvement Area A of CFD No. 2002-1. F. MANNER OF COLLECTION The Special Tax shall be collected at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2002-1 may at any time directly bill the Special Tax, may collect the Special Tax at a different time or 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. G. PREPAYMENT OF SPECIAL TAX The following definitions apply solely to this Section G.: Amount of Current Special Taxes Paid means the amount of the Special Tax levied against the subject Assessor's Parcel that was paid to the County or the City by the owner of the subject Assessor's Parcel and that will be applied to debt service payments on the Redemption Date. Outstanding Bonds means all Bonds which are deemed to be outstanding under the Indenture the day immediately preceding the next Interest Payment Date. Redemption Date means the Interest Payment Date on which Bonds are proposed to be redeemed from the prepayments of the Special Tax. 1. Prepayment in Full The Special Tax obligation applicable to such Assessor's Parcel in Improvement Area A may be fully prepaid and the obligation of such Assessor's Parcel to pay the Special Tax permanently satisfied as described herein. The owner intending to prepay the Special Tax obligation on one or more Assessor's Parcel(s) shall provide the Administrator with written notice of intent to prepay. It shall be a condition precedent to prepayment that the owner intending to prepay the Special Tax must pay to the County all past due Special 5 -t Res.No.2002-26= Ex.C Tax on the Assessor's Parcel to be prepaid and provide proof of payment to the Administrator. Promptly following receipt of such notice, the Administrator shall notify the owner of such Assessor's Parcel(s) of the prepayment amount of such Assessor's Parcel(s). The Administrator may charge a reasonable fee for providing this figure. Prepayment must be made not less than 90 days prior to the next occurring date that Bonds may be redeemed from the proceeds of such prepayment pursuant to the Indenture. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined above or below): Bond Redemption Amount Plus Redemption Premium Plus Defeasance Amount Plus Administrative Fees and Expenses Less Reserve Fund Credit Less Amount of Current Special Taxes Paid Total: Equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows; Paragraph No. 1. For Assessor's Parcels of Taxable Property intended to be prepaid, compute the Maximum Special Tax for such Assessor's Parcels for the current Fiscal Year. 2. Divide the Maximum Special Tax computed pursuant to Paragraph l by the total Maximum Special Tax of all Assessor's Parcels of Taxable Property for the current Fiscal Year. 3. Multiply the quotient computed pursuant to Paragraph 2 by the Outstanding Bonds as defined in this Section G to compute the amount of Outstanding Bonds to be retired and prepaid, and round the result up to the nearest multiple of$5,000 (the Bond Redemption Amount). 4. Multiply the Bond Redemption Amount less the par amount of Bonds scheduled to mature on the Redemption Date by the applicable redemption premium (the Redemption Premium). 5. Compute the amount needed to pay interest on the Bond Redemption Amount from the Interest Payment Date immediately preceding the Redemption Date to the Redemption Date. 6. Compute the amount the Administrator reasonably expects to derive from the - reinvestment of the Prepayment Amount from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 7. Add the amounts computed pursuant to Paragraph 5 and subtract the amount computed pursuant to Paragraph 6 (the Defeasance Amount). 6 Res.No.2002-16 Ex.C 8. Determine the administrative fees and expenses of Improvement Area A associated with the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the Administrative Fees and Expenses). 9. Determine the reserve fund credit (the Reserve Fund Credit) which shall equal the lesser of: (a) the expected reduction in the Reserve Requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new Reserve Requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 10. The Special Tax prepayment is equal to the sum of the amounts computed pursuant to Paragraphs 3, 4, 7 and 8, less (i) the amounts computed pursuant to Paragraph 9 and (ii) the Amount of Current Special Taxes Paid (the Prepayment Amount). 11. From the Prepayment Amount, the amounts computed pursuant to Paragraphs 3, 4, 7 (if greater than zero), and 9 shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments (as appropriate). The amount computed pursuant to Paragraph 8 shall be retained by the Administrator. With respect to any Assessor's Parcel that is prepaid, the City Council shall (i) cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax and the release of the Special Tax lien on such Assessor's Parcel, (ii) notify the County that the Special Tax, if any, remaining on the secured tax roll for the Assessor's Parcel has been satisfied and that the County should remove such amounts from the secured tax roll, and (iii) refund the owner for any Special Tax payments made on the Assessor's Parcel after the date of prepayment. From and after the prepayment, the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of the Maximum Special Tax that may be levied on Taxable Property within Improvement Area A of CFD No. 2002-1 after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. 2. Prepayment in Part The Maximum Special Tax on an Assessor's Parcel of Taxable Property may be partially prepaid. The amount of the prepayment shall be calculated as in Section G.1, except that a partial prepayment shall be calculated according to the following formula: 7 •r Res.No.2002-29 Ex.C PP =(PH xF)+G Where these terms are defined as follows: PP = the partial prepayment PH= the Prepayment Amount calculated according to Section G.1, minus the amounts determined in Paragraph No. S of Section G.1. F = the percent by which the owner of an Assessor's Parcel(s) is partially prepaying the Maximum Special Tax. G = the amounts determined in Paragraph No. S of Section G.1. The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax shall notify the Administrator of (i) such owner's intent to partially prepay the Maximum Special Tax, and (ii) the percentage by which the Maximum Special Tax shall be prepaid. The Administrator shall promptly provide the owner with a statement of the amount required for the partial prepayment of the Maximum Special Tax for an Assessor's Parcel following receipt of the request. With respect to any Assessor's Parcel that is partially prepaid, CFD No. 2002-1 shall (i) distribute the funds remitted to it according to Paragraph 11 of Section G.1, and (ii) indicate in the records of Improvement Area A of CFD No. 2002-1 that there has been a partial prepayment of the Maximum Special Tax and that a portion of the Maximum Special Tax equal to the outstanding percentage (i.e., 100% - F) of the remaining Maximum Special Tax shall continue to be authorized to be levied on such Assessor's Parcel pursuant to Section D. H. PROPERTY OWNER APPEALS OF SPECIAL TAX LEVIES Any property owner claiming that the amount or application of the Special Tax is not correct and requesting a refund may file a written notice of appeal and refund to that effect with the Administrator not later than one calendar year after having paid the Special Tax that is disputed. The Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and decide the appeal. If the Administrator's decision requires that the Special Tax be modified or changed in favor of the property owner, a cash refund shall not be made (except for the last year of the levy), but an adjustment shall be made to the next Special Tax levy. Any dispute over the decision of the Administrator shall be referred to the City Council and the decision of the City Council shall be final. This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to any legal action by such owner. 8 Res.No.2002-26 Ex.D EXHIBIT D IMPROVEMENT AREA B OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX A Special Tax applicable to each Assessor's Parcel of Taxable Property in the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) (herein "CFD No. 2002-1") shall be levied and collected according to the special tax liability determined by the Administrator through the application of the procedures described below. The real property in Improvement Area B of CFD No. 2002-1, unless exempted by law or by the provisions hereof, shall be specially taxed for the purposes, to the extent, and in the manner herein provided. A. DEFINITIONS The capitalized terms hereinafter set forth have the following meanings when used in this Rate and Method of Apportionment of Special Tax: Acre or Acreage means the land area of an Assessor's Parcel as shown on the applicable final map, parcel map, or other parcel map recorded with the County Recorder. If the Acreage of a particular Parcel is unclear after reference to available maps, the Administrator shall determine the appropriate Acreage for that Parcel. Act means Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the City of Huntington Beach and, as applicable, the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311), Part 1, Division 2, of Title 5 of the Government Code of the State of California. Administrative Expenses means any or all of the following actual or reasonably estimated costs directly related to the administration of Improvement Area B of CFD No. 2002-1: the fees and expenses of any Fiscal Agent (including any fees and expenses of its counsel) employed in connection with any Bonds; any costs associated with the marketing or remarketing of the Bonds; costs related to credit enhancement for the Bonds; the expenses of the Administrator and the City in carrying out their duties under any Indenture, including, but not limited to, the levy and collection of the Special Tax, the fees and expenses of legal counsel, Bond redemption expenses, charges levied by the County or any division or office thereof in connection with the levy and collection of the 1 Res.No.2002-2rat Ex.D Special Tax, audits, and amounts needed to pay arbitrage rebate to the federal government with respect to the Bonds; costs associated with complying with continuing disclosure requirements; costs associated with responding to public inquiries regarding Special Tax levies and appeals; attorneys' fees and other costs associated. with commencement or pursuit of foreclosure for any delinquent Special Tax; and all other costs and expenses of City, the Administrator, the County, and any Fiscal Agent, escrow agent or trustee related to the administration of Improvement Area B of CFD No. 2002-1 or any Bonds. Administrator means the Director of Administrative Services of the City or such other person or entity designated by the City Administrator or the City Council to administer the Special Tax according to this Rate and Method of Apportionment of Special Tax. Assessor's Parcel or Parcel means a lot, parcel or airspace parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel Number that is located within Improvement Area B of CFD No. 2002-1. Assessor's Parcel Map means an official map of the Assessor of the County designating Parcels by Assessor's Parcel Number. Bonds mean any bonds or other debt (as defined in Section 53317(d) of the Act),whether in one or more series, issued by the City for Improvement Area B of CFD No. 2002-1 under the Act. Bond Fund means the fund or account created pursuant to the Indenture in which the collections of the Special Tax are deposited. Bond Year means the one year period from September 2 to the following September 1. City means the City of Huntington Beach. City Council means the City Council of the City of Huntington Beach, acting as the legislative body of CFD No. 2002-1. County means the County of Orange. Delinquencies mean the amount, if any, equal to delinquencies in payment of the Special Tax levied in Improvement Area B of CFD No. 2002-1 in the previous Fiscal Year. Exempt Land means (1) any real property within the boundaries of Improvement Area B of CFD No. 2002-1 which is owned by a governmental agency for public right of way purposes, including, but not limited to, streets, water well production facilities, public walkway corridors, and slopes as determined in each Fiscal Year by the Administrator, and (2) any Assessor's Parcel for which the Special Tax has been paid in full. Fiscal Agent means the fiscal agent or trustee who is a party to the Indenture. 2 Res.No.2002-26 Ex.D Fiscal Year means the period commencing on July 1 and ending on the following June 30, in any year in which the Bonds are outstanding. Improvement Area B means any real property within the boundaries of CFD No. 2002-1 as depicted on the boundary map for said CFD entitled "Proposed Boundaries of The City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Parr), County of Orange, State of California" and approved by the City Council. Said Improvement Area B is comprised generally of Parcels 1 through 3, Parcels 12 through 20 and adjacent portions of the following roadway right-of-way; Skylab Road, Street `A', Street `C' and Street `D'; as shown on Tentative Parcel Map No. 2001-122 on file with the City and encompassing approximately 48.803 gross acres and. 43.785 net taxable acres. In no case shall the net taxable acres in Improvement Area B be less than 43.785. Indenture means the indenture, fiscal agent agreement, resolution or other instrument approved pursuant to the Resolution of Issuance and pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. Infrastructure means the public improvements authorized to be financed by Improvement Area B of CFD No. 2002-1 in accordance with the terms of the Act. Interest Payment Date means any date on which regularly scheduled principal and/or interest payments are due on the Bonds. Maximum Special Tax means, with respect to any Assessor's Parcel of Taxable Property, the maximum Special Tax determined in accordance with Section C that can be levied in any Fiscal Year on such Assessor's Parcel. Outstanding Bonds means all Bonds that are then outstanding under the Indenture. Property Owner means the owner of an Assessor's Parcel within the boundaries of Improvement Area B of CFD No. 2002-1 as determined from the latest equalized tax rolls of the County or as proved through some other acceptable manner to the Administrator. Reserve Fund means the fund of that name created under the Indenture. Special Tax means the special tax to be levied pursuant to the Act and this Rate and Method of Apportionment of Special Tax on Taxable Property within Improvement Area B of CFD No. 2002-1. Special Tax Requirement means the amount required in any Fiscal Year for Improvement Area B of CFD No. 2002-1 necessary: (1) to pay the annual scheduled debt service on the Outstanding Bonds due in the next succeeding Bond Year which 3 Res.No.200246 Ex. D commences in such Fiscal Year, (ii) to pay any amounts required to establish or replenish the Reserve Fund for all Outstanding Bonds, (iii) to pay Administrative Expenses due and estimated by the Administrator to become due prior to the next levy of the Special Tax, and (iv) to cure any Delinquencies in the payment of principal or interest on indebtedness of Improvement Area B of CFD No. 2002-1. The Special Tax Requirement shall be reduced by the following: (i) any credit from interest earnings on the Reserve Fund or other Bond funds the earnings on which are available under the terms of the Indenture to pay debt service on the Bonds, (ii) the collection of delinquent Special Tax since the last Special Tax Levy, and (iii) any other funds legally available to apply against the Special Tax Requirement as determined by the Administrator. Taxable Property means all of the Assessor's Parcels within the boundaries of Improvement Area B of CFD No. 2002-1, which are not Exempt Land, or otherwise exempt from the Special Tax pursuant to the Act. B. IDENTIFYING TAXABLE PROPERTY On or about each July I", the Administrator shall determine which Assessor's Parcels in Improvement Area B of CFD No. 2002-1 are Taxable Property. The Taxable Property shall be subject to the Special Tax in accordance with the rate and method of apportionment described in Sections C and D-below. C. MAXIMUM SPECIAL TAX The Maximum Special Tax for each Parcel of Taxable Property is $11,200 per Acre commencing in Fiscal Year 2002-2003 and such Maximum Special Tax shall increase in every Fiscal Year thereafter by two percent (2%) of the Maximum Special Tax for the prior Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2002-2003, and during each Fiscal Year thereafter, the City Council or its designee shall levy the Special Tax proportionally on each Assessor's Parcel of Taxable Property at up to one hundred percent (100%) of the Maximum Special Tax for that Fiscal Year, as described in Section C, above, as needed to satisfy the Special Tax Requirement. Res.No.2002-29 Ex.D E. LIMITATIONS No Special Tax shall be levied on an Assessor's Parcel after such Assessor's Parcel becomes Exempt Land. The Special Tax may be levied and collected on Taxable Property commencing with Fiscal Year 2002-2003, and for each Fiscal Year thereafter, and until the date on which principal and interest on all Outstanding Bonds have been paid in full (or provision for their payment has been made). Upon determination by the Administrator that this requirement has been met, the Special Tax lien shall be removed from all Assessor's Parcels in Improvement Area B of CFD No. 2002-1. F. MANNER OF COLLECTION The Special Tax shall be collected at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2002-1 may at any time directly bill the Special Tax, may collect the Special Tax at a different time or 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. G. PREPAYMENT OF SPECIAL TAX The following definitions apply solely to this Section G.: Amount of Current Special Taxes Paid means the amount of the Special Tax levied against the subject Assessor's Parcel that was paid to the County or the City by the owner of the subject Assessor's Parcel and that will be applied to debt service payments on the Redemption Date. Outstanding Bonds means all Bonds which are deemed to be outstanding under the Indenture the day immediately preceding the next Interest Payment Date. Redemption Date means the Interest Payment Date on which Bonds are proposed to be redeemed from the prepayments of the Special Tax. 1. Prepayment in Full The Special Tax obligation applicable to such Assessor's Parcel in Improvement Area B may be fully prepaid and the obligation of such Assessor's Parcel to pay the Special Tax permanently satisfied as described herein. The owner intending to prepay the Special Tax obligation on one or more Assessor's Parcel(s) shall provide the Administrator with written notice of intent to prepay. It shall be a condition precedent to prepayment that the owner intending to prepay the Special Tax must pay to the County all past due Special 5 Res.No.2002-26 Ex.D Tax on the Assessor's Parcel to be prepaid and provide proof of payment to the Administrator. Promptly following receipt of such notice, the Administrator shall notify the owner of such Assessor's Parcel(s) of the prepayment amount of such Assessor's Parcel(s). The Administrator may charge a reasonable fee for providing'this figure. Prepayment must be made not less than 90 days prior to the next occurring date that Bonds maybe redeemed from the proceeds of such prepayment pursuant to the Indenture. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined above or below): Bond Redemption Amount Plus Redemption Premium Plus Defeasance Amount Plus Administrative Fees and Expenses Less Reserve Fund Credit Less Amount of Current Special Taxes Paid Total: Equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Paragraph No. 1. For Assessor's Parcels of Taxable Property intended to be prepaid, compute the Maximum Special Tax for such Assessor's Parcels for the current Fiscal Year. 2. Divide the Maximum Special Tax computed pursuant to Paragraph 1 by the total Maximum Special Tax of all Assessor's Parcels of Taxable Property for the current Fiscal Year. 3. Multiply the quotient computed pursuant to Paragraph 2 by the Outstanding Bonds as defined in this Section G to compute the amount of Outstanding Bonds to be retired and prepaid, and round the result up to the nearest multiple of$5,000 (the Bond Redemption Amount). 4. Multiply the Bond Redemption Amount less the par amount of Bonds scheduled to mature on the Redemption Date by the applicable redemption premium (the Redemption Premium). 5. Compute the amount needed to pay interest on the Bond Redemption Amount from the Interest Payment Date immediately preceding the Redemption Date to the Redemption Date. 6. Compute the amount the Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 7. Add the amounts computed pursuant to Paragraph 5 and subtract the amount computed pursuant to Paragraph 6 (the Defeasance Amount). 6 Res.No.2002-26 Ex.D 8. Determine the administrative fees and expenses of Improvement Area B associated with the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the Administrative Fees and Expenses). 9. Determine the reserve fund credit (the Reserve Fund Credit) which shall equal the lesser of: (a) the expected reduction in the Reserve Requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new Reserve Requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 10. The Special Tax prepayment is equal to the sum of the amounts computed pursuant to Paragraphs 3, 4, 7 and 8, less (i) the amounts computed pursuant to Paragraph 9 and (ii) the Amount of Current Special Taxes Paid (the Prepayment Amount). 11. From the Prepayment Amount, the amounts computed pursuant to Paragraphs 3, 4, 7 (if greater than zero), and 9 shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments (as appropriate). The amount computed pursuant to Paragraph 8 shall be retained by the Administrator. With respect to any Assessor's Parcel that is prepaid, the City Council shall (i) cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax and the release of the Special Tax lien on such Assessor's Parcel, (ii) notify the County that the Special Tax, if any, remaining on the secured tax roll for the Assessor's Parcel has been satisfied and that the County should remove such amounts from the secured tax roll, and (iii) refund the owner for any Special Tax payments made on the Assessor's Parcel after the date of prepayment. From and after the prepayment, the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of the Maximum Special Tax that may be levied on Taxable Property within Improvement Area B. of CFD No. 2002-1 after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. 2. Prepayment is Part = The Maximum Special Tax on an Assessor's Parcel of Taxable Property may be partially prepaid. The amount of the prepayment shall be calculated as in Section G.1, except that a partial prepayment shall be calculated according to the following formula: 7 Res.No.2002-2fi Ex. D PP =(PH xF)+ G Where these terms are defined as follows: PP = the partial prepayment PH= the Prepayment Amount calculated according to Section G.1, minus the amounts determined in Paragraph No. 8 of Section G.1. F = the percent by which the owner of an Assessor's Parcel(s) is partially prepaying the Maximum Special Tax. G = the amounts determined in Paragraph No. 8 of Section G.1. The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax shall notify the Administrator of (i) such owner's intent to partially prepay the Maximum Special Tax, and (ii) the percentage by which the Maximum Special Tax shall be prepaid. The Administrator shall promptly provide the owner with a statement of the amount required for the partial prepayment of the Maximum Special Tax for an Assessor's Parcel following receipt of the request. With respect to any Assessor's Parcel that is partially prepaid, CFD No. 2002-1 shall (i) distribute the funds remitted to it according to Paragraph 11 of Section G.1, and (ii) indicate in the records of Improvement Area B of CFD No. 2002-1 that there has been a partial prepayment of the Maximum Special Tax and that a portion of the Maximum Special Tax equal to the outstanding percentage (i.e., 100% - F) of the remaining Maximum Special Tax shall continue to be authorized to be levied on such Assessor's Parcel pursuant to Section D. H. PROPERTY OWNER APPEALS OF SPECIAL TAX LEVIES Any property owner claiming that the amount or application of the Special Tax is not correct and requesting a refund may file a written notice of appeal and refund to that effect with the Administrator not later than one calendar year after having paid the Special Tax that is disputed. The Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and decide the appeal. If the Administrator's decision requires that the Special Tax be modified or changed in favor of the property owner, a cash refund shall not be made (except for the. last year of the levy), but an adjustment shall be made to the next Special Tax levy. Any dispute over the decision of the Administrator shall be referred to the City Council and the decision of the City Council shall be final. This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to any legal action by such owner. 8 Res.No.2002-26 Ex.E EXHIBIT E CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) NOTICE OF PUBLIC HEARING Notice is hereby given that on April 1, 2002, the City Council of the City of Huntington Beach adopted a Resolution entitled"A Resolution of the City Council of the City of Huntington Beach Declaring Its Intention To Establish A Community Facilities District And To Authorize The Levy Of Special Taxes Therein." Pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City and, as applicable, the Mello-Roos Community Facilities Act of 1982, the City Council of the City hereby gives notice as follows: A. The text of said Resolution of Intention is as follows: WHEREAS, under the provisions of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the City of Huntington Beach (the "Code") and, as applicable under the Code, the Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the California Government Code (the "Act," and, together with the Code, the "Law"), this City Council may commence proceedings for the establishment of a community facilities district;and There has been submitted to this City Council a Petition (Including Waiver) of McDonnell Douglas Corporation (the "Petition"), requesting the formation by this City Council of a community facilities district under the Law to be known as the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) (the"District") comprised of two separate improvement areas; and There has also been submitted to this City Council a Deposit/Reimbursement Agreement (the "Deposit Agreement") wherein the petitioner has agreed to pay all costs of the City of Huntington Beach (the"City") related to the formation of the District, and Under the Law, this City Council is the legislative body for the proposed District and is empowered with the authority to establish the District and levy special taxes within the District;and This City Council now desires to proceed with the actions necessary to consider the establishment of the District and the designation of improvement areas therein. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington Beach as follows: E-1 Res.No.2002-26 Ex.E Section 1. This City Council proposes to begin the proceedings necessary to establish the District pursuant to the Law. Receipt of the Petition to form the District and the Deposit Agreement is hereby acknowledged. The City Administrator is hereby authorized to execute the Deposit Agreement and the Director of Administrative Services of the City, working with the City Treasurer, is hereby authorized to cash the deposit referenced therein and to expend the deposits for costs of formation of the District, as contemplated by the Deposit Agreement. Section 2. The name proposed for the District is City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park). Pursuant to Section 53350 of the Act, the City Council hereby designates a portion of the District as "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)" ("Area A"), and a portion of the District as "Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)" ("Area B"). Section 3. The proposed boundaries of Area A and of Area B of the District are as shown on the map of the District on file with the City Clerk of the City, which boundaries are hereby preliminarily approved. The City Clerk is hereby directed to record, or cause to be recorded, the map of the boundaries of the District in the office of the County Recorder as soon as practicable after the adoption of this Resolution. Section 4. The type of public facilities (the "Area A Facilities") proposed to be eligible for funding by Area A and pursuant to the Law shall consist of those items listed on Exhibit A hereto under the heading "Facilities," which Exhibit is by this reference incorporated herein. The type of public facilities (the "Area B Facilities") proposed to be eligible for funding by Area B and pursuant to the Law shall consist of those items listed on Exhibit A hereto under the heading "Facilities," which Exhibit is by this reference incorporated herein. Section 5. Except to the extent that funds are otherwise available to Area A of the District to pay for the Area A Facilities and/or pay the principal and interest as it becomes due on bonds of Area A of the District issued to finance the Area A Facilities, a special tax sufficient to pay the costs thereof, secured by recordation of a continuing lien against all non-exempt real property in Area A of the District, will be levied within Area A of the District and collected in the same manner as ordinary ad valorem property taxes or in such other manner as this City Council or its designee shall determine, including direct billing of the affected property owners. The proposed rate and method of apportionment of the special tax among the parcels of real property within Area A of the District, in sufficient detail to allow each landowner within the proposed Area A of the District to estimate the maximum amount such owner will have to pay, is described in Exhibit C attached hereto which Exhibit is by this reference incorporated herein. Except to the extent that funds are otherwise available to Area B of the District to pay for the Area B Facilities and/or pay the principal and interest as it becomes due on bonds of Area B of the District issued to finance the Area B Facilities, a special tax sufficient to pay the costs thereof, secured by recordation of a continuing lien against all E-2 Res.No.2002-26 Ex.E non-exempt real property in Area B of the District, will be levied within Area B of the District and collected in the same manner as ordinary ad valorem property taxes or in such other manner as this City Council or its designee shall determine, including direct billing of the affected property owners. The proposed rate and method of apportionment of the special tax among the parcels of real property within Area B of the District, in sufficient detail to allow each landowner within the proposed Area B of District to estimate the maximum amount such owner will have to pay, is described in Exhibit D attached hereto which Exhibit is by this reference incorporated herein. This City Council finds that the provisions of Section 53313.6, 53313.7 and 53313.9 of the Act (relating to adjustments to ad valorem property taxes and schools financed by a community facilities district) are inapplicable to either Area A or Area B of the District. Section 6. It is the intention of this City Council, acting as the legislative body for Area A of the District, to cause bonds of the City to be issued for Area A of the District pursuant to the Law to finance a portion of the costs of the Area A Facilities. If so issued, the bonds shall be issued in one or more series in an aggregate principal amount of not to exceed $13,000,000, shall bear interest payable semi-annually or in such other manner as this City Council shall determine, at a rate not to exceed the maximum rate of interest as may be authorized by applicable law at the time of sale of such bonds, and shall mature not to exceed 40 years from the date of the issuance thereof. It is the intention of this City Council, acting as the legislative body for Area B of the District, to cause bonds of the City to be issued for Area B of the District pursuant to the Law to finance a portion of the costs of the Area B Facilities. If so issued, the bonds shall be issued in one or more series in an aggregate principal amount of not to exceed $13,000,000, shall bear interest payable semi-annually or in such other manner as this City Council shall determine, at a rate not to exceed the maximum rate of interest as may be authorized by applicable law at the time of sale of such bonds, and shall mature not to exceed 40 years from the date of the issuance thereof. Section 7. This City Council reserves to itself the right and authority to allow any interested owner of property in either Area A or Area B of the District, subject to the provisions of Section 53344.1 of the Act and such requirements as it may otherwise impose, and any applicable prepayment penalties as prescribed in the indenture or fiscal agent agreement for any bonds of the City for the respective improvement area of the District, to tender to the Director of Administrative Services of the City (who shall remit the same to the City Treasurer) in full payment or part payment of any installment of special taxes for such improvement area of the, District or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, in the manner described in Section 53344.1 of the Act. Section 8. The levy of the proposed special tax in each improvement area of the District shall be subject to the approval of the qualified electors of such improvement area at a special election. The proposed voting procedure shall be by mailed or hand- E-3 Res.No.2002-26 Ex.E delivered ballot among the landowners in the proposed improvement area of the District,with each owner having one vote for each acre or portion of an acre of land such owner owns in the respective improvement area of the District. Section 9. Except as may otherwise be provided by law or the rate and method of apportionment of the special tax for the respective improvement area of the District, all lands owned by any public entity, including the United States, the State of California and/or the City, or any departments or political subdivisions of any thereof, shall be omitted from the levy of the special tax to be made to cover the costs and expenses of the facilities, the issuance of bonds by the City for such improvement area of the District and any expenses of the respective improvement area of the District. Section 10. The Director of Public Works of the City is hereby directed to study said proposed facilities for each improvement area of the District and to make, or cause to be made,and file with the City Clerk a report in writing,presenting the following: (a) A brief description of the facilities for each improvement area of the District. (b) An estimate of the fair and reasonable cost of providing the facilities for each improvement area of the District, including the incidental expenses in connection therewith, including the costs of the proposed bond financing, any City administrative costs and all other related costs. Said report shall be made a part of the record of the public hearing provided for below. Section 11. Monday, May 6, 2002, at 7:00 p.m. or as soon thereafter as the matter may be heard, in the regular meeting place of this City Council, City Council Chambers, City Hall, 2000 Main Street, Huntington Beach, California, be, and the same are hereby appointed and fixed as the time and place when and where this City Council, as legislative body for the District, will conduct a public hearing on the establishment of each improvement area of the District and consider and finally determine whether the public interest, convenience and necessity require the formation of each improvement area of the District and the levy of said special tax within the respective improvement area. Section 12. The City Clerk is hereby directed to cause notice of said public hearing to be given by publication one time in a newspaper published in the area of the District. The publication of said notice shall be completed at least seven days before the date herein set for said hearing. Said notice shall be substantially in the form of Exhibit C hereto. Section 13. The firms of Michael Swan Consulting and Quint & Thimrnig LLP are hereby designated as special tax consultant and bond counsel and disclosure counsel, respectively, to the City for the District. The City Director of Administrative Services and the City Attorney, respectively, are hereby authorized to execute E-4 Res.No.2002-26 Ex.E agreements with said firms for their services related to the District provided that all fees and expenses of such firms are payable solely from a deposit by the landowner in the District or the proceeds of the bonds, if any, issued by the City for either of the improvement areas of the District. Section 14. This Resolution shall take effect upon its adoption. B. The exhibits to the Resolution which describe the facilities eligible to be funded and the rate and method of apportionment of the special taxes for each improvement area of the district are on file in the office of the City Clerk of the City of Huntington Beach. C. The time and place established under said Resolution for the public hearing required under the Law are Monday, May 6, 2002, at the hour of 7:00 p.m. or as soon thereafter as the matter may be heard, in the regular meeting place of the City Council of the City of Huntington Beach, City Council Chambers, City Hall, 2000 Main Street,Huntington Beach, California. D. At said hearing, the testimony of all interested persons or taxpayers for or against the establishment of each of the improvement areas of the district, the extent of each of the improvement areas of the district or the furnishing by each improvement area of the specified types of facilities will be heard. Any person interested may file a protest in writing with the City Clerk. If fifty percent or more of the registered voters, or six registered voters, whichever is more, residing in the territory proposed to be included in an improvement area of the district, or the owners of one-half or more of the area of land in the territory proposed to be included in an improvement area of the district and not exempt from the special tax file written protests against the establishment of such improvement area and the protests are not withdrawn to reduce the value of the protests to less than a majority, the City Council shall take no further action to establish such improvement area or levy the special taxes in such improvement area for a period of one year from the date of the decision of the City Council, and if the majority protests of the registered voters or the landowners are only against the furnishing of a type or types of facilities within an improvement area of the district, or against levying a specified special tax in such improvement area, those types of facilities or the specified special tax will be eliminated from the proceedings to form such improvement area. E. The proposed voting procedure shall be by special mail or hand-delivered ballot to the property owners within the territory proposed to be included in each respective improvement area of the district. Dated: April _, 2002 Is/ Connie Brockway City Clerk, City of Huntington Beach E-5 Res. No. 2002-26 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 1st day of April, 2002 by the following vote: AYES: Green, Dettloff, Bauer, Cook, Houchen, Winchell, Boardman NOES: None ABSENT: None ABSTAIN: None efvx� City Clerk and ex-officio dierk of the City Council of the City of Huntington Beach, California