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HomeMy WebLinkAboutCity Council - 2004-76 RESOLUTION NO. 2 0 0 4-7 6 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ESTABLISHING CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2004-1 (THE STRAND) AND ESTABLISHING THE BOUNDARIES THEREOF WHEREAS, the City Council (the "City Council") of the City of Huntington Beach ("City") has heretofore adopted on August 16, 2004, Resolution No. 2004-68, stating that a proposed community facilities district to be known as "City of Huntington Beach Community Facilities District No. 2004-1 (The Strand), County of Orange, State of California" (the "Community Facilities District"), is proposed to be established under the terms of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the City of Huntington Beach (the "Code") and Chapter 2.5 (commencing with § 53311) of fart 1 of Division 2 of Title 5 of the California Government Code, commonly known as the "Mello-Roos Community Facilities Act of 1982" (the "Act"), and fixing the time and place for a public hearing on the establishment of the Community Facilities District; and WHEREAS, notice was published and mailed to the owners of property in the Community Facilities District as required by law relative to the intention of the City Council to establish the Community Facilities District, the levy of the special taxes therein, the financing and refinancing of public facilities therein, and the incurring of a bonded indebtedness by the Community Facilities District, and of the time and place of said public hearing; and WHEREAS, on September 20, 2004, at the time and place specified in said published and mailed notices, the City Council opened a public hearing as required by law relative to the formation of the Community Facilities District, the levy of the special taxes therein and the financing of facilities by the Community Facilities District and continued such hearing to November 15, 2004, in accordance with applicable law; and WHEREAS, prior to said hearing there was filed with the City Council a report (the "Report") containing a description of the services being financed within and for the Community Facilities District, and an estimate of the cost of such financing, as required by Section 53321.5 of the California Government Code; and WHEREAS, at the public hearing all persons desiring to be heard on all matters pertaining to the establishment of the Community Facilities District, the levy of the special taxes and the financing of the public facilities therein were heard, and a full and fair hearing was held; and WHEREAS, the City Council may therefore proceed to establish the Community Facilities District; NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Huntington Beach, the following: RVPUB1MUM1678693.3 1 Resolution No. 2004-76 Section 1. Findings. The City Council finds as follows: (i) all of the preceding recitals are correct, (ii) on September, 2004, pursuant to notice thereof duly given as provided by law, the City Council opened a public hearing with respect to the establishment of the Community Facilities District and the annual levying of specified special taxes on the taxable property within the Community Facilities District to pay for public facilities for the Community Facilities District which are described in Section 3 hereof, and continued such hearing in accordance with applicable law, (iii) such public hearing was conducted on November 15, 2004, (iii) the boundary map of the Community Facilities District has been recorded pursuant to Sections 3111 and 3113 of the Streets and Highways Code as Instrument No. 2004000762874 in Book 89 of Book of Maps of Assessment and Community Facilities Districts at page 41 of the Official Records of the County of Orange, (iv) all prior proceedings with respect to the establishment of the Community Facilities District prior to and during the hearing with respect to the establishment of the Community Facilities District conducted by the City Council on September 20, 2004 and November 15, 2004, were valid and in conformity with the requirements of Chapter 2.5 (commencing with § 53311) of Part 1 of Division 2 of Title 5 of the California Government Code, (v) no written protests were received at or prior to the time of said hearing against the establishment of the Community Facilities District or the levying of said special taxes by the Community Facilities District, and said special taxes have, therefore, not been limited by majority protest pursuant to Section 53324 of the California Government Code, (vi) the City Council is, therefore, authorized to adopt a resolution of formation pursuant to Section 53325.1 of the California Government Code for the establishment of City of Huntington Beach Community Facilities District No. 2004-1 (The Strand), County of Orange, State of California, and the Community Facilities District should be established. Section 2. Establishment of District. City of Huntington Beach Community Facilities District No. 2004-1 (The Strand) County of Orange, State of California, is hereby established. The boundaries of the Community Facilities District are set forth in Exhibit "A" attached hereto and are also shown on the map entitled`Boundaries of City of Huntington Beach Community Facilities District No. 2004-1 (The Strand), County of Orange, State of California" which is on file with the Clerk and said boundaries are hereby established. Section 3. Types of Facilities; Incidental Expenses; Maintenance. (1) The types of public facilities proposed to be provided within and financed by the proposed Community Facilities District are: (a) Street improvements including costs of condemnation, removal, demolition, grading, paving, curbs and gutters, sidewalks, street lights and parkway and landscaping related thereto. (b) Storm drains. (c) Sewers, sewer treatment facilities and sewer capacity acquisition. (d) Parking facilities including parking garage. (e) Water distribution facilities, including fire hydrants and water storage facilities. RVFUBWUM1678693.3 2 Resolution No. 2004-76 (f) Street signalization and signage, including traffic fees. (g) Fire facilities including structures and capital equipment. (h) Utility facilities construction and relocation. (i) Acquisition of land, rights-of-way and easements necessary for any of the facilities specified in paragraphs (a)through (h) above. (�) The incidental expenses which will be incurred are: (i) the cost of engineering, planning and designing such facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the creation of the proposed community facilities district, issuance of the bonds thereof, the determination of the amount of and collection of taxes, the payment of taxes, and costs otherwise incurred in order to carry out the authorized purposes of the community facilities district, and (iii) any other expenses incidental to the construction, acquisition, completion, inspection, and maintenance of such facilities. Section 4. Special Taxes. Except where funds are otherwise available, special taxes sufficient to pay for all such facilities and to pay the principal of and interest on the bonds of the Community Facilities District and any territory to be annexed in the future, and the annual administrative expenses of City and the Community Facilities District in determining, apportioning, levying and collecting such special taxes, and in paying the principal of and interest on such bonds, and the costs of registering, exchanging and transferring such bonds, secured by the recordation of a continuing lien against all taxable or nonexempt property in the Community Facilities District, and maintaining a reserve fund for such bonds, and paying any amounts that must be paid to the United States in order to preserve the tax-exempt status of such bonds shall be annually levied within the Community Facilities District. Additionally, there shall be levied special taxes sufficient to pay for the maintenance, repair and replacement of such public facilities. The rate and method of apportionment of said special taxes shall be as set forth in Exhibit"B"attached hereto and by this reference made a part hereof. Section 5. Annexation of Territory. Other property within the boundaries of City may be annexed into the Community Facilities District upon the condition that parcels within that territory may be annexed only with the unanimous approval of the owner or owners of each parcel or parcels at the time that parcel or those parcels are annexed. Section 6. Exempt Property, Pursuant to Section 53340 of the California Government Code, properties of entities of the state, federal and local governments or used for public rights of way or other public uses, shall be exempt from the levy of special taxes of the Community Facilities District. Section 7. Report. The Report is hereby approved and is made a part of the record of the public hearing regarding the formation of the Community Facilities District, and is ordered to be kept on file with the Clerk of the City as part of the transcript of these proceedings. RVPUBNUNIM786933 3 Resolution No. 2004-76 Section S. Renayment of Funds Advanced or Work-in-Kind. Pursuant to Section 53314.9 of the California Government Code, the City Council may accept advances of funds or work-in-kind from private persons or private entities and may provide, by resolution, for the use of those funds or that work-in-kind, for any authorized purpose, including,but not limited to, paying any costs incurred by City in creating the Community Facilities District and may enter into an agreement by resolution, with the person or entity advancing funds or work-in-kind to repay funds advanced, or to reimburse the person or entity for the value or cost, whichever is less, of the work-in-kind, as determined by the City Council. Section 9. Tender of Bonds. This City Council hereby reserves the right, on behalf of the Community Facilities District to accept tenders of bonds in full or partial payment of special taxes to be levied within the Community Facilities District pursuant to Section 3.56.320 of the Code. Section 10. Description of Voting Procedures. The voting procedures to be followed in conducting the consolidated special elections on (i) the proposition of the Community Facilities District incurring a bonded indebtedness in an amount not to exceed $15,000,000, (ii) the proposition with respect to the levy of special taxes on the land within the Community Facilities District to pay the principal of and interest on the bonds thereof and to pay the costs of maintenance ,repair and replacement of public facilities, and (iii) the proposition with respect to the establishment of an appropriations limit for the Community Facilities District in the amount of$4,000,000, if the Community Facilities District is established and such consoli- dated special elections (the "consolidated special elections") are held, shall be as follows: (1) If at least 12 persons have been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public or protest hearing (the "protest hearing"), the vote in the consolidated special elections shall be by the registered voters of the Community Facilities District with each voter having one vote. In that event, the consolidated special elections shall be conducted by the Clerk, and shall be held on a date selected by the City Council in conformance with the provisions of Section 53326 of the California Government Code and pursuant to the provisions of the California Elections Code governing elections of cities, insofar as they may be applicable, and pursuant to said Section 53326 the ballots for the consolidated special elections shall be distributed to the qualified electors of the Community Facilities District by mail with return postage prepaid or by personal service, and the consolidated special elections shall be conducted as a mail ballot election. (2) if 12 persons have not been registered to vote within the territory of the community facilities district for each of the 90 days preceding the close of the protest hearing, and pursuant to Section 53326 of the California Government Code, the vote is therefore to be by the landowners (as defined in Section 3.56.070 of the Municipal Code of the City of Huntington Beach) of the Community Facilities District, with each landowner of record at the close of the protest hearing having one vote for each acre or portion of an acre of land that he or she owns within the Community Facilities District, the consolidated special elections shall be conducted by the City Clerk pursuant to the Municipal Code of the City of Huntington Beach and Section 53326 of the California Government Code as follows: RVPUBWUN1 R678693.3 4 Resolution No. 2004-76 (a) The consolidated special elections shall be held on the earliest date, following the adoption by the City Council of the resolution of formation establishing the Community Facilities District pursuant to Section 53325.1 of the California Government Code, and a resolution pursuant to Section 53326 of said Code submitting the propositions with respect to (i) whether a bonded indebtedness shall be incurred for constructing and financing through the sale of bonds public facilities necessary for the formation of the Community Facilities District; (ii) the levy of special taxes to pay the principal of and interest on the bonds of the Community Facilities District and (iii) the establishing of an appropriations limit therefor to the qualified electors of the Community Facilities District, upon which such elections can be held pursuant to said Section 53326 which may be selected by the City Council, or such earlier date as the owners of land within the Community Facilities District and the Clerk agree and concur is acceptable. (b) Pursuant to said Section 53326, the consolidated special elections may be held earlier than 90 days following the close of the protest hearing if the qualified electors of the Community Facilities District waive the time limits for conducting the elections set forth in said Section 53326 by unanimous written consent and the Clerk concurs in such earlier election date as shall be consented to by the qualified electors. (c) Pursuant to said Section 53326, ballots for the consolidated special elections shall be distributed to the qualified electors by the Clerk by mail with return postage prepaid, or by personal service. (d) Pursuant to applicable sections of the California Elections Code governing the conduct of mail ballot elections of cities, and specifically Division 4 (commencing with §4000 of the California Elections Code with respect to elections conducted by mail), the Clerk shall mail (or deliver) to each qualified elector an official ballot in a form specified by the City Council in the resolutions calling and consolidating the consolidated special elections, and shall also mail to all such qualified electors a ballot pamphlet and instructions to voter, including a sample ballot identical in forin to the official ballot but identified as a sample ballot, an impartial analysis by Counsel to City pursuant to Section 9280, as amended, of said Code with respect to the ballot propositions contained in the official ballot, arguments and rebuttals, if any, pursuant to Sections 9281, as amended, to 9287, as amended, inclusive, and 9295, as amended, of said Code, a return identification envelope with prepaid postage thereon addressed to the Clerk for the return of voted official ballots, and a copy of the form of Resolution of Formation establishing the Community Facilities District, adopted RVPUBWUM\678693.3 5 Resolution No. 2004-76 by the City Council pursuant to Section 53325.1 of the California Government Code, and the exhibits thereto, provided, however, that such analysis and arguments may be waived with the unanimous consent of all the landowners, and in such event a finding regarding such waivers shall be made in the resolution adopted by the City Council calling the consolidated special elections. (e) The official ballot to be mailed (or delivered) by the Clerk to each landowner shall have printed or typed thereon the name of the landowner and the number of votes to be voted by the landowner and shall have appended to it a certification to be signed by the person voting the official ballot which shall certify that the person signing the certification is the person who voted the official ballot, and if the landowner is other than a natural person, that he or she is an officer of or other person affiliated with the landowner entitled to vote such official ballot, that he or she has been authorized to vote such official ballot on behalf of the landowner, that in voting such official ballot it was his or her intent, as well as the intent of the landowner, to vote all votes to which the landowner is entitled based on its land ownership on the propositions set forth in the official ballot as marked thereon in the voting square opposite each such proposition, and further certifying as to the acreage of the landowner's land ownership within the Community Facilities District. (f) The return identification envelope delivered by the Clerk to each landowner shall have printed or typed thereon the following- (1) the name of the Iandowner, (ii) the address of the landowner, (iii) a declaration under penalty of perjury stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, (iv)the printed name and signature of the voter, (v)the address of the voter, (vi)the date of signing and place of execution of said declaration, and (vii) a notice that the envelope contains an official ballot and is to be opened only by the Clerk. (g) The instruction to voter form to be mailed by the Clerk to the landowners shall inform them that the official ballots shall be returned to the Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon properly inserted not later than 7:00 p.m. on the date of the election, or immediately after the Resolution Calling the Special Election is adopted RVPUMMUNM78693.3 6 Resolution No. 2004-76 (h) Upon receipt of the return identification envelopes which are returned prior to the voting deadline on the date of the elections, the Clerk shall canvass the votes cast in the consolidated special elections, and shall file a statement with the City Council as to the results of such canvass and the election on each proposition set forth in the official ballot. The procedures set forth in this section for conducting the consolidated special elections, if they are held, may be modified as the City Council may determine to be necessary or desirable by a resolution subsequently adopted by the City Council. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 15`h day of November, 2004. Mayor APPROVED AS TO FORM: Cit Attorney �v g REVIEWED AND APPROVED: INITIATED AND APPROVED A_'/ C �gr ity Ad inistrator Director:gf Economic" Development Director of Public %Yls RVFUMMUW678693.3 7 Resolution No. 2004-76 EXHIBIT A LEGAL DESCRIPTION CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2004-1 (THE STRAND), COUNTY OF ORANGE, STATE OF CALIFORNIA In the City of Huntington Beach, County of Orange, State of California, being Lots 10, 12, 14, 16, 18, 20, 22, 24, 26, 28, a portion of Lot 9 and a portion of the alleys adjacent to said Lots, in Block 104; Lots I through 21, inclusive, 23, 25, 27, and a portion of the alleys adjacent to said Lots, in Block 105; together with that portion of Fifth Street adjacent to said Blocks 104 and 105, all as shown on Map of Huntington Beach filed in Book 3, Page 36 of Miscellaneous Maps,Records of said County described as follows: Beginning at most easterly corner of said Lot 28; thence South 41°37'44" West 22 5.10 feet along the northwesterly line of the Alley, 15 feet wide, within said Block 104, to the most southerly corner of Lot 12 of said Block 104; thence North 48022'14" West 67.71 feet along the southwesterly line of said Lot 12 to the northeasterly prolongation of the northwesterly line of the Deed recorded October 10, 1990 as Instrument No. 90-538988, of Official Records of said County; thence South 41°37'10" West 125.05 feet along said prolongation and said northwesterly line to the northeasterly line of Pacific Coast Highway (Ocean Avenue), 100.00 feet wide, per the Map of Huntington Beach filed in Book 3, Page 36 of Miscellaneous Maps, Records of said County; thence North 48°21'52" West 359.91 feet along said northeasterly line to the southeasterly line of Sixth Street, 75 feet wide as shown on said Map of Huntington Beach; thence North 411137'11" East 250.03 feet along said southeasterly line to the most northerly corner of Lot 20 of said Block 105; thence South 48°22'50" East 125.07 feet along the northeasterly line of said Lot 20 and the southeasterly prolongation thereof to the centerline of the Alley, 15 feet wide, within said Block 105; thence North 41°37'11" East 100.01 feet along said centerline to the southwesterly line of Walnut Avenue, 60 feet wide as shown on said Map of Huntington Beach; thence South 48°22'50" East 302.58 feet along said southwesterly line to the POINT OF BEGINNING. Containing 2.956 acres, more or less. RVPUB%MUW679693.3 A_1 Resolution No. 2004-76 EXHIBIT B CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2004-1 (THE STRAND) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX [See attached document] RVPUBWUW678693.3 B_1 Resolution No. 2004-76 CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2004-1 (THE STRAND) 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. 2004-1 (The Strand) (herein CFD No. 2004-1) shall be levied and collected according to the tax liability determined by the Administrator through the application of the procedures described below. The real property in CFD No. 2004-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. A. DEFINITIONS The capitalized terms hereinafter set forth have the following meanings when used in this Rate and Method of Apportionment: Acre or Acreage means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, or the 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 a 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 CFD No. 2004-1: the fees and expenses of any Fiscal Agent or trustee (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; the expenses of the Administrator and the City in carrying out their duties under any Indenture or resolution with respect to the Bonds, including, but not limited to, the levy and collection of the Special Tax, the fees and expenses of legal counsel, charges levied by the County or any division or office thereof in connection with the levy and collection of Special Taxes, audits, continuing disclosure or other amounts needed to pay arbitrage rebate to the federal government with respect to Bonds; costs associated with complying with continuing disclosure requirements; costs associated with responding to public inquiries regarding Special Tax levies and appeals; attorneys' fees Resolution No. 2004-76 and other costs associated with commencement or pursuit of foreclosure for delinquent Special Taxes; 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 CFD No. 2004-1. Administrator means the Director of Administrative Services or such other person or entity designated by the Administrator or the City Council to administer the Special Tax according to this Rate and Method of Apportionment of Special Tax. Agency means the Redevelopment Agency of the City of Huntington Beach. 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. Hotel Airspace Assessor's Parcel means the parcel covering the airspace designated for hotel use on the recorded airspace condominium map for CFD No. 2004-1 with an assigned Assessor's Parcel number. Parking Garage Airspace Assessor's Parcel means the parcel or parcels covering the airspace designated for parking purposes on the recorded airspace condominium map for CFD No. 2004-1 with an assigned Assessor's Parcel number. Retail Airspace Assessor's Parcel means the parcel or parcels covering the airspace designated for retail commercial use on the recorded airspace condominium map for CFD No. 2004-1 with an assigned Assessor's Parcel number. Assessor's Parcel Map means an official map of the Assessor of the County designating Parcels by Assessor's Parcel number. 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 CFD No. 2004-1 under the Act. 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. 2004-1. County means the County of Orange. DDA means that certain Disposition and Development Agreement dated June 17, 1999, which was supplemented by that certain [First] Implementation Agreement entered into between the Agency and CIM Group, LLC dated April 6, 2000; that certain Second Implementation Agreement entered into between the Agency and CIM Group, LLC dated March 5, 2001; that certain Third Implementation Agreement entered into between the Agency and CIM Huntington Beach, LLC dated October 30, 2002; and that certain Fourth Implementation Agreement entered into between Agency and CIM/Huntington, LLC dated September 15, 2003; including all Attachments thereto and any supplemental amendments or agreements thereto hereafter approved by the Agency and CIM/Huntington, LLC and/or their assigns and successors-in-interests. 9/2/2004 2 Resolution No. 2004-76 Exempt Land means (1) any real property within the boundaries of CFD No. 2004-1 which generally serves the development subject to the DDA and is owned by a governmental agency for public right-of-way purposes including, but not limited to streets, public walkway corridors and the Parking Garage Airspace Assessor's Parcel as determined in each Fiscal Year by the Administrator or (2) any Assessor's Parcel for which the Special Tax has been paid in full. Fiscal Agent means the fiscal agent who is a party to the Indenture, if so approved. 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. 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. Maximum Special Tax means, with respect to any Hotel or Retail Airspace Assessor's Parcel, the maximum Special Tax determined in accordance with Section C that can be levied in any Fiscal Year on such Parcel. Maximum Back-up Special Tax means, with respect to any underlying Assessor's Parcel of Taxable Property (prior to the recording of an airspace condominium parcel map), the maximum back-up Special Tax that can be levied in any Fiscal Year on such Parcel. The Maximum Back-up Special Tax is $590,000 per Acre of Taxable Property. Outstanding Bonds means all Bonds that are then outstanding under the Indenture. Reserve Fund means the fund of that name created under the Indenture. Resolution of Issuance means the resolution adopted by the City Council of the City, acting as the legislative body of CFD No. 2004-1, authorizing the issuance of the Bonds in accordance with the Act. Special Tax means the special tax to be levied pursuant to the Act and this Rate and Method of Apportionment of Special Tax in each Fiscal Year on Taxable Property within CFD No. 2004-1. Special Tax Requirement means the amount required in any Fiscal Year for CFD No. 2004-1 necessary: (i) to pay the annual scheduled debt service on the Outstanding Bonds due in the calendar 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, (iv) to pay costs of any credit enhancement (including fees and expenses related to any letter of credit) for the Bonds, and less a credit for available funds determined pursuant to the Indenture. 9/2/2004 3 Resolution No. 2004-76 Square Foot or Square Footage means the area of an Assessor's Parcel as shown on a recorded tract or parcel map for airspace condominium purposes, or if the area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, or the other parcel map recorded with the County Recorder. If the Square Footage of a particular Parcel is not indicated or is unclear after reference to available maps,the Administrator shall determine the appropriate square footage for a Parcel. Taxable Property means all of the Assessor's Parcels within the boundaries of CFD No. 2004-1, which are not Exempt Land or exempt from the Special Tax pursuant to law, but in no circumstance shall the total amount of Taxable Property be less than 2.20 acres. Trustee means the trustee who is a party to the Indenture, if so approved. B. IDENTIFYING TAXABLE PROPERTY Not less than fifteen business days prior to the beginning of each Fiscal Year, the Administrator shall determine which Parcels in CFD No. 2004-1 are Taxable Property. The Taxable Property shall be subject to Special Taxes 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 the Assessor's Parcels of Taxable Property in CFD No. 2004-1 shall be the greater of (1) if a tract or parcel map for airspace condominium purposes has not been recorded, the Maximum Back-up Special Tax or (2) if a tract or parcel map for airspace condominium purposes has been recorded, the amount determined pursuant to the following steps: Step 1: Determine the maximum annual debt service on all Outstanding Bonds; Step 2: Multiply the total debt service determined in Step 1 by 1.1 and add the Administrative Expenses; Step 3: Multiply the amount from Step 2 by 0.6 and divide by the square footage of the Hotel Airspace Assessor's Parcel to determine the Maximum Special Tax per square foot for the Hotel Airspace Assessor's Parcel; - Step 4: Multiply the amount from Step 2 by 0.4 and divide by the square footage of the Retail Airspace Assessor's Parcel to determine the Maximum Special Tax per square foot for the Retail Airspace Assessor's Parcel 9/2/2004 4 Resolution No. 2004-76 D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2006-2007, and for each Fiscal Year thereafter, the City Council shall Ievy the Special Tax proportionately on each Assessor's Parcel of Taxable Property at up to 100% of the Maximum Special Tax, as determined by reference to Section C, above, as needed to satisfy the Special Tax Requirement. E. LIMITATIONS No Special Taxes shall be levied on any Parcel after such Parcel becomes Exempt Land. The Special Tax may be levied and collected on Taxable Property commencing with Fiscal Year 2006-2007, 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 such requirements have been met, the Special Tax lien shall be removed from all Parcels in CFD No. 2004-1. F. MANNER OF COLLECTION The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that the City on behalf of CFD No. 2004-1 may directly bill the special tax or any portion thereof, may collect special taxes or any portion thereof at a different time or in a 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. APPEALS The City Council shall establish as part of the proceedings and administration of CFD No. 2004-1, a special three-member Review/Appeal Committee. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any appeals, as herein specified. The owner of any Taxable Property within CFD No. 2004-1 claiming that the amount or application of the Special Tax is not correct may file a written notice of appeal with the Review/Appeal Committee not later than one calendar year after having paid the Special Tax that is disputed. The Review/Appeal Committee shall promptly review the appeal, and if necessary, meet with the owner, consider written and oral evidence regarding the amount of the Special Tax, and resolve the appeal. If the Review/Appeal Committee's decision requires the Special Tax to be modified or changed in favor of the 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. This procedure shall 9/2/2004 5 Resolution No. 2004-76 be exclusive and its exhaustion by any owner shall be a condition precedent to any legal action by such owner. H. PREPAYMENT OF SPECIAL TAX The following definitions apply solely to this Section H: 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 that 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 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 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 9/2/2004 6 Resolution No. 2004-76 As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Parap,rqph 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). 8. Determine the administrative fees and expenses 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). 9/2/2004 7 Resolution No. 2004-76 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 shalI 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 CFD No. 2004-1 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 H.1, except that a partial prepayment shall be calculated according to the following formula: PP = (PH xF) + C Where these terms are defined as follows: PP = the partial prepayment PH= the Prepayment Amount calculated according to Section H.1, minus the amounts determined in Paragraph No. 8 of Section H.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 H.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. 9/2/2004 8 Resolution No. 2004-76 With respect to any Assessor's Parcel that is partially prepaid, CFD No. 2004-1 shall (i) distribute the funds remitted to it according to Paragraph 11 of Section H.1, and (ii) indicate in the records of CFD No. 2004-1 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. 9/2/2004 9 Res. No. 2004-76 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) 1, JOAN L. FLYNN the duly appointed, 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 an regular meeting thereof held on the 15th day of November, 2004 by the following vote: AYES: Sullivan, Coerper, Hardy, Green, Boardman, Cook, Winchell NOES: None ABSENT: None ABSTAIN: None PA&J Clerk and ex-offici Clerk of the City Council of the City of Huntington Beach, California