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HomeMy WebLinkAboutCity Council - 2002-38 RESOLUTION NO. 2002-38 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH OF FORMATION OF IMPROVEMENT AREA A AND IMPROVEMENT AREA B OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) WHEREAS, on April 1, 2002, this City Council 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" (the "Resolution of Intention") stating its intention to form the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) (the "District") pursuant to 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"); and The Resolution of Intention designated 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"), as authorized by Section 53350 of the Act (Area A and Area B are sometimes referred to below individually as an "improvement area" and, collectively, as the "improvement areas"); and The Resolution of Intention, incorporating by reference a map of the proposed boundaries of Area A and of Area B and stating the improvements to be provided by Area A and Area B (collectively, the "Facilities"), the cost of providing the Facilities, and the rate and method of apportionment of the special tax to be levied within Area A and Area B to pay the costs of the Facilities and the principal and interest on bonds proposed to be issued with respect to Area A and Area B, is on file with the City Clerk and the provisions thereof are incorporated herein by this reference as if fully set forth herein; and On this date, this City Council held a noticed public hearing as required by the Law and the Resolution of Intention relative to the proposed formation of Area A and of Area B; and At the hearing all interested persons desiring to be heard on all matters pertaining to the formation of Area A and of Area B, the Facilities to be provided by each such improvement area of the District and the levy of the special tax in each such improvement area were heard and a full and fair hearing was held; and Res.No.2002-38 At the hearing certain changes were presented to the rate and method of apportionment of special taxes for the improvement areas, and the revised rate and method of apportionment of special taxes for Area A is attached to this Resolution as Exhibit A and the revised rate and method of apportionment of special taxes for Area B is attached hereto as Exhibit B; and At the hearing evidence was presented to this City Council on the matters before it, including a report by the Director of Public Works of the City (the "Report") as to the Facilities to be provided by each improvement area of the District and the costs thereof, a copy of which is on file with the City Clerk, and this City Council at the conclusion of the hearing was fully advised regarding each improvement area of the District; and The sole owner of the land in the improvement areas that will be subject to the levy of the special taxes has been furnished with copies of this Resolution, including Exhibits A and B hereto; and Written protests with respect to the formation of the improvement areas of the District and/or the furnishing of specified types of Facilities by such improvement areas as described in the Report have not been filed with the City Clerk by fifty percent (50%) or more of the registered voters residing within the territory of either of the improvement areas of the District or property owners of one-half(1/2) or more of the area of land within either of the improvement areas of the District and not exempt from the special tax; and The special tax proposed to be levied in Area A to pay for the Facilities to be provided thereby, as set forth in Exhibit A to this Resolution, has not been eliminated by protest by fifty percent (50%) or more of the registered voters residing within the territory of Area A or the owners of one-half (1/2) or more of the area of land within Area A and not exempt from the special tax; and The special tax proposed to be levied in Area B to pay for the Facilities to be provided thereby, as set forth in Exhibit B to this Resolution, has not been eliminated by protest by fifty percent (50%) or more of the registered voters residing within the territory of Area B or the owners of one-half (1/2) or more of the area of land within Area B and not exempt from the special tax; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington Beach as follows: Section 1. The foregoing recitals are true and correct. Section 2. The proposed special tax to be levied within the Area A of the District has not been precluded by majority protest pursuant to Section 53324 of the California Government Code. The proposed special tax to be levied within the Area B of the District has not been precluded by majority protest pursuant to Section 53324 of the California Government Code. -2- G:Mulvihill:Mc Don nellDouglasCMResoFormationJ6158 Res.No.2002-38 Section 3. All prior proceedings taken by this City Council in connection with the establishment of Area A of the District and the establishment of Area B of the District and the levy of the special tax in each such improvement area have been duly considered and are hereby found and determined to be valid and in conformity with the Law. Section 4. The community facilities district improvement areas designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)" and designated "Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park}" are hereby established pursuant to the Law. Section 5. The boundaries of Area A and of Area B of the District, as described in the Resolution of Intention and set forth in the boundary map of the District recorded in the Orange County Recorder's Office at Book 85 of Maps of Assessment and Community Facilities Districts at Pages 3-6 (Instrument Number 20020279386), are hereby approved, are incorporated herein by this reference and shall be the boundaries of Area A and of Area B, respectively, of the District. Section 6. The type of public facilities proposed to be financed by Area A of the District pursuant to the Law shall consist of those items listed as Facilities on Exhibit A to the Resolution of Intention which Exhibit is by this reference incorporated herein. The type of public facilities proposed to be financed by Area B of the District pursuant to the Law shall consist of those items listed as Facilities on Exhibit B to the Resolution of Intention which Exhibit is by this reference incorporated herein. This City Council hereby finds that the Facilities are necessary to meet increased demands placed upon Iocal agencies as the result of development occurring in the applicable improvement area of the District. Section 7. Except to the extent that funds are otherwise available to Area A of the District to pay for the Facilities and/or the principal and interest as it becomes due on bonds of Area A of the District issued to finance the 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 annually 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 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 District to estimate the maximum amount such owner will have to pay, are described in Exhibit A to this Resolution 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 Facilities and/or the principal and interest as it becomes due on bonds of Area B of the District issued to finance the 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 annually 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 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, -3- G:M ulvihill:Mc DonncilDouglasCFD:ResoFormationl6158 Res.No.2002-38 in sufficient detail to allow each landowner within the proposed District to estimate the maximum amount such owner will have to pay, are described in Exhibit B to this Resolution which Exhibit is by this reference incorporated herein. Section 8. The Director of Administrative Services of the City of Huntington Beach, 2000 Main Street, Huntington Beach, California, 92648, telephone number (714) 536-5236, is the officer of the City that will be responsible for preparing annually a current roll of special tax levy obligations by assessor's parcel number and which will be responsible for estimating future special tax levies pursuant to Section 53340.2 of the California Government Code. Section 9. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the California Streets and Highways Code, a continuing lien to secure each levy of the special tax shall attach to all nonexempt real property in each of Area A and Area B of the District, respectively, and this lien shall continue in force and effect until the special tax obligation imposed in the respective improvement area is fully paid or prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax in the applicable improvement area by the City ceases. Section 10. In accordance with Section 53325.7 of the California Government Code, the appropriations limit, as defined by subdivision (h) of Section 8 of Article XM of the California Constitution, of Area A of the District is hereby preliminarily established at $13,000,000 and said appropriations limit shall be submitted to the voters of the District as provided below. In accordance with Section 53325.7 of the California Government Code, the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution, of Area B of the District is hereby preliminarily established at $13,000,000 and said appropriations limit shall be submitted to the voters of the District as provided below. The proposition establishing an 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 California Government Code. Section 11. Pursuant to the provisions of the Law, the proposition of the levy of the special tax and the proposition of the establishment of the appropriations limit specified above for Area A shall be submitted to the qualified electors of Area A of the District at an election, the time, place and conditions of which election shall be as specified by a separate resolution of this City Council. Pursuant to the provisions of the Law, the proposition of the levy of the special tax and the proposition of the establishment of the appropriations limit specified above for Area B shall be submitted to the qualified electors of Area B of the District at an election, the time, place and conditions of which election shall be as specified by a separate resolution of this City Council. Section 12. This Resolution shall take effect upon its adoption. -4- G_Mulvihi II:McDonnellDouglasCPD:ResolormationJ6i 58 Res.Ho.2002-38 PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 3xd day of ,Tune , 2002. Mayor ATTEST: APPROVED AS TO FORM: d'wzi ;7- ::,� d�11� , 110, City Clerk at 4-n City Attorney REVIEWED AND APPROVED: INITIATED AND APPROVED: ity Administrator Director of Economic Development -5- G:M u Ivihi[l:M cDonn ell DouglasCFD:ResoFormationJ6158 I Res.No.2002-38 Ex.A EXHIBIT A 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 Res.No.2002-38 Ex.A EXHIBIT A 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 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 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 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 A-1 Res.No.2002-38 Ex.A 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 P arcel 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. 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 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. 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. A-2 Res.No.2002-38 Ex.A 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 ;Weans 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. 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 A-3 Res.No.2002-38 Ex.A 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, (H) 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 1st, 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 Tax for that Fiscal Year,as described in Section C, above, as needed to satisfy the Special Tax Requirement. 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 A-4 Res.No.2002-38 Ex.A 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 P arcels 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 would be applied to debt service payments on the Redemption Date and the Interest Payment Date immediately following 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 P arcel 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 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. A-5 Res.No.2002-38 Ex.A 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 P arcels 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. I 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). 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). A-6 Res.No.2002-38 Ex.A 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 P arcel 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: PP= (PHxF) +G. A-7 Res.No.2002.38 Ex.A 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 P arcel 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. A-8 Res. No.2002-38 Ex.B EXHIBIT B 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 Res.No.2002-38 Ex.B EXHIBIT B 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 1952, 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 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 B-1 Res.No.2002-38 Ex.B 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 P arcel 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. 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. B-2 Res.No.2002-38 Ex.B 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 Park), County.of Orange, State of California" and approved by the City Council. Said Improvement Area B is comprised generally of Parcels 1, 2, 3, 12, 13, 15, 17 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: (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 B-3 Res.No.2002-36 Ex.B 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 1st, 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. 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 fall (or provision for their payment has been made). Upon determination by the Administrator that this B-4 Res.No.2002-38 Ex.B 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 P arcels 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 would be applied to debt service payments on the Redemption Date and the Interest Payment Date immediately following 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 P arcel 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 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. B-5 Res.No.2002-38 Ex.B 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 P arcels 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). 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). B-6 Res.No.2002-38 Ex.B 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 31 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 P arcel 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 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: PP= (PxxF) tG B-7 Res.No.2002-38 Ex.8 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.I. 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 P arcel 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. B-8 Res. No. 2002-38 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-ofFcio 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 3rd day of June, 2002 by the following vote: AYES: Green, Dettloff, Boardman, Cook, Winchell, Bauer NOES: None ABSENT: Houchen (out of room) ABSTAIN: None City Clerk and ex-officio C erk of the City Council of the City of Huntington Beach, California